Thursday, 31 January 2019
Trading signals
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The most important and interesting points of Wednesday session for FOREX market is that traders received a solid confirmation of USD dollar weakness. Amid strategicla news FX markets managed to break through strong technical levels and moved the price into new ranges. This primarily means that USD dollar weakness was designed and we have to keep it in mind in our trading decisions.
EUR/USD
News background allowed the traders brake through 1.1430 resistance on the move and develop the surge up to strategical level 1.1515. if 1.1430 mark was of a tactical nature than this new area has a strategical importance for entire market. It is this level that divides two long-lived phase of EUR/USD market. The market has approached the area of overbought conditions and the move higher without correction seems impossible. But in the market it is nothing impossible and if bulls manage to fix above 1.1500 today it will be a big psychological victory. Tactical support is located around 1.1475-1.1465. In general we believe that the global change in market expectation is able to send quotes higher at least to 1.1575-1.1600. We look for interesting and safe entry-points to join the market movement.
Trading recommendation – longs in the area of the first resistance 1.1465-1.1475
GBP/USD
It is interesting enough that USD dollar weakness was ignored by GBP/USD market. It is not a big surprise given gains that GBP displayed last week. On Monday GBP/USD has approached a strong level of resistance 1.3140 but Brexit uncertainty is still in the market spotlight. However the closest support 1.3060 proves to be firm and keeps the market above. Today we expect a large amounts of GB data that can easily increase volatility. But technically no signs so far that market is ready to sell GBP.
Trading recommendations – careful longs in 1.3085-1.3060 area
Gold
The precious metal keeps on rising in price amid stronger weakness of USD dollar. Yesterday traders focused on FOMC press-conference and once they heard the confirmation of their expectations they rushed to buy the gold more and more. On this news the gold has broken through local highs around 1321. We mentioned that the entire area (1315-1325) is a some kind of market vicious resistance zone. Despite the current growth it is somewhat dangerous to go long on these levels. The market is locally overbought and any time we can see the profit fixation and local pullback. However if the market can display two four-hours candles close above 1325 we can believe it is a sign for more growth. After yesterday gains the closest support is located around 1315 and lower 1307.
Trading recommendations- longs in area 1310-1307 after market pullbacks
USD dollar index
Our expectations of the year start have finally come true. Back to that time we expected a massive USD dollar decline and yesterday USD dollar index dropped to four month lows and tested area 94.80-94.85. It is quite interesting that by this decline the market broke through 23.6% Fibo level. The next Fibo expansion (38.2%) is located around the 94.10 points. This might be the middle term target for USD dollar index. However we can expect a of correction in USD dollar as FX markets have come upon news strong technical levels. Not to forget thta negative news on US-China trade talks can significantly support USD. We will look into the developments of this strategical market.
Trading recommendations- look for sell entries as the market pullback
Wednesday, 30 January 2019
Forex Forex Trading Signals
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Wednesday has a chance to become the most volatile day of the week as today several major geopolitical and political scripts meet. On such days, it is better to be out of the market and watch the development from the outside. First this is Fed meeting that is always in focus and the subsequent press conference, then the beginning of trade negotiations between the USA and China, Brexit development and finally a rather busy day in terms of economic statistics. Today we will analyze data on consumer confidence index in Germany, data on economic statistics in the Eurozone, and finally data on the American labor market from ADP.
EUR / USD
As expected earlier this week, the market stopped the upward movement near the mark of resistance around 1.1430-1.1440. The breakthrough above was not confirmed; however, the technical pullback didn’t realized as well. Yesterday's daily close hints that a scenario with a deeper corrective pullback is more likely for the market in the current conditions. In this case, the nearest local support is located in the area 1.1405-1.1395. Given the richest news background, we want to stay out of the market and close some of longs opened earlier.
Trading recommendations - out of the market
GBP / USD
On Tuesday, some profit-fixation was detected on the British currency market for the first time in six days. As a result, quotes broke through local support 1.3140 and plunged into a more stable area of 1.3070. We can state that Brexit still influences the dynamics of the British currency. Yesterday, seven amendments to «B plan» submitted by were considered, and only two of them were finally adopted by parliament. And both of them are essentially advisory in nature. Today, British pound maintains positive sentiment; buyers were able to seize the initiative in the support area of 1.3070. Now resistance at yesterday's support levels 1.3140. Let us see how events will develop today, on the background of a day full of news and statistics.
Trading recommendations - out of the market
Gold
The gold market maintains positive sentiment, moreover, the bulls now fully control this market. Yesterday the local maximum was updated, and today the growth continued in the zone of 1313.70. No surprise that we consider only longs in current conditions, and look for entry points. The market has almost reached the level 1315, this is a strong zone of resistance. We expect a pullback and open more longs. The nearest support is located in the area of 1310 and further in the zone of 1307.
Trading recommendations- purchases during rollbacks
US dollar index
Yesterday, US dollar index attempted growth, but could not break above the level 95.55 points. Here the tactical level of resistance goes, and the inability of the market to break through above tells us that the pressure on the US dollar will continue. Until we received a reversal signal on the daily chart, we continue to expect the weakening of the US currency. Of course, much will depend on the Fed’s press conference today, but technically the downward move target is located around 94.80 points.
Trading recommendations - out of the market
Tuesday, 29 January 2019
FOREX trading signals
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Tuesday’s trading calendar is not all so hot, but there are large-scale storylines that can easily cause greater volatility. These include trade negotiations between US and China, updates on Brexit development and the expectations of the long-awaited FOMC decision on Wednesday. All these strategic factors can restrain market activity in the first half of the trading week, and as in the previous five days, volatility would increase dramatically at the end. The technical picture continues to point to the weak dynamics of US dollar.
EUR / USD
The upward impulse reached the first resistance zone around 1.1440. A local reversal may well take place here on the background of partial profit taking, however, in early European trading, a direct signal to the weakening of the upward impulse was not yet detected;
In the case of movement above 1.1440, the target will be the area of resistance 1.1485-1.1500, from where correction appears inevitable. The nearest local support in the zone 1.1411-1.1405.
Trading recommendations - longs when pulling back to 1.1411 or after consolidating above 1.1440
GBP / USD
Last Friday, the market reached a really strong resistance zone around 1.3200 (four-month highs), and then the market expectedly adjusted to the area of the first local support 1.3140. It is interesting that last week the market completely ignored the development of the Brexit issue. Let's see how this news will affect the market this week. Already today, a vote on Plan B from the British Prime Minister is expected. This is a certain risk factor for the British currency. Technically, as long as the quotes remain above 1.3140, the chances for a quick retest of this level remain. However, a stronger support area is in the 1.3170 area.
Trading recommendations – longs in 1.3140, 1.3060
Gold
On Friday, the market updated the local highs above 1300 mark, and Monday confirmed that the market had taken this historical market area (Monday's candle close occurred at the levels of 1302). Today in the Asian trading session, the growth of the market continued. The technical picture is very simple - support is in the area of 1296-1300. Resistance is also close -a strong area of support is located around 1306-1310.
Trading recommendations - buying in the area 1296-1300
US dollar index
The decline in the US dollar continues. The dollar index fell to the support area of 95.35 points. However, the short-term technical target of this current downward decline is somewhere in the zone of 95 points.
Trading recommendations - we expect further decline
Monday, 28 January 2019
Thursday, 24 January 2019
Trading signals
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If you are thinking about the main currency markets this week and suddenly realize that we haven’t seen anything yet - the first part of the week out to be inactive as if the market is experiencing calm before the storm - we agree with you only if we don’t talk about the pound . This week, the pound is doing its job and living its life, with a 1.5% gain since Monday's opening, and this is amid the background of continuing uncertainty with Brexit. Today we will analyze the meeting of the ECB and the subsequent reaction of EUR / USD. Today, a calm week may end abruptly, as volatility is already beginning to grow.
EUR / USD
On Wednesday, the European currency got a chance for a weak corrective pullback, primarily due to the US dollar weakness. However, the strength and duration of this pullback illustrates the entire situation in this market. EUR / USD rose to the first resistance level around 1.1395 and immediately turned down as the quotes returned to the area from which this correctional growth began. Thus, the market situation has not changed, as well as all our thoughts on this market about which we wrote during the entire week. Today we are waiting for the market reaction to the meeting of the European regulator and remain out of the market and expecting increased in volatility.
Trading recommendations - out of the market
GBP / USD
On Wednesday, the British pound continued to grow. The pair marked new highs in the 1.3090 area. In the area of this mark, the rally of the British currency is likely to end. This is an area of strong resistance where the market meets the 200th MA. Actual strong support is located in the 1.3000 area. However, we need to keep in mind that longs at these levels are quite dangerous.
Trading recommendations – cautious longs around 1.3000
Gold
On Wednesday’s trading session, gold could not overcome the first tactical resistance in the area of 1285. This can mean only one thing - bulls do not have the strength to build on success and seize the initiative and now what is more important that the first line of defense around $1277 is under threat. Now the market is trading within a wider channel 1277-1295. The next support zone is located in the area of $ 1266 - there goes 23.6% Fibonacci extension. We are watching the development of the situation and close the previously open longs.
Trading recommendations - out of the market
Dollar index
Yesterday, USD dollar index pulled back from the mark of 96 points, although today the market has recovered back to this area. Thus, the market situation has not changed. We look forward to further developments.
Trading recommendations - shorts from 96
Wednesday, 23 January 2019
FOREX MARKET TRADING SIGNALS
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The middle of the current week has not been that active for Forex markets. Two first days of the week has shaken off investor’s interest in risk as risk liquidation was general Tuesday theme, with safe haven currencies outperforming and global equities turning deep into the red. So far no drastic change has happened as US SP 500 stayed well above 2600 points which is a good sign. Yesterday US economic adviser attempted to calm down the markets experiencing a kind of panic sell and today futures for US equities display slight positive. USD dollar is still firm but USD dollar index failed to overcome 96 point level. This might be a sign that the showtime is about to begin. Until the end of the week we will focus upon ECB meeting and data from US and Europe.
EUR/USD retains good chance for corrective upward move
EUR/USD market has been oversold for four trading sessions but so far it doesn’t help much for upward correction. The market declined to the lowest end of middle-term channel (1.1345-1.1515) and no real attempt to adjust has been detected yet. It is quite interesting that bears need correction much more that bulls do, if bears ever plan to push the market lower. Everyone knows that market needs space in order to break through any strong technical level. 1.1350-1.1345 is a very strong technical area and market support. However, it seems that no one truly believes that EUR / USD market would go straight lower from these levels and in general the whole situation on the EUR / USD market develops contrary to logic and common sense. But this is the market and it has its own logic. Yesterday, the trading day closed mixed without victorious side. EUR / USD produced long shadow of the daily candle – a kind of reversal sign, US dollar index also denotes reversal signals for two trading sessions. What if these are the first signs of an approaching correction in the dollar and, therefore, in EUR / USD. This is the most logical development of events. We will see how the trading session proceed. Market support is the area of 1.1345, the nearest resistance level is 1.1400, and further 1.1430.
Trading recommendations - longs at current levels 1.1345
GBP / USD - back to two-month high
As Forex market turns somewhat inactive and suppressed, British currency gains look impressive. Yesterday, GBP / USD continued to gain and, given today's positive market dynamics, GBP / USD almost came close to the round mark of 1.3000. This is a zone of two monthly highs. Traders positively assessed the strong data on the British labor market. Now the main question for GBP can the market overcome 1.3000 in the face of continuing Brexit uncertainty? The nearest support level is 1.2920. Resistance 1.3000. Kickbacks can be used to open long positions.
Trading recommendations - longs in area 1.2840
Gold is storming $ 1285 as s resistance this time
Today on Wednesday the gold market is facing an important tactical task. Yesterday's growth momentum brought the yellow metal quotes up to the first local resistance - the level of $ 1285. If bulls are able to bring the market back inside the channel 1285-1295, it will be a big psychological victory for them. No we need to monitor the situation development and wait for the close of at least two four-hour candles above 1285 in order to get the correct confirmation of this mark taking. If buyers win this local fight, additional longs might inflow, and the next resistance level will be the old local high around 1295 and then 1300.
Trading recommendations – longs in 1277, 1285
USD dollar index
US dollar index spent Tuesday session around 96 mark. Despite the best efforts, American dollar fails to beak this level. On the chart we see two daily reversal candles, and today we will most likely see the third one. Candlestick analysis indicates the development of a downward correction in the dollar. Let's see how the session will go, there are still two days left till the trading week end. The market has plenty of time.
Trading recommendations - cautious shorts from 96 points
Tuesday, 22 January 2019
FOREX market trading signals
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On Tuesday, we are returning to working schedule as markets are back to full form today after US had been on extra holiday. As Americans return to the desks they will probably start playing out the news published on Monday. The main theme of Tuesday session is the risk-off mode and risk liquidation on the background of weak China economic growth and IMF weak outlooks for 2019. With such a sentiment in air, safe-haven currencies outperform and equity indexes are down in the red. The trading calendar is full of important data and information – looking at the day ahead we will get information on GB unemployment, ZEW Index for Germany and Eurozone and numbers on existing home sales in US.
EUR/USD
No important changes so far in the market of the main pair of FX market. EUR/USD keeps on downward consolidation close to the key support level 1.1345-1.1350. For the time being, we don’t see any reversal signals in the market so the scenario with more bearish move is just a priority. What is more important is that the market is heavily oversold which makes more decline extremely difficult. In any case new shorts on current levels is not an option, it is too dangerous.
Trading recommendation – out of the market
GBP/USD
Despite the fact that new plan from GB prime-minister voiced on Monday did not bring more clarity on Brexit issue ( two months before the Brexit but no one knows how it will particularly go) British currency trade rather firm being above the strategical support area 1.2800-1.2840. On the moment it is not clear on how the middle-term GBP/USD development will proceed but while GBP/USD above 1.2840 it is a positive sign.
Trading recommendation – out of the market
Gold
As we expected earlier, American traders, returning to the trading terminals would provide some support for gold market. The normal market volume is what the gold need to play out two main Monday themes- weak China data and feeble IMG outlooks for 2019. Today in European session, the gold quotes rebounded from the support 1277 and headed to the mark 1285. It is an expected development. Now this former 1285 support turned new resistance area. We will know the market intension today if bulls have enough powerto return back into the channel (1285-1295). In any case, the support 1277 proved to be firm and this is likely to attract more longs in the market.
Trading recommendation – longs in area 1277
American dollar index
In the beginning of the week Forex market is experiencing a kind of calm and it seems that this is a calm before the storm. USD dollar index spent the Monday session in a very limited range around strategical mark 96. We talked a lot about the importance of this level and if to speak it short it’s the strategical zone. On Monday USD dollar index failed to settle about this mark. Contrarily we received a type of reversal signal – doji pattern. That might be the first sign that the USD dollar reversal is heading or at least correction as USD dollar is rather oversold.
Trading recommendations sell down from 96 points
Monday, 21 January 2019
FOREX market trading signals
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Once again new trading week brings new background. Americans enjoy an extra day off, while markets focus on economic data from China. Although Chinese data confirmed a slowdown in the economy (it is not important for us now if it is the influence of the global economic downturn, or trade issue with the US), this did not come as a surprise to the markets, nor did it cause additional demand for risky assets. It seems that the markets remain optimistic after the last Friday market close, in addition the relatively “thin” market makes it hard to respond to the data fully. FOREX market starts the week within Friday levels. Traders focus on US dollar. Last week, US currency index showed impressive results. Dollar index gained from the level of 95.00 points to the level of 96.00. Once again, we note that this area 95.75-96 is a strong resistance area, but more details on this below. Technically, the dollar is overbought somewhat, but we will find out how events will develop this week.
EUR / USD starts trading day under pressure near monthly lows
EUR/USD is starting the new trading week close to monthly lows. On Monday in Asian trading, the market opened around 1.1360 levels, while last week's lows is located at 1.1351. The weak upward correctional movement ran out at 1.1390, and negative dynamics continued as the pair dropped to the area of 1.1372. It is interesting that last Friday's trading session was sharply negative. Contrary to our expectations, the technical corrective pullback did not take place, the market continued to trade under strong pressure, despite the strong support level and oversold conditions. In general, this situation reflects the current state of the market, players sell the euro and buy the American dollar. Today, the market should not expect an active trading day. It is better to stay out of the market and expect further developments.
Trading recommendations - out of the market
GBP / USD - after reaching a two-month high 1.3000, the market adjusted lower to 1.2810
The development of the situation in this market assumes a rather technical character, despite the increase in volatility and the difficult fundamental background associated with the uncertainty around Brexit. Last Thursday, GBP / USD market surprised many with increasing volatility and showed impressive growth, the pair broke through all local resistances and gained to the area of a two-month high — a round mark 1.3000. After that, we expected a correction and a pullback from this important mark as the market had no chance to gain a foothold in that area in current conditions . On Friday, the pair adjusted and broke through local support 1. 2920-1.2890. Today, the decline continued - the market is moving into the area of the recent resistance zone 1.2810-1.2760. Now this is an area of strategic support and, despite political uncertainty, the technical picture assumes limit orders in mentioned area.
Trading recommendations - cautious purchases in the area of 1.2810-1.2760
Gold tests support $1277
Last Friday, a three-week gold consolidation in a tight range 1285-1295 has finally ended. This price action seemed to reflect longs liquidation which brought the quotes to the lower support level 1295. Gold price moved out from the consolidation range and, what is more important, the continuation pattern “flag” was canceled. This «flag» pattern formed some expectations for a growth and a test of the strategic mark 1300 without correction. But this did not come true as the market has moved to the formation of another scenario. Quotes fell into the first support area $ 1280- $ 1277.
Now there is the main intrigue in the market whether buyers will be able to seize the initiative at these marks. Monday's trading session is negative so far, the market has dropped to the lower limit of this range - 1277 mark. If this area does not hold on, the decline will continue to $ 1269- $ 1266 that is the area where Fibonacci expansion of 23.6% is located. Equity markets growth exert some pressure for gold as the positive sentiment has somewhat returned to the market.
Today it is better to stay out of the market, given that Monday trading activity will be minimal, and tomorrow the market can fully play back economic statistics from China, which can support gold. A possible correction of the overbought dollar and strong technical levels for the dollar index (96 points) are also a short-term positive driver for gold, that is likely will be able to keep the market above 1277 and 1270.
Trading recommendations – careful longs in the area of 1277 and below 1270.
US dollar index - and again a mark of 96 points
While Australian dollar uncertainty continues, and AUD market is not interesting in technical terms, we will analyze US dollar market and, more precisely, we will look into US dollar index. FOREX market situation now develops the way that it is enough to analyze the dollar index to understand the power alignment in any FX major pair.
The American currency is more than ever in market spotlight! Last week trading was marked by US dollar gains. In this sense, USD market again “surprised” everyone, if we recall the sentiments of the first full January trading week –everyone talked about changing Fed's policy for 2019 amid higher economic risks and a sharp USD dollar decline. However, having reached 95 points on the index, the dollar moved to strengthen. What was it? Correction to the medium-term downward movement, which will eventually gain momentum, or continued growth in the long-term uptrend (just open the monthly chart to see this trend) We believe that we will know the answer to this question in the coming days ... The fact is that USD dollar index, and indeed all the other market instruments, have reached an important technical levels. For US dollar index it is the mark around 96 points. This is a strategic area.
There are two options for further development- whether the index goes higher and continues to gain to the area of two yearly highs - zone 97.60, or the index resumes the decline in the medium-term negative expectations for USD dollar (more dovish outlook for Fed policy for 2019). Therefore, the current week will be interesting and decisive. Perhaps the market itself has not yet decided on future plans for 2019, so we will monitor the situation and remain out of the market for now.
Trading recommendations - out of the market
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Friday, 18 January 2019
Trading signals
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In general, FOREX market hasn’t been active so much this week. On Friday, most major currencies are trade in tight ranges and what is most interesting point, within one percent of the weekly open level. We recall that the first 2019 full-active trading week was much more intense and volatile. It seems that the markets took a breather to reflect on the current situation, or a local balance of power has emerged amid information vacuum at the end of the trading week. All of stated above applies to all FX instruments, with the exception of the British pound, that presented the expected but no less interesting surprise.
EUR / USD - conditions for corrective pullback have formed
Trading activity in this market has been declining since Wednesday, when the pair reached $ 1.1370 level. Now the fact is evident to everyone that this is a strong technical level, the market is somewhat oversold and a further decline has a low probability. However, the interesting situation is that there is no driver for growth and market reversal. Bulls cannot seize the initiative and cannot yet initiate any pullback. It is significant that at the same time, the US dollar index can not overcome a very strong level of 95.75 points. However, like European currency, there is no active decline. Today is Friday session and the market will close the trading week. Bulls may try to close the week above 1.1395 and, if lucky, above 1.1400. This will be a positive signal for the next five days. It is likely that some traders will try to take profits before the weekend. Let's see how events will develop in the US trading session. However, we stay on longs priority, waiting for an upward corrective pullback at least in the area of 1.1430-1.1440.
Trading recommendations - longs at current levels 1.1385-1.1390
GBP / USD- strengthened to two-month highs
Yesterday, the British pound surprised many as on the background of quite market, GBP / USD pair showed increased intra-day volatility and rallied to 1.3000. Moreover, no clear fundamental and informational excuse for this type of action has been discovered so far. Perhaps the market continues to close shorts after risks of hard Brexit somewhat eased. On the chart, the pair updated the recent highs around 1.2920, braking those levels on the move and gained to 1.3000. These are the two-month highs of the market and the last time when market visited this area was November 2018. Now support is located in the area of recent highs - this is zone 1.2890-1.2900. Resistance is located at 1.3000. After reaching these levels, the future market outlook does not look so clear. Immediate support 1.2900 seems infirm, but we see strong support in the area 1.2880.
Trading recommendations - longs in the area of 1.2900-1.2880
Gold - quotes fell to the lower boundary of the channel in European trading
The gold market was trading within the familiar range of 1286-1295 throughout the week, while in recent days, buyers were able to shift the balance above 1290. We viewed this price movement as a type of minor bull’s victory. However, no decisive action followed after that, as bulls failed to organize a test of the upper end of the mentioned range. In addition, according to the main rule of the market “If the market does not go up, it goes down” today in early European trading, we see a strong short movement and quotes decline to area $ 1285. We will see as Friday session goes on how strong will be this short squeeze. In general, we regard this price action as a positive sign, since a decline first to the area of 1285 and further to the area of 1280 will help to relieve the oversold market and attract more green volume at more attractive and safer levels. The closest support is located in area of 1280, where market is heading, and the next one is lower to the $ 1277 mark.
Trading recommendations - longs in the region of $ 1285, $ 1280, $ 1277
AUD / USD - the market retains uncertainty
High volatility and reduced trading activity makes this market difficult to analyze in current conditions. On Friday in the middle of European session, one thing is clear, this week the market failed to overcome the level 0.7200. Therefore, the market remained at the mid-term disposal of the sellers. However, since the current trend has a medium-term downward nature, then the dominance of sellers in this market is more fundamental. Despite all this, selling now is somewhat dangerous, and the market seem cannot decide on the direction. Longs are also not an option. It will be safer to stay out of the market and watch the situation.
Trading recommendations - out of the market
Thursday, 17 January 2019
Trading signals
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We enter the second half of the current week - events in the markets are developing somewhat quietly. The biggest event this week is left behind -Brexit vote in the British Parliament, and Theresa May is now working on her Plan B, which she outlined on Monday. The inflation rates in the Eurozone and the Philadelphia FED will be in market focus in the Thursday calendar. US dollar continues the moderate growth, but USD has displayed signs of overbought conditions, futures for US indices in the red zone in Asian trading.
EUR / USD - the market fell to the lower end of middle-term channel
Contrary to our expectations, on Wednesday European currency decline continued. FOREX market main pair dropped below 1.1400-1.1395, and this strong support zone was left behind. Today, on Thursday, the pair is trading around 1.1370. Now market is deep into strong area of support 1.1400-1.1350, and the lower the quotes falls, the more oversold the conditions become which make more chances for the market sharp upward pullback.
An additional support factor for Euro is that the lowest end of specified range is located in this area. This is a strong support factor. We cannot expect that the market will be able to update local lows and move lower breaking through the specified level; in addition selling at these levels is extremely dangerous. To sum up, the technical picture is somewhat in favor of quotes rebound from current levels up to the area of 1.1430-1.1460, which is a middle zone of the channel. We are still positive regarding the middle-term outlook for Euro and believe that current levels are good enough for longs.
Trading recommendations- longs at current levels, in zone 1.1370-1.1400
GBP / USD maintains a positive technical picture
After the volatile sessions of the weekly start, in the middle of the week the market decreased its activity and is traded in a narrow range. GBP quotes occupied the area around 1.2890, and spent two sessions around this mark. Strong support level is very close to the price rate, it is a zone of former long-term resistance around 1.2810-1.2760 area. No doubt, that British currency will restrain the volatility amid political factors, but the technical picture speaks in favor of continuing positive dynamics for this market. The resistance of this market is also quite close; it is an area of 1.2895-1.2920. We maintain cautious positive expectations for GBP short-term outlook.
Trading recommendations – longs when market pulls back lower to 1.2815
Gold bulls were able to consolidate above $1290 mark, which a positive sign
There were no strategic changes in this market during the last trading session. The market remains within the narrow sideway range $1285-$1295. However, yesterday there was a kind of tactical bull’s victory. An interesting and positive moment for the bulls was the fact that they were able to gain a foothold in the middle level of this tight range. That is, the balance median level $1290 located right in the middle of 1285-1295. So buyers were able to shift the point of balance volume up to this level, and now this mark is their closest support and they are ready to storm the upper end of this channel and test the strategic level $ 1,300. We continue to monitor the development of this interesting situation, but we believe that longs in this narrow range can be somewhat dangerous.
Trading recommendations - cautious longs in the area of 1290, 1285, 1277.
AUD / USD has rebounded from 0.7200 support
On Wednesday, technical situation on this market finally turned to the long-awaited development, as the Australian currency local upward impulse was reversed being weak and unstable. Australian currency pulled back from 0.7200 and adjusted to the area of 0.7145. In general, the situation in this market remains uncertain, volatile trading persists. Support is located close in 0.7145 area, but the middle-term market outlook is uncertain. As long as the Australian currency market is under 0.7200, sellers maintain control over the market.
Trading recommendations - out of the market
CAD / USD-new strong short volumes affected the market
Recent development in Canadian currency market is interesting. A couple of weeks ago, Canadian dollar reached a local high around 1.3660, that corresponds to the resistance line of a long-term uptrend. Followed correction has sent the market quotes lower to 1.3280, as a strong support level 1.3335 was broke on the move. Finally, this week, the market slowed down the drop and moved first to consolidation, and then to corrective growth. This provides the opportunity to join the corrective rally.
Recently, the market reached the level of 1.3310, after which the upward momentum was exhausted. Immediate support is located at 1.3270. However, the main support is located in the 1.3240 area. We can consider longs in the area 1.3240 with the target of 1.3310.
Trading recommendations - longs in the area of 1.3240
Wednesday, 16 January 2019
Trading signals
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After the loud Tresa May defeat on the Brexit vote in parliament, which is the worst defeat for the current UK government, there are many other uncertainties in the market, and these uncertainties have more fundamental and more extensive nature. The slowdown in economic growth in Germany, which means in Europe, the actual decline in exports and imports in China, all this creates risks for the American economy — in this sense, today's retail sales data will be in general market focus.
EUR / USD - a fundamental weakness sent quotes to the lows of 1.1395
On Tuesday trading session, European currency strengthened the decline. We put aside the fundamentally news that affected price action (the decline in European currency can be explained by weak data on German economic growth, and the increased uncertainty of Brexit, which also put pressure on the European currency) and as always focus on technical factors. Therefore, yesterday, in the course of a complex news background, quotes of the European currency broke through important support levels of 1.1460, 1.1430, and dropped to around 1.1400. Today, at Asian trading, the market is trading around 1.1395, and so far we can’t say that 1.1400 level is broken. We wrote earlier that, in our opinion, a break of 1.1400 would mark the market turns more bearish and play back the last upward impulse to area of 1.1570. How will events in this market proceed? Taking into account US currency weakness and the general fundamental background, we can expect the correctional growth of the market from these marks and the that area 1.1400-1.1395 proves to be firm. This level is the main market support in the current conditions, and we believe that a further decline in EUR / USD is unlikely.
Trading recommendations - longs in the area 1.1395
GBP / USD - despite the high volatility, the market consolidated above the level of 1.2800
Yesterday this market showed high volatility as expected. On Tuesday, British currency showed an intraday range of about 250 points (1.2670-1.2900). However, according to the results of the trading day, the market closed above support 1.2800. This is a significant sign for the market. Of course, we can expect that market volatility to continue today. No doubt that market will test 1.2800 level, but closing the market above the significant level on a strong negative background is a positive signal for the medium-term future of the British currency. Despite the negative news background and increased risks, we will take into account the technical picture of the market, which says that the market maintains positive sentiment and is trying to develop an upward movement. Support is now located in the area of recent resistance 1.2760-1.2800, and new resistance is the area of recent highs around 1.2925 (extension 23.6 Fibonacci).
Trading recommendations - cautious longs in the area of 1.2770-1.2800
Gold - consolidates around $ 1290
Gold continues to trade within a narrow range 1285-1295. Yesterday's GBP / USD volatility and the related strengthening of the dollar had no impact on the gold market. Moreover, the price has returned to the median level of this narrow channel - the mark $1290. This is a significant moment, and we can say that the market has accumulated enough volume for a possible exit from this consolidation. No much if any technical changes in the market did happen. We look forward to the development and see more longs opening.
Trading recommendations- longs in the $ 1285, $ 1280 and $ 1277 area
AUD / USD- no changes in the market
The market continues to consolidate below 0.7200 - this is a zone of resistance, where market lost its upward momentum. Quotes are moving to consolidation, and sideway dynamics prevail in a narrow range. The overall disposition of the market forces has not changed - the first support of the market is at around 0.7160. Resistance is located at 0.7200.
Trading recommendations - out of market
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