Monday, 21 January 2019

FOREX market trading signals

Posted by Anonymous at 13:45 Labels:
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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