Wednesday, 16 January 2019
Trading signals
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trading signals
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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