Thursday, 17 January 2019
Trading signals
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trading signals
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
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