Friday, 18 January 2019
Trading signals
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trading signals
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
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