Thursday, 28 February 2019
USD/JPY, GBP/USD, EUR/USD
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EUR/USD
On Thursday, the EUR/USD pair is trading with a slight increase, winning back yesterday's losses. But the overall market situation remains very uncertain, so at any moment the growth wave may be replaced by a fall.
Against the background of uncertainty in trade relations between China and the U.S., and the lack of new drivers for the movement, investors can not decide on the further direction of the movement.
There is very little important statistical information published this week in Europe. Only preliminary data on GDP and inflation in France was presented today. This data matched the forecasts, so it did not have a significant impact on the trading.
The central event of the day should be the publication of interim data on the assessment of the U.S. GDP growth in the fourth quarter of 2018. Experts expect a decline in growth rates compared to the data demonstrated in the third quarter of last year from 3.4% to 2.6%. Accordingly, the data at the forecasted level or lower may exert significant pressure on the dollar, pushing the EUR / USD pair up.
Also, statements of FOMC representatives, Bostic, Kaplan and Harker, may have an impact on the dollar. Recently, investors have been studying very carefully the signals from the Federal Reserve representatives, assessing the possible directions of the monetary policy implementation.
The chart shows a bearish correction after testing the resistance at 1.1400. Locally, the currency pair found support just above the level of 1.1360, but a stronger support range is located between 1.1340-1.1350. Therefore, in the first half of the day we expect a developing of the bearish trend with the above mentioned targets, where a reversal formation can be formed. In the medium term, the growth of quotations remains a more likely scenario.
Our recommendations: buy from 1.1350
GBP/USD
After four days of almost constant growth, the currency pair GBP/USD on Thursday consolidates around the 1.3300 level.
Investors have fully played the Brexit news, which were published earlier this week. At the maximum values of more than 7 months of trading, investors are now partially fixing their long positions, which is the main reason for the development of the corrective movement.
The main driver of growth were reports that both the UK and EU have almost ruled out the possibility of uncontrolled Brexit. In addition, British Prime Minister Teresa May did not rule out the possibility of postponing Brexit to a later date. Now the market considers this scenario as the most likely. According to Deutsche Welle, Berlin and Paris are in favor of postponing Brexit - a joint statement on these results of the meeting was made in the French capital.
Today this situation received comments by the Prime Minister of Ireland L. Varadkar. According to him, the Brexit date may be postponed from March 29 to June or July. These statements have become another confirmation that the option of postponing the Brexit date is now considered as the main by senior officials in the EU and the UK alike.
The chart still shows a clear structure of the upward price channel, which indicates the continuation of bullish dynamics of the movement. On the other hand, the price has now reached a very strong resistance area above 1.3300. The probability of the corrective wave development from these levels is very high, so as long as the quotes are kept below 1.3300 the scenario of the corrective wave to 1.3200 development will remain the most likely.
Our recommendations: sale from 1.3300.
USD/JPY
The volatility of USD/JPY has increased significantly in recent days. This may be due to the large number of important geopolitical news in the market, which have a very strong impact on the exchanges and, respectively, the USD/JPY pair.
Today, the currency pair is correctively declining after a very strong growth the day before. The reason for the development of the correction wave is the weak statistics published today in China. The presented data showed that the economic activity of production and non-production sectors of the economy continues to decline, which reinforces investors' fears about the slowdown in the growth rate of the Chinese economy. The stock markets immediately reacted to the publication of this data and now the main world indices continue to be traded in the red zone. Demand for the yen is growing, putting pressure on the pair USD/JPY.
Today the monetary policy was commented by one of the representatives of the Central Bank, Suzuki. He noted that the regulator intends to continue conducting a fairly soft monetary policy to achieve the target inflation rate of 2%. At the same time, he sees no reason for its further softening.
On the chart, despite the growth of volatility, there is still a predominantly horizontal direction of movement. The range of trading can be indicated by levels 110.40-111.10. Accordingly, all trade decisions are best made near the boundaries of this range. Since the chart continues to develop sideways, one should open positions inside the price channel.
Our recommendations: buy from 110.40 and sell from 111.10.
GOLD
On Wednesday, gold lost in price a little more than 0.5% against the strengthening dollar, the index of which ended the trading day with an increase of 0.15%.
The US dollar began to strengthen after Fed Chairman Jerome Powell, speaking in Congress, announced that a plan would soon be announced to complete the balance reduction process. The balance now contains about 4 trillion dollars assets. Gold always reacts very painfully to changes in the dollar exchange rate, since it is the American currency that is always used to nominate the price of gold. As a result, the yellow metal was under pressure.
But today the market situation may change due to the influence of a whole series of important geopolitical and economic factors. First, weak data on business activity in the manufacturing and non-manufacturing sectors of the Chinese economy was published this morning. The stock market immediately reacted with decline, that always provokes a growth in demand for safer assets such as gold and yen.
Secondly, the market continues to receive quite positive news about the course of trade negotiations between the United States and China. In particular, last night, the White House trade representative, Robert Lightheiser, announced that the United States so far refused to threaten to increase duties on March 1 from 10% to 25%. Investors see this as a signal of an early agreement between the parties, which can put a lot of pressure on the dollar, which was previously considered as the main protective asset against trading risks.
Third, interim data on US GDP for the fourth quarter of 2018, which are delayed due to the suspension of government work at the beginning of this year, may become another factor of pressure on the US currency today. Experts predict the release of weaker data, and the dollar can respond with a decline.
The bear correction is actively developing on the chart. Yesterday, the price pushed through an important intermediate support level of 1325.00, opening up new opportunities to reduce quotes. Now the price is supported by the level of 1320.00, but since we do not see a strong price reaction to this mark, we can very likely expect a continuation of the bearish movement with targets in the range of 1315.00-1317.00, where reversal signals can be formed.
Resistance Levels: 1325.00, 1335.00, 1340.00;
The levels of support: 1320.00, 1315.00, 1310.00.
The main scenario - a decline in the range 1315.00-1317.00
Alternative scenario - consolidation above 1320.00 and growth to 1330.00
The news background on the market can now be described as neutral, but the downward trend locally dominates on the chart. For this reason, preference in trading in the first half of the day should be given to the short positions that can be searched for from the level 1323.50
Wednesday, 27 February 2019
Tuesday, 26 February 2019
USD / JPY, GBP / USD,EUR / USD
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EUR / USD
On Tuesday, the EUR / USD currency pair continues to trade in a narrow range amid the absence of important economic news on the market, which could serve as a driver for a trend movement.
In the economic calendar of Europe today there are no important economic data, so the main influence on trading will probably be provided by news from the UK, where another Brexit vote should take place today. The European economy remains very vulnerable due to the influence of external factors, so the bad news from the UK can greatly weaken investor interest in euro.
The dollar is now also under pressure. The dollar index is sensitive to reports about possible breakthrough in trade negotiations between China and the United States. For many months, the dollar has acted as a major asset for many investors to protect against trade risks, and now, amid a warming of relations between the two countries, the US currency is under pressure.
Another deterrent for investors is the Fed policy, which has undergone major changes in recent months. From statements about maintaining high pace of interest rate increase, the Fed has moved to softer rhetoric, and took a pause to assess the state of the economy and the degree of influence on non-external negative factors. Today, the Fed chairman will submit a semi-annual report on the activities of the regulator to the US Senate Banking Committee. Powell's comments can have a very strong impact on all world markets, so on the eve of such an important event, investors are very passive and not in a hurry with purchases of the American currency. The soft rhetoric of the Fed chief can seriously weaken the dollar.
On the chart, the range 1.1320-1.1360 continues. Accordingly, until we see the price fixing behind one of the borders of the range, you should not count on the formation of a directional trend movement. Taking into account the current situation in recent days, the scenario with the exit of prices from the sideways upwards is still a priority. The breakdown of the level of 1.1360 will make the next target for growth the level of 1.1400, and in the future 1.1500. But if the sellers manage to push the support at 1.1320 to the fore, the southern version of the movement will be released with the target at 1.1200.
Our recommendations: longs from 1.1340
GBP / USD
The pair GBP / USD shows growth with the background of reports of a possible Brexit postponement. HSBC analysts report that if the parliament does not approve the May project on Brexit tomorrow, an informal vote may be taken to determine the further action plan and here a greater number of parliamentarians support the Brexit deferred scenario.
Also, the increase in the pound was facilitated by reports on the Labor Party’s support of the scenario with a re-run of the Brexit vote. The party leader Jeremy Cobrin informed. Corbin is expected today to submit an appropriate amendment to parliament. But most experts still believe that the likelihood of such events remains very low. Most representatives of the parliamentary do not support this initiative and are unlikely to approve these amendments.
In addition to important domestic political news, investors today will closely monitor the presentation of the inflation report and comments on this topic from the head of the Bank of England, Carney.
On the chart, the pound shows a tendency to grow and is now trying to gain a foothold above 1.3150. This is a good signal in favor of the further development of the bullish scenario with a new short-term target at the level of 1.3200. This scenario is now seen as the most likely to be implemented. The option with a decrease in quotations will again become relevant after fixing the currency pair under local support at 1.3140.
Our recommendations: longs from 1.3140
USD / JPY
The pair USD / JPY yesterday managed to get out of the outset 110.60-110.90 due to a decrease in demand for defensive assets, which include the Japanese yen. But today, sellers managed to win back a large part of yesterday’s losses, thanks to the exacerbation of the geopolitical situation and increased uncertainty on the market, that increases interest in the yen as usually.
Yesterday, positive expectations remained on the market regarding the successful completion of trade negotiations between the United States and China. Optimism to investors added Trump's Sunday tweet, on the possible postponement of the introduction of higher duties on Chinese goods. Having this background, stock indexes showed growth, which always reduces the demand for yen, which is one of the main funding currencies on world markets.
But later, Trump quickly won back the situation and stopped all speculations on this topic. The deal between the US and China may not take place. Immediately stock markets went from growth to decline. Spoiled investors' appetite for risk also the escalating military conflict between India and Pakistan. Accordingly, now the main global indices are trading in the red zone, which contributes to the strengthening of the yen and other protective assets.
In addition to geopolitical news, the spotlight today will be Jerome Powell’s report to the Senate Banking Committee, which could have a very strong impact on the USD / JPY pair.
The chart demonstrate uncertainty. On the one hand, the price exited from the range 110.60-110.90, which is a signal of the continuation of the local bull trend. On the other hand, a reversal signal “false breakdown” of the level of 111.10 was subsequently formed, which held back the price increase. Accordingly, in this scenario, we can expect the development of a range movements with the immediate target at 110.60.
Our recommendations: stay off the market
Monday, 25 February 2019
EUR / USD
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The EUR / USD pair cannot determine the trend and spent the last three trading days in a narrow price channel, with borders at levels 1.1320-1.1360.
The main reason for the formation of the channel is the fact that now both currencies are under some pressure after the publication of internal statistics, as well as the influence of other factors.
In Europe, the focus of investors is on German data. Statistics of recent months shows a significant slowdown in the growth rate of the main economy of the European Union, which can have a strong negative impact on the situation in the EU as a whole. This morning, German Finance Minister O. Stolz said that the country's economy is still moving in an uptrend, even though in the near future growth rates will be much lower than in similar periods of previous years. At the same time, among the main risks for the German economy, Stolz noted the Brexit problem.
The dollar is mainly influenced by the uncertainty associated with the US-China trade negotiations, which continue in Washington, as well as domestic statistics, which indirectly indicate a possible slowdown in US economic activity. Although the Fed's notes published last week showed that the regulator's policy in 2019 may be tougher than investors had expected earlier.
During the week it is the internal statistics data that will have the main influence on the further price vector.
On Monday, no major events in the United States and Europe are expected.
On Tuesday, the speech of the British Prime Minister Theresa May could have a strong influence on the currency trading (the exact time of the speech is still unknown). On the same day, a report on the construction sector and an index of consumer confidence will be presented in the United States, and at 18:00 Moscow time, Jerome Powell will speak to the US Senate Banking Committee.
The presentations of the ECB representative Kere and the head of the Bundesbank Weidmann should take place on Wednesday. In the US, there will be much more important news. At 1:15 pm London time, employment data from ADP will be presented. Later, a report on production orders and pending sales in the real estate market. And on the same day there will be another speech by the Fed Chairman in the relevant committee of the US Congress.
On Thursday in Europe, in focus will be preliminary data on the consumer price index in selected EU countries. In the US, among the most significant events are the speeches of the FOMC members Bostic, Harker and Kaplan and the publication of a report on GDP growth for the fourth quarter of 2018.
On Friday, a large block of statistics will be presented in both Europe and the USA. In the first half of the day, the report on the German labor market, data on the PMI of the services sector in this country and in the EU as a whole, the report on the EU labor market and preliminary data on inflation in the region will have an impact on trading. In the US, you should pay attention to the report on expenditures and incomes of individuals, as well as the index of business activity of the manufacturing sector from ISM.
On the graph, the situation in recent days has minimum changes. At higher time intervals, the bearish trend with the immediate ефкпуе at the level of 1.1200 remains dominant. At lower intervals, a side movement develops with borders at levels 1.1320-1.1360. At the same time, in recent days, the structure of the side movement has been significantly changed and now the scenario with the release of the currency pair from consolidation upwards is more likely.
Resistance Levels: 1.1360, 1.1400, 1.1450.
Levels of support: 1.1320, 1.1260, 1.1200.
The main scenario - growth to 1.1400
Alternative scenario - consolidation below 1.1320 and decline to 1.1260.
The general background in the market remains neutral, but there are prerequisites for the resumption of upward movement within current framework. Therefore, intraday preference should be given to buying the from the intermediate support levels of 1.1320 and 1.1340.
Thursday, 21 February 2019
Gold
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technical analysis
On Wednesday, gold tried to continue its upward movement, but at the end of the day, buyers lost all their advantages and as a result, the trading was finished in a slightly negative zone. The main factor of pressure on the yellow metal was the US dollar, which, after the publication of the FOMC meeting minutes, strengthened to all major world currencies. At the same time, protocols did little to surprise the market. The meeting participants signaled the suspension of the rate hike cycle until the situation with the impact of negative external and internal factors on the US economy will be clarified. Probably, some investors found positive information that the meeting also expressed an opinion on the possible resumption of the rate increase process in 2019 if the economic indicators meet the necessary requirements and forecasts of the Fed.
Also this week investors will monitor the trade negotiations between the US and China. Today, ministerial-level officials must join the negotiation process, and many investors still hope that the parties will be able to make progress. One of the signs of successful progress of the negotiation is Trump’s rather positive comments, which do not exclude the possibility of extending the terms of the truce after March 1.
In the United States itself, one of the main topics for discussion remains the confrontation between Congress and Donald Trump. While currently investors are quietly watching what is going on, if the aggravation of domestic political struggle will continue the market reaction can be very strong. Trump intends to declare a state of emergency in the country to attract additional funds to finance the construction of the wall on the border with Mexico. Today, Speaker of the House of Representatives Nancy Pelosi said that lawmakers will quickly respond to these actions and adopt a resolution to block the presidential decree.
Today is one of the most active days of this week in terms of publishing important statistical information. Investors will monitor preliminary PMI data for manufacturing and services sectors in Europe and the USA. Also today, the minutes from the last meeting of the ECB will be made public, and in the US statistics on sales in the secondary housing market, basic orders for durable goods and indices from the Federal Reserve Bank of Philadelphia will be presented.
On the chart, we see that the price has met serious resistance at the level of 1350.00. Now a downward correction is developing from this mark, which can be continued as the nearest strong support for the price is only at the level of 1325.00. In the longer term, the yellow metal retains good opportunities for continued growth with a new target at the level of 1370.00, but this scenario can only be considered after the price fixes above 1350.00. Now we are waiting for correctional movement.
Resistance Levels: 1350.00, 1355.00, 1360.00;
Support levels: 1340.00, 1325.00, 1315.00.
The main scenario - a decline to 1325.00
Alternative scenario - consolidation above 1350.00 and growth to 1360.00
On the graph, signals indicating the development of a correction wave are amplified. This scenario is now supported by signals of fundamental analysis. Therefore, today we give preference to short positions that can be initiated near the level of 1345.00.
Wednesday, 20 February 2019
Tuesday, 19 February 2019
EUR / USD
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On Monday, due to the absence of important economic information on the market, as well as reduced trading volatility, due to the US stock exchanges were closed, the European currency was able to slightly strengthen its position against the dollar. But this morning, sellers restored the status quo due to the strengthening of the dollar against all G7 currencies in Asian trading.
The EUR / USD pair remains very much dependent on the behavior of the dollar, since the European currency is now virtually devoid of support factors and with all other factors being equal, can only move down. Increasing economic difficulties, domestic political problems, the risks associated with Brexit and possible trade restrictions from the United States, seriously reduce the euro's ability to develop corrective upwards movements.
In the current situation, the only support factor for the EUR / USD pair could be the weakness of the US currency, which is now becoming vulnerable, amid growing pressure from domestic economic and political factors, as well as the influence of geopolitical news. The statistics published last week, unexpectedly for many, turned out to be much weaker than forecast expectations, which led to an active discussion of a possible slowdown in US economic growth. Another blow to the dollar was the US-Chinese trade negotiations that ended on Friday. Both sides positively assessed the outcome of the meeting, and Trump hinted at the possibility of extending a trade truce before concluding a bilateral agreement between the countries. As a result, the dollar has lost a significant number of investors who previously viewed it as a protective asset against trading risks. The internal political situation in the United States remains difficult. The repetition of government shutdown was avoided, but the confrontation between Trump and Congress continues.
Today, the dollar remains the focus of investors' attention, especially in the light of the fact that large investors are returning to the market from the US after a long weekend. Today at the beginning of the European trading session we must watch the economic statistics from Germany, where the ZEW institute should publish indices of current economic conditions and economic sentiment.
On the graph for the day the overall picture has not changed dramatically. At higher time intervals, the downward trend remains dominant, within which we can expect the update of the local minimum at 1.1200. At lower time intervals, a correctional movement is developing, which today can continue in the direction of the 1.1350 level, where reversal in the direction of the global down trend can resume.
Resistance Levels: 1.1315, 1.1350, 1.1400.
Levels of support: 1.1250, 1.1200, 1.1170.
The main scenario - growth to 1.1350.
Alternative scenario - consolidation below 1.1300 and decrease to 1.1250
In the medium term, the downward movement remains a priority, but short-term on the chart there are prerequisites for the continuation of the upward correction. The pressure of fundamental factors on the currency pair has also weakened, so short-term long positions can now be quite relevant. Entry points can be found already near 1.1300.
Monday, 18 February 2019
EUR/USD
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fundamental review
The trading week for the EUR / USD pair was very hard. Several times, the single European currency was close to updating the trade lows for 2018, but due to a series of weak economic reports from the US, as well as positive news from Beijing and Washington, buyers managed to keep the price above the level of 1.12.
The main problems of the European currency are still associated with the weakening of the region's economy. The latest statistics show that the main trend is still negative, which also leads to aggravation of internal political problems. Additional pressure on the currency pair is being caused by the risks associated with Brexit, since in case of an uncontrolled British exit from the EU, serious economic problems can be inflicted on the key countries of the region - France and Germany. Last week, research data were cited, which showed that in case of a “tough” Brexit, up to 100,000 jobs could be under threat in Germany, and in France there would be half as many. The topic of the possible introduction of increased duties on European cars by the United States is being actively discussed now. These prospects do not add optimism for the investors. These restrictive measures will primarily hit the main economy of the EU - Germany, which is now not in the best condition and in the fourth quarter of 2018 showed a 0.0% growth in GDP.
For the dollar, the main blow last week was the data of internal statistics, which unexpectedly turned out to be significantly lower than anticipated. In addition the positive results of the next round of negotiations between Beijing and Washington reduce the interest in the dollar as a protective asset against trading risks.
Next week, investors will carefully study the new statistical information from Europe, trying to assess the real situation in the EU. For the dollar, the main topics of the week will continue to be the US and Chinese negotiations, domestic statistics and the Fed policy.
On Monday there is a celebration of President’s Day in USA. All financial markets of the country will be closed, which adversely affects the volatility and liquidity of the markets.
On Tuesday, US traders will return on the market again, but the focus of investors will mainly be on news from Europe, where the ZEW Institute will publish its indices for Germany. Also the same day the speech of the ECB member Prath is scheduled.
The main event of Wednesday should be the publication of the minutes of the January FOMC meeting.
On Thursday, a large block of economic statistics will be released from the USA and Europe. The EU will present preliminary data on PMI production and services sectors. The minutes of the last ECB meeting will also be published.
In the United States, on this day, will be released data of preliminary PMI for the manufacturing and service sectors, orders for durable goods, data on the secondary housing market and other less important economic data.
On Friday, investors will focus on fourth-quarter GDP data in Germany, the IFO business climate index for Germany, updated inflation data in the EU, and Mario Draghi's speech at the event in Bologna.
The same day in the United States the forum dedicated to the monetary policy of the Fed will take place. Some heads of the Federal Reserve Bank will speak.
On the chart, despite the local correction, the situation for the EUR / USD pair remains very difficult. At lower time intervals, a bearish trend is clearly dominant, indicating a likely downward continuation. On the daily chart, we also notice the presence of signals in favor of the development of a downward movement and a high probability of updating the local minimum at 1.1200. Therefore, correctional growth is seen as a good opportunity to increase short positions.
Resistance Levels: 1.1315, 1.1350, 1.1400.
Levels of support: 1.1290, 1.1260, 1.1200.
The main scenario is the building of a reversal formation in the range 1.1315-1.1330.
An alternative scenario - fixing prices above 1.1315 and the continuation of corrective growth.
The chart is dominated by bearish signals. The fundamental background also remains negative. Therefore, preference is given to short positions that can be opened already at the level of 1.1315.
FortFS
Friday, 15 February 2019
Trading signals
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We are at the end of the week at Friday's trading session and are looking at the FX performance. USD dollar is the complete champion of the week. New Zealand dollar rose by about 1.25% from Monday, while the pound is at the other end of the spectrum, declining by about 1.% over the week. Retail sales in the UK, trading in the Eurozone and US manufacturing are some of today's data.
EUR / USD
The European currency is consolidating in a narrow range under the mark 1.1300. Support is now in the range 1.1265, resistance, respectively, 1.1300. Taking into account Friday's trading, we can see some profit-taking and the return of quotes above 1.1300. if confirmed that will be a positive sign for the more solid corrective growth of the market next week.
Trading recommendations - longs in area of 1.1265
GBP / USD
The pound shows weak pullback attempts, but the pressure in this market persists. The former support level 1.2840, which supported quotes for three days, turned out to be a strong resistance zone for the market. We can try to open shorts from this mark.
Trading recommendations - sales from 1.2830
Gold
An interesting pattern has emerged- double-bottom configuration has formed on the chart. We can see the breakdown of the local resistance around 1315 and the test of recent highs (1325) today. With the consolidation above 1315 we can add longs.
Trading recommendations - purchases
Dollar index
The dollar index marked annual highs in the area 97.10 and then entrenched above the support of 96.85. Today is a very important day, if sellers are unable to close the week below this mark, then we can confidently expect 2018 dollar highs update, which are in the 97.50 area.
Trading recommendations - out of market
FortFS
Thursday, 14 February 2019
FOREX market trading signals
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Looks like market did not have time to assess China positive trade data, since the most of market focus concentrates on the political background and news from China-US trade talks. Technically speaking, we are at a critical point in the market when the euro fluctuates just above the 2018 low against the US dollar. The dollar is attempting to continue the growth but the stress that the markets experience, makes it necessary to remain cautious and watch the development of the situation with all positions closed.
EUR / USD - weak data and Spain crisis did not leave euro bulls a chance
The market continues to decline, Monday lows were updated yesterday, quotes returned below the mark 1.1300. Now the strategic support level is located around 1.1215. However, the market is heavily oversold and looks like a compressed spring. It is extremely dangerous to open shorts in such conditions. Now events in the market can develop quickly, as today volatility will be extremely high. This type of market it not the best for opening any positions. It seems that the sellers activated most of the stop orders located around 1.1265-1.1300 zone. Let's see how events will develop today.
Trading recommendations - out of market
GBP / USD - market support in area 1.2800-1.2830
The decline in the British currency continues today. The market is assaulting an important support level around 1.2845-1.2800. Breakthrough and consolidation under this mark will send market quotes to the 2018 minimum -1.2480.
Trading recommendations - sales if the market passes the area 1.2800
Gold - received a signal for a test of 1300-1296 zone
The shadow of last daily candle from the mark of 1317 is a alarming signal. The pressure on gold now comes from two sides - a rally in equities markets and a gaining USD dollar. Nevertheless, the zone 1296-1300 is still in the center of bull’s attention.
Trading recommendations- purchases 1296-1300
US dollar index - more USD gains
As we thought, we observed only a correction, on Wednesday the market recovered all losses and continues to grow today. We were alarmed by the fact that on Tuesday that the market had not updated Monday lows. However, in the coming days we will see a rich information background, both in terms of statistics and in terms of geopolitical news. Market volatility may rise again and the dollar will be in the spotlight. The market is overbought, and if buyers do not have enough strength today to show new highs, we will see a fixed profit for the dollar and another correctional pullback by weekend.
Trading recommendations - out of the market
Wednesday, 13 February 2019
FOREX MARKET TRADING SIGNALS
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Yesterday market event finally took the expected turn the one we were talking about for entire week. USD dollar got mercy and produced a sign of weakness. Now it is much more interesting to analyze the markets and look into the future moves. No matter how strong USD bulls are they cannot drug the market higher without any break. Over the past few months, euro pullbacks against the US dollar have been a constant phenomenon. Only in the last three months, we have observed four large-scale EUR / USD pullbacks from a significant market zone 1.1260-1.13000. The market likes such scripts and focus on them, the market generally loves chart history, and has the ability to act on the script. Tuesday's bullish reversal set the stage for another bounce after the single currency broke through Monday's high, completing a sequence of seven consecutive days in the red.
EUR / USD - bulls seized the initiative
The first half of February, EUR / USD showed a stable decline, after reaching the level around remarkable high 1.1515 at the end of January. We have expected at least technical pullback after the market broke through 1.1355. However, the market dipped to area 1.1265-1.1300- impressive six red days. This is the zone of base support level for middle-term sideway range. Yesterday, the sellers were finally stopped and forced to take profits, but what is more important is that the market updated Monday highs. It is a good sign for Euro bulls. Now market events can develop quickly, although local support is located in area 1.1315, the real demand area is somewhat lower 1.1300. The resistance that bulls need to overcome in order to confirm their willingness to control the market in the short term is area 1.1345-1.1355.
Trading recommendations – longs in area 1.1315, 1.1300
GBP / USD - market support in the area of 1.2840-1.2845
Amid American currency adjustment, British pound received some support bouncing off from the level of 1.2840. However, in recent days, the British currency has shifted to a new range, 1.2940-1.2830. And most likely the market will continue to consolidate in this range. Given Brexit risks , it is unlikely that the GBP / USD market will be able to return above 1.2930 in the nearest trading session. However, longs in case of pullbacks to the zone 1.2840 should be used to open longs.
Trading recommendations- longs in area 1.2840
Gold accumulates market volume, longs are still relevant
No significant changes in the market happened despite the strong weakening of the US dollar. It is interesting that in recent weeks, gold acted mostly independent from USD dollar, although the dollar was and is a strategic influence factor for the dollar. At the same time, locally, gold continues to accumulate volume, which will serve as a basis for the market to grow to the region of the nearest local maximum, $ 1323- $ 1325th zone
Trading recommendations longs in the current market area 1305-1310
US dollar index - the long-awaited correctional pullback
Yesterday, the dollar finally realized the correctional pullback that was expected by entire market community as overbought conditions were evident. USD dollar index updated its annual highs in the area of 96.85 points and then moved to a decline. At the same time, the fact that the market did not refresh Monday lows is alarming, since this fact should be regarded in favor of just a profit-taking, rather than a market reversal. However, in the coming days we will see a rich information background, both in terms of statistics and in terms of geopolitical news. Market volatility may gain and the dollar will be in the spotlight. Closest support for the market - 96.40 points zone, resistance is located around 96.64. Stay out of the market and watch these two levels.
Trading recommendations - out of the market
Oil - the market is ready for a powerful soar
An interesting technical situation is emerging on the Brent oil market. The market has been in narrow consolidation for five weeks. Many times Brent approached the resistance level (zone 63.40-63.65) but with no results, while the market did not have enough strength for a decisive assault. In recent days, the technical configuration in this market has changed, the bulls have accumulated enough volume to storm this resistance. We expect a fairly strong breakthrough of this market, at least in the $ 67 zone in case more USD dollar weakness.
Trading recommendations – go longs at current levels
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