GBP/JPY is expected to trade in a lower range. It is undermined by the soft EUR/USD undertone, diminished investor risk appetite and Japan's exports. But the EUR/JPY losses are tempered by demand from the Japanese importers.
The daily chart is mixed as the MACD is bullish, stochastics is turning bullish at oversold levels, but five-day moving average is below 15-day moving average and is declining.
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below the pivot point. Short positions are recommended with the first target at 182.50. A break of that target will move the pair further downwards to 182.10. The pivot point stands at 184.15. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, a long position is recommended with the first target at 184.40 and the second target at 184.75.
On the daily chart we can see that the nearest target in the downside road is still located at the support level of 1.5247, because the GBP/USD pair continues to be bearish. The strong rejection by the resistance level of 1.5491 is a clear indication of weakness that this pair is currently having and maybe it is a new start of the general bearish bias, which could be confirmed with a consolidation below the level of 1.5050.
The bearish structure is more clear when we look at the H1 chart, as the GBP/USD pair is being consolidated below the 200 SMA. The fractals formed above the current levels of this pair could be a confirmation of a new short-term bearish trend that GBP/USD is currently riding and, for now, we would expect more falls.
Trading recommendations for today: Based on the H1 chart, place short (sell) orders only if the GBP/USD pair breaks a bearish candlestick; the support level is at 1.5340, take profit is at 1.5257, and stop loss is at 1.5423.
Since then, the GBP/USD pair has been trending upwards. Persistence of the pair above the recent DAILY support (the price zone of 1.5170-1.5200) put extensive bullish pressure on the price level of 1.5300-1.5360 (significant Fibonacci levels on the H4 chart), which did not provide enough RESISTANCE. Now these price levels are acting as temporary SUPPORT.
The GBP/USD pair has been moving upwards within the short-term bullish channel depicted on the daily chart until Monday, when the DAILY breakdown of the channel's lower limit took place, thus indicating an upcoming bearish swing initially towards 1.5280.
Risky traders can wait for DAILY fixation below 1.5350 to take a short-term SELL entry with TP at 1.5250 and 1.5200.
Note that successive lower highs are being established within the wedge-pattern depicted on the DAILY chart.
On the other hand, the bullish persistence above 1.2300 (79.6% Fibonacci level) enhances further bullish advancement towards 1.2760-1.2780 without further retesting of 1.2000 (low probability in the current overbought state of the market).
Traders should wait for a DAILY closure below 1.2300 for SHORTING the USD/CAD pair.
TP levels should be set at 1.2250 and 1.2190.
The EUR/USD pair has lost almost 900 pips since the beginning of 2015.
A bearish breakout below 1.2000 and 1.1900 (prominent psychological SUPPORT) allowed a quick bearish decline towards 1.1100 to take place few days later.
Conservative traders were suggested to wait for a bullish pullback looking for better prices to SELL the EUR/USD pair off (R1 at 1.1550 and R2 at 1.1700). However, the market did not show enough bullish momentum to reach these levels.
A bearish Flag pattern was established on the daily chart. DAILY fixation below the price level of 1.1260 (recent bottom) confirmed that bearish pattern.
Risky traders could wait for a bullish pullback towards the price level of 1.1260 (recent SUPPLY level) to SHORT the EUR/USD pair at retesting.
Price action should be watched carefully around 1.1110 (weekly low) in order to determine the next destination of the pair.
In case of bearish breakdown of 1.1100, estimated long-term projection targets for the flag pattern would be located around 1.0800 and 1.0500.
A bearish breakout below 1.5550 directly exposed lower targets. Bears have already pushed towards the price levels of 1.5050 and 1.4960, which have not been visited since July 2013.
Estimated projection targets are located around 1.5600-1.5640 where the previous consolidation zone was located. However, earlier, bears had put significant pressure around 1.5550 resulting in the formation of multiple bearish engulfing daily candlesticks without further retesting of 1.5600.
Two weeks ago, the GBP/USD pair consolidated above the price zone of 1.5360 (61.8% Fibonacci level), which failed to provide enough RESISTANCE over the last bullish swing.
For the current bullish breakout to persist, bulls should keep defending the price zone of 1.5300-1.5330 that is likely to be tested today.
Estimated projection targets for the recent bullish breakout are roughly located around 1.5600-1.5640, which have not been tested yet. Moreover, a recent Head and Shoulders pattern is being established as depicted on the chart.
On the other hand, the price action should be seen around the price zone of 1.5350-1.5300 ( Intraday DEMAND level ) to determine the next destination of the GBP/USD pair.
Bearish breakdown of 1.5300 should not be excluded, especially after the obvious bearish engulfing candlestick that occurred on Monday. If so, a quick bearish decline towards 1.5200 would be expected.
In our last analysis EUR/NZD was trading downwards. The price has tested the level of 1.4644 (fresh low) in a very high volume. The major support level at the price of 1.4790 is broken, but we still need to see a daily-weekly close to confirm valid break. Anyway, I have placed Fibonacci expansion to find next support level and have got Fibonacci expansion 161.8% at the price of 1.4500. Selling EUR/NZD at this stage still looks very risky since we may expect reaction from buyers. Any larger reaction from our support levels may confirm a further bullish phase.
Since our last analysis, gold has been trading sideways around the price of $1,205.00. Our Fibonacci retracement 61.8% at the price of $1,202.00 is on the test. According to the 4H time frame, we can observe low volatility. My advice is to watch for potential buying opportunities. We have a resistance level around the price of $1,235.00 (Fibonacci retracement 38.2%). According to the daily time frame, we have a weak supply bar in a volume below the average.
The USDX is currently performing a bullish breakout at the resistance level of 95.45 on the daily chart. The instrument could be looking to the upside target at the level of 96.96. The current move is taking place after the higher high pattern formation below the resistance zone mentioned. It should be noticed that during the current bullish bias the USDX could form another bullish pattern.
After moving sideways on the H1 chart during three sessions, the USDX made a breakout at the level of 95.52. Now, the instrument is looking to reach the short-term target located at the resistance level of 96.08. If the USDX makes a breakout at that level, it would be expected to reach a new important high at the zone of 96.85.
Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the USD Index breaks with a bullish candlestick; the resistance level is at 96.08, take profit is at 96.85, and stop loss is at 95.31.
The Dollar index remains in a bullish trend after a triangle break out. It is only a matter of time before the index will make new highs and accelerate upwards. A long-term target is at 100-101.
The Dollar index is making higher highs and higher lows. Support is at 94.80 and resistance is at 95.55. I believe we are going to see new highs soon, and the upward move will expand towards 97 for the short term.
The Dollar index is now testing the 50% retracement on the monthly chart as shown above. I believe, we will break above 96 and eventually reach the 61.8% retracement at 100-101 over the coming weeks. I remain bullish.
The gold price continues to trade above the support at $1,200. However, there is no clear sign of strength that could push the price above $1,225. A short-term trend is neutral. As long as the price is above $1,190-$1,200, bulls have hope for a bigger bounce towards $1,250.
Now, the Ichimoku cloud is back above the Gold price again. Gold has not managed to reach the 38% retracement of the decline, but I still believe that it may hit that level. The short-term support is at $1,200 and the short-term resistance is at $1,213.
The weekly chart is not good for bulls as the rejection at the kijun-sen (yellow line) is a bearish sign. Support is found at $1,190. If broken bears are in control, we could see a sharp move downwards towards $1,130.
The market of the GBP/USD pair showed the signs of instability. The trend movement was debatable as it took place in the narrow sideways channel. Due to the previous events, the price is still between the levels of 1.5328 and 1.5440, so it is recommended to be careful while making deals in this area. Therefore, it is necessary to wait until the sideways channel is passed through. Then the market will probably show the signs of a bullish trend. In other words, buy deals are recommended above 1.5330 with their first target at the level of 1.5390. From this point, the pair is likely to begin an ascending movement to the point of 1.5412 and further to the level of 1.5440 (it will act as a strong resistance for this week because it is representing the weekly pivot point). However, if the pair fails to pass through the level of 1.5440, the market will indicate a bearish opportunity below the strong resistance level of 1.5440. In this regard, sell deals are recommended lower than the level of 1.5440 with the first target at 1.5387. It is possible that the pair will turn downwards continuing the development of the bearish trend to the level 1.5328 then 1.5328 in order to test the double bottom and the support 1 on the H1 chart. It should be noted that the weekly resistance 1 is at the level of 1.5328 and the double bottom is already placed at the point of 1.5332.
The double bottom of EUR/USD is likely to set at the level of 1.1154 and supports are going to be set at the 1.1150/1.1160 levels. It should be noted that the last range was very small, around 55 pips only. Today, we expect the range of 80-110 pips. Moreover, the price has not hit support 1 nor the weekly pivot point this week. So, according to past events, the market is likely to move between the levels of 1.1150 and 1.1255; because the major support is going to be set at 1.1150; and the resistance had been already set at the level of 1.1255 (the weekly pivot point). Also, it should be noted that the price of 1.1255 represents the double top in the H1 chart. Therefore, it will be very useful to buy above the price of 1.1150 in the short term with the first target at 1.1197. Additionally, if the trend is able to break the first target at 1.1197, then it might resume towards the price of 1.1255.
EUR/USD: This pair is still bearish in outlook, not yet able to go upwards significantly, following the strong bearish run that happened at the end of the last week. As long as the pair is weak, USD/CHF (which normally gets negatively correlated to the EUR/USD pair) would not be able to go downwards. The price is currently between the support line at 1.1150 and the resistance line at 1.1200. The support line may be breached to the downside but the price may not be able to close below it, because the outlook on the EUR is upbeat.
USD/CHF: The USD/CHF pair continues to go upwards in a determined manner. The bullish movement is slow and gradual, as the price forms a series of lower highs and higher highs in the chart. The price is now above the support level at 0.9600, and it may get to the resistance levels at 0.9650 and 0.9700.
GBP/USD: The outlook for the Cable this week is downbeat and it is not a surprise that the price is showing some signs of weakness. The EMA 11 is below the EMA 56 and the RSI period 14 is below the level of 50. This shows a serious Bearish Confirmation Pattern in the chart: the price may trend lower from here.
USD/JPY: In spite of the effort of bears, expectations remain bullish. While, it is possible that the price could touch the demand levels at 119.50 and 119.00, the supply levels at 120.00 and 125.00 can also be attained.
EUR/JPY: Although, the current price action shows that this cross is weak, a bullish breakout is expected at any day this week. It may be today, tomorrow, or Friday, but eventually, there would be a rally in the market and the rally could go on for a few weeks. One reason behind this is the expected weakness of the JPY.
The current wave progression does not really confirm the impassive wave development to the upside and the outlook for the intraday wave count is more and more in favor of more complex and time consuming corrective cycle in wave X brown. However, this point of view has not been yet confirmed by the market and an impassive breakout below the intraday support at the level of 133.43 is needed to draw that kind of conclusion. In that case, the next support is seen at the level of 132.77.
The buy orders should still be kept open, but please keep an eye on the level of 133.42 as any breakout below this level invalidates any possibility of a bullish wave progression.
The alternative wave count had been invalidated after the level of 1.2474 violation and now the main count is the one to keep an eye on. The corrective cycle labeled as wave abc green had been completed. The first impulsive wave to the upside had been made and the market is in the corrective cycle now. The most important level is the intraday support at 1.2430 as any breakout lower would invalidate the current intraday impulsive count and make the corrective cycle more complex and time consuming. Please notice the bias is still bullish and break out higher is expected soon.
As advised yesterday: the buy orders should be still kept open (SL below the level of 1.2430 and TP open for now), as the market might be in the middle of the impulsive wave to the upside.
We are still looking for a break below minor support at 133.39 to provide acceleration lower in red wave iii towards 131.04 as the first target. In the long term, we are looking for a decline towards 125.98 as the final low for wave C expanded flat correction from the December 2013 high at 145.69. At thas point, a break above minor resistance at 134.60 will delay the expected downside pressure, but only a break above 135.63 will invalidate an immediate bearish count.
Again, the metal price managed to close above $1,200.00 mark at yesterday's session. The metal dropped to $1,195.00 at the Asian session but managed to closed above $1,200.00. Ahead of ADP data, the metal opened on a bullish note. The price is hovering around $1,200.00 for 8 days. This week, US nonfarm pay roll is due on Friday, which will inflience the Federal Reserve thinking about an interest rate hike. Until prices close below $1,214.00, bears have the upper hand. The intraday support is found at $1,203.00 and resistance is seen at $1,211.00 and $1,214.00. The weekly resistance is set between $1,223.00 and $1,228.00. The near-term bottom was placed at $1,190.00. A daily close below $1,185.00 leads to $1,170.00, $1,167.00, and $1,150.00.
We recommend fresh selling below $1,203.00 with targets at $1,200.50, $1,195.00, and $1,190.00. We can expect intraday strong momentum only above $1,211.00 towards the levels of $1,214.00, $1,216.00, $1,220.00 and $1,222.00. We can expect another strong momentum above $1,224.00 towards the levels of $1,236.00, $1,245.00, and $1,255.00 on a weekly basis.
Strong upswing momentum is only above $1,211.00. Until the price closes above $1,195.00, bulls try to hit $1,222.00 again.
We are still waiting for the last decline to a long-term support around 1.4700 from 1.7274 to end and set a stage for a multi-month rally. We ideally will see the 1.4819 upside protection for the expected decline closer to 1.4700 in the short term. That says any break below 1.4763 is going to fulfill all requirements for the decline from 1.5821 as a five-wave decline may be counted and we should be looking for a long-term low.
When the European market opens, economic data on retail sales m/m, the final services PMI, the Italian services PMI, and the Spanish services PMI will be released.The US is expacted to release economic data on the Beige Book, crude oil inventories, the ISM mon-manufacturing PMI, the final services PMI, and the ADP non-farm employment change. So, EUR/USD will move low to medium volatility during this day amid the reports.
In Asia, Japan is not expected to release any economic data, but the US will release data on the Beige Book, crude oil inventories, the ISM non-manufacturing PMI, the final services PMI, and the ADP non-farm employment change. So, there is a strong probability that the USD/JPY pair will move with low volatility during the Asian session, but with low to medium volatility during the North American session.
From the today's H4 chart, yesterday the metal failed to break the support level of 16.30 to bounced again from it to trade between this support level and the resistance level of 16.50. Currently, the metal is approaching the resistance level of 16.50 again; therefore, we should wait for closing above to continue its upward trend move. Given that the metal has managed to close 4H above today, this gives us a good opportunity for more bullish signals above it with the first target few pips below the resistance level of 16.75, then the second target of 17.00 after breaking this resistance level. But as long as silver is trading below 16.50, waiting would be prefered in that case that would cancels the bullish move scenario.
Resistance and support levels: R3 (17.00), R2 (16.75), R1 (16.50), S1 (16.30), S2 (16.00), S3 (15.75).
As it is shown on the attached H4 chart, the price has closed below the support area of 184.60 and gave a new opportunity for more bearish signals today. As it is depicted, the price has already broken 184.60 and now is testing the support level of 183.50. Closing below this level again may provide us with more sell signals util the price tests the support level of 182.50. So we can consider our first target a few pips above this support level then 182.00 as the second level. But we should wait for breaking 183.50 and closing H4 below before making a decision. But the price's closing above the support level of 183.50 cancels the bearish scenario.
Resistance and support levels: R3 (185.00), R2 (184.60), R1 (184.00), S1 (183.50), S2 (182.50), S3 (182.00).