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GBP/USD ahead of UK GDP Q3: Time to unleash the bears? 10/27/2016 Today starting at 08:30 GMT we’ll see a series of data releases from the United Kingdom, as we could see a more clear view about the Brexit impact in the national economy. Preliminary GDP, which gauges the gross demand product in the third quarter, is expected to see a decline from 0.7% to 0.3%, and the yearly-basis reading can be unchanged. The latest GDP release was positive for the UK, as we saw a better-than-expected number (0.7% vs. 0.6%). Our technical view for GBP/USD at H1 chart is sideways, as the pair has been very volatile in the recent days. Currently, it’s edging higher above the 200 SMA and it can test the 1.2280 level in coming hours, only if we see a reading better-than-expected for GDP, while a negative scenario can produce a pullback and GBP can crawl lower towards the 1.2100 psychological level in a first degree. More: https://fxbazooka.com/analytics/11059

Oil prices lost their footing at $50 per barrel 10/26/2016 Oil prices dropped today as American Petroleum Institute (API) data released yesterday showed that the US crude inventories rose by 4.8 million barrels. Official Energy Information Administration (EIA) data is going to be published later in the session. Forecasts indicate a significant increase in the US stockpiles; this could send quotes towards $49.73 (October 3 low) or $49.00 (38.2% Fibo level) from its present $49.88 level. Donald Morton, senior vice president at Herbert J. Sims & Co., a high-profile expert who runs an energy-trading desk, believes that the quotes may fall down to $46 a barrel in the near-term if concerns over the feasibility of the oil freeze deal continue to rise. “Bearish” outlook for oil could be confirmed technically. There is a double-top reversal pattern at the end of the upward trend. From this, we may conclude, that there could be a significant downfall towards $47.83 (near the 50% Fibo level). Concerns about a prolonged global glut refueled as Iraq refused to participate in any deal that could curb its current production. The oil prices have been rising since September 28 when OPEC nations reached an accord to curb output in November 30 in the course of the meeting in Vienna. Now the prospects of the cut in oil production are fading away as more squabbles among oil-exporting countries are coming to light. More: https://fxbazooka.com/analytics/11054

USD/JPY: "Engulfing" stopped bulls 10/26/2016 We’ve got an “Engulfing” pattern at the local high, so the price is declining. In this case, bears are likely going to reach the 34 Moving Average in the short term. As we can see on the Daily chart, here’s a “Shooting Star”, but this pattern hasn’t been confirmed yet. So, bulls are likely going to reach the upper “Window” once again. If a pullback from this level happens, there’ll be an option to have a downward price movement. There’re an “Engulfing” and a “Belt Hold”, which both have been confirmed enough. It’s likely that the price is going to test the “Window” once again. If a pullback from it happens, bears will probably try to deliver a correction. More: https://fxbazooka.com/analytics/11053

Goldman Sachs is bearish on GBP 10/26/2016 The pound dropped a 31-year low against the greenback in October. According to Goldman Sachs, sterling has further room for depreciation. You will probably ask why. There are several reasons: The UK currency is still overvalued by around 10 % despite its tremendous downfall that happened after June referendum. The UK will need further depreciation of the pound to bring its current account to equilibrium. Due to sterling’s precipitous downfall in October, the UK’s current account deficit has shrunken from 6% to about 3.3% of GDP. It is still not enough to reach a 1.5% target. To fulfill it, the pound should be 20 – 40% lower from its pre-referendum levels. The political uncertainty concerning the conditions of Brexit still weights on the pound. There is a possibility that the Bank of England can recourse to quantitative easing and rate cuts. Chancellor Philip Hammond of the House of Commons said on Tuesday that he sees no reason of rejecting central bank’s request for easing measures and that they might be needed to support the UK economy in the nearest future. Yesterday the UK currency picked up a little primarily due to Carney’s deliberate performance and his attempts to reassure on QE, his own future as a Head of Bank of England, and worries over the Bank’s independence. Now the pound is somewhere at 1.2205, having all chances to slide down once again, if we rely on the Goldman Sachs’s forecasts. Any disturbed economic data from US (the US New home Sales data for September, for example, that should show a slight decrease in the number of home purchases), however, could offer some support to the cable in the short-term. More: https://fxbazooka.com/analytics/11052

EUR/USD: "Inverted Hammer" resulted in a correction 10/26/2016 We’ve got a “Tweezers” and an “Engulfing” at the local low, which both have been confirmed enough. If a pullback from the 21 Moving Average happens, there’ll be an opportunity to have a local downward correction. However, bulls will probably try to reach the 55 Moving Average afterwards. As we can see on the Daily chart, there’re a “Doji” and a “High Wave” patterns, so it’s likely to have a bullish correction towards the nearest resistance level. There’s an upward correction, which is taking place on the one-hour chart. Previously, an “Inverted Hammer” was formed at the local low. So, the market is likely going to get a support on the 34 Moving Average during the day. If a pullback from this line happens, there’ll be an option to have a bullish movement in the direction of the 144 Moving Average. More: https://fxbazooka.com/analytics/11051

Key option levels for Wednesday, October 26th 10/26/2016 USD/JPY Main trend Short-term period Medium-term period Neutral Neutral Changes in the open interest - 341 ? + 215 ? Closest resistance levels 104.13; 104.38; 104.56; 104.81 Closest support levels 103.90; 103.64; 103.41; 103.12 Trading recommendations Baseline scenario Long USD/JPY above 104.13, with the target points at 104.38 and 104.56 Alternative scenario Moving below 103.90 can be considered as a signal to sell the pair, with target at 103.64 and 103.41 USD/CAD Main trend Short-term period Medium-term period Bullish Bullish Changes in the open interest + 98 ? + 254 ? Closest resistance levels 1.3364; 1.3385; 1.3425; 1.3479 Closest support levels 1.3312; 1.3287; 1.3252; 1.3203 Trading recommendations Baseline scenario Long USD/CAD above 1.3364, with the target points at 1.3385 and 1.3425 Alternative scenario Moving below 1.3312 can be considered as a signal to sell the pair, with target at 1.3287 and 1.3252 More: https://fxbazooka.com/analytics/11050

USD/JPY: consolidation in channel Tenkan-Kijun 10/26/2016 Technical levels: support – 104.00/05; resistance – 105.20, 105.70. Trade recommendations: 1. Buy — 104.10; SL — 103.90; TP1 — 105.20; TP2 — 105.70. Reason: bullish Ichimoku Cloud and rising Senkou Span A and B; golden cross of Tenkan-sen and Kijun-sen. More: https://fxbazooka.com/analytics/11049

AUD/USD: trades going to positive zone 10/26/2016 Technical levels: support – 0.7670, 0.7650; resistance – 0.7710, 0.7760. Trade recommendations: 1. Buy — 0.7670; SL — 0.7650; TP1 — 0.7710; TP2 — 0.7760. Reason: bullish Ichimoku Cloud; cancelled dead cross of Tenkan-sen and Kijun-sen; a strong support of the Cloud. More: https://fxbazooka.com/analytics/11048

EUR/USD: in correction to Kijun 10/26/2016 Technical levels: support – 1.0890; resistance – 1.0945. Trade recommendations: 1. Sell — 1.0945; SL — 1.0965; TP1 — 1.0890; TP2 – 1.0860. Reason: dead cross of Tenkan-sen and Kijun-sen, but narrowing channel of Tenkan-Kijun; bearish character of Ichimoku Cloud; the prices are inside the channel Tenkan-Kijun. More: https://fxbazooka.com/analytics/11047

Scaling in trading approach 10/26/2016 Neither traders nor high-profile analysts can say for sure which way the prices will go. If traders knew, they would commit all their funds at the top or the bottom of the technical chart in order not to lose a chance of snatching great sum of money, and did make big profits from their lots. Unfortunately, we are not prophets who possess psychic powers, we are humans, so, it’s beyond our abilities to make such predictions. What we do have, though, is our rational mind and gut feeling that could give us some clues on how the quotes will move further. Imagine you have a really great idea on how to trade a certain currency pair, but you don’t want to risk the whole sum of money you possess because you’re not a hundred percent sure in your guess. So, in this situation, you may apply a more cautious way of trading called “scaling in”. It suggests you smooth your risks by entering the market in pieces instead of putting the entire position on just in one entry. So, you simply should take an early, partial or quarter position based on your assumptions of a further price move and wait to see how your assumption play out. If you are better off after the first try, you can continue to place your bets putting aside some money for the next trading sessions. To use this trading approach accurately you should plan out your entries, divide the money you possess into shares and assign them to several bets. Don’t go overboard if you got lots of money after the first try. Markets are vicious, they can play a low-down trick with you and leave you without pants. “Scaling in” approach is designed for rational, prudent and tactical traders, who trade not just for pleasure, but also for making money from their bets. Example: in the situation presented on the picture, you divide your bet into 4 pieces. You start with the 0.8900 point, and if the trend continues, you open the next long position at the upper level (at 0.8950) with the same bet. Then, you continue to place new orders similar to your first ones (at 0.9000, at 0.9050) until the end of the trend. More: https://fxbazooka.com/analytics/11046

GBP/USD: intraday "Pennant" 10/26/2016 The lower side of the last “Wedge” pattern has been broken. The price faced a support at 1.2089, which led to the current upward correction. Therefore, bears are likely going to move on, cause we haven’t got any confirmed reversal pattern so far. We’ve got a “V-Bottom” pattern, which was a departure point for the current bullish correction. Also, there’s a “Pennant”, so bulls are likely going to test the 89 Moving Average during the day. If a pullback from this line happens, there’ll be an opportunity to have another decline. More: https://fxbazooka.com/analytics/11045

EUR/USD: small local "Flag" 10/26/2016 The last bearish “Flag” was broken yesterday. However, the price came back to the previous levels, so there’s an opportunity to see an upward correction. At the same time, the nearest support at 1.0847 could be tested once again. If so, bulls are likely going to reach a resistance at 1.0911 – 1.0951. The price faced a support at 1.0847, which led to form a “V-Bottom” pattern, so we’ve got a consolidation under the 34 Moving Average. Also, we’ve got a local “Flag”, so the market is likely going to reach the 55 Moving Average soon. If a pullback from this line happens, bears will probably try to test the nearest support. More: https://fxbazooka.com/analytics/11044

Morning brief for October 26, 2016 10/26/2016 Aussie hopped today having reached the 0.7708 resistance line on the better-than-expected inflation data. Consumer prices rose 0.7% in the last quarter, but the annual headline inflation remained at an anemic 1.3%. The quarterly increase could diminish the likelihood of a rate cut at the upcoming meeting of Reserve Bank of Australia. But with persistently low annual inflation rate hardly reaching bank’s 2-3% target, the prospect of interest rate cut is still on the table in the longer-term. NZD/USD added some additional points having decided to keep pace with Aussie. We will see what happens next with this pair after the trade balance release is published later today. There were some toing and froing on the 4H timeframe chart of USD/JPY. The pair moved lower in the Tokyo morning, tracking down towards the 104 mark before adding 40-odd points, then it was rising again. There wasn’t any significant news that could disturb smooth cruising of this pair. Today, however, the pair can experience some moves after the US new home sales data come to the surface. The market expects a slight drop in sales which could cause USD depreciation in relation to other currencies. Oil prices lower today with rising production in Nigeria, wrangling among producers about a planned output cut, stiff Iraqi refusal to participate in any deal that could curb its present oil production and imminent impeachment of Nicolas Maduro (Venezuelan President). Oil prices may fall even further today if the Energy Administration Agency crude inventories figures do increase, as forecasts predict so. The EUR/USD currency pair is trading sideways near the 1.0877 level preparing for the range of great events (the US elections, FOMC and ECB meetings) that could fuel its long-lasting flat movement. All we can do at the present moment to return volatility to the EUR/USD chart is to cry “hallo”. More: https://fxbazooka.com/analytics/11043

USD/JPY: bulls faced with pin-bar 10/26/2016 On the USD/JPY daily chart, "bull" showed weakness having failed to consolidate above the previously reached high. As a result counterattack, "bearish" pin bar has been formed. Breakout of the support line at the minimum of the pin-bar (at 104.06) will tell us about the continuation of correction. There could be a restoration of the upward trend if quotes move above the $ 104.9 level. On the USD hourly chart, break of the lower border of the upward trading channel will increase the risks of formation of a wave from 4-5 expanding wedge pattern. If quotes return to the support line at 103.15, the "bears" will have a chance to continue the correction in the direction of the 102 mark. Recommedations: shift SL on shorts to the 104,55 mark (breakeven point), SELL 104,05 SL 104,6 TP1 103,15 TP2 102 More: https://fxbazooka.com/analytics/11042

Gold is returning to the trend 10/26/2016 On the daily chart of gold, "bulls" failed to test the resistance line at $1273-1276 per ounce. If they manage to break it, they will move up further towards $1292 and $1308 levels (38.2% and 50% levels from the last mid-term downward wave). On the hourly chart of gold, quotes moved beyond the consolidation area located at $ 1250-1267 per ounce. It means that the process of accumulation of long positions has been finished and that a trend is showing up. If the "bulls" manage to test the resistance line at $ 1276, their rally may continue. Recommendation: hold longs formed at $1267 per ounce. More: https://fxbazooka.com/analytics/11041

EUR/USD & New Home Sales: Can we see further bullish momentum after the data? 10/26/2016 Today at 14:00 GMT will be released the US New Home Sales data for September and we’re expecting to see a slight decrease to 600,000 from 609,000. With that being said, markets should react against the US Dollar, which has been showing some weakness across the board, following the last week that was characterised by gains. We should remind that new home sales’ numbers had been showing good performance in the last three months. Our technical analysis for EUR/USD at H1 chart is still bearish, but the pair remains trapped in a sideways range between the 1.0893 and 1.0852 levels. If we see positive data from the United States, then we can expect an attempt to break the support level of 1.0852, which should open the doors to visit the 1.0786 level. However, as the EUR/USD pair is consolidating above the 50 SMA, one can expect a short-lived bullish momentum towards the 200 SMA. More: https://fxbazooka.com/analytics/11040

Keep in focus M. Draghi’s speech 10/25/2016 Last week Mario Draghi ascertained the reporters that an abrupt end of the bond-buying program is unlikely in the forthcoming future. In addition, he sent a clear signal that the QE program will likely be if not expanded, but at least extended beyond March. The market’s reaction followed without further delay; the euro dropped to its June’s lows in the course of the ECB press conference. Now, it is sliding down further hardly losing the momentum it got on Thursday. Later today at 3:30 GMT we will hear ECB President Mario Draghi speaking about stability, equity, and monetary policy at the German Institute for Economic Research in Berlin. According to Barclays, we should expect some further elaboration from Draghi on the extent of the ECB’s bond purchasing program, as its present pace with the shrinking pool of eligible assets and dim perspectives of the Eurozone economic recovery cannot be sustained anymore. If we get confirmation of Barclay’s guess from M. Draghi today’s speech, we may hope for the euro’s recovery from its present lows. More: https://fxbazooka.com/analytics/11037

USD/JPY: bulls going to deliver new high 10/25/2016 The 21 & 34 Moving Averages acted as a support, so the price is likely going to test the nearest resistance level. As we can see on the Daily chart, bulls are going to reach the upper side on the “Window”. If any reversal pattern arrives afterwards, there’ll be an option to see a local correction. The price is moving in a range of the “Window”. Considering that there isn’t any reversal pattern so far, bulls are likely going to deliver a new high during the day. More: https://fxbazooka.com/analytics/11036

October’s market trend 10/25/2016 Currency volatility felt significantly on the triple-win of Hillary Clinton in the presidential debates and on the market pricing the probability of the US interest rate hike. The dollar managed to rise at a seventh-month high not stopping its rally in the course of three weeks. Polls show Democratic nominee Clinton is taking the lead over her counterpart Donald Trump in the election race. In a way, it reduces political uncertainty and turns the traders’ attention to the monetary policy. At the present moment, the market is already pricing the probability of the US interest rate hike at 70%. The majority of stakeholders sell the euro for the dollar and buy the dollar for the yen on the reoccurring drops in its movement. It seems that peace and quiet have finally established in the currency market. But there is no answer how long all this will last. The JPMorgan Chase & Co. global currency volatility index fell to 9.3%, reaching its lowest rate since December 8. The US dollar index, which measures the value of the greenback in relation to other major currencies, reached its highest level since February. There is a strong need for some catalyst to kick the market and drag it from the beaten path. We will keep a sharp look out to inform you on the possible triggers. Meanwhile, you may enjoy the market’s smooth cruising. US Dollar Index More: https://fxbazooka.com/analytics/11035

EUR/USD: "Tweezers" set up bullish correction 10/25/2016 The previously formed “Tweezers” pattern on the one-hour chart has been confirmed. Therefore, the market is likely going to achieve the 89 Moving Average. If we see a pullback from this line, bears will probably try to test the last low. The price faced a support at 1.0847, which led to the current consolidation. Also, we’ve got a “Flag” pattern, so the market is likely going to reach the nearest support at 1.0821. If a pullback from this level happens, there’ll be an opportunity to have another upward movement. More: https://fxbazooka.com/analytics/11034

AUD/JPY reversed from support level 78.70 10/25/2016 AUD/JPY reversed from support level 78.70 Next buy target - 81.00 AUD/JPY continues to rise following the earlier upward reversal from the support level 78.70 (former resistance level and the upper boundary of the sideways price channel from August, acting as support now after it was broken). The upward reversal from the support level 78.70 continues the active minor impulse wave (iii), which belongs to the C-wave of the intermediate ABC correction ( from the end of June. AUD/JPY is expected to rise to the nearby resistance level 80.00 (which reversed the pair last week) – the breakout of which can lead to further gains toward the next buy target at the resistance level 81.00 (target price for the completion of the active impulse wave 3). More: https://new.fxbazooka.com/analytics/11033

NZD/CAD rising inside impulse waves 3 and (3) 10/25/2016 NZD/CAD rising inside impulse waves 3 and (3) Next buy target - 0.9640 NZD/CAD has been rising steadily in the last few trading sessions inside the active minor impulse wave 3, which started earlier – when the pair reversed up from the support zone lying between the pivotal support level 0.9300 (low of wave (ii)), lower daily Bollinger Band and the 38.2% Fibonacci correction of the previous sharp upward impulse from the end of April. The active impulse wave 3 belongs to the intermediate impulse wave (3). NZD/CAD is expected to continue to rise in the active impulse waves 3 and (3) toward the next buy target at the strong resistance level 0.9640 (which reversed the price multiple times in September). https://new.fxbazooka.com/img/articles/11032/NZDCAD_-_Primary_Analysis_-_Oct-25_1153_AM_(1_day).png[/iG] More: https://new.fxbazooka.com/analytics/11032

Forecasts for AUD/USD ahead of the Australian CPI release 10/25/2016 Aussie surged today on the rising commodity prices having broken the resistance line at 0.7603. Now it paves its way towards the cherished resistance line at 0.7737. Tomorrow we will be waiting for the Australian Consumer Price Index quarterly update. The index measures the change in the consumer prices of goods and services. It is believed that it could seriously affect the AUD/USD movement. If the data come within the market expectations, AUD/USD could show some fluctuation, but remain in range. If the data are worse-than-expected, the pair could slide down to the support located at 0.7582. Analysts from Australian National Bank (NAB) recommend getting short anywhere above the 0.77 mark with a stop loss above the 0.7835 level and target at 0.75. The greenback remains strong with anticipation of December Fed’s rate hike and positive economic data coming from the US, while the overall sentiment towards Aussie remains bearish. The NAB supports its recommendations with technical chart analysis and some observations. Last week we got a rather mixed data on Australian labor market. The unemployment rate improved slightly, but the market lost 9.8K jobs; the latter data dragged the Aussie from its high (from the 0.7735 mark) to its present positions. The NAB analysts note that there was the identical situation on 8 September when the pair made almost the same high, but then traded down over the 3 consecutive days to a low of 0.7442. So, they believe that there should be a “history repeating”. Meanwhile, today’s sentiment towards this currency pair is rather bullish. So, our analysts recommend you to trade AUD/USD long in a short-term. More: https://new.fxbazooka.com/analytics/11031

GBP/USD: flat inside "Wedge" 10/25/2016 The price is consolidating under the 34 Moving Average. There’s a possible “Rising Wedge” pattern, so bears are likely going to reach a support at 1.2089 in the short term. If any bullish pattern arrives afterwards, there’ll be an opportunity to have an upward correction. There’s the 89 Moving Average, which is likely going to act as a resistance soon. At the same time, if a pullback from this line happens, bears will probably try to deliver a new local low. More: https://fxbazooka.com/analytics/11030

EUR/USD: bearish "Flag" 10/25/2016 The price faced a support at 1.0847, which led to the current consolidation. Also, we’ve got a “Flag” pattern, so the market is likely going to reach the nearest support at 1.0821. If a pullback from this level happens, there’ll be an opportunity to have another upward movement. There’s a consolidation, which is taking place between the 34 Moving Average and the closest support at 1.0847. Considering the bearish “Flag”, which hasn’t finished yet, the price is likely going to rise towards the next resistance at 1.0896 – 1.0911 during the day. If we have a pullback from this area, bears will probably try to test a support at 1.0821. More: https://fxbazooka.com/analytics/11029