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EUR/USD: bulls want more
02/28/2017

On the daily EUR/USD chart, the bulls keep trying to conquer the upper border of the bullish trend channel. If they succeed, the risks of advance towards 1.0710 and 1.0820 will increase. On the other hand, decline below 1.0569 will increase the odds of the euro reaching 88.6% of the "Shark" pattern target (1.0380).

Screenshot_2017_02_28_08_20_22.png

On H1, the break of 1.0565 and 1.0550 will trigger the "Shark" pattern with targets at 1.0510 and 1.0475. For the pair to keep going up it should overcome resistance at 1.064.

Screenshot_2017_02_28_08_20_39.png

Recommendation: SELL 1.0565, SL 1.0620, TP1 1.0475, TP2 1.0380.

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USD/CHF: will the bears regain the initiative?
02/28.2017

On the daily USD/CHF chart the quotes are moving within the bullish trend channel. However, the inability of the bulls to conquer resistance at 1.0105 (50% of the wave CD of the 5-0 pattern) points at their weakness. If the pair falls below support at 1.0045, this will increase the risks of a fall to 0.9945 and 0.9860.  

Screenshot_2017_02_28_08_20_56.png

On H1, the break of support at 1.0045 and 0.9975 will set off the "Shark" pattern. It's targets are at 88.6% (0.989) and 113% (0.9825). In order to keep moving to the north the bulls have to push USD/CHF above 1.0160.

Screenshot_2017_02_28_08_21_16.png

Recommendation: SELL 1,0045 SL 1,01 TP1 0,989 TP2 0,9825.

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GBP/USD: pound supported by daily Cloud
02/28/2017

Technical levels: support – 1.2380; resistance – 1.2525.

Trade recommendations:

1. Buy — 1.2440/50; SL — 1.2400; TP1 — 1.2560; TP2 — 1.2640.

Reason: expanding bullish Ichimoku Cloud, rising Senkou Span A; an irregular dead cross of Tenkan-sen and Kijun-sen with the rising Kijun-sen; the prices are on the support of the Cloud.

02-gbpusdh4(75).png

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USD/JPY: Dollar has weakened
02/28/2017

Technical levels: support – 112.20, 111.60, 109.90; resistance – 113.00, 113.60.

Trade recommendations:

1. Sell — 112.50; SL — 112.80; TP1 — 111.60; TP2 — 110.00.

Reason: expanding bearish Ichimoku Cloud; a new dead cross of Tenkan-sen and Kijun-sen; the prices are on the Senkou Span B and daily support.



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EUR/USD: new local high is coming
02/28/2017


We’ve got a “V-Top”, which led to the last decline. However, there’s a local “V-Bottom”, so bulls are likely going to test the 89 Moving Average in the short term. If a pullback from this line happens, there’ll be an opportunity to have another decline towards a support at 1.0552 – 1.0520.

28-2-2017-EUR-H1.png

Bulls faced a support on the Moving Averages, which led to form a “V-Bottom”, so the price reached a resistance at 1.0588. Therefore, the market is likely going to achieve the next resistance at 1.0629 – 1.0640 during the day. Considering a possible pullback from this area, bears will probably try to achieve a support at 1.0569 – 1.0552 later on.

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GBP/USD: bulls look at the nearest resistance
02/28/2017

28-2-2017-GBP-H4.png

The price found a support at 1.2386, so we’ve got a “Double Bottom”, which has been confirmed. Therefore, the market is likely going to test an area between the 34 Moving Average and the nearest resistance at 1.2509. If a pullback from these levels happens, there’ll be an opportunity to have a decline towards a support at 1.2386 – 1.2347.

28-2-2017-GBP-H1.png

The price is consolidating near the Moving Averages. Also, there’s a “V-Top”, which pushed the market a little bit lower. Nevertheless, bulls are likely going to test the closest resistance at 1.2477 – 1.2506 during the day. If we see a pullback from this area, bears will have a chance to test a support at 1.2390 – 1.2382.

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EUR/USD: "Window" acted as a resistance
02/28/2017

2802eurusdH4.png

The 34 & 55 Moving Averages are acting as a resistance. Also, we’ve got a bearish “Engulfing” and a “High Wave”, but a confirmation of both patterns is a quite weak. Therefore, the market is likely going to test the nearest support lever, which could be a departure point for another upward price movement.

2802eurusdH1.png

The upper “Window” acted as a resistance, so we’ve got an “Engulfing” pattern here. At the same time, there’s a support by the 55 Moving Average. In this case, bears are likely going to test the closest resistance. If a pullback from this level happens, there’ll be an opportunity to see another decline.

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Key option levels for Tuesday, February 28th
02/28/2017

 

EUR/USD

EURUSD(135).png


Main trend    Short-term period    Medium-term period
Neutral    Neutral
Changes in the open interest     -No Data-     -No Data-
Closest resistance levels    1.0594; 1.0618; 1.0638; 1.0668
Closest support levels    1.0575; 1.0556; 1.0525; 1.0487
Trading recommendations
Baseline scenario    Short EUR/USD below 1.0575, with target points at 1.0556 and 1.0525
Alternative scenario    Moving above 1.0594 can be considered as a signal to Buy the pair, with target at 1.0618 and 1.0638

USD/JPY

USDJPY(103).png


Main trend    Short-term period    Medium-term period
Neutral    Neutral
Changes in the open interest     -No Data-     -No Data-
Closest resistance levels    112.78; 113.15; 113.46; 113.87
Closest support levels    112.32; 111.98; 111.53; 111.01
Trading recommendations
Baseline scenario    Short USD/JPY below 112.32, with the target points at 111.98 and 111.53
Alternative scenario    Moving above 112.78 can be considered as a signal to Buy the pair, with target at 113.15 and 113.46
 

USD/CAD

USDCAD(116).png


Main trend    Short-term period    Medium-term period
Bearish    Bullish
Changes in the open interest    -No Data-     -No Data-
Closest resistance levels    1.3205; 1.3263; 1.3339; 1.3425
Closest support levels    1.3149; 1.3104; 1.3051; 1.2982
Trading recommendations
Baseline scenario    Short USD/CAD below 1.3149, with the target points at 1.3104 and 1.3051
Alternative scenario    Moving above 1.3205 can be considered as a signal to Buy the pair, with target at 1.3263 and 1.3339
 
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USD/JPY: bearish "Tweezers"
02/28/2017

2802usdjpyH4.png

There’s a bearish “Harami”, which has been confirmed. Also, the upper “Window” acted as a resistance. Therefore, the market is likely going to continue falling down until any bullish pattern arrives.

2802usdjpyH1.png

We’ve got a confirmed “Tweezers” on the “Window”, which has acted as a resistance. Considering that there isn’t any reversal pattern so far, bears are likely going to deliver a new local low during the day.

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AUD/CAD reversed from pivotal support level 1.0070
02/28/2017

    AUD/CAD reversed from pivotal support level 1.0070
    Next buy target - 1.0200

AUD/CAD continues to rise after the earlier upward reversal from the pivotal support level 1.0070 (former major resistance level which stopped the previous waves B, 1 and (i), acting as support now – after it was broken by the previous sharp upward impulse (i)). The upward reversal from the support level 1.0070 continues the active impulse wave 3.

AUD/CAD is expected to rise to the next buy target at the resistance level 1.0200 (target price calculated for the termination of the active minor impulse wave (iii)).

AUDCAD_-_Primary_Analysis_-_Feb-28_1701_

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EUR/USD: euro going to negative area
3/1/2017

Technical levels: support – 1.0560, 1.0500; resistance – 1.0590.

Trade recommendations:

1. Sell — 1.0550/60; SL — 1.0580; TP1 — 1.0500; TP2 – 1.0460.

Reason: bearish Ichimoku Cloud, but rising Senkou Span A; a golden cross of Tenkan-sen and Kijun-sen, but the narrow channel Tenkan-Kijun; the prices are going out from the Cloud.

01-eurusdh4(97).png

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GBP/USD: bears attacked again
3/1/2017

Technical levels: support – 1.2345; resistance – 1.2450, 1.2480.

Trade recommendations:

1. Buy — 1.2345; SL — 1.2325; TP1 — 1.2450; TP2 — 1.2480.

Reason: expanding bearish Ichimoku Cloud, falling Senkou Span A; a new dead cross of Tenkan-sen and Kijun-sen; the prices are in negative area, but there is a strong support on 1.2340/45.

02-gbpusdh4(76).png

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EUR/USD: bears going to test the next support
3/1/2017

2-3-2017-EUR-H4.png

There’s a “Triple Top”, which has been confirmed, so the price came back into downward channel. So, the market is likely going to test the nearest support at 1.0520 – 1.0493 in the short term. If a pullback from this area happens afterwards, there’ll be an opportunity to have another bullish price movement in the direction of the next resistance at 1.0578 – 1.0588.

2-3-2017-EUR-H1.png

All Moving Averages have been broken, so bears are likely going to reach a support at 1.0520 – 1.0493 in the short term. However, if we see a pullback from this area, bulls will probably try to test a resistance between the levels 1.0578 – 1.0588.

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Morning brief for March 1
03/01/2017

President Trump’s speech was the main focus of the past session. There was a lot of food for political debates, while economists were left with empty stomachs as the US President didn’t provide them with the details of the border adjustment tax reform. In general, the main points for markets were:

Trump voiced the need to provide a substantial tax relief to the middle-income swath.
Also, he said that he will cut corporate tax rates.
Trump plans to spend $1 trillion on the infrastructure.
But there were no specifics, so the market participants were disappointed.  

The tailwind for the USD was the gist of the hawkish comments from the Fed’s senior officials that revived the talk over a March hike (with the probabilities of a rate increase banding at around 60-80%). The USD gained across the trading board in the course of the Asian session, so Trump’s speech lacking details on the tax reforms was a pinch for the USD, not a substantial loss.

The euro slid below 1.0550 overnight. Today’s focus will be on the German preliminary CPI, manufacturing data from leading Eurozone economies, German unemployment change.

GBP/USD declined to 1.2360 overnight mainly on the massive strengthening of the greenback. Keep an eye on the UK manufacturing PMI data and net lending to individuals both coming at 11:30 am MT time. The current weak undertone is still intact. The pound will likely slide further towards the support at 1.2350. Once it is broken out, GBP may extend its losses to 1.2260.

Aussie was trading choppily in the Asian session. First, it moved below the support at 0.7640, then rebounded on the upbeat Australian GDP figures to 0.7700. At the current moment, the prices are moving above the 0.7660. AUD/USD may rise higher on the session towards the nearest resistance 0.7675 (the lower border of Ichimoku cloud on the H4 timeframe). A move above the 0.7700 will open the way for a further uplift towards 0.7710/0.7740.

USD/CAD spiked to 1.3322 overnight. Today’s focus will on the Canadian rate statement that should be delivered at 5:00 pm MT time. Most market analysts expect the BoC to stay on hold. Oil prices jumped to $56.50 from yesterday’s low at $55.20 in the Asian session.

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GBP/USD: "Double Top" led to decline
3/1/2017

2-3-2017-GBP-H4.png

There’s a “Double Top”, which has been confirmed, so we’ve got a new low. In this case, the pair is likely going to decline towards a support at 1.2315 – 1.2277 in the short term. Meanwhile, bulls will probably try to test a resistance at 1.2386 – 1.2432 afterwards.

2-3-2017-GBP-H1.png

We’ve got a confirmed “Double Top” under the 89 Moving Average. Therefore, the pair is likely going to continue falling down towards a support at 1.2315. If a pullback from this level be on the table, there’ll be an opportunity to have a bullish price movement in the direction of the closest resistance at 1.2390 – 1.2450.

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Key option levels for Wednesday, March 1st
3/1/2017

EUR/USD

EURUSD(136).png

Main trend    Short-term period    Medium-term period
Neutral    Neutral
Changes in the open interest     -No Data-     -No Data-
Closest resistance levels    1.0562; 1.0598; 1.0616; 1.0636; 1.0667
Closest support levels    1.0531; 1.0492; 1.0447; 1.0399
Trading recommendations
Baseline scenario (High risk of reversal)    Long EUR/USD above 1.0562, with target points at 1.0598 and 1.0616
Alternative scenario    Moving below 1.0531 can be considered as a signal to Sell the pair, with target at 1.0492 and 1.0447
 
USD/JPY

USDJPY(104).png

Main trend    Short-term period    Medium-term period
Bullish    Neutral
Changes in the open interest     -No Data-     -No Data-
Closest resistance levels    113.75; 114.34; 114.97; 115.62
Closest support levels    112.80; 112.51; 112.18
Trading recommendations
Baseline scenario    Long USD/JPY above 113.75, with target points at 114.34 and 114.97
Alternative scenario    Moving below 112.80 can be considered as a signal to Sell the pair, with target at 112.51 and 112.18
 
USD/CAD

USDCAD(117).png

Main trend    Short-term period    Medium-term period
Bearish    Bullish
Changes in the open interest    -No Data-     -No Data-
Closest resistance levels    1.3317; 1.3364; 1.3434; 1.3515
Closest support levels    1.3289; 1.3259; 1.3217; 1.3151
Trading recommendations
Baseline scenario    Short USD/CAD below 1.3289, with the target points at 1.3259 and 1.3217
Alternative scenario    Moving above 1.3317 can be considered as a signal to Buy the pair, with target at 1.3364 and 1.3434

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In the run-up to the BoC rate announcement
3/1/2017

stephen-poloz.jpg

To raise, or not to raise  - that is the question

The Bank of Canada is poised to deliver its interest rate decision at 17:00 MT time.

Market participants don’t anticipate any significant changes from the BoC, neither they expect great swings/troughs from loonie, because:

- Governor Stephen Poloz has recently pointed out that Canada’s economy is weaker relative to the US (a good signal for investors not to price in interest rate hikes in the nearest future).

- Policy makers are still worried about trade with Canadian major partner – the US. There are still some fears that Donald Trump may impose a border adjustment tax.

- Although Canadian economy has noticeably evolved in recent months (labor market in particular – recent report on the job creation was very strong; it posted a record half-year performance in just over 14 years), there are evidences that some consumers have become more cautious (a starting point for the deceleration of economic growth – drop in the consumer purchasing activities). A trade surplus Canada experienced in recent two months mainly due to surging commodity prices, not structural changes in the Canadian exports.

- There are plentiful uncertainties not allowing the BoC to slash/raise interest rates. Most of them can be referred to Trump’s Presidency.

- The major central banks normally set their interest rates in accordance with the Fed. So, in the countdown to the FOMC March meeting, the Bank of Canada will unlikely introduce any significant changes to its present monetary policy stance.  

Although the listed factors allow the BoC not to change its present easing monetary policy, we must admit that the recent macroeconomic releases are making it harder for the Bank of Canada to maintain its dovish approach. The next step from the bank’s part will probably be a rate increase, but not until 2019.

The technical outlook for the USD/CAD is bullish. The pair has recently spiked to 1.3330 area (its January high) as the USD strengthened from the hawkish comments of Fed’s officials. It may extend its gains to 1.3360, 1.3390/13380 resistance lines if the BoC's statement is dovish. As the RSI line moved in the overbought area we may expect some short-term corrections towards the nearest supports at 1.3300, 1.3250/1.3215 (50-day MA).

USDCADDaily(9).png

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Review on Nassim Taleb's book
3/1/2017

black-swan1(1).jpg

As the old saying goes: “A promise is a promise”. In our article about Nassim Nicolas Taleb, we promised to cover his writings in our “Book review” section. So, let it be the day of our reckoning.

The Black Swan is about the crucial impact of highly improbable events (black swans) and human’s tendency to find simplistic explanations for the occurrence of these events. Taleb believes that people are limited in their thinking; they make their assumptions based on what they see or know. According to him, “nerdy people” (Taleb’s term for forecasters) can only work within the parameters of the Gaussian bell curve, sigma, ordinary randomness which are all inadequate for prediction of great deviations and thus ignore the occurrence of “black swans.” Having only these analytical tools at hand, they tend to see bell curves everywhere downplaying the importance of the exogenous shocks, noises (black swans).  Another cohort of people strongly believes in the predictive powers of the nerdies and readily pay them lots of money for their fallacious predictions. It’s a bit unfair, will you agree? Shouldn’t we abuse these charlatans and swindlers left and right draining our pockets? According to Mr. Taleb, we should. Here is the recipe for the success of his book. People like reading someone criticizing scholars and academics, calling market analysts and mass media idiots and morons, deflating artsy-fartsy egos. All these things can be found in Mr. Taleb’s book.

I won’t lie to you, I liked this book for the author’s style, his contemplations, for his beautiful metaphors and outstanding examples, references to proverbial wisdom and philosophical treatise of the brightest minds of humanity. If you like well-reasoned, constructive criticism, I am sure you will like this book too.  But after you read “The Black Swan” from the title-page to colophon, a small unpleasant taste might remain. You would ask why. Because after criticism, the reader expects a new solution of the problem, a new way of dealing with a certain issue. That’s something, I didn’t get in Nassim Taleb’s writing or maybe missed somehow. If I am wrong, please, write us and open my eyes to Taleb’s veiled “holy grail” of dealing with randomness. I am curious to know. So far,  Nassim Taleb managed to predict the occurrence of several black swans (the financial crash of 1987, the global financial crisis 2007 – 2008).

DOWNLOAD THE BOOK

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EUR/USD: bears broke "Window"
3/1/2017

0103eurusdH4.png

The 55 & 89 Moving Averages acted as a resistance, so we’ve got an “Engulfing”, a “High Wave” and an “Inverted Hammer”, which all have been confirmed. Therefore, the market is likely going to test the nearest resistance, which could be a departure point for a local bullish correction.

0103eurusdH1.png

The price broke the local “Window”. Also, there’s a possible “Three Methods” pattern, so we could have a new local low during the day. However, bulls are likely going to test the broken “Window” afterwards.

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USD/JPY: correction is coming
3/1/2017

0103usdjpyH4.png

There’s a bullish “Engulfing”, which has been confirmed. Considering that there isn’t any reversal pattern, the market is likely going to test the nearest resistance. If a pullback from this level happens, bears will probably try to test the 55 Moving Average.

0103usdjpyH1.png

The nearest “Window” acted as a support, so the price is likely going to reach the upper side of the closest resistance area. If any bearish pattern arrives later on, there’s be an opportunity to have another test of the “Window”.

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Trade signals from BofA Merrill
3/1/2017

Analysts from BofA Merrill suggest you going short on EUR/AUD as there is a combination of three bearish signals on the weekly technical chart: a bearish crossover of the moving averages, a breakdown of the long-term uptrend, and a broad triangle top pattern.

The bank’s target equates to spot reaching 1.3450 level. The nearest supports are located at 1.3490, 1.3450. There might be an oversold recovery. So, in the longer term, you should consider selling, especially if prices reach the 1.4000 – 1.4100 resistance area.

%D0%91%D0%B5%D0%B7%D1%8B%D0%BC%D1%8F%D0%

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EUR/USD: wedge is about to end
3/1/2017

Image20170301163102001.png

There’s a wedge, which is taking place on the four-hours chart. The price is going to test the lower side of this pattern and 4/8 MM Level. If we see a pullback from these levels, there’ll be an opportunity to have a local bullish correction.

Image20170301163102002.png

Wave (iv) formed a zigzag with a triangle in wave b. Therefore, the price is declining in wave (v) of . The main intraday target is -1/8 MM Level, which could be a departure point for wave [ii].

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GBP/USD reached sell target 1.2400[/]B]
3/1/2017
    GBP/USD reached sell target 1.2400
    Next sell target – 1.2200

GBP/USD continues to fall after the earlier breakout of the key support level 1.2400 (previous sell target, which reversed the earlier waves (1), 1 and (B), as can be seen from the daily GBP/USD chart below). The breakout of the support level 1.2400 accelerated the active minor impulse wave 3, which belongs to the intermediate impulse wave (3) from the start of February.

GBP/USD is expected to fall further to the next sell target at the support level 1.2200 (target price calculated for the completion of the active minor impulse wave 3).

GBPUSD_-_Primary_Analysis_-_Mar-01_1644_

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USD/CAD rising inside intermediate impulse wave (3)
3/1/2017

    USD/CAD rising inside intermediate impulse wave (3)
    Next buy target - 1.3380

USD/CAD continues to rise inside the active intermediate impulse wave (3), which started earlier from the key support level 1.3020 (which also reversed the previous corrective waves (A) and ©, as can be seen from the daily USD/CAD chart below).  The price earlier broke above the pivotal resistance level 1.3200 (which stopped the previous impulse wave (1)).

USD/CAD is expected to rise in the active impulse wave (3) toward the next buy target at the resistance level 1.3380 (the top of the previous intermediate correction (B)).

USDCAD_-_Primary_Analysis_-_Mar-01_1647_

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AUD/USD: bulls gave a head start
3/2/2017

On the AUD/USD daily chart, bulls have decided to postpone the campaign towards the target 113% in the "Shark inverted pattern. To come up with this idea again they need to push the prices above 0.7703. At the present moment, the most likely scenario is a development of the correction in case of the successful test of the support at 0.764.

Screenshot_2017_03_02_08_22_25.png

On  AUD/USD hourly chart, the expanding wedge pattern has been realized. A return of quotes towards 50% and 61.8% levels of CD-wave allowed opening of the short position. A successful test of the support at 0.764 will increase the chances of the realization of the target 113% in the "Shark" pattern.

Screenshot_2017_03_02_08_22_39.png

Recommendation: hold the recently formed shorts (SELL 0,77 SL 0,7755 TP 0,76, SELL 0,7665 SL 0,772 TP 0,7535).

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