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EUR/USD: "V-BOTTOM" PUSHING PRICE HIGHER

06:44 19.05.2017

 

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The price faced support at 1.1066, so we've got a "V-Bottom" pattern. In this case, the market is likely going to continue moving up towards the next resistance at 1.1152 - 1.1171. However, if a pullback from this area happens, there'll be an opportunity to have a decline in the direction of support at 1.1103 - 1.1066.

 

1495176097-1ed8b69b23d84894b8606e831b203

 

There's a consolidation, which is taking place along the 34 Moving Average. Therefore, bears are likely going to test the nearest support at 1.1081 - 1.1075 in the coming hours. If we see a pullback from these levels, bulls will have a green light to reach resistance at 1.1152 - 1.1171.

 

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GBP/USD: BULLS GOING TO TEST NEXT RESISTANCE

06:46 19.05.2017

 

1495176098-d3252d57c7babdc358f2ce21530f4

 

The 55 Moving Average has acted as support, so there's a "V-Bottom" pattern, which pushed the price a little bit higher. Under this circumstances, we should keep an eye on resistance at 1.3023 - 1.3057 as the next bullish target. Meanwhile, if a pullback from this area happens, we could have a downward correction towards support at 1.2945 - 1.2913.

 

1495176097-70effe241e6ae38efaaa81c370650

 

Bulls found support at 1.2883, so we've got a "V-Bottom" pattern, which led to the current consolidation. Therefore, bears are likely going to get support on the 89 Moving Average, which could be a departure point for another upward price movement in the direction of the next resistance at 1.2988 - 1.3023.

 

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US DOLLAR: OUTLOOK FOR MAY 22-26

11:09 19.05.2017

 

US dollar had the worst week in 9 months. The greenback was hit hard by the political turmoil in the United States. The hype was caused by Donald Trump's firing of former FBI director James Comey, talk that he pressed Comey to stop investigating his former national security chief, and his campaign's alleged ties with Russia. There are concerns not only that the President may be impeached, but also that the fiscal stimulus he promised will be unlikely anytime soon.

We can now clearly see that the US dollar index recoiled down from the previous support and now resistance line in the 99.50 area. It seems like the index has formed a triple top with the neckline at 99.15 and is vulnerable to a decline to 94.70. Daily moving averages turned to the downside. DXY is trading below 50% Fibonacci of 2016-2017 advance. The next Fibo level lies at 96.40. A weekly close below the 100-week MA at 97.65 will be a very bearish sign. Resistance is at 98.65 and 99.20.

 

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In the coming days pay attention to the FOMC May meeting minutes on Wednesday and core durable goods together with preliminary Q1 GDP on Friday. The Federal Reserve is still widely expected to raise interest rates in June after a rather optimistic May statement. However, as next month’s rate hike is already significantly priced in, so we don’t see how it can provide much strength to the US currency.

The problems of Trump administration should remain in the center of the market’s attention. In addition, analysts warn that risks associated with North Korea have increased and advise to prepare for high volatility in the short-term.

 

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EUR/USD: 8/8 MM LEVEL GOING TO ACT AS RESISTANCE

12:10 19.05.2017

 

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The price is still rising, so bulls are likely going to test 8/8 MM Level in the coming hours. If a pullback from this level happens, there'll be an opportunity to have a bearish wave (i). In this case, we should keep an eye on 6/8 MM Level as an intraday target.

 

1495195776-2f8d541eeaa2de51955672dce6b78

 

We've just got a new local high. Previously, the price couldn't fixate under 6/8 MM Level. Therefore, wave v of © is likely going to be continued towards 8/8 MM Level, which could be a departure point for wave i of (i).

 

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EUR/USD: BULLISH PARTY

12:51 19.05.2017

 

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The lower "Window" has acted as support, which led to a new local high. Considering the last "Hammer", bulls are likely going to test the nearest resistance level, which could be a departure point for a downward correction.

 

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We've got some bullish patterns such a "High Wave" and a "Hammer" at the last low. So, there's an opportunity to have the market even higher in the short term. However, if any bearish pattern arrives afterwards, bears will probably try to deliver a correction.

 

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USD/JPY: "INVERTED HAMMER" AT THE LAST LOW

12:53 19.05.2017

 

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There's a "Tweezers" pattern at the local high, but the last bullish "Hammer" is still on the table. Therefore, the market is likely going to rise towards the Moving Averages in the coming hours

 

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We've got an "Inverted Hammer" at the last low, which has been confirmed enough. Also, there's a bearish "Tweezers", so bears are likely going to test the nearest support level during the day. If a pullback from this level happens, bulls are going to deliver a new high.

 

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EUR/USD RISING INSIDE IMPULSE WAVES (III) AND C

14:25 19.05.2017

 

EUR/USD rising inside impulse waves (iii) and C

Next buy target - 1.1260

EUR/USD continues to rise inside the minor impulse (iii), which earlier reversed up from the support zone lying between the support level 1.1100 and the upper trendline of the recently broken daily up channel from the start of this year (acting as support after it was broken earlier this month).

 

If the pair closes today near the current levels it will form the daily Japanese candlesticks reversal pattern Bullish Engulfing. EUR/USD is expected to rise further in the active impulse waves (iii) and C toward the next buy target at the resistance level 1.1260 (forecast price for the completion of the active wave C).

 

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CAD/JPY REVERSED FROM SUPPORT ZONE

14:27 19.05.2017

 

CAD/JPY reversed from support zone

 

Next buy target - 83.70

 

CAD/JPY recently revered up with the daily Japanese candlestick reversal pattern Hammer from the support zone lying between the pivotal support level 80.60 and the lower daily Bollinger Band. The upward reversal from this support zone started the active minor impulse wave 3, which belongs to the impulse wave (3) from the end of April. 

 

Given the clear bullish divergence on the daily Stochastic indicator - CAD/JPY is expected to rise to the next buy target at the resistance level 83.70. Strong support remains at 80.60.

 

8bjiVqWYK.png

 

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GBP/USD: OUTLOOK FOR MAY 23 - 26

09:25 19.05.2017

 

The political turmoil that gripped the White House this week resulted in the weakening of the USD against its major counterparts, such as the British pound. US President Donald Trump was accused of pressuring ex-FBI director James Comey to drop the investigation into ties between Russia and former security adviser, Michael Flynn. This was regarded as a serious, impeachable offense – an obstruction of justice. The latest development is circulation of Comey’s testimony in which former FBI director confirmed that he hadn’t been pressured for political purpose. This has lifted pressure from the US dollar, but only partially. In its turn, GBP was supported by the numerous economic data releases and actively tested 1.30.

 

On Tuesday, the Bank of England Governor Mark Carney will testify on inflation and the economic outlook before Parliament’s Treasury Committee. British inflation figures continue moving upwards: CPI rose by 2.7% in April. The BoE is ready to tolerate inflation at around 3%, a higher rate may make the central bank to raise its interest rate. On Wednesday, traders will wait for the FOMC meeting minutes’ release, though it shouldn’t bring any great market fluctuations. Towards the end of the week, we will be focused on the second estimate of GDP figures and preliminary business investment gauge both coming out of the UK on Thursday.  On Friday, keep an eye on the US preliminary Q1 GDP figures.

 

The technical outlook for GBP/USD currency pair is neutral with some bullish bias. Most likely, the pair will be trading choppily within the range between 1.2850 and 1.3070 in the upcoming days. Stochastic indicates a room for the pound’s extension towards the upper border of consolidation range or higher, towards 1.3150 (38.2% Fibo of the post-Brexit decline). On the downside, there is a support at 1.2750 and 1.2710 which previously served as a very important resistance line.

 

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USD/CAD: OUTLOOK FOR MAY 22-26

16:24 19.05.2017

 

USD/CAD slumped to 1.3545 in the past week due to rising oil prices and weaker USD. WTI and Brent oil futures rose after the Saudi Arabia and Russia have committed to extend production cut agreement. The political turmoil in Washington that could potentially end with Trump’s impeachment weighted in the USD depreciation against its major peers.

 

Next week the main focus will be on the Bank of Canada’s rate statement which is due on Wednesday. The central bank is widely expected to remain its rate on hold despite the soaring prices at Canadian house market.  Household debt is poised to reach record levels as continuously low rate whet appetite for credit and inflated a bubble in real estate market. Canadian CPI figures picked up in April, but not enough for the central bank to raise its interest rate. An extremely dovish tone of the BoC’s policymakers will definitely hurt the CAD. The loonie might recoup its losses on May 25 following the OPEC meeting where more details on the extension of production cut agreement will be announced. On the USD front, pay special attention to what FOMC members’ chorus will tell you. A number of Fed’s policymakers will be speaking in the first half of the week. On Friday, traders will be waiting for the preliminary release of GDP figures and a monthly update of core durable goods orders. If headlines beat market expectation, USD might gain a strong momentum.

 

Technically, USD/CAD may slide further towards the solid support at 1.3480, or lower towards 1.2242 (100-day MA intersecting lower border of the rising trading channel). On the upside, there is a strong resistance at 1.3795 that might prevent USD from rising higher. 

 

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USD/JPY: OUTLOOK FOR MAY 23 - 26

09:27 19.05.2017

 

USD/JPY fell to 110.20 in the course of the past week. The pair was hit by continuing troubles of Trump administration. Nervous investors switched to the safe-haven yen after media reported that Trump obstructed justice by pressuring former FBI director James Comey to end investigation into ties between Russia and the former US security advisor Michael Flynn. Lawyers regarded Trump’s actions as an impeachable offense. On the economic data front, Japanese Preliminary GDP improved to 0.5% vs forecasted 0.4%. US jobless claims and the Philly Fed Manufacturing index surpassed market expectations and helped USD recover its losses, but only partially. It’s clear that political factor will keep affecting the pair.

 

Let’s have a look at the upcoming events. We will receive Japan’s trade balance data on Monday. Flash Manufacturing PMI and CPI figures will be released on Wednesday and Friday respectively. US statistical entities will release housing market data, manufacturing figures, core durable goods orders and, most importantly, preliminary GDP. If Trump’s aides fail to improve the situation, the US dollar will remain under pressure next week and lose even more ground.

 

USD/JPY reversed to the downside from 100-week MA just above 113.00. This line will now act as resistance together with 100-day MA at 112.75. Support lies at the psychologically important level of 110 ahead of 108.60 (50-week MA). The pair may consolidate between 112.50 and 108.50 in the coming weeks. Increase in the market’s risk aversion can make the greenback test lower border of this range.

 

1495186011-9979bfdacf87e6ddf67fc3a176475

 

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EUR/USD: BULLS TESTED DAILY RESISTANCE

05:14 22.05.2017

 

Technical levels: support – 1.1120; resistance – 1.1230.

 

Trade recommendations:

 

Sell — 1.1230; SL — 1.1250; TP1 — 1.1120; TP2 – 1.1080.

Reason: bullish Ichimoku Cloud with rising Senkou Span A; a golden cross of Tenkan-sen and Kijun-sen, but Tenkan-sen is horizontal; expecting a bouncing from the daily resistance near 1.2330/50.

 

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AUD/USD: BULLS CANT BREAKING OUT SSB’S RESISTANCE

05:17 22.05.2017

 

Technical levels: support – 0.7370, 0.7400/10; resistance – 0.7450.

 

Trade recommendations:

 

Sell — 0.7400; SL — 0.7420; TP1 — 0.7340; TP2 — 0.7310.

Reason: narrow bearish Ichimoku Cloud, horizontal Senkou Span A and B; a new weak golden cross of Tenkan-sen and Kijun-sen; the prices are three way bounced from the SSB’s resistance.

 

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MORNING BRIEF FOR MAY 22

06:02 22.05.2017

 

GBP/USD was trading choppily in the Asian session. First, the pound gapped lower towards 1.2970, then bounced to 1.2995 covering much of its previous losses. GBP selling stemmed from option-related interest combined with Britain’s threats to quit negotiations on its departure unless the bloc drops its demand for a divorce bill payment as high as 100 bln euros. The officials and UK representatives will meet today to discuss their negotiating positions, so we expect some moves from GBP in the upcoming trading sessions. Formal Brexit talks are expected to begin. At 9:00 pm MT time don’t miss US PM Theresa May’s speech in an interview conducted by BBC TV.

 

USD/JPY was very active in the Asian trading session. North Korea conducted another ballistic missile test on Sunday which inspired the early yen strength. Towards the end of the Asian session, the greenback gained momentum and rose to 111.50 despite decent Japan’s trade balance data. The data reflected a declining trade surplus with the US on the month which should reduce pressure on Japan emanating from the US. The US dollar was weak throughout the past week after the media reports stating that Trump committed an impeachable offense (obstruction of justice) asking former FDI director James Comey to drop an investigation into Michael Flynn’s ties with Russian entities. The Republican chairman of the House Oversight and Government Reform Committee said he is going to talk with Comey on Monday and pursue any existing records of President Trump’s meeting with the fired FBI director. Meanwhile, Trump continues his trip in Saudi Arabia where he signed several agreements in the defense, energy and infrastructure industries.   

 

EUR/USD closed past week above 1.12 for the first time since November 9, 2016. The following upsurge came after the French presidential election and a bulk of releases indicating an economic improvement in the Eurozone that might push the ECB to tone down its dovish language at the next meeting. In the course of the Asian session, the euro traded lower at 1.1190. The nearest support lies at 1.1170. Those who were trading long the EUR/USD should adjust their stop-loss to 1.1095.

 

The Aussie fell below 0.7430 against the USD in Tokyo morning. The RBA Assistant Governor will be speaking in Basel today; the Australian dollar might be affected. The Fed officials Patrick Harker and Neel Kashkari are also scheduled to speak today. The technical outlook for AUD/USD is still positive until quotes are trading above 0.7400.  A move towards 0.7480/85 is possible despite the recent decline in AUD/USD.

 

USD/CAD dipped lower towards 1.3525 due to rising oil prices. Brent futures hit $54 for the first time in this month after Saudi Arabia’s energy minister Khalid A. Al-Falih said all producers are ready to agree to extend the cuts by nine months. It will be officially confirmed at the meeting in Vienna scheduled for May 25.

 

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USD/JPY: BULLS-BEARS 5:0

06:29 22.05.2017

 

Recommendation: BUY 111,7 SL 111,15 TP 112,85.

 

On the USD/JPY daily chart, the "Shark" pattern transformed into 5-0. The rebound from 61.8% and 50% levels of the last corrective wave can be used for opening long positions. There will be a restoration of the uptrend if the bulls manage to push the quotes above the upper border of the downward trading channel.

 

Screenshot_2017_05_22_06_26_12.png

 

On the USD/JPY hourly chart, there is a consolidation. It might have been brought about by the accumulation of long positions by market majors. A breakout of the resistance at 111.68 will activate the inverted "Shark" pattern. Its target 113% is located in the convergence zone of 112.8-112.95 levels.

 

Screenshot_2017_05_22_06_26_27.png

 

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EUR/JPY: BULLS HAVE SITUATION UNDER CONTROL

06:31 22.05.2017

 

Recommendations: BUY 124,9 SL 124,35 TP1 126,2 TP2 128. 

 

On the EUR/JPY daily chart, there is a continuation of the upward movement within the framework of the boundaries of the Deep Shark pattern. Its target is located at 161.8% of the BC wave; it corresponds to the level of 128. Bears' attempt to launch a counterattack has failed; it has become a signal of their weakness.

 

Screenshot_2017_05_22_06_25_37.png

 

On the EUR/JPY hourly chart, quotes are moving within the upward trading channel in the direction of the 113% target in the Shark inverted pattern. The signal for opening long positions might occur when quotes go beyond the boundaries of the triangle.

 

Screenshot_2017_05_22_06_25_56.png

 

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EUR/USD: BULLS GOING TO TEST NEXT RESISTANCE

07:38 22.05.2017

 

1495438631-449417fd4ebff7ec1deee87f2ecb8

 

Bulls faced resistance at 1.1204, so the market is consolidating. However, the price is likely going to move on towards the next resistance at 1.1232 - 1.1249. If a pullback from this area happens, there'll be an opportunity to have a downward correction in the direction of support at 1.1171 - 1.1139.

 

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There's a consolidation, which is taking place between the levels 1.1171 - 1.1204. Meanwhile, bears are likely going to get support on the 34 Moving Average, which could be a departure point for another bullish price movement. So, we should keep an eye on resistance at 1.1232 - 1.1249 as an intraday target.

 

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GBP/USD: DEVELOPING CONSOLIDATION

07:41 22.05.2017

 

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We've got an upward consolidation, which is developing between the 34 Moving Average and resistance at 1.3023. It's likely that the pair is going to move up towards the closest resistance at 1.3090 - 1.3120. If we see a pullback from this area, bulls will probably try to test support at 1.2945 - 1.2913.

 

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OIL MARKET OVERVIEW

08:42 22.05.2017

 

WTI and Brent futures climbed to their highest monthly levels as Saudi Arabia and non-OPEC member Russia rally support for a nine-month extension to the production cut deal signed by the majority of petroleum exporting nations. Signs that US supplies have started to ease added optimism that oil producers will eventually reach their goal of trimming global stockpiles and bring the balance in the global oil market. The US oil rig counts have been gradually picking up, but production isn’t rising as rapidly as would be expected and thereby provides a solid support to oil prices.

 

OPEC will hold its highly anticipated meeting on this Thursday, May 25, with nearly everyone so far predicting that members will agree to extend production cuts at least through the end of this year. Saudi Arabia and Russia claimed Monday in a joint statement they will “do whatever it takes” to reduce global oil inventories, pledging to extend the cuts by nine months. There is a remote probability that the agreement is extended with a more stringent cut. This would see prices rising from the current levels in the short-term, but in a longer-term, there is a high risk of a breakdown in the agreement to noncompliance. This would send prices lower.

 

Another factor that might contribute the oil prices’ drop/upsurge is the Iranian volumes of oil production. Incumbent President Hassan Rouhani won the election on last Friday. He suggested a great variety of reforms aiming at reviving the continuously weak economic growth of the country. He might encounter resistance in terms of the pace and shape of reforms he promulgates. In addition, there is a threat of disruption of the 2015 nuclear accord. Mr. Trump is unfriendly towards Iranian officials. Throughout his election campaign, he criticized Obama’s administration for forging a deal with Tehran. He is apt for doing great things with Sunni Arab leaders rather than Iranians. A sanctions snap-back could not only deter foreign investment in the Iranian energy but also curtail the country’s ability to sell oil abroad.  This would help oil prices to rise higher.

 

The additional factor that still puts a great pressure on the oil prices is oversupply from other key markets like Nigeria and Libya which are exempt from the oil production cut agreement.  If they manage to refurbish their petroleum producing industries this might derail the OPEC-led cut project.

 

Overall, in the short term, oil prices will likely continue their recent rally, especially, following the OPEC meeting. What happens with them afterward is still a big question. We may start making predictions as soon as we are able to assess the outcome of the Vienna meeting.

 

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EUR/USD: 8/8 MM LEVEL COULD SEND PRICE LOWER

11:38 22.05.2017

 

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The price reached 8/8 MM Level, so wave © of [y] may have been ended, which means there's an opportunity to have bearish wave (i). In this case, we should keep in mind 6/8 MM Level as the next intraday target.

 

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As you can see on the one-hour chart, wave v of © achieved 8/8 MM Level, which could be a departure point for wave (i). Therefore, bears are likely going to test 6/8 MM Level in the coming hours.

 

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EUR/USD: MORNING STAR PUSHING PRICE HIGHER

13:31 22.05.2017

 

1495459758-8e189939dfb87a9bff33a0e7fd0da

 

The price has been rising since the lower "Window" acted as support. Also, we don't have any reversal pattern so far, which mean the pair could test the upper "Window" soon. If we see any bearish pattern on this level, there'll be an opportunity to have a correction.

 

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We've got a "Morning Star", which has been confirmed, so the price is moving up. At the same, there's a chance to have a local correction towards the nearest support level. Anyway, we are likely going to see the price even higher in the coming hours.

 

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USD/JPY: ""WINDOW" ACTING AS STRONG SUPPORT

13:37 22.05.2017

 

1495459758-aecf1d963efbae4c8837ffba15d8b

 

There's a consolidation, which is taking place on the four-hours chart. The 34 Moving Average is acting as resistance. Considering the last bearish "Tweezers", the price is likely going to test the closest support level in the short term.

 

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The lower "Window" is acting as strong support, so the price is likely going to test this level once again. Nevertheless, the market is likely going to reach the 55 Moving Average afterwards.

 

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MORNING BRIEF FOR MAY 23

06:15 23.05.2017

 

The British pound slumped after authorities said a blast at an Ariana Grande concert in Manchester could be a terror-related.  A suspected terrorist attacked killed at least 19 people and wounded 50. It happened in the middle of an election campaign and ahead of the tough Brexit negotiations with the two parties embroiled in a wrangle over the size of compensation for the Britain’s divorce settlement. GBP/USD lost a few points on Tuesday having slipped to 1.2990. Today’s focus will be on the BOE Governor Mark Carney’s testimony on inflation and economic outlook before Parliament’s Treasury Committee as well as on the public-sector net borrowing.

 

EUR/USD hit a six-month high (1.2542) overnight after German Chancellor Angela Merkel said that the currency was made too weak by the European Central Bank’s loose monetary policy.  The cheaper euro is partly to blame for Germany’s trade surplus. In Tokyo morning, the euro was trading near 1.2450. The bullish phase that started last week appears to a bit overextended.  The euro will unlikely hit 1.3000 in the short-term future. So, while undertone of the pair is still positive, we would suggest adjusting some stop-losses to avoid unexpected dips. Tonight’s focus will be on German May Ifo Survey and second vintage of quarterly GDP. Eurozone’s PMIs are also out today.

 

The yen gained some points in the early hours of the Asian session probably on concerns over the explosion in the UK and political wrangling in Washington. USD/JPY retraced to 111.05 from yesterday’s high 111.60. Markets lost their confidence in the growth-generating capacity of the current US administration with Trump’s presidency engulfed in a crisis over his firing of FBI James Comey and the allegations he had some close ties with Russians in the course of his election campaign. With Donald Trump on his first overseas trip, the political crisis has calmed for now. But we expect the melodrama to pick after once the US president returns to Washington. There were two Fed speeches today, both at the dovish end of the monetary policy spectrum – Charles Evans and Lael Brainard who didn’t provide us with any comments on current economic outlook and on monetary policy. FOMC member Kashkari will be speaking today at 4:00 pm and 10:00 pm MT time.  

 

Aussie and kiwi are both higher on the session due to rising commodity prices. AUD/USD is trading above 0.7490 at the current moment. There is a room for extension towards 0.7480/85 levels. To maintain the momentum, bulls should allow quotes to move below 0.7430. NZD/USD spiked to 0.7030. A move beyond 0.7050 will force to focus on the upper levels.

 

USD/CAD dropped below 1.3475 (below 50-day MA) on surging commodity prices. Yestersay we received Trump's complete budget proposal that seeks to boost government revenues by allowing oil drilling in the Alaska National Wildlife Refuge and draining the Strategic Petroleum Reserve. This might hurt the Loonie and oil prices in the short-term and push USD/CAD higher. On the daily chart of Brent oil futures, the doji candlestick has been formed. It is a good selling opportunity. 

 

1495522550-5fb7a9348c98b8206c13fb4e2b440

 

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AUD/USD: AUSSIE CAME CLOSER TO RUBICON

06:32 23.05.2017

 

On the AUD/USD daily chart, bulls managed to push the quotes beyond the downward trading channel and tested the resistance at 0.749. if it is broken successful, the way towards the 0.7525-0.7535 convergence zone will be opened. In contrast, the return of the Australian dollar to support at 0.745 will raise hopes for a downtrend recovery.

 

Screenshot_2017_05_23_07_13_18.png

 

On the AUD/USD hourly chart, quotes reached 200%target in the AB = CD pattern. It corresponds to the upper border of the upward trading channel. It may lead to the rollback. To break the downward short-term trend, the resistances at 0.751 and 0.753 levels should be overcome.

 

Screenshot_2017_05_23_07_13_34.png

 

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USD/CAD: WILL 5-0 BE REALIZED?

06:33 23.05.2017

 

Recommendations:

 

BUY 1.3435 SL 1.3380 TP 1.3650

 

BUY 1.3375 TP 1.3320 TP 1.3525

 

On USD/CAD daily chart, the 5-0 and Wolf Waves patterns are in the process of realization. If "bears" manage to test support levels at 1.3435 and 1.334, the target of Wolf Waves pattern will be fulfilled. In contrast, the rollback from 50% and 61.8% levels of the CB wave in the Shark pattern will allow the "bulls" to count on the restoration of the long-term uptrend.

 

Screenshot_2017_05_23_07_13_49.png

 

On USD/CAD hourly chart, correction of the bullish trend continues. The rollback may end within the 161.8% target of the "Crab" pattern. It corresponds to the lower border of the upward trading channel.

 

Screenshot_2017_05_23_07_14_04.png

 

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