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MORNING BRIEF FOR JUNE 1

06:00 01.06.2017

 

Australian manufacturing PMI and NZ terms of trade kicked the Asian session off but did little to give rise to market fluctuations. Aussie gained some strength in the light of the data but then was hit by the Caixin China manufacturing data that showed industry contraction for the first time in 11 months. AUD/USD dropped below 0.74. The following pullback has shifted the pressure to the downside but at the present moment, a sustained move below 0.7380 seems unlikely.

 

USD/JPY moved above 111 in the Asian session. The Capex data from Japan beat market expectations and argued for a stronger yen, But the international securities flows data confirming the fifth week of Japanese buying foreign bonds prevented a further yen’s appreciation.

 

EUR/USD edged higher above 1.1250 overnight. In the Tokyo morning, it was flat at 1.1243. The US dollar remains pressured as FBI and several congressional panels carry out an investigation into Russian meddling in the 2016 presidential election and possible collusion by the Trump campaign. The following investigations have become too much of a distraction in Trump’s presidency. Trump’s fellow Republicans urged him to tweet less and focus on delivering his election promises instead. The current outlook for EUR/USD pair is neutral. The single currency has to register a New York close above 1.1300 for us start targeting higher levels.

 

GBP/USD declined on Thursday on fears that PM Theresa May could lose control of parliament in Britain’s June 8 election. A YouGov showed that May needs more seats to form a solid, not hung parliament thereby raising prospects of political turmoil before formal Brexit talks begin. Other polls, however, show May winning a big majority. At the present moment, GBP/USD currency pair is trading near 1.2860. It could be a start of the consolidation phase. In the near-term future, GBP will likely trade sideways within a broad range of 1.2800 – 13000.

 

USD/CAD is still in the near-term consolidation phase. The pair is trading at .125. it has a room for extension towards 1.3540 as well as slow down the pace of its rally and slide towards 1.3480, 1.3420. oil prices didn’t help Loonie to regain its strength. However, they did rise a little in the past session after a report that showed US crude stockpiles had fallen more than expected. Brent oil futures are now trading at $51.20 hardly showing any signs of recovery after the massive drop the OPEC members failed to fully satisfy market expectations.

 

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AUD/USD: BEARS HAVE WON

06:31 01.06.2017

 

Technical levels: support – 0.7370, 0.7340; resistance – 0.7440.

 

Trade recommendations:

 

Sell — 0.7410; SL — 0.7420; TP1 — 0.7370; TP2 — 0.7340.

Reason: narrowing bullish Ichimoku Cloud, falling Senkou Span A and B; a new dead cross of Tenkan-sen and Kijun-sen with falling lines; the prices are under the Cloud and formed the new lows.

 

1496298674-42a68b4bfa2f0515dfbaa054e9dba

 

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USD/JPY: DOLLAR TESTED 3W LOWS

06:32 01.06.2017

 

Technical levels: support – 110.50; resistance – 111.00, 111.30.

 

Trade recommendations:

 

Sell — 111.00; SL — 111.30; TP1 — 110.50; TP2 — 110.10.

Reason: expanding bullish Ichimoku Cloud, falling Senkou Span A; a dead cross of Tenkan-sen and Kijun-sen with falling Kijun-sen; the prices are corrected to Kijun-sen.

 

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GBP/USD: POUND MADE FRIENDS WITH THE WEDGE

06:34 01.06.2017

 

Recommendation: BUY 1,2865 SL 1,281 TP 1,3025,

 

SELL 1,28 SL 1,2855 TP 1,264. 

 

On the GBP/USD daily chart, the Bulls hit the target 88.6% of the Shark pattern. At the present moment, we may observe the transformation of the Shark pattern into 5-0. A rebound from 50% and 61.8% correction levels of the CD wave creates prerequisites for sales. However, if the bulls manage to reach 1.2995 and 1.3023 levels, there will be a continuation of the rally. 

 

Screenshot_2017_06_01_07_29_21.png

 

On the GBP/USD hourly chart, there is an expanding wedge pattern. A rollback towards 50% and 61.8% levels of the 4-5 wave followed by the return of quotes to 38.2% and 50% can be used for opening long positions.

 

Screenshot_2017_06_01_07_29_40.png

 

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NZD/USD: BULLS STUMBLED ACROSS PIN-BAR

07:11 01.06.2017

 

Recommendation: BUY 0,7045 SL 0,6990 TP1 0,715 TP2 0,723. 

 

On the NZD/USD daily chart, bulls hit an intermediate target 127.2% of the Deep Shark pattern. Then, there was a rollback. The formation of a pin-bar with a long shadow increases the risks for the development of the correction.

 

Screenshot_2017_06_01_07_28_47.png

 

On the NZD/USD hourly chart, the "Bump and Run Reversal" and "Shark" patterns were realized. Until the Bears did not test the diagonal support of the introductory stage of the former pattern, the "bulls" retain control over the pair. Rebound from the target 88.6% in the Shark pattern will allow buyers to launch a counterattack.

 

Screenshot_2017_06_01_07_29_04.png

 

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EUR/USD: RESISTANCE WAITING FOR BULLS

08:11 01.06.2017

 

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The price is still rising, so bulls faced resistance at 1.1249, which led to the current consolidation. Therefore, the pair is likely going to test the nearest support at 1.1204 - 1.1171 in the short term. If we see a pullback from this area, there'll be an opportunity to have another upward price movement towards the next resistance at 1.1287 - 1.1307.

 

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We've got a "Double Top" pattern, which has been confirmed. So, bears are likely going to reach the closest support at 1.1204 - 1.1196 in the coming hours. However, if a pullback from these levels happens, bulls will probably try to test another resistance at 1.1287.

 

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GBP/USD: "V-TOP" PATTERN

08:14 01.06.2017

 

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The price faced resistance at 1.2913, so we've got a "V-Top" pattern, which pushed the price lower. Therefore, the market is likely going to decline in the direction of the nearest support at 1.2816 - 1.2793. If we see a pullback from this area, there'll be a chance to have bullish price movement in the direction of the next resistance at 1.2913 - 1.2945.

 

1496304601-fee38ffeb689a2a22c76cb06016ea

 

Bulls found resistance at 1.2932, which led to forming a "V-Top" pattern. So, the pair is likely going to test the closest support at 1.2816 - 1.2793. If a pullback from these levels happens, there'll be a green light for another bullish rally towards resistance at 1.2905 - 1.2935.

 

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EUR/USD: BULLISH "HIGH WAVE"

13:13 01.06.2017

 

1496322713-d2d0a1a5f27e04114d218455944a2

 

Bulls are still pushing the price higher, but there's a bearish "Engulfing" pattern, which hasn't been confirmed yet. Therefore, the market is likely going to test the nearest support, which could be a departure point for another upward price movement.

 

1496322713-35c722b8e248cd11ba6edbc68cf16

 

We've got a "Shooting Star", which has been confirmed. Therefore, bears are likely going to test the 89 Moving Average. If we see a pullback from this line, there'll be an opportunity to have a new high.

 

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USD/JPY: "THREE METHODS" PATTERNS

13:32 01.06.2017

 

1496322713-75dbeda5a22e2fdc6a09512d60549

 

There's a bullish "Hammer", which has been confirmed enough. So, the pair is likely going to test the 55 Moving Average once again. However, if a pullback from this line happens, there'll be a green light for another decline.

 

1496322714-81675b7965ab000a832b244adea18

 

The last "Three Methods" patterns point to a possibility to have the market even higher. However, the price could test the nearest support firstly

 

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GBP/AUD REVERSED FROM COMBINED SUPPORT ZONE

17:09 01.06.2017

GBP/AUD reversed from combined support zone

 

Next buy target - 1.7650

 

GBP/AUD continues to rise after the earlier upward reversal from the combined support zone lying between the support level 1.7200 (former strong resistance level from January), lower daily Bollinger Band and the 38.2% Fibonacci correction of the upward impulse from the middle of April. The upward reversal from this support zone stopped the earlier minor impulse wave (iii).GBP/AUD is expected to rise toward the next buy target at the resistance level 1.7650 (which reversed the previous primary ABC correction ? at the start of May, as can be seen below).

 

dmWDU13Xp.png

 

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EUR/AUD BROKE STRONG RESISTANCE LEVEL 1.5060

17:10 01.06.2017

 

EUR/AUD broke strong resistance level 1.5060

 

Next buy target - 1.5060E

 

EUR/AUD has been under strong bullish pressure lately – after the earlier breakout of the strong, multi-month resistance level 1.5060 (which also reversed the previous indeterminate correction (2) in September of 2016, as can be seen from the daily EUR/AUD chart below). The breakout of this resistance level accelerated the active minor impulse waves (iii) and 5 – both of which belong to the intermediate impulse wave © from March.EUR/AUD is expected to rise to the next buy target at the next resistance level 1.5300. Strong support now stands at the aforementioned price level 1.5060.

 

dn2ScyJy3.png

 

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EUR/USD: EURO READY TO CONTINUE UPTREND

05:14 02.06.2017

 

Technical levels: support – 1.1210; resistance – 1.1250.

 

Trade recommendations:

 

Buy — 1.1210/20; SL — 1.1190; TP1 — 1.1300; TP2 – 1.1340.

Reason: expanding bullish Ichimoku Cloud with rising Senkou Span A; a new golden cross of Tenkan-sen and Kijun-sen, rising Tenkan-sen; the prices are supported by Cloud and Tenkan-sen.

 

1496380446-5974574d0f06c411e972e24d898d2

 

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GBP/USD: BULLS TESTED CLOUD’S RESISTANCE

05:15 02.06.2017

 

Technical levels: support – 1.2850; resistance – 1.2910.

 

Trade recommendations:

 

Sell — 1.2840; SL — 1.2860; TP1 — 1.2780; TP2 — 1.2750.

Reason: bearish Ichimoku Cloud, but horizontal Senkou Span A and B; a new weak golden cross of Tenkan-sen and Kijun-sen under the Cloud; the market can’t breaking out the Cloud’s resistance.

 

1496380529-5838ef800660551113de2aff99712

 

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MORNING BRIEF FOR JUNE 2

06:02 02.06.2017

 

Today’s news headline is that Trump officially announced the withdrawal of the US from the Paris climate agreement.  The President considered the deal a burden and unfair to the US and said he would welcome renegotiation with the other countries. The German, Italian and French governments all reacted immediately to Trump’s announcement putting out a joint statement saying they “take note with regret” of Trump’s decision. The UK Theresa May took some time before saying anything on this subject. Her reluctance to come down stronger on Trump may be explained by looming Brexit negotiations. She tries to distance herself from the European countries and make friends with the US. The market’s reaction was subdued. Us equities moved higher on Trump’s announcement, while oil futures dropped.

 

The US dollar regained its strength in the past session due to strong economic data flowing from the country.  Yesterday, we got a bunch of releases out of the US. ADP private sector employment increased by 253K vs forecasted estimate of 181K. The ADP is expected to mirror the official non-farm employment data. But we must admit that the correlation is not always great but the print with 253K, 200K, 180K or even 120 K are all good for the market to think the Fed will raise its interest rate on June 14th.  The US jobless claims came at 248K. This was higher than the consensus estimate, but in general it didn’t change the trend. The ISM Manufacturing employment component was also very strong.

 

Today’s focus will be on the US labor market report consisting of average hourly earnings, NFP and jobless rate data. It will be release at 3:30 pm MT time.

 

The euro moved lower to 1.1225 from 1.2569 in Tokyo morning due to widespread strengthening of the USD. The outlook is still neutral, it may change to bullish one if EUR/USD breaks 1.3000.

 

Sterling is still pressured by the upcoming UK general election scheduled for June 8. At the present moment, the pair is hovering around 1.2850. We will be bearish on GBP only if it slide below 1.2755 – 1.2760 levels. Today, we will receive construction PMI out of the UK.

 

Australian dollar slumped to 0.7395 in the Asian session. National Australia Bank posted a note on their forecast of the first quarter GDP data which is due on Wednesday 7 June. Economic partials point to a modest contraction in real GDP. Earlier this week we released CAPEX report that contained decreasing spending on plant and equipment (the essential element of the GDP gauge). In the upcoming session, we will be waiting for a further slide towards the supports at 0.7355 or lower, towards 0.7330.

 

USD/CAD moved a little bit higher on the session and almost hit 1.3460 level on the stronger greenback and falling oil prices. Today we release trade balance and labor productivity data out of Canada.

 

Brent oil futures dropped below $50.30 in the past sessions after the US President Trump announced that the US would leave the Paris Climate Accord. The might instigate the growth of the American oil  industry which in turn will complicate OPEC’s production cut projections.

 

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GOLD: STEP FORWARD, TWO BACKWARDS

06:30 02.06.2017

 

On the daily chart of gold, the exit of quotes from the triangle allowed the Bulls to return to the upward trading channel. If buyers fail to gain a foothold there and push the quotes towards the support at $1256 will tell us about their weakness and open the way towards $1240-1245. For continuation of the rally, the Bulls need to update the May high.

 

Screenshot_2017_06_02_07_00_16.png

 

On the hourly chart of gold, a breakout of support at $1,260 will allow the Bears to return quotes within the borders of the triangle and activate the Shark pattern. Its targets are located near the marks of $1,250 and $ 1,245.

 

Screenshot_2017_06_02_07_00_31.png

 

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USD/JPY: BULLS REGAIN THEIR STRENGTH

06:31 02.06.2017

 

Recommendation:  BUY 111,95 SL 111,4 TP1 113,5 TP2 114,6.

 

On the USD/JPY daily chart, the Bears failed to consolidate below 110.5. This tells us about their weakness. Bulls launched a counterattack and became ready to activate the Crab pattern and to implement the 5-0 pattern. But first, they need to test the resistance at 112.05.

 

Screenshot_2017_06_02_06_59_47.png

 

On the USD/JPY hourly chart, the formation of the expanding wedge pattern continues. To activate this pattern, the Bulls need to update the high at point 3. The resistance is located at 111.95. If it is tested successfully it will be a signal for opening long positions.  

 

Screenshot_2017_06_02_07_00_02.png

 

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BANKS PREVIEW FOR THE NONFARM PAYROLLS

07:19 02.06.2017

 

Analysts from major banks offer insights on their expectation from the today’s US labor market report which is due at 3:30 pm MT time. It will be critical for the Fed’s rate June decision as its monetary policy decisions are based on the changes in employment and inflation estimates. The headlines close to the forecasted data should produce a surprise effect across the trading board. There might be extreme fluctuation if the reading results in an extreme divergence from market’s expectations.

 

In general, we don’t expect great moves from the report; the employment has been extremely healthy in the past months (steadily growing) and it seems that it is not a great concern of the Fed’s officials anymore. Wages are becoming more important in the US labor market report as they have a strong correlation with inflation figures.

 

The upcoming release should bring around 181K new jobs which is a quite decent figure, sufficient for the market to think of rate hike at the Fed’s June meeting. The jobless rate is expected to remain unchanged at 4.4%, while monthly wages should disappoint markets with their soft print. If it is the case, the USD will be hurt. 

 

Yesterday we release a strong ADP jobs report which has some correlation with official data. So, the US dollar rally appears to have already discounted an upbeat NFP print. it means that positive payrolls could even trigger ‘Sell the fact’ trading in the USD. 

 

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EUR/USD: BEARISH "PENNANT"

08:07 02.06.2017

 

1496390772-5728842db5ef73aab42192dee7b8d

 

Bulls faced resistance at 1.1249, so the price is consolidating. Also, we've got a "Double Top" pattern, which means bears are likely going to test the nearest support at 1.1204 - 1.1171 in the short term. If we see a pullback from this area, there'll be an opportunity to have an upward price movement towards the next resistance at 1.1287 - 1.1307.

 

1496390771-044b8943f81acadd33f15ac3b2227

 

We've got a "Double Top", which has been confirmed. Also, we've got a bearish "Pennant" pattern, so the market is likely going to test the 89 Moving Average in the coming hours. If a pullback from this line happens, bulls will have an option to test resistance at 1.1267 - 1.1278.

 

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GBP/USD: MOVING AVERAGES ACTING AS SUPPORT

08:12 02.06.2017

 

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The price is consolidating along the Moving Averages. Considering the double pullback from resistance at 1.2913, bears are likely going to test the closest support at 1.2843 - 1.2816. However, if we have a pullback from this area, we should keep in mind the next resistance at 1.2913 - 1.2945 as the next bullish target.

 

1496390772-3dfca8e6563d64e8258fe615b1c5c

 

The 55 & 34 Moving Averages are acting as support. If these lines turn out to be broken, bears are likely going to achieve the closest support at 1.2848 - 1.2839. At the same time, if a pullback from this area happens, bulls will have a chance to deliver a new local high.

 

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GBP/USD: OUTLOOK FOR JUNE 5-9

13:09 02.06.2017

 

Sterling was really volatile in the course of the past week as we approach the general election on 8 June. The recent polls indicated that Theresa May’s lead has narrowed. This made the pound to lose its ground in the beginning of the week. The UK economic fundamentals helped GBP to regain in strength as Thursday’s Manufacturing PMI indicated industry expansion, and Friday’s Construction PMI spiked to 17-month high in May. On Friday, YouGov election poll posted another soggy result for Theresa May’s party: it lacks of 13 seats of an overall majority. The pound tumbled below 1.2850.

 

Next week, ahead of the UK general election, GBP will continue experiencing some volatile moves. On the economic data front, receive services PMI will be released on Monday, Halifax house price index and Britain’s manufacturing production figures will be released on Wednesday and Friday accordingly. On June 8, the UK general elections will be held. On the same day, in the US, the former FBI director Comey will testify before the Senate intelligence committee on whether Donald Trump asked him to drop investigations into ties between US President’s former national security adviser, Michael T. Flynn, and Russian entities. Once this is confirmed, the US dollar will likely suffer.

 

At the present moment, the GBP/USD is neutral. An immediate support can be found at 1.2840. A break below 1.2800 will result in restoration of the downtrend. Then, the quotes may decline down to 1.2760. The key resistances are located at 1.2920, 1.3000.

 

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EUR/USD: OUTLOOK FOR JUNE 5 - 9

13:39 02.06.2017

 

EUR/USD currency pair was trading in a horizontal band during the past week as investors await the European Central bank’s meeting on June 8. ECB policymakers are set to strike a cautious tone about future tightening of monetary policy because of doubt around inflation. Preliminary data released on Wednesday fell short of market expectations having posted 1.4% in May which is well below the bank’s 2% target. The ECB president Mario Draghi said on Tuesday that a massive monetary policy stimulus is still needed to fight with weak inflation figures. On Friday, EUR/USD regained its strength following a bit disappointing US labor market report. The nonfarm payrolls revised to 138K from expected 182K. Wage growth was mediocre, while the jobless rate fell a bit lower to 4.3%. in general, the report wasn’t so bad. It shouldn’t prevent Fed from raising rate at its June meeting.  

 

Apart from the ECB meeting, we will receive the Eurozone countries’ PMIs and industrial production figures on Monday and Friday respectively. Political turmoil in the US seems to come back to life next week as the former FBI director Comey is scheduled to testify in an open and closed session on June 8 before the Senate intelligence committee which is currently investigating into possible collusion between Russian entities and Trump’s election campaign.

 

At the present moment, the pair is trading at 1.1265. The undertone for the single currency is still positive, but only a clear break of 1.3000 will indicate that EUR/USD has entered into bullish phase. The key supports are located at 1.1205, and at 1.1170.

 

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NZD/USD REACHED BUY TARGET 0.7130

16:56 02.06.2017

 

NZD/USD reached buy target 0.7130

Next buy target - 0.7200

NZD/USD today broke sharply above the resistance level 0.7130, which was set as the buy target in our earlier forecast for this currency pair. The breakout of the resistance level 0.7130 was preceded by the breakout of the 50% Fibonacci correction of the earlier intermediate impulse wave © from the start of February – which accelerated the active intermediate impulse wave (3). NZD/USD is expected to rise in the active impulse waves (3) and Ⓒ in the direction of the next buy target at the resistance level 0.7200.

 

dLeEgG2I1.png

 

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USD/CHF REACHED SELL TARGET 0.9670

16:58 02.06.2017

 

USD/CHF reached sell target 0.9670

Next sell target - 0.9550

USD/CHF continues to fall inside the minor impulse wave (v) – which started earlier from the resistance zone lying between the resistance level 0.8900, 38.2% Fibonacci correction of the downward impulse from the middle of May and the former support trendline of the recently broken daily down channel from March (acting as resistance now after it was broken).

 

Having recently broken below the support level 0.9670 (which was set as the sell target in our earlier forecast for this currency pair) - USD/CHF is expected to fall toward the next sell target at the support level 0.9550 (low of the previous ABC correction ④ from November of 2016).

 

dLnhywgvk.png

 

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AUD/USD: AUSSIE TESTING CLOUD’S RESISTANCE AGAIN

05:14 05.06.2017

 

Technical levels: support – 0.7440; resistance – 0.7470.

 

Trade recommendations:

 

Sell — 0.7420; SL — 0.7440; TP1 — 0.7370; TP2 — 0.7340.

Reason: narrow bearish Ichimoku Cloud, horizontal Senkou Span A and B; a dead cross of Tenkan-sen and Kijun-sen, but rising Tenkan-sen; the prices are returned to the Cloud and breakout Senkou Span B.

 

1496639654-42a68b4bfa2f0515dfbaa054e9dba

 

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USD/JPY: DOLLAR GOING TO NEW LOWS

05:16 05.06.2017

 

Technical levels: support – 110.15; resistance – 110.90.

 

Trade recommendations:

 

Sell — 110.90; SL — 111.10; TP1 — 110.20; TP2 — 119.60.

Reason: expanding bearish Ichimoku Cloud, falling Senkou Span A; Tenkan-sen and Kijun-sen will make a new dead cross; the prices are bounced from Senkou Span A and made the new lows for last two weeks.

 

1496639760-3dcc4d3b0e9d38341d309e86e7227

 

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