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GBP/USD: POUND DREAMS OF REVENGE

06:11 07.06.2017

 

The GBP/USD daily chart, the transformation of the Shark pattern into 5-0 continues. If bulls fail to return to the borders of the upward trading channels. It will be a signal of their weakness and will allow us to sell the pound from the break of support at 1.284 (23.6% of the CD wave). In contrast, a test of the solid resistance at 1.3024 (88.6% of the CD wave) will create prerequisites for the continuation of the rally.

 

 

 

On the GBP/USD hourly chart, the realization of the expanding wedge pattern continues. As long as the quotes are above the supports at 1.284 and 1.278, the Bulls retain their control over the pair.

 

 

 

Recommendations:

 

SELL 1,284 SL 1,2895 TP1 1,274 TP2 1,264,

 

BUY 1,3025 SL 1,297 TP 1,3125. 

 

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DAILY OIL MARKET OVERVIEW

07:57 07.06.2017

 

The oil prices are higher at the time of writing. They managed to regain their strength that was undermined after OPEC meeting on May 25. The market participants expected deeper and longer cuts from OPEC market, but were disappointed with the meeting’s outcome. Since then they have been selling into every bounce.  On Monday, oil prices were hit by announcement that Saudi Arabia, Egypt, UAE and Bahrain cut their links with Qatar seeking to punish the country for according assistance to Islamist groups. Traders feared that a political rift between these Arab countries would undermine OPEC’s effort to curb global oil glut.

 

Tuesday was a happy day crude oil futures. As market realized geopolitical tension is unlikely to become more severe in the Middle East, with Qatar clearly wanting to diffuse the politically charged environment rather than to escalate it. Qatar’s policymakers have recently pledged to adhere to their commitment under the output cut agreement.  Even if it did refuse to comply with OPEC agreement, the implications for the oil market would be minimal, given the fact that Qatar’s commitment to cut amounts to just 30,000 barrels a day.

 

Today analysts expect US official data from the Energy Information Administration to print a ninth-straight decline in domestic crude inventories. This should offer some support to currently falling oil prices.

 

At the present moment, Brent oil futures are hovering near $49.80. If the EIA data does reveal a drop in the US crude oil inventories, the futures will rise higher towards the psychologically resistance at $50 or higher.

 

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EUR/USD: BULLISH "PENNANT"

09:46 07.06.2017

 

1496828736-5b0072d8b1b76522961a4a2f14f60

 

The price has been consolidating under resistance at 1.1287. Also, we've got a "Pennant" pattern, so the pair is likely going to test the next resistance at 1.1307 - 1.1325. If a pullback from this area happens, there'll be an opportunity to have a decline towards the nearest support at 1.1249 - 1.1232.

 

1496828737-de69bcdef49bbea4955b57e75d41f

 

There's a consolidating, which is taking place between the closest resistance at 1.1287 and the 34 Moving Average. At the same time, we've got a "Triangle", so the market is likely going to test the lower side of this pattern, which could be a departure point for an upward price movement towards resistance at 1.1287 - 1.1307.

 

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GBP/USD: BULLS GOING TO DELIVER NEW LOCAL HIGH

09:51 07.06.2017

 

1496828736-0a2ef20be72224b66b506cb39737d

 

Bulls faced resistance at 1.2945, so the price is consolidating. However, the price is likely going to test the next resistance at 1.2945 - 1.2964 in the short term. If a pullback from this area happens, we should keep an eye on the nearest support at 1.2913 - 1.2887 as an intraday target.

 

1496828736-0a2cfec73cc82675174ece727bf0b

 

The price hasn't broken resistance at 1.2932, so bears are likely going to test support at 1.2887 in the coming hours. However, if we see a pullback from this level, bulls will have a chance to reach the next resistance at 1.2964.

 

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EUR/USD: BEARISH "TWEEZERS"

12:50 07.06.2017

 

1496839765-d6871e5007db49876f68898d851d4

 

The upper "Window" has acted as resistance, so we've got a bearish "Tweezers", which has been confirmed. Therefore, the pair is likely going to test the 55 Moving Average, which could be a departure point for another bullish price movement.

 

1496839765-7240c07ecd1151477b2e930e8fa79

 

The current bearish correction is still in progress, so the price reached the 144 Moving Average. In this case, we could have a local upward correction in the coming hours, but bears are likely going to push the price even lower afterwards.

 

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USD/JPY: "MORNING STAR" PUSHING PRICE HIGHER

12:53 07.06.2017

 

1496839765-8113a742c87d389e54d707b23c681

 

The price meet a support by the lower "Window", but we still don't have any reversal pattern so far. Therefore, bears are likely going to reach the next "Window" in the short term.

 

1496839765-39509ae35d18fe7c23b79dea0ebb5

 

We've got a "Morning Star", so there's a green light for a bullish intraday correction. The main target is the last "Three Methods" pattern. If a pullback from this level happens, we could have another decline shortly.

 

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NZD/CAD REACHED BUY TARGET 0.9630

17:00 07.06.2017

 

NZD/CAD reached buy target 0.9630

Next buy target - 0.9630

NZD/CAD continues to rise sharply – after the earlier breakout of the resistance level 0.9630 (which stopped the previous waves 1 and B and which was set as the buy target in our previous forecast for this currency pair). The breakout of the resistance level 0.9630 accelerated the active impulse waves (iii) and 3 – both of which belong to the sharp intermediate impulse wave (3) from April. NZD/CAD is expected to rise to the next buy target at the next resistance level 0.9800. Buy stop-loss can be placed below the aforementioned price level 0.9630.

 

fK48y7CyA.png

 

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AUD/USD BROKE KEY RESISTANCE LEVEL 0.7510

17:01 07.06.2017

 

AUD/USD broke key resistance level 0.7510

Next buy target - 0.7670

AUD/USD continues to rise after the earlier breakout of the key resistance level 0.7510 (which stopped the earlier minor correction (a) in May, as can be seen below). The breakout of the resistance level 0.7510 was preceded by the breakout of the resistance trendline of the daily down channel from March (which has enclosed the previous minor impulse sequence 1). AUD/USD is expected to rise to the next buy target at the next resistance level 0.7670 (top of the previous minor correction (ii) from March). Strong support now stands at 0.7510.

 

fJZusmfEx.png

 

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EUR/USD: ON SUPPORT OF TENKAN AND KIJUN

04:57 08.06.2017

 

Technical levels: support – 1.1250; resistance – 1.1360.

 

Trade recommendations:

 

Buy — 1.1250/60; SL — 1.1230; TP1 — 1.1340; TP2 – 1.1360.

Reason: bullish Ichimoku Cloud, but the lines Senkou Span A and B are horizontal; a cancelled golden cross of Tenkan-sen and Kijun-sen, horizontal Tenkan-sen and Kijun-sen; the market is overbought, but prices are supported by Tenkan-sen and Kijun-sen.

 

1496897836-5974574d0f06c411e972e24d898d2

 

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GBP/USD: POUND IS APPROACHING RESISTANCE

04:59 08.06.2017

Technical levels: support – 1.2910; resistance – 1.2980.

 

Trade recommendations:

 

Sell — 1.2980; SL — 1.3000; TP1 — 1.2910; TP2 — 1.2870.

Reason: narrow bullish Ichimoku Cloud and horizontal Senkou Span A and B; a golden cross of Tenkan-sen and Kijun-sen with horizontal lines; the prices are under strong 3-week’s resistance.

 

1496897982-5838ef800660551113de2aff99712

 

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MORNING BRIEF FOR JUNE 8

06:14 08.06.2017

 

Currency ranges in Tokyo morning were subdued as traders take a time out ahead of an onslaught of major events today including a general snap election in the UK, an ECB monetary policy meeting, and testimony by James Comey, the former FBI director.

 

The US dollar index remains at its eight-months low as investors lost faith in Trump’s ability to push through his stimulus plans. There is an impeachment heaving in sight as James Comey in his written statement deposed to a fact that Donald Trump did ask him to drop an investigation of former national security adviser Michael Flynn as part of a probe into Russia’s interference in the US presidential elections.  His oral testimony may strengthen an impeachment case build on obstruction of justice, but first, prosecutors should prove that incumbent US President Donald Trump acted with corrupt intent.

 

EUR/USD is trading range bound near 1.2560 before the ECB meeting and Mario Draghi’s press conference scheduled for 2:45 and 3:30 pm (MT time) respectively. ECB’s policymakers are up to announce a “no change” to their monetary policy settings and probably to upgrade their economic assessment and policy guidance with regards to Eurozone in lights of strengthening of its economic fundamentals. The inflation forecast would be cut to 1,5% for this year from 1.7% as the lower prices one energy source might be taken into account.  A “no change” decision without any hints of bank’s intention to remove the reference to lower rates, or change its extremely dovish tone to an at least hawkish one will likely weigh on the EUR.

 

Another threat event of today is a snap election in the UK. GBP holds firm above 1.2950 due to incoming polls indicating that Tories are on course to win the election with a decent majority. Yet the traders remain concerned ahead of the election outcome as Conservative party’ s lead over its major rival Labour party has been narrowing throughout the campaign. Theresa May called the snap election in April seeking to strengthen her position in the talks with EU officials over Brexit, but the internal Tory backlash over the failures of her campaign as well as horrific terrorist attacks made her position more vulnerable, more perilous than before.  GBP/USD is trading at 1.2960. There is a slight upside bias. The pound may extend its gains towards 1.3000/1.3050 resistance levels. If Tories fail to gain a solid ground in the election, we will see the pair tumbling to the much lower levels – 1.2880, 1.2770.  If they manage to win a solid majority, we will easily see a surge in the GBP.

 

The yen has strengthened against the USD in Tokyo morning despite disappointing final GDP that came from Japan. Investors raised their demand for this safe-haven currency ahead of the numerous risky events and on the increased Qatari activity and North Korea’s missile tests. USD/JPY is trading at 109.45. There is a room for the further weakness of the greenback. The quotes may move towards the supports at 109, 108.70.

 

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NZD/USD: KIWI IS POISED TO FALL LOWER

06:39 08.06.2017

 

On the NZD/USD daily chart, a workout of the triangle with its lower border acting as a solid resistance allowed the quotes to approach 113% and 161.8% targets of the Crab and AB = CD patterns. A break of the convergence zone 0.6745-0.6785 may result in the continuation of the downward movement. 

 

 

On the NZD/USD hourly chart, the target 113% should be fulfilled for the quotes to slide towards 38.2% and 50% levels of the CD wave. Rebound from the supports at 0.687 and 0.6885 can be used for opening short positions.

 

 

 

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USD/JPY: BEARS SHOWED THEIR WEAKNESS

06:42 08.06.2017

 

Recommendation: BUY 110,6 SL 110,05 TP1 112,1 TP2 113,8. 

 

On the USD/JPY daily chart, the Bears' failure to move below support at 109.35 (78.6% of the last corrective wave) was a signal of their weakness. To launch a counterattack, the Bulls need to break the resistance at 110.5. Once it is broken, the risks for implementation of the target 88.6% of the Shark inverted pattern will increase substantially.

 

 

 

On the USD/JPY hourly chart, a further direction of the pair will be determined by the Bulls' attempt to return the quotes to the previous consolidation range of 110.35-111.9. If they succeed, the formation of the Shakeout-Fakeout pattern may lead to the continuation of the rally.

 

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EUR/USD: BULLISH "RECTANGLE"

08:00 08.06.2017

 

1496908742-cd0d9f05d9e2cb72f71467adccd3f

 

The price has been consolidating under resistance at 1.1287. The 34 Moving Average is acting as support, so the pair is likely going to test the nearest resistance at 1.1307 - 1.1325. If a pullback from this area happens, there'll be an opportunity to have a decline towards the closest support at 1.1249 - 1.1232.

 

1496908742-bb62bf7d479df388e3901e3a21396

 

There's a consolidation, which is taking place between the levels 1.1278 - 1.1204. Also, we've got a "Rectangle", so bulls are likely going to test the next resistance at 1.1287 - 1203 in the coming hours. However, if we have a pullback from this area, bears will probably try to test the 55 Moving Average

 

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GBP/USD: "FLAG" PUSHING PRICE HIGHER

08:05 08.06.2017

 

1496908742-51dfaa1a033b35a817aec5e23a381

 

Bulls faced resistance at 1.2964, so the price is consolidating. Meanwhile, we've got a "Flag" pattern, the market is likely going to achieve the nearest resistance at 1.2988 - 1.2995. However, if we see a pullback from this area, there'll be an option to have another bearish price movement in the direction of the next support at 1.2964 - 1.2945.

 

1496908742-32125dc50581754ca4fead1577f8b

 

We've got a "Flag", so bulls are likely going to reach the closest resistance at 1.2988 - 1.2995 during the day. However, if a pullback from these levels happens, bears will have a green light to reach support at 1.2964 - 1.2945.

 

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EUR/USD: "TWEEZERS" PATTERN

11:45 08.06.2017

 

1496922276-448053ca6239c9c9bb1f7d7b418b9

 

We've got a "Tweezers" pattern, which has been confirmed. So, bears are likely going to test the 34 Moving Average line, which could be a departure point for another bullish price movement

 

1496922275-59ca78724a85c96d7db08ce6cbe42

 

The 144 Moving Average has acted as support, but there's a bearish "Engulfing' at the local high. Considering confirmation of this pattern, the pair is likely going to test the 144 MA one more time.

 

 

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USD/JPY: BULLISH "THREE METHODS"

11:48 08.06.2017

 

1496922276-a88b039d3798bbbe4e41bc6059241

 

There's an "Inverted Hammer", which has confirmation. Also, we've got bullish "Three Methods", so the market is likely going to test the nearest resistance. If we see any bearish pattern on this level, there'll be an opportunity to have a decline towards the last low.

 

1496922275-61869798c493c4b5005a1b6b38d25

 

We've got some bullish patterns such a "Morning Star" and a "Harami", which both have been confirmed. However, there's a bearish "Hanging Man", so we could have a local downward correction in the coming hours. Anyway, bulls are likely going to deliver a new local high afterwards.

 

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HIGHLIGHTS OF THE ECB MEETING AND PRESS CONFERENCE.

12:53 08.06.2017

 

The European Central Banks left its key interest rates. The Council decided to remain the rates at the present levels for an extended period of time, and well past the horizon of the net asset purchase.

 

 The asset purchase program is left at 60 bln of euros per month. It will be run until the end of December 2017, or beyond, if necessary, until the ECB’s policymakers sees a sustained adjustment in the path of inflation consistent with their target.

 

Press Conference

Assets purchases are still need; they will be maintained until sustained inflation around the 2% level.  

There is a stronger momentum in the euro area economic growth

Risks to the growth outlook is broadly balanced

If growth projections are distorted, the ECB is ready to increase its asset purchase program in size and duration

ECB growth outlook has been revised upwards.

HICP was volatility due to temporal increases in energy and services prices.  

The inflation headline will remain at current level in the upcoming months, there is no convincing sign of pickup

The ECB policymakers expect only gradually rise in inflation figures  

Inflation expectations are revised downwards, while the growth expectations – upwards.

The euro moved a little bit lower against the USD on the lowering of the inflation estimates by the ECB policymakers.

 

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EUR/USD: NEW HIGH COMING SOON

15:41 08.06.2017

 

1496936445-c3ba0e165fe5dc991775409eb9fda

 

There's a developing diagonal triangle in wave (v) of [c], which is taking place on the four-hours chart. The main intraday target is 5/8 MM Level, which could act as resistance. If so, there'll be an opportunity to have a bearish price movement towards 3/8 MM Level.

 

1496936446-61386148c512784918da89d89e739

 

It seems like we've got a zigzag in wave ii with a triangle in wave . Therefore, bulls are likely going to deliver wave iii, which means we could have a new local high in the coming hours. If +2/8 MM Level breaks, the Murray math indication will be updated.

 

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EUR/USD REACHED BUY TARGET 1.1270

17:27 08.06.2017

 

EUR/USD reached buy target 1.1270

Next sell target - 1.1160

EUR/USD recently reversed down from the powerful, long-term resistance level 1.1270 (which reversed the pair sharply in November and May and which was set as the buy target in our earlier forecast for this currency pair). The downward reversal from this resistance level stopped the earlier minor impulse wave (v) – which belongs to the C-wave from the middle of April. Considering the clear bearish divergence on the daily RSI indicator - EUR/USD is expected to fall to the next sell target at the next support level 1.1160. Strong resistance remains at 1.1270.

 

g93W66tzG.png

 

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NZD/USD REACHED BUY TARGET 0.7200

17:28 08.06.2017

 

NZD/USD reached buy target 0.7200

Next buy target - 0.7250

NZD/USD continues to rise after the earlier breakout of the resistance level 0.7200 (which was set as the buy target in our previous forecast for this currency pair). The breakout of the resistance level 0.71200 follows the earlier breakout of 61.8% Fibonacci correction level of the previous sharp downward impulse wave © from the start of February – which accelerated the active impulse waves 3 and (3). NZD/USD is expected to rise to the next buy target at the next resistance level 0.7250 (target price for the termination of the active impulse (3)).

 

g8VbZpgX5.png

 

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MORNING BRIEF FOR JUNE 9

05:55 09.06.2017

 

Seven weeks ago, prime minister Theresa May called the snap election seeking a stronger mandate in talks over leaving the European Union. Today, while writing this brief, I can hear the Rolling Stones singing in chorus to her “You can always get what you want”.  It had been a catastrophic campaign for her with the Conservatives being on course to fall short of a solid majority. The exit polls pointed, and early official results pointed to a Hung Parliament, with the Conservative forming a government in coalition. This creates another layer of uncertainty ahead of the Brexit negotiations which are due in 10 days.  Sterling fell off a cliff after the announcement of the election results, and now it looks truly vulnerable to further downside. GBP/USD is trading at around 1.2730 at the moment of writing. Ahead there are several supports at 1.2705, 1.2690, 1.2615.

 

The latest update of the UK election results from Bloomberg.com

 

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With 646 out of 650 seats declared, the Conservatives had won 314 seats and therefore failed to reach the 326-mark for a solid parliamentary majority. Labour had won 261 seats. 

 

As for the other risk event of our Super Thursday, they came without too much fanfare.

 

Former FBI direct James Comey didn’t provide a smoking gun in his testimony. He did contribute to the continuation of the cacophony surrounding the US President. He said that it’s not for him to decide whether his conversation with Trump was an effort to obstruct justice. Also, he confessed that the true reason for his dismissal was the way he conducted the Russia investigation. Donald Trump didn’t like it as it put some pressure on him. Now it is up to the lawyers and Congress to decide whether Comey’s testimony is sufficient for impeachment or not. The strength of the USD reverberated across the trading desk with almost all major currencies lower against the greenback. Perhaps, only the kiwi was an exception. It rose to 0.7222 overnight without a clear reason for such outperformance.

 

Aussie slipped a few points and slid from 0.7545 to 0.7525 in Tokyo morning. Australian housing finance data showed a reduction in investor lending. From China, we got CPI and PPI figures that came short of market expectations.

 

EUR/USD dropped below 1.1210 from yesterday’s high at 1.1268 after the ECB policymakers downgraded their headline inflation forecasts having said that underlying inflation has “yet to show convincing sign of pick-up.” They upgraded the risks on economic growth of the Eurozone countries to broadly balance from extremely negative one. In addition, they pledged to continue their asset purchase program until sustained inflation around 2% level.

 

USD/CAD ticked higher mainly on the pronounced strength of the USD. Oil prices didn’t provide any support to Loonie. Brent oil futures are below $50 mark (at $47.80) as investors are still skeptical about the effect of the OPEC-led production cut deal.  

 

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AUD/USD: AUSSIE UNDER MAIN RESISTANCE

06:20 09.06.2017

 

Technical levels: support – 0.7520; resistance – 0.7540.

 

Trade recommendations:

 

Sell — 0.7510; SL — 0.7530; TP1 — 0.7470; TP2 — 0.7420.

Reason: bullish Ichimoku Cloud, rising Senkou Span A and B; a golden cross of Tenkan-sen and Kijun-sen; but the prices are under the main daily resistance and local market is overbought.

 

1496989197-42a68b4bfa2f0515dfbaa054e9dba

 

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USD/JPY: DOLLAR CORRECTED TO KIJUN-SEN

06:21 09.06.2017

 

Technical levels: support – 109.90; resistance – 110.40.

 

Trade recommendations:

 

Sell — 109.80; SL — 110.00; TP1 — 108.70; TP2 — 108.30.

Reason: expanding bearish Ichimoku Cloud, falling Senkou Span A; a dead cross of Tenkan-sen and Kijun-sen with falling Kijun-sen; the prices are corrected to local resistance and may continue the downtrend.

 

1496989259-3dcc4d3b0e9d38341d309e86e7227

 

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GOLD FAILED TO FIND HAPPINESS IN THE NORTH

06:22 09.06.2017

 

Recommendation: SELL $1270 SL $1285 TP $1240.

 

On the daily chart of gold, the bulls failed to hold the quotes above the important level of $1280.  As a result, there is a risk of the correction towards the convergence zone $1250-1256 and then towards the intersection of the lower border of the upwards trading channel and upper border of the long-term downward trading channel.

 

 

 

On the hourly chart of gold, the Bump and Run-Reversal pattern has been realized. A break of the diagonal support of the initial stage followed by the rollback of the quotes towards $1270 may result in the restoration of the downtrend.

 

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