LiteForexTeam

XAU/USD: pair resumed fall

Current trend

After Thanksgiving Day in the US yesterday when American markets were closed and volatility remained low, since today’s opening the XAU/USD pair is falling.

Most likely, amid expectations of monetary policy tightening in the US downward dynamics in the pair will remain until the Fed’s meeting on 16 December.

Currently, market expectations that are represented by the price of Fed Funds futures stand at 78% probability of an interest rate increase in December.

Support and resistance

The pair is falling along a channel on the daily chart with the lower border below the level of 1050.00, and is heading towards 965.00 (ЕМА200 on the monthly chart).

At the same time, an upward correction is possible to the levels of 1085.00, 1095.00 (ЕМА144 on the 4-hour chart), while a breakout of the level of 1105.00 (the middle line of the upward channel) could send the price towards 1138.00 (38.2% Fibonacci correction, ЕМА144 on the daily chart).

On all charts from the 4-hour to monthly, OsMA and Stochastic suggest a fall continuation.

Support levels: 1065.00, 1060.00.

Resistance levels: 1085.00, 1095.00, 1105.00, 1118.00.

Trading tips

Pending sell orders can be placed at the level of 1064.00 with targets at 1060.00, 1050.00, 1010.00 and stop-loss at 1072.00.

Pending buy orders can be placed at the level of 1078.00 with targets at 1085.00, 1095.00, 1105.00 and stop-loss at 1072.00.

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XAU/USD: technical analysis

Current trend

XAU/USD, D1

On the daily chart, the price remains below its moving averages with periods 10, 20 and 50 that are directed down, which indicates a downward movement in the pair. MACD’s histogram is in the negative zone that also indicates a fall. ADX also suggest decline as the DI lines are heading down and ADX is falling.

XAU/USD, H4

On the 4-hour chart, the pair is trading near the middle MA of Bollinger Bands, which is directed horizontally. The price remains below its MA10, MA20 and MA50, directed sideways. ADX turned down as it reached the level of 46.30, the DI lines are heading towards each other. MACD is at the zero line.

Support and resistance

Support levels: 1065.85 (local low), 1064.63 (last week low).

Resistance levels: 1075.27 (middle MA of Bollinger Bands on the 4-hour chart), 1080.00, 1081.25 (this week high), 1087.99 (last week high).

Trading tips

Short positions can be opened from current prices with the target at 1066.67 and stop-loss at 1075.27.

Long positions can be opened from the level of 1076.50 with the target at 1087.00 and stop-loss at 1072.70.

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USD/JPY: BoJ Governor satisfied with GDP statistics

Current trend

Yesterday, the Bank of Japan decided to keep its current monetary policy unchanged. BoJ Governor considers that a decline in the third-quarter GDP was insignificant. However, as many economists suggest, the Regulator may be back to discussion on easing policy at its next meeting, due on 28-29 January.

At the same time, market participant are getting ready for a hike in the US interest rates. On Thursday, US stock indices declined, while Fed funds futures show a 72% chance of a rate increase in December against a 58% likelihood two weeks ago.

Support and resistance

On the daily chart, the USD/JPY pair is trading in an upward channel with the upper border at the level of 129.00.

OsMA and Stochastic indicators on the 4-hour and daily charts recommend short positions, but on the weekly chart, they are giving buy signals.

The breakdown of 122.50 allows the pair to decline to the support levels of 122.00, 121.50 (EMA200 on the 4-hour chart and 50.0% Fibonacci). Otherwise, after the breakout of the resistance level of 123.70, the pair would strengthen to 125.00, 125.65 (year highs).

Support levels: 122.50, 122.00, 121.50.

Resistance levels: 123.50, 123.70, 124.00, 124.50.

Trading tips

Long positions can be opened from the level of 123.10 with targets at 123.70, 124.00, 124.50 and stop-loss at 122.70.

Short positions can be opened from the level of 122.40 with targets at 122.10, 121.50 and stop-loss at 122.80.

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AUD/USD: flat after yesterday's growth

Current trend

Today, the AUD/USD pair is keeping its positions though the US dollar is strengthening against other currencies. On Thursday, the Australian dollar gained significant support from strong labour market statistics, released in Australia. Thus, Unemployment Rate declined from 6.2% to 5.9% in October, while Employment Change indicated a growth by 58.6K that is about four times above the forecast.

Australia's economy is export-oriented, thus, it will benefit from a weaker national currency. At the same time, China, as Australia's biggest trading partner, is showing clear signs of economic slowdown, lowering inflation and weakening domestic demand.

Today, attention needs to be paid to Retail Sales for October and Reuters/Michigan Consumer Sentiment Index for November, due in the US. Favorable statistics will strengthen the US dollar.

Support and resistance

On Thursday, the price strengthened to the resistance level of 0.7150 (EMA50 on the daily chart, the upper border of a downward channel and EMA200 on the 4-hour chart).

On the 4-hour chart, OsMA and Stochastic indicators are turning to short positions.

If the price fails to overcome the level of 0.7150, a downward trend may resume towards 0.7030, 0.7000 (the lower border of the downward channel), 0.6950 and 06910 (September and year lows).

On the daily chart, OsMA and Stochastic recommend long positions, indicating that the price may continue correcting up and breakout the level of 0.7150.

Support levels: 0.7100, 0.7030, 0.6950, 0.6910.

Resistance levels: 0.7150, 0.7190, 0.7325, 0.7390, 0.7500.

Trading tips

Short positions can be opened from the level of 0.7110 with targets at 0.7030, 0.6960, 0.6910 and stop-loss at 0.7150.

Long positions can be opened from the level of 0.7170 with targets at 0.7210, 0.7300, 0.7380 and stop-loss at 0.7140.

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GBP/USD: public holiday in the US

Current trend

Today is a public holiday in the US so the volatility in the GBP/USD pair is expected to grow during the European session, when the UK releases Unemployment Rate and Average Earnings statistics for the third quarter.

According to the forecast, Unemployment Rate will remain unchanged at 5,4% while Average Earnings will grow from 3.0% to 3.2%.

At the same time, UK GBP came in at 0.5%, below the forecast of 0.6%, that suggests a slowdown of the economic growth. Thus, given expectations of a hike in the US interest rates, the pair will be under pressure at least until the forthcoming Fed meeting.

The BOE's Governor Mark Carney speech is worth paying attention to today as well. He is expected to give his assessment of the current economic situation in the UK.

Support and resistance

The price continues declining in a downward channel on the daily chart with the lower border at the level of 1.5000.

OsMA and Stochastic on the daily, weekly and monthly charts recommend short positions. At the same time, on the 4-hour chart, they indicate that an upward correction is likely to continue to the level of 1.5230 (23.6% Fibonacci, ЕМА50 and the upper border of a downward channel on the 4-hour chart).

While the pair remains below the resistance levels of 1.5450 (ЕМА200 and the upper border of the downward channel on the daily chart), 1.5400 (ЕМА144), 1.5330 (ЕМА50), it tends continue its downward trend to the levels of 1.5000, 1.4900 and 1.4600 (year lows).

Support levels: 1.5110, 1.5040, 1.5000, 1.4900.

Resistance levels: 1.5230, 1.5330, 1.5400.

Trading tips

Short positions can be opened from the level of 1.5145 with targets at 1.5110, 1.5085, 1.5040, 1.5010, 1.4980, 1.4910 and stop-loss at 1.5185.

Long positions can be opened from the level of 1.5210 with targets at 1.5230, 1.5290, 1.5330, 1.5390 and stop-loss at 1.5180.

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EUR/USD: general analysis

Current trend

On Tuesday, the EUR/USD pair was declining until Wholesale Inventories statistics were released in the US. The indicator came in above the forecast of 0.0%, having grown by 0.5%, that suggests an economic slowdown and negatively affects the US dollar. After the publication, the pair started strengthening and, at present, is trading in the area of 1.0760.

Today, attention needs to be paid to the ECB President Mario Draghi's Speech.

Support and resistance

On the hourly chart, the price is trading above MA10 and MA20 that have crossed each other and are directed up. MACD histogram is leaving the negative zone, its volumes are growing. Today, the price is likely to remain within the range of 1.0665-1.0770 that is confirmed by the location of Bollinger Bands MAs.

In general, the indicators suggest positive dynamics, but the pair will be under pressure until the ECB President Mario Draghi's Speech.

Support levels: 1.0700, 1.0665.

Resistance levels: 1.0770, 1.0975.

Trading tips

Long positions can be opened after the consolidation above the level of 1.0770 with the target at 1.0830 and stop-loss at 1.0750.

Short positions can be opened after the consolidation below the level of 1.0665 with the target at 1.0600 and stop-loss at 1.0720.

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USD/JPY: within range

Current trend

After a growth amid publication of strong labour market data from the US, the pair is trading within a narrow range.

The pair remains under pressure from strong NFPR data and Bank of Japan commentaries that represented regulator’s tendency to continue with easy monetary policy. The most likely scenario is the pair’s movement within sideways channel until Friday when Retail Sales data for October is due in the US.

Attention of the markets is now focused on employment and inflation data from the US in November and beginning of December. If data comes out rather negative, the pair can fall.

Support and resistance

The price broke out the resistance level at 122.50 (38.2% Fibonacci correction) and continues moving along an ascending channel on the 4-hour and daily charts towards 123.70 (23.6% correction), 124.50 (upper border of the channel).

At the same time, a breakdown of the level of 122.50 would send the pair towards 121.50 (50% correction), 120.60 (61.8% correction, ЕМА144 on the daily chart).

OsMA and Stochastic on the daily and weekly charts recommend long positions and start turning to purchases on the 4-hour chart.

Support levels: 123.00, 122.50, 122.00, 121.50.

Resistance levels: 123.70, 124.00, 124.50.

Trading tips

Pending buy orders can be placed at the level of 123.40 with targets at 123.70, 124.00, 124.50 and stop-loss at 123.10.

Pending sell orders can be placed at the level of 122.90 with targets at 122.50, 122.10, 121.50 and stop-loss at 123.20.

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GBP/USD: the pair is preparing to break through 1.5490

1. Current trend

Since last week the pair has been within downward correction, which had been provoked by the FOMC Minutes publication. ThisTuesday Pound has already lost more than 150 points. Even positive GDP data from UK couldn’t stop the fall. According to the preliminary forecasts, GDP will rise up to 0.7% exceeding the expectations. There are no important releases in trader’s calendar for today, but tomorrow we anticipate the speech of BOE Mark Carney. His speech will probably cause high market volatility.

2. Support and resistance

We can see a development of the downward movement. The price is moving towards middle MA of Bollinger Bands 1.5490. If this level is broken through, the pair will go further down to the level of 1.5400 and even to the lower border of the uprising channel. Otherwise the price can return to the levels of 1.5600 and 1.5650. Regarding the situation I would recommend to open short trades with Take Profit orders at 1.5400.

3. Technical indicators

On the daily chart indicators confirm the possibility of fall. Bollinger Bands are directed upwards, but the price chart is moving towards the MA. MACD histogram is in overbought zone. It crosses signal line from above, forming a signal to sell. Stochastic lines have entered oversold zone, giving another signal to sell.

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Dmitriy Zolotov

Analyst of LiteForex Group of Companies

GBPUSD: pair will continue to grow

1. Current trend

On Wednesday the British currency received tremendous support from the members of the UK Monetary Policy Committee, who unanimously decided not to make changes in the monetary policy due to positive statistics in for the last quarter and general economic stability. With the help of support provided by macroeconomic indices, the pair GBPUSD soared up by more than 150 points.

Before the speech of the US Fed chairman Ben Bernanke the pair was volatile, first reaching the local highs of 1.5265 and then going below the level of 1.5200. The speech by Ben Bernanke was positive. He highlighted that program of assets purchase will be minimized by mid-2014, if unemployment rate will amount to 7% by this time.

However the program can be suspended later or earlier than planned depending on the forecast of the labor market. Investors assessed Bernanke’s speech as positive and the USD started to grow, while the pair GBPUSD fell to the level of 1.5160. Attention today should be paid to the next speech of the US Fed chairman and on the publication of the retail sale index in UK.

2. Important levels: support and resistance

In the current situation it is likely that the pair will decline due to USD strengthening and weak data on the British retail sales. Later ascending trend will resume. The decline will reach support level of 1.5100-1.5050 and after that the pair will grow to the new local highs of 1.5300-1.5410.

3. Best entry/exit points

We would recommend to place long pending positions from the level of 1.5050-1.5100 with profit taking at the level of 1.5300.

4. Supporting facts

On the four-hour chart MACD histogram is in the positive zone above the signal line and is directed upward, indicating that ascending trend will continue.

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Dmitry Likhachev

Analysts of LiteForex Group of Companies