Technical Analysis by Vistabrokers

[Vistabrokers]

GOLD. Final Warning

 

Bears have made the final warning to everybody who continues to persevere and hold long positions even after previously indicated support line was overcomed by the price. The last line of customers defense (correctional Fibo level 61.8% from the growth in January – 1220) is currently being tested by the price. The decline is orderly and remains within the downtrend channel. In recent days, world stock indices receive a significant support that is reflected in the demand for gold, which, given its status of a safe haven, walks in opposition with these indices.

 

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It is recommended to refrain from taking action in the market, waiting for appropriate signals to make an informed decision. So, we can expect continued decline in case of moving the price below current levels, where the mentioned correction Fibonacci level locates, because in this case we will have no arguments for up scenario. On the other hand, only a break of the current downward channel upper limit will give a reason to expect continuation of growth, where the first target is the January high of 1,308 dollars per troy ounce.

 

 

GBP / USD. Crouch Start

 

When the asset's market find a kind of price equilibrium, the situation may drastically change overnight, while sometimes left wondering what exactly it will be connected with. It is not always necessary to search for logic in it, but there are of course some through scenarios. Actual apparent consensus is one of those occasions when it's time to prepare for important changes, and today's publication of the Bank of England quarterly inflation report is a reason for scales to swing in one direction or another. Moreover, the subsequent press conference led by the Committee on Monetary Policy chairman Mark Carney may set the record straight on the question of possible changes in interest rates. Note that this question is key for the market, determining the direction of the asset.

 

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It is recommended to wait for the aforesaid events (10.30 GMT) and be ready to work on the next breakthrough levels of support (1.5195) and resistance (local extremum 1.5300 and correctional level 50% from the decline in December 2014 - January 2015 - 1.5350). In case of breaking the resistance line, the first target of growth will be 1.5465 (a correction 61.8% from said pulse).

[Vistabrokers]

USD / JPY. Bank of Japan Shows Correct Yen Rate to Market

 

Yesterday's downward movement in half figure looked very picturesque and dramatic, causing mild panic in bulls ranks. It was the result of some Bank of Japan representatives statements regarding the undesirability of further national currency devaluation and things like that. Apparently, the controller carefully monitors price changes, making adjustments to the yen value, using something like verbal interventions at the right time. Thus, now we do not expect more monetary stimulus incentives that cuts the ground from under the feet of those who are still counting that Japan will continue at any cost devalue the currency in favor of exporters. This means that mentioned earlier scenario after a graphic border of more than two months "triangle" breakthrough is up in the air again.

 

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The primary target we had set earlier (120.69), was not been formally worked out, but the price was close to it. In any case, we have to fix a result of long positions, since quotes are back into boundaries of abovesaid figure, and thus we go into "sleep mode". We need to give the market an opportunity to choose a direction in new conditions.

 

 

GBP / USD. Rubicon was Passed

 

So, we see a long-awaited breakthrough of a long-term downtrend line, and the price has overcome the next important resistance level (1.5350), which increases the likelihood of further growth of the pair. Yesterday, the publication of the Bank of England quarterly report has done its job and became a foundation for a powerful movement to the north, which was confirmed with trend indicators.

 

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We continue to hold yesterday's long positions opened for 1.5300 breakout with abovesaid target at 1.5465, where is the correctional Fibo level 61.8% of the descending wave in December 2014 - January 2015. Also note that in this area goes Fibonacci extension level 261.8% of the pulse on February 10-11. Using Fibo extensions often gives an opportunity to successfully build targets from the initial pulse, which is taken as 100%, and ttargets are set at 161.8%, 261.8% and 423.6% of the basic pulse. Also, this level is attractive because here is the target of the graphical turning figure "inverted head and shoulders" implementation.

[Vistabrokers]

GOLD. Level Test

 

We continue to pay attention to the current situation in gold again and again. At this stage, the minimum program is executed – the reducing target is achieved (1197.25). It is a support line connecting a number of local minimums, marked during the previous few months. As a result, we can contemplate a fairly powerful rebound and, quite possibly, this is where the bulls can start a counteroffensive. However, in order to consider the possibility of buying, the price is to demonstrate the seriousness of intentions.

 

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So, it is not recommended to take active steps at this stage. At the same time, it is worth considering the possibility of sales in case of a break below 1197.25 in order to achieve the yearly minimum - 1167 dollars. Purchases will be possible only in the case of relevant prerequisites appearance in the form of line of resistance breakthrough and the subsequent formation of growth signs in the form of gradually higher lows and highs.

 

 

 

EUR / USD. Market's Attention is Directed to ECB "Minutes" and Proud Greeks

 

After reaching eleven-year lows (1.1096) in January market players seem to have left the EUR / USD at rest, and some positions were closed. This led to a short time growth of the quotes, and a peak of buyers' activity was at 1.1532 . Now the pair has found a balance, moving in a narrow trading range. The nearest significant support is 1.1270, resistance - 1.1535. Fundamentally, the market continues to be uncertainty regarding the extension of funding Greece. Its representatives are still unable to find a compromise with the international lenders. Nevertheless, some progress is seen, because there is already a formal request to Brussels to extend the current program for 4-6 months (the period which is needed to develop a new program). We also can not forget about the possible impact of the minutes of the last ECB meeting publication (12.30 GMT), where the discussion of adopted at the January meeting quantitative easing program (60 billion euros per month) will be described in detail.

 

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Thus, aforesaid levels of support (1.1270) and resistance (1.1535) remain delimiters between bulls and bears, and there is something like a buffer zone between them, which means that the recommendation to work on this range exit. As a possible target in the event of rising scenario, we name 1.1655 (38.2% correction from the reduction in December 2014 - January 2015), and then - 1.1800, where is the correction of 50%, and 161.8% extension of the upward momentum in late January - early February. Breakdown of support will lead to January lows testing (1.1096).

[Vistabrokers]

GBP / USD Needs a Fuel to Move Further

 

The British currency is still feeling confident enough versus the US dollar - quotes are within the short-term but quite clear upward price channel. An important role in the development of this movement has played a publication of the last BOE meeting minutes on Wednesday. It became apparent that two members of the Monetary Policy Committee saw a reason for the rate hike from current levels (0.5%) this year. Also good data on the labor market has supported the pound. Thus, the unemployment rate fell and wages rose more than expected. We note that the factor of low wages previously was decisive for the Old Lady in its long periods of inactivity in the context of monetary tightening. In turn, the growth is limited by resistance levels: 61.8% Fibonacci correction of the decline in December 2014 - January 2015, as well as the expansion of 261.8% of the upward impulse that took place in mid-February.

 

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It is recommended to work in a northerly direction, but we should wait for today's publication of retail sales data. It is likely that this data will cause a deeper correction to the area of the support line, which can be used to build up long positions. The enter on a breakthrough of the current local maximum at 1.5480 is also possible.

 

 

USD / JPY. Oriental Calm

 

As we have noted earlier, a situation with the pair is now more complicated due to some representatives of the Bank of Japan. Recall that once quotes have overcome strategically important resistance level (upper limit of the graphic figure "triangle"), in the news appeared comments of BOJ members with respect to the undesirability of further national currency reduce, as well as reflections on the possible negative impact of additional stimulation measures on consumer sentiment. Thus, some market players went out "to clarify" that led to the formation of a new consolidation figure having its own potential.

 

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This figure can be realized in the next few hours and the exit direction is likely to provide the dominant trend in the near future. To confirm it is desirable to consolidate above / below the next resistance (119.40) or support (118.42) levels. We also can not ignore the formed upward price channel, boundaries of which can be boundaries of subsequent market movements.

[Vistabrokers]

USD / CAD Shows Vital Signs

At the end of January saw the US dollar has established nearly six-year low value against the Canadian dollar, which became possible amid the large-scale decline in oil prices (Canada is one of the largest exporters in the world), and the subsequent reduction in key interest rates of the Bank of Canada. However, with the advent of the correction oil market conditions has changed, and the last wave of growth met with a correction, which has taken the form of "triangle". This graphic figure only shows a lull, because with the advent of new vehicle, boundaries of the pattern will be overcome by the price and this will indicate priority for action. At this point, it seems that the bulls in USD / CAD began to take the upper hand, which became the cause of Friday's data on changes in retail sales in Canada. The December value has fallen by 2%, despite the fact that expectations were reduced to decrease by only 0.3%.

 

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It should be noted that the support for quotes is still provided by the trend line which has started on December 31 and which has repeatedly made the point for bulls' purchases. However, in this case, only the output of the aforementioned triangle boundaries will give us a signal to enter. So, on top the 1.2600 mark is still tighten growth, and the 1.2360 mark is doing it below.

 

EUR / USD. Cautious Optimism

 

The main currency pair has experienced some signs of turbulence, when on Friday the weak data on business activity in the industrial sector of the region's economy disappointed the market, bringing up quotes to the earlier indicated level of support (1.1270). No less dramatic was also a rebound from this mark after it became aware of a high probability of the current bailout program for Greece extension for another 4 months, which was rumored to be from the text of the agreement. Greeks asked for more (6 months), and the details of the agreement have not yet been disclosed, as well as not yet taken, however, it can take some of the risk out of the market in the context of what the country looks set to remain in the ranks of the eurozone. Thus, at the moment the pair is trading at usual levels, with in addition of a hidden growth potential, when the details of the agreement will be known.

 

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There is nothing more permanent than temporary, so the work in a horizontal channel (1.1270 - 1.1450) on the rebound from its borders, at the moment, is one of the most appropriate trading tactics. In this case, it is useful to use addition signals from indicators such as stochastics to confirm. At the same time, the potential after the powerful motion beyond this range is very high, and we must remember this.

[Vistabrokers]

GOLD. Is Trend our Friend Again?

 

While buyers are catching the bottom, the caravan slowly goes southward. As a result, not only the next final frontier was reached - the support line drawn through the last few months minimums, but also the first and probably not the last attempt to overcome it was made. Quotes remain within the downtrend channel of last few weeks, and moving averages confirm the priority of short positions. Despite the lack of the direct influence of fundamental publications in different countries, the today's speech of the Fed head Yellen ahead of the Senate could make adjustments to the current balance of power in the gold market.

 

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It is recommended to open the order to sell from the last local minimum breakthrough at 1190.00 or when approaching the trend line. The next target is the January minimum (1167 dollars per ounce).

 

 

 

USD / CAD. About Graphic Figures in Context of Fundamental Events

 

We continue to monitor the situation in USD / CAD, where has recently formed a graphic shape of consolidation "triangle". Note that to "score" this pattern, we needed a previous trend with clear graphic boundaries and also we needed the price to come through one of these boundaries subsequently. In last 24 hours first two terms have added the third - bulls attempted to break through the upper boundary of the figure, breaking the previously designated threshold level 1.2600. It is likely that in recent days the loonie was pressured by reduction of oil prices, as well as very weak fundamental data recently published in relation to the Canadian economy.

 

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There is a high probability that the dollar will continue to build up an advantage in USD / CAD, but today's speech of the Fed head ahead of the parliamentary committee in the Senate may be a stumbling block. Note that this event takes place only twice a year, so the impact on the market can be overwhelming. Investors are advised to carefully open position after this event (unless, of course, it would be appropriate in the context of Yellen statements), but for the short-term speculators it is an opportunity to buy just now, defending their positions by fairly short stops.

[Vistabrokers]

GBP / USD Moves to New Heights

A speech of the Fed's head ahead of the Senate Banking Committee gave the "cable" an additional impetus through the weakening of the US dollar. So, Yellen did not give reasons to doubt that the tightening of monetary policy sooner or later will happen (though it is certainly not going to happen at the next two meetings), but it seems that markets were set to more bellicose rhetoric of the main figure for financial markets in this context. Whatever it was, the pair has broken another resistance level (1.5480), which only confirms the hypothesis about the development of a full-scale correction of more than six months GBP / USD falling.

 

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Now, when the last correctional Fibonacci level 61.8% of the decline in December 2014 - January 2015 has left behind, we should consider opening long positions with an interim target 1.5620, where is the value of the nearest resistance level. Well, the first strategic target is 1.5800, where is a correction 38.2% of the decline in the period of July 2014 - January 2015.

 

 

 

USD / CAD. The Weather is Changing...

 

Yesterday a growth was a priority scenario (due to the upper border of the graphic pattern "triangle" overcome). However, yesterday's speeches of two most significant for the USD / CAD figures, namely the Fed chairman and the head of the Bank of Canada, have turned upside down ideas about further actions of these central banks. From Yellen the market has expected a tougher approach to interest rate policy, while Poloz has surprised markets, specifically making it clear that in the near future we should not expect rates cutting. A stormy reaction was expected, but now we have a new approach to the current situation. Thus, the false breakout of the above-mentioned figure backfires and dumps long positions by market participants. Now all the attention is drawn to the pair's dynamics and to the fact whether conditions be able to predict the start of a unprecedented in its scale correction of all the January movement.

 

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At this point it is recommended to be out of the market, waiting for a possible overcome of a designated support line, which was more than once a decisive argument in favor of the bulls. If the breakthrough is destined to be, the price can quickly reach the recent local minimum at 1.2360 and then - the 38.2% Fibonacci retracement (1.2325), which together form a zone of support. Further reduction will give strong arguments in favor of that targets, corresponding to the next levels of correction of 50% (1.2180) and 61.8% (1.2030), will be achieved.

[Vistabrokers]

GBP / USD. To Hold or to Fix

 

It is a new day and a new high for the pair. Buyers seem quite accustomed after the Fed's head did not persist with the promise to keep to head for the tightening of monetary policy by all means. Nobody wants to create problems to the own economy in the absence of the main object of the struggle (inflation). All the more reason the level of interest rates on government treasury bonds in USA is almost the highest in the developed world, so the rhetoric has become generally neutral. That is what bulls needed. Now they also have some comments from the Bank of England about a possible rate hike to 1% in 2017, and the unemployment rate, which is on the minimum of the last 5 years. To date, the quotes have reached the upper boundary of the rising channel.

 

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Investors for who fluctuations within the channel are child's play, can continue to hold long positions. For those who prefer a short-term work, trying to take everything and every movement, the resistance line achieving would mean the intermediate results fixing and the possible entry to the purchase when the support line is reached. Targets remain the same - 1.5620 (the nearest resistance level), and then - 1.5800 (correction level 38.2% from a seven-month fall). Today, it is worth paying attention to revised UK GDP for the 4th quarter 2014 release.

 

 

 

GOLD. At the Intersection of Two Roads

 

The situation in the gold market is somewhat different - buyers feel uncertainty of bears in their course of action after reaching the support line that connects minimum values of all the ascent, we can see over the past few months. We also see daily candles without bodies and with very long shadows that in terms of the Japanese candlestick analysis language can be called "doji". This is a strong reversal pattern, especially when it appears near significant levels. On the other hand, a short-term descending channel is still relevant for us.

 

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Taking into account the current technical picture, it is recommended to monitor the situation on a regular basis, ready to act, depending on the scenario. Given a strong support, sales are worthy of consideration only if the mark of 1190 dollars per troy ounce will be broken, while going beyond the downstream channel will give a signal to open long positions.

[Vistabrokers]

GBP / USD. Close-in Objective

 

In the last review, we noted the fact that prices had reached the channel line of the current uptrend and a correction from achieved levels is probable. Actually, that is what has happened, and the formal start of reducing put quite projected data on the revised value of the UK GDP for the 4th quarter (0.5%). It is likely that the role in the doubt of buyers played another quarterly statistics on the volume of capital investments in the country (-1.4% against the expected growth of 2%). Anyway, the fall was limited by the achievement of the rising channel lower boundary, where the situation has stabilized.

 

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This situation can be regarded as a godsend, because the market made it possible to build up a long position in the framework of the trend with a rather short stop. So, we recommend to open long positions, limiting the possible loss by the minimum value of yesterday's trading - 1.5392. As an interim target of purchases we can name 1.5620 mark, where is one of the important resistance levels. It is probably that in this area the price will reach the opposite border of the channel.

 

 

EUR / USD Bids its Time

 

We state qualitative changes in the balance of forces in the market - bears went on the offensive, and not without the influence of the Greek factor (today the German parliament will vote as for the Greek bailout approval for four months), as well as market awareness of the differences in the monetary policy of the Fed and the ECB. So if the Fed this year is expected to rise rate (which is manifested in the growth of government treasury bonds yields), the profitability of some European market (for example, German) – is currently in the negative zone. In the United States growth is still in a good level, which was confirmed by yesterday's data on orders for durable goods, while the eurozone is waiting for a long period of quantitative easing.

 

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At the moment, the price has reached the lower limit of two downstream channels in which the slope is relatively flat. Here, from a technical point of view, the fate of the pair's future direction should be decided. In case of yesterday's low break we should await for the quotes to reach January lows (1.1098), whereas the pullback in the channels' depth may ultimately lead to the achievement of its upper limit (1.1350-1.1400). We still have more questions than answers, but the situation is changing and this is positive. Today it is recommended to draw attention to the publication of the US GDP for the 4th quarter, which perhaps, will be a decisive argument for toe market.

[Vistabrokers]

GOLD. No Need to Hurry on the Edge of Breakthrough

 

Some eloquent indications of a possible upward movement has appeared at the gold market after the bears were not able to push a very important support line. Today quotes show signs of buyers' activity. They have finally succeeded to overcome a resistance line of a descending trend in which bids gold was traded for a month. Whether a breakthrough happens in fact, will show today's closing price, and it is better to wait for another day and the closing price above the resistance line.

 

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Currently we do not recommend to perform active actions in the market, and short positions (if any) should be closed. We need additional arguments, one of which (in addition to the above-mentioned closing of few days outside the downtrend channel) can be a) the formation of a clear upward impulse; b) its subsequent correction; c) and then the breakthrough of its extremum. This sequence will give us successively higher lows and highs, which is the essence of the uptrend.

 

 

GBP / USD. Daily Routine of Buyers...

 

This week will be full of macroeconomic publications and it means new trading opportunities for us. So, today bears will tickle nerves to those who continue to buy from a support line formed in the last few weeks short-term uptrend, because as early as 9.30 GMT an independent research agency Markit will release data on business activity in the UK manufacturing sector. As practice shows, this leading indicator can predict changes in the real sector, which means that the market will closely follow the release of the news. It is likely that the impulse will be relevant until the Bank of England will announce its decision on the next Monetary Policy meeting on Thursday.

 

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The 1.5380 mark, corresponding to the nearest local minimum as well as the 1.5330 mark are important support levels, possible breakthrough of which will give sellers an opportunity to seize the initiative. Thus, the trend remains upward, and the price is right on the trend line. It is recommended to decide after the publication of mentioned statistics, depending on the subsequent dynamics. Thus, we should sell from the 1.5330 level breakthrough and to buy if the price will move from the support.

[Vistabrokers]

USD / JPY. Coincidence or not?

 

USD / JPY moves gradually start to look aesthetic within boundaries of the upward channel formed in last couple of weeks. We can also name the other, more far-reaching trend, the direction of which is similar and it is worth remembering that currently this trend is useful only for its vector. It is clearly evident in recent years that in the way of growth of the yen Japanese officials choose the right time and drop bulls from the top. This expression is figurative, but it is the real fact that at the approach of quotations to certain price levels, a representative of Japanese ruling elite suddenly appears with a particular statement. So today, the yen strengthened significantly after approaching of the upper channel boundary when Etsuro Honda, the economic adviser to Prime Minister Kuroda, expressed doubts about the feasibility of further quantitative easing volume increasing. He motivated this with the normal course of affairs regarding the achievement of the inflation rate of 2%. Honda also pointed out that the current rate of the yen is at the edge of the comfort zone. The market's reaction was appropriate – quotes started to reduce.

 

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It is recommended to consider short positions in order to achieve the lower boundary of the rising channel. Stop order is at 120.26.

 

 

AUD / USD. Is Market Ready for Correction?

 

The pair continues to trade in the long-term and medium-term downward price channel. The latter rebound from the trend line was took place only a few days ago. Recall that, according to the results of the February RBA meeting, it was decided to reduce the rate for the first time since August 2013 to 2.25%, and it has led quotes to the lowest level since May 2009. So today, the another rate cut was expected, but the RBA did not go to new stimulation measures. Basic argument was a need to limit the growth in property prices. Overheating in the housing market could adversely affect the economic recovery of the Green continent. Amid this AUD / USD has increased significantly, threatening to retest the above-mentioned trend line.

 

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It is too early to talk about it, but it should be noted that the breakthrough of the local high at 0.7910 will give a technical basis for the development of full correction of all decline. If to theorize further, the first target of this correction may be the level of 0.8330, where is the Fibo level of 38.2% of the descending wave in July 2014 - February 2015.

[Vistabrokers]

GBP/USD. At the Crossroads Again

 

Despite the fact that there was no significant changes in the dynamics of the "cable" (in terms of the movement scale), we have a steady drift farther from overcoming support line of the last few weeks' trend. A level of support we have mentioned in one of previous reviews (1.5382) was also pushed through, and currently only one significant level is on bears' road - 1.5330. It should be noted that tomorrow will be a meeting of the Bank of England, that definitely keeps the tension of market players now (not allowing to take more decisive action), whereas immediately after the announcement of the results, we can count on more specific dynamics. We should also note the fact that the indicated level of support is strengthened by the Fibonacci correction level 38.2% of the above-mentioned pair growth in January and February of this year.

 

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Overcoming and subsequent consolidation of quotes below 1.5330 would give rise to open short positions with the target of 1.5250 (50% correction) and then - 1.5180 (61.8%) of the ascending wave in January and February. In the case of rebound from current levels and return to boundaries of the abandoned channel, we can expect growth to the February maximum (1.5550).

 

 

EUR / USD. Investors Wait for Explanation...

 

In anticipation of tomorrow's ECB meeting market players try not to tempt fate, and quotes are near the lower boundary of two downstream channels that differ only with angle of inclination. Returning to the subject of the European Central Bank, it is worth noting that the market expects explanations on a number of points regarding the upcoming program of quantitative easing, which could seriously affect the single currency.

 

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Thus, we recommend to wait for tomorrow's events and be ready to respond appropriately to changing market conditions after the new data. At the moment, the key support level is 1.1096 – the eleven-year minimum for EUR / USD, on top the growth is limited by 1.1270. In some degree the market can "swing" today due to the Services PMI publication.

[Vistabrokers]

GBP/USD. Is it a Correction of Correction?

 

Yesterday, the US dollar buyers stepped up again, which resulted in the fall of the "cable" to the area of 50% correction (1.5250) after overcoming of the preceding Fibo level 38.2% (of the January-February growth in this year), as well as previously indicated support level 1.5330. The main reason could be the publication of the quite weak data on business activity in the services sector, however, apparently it was only an indirect factor, because purchases of the dollar yesterday prevailed in most areas. Today will be held the Bank of England meeting - a major factor that can cause strong fluctuations in the market, and this also should not be forgotten.

 

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So, the next reducing target is 1.5180 (61.8%) from the abovementioned wave of growth. Will the achievement of the following target become the logical correction of the previous growth, which, in its turn, has become the first corrective wave of the second half of 2014 downtrend? The time will show us, but at this stage it is not necessary to persist in preferences, demonstrating a flexibility in tactical decisions.

 

 

EUR / USD. Is the Path Tabooed or Whether we should Wait a Little Longer?

 

The last bastion of bulls we have mentioned in the previous review fall. It is the established in January level of support corresponding to the minimum value over the past 11 years (1.1096). Together with it was finally won a support corresponding to a Fibonacci correction 61.8% of the total growth in 2000-2008 and it is quite a big deal because there is no other reasons for buyers to catch current levels. Today is held the ECB meeting, where will be announced details of the, adopted at the January meeting program of quantitative easing (12.45 GMT). And then at13.30 GMT the European Central Bank President will give the traditional press conference, where market players can hear a lot of interesting. However, the nature of this reduction lets us think that "the ice was broken," and it has come to stay no matter what would officials tell today. The US economy is growing on all fronts, as statistics says (which this year will result in the rates hike), while the euro zone only makes its first steps in quantitative easing. This is a long-term factor to be reckoned with for a long time.

 

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If you have no open short positions, it is recommended to wait for the completion of the Dreghi press conference before entering the market. A new downstream channel was formed, in which boundaries we must look for the entry point, working on a rebound from the trend line.

[Vistabrokers]

AUD / USD. Will the Correction Begin?

 

In anticipation of the US employment data release quotes of the pair are frozen near a line of a medium-term trend. Meanwhile the latest wave of reduction has already been corrected to 38.2% Fibonacci, which gives us formal grounds to enter a short position if getting additional signals. At the same time, a breakthrough of the resistance line is also not excluded, because at the beginning of February the long-term trend line of the channel was tested, which in any case should not be ignored. Thus, it is dangerous for the deposit to take decisive actions directly before the main event of the month.

 

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It is recommended to closely monitor the pair dynamics, keeping the willingness to buy on the resistance level 0.7910 break. Bears are limited with the mark 0.7624. Within this range boundaries we do not recommend to act decisively.

 

 

EUR / USD is Looking for Support and does not Find it

 

Yesterday's meeting of the ECB is now a history. The market got specifics regarding the asset repurchase program, which is a part of the quantitative easing, start on March 9 (as it became known). Thus, the ECB will buy securities even with a negative yield. The central bank seems to by very optimistic regarding prospects for economic recovery in the region due to low oil prices, as well as considerably reduce of the single currency in the foreign market. Amid this quotes have made several strong movements, close to the upper boundary of the formed channel, but only to give bears a point for new sales. We have the new eleven-year minimum, as well as all the prerequisites for further reduce. The downward movement can get e renewed momentum from today's publication of the US labor market data.

 

http://s018.radikal.ru/i502/1503/27/92eb8759ba63.png

 

It is recommended to hold short positions, refilling them in the case of the pair rebound from the trend line in order to achieve the opposite channel border. More conservative tactics is to wait for today's statistics from the US Department of Labor and then enter at the break of yesterday's low (1.0986).

[Vistabrokers]

GOLD is in Little Demand

 

Once again the US currency has strengthened in the foreign exchange market and also in the adjacent market where the gold price has made one of the most significant movements in recent months. The reason for the fall was the long-awaited data on the US labor market, which is globally confirmed that one of the world's largest economies is rapidly growing. In a narrower sense, it means that in the near future the Fed can loose all arguments in favor of keeping monetary policy unchanged, and will be forced to go to its tightening. In other words, US treasuries are doomed to yield growth, that in comparison with its lack for gold will force investors to get rid of the yellow metal in favor of the greenback.

 

http://s008.radikal.ru/i306/1503/e7/a7a3d85be7bd.png

 

So, the price has overcome a support line of a long-term uptrend, which increases the risks of continuing medium-term downtrend in an existing channel boundaries. At the same time, bears were not been able to push the level of support corresponding to the January minimum. It is recommended to hold short positions opened on the break of 1190 and to add to positions on the break of 1163 dollars per troy ounce.

 

 

EUR / USD. Speaking about Prospects...

 

At the moment we see a full wave reduction in boundaries of a downward price channel, which was launched back in the distant 2008. Since then, the market experienced strong fluctuations, because of all possible crises - from the subprime mortgage crisis to the European debt one, whereas now the ECB is launching an unprecedented asset purchase program. Simply put, the European Central Bank switches on its printing press for the benefit of bringing the region's economy in a sense (60 billion euros per month). Will the European QE replicate the success of the Fed's one? That remains to be seen. Meanwhile, the quotes overcame a major support level - the 61.8% Fibonacci correction from the growth in the period 2000-2008. That definitely adds confidence to sellers.

 

http://i004.radikal.ru/1503/26/74a95136997e.png

 

Giving the dynamics of the pair, the next target of bears will be the lower limit of the above-mentioned channel, the achievement of which is very likely to be on an equal value - one euro for one dollar.

[Vistabrokers]

GOLD. Price is Close to Strategic Support

 

We have a breakthrough of the indicated in our previous review level 1163, which means that a decline continues in a downward channel of last few weeks. During this time, the price has dropped from $ 1,300 per troy ounce to current levels, and, apparently, it is not the end. The nearest support level (local minimum of November 2014) is located at 1142, whereas the last bastion of bulls is at 1130. At this level is also the five-year minimum, where in November 2014 buyers have begun their counterattack after failing to break below the correctional Fibo level 61.8% of support from the growth in 2008-2011.

 

http://s018.radikal.ru/i506/1503/f9/77df0fa685c0.png

 

It still makes sense to work in a southerly direction with abovementioned targets. Upon reaching the level of 1130 we should be extra careful because here, as expected, the further dynamics of the instrument may be indicated.

 

USD / JPY. Buyers Demonstrate Serious Intent

 

Quotes continue their ascent in the medium-term rising channel, having currently reached its upper limit and freshed the maximum value since July 2007 - at the moment quotes have broken the mark of 122 yen per dollar. According to some economists, dollar in this pair is strengthening relatively slow, but, in our opinion, there are some limiting factors: close completion of the fiscal year in Japan and the corresponding income repatriation by investors and companies. Perhaps, this factor will cease to affect the market at the end of the month, which will give a new impetus to growth. Note that the next week it will be a regular meeting of the Federal Reserve, which market is already beginning to take into account in the form of dollars' purchases.

 

http://s019.radikal.ru/i627/1503/ee/6d819c8fabb8.png

 

Quotes fixing above USD / JPY 122.00 will signal to refill long positions, however, to deduct the breakthrough we need more arguments in the context of said rising channel boundary impact, as well as the impact of the resistance level corresponding to multi-year highs of the pair. The probability of the false breakout is high, but if the next wave of growth to be, then it will be large-scale.

[Vistabrokers]

AUD / USD. On the Way to Fresh Lows

After Friday's more than optimistic data on the US labor market, AUD / USD has made a significant leap down (at the moment the size of the movement is more than two figures), rebounded from the medium-term trend line in its direction. As a result, today a new six-year low was achieved. It is worth noting that the Reserve Bank of Australia leaders are still interested in further reducing of the national currency in the foreign market – today it was confirmed by the head of the RBA economic forecasts department Kent. As arguments he has named the situation with the current level of unemployment, which, by the way, had reached 13-year highs, and a drop in iron ore, the price of which, in turn, is at multi-year lows. Today, China has reported on industrial production (6.8% yoy against the expected 7.7% yoy), and retail sales, where the growth rate decreased to 10.7% in annual terms vs 11.9% a month earlier.

 

http://s019.radikal.ru/i616/1503/7c/999c49447480.png

 

It is recommended to hold short positions. The global target can be a support line drawn through lows of 2001 and 2008.

 

 

 

USD / CAD Remains Stable, despite Dollar Strength

 

Quotes have reached the upper limit of a shallow rising channel at 1.2700. In general, the loonie in recent weeks was showing a relative stability against the main beneficiary of the foreign exchange market after the Bank of Canada has set out its wait-and-see attitude to the possible change in interest rates, whereas previously the market had expected a further reduction in one of the next meetings. Among upcoming events that can qualitatively affect the current situation, we can note scheduled for Friday data on the labor market in Canada. Before this data we can count on a relatively quiet trading in a range with a high probability.

 

http://i038.radikal.ru/1503/ad/ebb7d979ed43.png

 

It is recommended to wait for confirmation of a rebound from the upper border of the channel by means of oscillators (eg, Stochastic) and to sell in order to achieve its opposite graphical boundary. A Protective stop should be moved behind the current local maximum of 1.2703.

[Vistabrokers]

GBP / USD. Reducing Gains Momentum

 

A next support level for GBP / USD (1.4813 – a minimum since June 2010) has been broken, while the movement of the pair gains momentum, despite a lack of visible weakness of the British pound. It is commonly believed that it is all the fault of the strong dollar, because the US economy is now the most confident among other developed countries and this gives reasons to expect from the Fed some steps of the monetary policy tightening in the near future. Yield is always at the head for investors, so the dollar is now enjoying the highest demand.

 

http://s005.radikal.ru/i212/1503/02/7568efc4c663.png

 

Reducing still takes place within a well-shaped channel with a tendency to accelerate, and we should use it for classical work with the trend, but do not forget about the impending Federal Reserve meeting (will complete on Wednesday), which is much expected. This can cause market players to take profits on short positions, which may positively affect the dynamics of the pair. In this case, the 1.4230 mark (minimum since May 2010) remains a long-term target.

 

USD / JPY. What Games are Japanese Officials Playing?

 

A direction of long-term and short-term channels is still upward. Tomorrow we expect the Bank of Japan meeting, which may surprise the market (this has happened more than once), especially after a number of high-ranking officials have repeatedly voiced a new rhetoric in their interviews with the media, as well as in public speeches. According to this rhetoric, the BoJ will no longer expand the asset repurchase program. Moreover, the current exchange rate is acceptable, but a further drop is undesirable due to increased cost of imports and consumer activity reducing.

 

http://s018.radikal.ru/i525/1503/3f/075f3d23379f.png

 

It is recommended to be out of the market until BoJ meeting results will be published and its head Haruhiko Kuroda will end the following press conference. If the accompanying statement will not contain harsh statements to stabilize the yen, growth within the existing channel may continue. Otherwise, we expect the correction to the lower medium-term channel boundary to the level of 120 yen per dollar.

[Vistabrokers]

GBP / USD. It is Better to Stay out of the Market

 

GBP / USD has returned above a significant support level of 1.4813 (2013 minimum) which has been overcome on Friday. Prices are climbing to an upper border of a descending channel, and sellers may likely use this situation soon. However, it will unlikely happen until tomorrow's Bank of England meeting minutes publication, from which the market will receive the information regarding the power balance in the Bank's direction. Namely, it will be clear how many members actually voted for keeping interest rates unchanged. Also some details of the meeting may be very interesting.

 

http://s003.radikal.ru/i204/1503/b1/bd1d231685db.png

 

It is recommended to fix results of open positions and wait for the publication of above mentioned minutes. We should also note that tomorrow results of the Fed meeting will be announced, and it will clearly affect the dynamics of the pair. So, given risks of increased volatility amid the low liquidity, there is every reason to stay out of the market tomorrow.

 

 

EUR / USD. It is Time to Rest

 

Having reached a lowest level of more than 12 years (1.0460) on Friday, the euro is gradually restoring against the US dollar. At the moment, the pair is at 1.06, and there is few reasons for this decrease in bears' activity. Among them is achieving of a long-term downtrend channel, history of which dates back to a record high of the pair in July 2008. It is likely that some market players will prefer to fix their current results on open positions here, at least until tomorrow's FOMC decision announcement. As expected, details of the FOMC meeting can be interesting, because no one believes that the regulator is ready for concrete steps in the form of rates hike right now, but the Fed should start to prepare the market for its further decisions. It is likely, that today ZEW indexes and the February consumer price index in the euro zone will have some influence on the market.

 

http://s015.radikal.ru/i333/1503/f6/696281ec0d8c.png

 

We will analyze an accompanying statement, that will be published after the FOMC rate decision tomorrow and consider a particular scenario for future EUR / USD dynamics. Meanwhile, it is recommended to close short positions.

[Vistabrokers]

GOLD. Rhetoric Determines Trend

 

On the eve bears have "knocked in" a nearest support level (1142). Here they were met, but not banished away. It is likely that today, this level will be crucial in the context of the future dynamics determining. Though it will be after the Fed confirms or confutes ideas that market participants and relevant experts think it should announce today. Now all of them are practicing in predicting of the FOMC accompanying statement text, excluding or adding words, but only the Fed itself will set the record straight. It is likely that it will happen not at once, but during the press conference with Janet Yellen.

 

http://s013.radikal.ru/i325/1503/8c/00789da7335c.png

 

A main market strategy as for gold is to analyze the Fed's rhetoric, and if it would indicate impending steps aimed at monetary policy tightening, it makes sense to sell the yellow metal with the first target at 1131.77 (five years minimum). If it will not happen, then the above-mentioned level may become a foothold for a counter-offensive of bulls.

 

USD / CAD. Bulls Demonstrate Seriousness of their Intentions

 

As judged by a current pair dynamics, buyers remain at a crouch start before the Fed meeting. It is telling that at the same time, trading run within an upward channel, close to six-year highs. However, as they say, everything can change, so we should not act actively prior to said events (or better, also for some time after them).

 

http://s017.radikal.ru/i407/1503/56/21de9b1128bc.png

 

One of logical decisions in this situation would be to put a pending order to buy at 1.2822 with a target of 1.3063. Looking ahead, we note that in the case of its achievements and the subsequent passage, a target value will be a 61.8% Fibonacci retracement (1.3450) of the total decrease in 2002-2007.

[Vistabrokers]

GOLD. It is Dramatic, but is it Effective?

 

As it was expected, the results of the Federal Reserve meeting gave market players new food for thought. A reaction was predictable, since the tone of the statement, as well as a little modified targets for economic growth and inflation were not so hawkish, as market had expected. This reduce expectations regarding an imminent tightening of monetary policy and supports gold as a reaction to the US currency sales. However, the quotes are still in the medium-term downtrend channel that formally does not give reasons for purchases.

 

http://s017.radikal.ru/i421/1503/2e/1af428163fbc.png

 

In the current situation it would be better to wait for further progression of events, so as the market dynamics will show us the best tactic. Thus, only a break of yesterday's daily high and consolidation above the resistance line may give reasons for purchases. If the price goes back under pressure, confirming another rebound from the trend line, sails with targets at 1142 and then at 1131 (five years minimum) per ounce will be priority again.

 

USD / JPY Bounces from Support Line

 

As it was expected, yesterday's Fed statement has led to a strong reaction in the market. Thus, the Fed dropped the word "patient" from the statement in terms of its monetary policy normalization (which generally gives the market a signal that a rate hike is around the corner), but the market was waiting for more rapid changes in the context of progressive improvement in the labor market. However, in order not to give investors a reason to buy greenback like mad once again, the Fed has signaled that the US economy still has some problems. That's why terms of the target inflation level achieving were moved to 2017. Also, a situation in employment will be monitored on a permanent basis. However, we can not say that for USD / JPY this caused irreversible effects compared to other major pairs, where the damage was higher. Thus, quotes have broken a support line of a short-term trend, than reached a medium-term support, and here the initiative was intercepted by buyers.

 

http://s001.radikal.ru/i193/1503/4f/1fbfb1303f81.png

 

As a base conservative scenario it is recommended to wait for a current upward impulse correction before opening long positions. A first purchase target can be 122.00, where is the maximum of July 2007.

[Vistabrokers]

EUR / USD. We Prefer to Stay out of the Market

 

A major currency pair is showing signs of stabilization after amplitude fluctuations that followed the Fed meeting results announcement. Note that dollar sales had stopped at a correctional Fibonacci level 61.8% near 1.1040, and after it quots have already come down by about 400 points. Now the market is at a crossroads, as there are reasoned arguments, both for purchases and for sales. So, on the one hand, we have a difference in monetary policies of the ECB and the Fed, the first of which only begins a long journey called "quantitative easing", while second is going to increase interest rates soon (as the market expects). On the other hand, the euro was declining for the last 9 months, and it is likely, that the currency has already offsetting the value of the abovesaid factors.

 

http://s017.radikal.ru/i433/1503/e6/698fc6d48c65.png

 

It is recommended to stay out of the market until we will get important trading signals.

 

 

USD / CAD. Market is Quiet prior to Canadian Data Release

 

Last days fluctuations, when the pair has firstly fallen by three and a half figures, and then bulls won back most of lost positions, make us to think seriously about the risks. However, it should be noted that fluctuations still occur within the previously formed trading channel and only its frames overcoming will mark the beginning of a new trend. Today, during the US trading session (12.30 GMT) we expect quite important statistical publications in Canada, which will give an opportunity to predict the future dynamics of the pair. As expected, retail sales in January fell by 0.7%, while the February consumer price index increased by the same 0.7%.

 

http://s018.radikal.ru/i517/1503/2e/d8f195415da0.png

 

We should not underestimate the potential market reaction to these publications. In the case of positive data bears can once again be proactive, leading quotes to a repeatedly tested line of support in the area of 1.2450. On the other hand, if data will be weak, then we can expect the pair to achieve a six-year high at 1.2833.

[Vistabrokers]

GOLD. Quotes are leaving Downward Channel Boundaries

 

Gold price has overcome an important resistance level (1177.92), we had mentioned in one of our previous reviews, and also a trend line of the last 2 month downward channel. Apparently, bears are not ready to assault a 61.8% Fibo level of growth in 2008-2011, and it is recommended to take profits on short positions "until the circumstances are clarified" amid general deterioration regards the dollar, while a rhetoric of the US Federal Reserve in respect of interest rate policy is more cautious than markets expect. This gives reason to work on counterbalance.

 

http://s017.radikal.ru/i426/1503/05/77335b105b44.png

 

Thus, it is advisable to hold long positions with a primary target at 1205 (38.2% correctional Fibo level of the whole decline wave in January-March). If the price returns to the abandoned channel boundaries we should consider the position closing and wait for new signals.

 

USD / CAD Provides New Opportunities for Buyers

 

Friday economic data (which caused a surge in volatility) on Canada remained behind, leaving USD / CAD with significant losses. Thus, despite quite optimistic consumer price index data (0.9% instead of the expected 0.7%), core retail sales (excluding car sales) completely failed. Thus, this index has decreased by 1.8% in January after the previous level of -2.0%. So, a rebound from a support line, where quotes have appeared firstly after the Fed meeting results, was corrected to 61.8%, where the price currently has an intermediate support.

 

http://s016.radikal.ru/i335/1503/64/94d4f7a628b6.png

 

At the moment, we have almost formed conditions for purchases. An ascending wave formation with subsequent moving averages overcoming may be a proof of it. In this case, a protective stop should be placed under a local minimum (1.2540). A target of long positions will be a multi-year high at 1.2830.

[Vistabrokers]

USD / JPY is Getting Closer to Event Horizon

 

Bulls still fail to trigger a growth from a trend - the US dollar continues its downward correction amid profit-taking after a prolonged growth. Today we expect inflation data in the US and it will probably be decided in the course of the US trading session to be or not to be a breakthrough of the said support line.

 

http://s015.radikal.ru/i330/1503/23/912926312afe.png

 

Better than expected (0.2%) data on the consumer price index increase will provide a basis for the pair growth (while purchases should be made only after getting confirmation from indicators). In case of weak data, bears will likely make an attempt to overcome a nearest support level (119.25 - the minimum, which has been reached after the Fed's statement last Wednesday). We must use it, acting accordingly (sale from 119.25), because the scope for the further reduction can not be overestimated.

 

 

 

EUR / USD. Restoring Gains Momentum

 

The single currency, along with the rest of the the American currency competitors, continues to recover, adding four and a half figures in last ten days. Today, during the European trading session will be published preliminary data on the level of business activity in the services sector, as well as the industrial sector, which might cause a new surge of optimism in the market, because expectations are rather optimistic. Many experts think that these data have the highest predicative function, showing appropriate further changes in the real sector. Currently the pair is moving within short-term upward trend boundaries, which is confirmed by the support line presence, as well as by the fact that quotes continue to be located above the average with period 25, shift 5 (trend indicator), that we use.

 

http://s011.radikal.ru/i318/1503/8c/9d09a7bc0f5f.png

 

It is recommended to buy at the nearest resistance level (1.1042) breakthrough, and then at the next one (1.1096), which is corresponding to an extremum of a descending wave, ended in January, with the target of 1.1380 (the level where the latest wave of decline has started).

[Vistabrokers]

GBP / USD. Situation is Heating up

 

A situation with the pair resembles a wound-up to a limit spring, which is ready to burst soon. Fluctuations amplitude is gradually reduced, which is confirmed by converging lines of graphic consolidation figure "triangle". Today at 9.30 GMT data on retail sales, as well as the quarterly report of the Bank of England, will be published in the UK, and it will likely cause a breakthrough of at least one of the closest price levels, giving us a reason to enter the market in an appropriate direction.

 

http://i038.radikal.ru/1503/6f/58e6ee57ccd0.png

 

We may talk about a possibility of opening positions in the direction of the triangle's exit only in the case of the level 1.4990 (buy) overcoming, while sales are recommended only when the price will overcome the level 1.4830. In such cases, it is important not to outperform the market, but to be abreast with it.

 

 

 

USD / JPY. Bulls Failed and Retreated

 

As it was expected, in order to hit important (from a technical point of view) lines and levels of support it was needed a proper reason. Yesterday this reason was (not at once) the release of disappointing data on durable goods orders in the USA. They were particularly important because of the market's sensitivity to statistics, which has increased after the Fed at its last meeting had signaled for its propensity for analysis of upcoming statistical data. This took pressure on world stock indexes (including the US and Asian ones), with which USD / JPY is in a high degree of correlation, and the US dollar. All of this did not leave a chance to bulls, and at the moment we have an avalanche activation of stop orders, which are traditionally located slightly below important support levels.

 

http://s020.radikal.ru/i702/1503/f9/40812a0abecd.png

 

It is recommended to sell with a target of 118.20, where is a 61.8% Fibonacci correction of growth in January-March.