LiteForex Analytics

Commercial Content Analysts
213

AUD/USD: pair resumed fall

Current trend
Yesterday the pair significantly fell after the RBA decision on interest rates. As was expected, the regulator left the rate unchanged at 2%.
At the same time, in its Rate Statement the regulator noted that it does not rule out further monetary policy easing this year if the economy continues slowing down due to the outside factors. It also noted that inflation is likely to remain very low in the medium-term.

Support and resistance
Bollinger Bands on the daily chart is moving up while the price range is narrowing. MACD is turning down and forming a sell signal. Stochastic is falling.
The indicators recommend short positions.
Support levels: 0.7015 (local low), 0.6981, 0.6936, 0.6900 (21 January low), 0.6875, 0.6850, 0.6826 (15 January low).
Resistance levels: 0.7045 (local high), 0.7068, 0.7100, 0.7128 (local high), 0.7158, 0.7183, 0.7200 (5 January high).

Trading tips
Short positions can be opened after the breakdown of the level of 0.7015 with the target at 0.6900 and stop-loss at 0.7060. Validity – 2-3 days.
Long positions can be opened after the price rebound from the level of 0.7015 (with the appropriate indicators signals) with the target at 0.7100 and stop-loss at 0.6960. Validity – 2-3 days.

Analytics from LiteForex

214

USD/CAD: pair is falling

Current trend
Yesterday the pair significantly declined amid growing oil prices that were supported by strong data on the Caixin China Services PMI.
In addition, the pair was pressured by mixed data from the US. The ADP Employment Change for January came out at 205 thousands that was better than forecasts but substantially worse than the previous figure. The Markit Services PMI for January fell from 53.7 to 53.2 points, which did not match the expectations.
Tomorrow attention needs to be paid to labour market data from the US and Canada.

Support and resistance
Bollinger Bands on the daily chart is moving down while the price range is slowly widening. MACD continues growing. Stochastic is in the oversold zone and trying to turn up.
The indicators recommend waiting for clearer trading signals.
Support levels: 1.3780 (local low), 1.3700, 1.3650, 1.3622 (10 December 2015 low), 1.3554, 1.3500.
Resistance levels: 1.3850 (local high), 1.3900, 1.3947, 1.4000 (psychologically important level), 1.4050, 1.4100 (local high), 1.4169, 1.4200, 1.4325 (26 January high).

Trading tips
Long positions can be opened after the breakout of the level of 1.3780 with the target at 1.4000 and stop-loss at 1.3700. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 1.3700 with targets at 1.3550, 1.3500 and stop-loss at 1.3760. Validity – 2-3 days.

215

XAG/USD: growth continues
Current trend
On Thursday, the price of silver was growing actively and hit new local highs. The price is strengthening amid weakness in the US Dollar, which remains under pressure from data on PMI and concerns about chances of further increases in US interest rates.
Yesterday, data on Initial Jobless Claims was released in the US. The indicator grew to 285K from 277K against 280K forecast. This data is particularly important as market participants are waiting for the publication of Nonfarm Payrolls statistics, due in the US today.

Support and resistance
Bollinger Bands indicator on the daily chart is directed up. The price range is widening actively, but the price remains out of it. MACD is growing and keeping a buy signal. Stochastic is moving up despite it has approached its highs in the overbought zone.
According to Bollinger Bands and Stochastic, a downward correction is possible in the short run. It is recommended to wait for clearer trading signals.
Support levels: 14.78 (3 February high), 14.63, 14.55, 14.48, 14.40, 14.30, 14.28 (near 29 January low), 14.00, 13.90, 13.83, 13.73 (12 January low).
Resistance levels: 14.90 (local high since November 2015), 15.00 (psychologically important level), 15.15, 15.25 (4 November 2015 level), 15.54, 15.62.

Trading tips
Long positions can be opened after the breakout of the levels of 14.90, 15.00 (with appropriate indicators signals) with targets at 15.25, 15.35, 15.50 and stop-loss at 14.60. Validity – 2-4 days.
Short positions can be opened if the price rebounds down from the level of 14.90 with targets at 14.50, 14.40 and stop-loss at 15.10. Validity – 2-4 days.

216

EUR/USD: decline in USD might continue

Current trend
This week, the EUR/USD pair has reached its highest levels since October 2015. The pair grew amid negative data on Services PMI, released in the US. The indicator fell to 53.5 points, the lowest result since 2014. Moreover, the American currency was under pressure as New York Fed President William Dudley stated the global financial conditions deteriorated notably.
Today, the pair might continue its growth which has stopped at 1.1210. It will be possible if data on Nonfarm Payrolls, due in the US today, confirms the forecast. The indicator is expected to come in at 190K that is far below the previous result. It should be noted that leading indicators have given mixed data. Despite the forecast, ADP Employment Change grew while Challenger Job Cuts was up by 75.114K. However, in general, negative data on Nonfarm Payrolls seems to be a likelier scenario.

Support and resistance
The range of 1.1200-1.1210 is seen as a key resistance the breakout of which leads to a growth to 1.1300 and 1.1380. Otherwise, the price might fall to 1.1097 (23.6% Fibonacci correction) and 1.1027 (28.2% Fibonacci correction).
Technical indicators are giving mixed signals. Bollinger Bands have turned up. The MACD histogram is in the positive zone, its volumes remain unchanged. Stochastic has left the overbought zone and formed a sell signal.
Support levels: 1.1210, 1.1300, 1.1380.
Resistance levels: 1.1097, 1.1027, 1.0971, 1.0828.

Trading tips
Long positions are more preferable and can be opened after the breakout of the level of 1.1210 with targets at 1.1300, 1.1380.
Short positions can be opened if the price rebounds down from the level of 1.1210 and declines below 1.1155 with targets at 1.1097, 1.1027.

217

USD/CHF: Franc continues growing

Current trend
Last week the pair significantly fell.
The pair was pressured by the latest Fed monetary policy meeting that substantially decreased chances of further interest rate hikes in the US. In addition, the USD was pressured by poor data on the Nonfarm Payrolls that fell from 262 to 151 thousands, while economists predicted 190 thousands. However, the Unemployment Rate unexpectedly fell by 0.1% to 4.9%, while Average Hourly Earnings grew by 0.5%.

Support and resistance
Bollinger Bands on the daily chart is turning down while the price range is widening. At the same time, the indicator formed a signal for correctional growth as the price has left the range. MACD is falling and giving a strong sell signal. Stochastic is in the oversold zone and turning horizontally.
The indicators recommend waiting for clearer trading signals.
Support levels: 0.9920 (local low), 0.9900, 0.9879 (11 January low), 0.9851 (24 December low), 0.9818, 0.9800, 0.9784 (14 December low).
Resistance levels: 0.9956 (local high), 1.0000 (psychologically important level), 1.0032, 1.0067, 1.0100, 1.0123 (3 February high), 1.0166, 1.0200, 1.0254 (29 January high), 1.0281.

Trading tips
Long positions can be opened after the breakout and consolidation above the level of 1.0000 (with the appropriate indicators signals) with the target at 1.0100 and stop-loss at 0.9960. Validity – 2-4 days.
Short positions can be opened after the price rebound from the level of 1.0000 with the target at 0.9900 and stop-loss at 1.0050. Validity – 2-3 days.

218

EUR/USD: general analysis

Current trend

The European currency was strengthening against the US Dollar. The pair gained support from Iran’s decision to replace the US Dollar with the Euro in its oil sales. Moreover, Teheran has required buyers of its oil to pay their debts in euros as well. Thus, India, which owes about $6 billion, has already reached an agreement on this issue with Iran. In this situation, the demand for the Euro might increase, and the currency is likely to continue strengthening.

Support and resistance

Support level: 1.1105.
Resistance level: 1.1246.

Trading tips

Long positions can be opened from the level of 1.1246 with the target at 1.1370 and stop-loss at 1.1200.

219

EUR/USD: general analysis

Current trend

The EUR/USD pair is trading near the important resistance level of 1.1230 (4/8 Murrey), after the breakdown of which, the pair continues declining to 1.1060 (MA200).

The European currency is under pressure from concerns about future of Deutsche Bank. The bank owns a capital of about $60 billion and has about $75 trillion in derivatives, so the bank’s debt is incredibly high. Thus, one of Germany’s largest and systematically important banks might repeat Lehman Brothers’s fate. ECB is likely to support such a large bank, but panics might trigger another fall in the European currency and European indices.

Support and resistance

Support level: 1.1230.
Resistance level: 1.1353.

Trading tips

Short positions can be opened from the level of 1.1230 with the target at 1.1108 and stop-loss at 1.1250.

220

AUD/USD: technical analysis

Current trend

This week, the AUD/USD pair was falling and reached its three week low at 0.6972. However, a correction started, the level of 0.7078, where the middle MA of Bollinger Bands and the 38.2% Fibonacci correction have concentrated, was broken out. At present, the pair is likely to strengthen to 0.7136 (23.6% Fibonacci correction) and 0.7160 (upper MA of Bollinger Bands). At the same time, the Head and Shoulders pattern seems to be forming that indicates a possibility of a fall from 0.7136 and 0.7160 to 0.7032 (50.0% correction), 0.6986 (61.8% correction) and 0.6937.

Support and resistance

Technical indicators are giving mixed signals. Bollinger Bands are turning down, limiting a growth in the pair. MACD histogram is about to enter the positive zone and form a buy signal. Stochastic lines have started turning down near the overbought zone.

Support levels: 0.7078, 0.7032, 0.6986, 0.6937.
Resistance levels: 0.7136, 0.7160, 0.7229, 0.7300.

Trading tips

Short positions are preferable but can be opened below the level of 0.7078 with targets at 0.7032, 0.6986 and stop-loss at 0.7110.
Long positions would become valid in case of the consolidation above the level of 0.7160 with targets at 0.7229, 0.7300 and stop-loss at 0.7130.

221

Brent: analysis and forecast

Current trend

Since the beginning of the week, the price of Brent crude oil has been gradually falling. Yesterday, the Energy Information Administration reported a decline by 754K barrels in US crude oil stocks; however, the price of oil did not manage to get any support. Despite a general decline in US crude inventories, investors were disappointed by the news about an increase at the country’s biggest oil storage hub in Cushing. According to the statistics, Cushing stocks rose by 0.5 million barrels to 64.7 million barrels that put the price of oil under more pressure.

Support and resistance

On the 4-hour chart, Bollinger Bands are directed down. MACD histogram is in the negative zone, its volumes are growing. According to the indicators, the price will continue moving down.

Support levels: 30.20, 29.20, 28.20.
Resistance levels: 31.84, 32.30, 32.90, 33.90.

Trading tips

Short positions can be opened after the breakdown of the level of 30.20 with the target at 29.20. If the price breaks down and consolidates below the level of 29.20, the next target will be 28.20.

Long positions can be opened after the breakout of the level of 31.84 with targets at 32.30, 32.90.

222

EUR/USD: general review

Current trend

The pair continues strengthening amid falling stock markets and weakening in the US Dollar. The Dollar was pressured by Fed Chair Janet Yellen testimony before the US Congress, after which the probability of further rate hikes significantly decreased. In addition, the head of the regulator stated that rate cuts remain a possibility if the situation requires this measure. And considering declining major macroeconomic indices and low inflation in the country, and the slowing Chinese economy, a possibility of this scenario exists.

Support and resistance

Support levels: 1.1224.
Resistance levels: 1.1321.

Trading tips

Long positions can be opened from the level of 1.1224 with the target at 1.1380 and stop-loss at 1.1185.

223

XAU/USD: growth will continue

Current trend
Since the beginning of this year, the price of gold substantially strengthened.
The price was significantly supported by a crash of the world stock markets that reduced the appetite for risk and forced investors to switch into safe-haven assets, such as gold.
In addition, the price was supported by the weakened US Dollar that remains under pressure due to the significantly lowered probability of further monetary policy tightening in the US this year.

Support and resistance
In the beginning of the month, the price broke out the upper border of a descending channel. In the short-term, a downward correction to the levels of 1174.50, 1153.85 is expected, after which a growth will resume.
Technical indicators suggest a growth continuation in the medium-term. MACD histogram is in the positive zone and its volumes are growing. Ichimoku point out to the growth as well.
Support levels: 1207.65, 1198.70, 1194.00, 1186.85, 1174.05, 1153.85, 1145.10.
Resistance levels: 1213.85, 1224.70, 1235.05, 1242.80, 1257.80, 1264.00.

Trading tips
Pending buy orders can be placed at the levels of 1186.85, 1153.85, 1145.10 with the target at 1300.00 and stop-loss at 1120.00.

224

GBP/USD: triangle has been formed; breakout of the upper border is expected

Current trend

During several months, the British Pound was falling against the US Dollar. However, at the beginning of February, the GBP/USD pair started growing within a narrow ascending channel and reached the key resistance level of 1.4670. For the last few days, the pair has been trading in a sideways channel and forming a triangle pattern.

Today, ahead of the macroeconomic releases, the Pound gained support and strengthened to the upper border of the triangle. However, later on, amid negative data on Consumer Price Index and Retail Price Index, released in the UK, the pair fell to the lower border. Key statistics for the UK and the US which might influence dynamics in the pair are due tomorrow and at the end of the trading week.

Support and resistance

If the lower border of the triangle is broken down, the pair would fall to 1.4180. In case of favorable data on the UK, the price might overcome the upper border and continue growing to 1.4670 and 1.4775.

According to technical indicators, the pair is likely to keep moving up. The price reached the middle MA of Bollinger Bands. MACD shows that volumes of short positions are falling.

Support levels: 1.4425, 1.4335, 1.4285, 1.4180, 1.4100, 1.4050, 1.3970.
Resistance levels: 1.4510, 1.4565, 1.4600, 1.4670, 1.4740, 1.4775, 1.4915, 1.5020.

Trading tips

Pending sell orders can be placed at the level of 1.4390 with the target at 1.4290 and stop-loss at 1.4420.
Pending buy orders can be placed at the level of 1.4530 with the target at 1.4630 and stop-loss at 1.4500.

225

Brent: general analysis

Current trend

Top oil producers – Russia, Qatar, Saudi Arabia and Venezuela – have agreed to freeze oil output at 11 January level. This decision might help to tackle an oversupply of the global oil market. Thus, the price of oil has its chance to strengthen to $40 per barrel. However, at the same time, there is a lack of clear understanding of how long the agreement will last and whether the countries will strictly follow all its conditions.

Support and resistance

The price is trading slightly below the MA200.
The nearest support level is at 32.00.
The nearest resistance level is at 32.50.

Trading tips

Short positions can be opened from the level of 32.00 with the target at 30.47 and stop-loss at 32.20.

226

AUD/JPY: Australian Dollar resumed growth

Current trend

Yesterday the pair strengthened amid growing prices for commodities.
Supportive news that hit the markets yesterday were that Iran agreed to the proposal by few OPEC member-countries to freeze current output levels of oil. The country, however, did not specify the dates when restrictions will come into effect.
At the same time, the Yen remains under pressure after the last week’s rally as investors are worrying that the Bank of Japan may intervene in the market should the Yen continues strengthening.

Support and resistance

Bollinger Bands on the daily chart is moving down while the price range is narrowing. MACD is growing and giving a quite strong buy signal. Stochastic reached the overbought zone and trying to turn down.
The indicators recommend waiting for clearer trading signals.
Support levels: 81.00 (local low), 80.34 (local low), 80.00, 79.20, 77.57 (11 February low).
Resistance levels: 82.06 (local high), 82.41 (16 February high), 83.00, 83.62, 84.46, 85.00 (4 February high), 85.69, 86.00, 86.35 (29 January high).

Trading tips
Long positions can be opened after the price consolidation above the level of 82.06 (with the appropriate indicators signals) with targets at 83.50, 84.50, 85.00 and stop-loss at 81.00. Validity – 2-4 days.
Short positions can be opened after the breakdown of the level of 80.34 with targets at 78.00, 77.50 and stop-loss at 81.00. Validity – 2-4 days.

227

AUD/USD: analysis and forecast

Current trend

During the Asian session, the AUD/USD pair fell to the level of 0.7100. The Australia Dollar was losing its positions after RBA board member John Edwards stated the national currency is too strong. In his opinion, a more comfortable level for the AUD/USD pair would be 0.6500.

The Australian currency came under pressure amid the publication of labour market report. In January, Unemployment Rate in Australia was slightly up to 6.0% from 5.8%; Employment Change fell by 7.9K while analysts forecasted a 15K rise.
Today, attention needs to be paid to data on inflation in the US. Consumer Price Index is expected to remain unchanged. In case of a growth in the indicator, the USD might strengthen.

Support and resistance

At present, the pair is trying to break down the level of 0.7100. The Bulls are getting less active.
Support levels: 0.7100, 0.7050, 0.7000.
Resistance levels: 0.7240, 0.7180, 0.7140.

Trading tips

Short positions can be opened below the level of 0.7090 with targets at 0.7050, 0.7000 and stop-loss at 0.7110.
Long positions can be opened from the level of 0.7140 with the target at 0.7200 and stop-loss at 0.7110.

228

EUR/USD: general analysis

Current trend

The EUR/USD pair continues falling. The European currency is under pressure from Germany’s macroeconomic releases. IFO Expectations indicator came below the forecast, having fallen to 98.8 points. The statistics have raised concern that the eurozone’s largest economy is experiencing a slowdown.
Today, attention needs to be paid to data on Consumer Confidence, due in the US. If the indicator exceeds 97 points, the Euro is likely to continue its decline.

Support and resistance

RSI has reached the 30 level, indicating the price is approaching the overbought zone and can turn down from the current levels 1.0990-1.0970.
The nearest support level is 1.0991.
The nearest resistance level is 1.1052.

Trading tips

Short positions can be opened from the level of 1.0980 with the target at 1.0950 and stop-loss at 1.1000.

229

AUD/USD: review and forecast

Current trend

During the Asian session, the AUD fell to the level of 0.7170. The pair was moving down amid the publication of macroeconomic data on Australia.
In particular, analysts expected Wage Price Index to remain unchanged both on the quarterly and annual bases. However, the index was down to 0.5% from 0.6% and to 2.2% from 2.3%, respectively. The indicator of Construction Work Done fell by 3.6% in the fourth quarter against an expected decline by 2.0%.

Support and resistance

The pair continues trading within an ascending channel. The price rebounded down from the upper border 0.7240 and tested the level of 0.7170. Trading volumes have fallen that indicates the Bears are getting less active.
Support levels: 0.7170, 0.7140, 0.796.
Resistance levels: 0.7240, 0.7300, 0.7400.

Trading tips

Short positions can be opened below the level of 0.7170 with targets at 0.7140, 0.7100 and stop-loss at 0.7200.
Long positions can be opened above the level of 0.7240 with targets at 0.7300, 0.7400 and stop-loss at 0.7210.

230

EUR/JPY: pair remains under pressure

Current trend

The European currency is losing positions against the Japanese Yen amid a very low appetite for risk. On Wednesday, the pair reached its lows since April 2013, having fallen to the level of 122.45.
The Euro came under moderate pressure from recent macroeconomic data. In particular, France’s Consumer Confidence fell to 95 in February from 97 that is the lowest reading for the last six months.
At the same time, Japan’s statistics did not manage to support the national currency. Thus, Coincident Index was down to 110.9 points in December from 111.9 points.

Support and resistance

Bollinger Bands indicator on the daily chart is directed down. The price range tends to narrow down reflecting correctional dynamics in the pair. MACD has started growing but is still keeping a sell signal. Stochastic is in the oversold zone and trying to turn up indicating an upward correction in the pair.
The indicators recommend waiting for clearer trading signals.
Support levels: 123.57, 123.06 (23 February low), 122.45 (24 February low).
Resistance levels: 124.22, 125.00, 125.77, 126.16, 126.62 (18 February level), 127.30, 128.17 (16 February high), 128.75, 129.13.

Trading tips

Long positions can be opened after the consolidation above the level of 125.00 with targets at 126.60, 127.00 and stop-loss at 124.20. Validity – 2-3 days.
Short positions can be opened if the price turns down at the level of 125.00 with the target at 122.45 and stop-loss at 125.50. Validity – 2-3 days.

231

GBP/USD: general review

Current trend

The pair continues trading in a downward trend having lost around 2% of the value since the beginning of the year.

The Pound is substantially pressured by the possibility of a British exit from the European Union. The pressure was magnified because of the statements by the number of UK’s politicians who supported the decision to leave the EU. Current situation is likely to last until 23 June when the referendum on the matter is due in the UK.

In addition, the pair is pressured by significantly lowered probability of monetary policy tightening in the UK due to weak macroeconomic statistics that come out in the country lately.

Support and resistance

The nearest support level is at 1.3876.
The nearest resistance level is at 1.4059.

Trading tips

Short positions can be opened from the level of 1.4059 with the target at 1.3876 and stop-loss at 1.4100.

232

GBP/USD: general review

Current trend
Last week the pair significantly fell having lost around 400 points and reached its March 2009 lows.
The pair was substantially pressured by strong data from the US on the GDP for the fourth quarter of 2015 and Personal Consumption Expenditure – Price Index. Furthermore, UK’s data on the Total Business Investment and Consumer Confidence came out worse than expectations, which added to the pressure on the pair.
Today attention needs to be paid to data on Pending Home Sales for January from the US.

Support and resistance
On the 4-hour chart, the pair is trading near the lower MA of Bollinger Bands. Moving averages with 50, 100 and 144 periods remain above the price and directed down. MACD histogram is in the negative zone and its volumes are barely changing. ADX indicates a fall in the price, while DI lines are crossing each other and heading in opposite directions.
Support levels: 1.3841.
Resistance levels: 1.3878, 1.3923, 1.3965, 1.4025, 1.4070, 1.4107.

Trading tips
Short positions can be opened from the level of 1.3840 with targets at 1.3800, 1.3760 and stop-loss at 1.3870. Validity – 1-2 days.
Long positons can be opened from the level of 1.3920 with the target at 1.3960 and stop-loss at 1.3900. Validity- 1-2 days.