USD/JPY: reduction of Japanese current account surplus has weakened the pair
1. Current trend of USD/JPY
The currency pair USD/JPY has been weakening this week. Today the price has reached six-week lows at the level of 96.20. The decline was driven by the data on the current account balance in Japan. At the end of June budget surplus was higher than the previous value, but below experts’ expectations, amounting to 0.65 trillion yen. This fact triggered the decline in the pair. On the other hand, Chairman of the Bank of Japan confirmed intention to increase monetary base by 60-70 trillion yen annually.
2. Important levels: support and resistance
The pair is trading near support level of 96.00. During the day the pair may experience upward correction to the level of 97.00. However it is more likely that the decline will continue down to the levels of 96.00 and 95.20. In the current situation it is advisable to place short positions with profit taking at the level of 95.20.
3. Technical indicators
On the daily chart Bollinger bands demonstrate divergence, confirming downtrend. However, the price chart has broken down the lower line twice, indicating a chance of upward correction. MACD histogram has moved to the oversold zone, its volumes are increasing. Stochastic lines have also moved to oversold zone (20), giving a buy signal.
Dmitriy Zolotov
Analyst of LiteForex Group of Companies
GBP/USD: Carney has opened new horizons
1. Current trend
Yesterday’s speech by the head of the Bank of England Mr. Carney has triggered high volatility in the national currency rate. First market’s reaction to his statement, that interest rate will not be raised until unemployment rate reaches the level of 7%, was negative. According to projections of the bank of England this level will be achieved not sooner than Q3 2016. The pair fell to the level of 1.5204.However, later, after the inflation report the pair rose up to the level of 1.5500.The Bank of England has changed GDP forecast to1.5% against the previous forecast of 1.2% in 2013 and to 2.5% instead of 1.9% for 2014.
Technical indicators show that the major obstacle to the further rise is the level of 1.5500. This level coincides with the level of 23.6 Fibonacci. If the level of 1.5500 is broken down, the growth may reach the level of 1.5800.
2. Support and resistance
The nearest support levels are 1.5500, 15475 and 15450, while the main target of the “bears” is 1.5400. Key resistance levels: 1.5550, 1.5580 and 1.5600.
3. Trading tips
At this stage we can expect testing of the level of 1.5500. If breakdown of this level takes place, the pair may grow up to 1.5800. Otherwise the pair may experience correction to the level of 1.5400.
Ilya Lashenko
Analyst of LiteForex Group of Companies.
GBP/USD: pair lacks drivers to rise
1. Current trend of GBP/USD
Since Wednesday the pair GBP/USD has been testing key resistance level at 1.5550, but isn’t able to consolidate above it. Pair lacks the drivers to rise. Today’s data on trade balance didn’t help it either. Market reacts feebly to the decrease of deficit rate down to -8.1 billion pounds, the pair stays around key level of 1.5550.
2. Important levels: support and resistance
The level of 1.5550 is the key one, but we expect the price to overcome it and go further up to the levels of 1.5630 and 1.5700. The fall to the level of 1.5490 is not so likely. If the price consolidates above 1.5550, it would be logical to open long positions with targets at 1.5630. Short-term sell positions can be opened at the level of 1.5530.
3. Technical indicators
On the daily chart Bollinger Bands are directed upwards. Price chart breaks through the upper line, which indicates the possibility of downward correction. MACD histogram is in overbought zone, its volumes are increasing. Stochastic lines are also in overbought zone, but the signal to buy hasn’t been formed yet.
Dmitriy Zolotov
Analyst of LiteForex Group of Companies
USD/CAD: unemployment rate will cause further decline
1. Current trend of USD/CAD
Time-frame of the four-hour chart clearly demonstrate the completion of the correction and continuation of the decline of quotes. Yesterday we witnessed intensive breakdown of the ascending channel, where the price corrected to the level of 50% Fibonacci. Growth in the pair was caused by yesterday’s data on a number of applications for unemployment benefits and the rise in price at the primary housing market.
Today attention should be focused on the Canadian statistics: we expect the data on a number of new houses constructions, unemployment rate and number of jobs. Analysts believe that unemployment is likely to remain at the previous level of 7.1%, while, according to experts, total number of employed people in the country will increase. The US statistics will be a crucial factor: according to experts the volume of wholesale sales may decrease; inventories of wholesale companies may increase by 0.4%. These facts will indicate overstocking in warehouses and stagnation in the industry.
2. Important levels: support and resistance
The nearest resistance level will be yesterday’s lows of the price at the level of 1.0302, next resistance level is 1.0276. Support level is 23.6% Fibonacci (1.0330).
3. Technical indicators
MACD histogram has moved to the negative zone, the signal line is directed downward, suggesting that “bearish trend will continue.
4. Trading tips
I would recommend to place short positions at the current price with the targets of 1.0276-1.0245.
Kamil Avad
Analyst of LiteForex Group of Companies
EUR/USD: Federal budget balance can weaken USD
1. Current trend
On the last trading day last week the American dollar slightly regained its positions: quotes of the pair EUR/USD fell by 60 points. This decline was caused by positive US macro-economic statistics. It became known that inventories at the warehouses of the wholesale companies have declined, which did not agree with experts’ expectations, thus indicating stability in this sector.
Technically, this movement is a part of decline to the lower limit of the channel. Attention today should be focused on a very important indicator- US Federal budget report. According to experts deficit can amount to 95.3 billion USD, which is worse than the previous data. This news can trigger further rise in the pair to the upper limit of the channel.
2. Levels of support and resistance
The nearest support level is 1.3265, which is near the lower line of the indicator “Bollinger bands”. Resistance levels are 1.3346 and 1.3400.
3. Trading tips
In advance of the expected news it is recommended to open long positions at the current price. It also makes sense to place pending buy orders near the level of 1.3265.
Kamil Avad
Analyst of LiteForex Group of Companies
Forex: Ichimoku Clouds. Review of USD/CHF
USD/CHF, H4
On the four-hour chart Tenkan-sen line is approaching Kijun-sen line from below prior to the Golden Cross formation. Chinkou Span line is crossing the price chart from below; current cloud is descending. The pair has overcome Tenkan-sen and Kijun-sen levels and is moving towards the cloud. The lower border of the cloud becomes a resistance level at 0.9299. Kijun-sen line becomes the closest resistance line at 0.9235.
USD/CHF, D1
Let’s look at the daily chart. Tenkan-sen line is below Kijun-sen; they are both horizontal. The price has slowed down its fall and been corrected to Tenkan-Sen line which remains resistance level at 0.9282. Chinkou Span is below price chart, current cloud is descending. One of the previous minimums of Chinkou Span line is expected to be a support level at 0.9200.
Key levels
Support levels: 0.9235, 0.9200.
Resistance levels: 0.9282, 0.9299.
Trading tips
On the four-hour chart we can see a trend reversal, which will be confirmed by the cross of Tenkan-sen and Kijun-sen lines. It is a good opportunity to open long trades. The chart of the higher timeframe doesn’t confirm the reversal, but shows a little correction.
Anastasiya Glushkova
Analyst of LiteForex Group of Companies
Weekly analytical review and forecast of Forex market. Financial instruments EURUSD, GBPUSD, USDJPY.
Other analytical reviews are available at LiteForex site: Forex Analysis : EUR USD : USD JPY and more : LiteForex
EUR/USD: The pair can go down below the level of 1.3250
1. Current trend of EUR/USD
This week the currency pair EUR/USD has weakened and by Tuesday the price fell by more than 100 points from the opening level. At the moment the pair is trading at the level of 1.3000. Even negative performance of the American Federal budget, which showed that expenditures of the America government exceeded revenue by 97.6 billion USD, was not able to prevent the rise in the USD.
2. Important levels: support and resistance
At the moment the pair is trading at the level of 1.3000. During the day the pair may temporarily go up to the level of 1.3330. The rise will be caused, first of all, by the release of data on volume of industrial output and business sentiment index in Eurozone (ZEW). The data is expected to be positive. However, it is likely that the price will continue to go down to the level of 1.3250. This level will coincide with the moving average line of the Bollinger bands and looks like the key one. If this level is broken out, the price will go further down to 1.3200 and 1.3140. Attention today shall be focused on the data of retail sales in US, which can give additional support to the USD. In the current situation it is advisable to place short positions with profit taking at the level of 1.3250.
3. Technical indicators
Technical indicators confirm a chance of downward movement in price. Bollinger bands are directed upward; however the price chart has bounced off upper line, trying to reach the moving average line at the level of 1.3250. MACD histogram is in the overbought zone and in the near future it can cross the signal line from top to bottom, forming a sell signal. Stochastic lines are directed downward, indicating that downward movement in price will continue.
Dmitriy Zolotov
Analyst of LiteForex Group of Companies
EUR/USD: General analysis
The Unified European currency had failed to break down important resistance level of 1.3398 on the daily chart and fell up to 1.3232, which is a support level on the four-hour chart. We can see that the pair has rebounded from this level and at the moment is trading in the range of1.3265 -1.3265. As a trading strategy we recommend to open short positions at the level of1.3215 with protective order near1.3240 and a target of 1.3150.
Good news from Germany, released yesterday, indicated, in particular, that sentiment index ZEW went up, gaining 42 points against the previous figure of 36.3 points, which was contrary to expectations; however the Unified European currency declined.
The reasons that cause this decline can be Greek problems, as the country may again need financial aid and forthcoming election of the German Chancellor. Recall, that the leading opponent of Mrs. Merkel- Mr. Shtaybryuk, blamed Chancellor in lop-sided approach to solving debt problems.
According to Mr. Shtaybryuk, Germany should make more substantial contribution to stabilization of economic situation in Eurozone. He said that we cannot bear the thought that Greece or any other participant can leave European Union, as it will have devastating consequences for the entire currency union.
Dmitry Agurbash
Analyst of LiteForex Group of Companies
Brent: Review
1. Current trend
Yesterday world prices for crude oil Brent rose by 0.85 USD and reached 109.82 USD per barrel. This rise was caused by the positive US news. It became known that retail sale in the USA increased by 0.2% in July. The index has been rising for the fourth consecutive month.
As of the morning of 14.08 2013 oil has slightly fallen in price amid concerns that the US Department of Energy will report that reduction in oil reserves is not too significant.
Today, official data on the reserves oil and oil products by US Department of Energy will become known. According to the forecast reserves of crude oil will reduce by 1.4-1.6 million barrels, stocks of gasoline will decrease by 1.9-2.1 million barrels, and that of distillate will drop by 1.0-1.1 million. Investors’ fears are based on publication of preliminary data from API. According to API estimates, crude oil reserves reduced by 999 thousand barrels, while inventories of gasoline increased by 1.7 million barrels, distillate inventories also increased by 1.1 million barrels.
2. Levels of support and resistance
Technical indicators show that the pair is experiencing correction, which followed after the growth, which lasted for several sessions in a row and investors have started to take profit. The first level on the way of bears will be level of 23.6 Fibonacci ((109.10). If correction continues, the next level will be 108.60 and after that level of 50.0 Fibonacci. Strong support level is 107.50. Resistance level is at the psychologically important mark of 110.00 USD per barrel.
Anton Karat
Analyst of LiteForex Group of Companies.
AUD/USD: The pair can continue to grow
1. Current trend of AUD/USD
On Wednesday quotes of the currency pair AUD/USD has shifted to growth. The change was caused unfavourable American statistics and declarations by the chairman of the US Federal Reserve Saint Lois James Bullard. The US producer price index amounted to 0.0% in July; the prices of goods have not actually changed at all, which suggests the decrease in inflation that is unfavourable for the American economy. At the same time Mr. Bullard said that situation in the labour market has significantly improved, while the rate of inflation fell short of the target of 2%, therefore it is too early to launch phasing out of QE3.
Attention today should be focused on the volume of industrial output and consumer price index in the USA. Experts believe that the data may weaken the USD.
2. Important levels: support and resistance
At the moment the price is trying to reach resistance level of 0.9200, which coincides with the upper line of the “Bollinger bands” indicator and looks like the key one. If this level is broken down, the price may go up to the level of 0.9300. Otherwise, the price may reverse and go back to the level of 0.9130, which corresponds to the moving average line of Bollinger bands. In the current situation it is advisable to place long positions. It also makes sense to place pending orders “sell limit at the level of 0.9200.
3. Technical indicators
On the four-hour chart Bollinger bands are in the sideways trend; the price chart tends to the upper line. Histogram of MACD indicator is in the overbought zone, its volumes are increasing. The lines of Stochastic are directed upward, entering into the overbought zone and giving a buy signal.
Dmitriy Zolotov
Analyst of LiteForex Group of Companies
EURUSD: General analysis
1. Current trend
Today the pair has slightly grown, rebounding from the lower limit of the channel. Note, that a sloped upward channel is being formed on the four-hour time chart. At the moment the pair is at the level of 1.3287, the moving average line of Bollinger bands indicator is located near this line. The price chart has crossed this line, forming a buy signal. The US news will be the fundamental factors that may cause changes in the price. Experts predict the rise in the retail sales index, the decline in the monthly index of consumer prices, while the annual value of the index will increase. Note also, that real wages will decrease; number of applications for the unemployment benefits will also go down. Obviously, the data on foreign purchase of debt obligations of the US Treasury will have significant impact on the USD rate. The last in the list of releases- is the data on business activity index in the manufacturing sector of Philadelphia district and the index of the housing market. Analysts believe that these indices may reduce. Today’s news shall add volatility to the pair, considering conflicting expectations of investors and analysts.
2. Levels of support and resistance
Psychologically crucial level is 1.3300, next resistance levels are 1.3317 and 1.3344. Support level is the lower limit of the channel, starting from this level ascending movement can go up to 1.3344 and to 1.3398.
3. Trading tips
As a trading strategy we recommend to open long positions with protective stop order at the level of 1.3228.
Kamil Avad
Analyst of LiteForex Group of Companies.
USDCAD: General analysis
1. Current trend
Since the opening of the European trading session today, the pair is demonstrating minor growth, pushing off from the lower limit of the forming ascending channel of 1.0293. At the moment quotes have reached technical resistance of 1.0330, where moving average line of the Bollinger bands indicator is located.
Later, the rise can reach the upper line of the indicator at the level of 1.0365, which can be encouraged by the US fundamental data. A lot of US economic statistics will become known today; experts predict the increase in a number of construction permits and new houses construction, as well as the rise in consumer confidence index by Michigan University.
Canadian news will be also worth of paying attention: volume of foreign investments in Canadian securities can increase, which will strengthen the CAD; while volume of sales in the manufacturing sector can go down.
2. Levels of support and resistance
Resistance levels are 1.0330 and 10365. Support level: 1.0293.
3. Trading tips
It is recommended to open long positions from the current market level. It is likely that the price will go to the line of 1.0365 today, however the “bulls” are unlikely to maintain further rise in price. In the long-term the price can go up to the upper limit of the channel at the level of 1.0445.
Kamil Avad
Analyst of LiteForex Group of Companies.
GBP/USD: Dynamics analysis and forecast for the future
1. Current trend of GBP/USD
On Thursday the currency pair GBP/USD significantly strengthened, gaining more than 150 points and reaching to the level of 1.5630. Support to the British currency was provided by the data, showing that retails sales in the country rose up by 1.1% in July. On the other hand, volume of industrial output in the US remained unchanged compared with the previous month, which also provoked the rise in the pair. However, today ascending movement has shifted to correction.
Attention shall be paid to some US macro-economic statistics, scheduled for the release today, including important data on number of construction permits and number of new houses construction in July. According to experts these indices may increase, which will trigger the rise in the USD and continuation of the corrective movement.
2. Important levels: support and resistance
At the moment the pair has pushed off from the upper limit of the ascending channel, providing probability of continuation of upward movement to the level of 1.5550, which coincides with the level of 50.0 Fibonacci. If this level is broken down, the price can go down further to the levels of 1.5490 and 1.5400, coinciding to the moving average line of the Bollinger bands indicator and the level of 61.8 Fibonacci. However, a chance that ascending movement will continue cannot be ruled out, especially if American statistics will be negative. In such case the price can go up to resistance level of 1.5730. In the current situation short positions can be opened with the target of 1.5490. Long positions are recommended from the level of 1.5670 with profit taking near 1.5730.
3. Technical indicators
On the daily chart indicators give mixed signals. Bollinger bands are directed upward; however the price chart has broken the upper line, which gives a chance of decline. MACD histogram is in the overbought zone, volumes are increasing. Stochastic lines are intersecting, going upward and forming a buy signal.
Dmitriy Zolotov
Analyst of LiteForex Group of Companies
EUR/USD: general analysis
1. Current trend
The pair has been trading without significant changes in the narrow range of 40 points for the second consecutive day. The chart clearly shows the formation of the pattern “Triangle” which can either continue the trend or change it. In case of breakdown of the upper border of the triangle, the price will go up to the levels of 1.3399 and 1.3416. If the price breaks down the lower boundary and the local lows of 1.3313, the movement will go to the lower boundary of the ascending channel to the level of 1.3247, which is close to the lower line of “Bollinger Bands” indicator. The data from US will become a fundamental factor, which will determine further movement in price. Retail sales index as per Redbook and ICSC estimates will become known today, as well as business activity index in the manufacturing sector by The Federal Reserve Bank of Chicago.
Attention shall be also focused on the sales figures in the secondary housing market, which is expected to rise by 1.6% against the value for the previous period. This data can strengthen the USD.
2. Important levels: support and resistance
The nearest obstacles on the way to the lower boundary of the channel are the lines of 1.3322 and 1.3313. Support level is 1.3374.
3. Technical indicators
The price chart is preparing to cross the midline of “Bollinger bands” indicator and form a sell signal. The signal line of MACD indicator is ready to go beyond histogram, also giving a sell signal.
4. Trading tips
In case of breakdown 1.3322 it is advised to open short positions with the target of 1.3247.
Kamil Avad
Analyst of LiteForex Group of Companies
NZD/USD: Graeme Wheeler’s speech caused a drop of NZD
1. Current trend of NZD/USD
Today, quotes of the New Zealand currency has declined sharply, losing over 100 points and reached support level of 0.7990. The decline in the NZD was caused by the speech of the head of the Reserve bank of New Zealand Graeme Wheeler, who said that the Bank is concerned about rapid rise in the house prices. Housing market of New Zealand has been significantly overvalued, which bears potential risks for the entire financial system. In order to resolve this situation RBNZ decided that the banks of the country should reduce mortgage lending limits.
2. Important levels: support and resistance
At the moment the pair is trading near the level of 0.7990. This level coincides with the moving average line of the “Bollinger bands” indicator and seems the key one. If the “bears” fail to overcome this level, the price can go back to the levels of 0.8100 and 0.8150. However it is likely that downward movement will continue up to the levels of 0.7900 and 0.7830 in the near future. In the current situation it is advisable to open short positions with profit taking at the level of 0.7830. Long positions can be opened from the level of 0.8030 with profit taking at the level of 0.8150.
3. Technical indicators
Technical indicators confirm the possibility of the downtrend. Bollinger bands are directed upward; however the price chart is testing the moving average line and if this line is broken down, the price chart will decline to the lower level of 0.7830. MACD histogram is in the overbought zone, its volumes are decreasing. In the near future histogram can cross the signal line from bottom to top, forming a sell signal. Stochastic lines are intersecting, moving down and also giving a sell signal.
Dmitriy Zolotov
Analyst of LiteForex Group of Companies
GBP/USD: downward correction is expected
1. Current trend
This week the pair is slowly rising, moving along the upper border of the upward channel. On Thursday Pound hit two-month highs at 1.5695. Today the pair is in the correction waiting for the public sector net borrowing data to be published. According to experts UK budget deficit may reach 3.7 billion pounds weakening British currency.
The attention should also be paid to the FOMC meeting minutes, which can clarify the intentions of American regulator towards QE program.
2. Support and resistance
The pair is trading around 1.5650. The fall to the level of 1.5600 and even 1.5550 will be the most probable scenario. However any of these levels can be a turning point for the trend. I would recommend to open short trades with targets at 1.5600. At the levels of 1.5600 and1.5550 buy limit orders can be placed.
3. Technical indicators
On the daily chart Bollinger Bands are directed upwards, confirming the upward trend. The price chart has bounced off the upper line of the indicator, which can be a sign of downward correction. MACD histogram is in overbought zone; its volumes have stopped to grow. Stochastic lines have crossed within overbought zone and can soon give us a signal to sell.
Dmitriy Zolotov
Analyst of LiteForex Group of Companies
EUR/USD: sales growth in the US real estate market can strengthen the USD
1. Current trend
At the opening of the American trading session yesterday the pair rapidly went up. The rise was triggered by high demand for Euro and publication of the US macro-economic statistics, showing the decrease in indices against the previous period. Attention today shall be paid to important indicator of economic state- sales at the secondary housing market. Experts believe that this index will go up. Mortgage lending index and index of refinancing mortgage lending can also affect the USD rate. Later, minutes of FOMC meeting will become known. Sales growth in the secondary housing market can provide some support to the USD.
2. Important levels: support and resistance
At the moment the pair is trading near resistance level of 1.3416, it is likely that downward movement will continue up to the level of 1.3311. The pair will encounter resistance at the level of 1.336, not far from which the moving average line of “Bollinger bands” is located. Intersection with the moving average will indicate further movement to the lower boundary of the ascending channel.
3. Technical indicators
MACD indicator is still demonstrating “bullish” trend. We will be able to speak about the development of the downward movement if the signal line goes beyond the histogram area. However, keep in mind that it may be just a short-term correction.
4. Trading tips
It is recommended to open short positions in anticipation of the further decline in quotes to the lower boundary of the channel. Do not forget about protective stop-order, as “bullish” trend has not yet completed and the rise to the level of 1.3520 is still possible.
Kamil Avad
Analyst of LiteForex Group of Companies
Forex: Ichimoku Clouds. Review of XAG/USD
XAG/USD, H4
Let’s look at the four-hour chart. Tenkan-sen line is above Kijun-sen line and they are both horizontal. Chinkou Span line is above the price chart, current Kumo is ascending. After long rise the price decreases to the level of Tenkan-sen line, which becomes support level (22.79). One of the previous extremums of Chinkou Span line is expected to be resistance level at 23.45.
XAG/USD, D1
On the daily chart Tenkan-sen line is above Kijun-sen line, the blue one remains horizontal while the red one is directed upwards. Chinkou Span line is above the price chart, current Kumo is ascending. The closest support level is Tenkan-Sen (21.84). One of the previous extremums of Chinkou Span line is expected to be resistance level at 23.24.
Key levels
Support levels: 23.45, 23.24.
Resistance levels: 22.79, 21.84.
Trading tips
On the four-hour chart the price has slowed down its upward movement. It is good opportunity to open new long trades. On the daily chart Ichimoku lines confirm Bullish trend.
Anastasiya Glushkova
Analyst of LiteForex Group of Companies
EUR/USD: the pair may continue to decline
1. Current trend of EUR/USD
On Wednesday the currency pair EUR/USD fell to the level of 1.3335. The rise in the American dollar was caused by publication of the minutes of July’s meeting of the US Fed Open Markets Committee. According to the minutes, majority of FOMC members agreed that phasedown of the quantitative easing program can be launched before the end of this year; however no specific dates have been indicated.
2. Important levels: support and resistance
At the moment the pair continues to decline, tending to the level of 1.3305. This level seems the key one, as it practically coincides with the moving average line of “Bollinger bands” indicator, with the level of 61.8% Fibonacci and also with the boundary of the ascending channel. In case of breakdown of this level, the price will drop to the level of 1.3200, which coincides with the lower line of “Bollinger bands” and the level of 50.0* Fibonacci. Otherwise, the price can return to the level of 1.3400. Attention shall be drawn to US Fed conference in Jackson Hole that starts today and which will be one of the fundamental events. Decisions made at this Forum can have dramatic impact on the movement in the pair. In the current situation it is advisable to place short positions if the price consolidates below the level of 1.3305. Profit taking is recommended at the level of 1.3200. Long positions can be opened from the level of 1.3360.
3. Technical indicators
Technical indicators on the daily chart confirm possibility of downward movement. Bollinger bands are directed upward; however, the price chart tends to the moving average, which is at the level of 1.3305. MACD histogram is in the overbought zone, its volumes are decreasing. Stochastic lines are crossing and directed downward, giving a sell signal.
Dmitriy Zolotov
Analyst of LiteForex Group of Companies
