daily market outlook

[jebat66]

GBP/JPY is expected to trade in a lower ground as the key resistance is at 161.05. The pair remains under pressure after the downside breakout of its key horizontal level at 161.05. The previous support now acts as a resistance, which should limit any upside room. Besides, the 20-period and 50-period moving averages are turning down, calling for a new decline. Hence, look for further downsides to 159.40 and 158.70 in extension below 161.05.

Trading Recommendations:

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 159.40. A break of this target will move the pair further downwards to 158.70. The pivot point stands at 161.60. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 161.85 and the second target at 162.85.

Resistance levels: 161.85, 162.85, 163.40

Support levels: 159.40, 158.70, 158

 

[jebat66]

Overview:

The USD/CHF pair didn't make any significant movements yesterday. There are no changes in our technical outlook. The bias remains bearish in the nearest term testing 0.9802 or lower. Immediate support is seen around 0.9870. A clear break below that area could lead price to the neutral zone in the nearest term. Price will test 0.9802, because in general, we remain bearish on March 16th, 2016.
Yesterday, the market moved from its bottom at 0.9830 and continued to rise towards the top of 0.9890. Today, on the one-hour chart, the current rise will remain within a framework of correction. However, if the pair fails to pass through the level of 0.9910 (major resistance), the market will indicate a bearish opportunity below the strong resistance level of 0.9910 (the level of 0.9910 coincides with tha ratio of 38.2% Fibonacci retracement). Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 0.9910 with the first target at 0.9802 so as to test the double bottom. If the trend breaks the double bottom level of 0.9802, the pair is likely to move downwards continuing the development of a bearish trend to the level of 0.9721 in order to test the weekly support 1.

 

[jebat66]

Global macro overview for 16/03/2016:

The American Petroleum Institute report regarding its inventory levels of US crude oil, gasoline and distillates stocks revealed lower than expected build in inventories. The market participants expected the gain of 3 400K barrels this week, down from 4.400K barrels last week, but the number revealed was 1 500K barrels only. Oil prices are also being carefully monitored by the Federal Reserve and other central banks, as developed economies continue to grapple with ultra-low inflation levels, fueled by the collapse in oil prices. In conclusion, this is somehow encouraging sign of increased short-term demand for oil, but it is still not enough to tame the oversupplied global oil market

Let's now take a look at the technical picture of the crude oil on the daily chart. The market was rejected at the 39.50 resistance level and then, broke out below the golden trend line signaling a possible short- term bull trend exhaustion. Nevertheless, it is still trading above the 21,50 and 100 daily moving average, so the bulls might take the control again any time soon. Only a sustained and clear break out below the support at the level of 36.08 would change the situation as more favorable for bears.

 

[jebat66]

Wave summary:

We have moved closer to important support at 1.6470 which should protect the downside for a new rally above 1.6715 and, more importantly, above resistance at 1.6874 confirming a rally towards 1.7220 and higher.

A break below 1.6470 will not invalidate the bullish bias, but merely delay the expected upside rally. Only a break below important support at 1.6197 will invalidate the bullish outlook.

Trading recommendation:

We are long in EUR from 1.6595 with a stop placed at 1.6460. If you are not long in EUR yet, then buy near 1.6470 and use the same stop at 1.6460 or buy a break above minor resistance at 1.6874.

 

[jebat66]

USD/JPY is expected to trade in a lower range as the key resistance is at 113.05.Overnight U.S. stocks settled higher, cheered by the Federal Reserve's dovish rate outlook. Commodities and energy shares were also boosted by a surge in oil prices. The Dow Jones Industrial Average rose 0.4% to 17325, the S&P 500 increased 0.6% to 2027, and the Nasdaq Composite was up 0.8% to 4763.

Nymex crude oil surged 5.8% to $38.46 a barrel, gold gained 2.5% to $1262 an ounce, while the benchmark 10-year Treasury yield declined to 1.940% from 1.961% in the previous session.

The Federal Reserve, as expected, kept interest rates unchanged while projecting two more quarter-point interest rate increases by the end of 2016, down from four as projected in December.

As a result, the U.S. dollar fell broadly against most other major currencies, with the WSJ Dollar Index losing 0.8% to 87.76, the lowest level since October. EUR/USD gained 1.0% to 1.1222, GBP/USD rose 0.8% to 1.4257, USD/JPY declined 0.5% to 112.57, while AUD/USD was up 1.2% to 0.7548. With an additional boost from rising oil prices, the Canadian dollar surged against the greenback, with USD/CAD plunging 1.9% to 1.3095 and closing below the 200-day moving average again. The pair plunged to 112.29 overnight before posting a rebound. Currently it remains capped by the key resistance at 113.05. And the bearish bias is also maintained by the descending 20-period (30-minute chart), which has crossed below the 50-period one. Meanwhile the intraday relative strength index remains below the neutrality level at 50. As long as 113.05 is not surpassed, the pair should return to the first downside target at 111.85 and decline further toward 111.60.

Trading Recommendation:

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 111.85. A break of this target will move the pair further downwards to 111.60. The pivot point stands at 113.05. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 113.45 and the second target at 113.80.

Resistance levels: 113.45, 113.80, 114.15

Support levels: 111.85, 111.60, 111.05

 

[jebat66]

Wave summary:

The important short term resistance at 126.70 has protected the upside nicely and we will now be looking for renewed weakness to below support at 125.05 confirming more downside pressure towards 123.01 and below to 122.06 and 119.90.

Only an unexpected break above 126.70 will delay the expected downside pressure for a move closer to 127.45 before heading down again.

Trading recommendation:

We are short in EUR from 126.79 with a stop placed at 126.75. If you are not short yet, then sell upon a break below 125.57 and use the same stop at 126.75.

 

[jebat66]

USD/CHF is expected to extend its downside movement. After yesterday's sharp decline, the pair is now in a downtrend, capped by its falling 20-period and 50-period moving averages. The relative strength index is negative, but is close to its support at 30. Even though a technical rebound cannot be ruled out at the current stage, its extent should be very limited by 0.9845. To conclude, as long as 0.9845 is not surpassed, a break below 0.9745 would trigger a drop towards 0.9715.

Trading Recommendations:

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 0.9745. A break of this target will move the pair further downwards to 0.9715. The pivot point stands at 0.9845. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 0.9915 and the second target at 0.9940.

Resistance levels: 0.9915, 0.9940, 0.9995

Support levels: 0.9745, 0.9715, 0.9675

 

[jebat66]

USD/CAD is expected to trade with a bearish bias. After yesterday's sharp decline, the pair has clearly reversed down, and is likely to post a new drop towards 158.70. The relative strength index is badly directed. Even though it is now within its "oversold" area below 30, it hasn't yet showed any reversal signals. The 20-period and 50-period turned down as well, which should confirm a negative outlook. To sum up, as long as 161.05 is not surpassed, look for further downsides to 158.70 and 157.50 in extension.

Trading Recommendations:

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 158.70. A break of this target will move the pair further downwards to 157.50. The pivot point stands at 161.05. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 161.85 and the second target at 162.85.

Resistance levels: 161.85, 162.85, 163.40

Support levels: 158.70, 157.50, 156.90

 

[jebat66]

CHF/JPY seems to establish a bearish trend after breaking below the ascending Fibonacci channel and then breaking below the 161.8% retracement line.

The first corrective wave after the 161.8% trendline breakout shows a few potential downside targets, one being S2 (114.10) - 261.8% and another S3 (113.60) - 361.8% retracement which also corresponds with the 361.8% retracement of the Fib channel.

Consider selling CHF/JPY on any pullbacks towards R1 (115.40) or on a breakout of S1 (114.90). The stop loss should be above R1, with the final target at the S3 (113.60) area.

Support: 114.90, 114.10, 113.60

Resistance: 115.40

 

[jebat66]

USD/JPY has been range trading for an extended period of time if we look at the 1H timeframe. The price has been crossing a 200 Moving Average a number of times showing no signs of a trend.

But the recent price action shows that the pair started to produce lower lows and lower highs suggesting that bears could be starting to take over. In addition, the ascending Fibonacci channel breakout confirms the bearish scenario, where, after the breakout, the price found resistance and the lower trendline of the channel. The Fibonacci retracement applied to the first corrective wave after the channel breakout is pointing to a few potential downside targets, one being 261.8% and another 361.8% accordingly.

Consider selling USD/JPY on any pullbacks towards R1 (11.75) resistance or on the S1 (112.45) breakout. The stop loss should be just above the high produced near R1. The final target is the S3 (111.50) area.

Support: 112.45, 112.00, 111.50

Resistance: 112.75