LiteForex Analitics

[Mikhail Kurakin]

Brent Crude Oil: prospects for demand growth support quotes

Current trend

Benchmark Brent crude prices are on the upward trend amid rising global energy demand, trading around $75.00 per barrel. Last week, the instrument was pressured by the expectation of an inflow of Iranian oil to the market; however, after the slowdown in negotiations on the "nuclear deal", the total volume of demand began to significantly exceed supply, which allows the "black gold" rate to adjust upward. A positive point is the significantly increased consumption of petroleum products due to the prevalence of road transport in the world over the rest since most of the borders are closed for air travel.

Paying attention to the main world arbitrage position of the spread between Brent Crude Oil and WTI Crude Oil, the range of fluctuations has narrowed significantly and is currently only $1.70, which is the lowest indicator since the price collapse in the summer of 2018. This fact suggests that the implementation of a large position is being prepared.

Support and resistance

On the global chart, the asset is moving within an uptrend. Technical indicators maintain a stable buy signal: Alligator indicator’s EMA fluctuations range expands upward, while the AO oscillator histogram remains high in the positive zone.

Resistance levels: 76.00, 78.00.
Support levels: 72.00, 65.00.

 

[Mikhail Kurakin]

USD/CAD: wave analysis

The pair is in a correction and may grow.

On the daily chart, the downward wave of the higher level (C) of 4 develops, within which the third wave 3 of (C) formed. Now, an upward correction is developing as the fourth wave 4 of (C), within which the wave a of 4 has formed, and the wave b of 4 is developing. If the assumption is correct, after the end of the correction, the pair will grow to the levels of 1.2537–1.2716. In this scenario, critical stop loss level is 1.2194.

 

[Mikhail Kurakin]

Alibaba Group Holdings Ltd.: wave analysis

The price may fall.

On the daily chart, the first upward wave of the higher level 1 developed, and a downward correction forms as the wave 2. Now, the wave (C) of 2 is forming, within which the third wave of the lower level 3 of (C) has formed, and a local correction is developing as the wave 4 of (C). If the assumption is correct, after the end of the correction, the price will fall to the levels of 187.27–155.97. In this scenario, critical stop loss level is 245.00.

 

[Mikhail Kurakin]

GBP/USD: Bank of England is not ready to change the course of monetary policy

Current trend

The GBP/USD pair moves horizontally, trading around the level of 1.3930 amid the rhetoric of the Bank of England.

GBP reacted neutrally to the regulator's decision not to change the main parameters of monetary policy and leave the interest rate at 0.10%, and the total volume of the government bond purchase program at 875B pounds. Officials of the department stressed that at the moment the priority is to achieve a stable inflation range above 2%, mainly due to a possible further increase in energy prices. The bank also drew attention to GDP growth rates, which are still below the benchmarks, and set a target range of around 5.5% for the third quarter.

The US macroeconomic statistics were also viewed as neutral by investors. Although Initial Jobless Claims were higher than the forecast, amounting to 411K against 380K expected, USD rate remained at the level of the beginning of the week. Among the negative indicators, it is worth noting the decrease in durable goods orders for May to 0.3% from 1.7% for April. Now, it seems that the overpriced dollar is being held artificially, and in case of further deterioration of the quotes, the quotes may start to actively decline.

Support and resistance

The course moves within a wide lateral channel. Technical indicators keep a local sell signal: fast EMAs on the Alligator indicator are below the signal one, and the AO oscillator histogram is kept in the sell zone.

Resistance levels: 1.3985, 1.4221.
Support levels: 1.3788, 1.3668.

 

[Mikhail Kurakin]

USD/CAD: in anticipation of new growth drivers

Current trend

After a decline at the end of last week, today during the Asian session, the USD/CAD pair grows slightly, adding about 0.11% and trying to consolidate above the psychological level of 1.2300.

Investors are assessing the prospects for tightening the monetary policy of the US Federal Reserve in the light of the approval in Congress of a new plan to modernize the US infrastructure in the amount of almost $600B. The regulator was previously in no hurry to raise interest rates, so now analysts expect him to take even more measured actions.

On Monday, traders expect statements from two representatives of the US Federal Reserve, John Williams and Randal Quarles, who are likely to express their views on the timing of tightening monetary policy and the rate of inflation in the country.

Support and resistance

Bollinger bands are actively growing on the daily chart. The price range is narrowing from below, reflecting the emergence of multidirectional trading dynamics in the short term. The MACD indicator is going down, maintaining a poor sell signal (the histogram is below the signal line). Stochastic, having approached the level of 20, reversed into a horizontal plane, reacting to the flat nature of the trades of the last days.

It is better to wait for the clarification of signals from technical indicators to open new positions for the instrument.

Resistance levels: 1.2300, 1.2352, 1.2400, 1.2439.
Support levels: 1.2245, 1.2200, 1.2143, 1.2060.

 

[Mikhail Kurakin]

USD/CHF: USD is recovering

Current trend

USD has seen moderate gains against CHF during the Asian session, testing the resistance at 0.9200.

Investors are in no hurry to open new trading positions, preferring to wait for additional drivers to appear on the market. The focus is on the June report on the US labor market, which will assess the prospects for tightening the US Fed's monetary policy. The ADP Employment Change is due tomorrow, setting the tone for end-of-week expectations. Current forecasts are pretty pessimistic. The US economy is expected to create only 600K new private sector jobs in June, significantly less than the nearly 1M jobs created in May.

The market also expects the publication of data on jobless claims on Thursday. It is assumed that for the week ending June 25, the number of Initial Jobless Claims will show a decrease from 411K to 393K. The number of Continuing Jobless Claims for the week ending June 18 may be reduced from 3.39M to 3.382M.

Support and resistance

Bollinger Bands in D1 chart show active growth. The price range is narrowed from below, being spacious enough for the current activity level in the market. MACD indicator is growing preserving a weak buy signal (located above the signal line). Stochastic, interrupting its active decline last week, reversed upwards, indicating the prospects for growth in the instrument in the nearest time intervals.

Resistance levels: 0.9200, 0.9237, 0.9300, 0.9350.
Support levels: 0.9153, 0.9100, 0.9050, 0.9000.

 

[Mikhail Kurakin]

JP Morgan Chase Co.: wave analysis

The price is in a correction, a fall is possible.

On the daily chart, the fifth wave of the higher level (5) forms, within which the wave 3 of (5) ended. Now, a downward correction is developing as the fourth wave 4 of (5), within which the wave a of 4 has formed. If the assumption is correct, after the end of the correction b of 4 the price will fall to the levels of 138.46–129.29. In this scenario, critical stop loss level is 167.46.

 

[Mikhail Kurakin]

WTI Crude Oil: consolidation near record highs

Current trend

The prices for WTI Crude Oil show near-zero dynamics, holding close to record highs and the level of $74 per barrel. The quotes are still moderately supported by the fact that the oil stocks in US warehouses are declining. At the same time, data from OPEC indicate a growing oil shortage in the market, in connection with which the cartel may decide to increase quotas for oil production. The next meeting of the organization should take place today.

As the report from the US Department of Energy published yesterday showed, stocks of oil and petroleum products in the country for the week of June 25 decreased by 6.718M barrels after falling by 7.614M barrels over the previous period. Analysts' forecasts assumed a decrease in reserves by only 4.686M barrels. At the same time, gasoline inventories rose again by 1.5M to 241.6M barrels, while experts expected a reduction of 1.2M barrels.

Support and resistance

On the daily chart, Bollinger bands are rising moderately. The price range is inclined to reverse into a horizontal plane, reacting to the flat nature of the trades of the last days. The MACD indicator is going down, maintaining a poor sell signal (the histogram is below the signal line). After a short decline, Stochastic is trying to reverse upwards again, reflecting the appearance of the “bullish” impulse on Tuesday.

Resistance levels: 74.00, 75.00, 75.68.
Support levels: 73.00, 71.80, 71.00, 70.00.

 

[Mikhail Kurakin]

USD/JPY: USD updates record highs

Current trend

USD has seen slight gains against JPY in Asian trading, hitting record highs since late March 2020. Market activity remains rather low, as traders await the publication of the US employment report, which remained one of the main drivers throughout the week.

The macroeconomic statistics from Japan released the day before managed to support the "bullish" sentiments on JPY for some time, but were unable to reverse the negative trend. Tankan Large Manufacturing Index in Q2 2021 increased from 5 to 14 points, which turned out to be worse than the expected values by 1 point. Tankan Large All Industry Capex for the same period increased from 3% to 9.6%, while the forecast was at 7.2%. Jibun Bank Manufacturing PMI increased from 51.5 to 52.4 points in June.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range is expanding but it fails to conform to the surge of "bullish" activity at the moment. MACD indicator is growing preserving a stable buy signal (located above the signal line). Stochastic maintains a confident upward direction, but reaches its highs, which significantly limits the development of "bullish" sentiments in the nearest time intervals.

Resistance levels: 111.70, 112.00, 112.44, 113.00.
Support levels: 111.34, 111.00, 110.81, 110.42.

 

[Mikhail Kurakin]

USD/CHF: correction after the publication of the report on the labor market

Current trend

Today during the Asian session, the USD/CHF pair slightly grows within the correction, trying to recover from a sharp decline last Friday, which was provoked by the publication of the report on the US labor market for June.

The report reflected an increase in Nonfarm Payrolls by 850K after an increase of 583K for May, although analysts' forecasts assumed an increase in the indicator only to 700K. Nevertheless, the market was covered by a wave of sales of the American currency, as investors secretly counted on much more impressive growth.

On Monday, traders are focused on the statistics on business activity in the service sector and manufacturing in Europe for June. The US will report on the dynamics of business activity only on Tuesday.

Support and resistance

Bollinger bands actively grow on the daily chart. The price range narrows, reflecting the ambiguous short/ultra-short term trading. MACD falls, maintaining a poor sell signal (the histogram is below the signal line). Stochastic, reversed at 80, maintains a fairly confident “bearish” dynamics, signaling in favor of the development of a downtrend in the US currency in the ultra-short term.

The current readings of technical indicators do not contradict the further development of the corrective decline in the nearest time intervals.

Resistance levels: 0.9237, 0.9273, 0.9300.
Support levels: 0.9200, 0.9153, 0.9100, 0.9050.

 

[Mikhail Kurakin]

AUD/USD: the uptrend is strengthening

Current trend

AUD has shown significant gains against USD in trading in Asia, updating local highs since the end of June and actively testing 0.7570 for a breakout.

The instrument significantly benefited from the publication of Friday's US labor market report, as investors rushed to look for alternatives to the "safe" USD, expecting that the US Fed will maintain its current monetary policy for a while. "Bullish" sentiment was supported yesterday by moderately optimistic macroeconomic statistics from Australia. In particular, investors reacted positively to a 0.4% MoM growth in retail sales in May after a 0.1% MoM growth in April.

Today, traders are focused on the meeting of the Reserve Bank of Australia (RBA), at which, as expected, the regulator left the interest rate level unchanged at 0.1%. As for the bond buyback program, the RBA intends to prolong it after completion in early September. The regulator is expected to buy bonds worth 4B dollars a week until at least mid-November.

Support and resistance

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is narrowing from above, being spacious enough for the current activity level in the market. MACD has reversed to growth having formed a strong buy signal (located above the signal line). Stochastic keeps its upward direction but is approaching its highs rapidly, which reflects risks of the overbought AUD in the ultra-short term.

Resistance levels: 0.7570, 0.7600, 0.7645, 0.7676.
Support levels: 0.7531, 0.7500, 0.7475, 0.7443.

 

[Mikhail Kurakin]

Mastercard Inc.: wave analysis

The price may grow.

On the daily chart, the fifth wave of the higher level (5) develops, within which the wave 3 of (5) forms. Now, the third wave of the lower level iii of 3 is developing, within which the wave (ii) of iii has ended, and the formation of the wave (iii) of iii has started. If the assumption is correct, the price will grow to the levels of 450.00–500.00. In this scenario, critical stop loss level is 355.20.

 

[Mikhail Kurakin]

USD/CAD: the instrument is renewing the highs since the end of April

Current trend

Today, during the Asian session, the USD/CAD pair grows steadily, renewing the local highs of April 22.

Yesterday, the instrument showed ambiguous dynamics, which was caused by the publication of the latest minutes of the US Federal Reserve meeting. As expected, they reflected its wait-and-see stance on reductions in existing incentives. Also, the regulator expects a gradual return of inflation to the target level of 2%. Positive macroeconomic statistics from Canada put additional pressure on the rate. Thus, the Ivey business activity index for June rose from 64.7 to 71.9 points, which was better than the average forecasts of analysts.

On Thursday, traders will focus on US statistics on the dynamics of initial and continuing jobless claims. Key data from Canada is due on Friday when the June labor market report will be released. Analysts' forecasts for Canadian statistics are very optimistic.

Support and resistance

On the daily chart, Bollinger bands grow moderately. The price range expands but not as fast as the “bullish” sentiment develops at the moment. MACD grows, maintaining a strong buy signal (the histogram is above the signal line). Stochastic also maintains a strong upward trend but is close to its highs, signaling that USD is overbought in the short term.

The current readings of technical indicators do not contradict the further development of bullish dynamics in the nearest time intervals.

Resistance levels: 1.2554, 1.2600, 1.2650.
Support levels: 1.2500, 1.2448, 1.2400, 1.2352.

 

[Mikhail Kurakin]

GBP/USD: moderate decline at the end of the week

Current trend

GBP is showing a slight decline against USD during the morning trading session, preparing to end the week near the local lows since July 2. The instrument is testing 1.3770 for a breakdown and expects new drivers to appear on the market, which may be the US Fed's monetary policy report and a block of macroeconomic statistics from the UK.

Macroeconomic data from the USA published the day before turned out to be contradictory. Initial Jobless Claims for the week ending July 2 unexpectedly increased from 371K to 373K, which turned out to be significantly worse than the positive market forecast of a decrease to 350K. Continuing Jobless Claims for the week ending June 25 fell from 3.484M to 3.339M, which was only slightly worse than expectations at 3.335M.

Support and resistance

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. The MACD indicator is trying to reverse upwards, keeping a formal buy signal (the histogram is above the signal line). However, it is still not worth relying on such indicator readings at the moment. Stochastic, on the other hand, maintains a moderate decline, rapidly approaching the level of "20", which indicates increasing risks of oversold GBP in the ultra-short term.

Resistance levels: 1.3800, 1.3857, 1.3900, 1.3960.
Support levels: 1.3750, 1.3700, 1.3650, 1.3600.

 

[Mikhail Kurakin]

WTI Crude Oil: prices are holding near record highs

Current trend

Today, during the Asian session, prices for WTI Crude Oil are growing moderately, developing the “bullish” momentum formed at the end of last week.

Yesterday, the instrument renewed record highs since October 2018 but still failed to consolidate at the occupied levels since a wave of sales covered the market at the end of the daily session. The situation remains rather uncertain at the moment, as investors assess the likelihood of the spread of a new strain of coronavirus, which could lead to new restrictive measures and a decrease in energy demand. Also, the quotes are influenced by the ambiguous OPEC+ policy: the latest negotiations of the alliance reached a dead end but traders do not give up hope that an agreement will be reached.

On Tuesday, investors are focused on statistics on consumer inflation in the US and a report from the American Petroleum Institute (API) on oil reserves for the week of July 9. Previous data reflected a decrease in reserves by 7.983M barrels.

Support and resistance

Bollinger bands actively grow on the daily chart. The price range expands from above but not as fast as the “bullish” sentiments develop. MACD reversed upwards, forming a new buy signal (the histogram is above the signal line). Stochastic grows but the indicator line is approaching its highs, indicating that the instrument may become overbought in the ultra-short term.

Resistance levels: 75.68, 76.27, 77.00.
Support levels: 75.00, 74.00, 73.00, 71.80.

 

[Mikhail Kurakin]

NZD/USD: wave analysis

The pair is in a correction, a fall is possible.

On the daily chart, the upward wave of the higher level (А) of B developed, and the downward wave (B) of B forms. Now, the wave C of (B) is developing, within which the development of the third wave of the lower level iii of C has started. If the assumption is correct, the pair will fall to the levels of 0.6690–0.6467. In this scenario, critical stop loss level is 0.7321.

 

[Mikhail Kurakin]

AUD/USD: rhetoric of the US Fed again disappointed the markets

Current trend

The pair AUD/USD continues to correct in a lateral trend amid ambiguous data on the Australian labor market and is at 0.7465.

The overall unemployment rate fell in June to 4.9% from 5.1% in May, but the number of people employed increased by 29.1K (slightly lower than the 30.0K forecast). The share of the economically active population remained at the May level (66.2%), while analysts expected the indicator to increase to 66.3%. The indicators reflected the ongoing recovery of the labor market, and for a complete picture, one needs to wait for the inflation data.

USD also failed to get support after yesterday's speech by the head of the US Fed Jerome Powell in the House of Representatives. Analyzing the significant increase in inflation, the official continued to adhere to his line and noted that, despite the unexpected persistence of inflation, the regulator does not plan to take action and expects a decrease in the indicator as the impact of the pandemic subsides. Investors were disappointed by the agency’s reaction, and the dollar sell-off began to intensify.

Support and resistance

On the global chart, the price continues to form a downtrend. Technical indicators still give a sell signal: the range of the EMAs fluctuations of the Alligator indicator is quite wide, and the AO histogram is trading deep in the sell zone.

Support levels: 0.7420, 0.7200.
Resistance levels: 0.7520, 0.7655.

 

[Mikhail Kurakin]

Intel Corp.: wave analysis

The price may grow.

On the daily chart, a downward correction of the higher level developed as the second wave (2), within which the wave C of (2) formed, and the development of the third wave (3) started. Now, the first entry wave of the lower level 1 of (3) has formed, a downward correction has developed as the wave 2 of (3), and the formation of the wave 3 of (3) has started. If the assumption is correct, the price will grow to the levels of 75.00–80.00. In this scenario, critical stop loss level is 53.14.

 

[Mikhail Kurakin]

WTI Crude Oil: wave analysis

The price may grow.

On the daily chart, a downward correction of the higher level developed as the wave B, and the upward wave C forms, within which the first wave 1 of (1) of C develops. Now, the fifth wave of the lower level v of 1 is forming, within which the wave (iii) of v has formed, and the fourth correctional wave (iv) of v is ending. If the assumption is correct, after the end of the correction, the price will grow to the levels of 80.00–85.00. In this scenario, critical stop loss level is 69.20.

 

[Mikhail Kurakin]

Alibaba Group Holdings Ltd.: wave analysis

The price may fall.

On the daily chart, the first upward wave of the higher level 1 developed, and a downward correction forms as the wave 2. Now, the wave (C) of 2 is forming, within which the fifth wave of the lower level 5 of (C) is developing. If the assumption is correct, the price will fall to the levels of 187.27–155.97. In this scenario, critical stop loss level is 231.50.