Market news and trade recommendations by FBS

[riki143]

EUR/USD: BULLISH "HIGH WAVE"
16:09 05.07.2017

The price is still declining, so the last "Three Methods" pattern is still on the table. Also, there isn't any reversal model so far. In this case, the market is likely going to continue moving down towards the lower "Window".

We've got a bullish "High Wave", but confirmation of this pattern is a quite weak. Therefore, the market is likely going to test the 55 Moving Average, which could be a departure point for another decline towards the 144 MA.

More:
https://fbs.com/analytics/articles/eur_usd:_bullish_"high_wave"_2018

 

[riki143]

USD/JPY: PRICE FIXATED ABOVE THE "WINDOW"
16:11 05.07.2017

The price fixated above the "Window", so we've got bullish patterns like a "High Wave" and a "Hammer". Under this circumstances, bulls are likely going to continue pushing the pair even higher.

There's a "Shooting Star", which has been formed at the last high. So, the market is likely going to test the nearest "Window" during the day. If any bullish pattern arrives afterwards, there'll be an opportunity to have a new local high

More:
https://fbs.com/analytics/articles/usd_jpy:_price_fixated_above_the_"window"_2019

 

[riki143]

USD/CHF REACHED SELL TARGET 0.9550
17:08 05.07.2017

USD/CHF reached sell target 0.9550
Next buy target - 0.9750
USD/CHF has been rising in the last few trading sessions – following the earlier upward reversal form the support area lying between the powerful support level 0.9550 (which has been reversing the price from last August and which was set as the sell target for this currency pair) and the lower daily Bollinger Band. USD/CHFis expected to rise to the next buy target at the next resistance level 0.9750 (which reversed the previous minor correction in June).

More:
https://fbs.com/analytics/articles/usd_chf_reached_sell_target_0.9550_2020

 

[riki143]

GBP/USD FALLING INSIDE INTERMEDIATE IMPULSE WAVE (3)
17:09 05.07.2017

GBP/USD falling inside intermediate impulse wave (3)
Next sell target - 1.2750
GBP/USD continues to fall inside the intermediate impulse wave (3), which started earlier from the strong resistance zone lying between the round resistance level 1.3000 (which also stopped the previous primary ABC correction ? in the middle of May) and the upper daily Bollinger Band. The downward reversal from this resistance zone created the daily Japanese candlesticks reversal pattern Evening Star. Given the overbought daily Stochastic - GBP/USD is expected to fall to the next sell target at the next support level 1.2750.

More:
https://fbs.com/analytics/articles/gbp_usd_falling_inside_intermediate_impulse_wave_(3)_2021

 

[riki143]

MORNING BRIEF FOR JULY 6
08:46 06.07.2017

The US dollar suffered losses overnight following a bit divided FOMC meeting minutes which disappointed investors expecting confirmation of Janet Yellen’s hawkishness. There were several rather than just a few members who expressed their concerns that inflation rates might not pick up to the extent that it would justify a further normalization of monetary policy. Fed’s official failed to express an undivided opinion on when to start balance sheet run-off. Some wished it happened in August – September, others asked for deferral pointing out at easing financial conditions. A formal announcement will probably come at the Fed’s July meeting.

Mixed minutes didn’t result in an extreme USD depreciation, though. Traders remain focused on Friday’s labor market report with quite strong data (latest ISM report indicated that manufacturing jobs are currently on the rise). The euro stabilized against the USD. It holds firmly around 1.1340 for the third day now. In the past few sessions, we see some improvements in the Eurozone official data (upgraded German manufacturing and service sector activities, higher PMI indices (expect Italian PMI) and a rebound in retail sales). The positive data flow undoubtedly strengthened the currency’s resilience to the greenback’s assaults.

Today traders should focus on the ADP employment survey – a major pre-NFP report, and more importantly the ISM non-manufacturing survey. Also, we will receive the ECB account of the last monetary policy meeting at 2:30 pm MT time. We don’t expect it becomes a tailwind for the euro given the biased commentaries from various ECB’s officials. Most likely, it will show that not everyone in the central bank recognized the need to reduce monetary policy stimulus.

Aussie added a few points in the Asian session on the big Australian surplus announcement but failed to hold its gains and bounced back to 0.7600. But we cannot take the following dip for the start of the bearish reversal. Most likely it is a continuation of the post-RBA’s consolidation phase. AUD/USD will likely trade sideways within the range of 0.7535 – 0.7680 in the upcoming sessions.

USD/CAD moved higher in Tokyo morning as a drop in oil prices capped the recent Bank of Canada’s inspired rally of the Loonie. Brent and WTI futures fell following comments from Russia that it doesn’t want deeper production cuts. In today’s spotlight – Canada’s building permits and trade balance data coming at 3:30 pm MT time.

Sterling is trading at 1.2940 in the broad consolidation range of 1.2820 – 1.3030. A break of its upper border will allow the GBP to hit higher levels. But this might happen only if today’s economic data out of the US is below the market’s expectations. There are no UK releases scheduled for today. The focus will on tomorrow’s industrial production and trade balance reports that might disappoint traders given the lower PMI we got earlier.

More:
https://fbs.com/analytics/articles/morning_brief_for_july_6_2034

 

[riki143]

EUR/USD: THERE MIGHT BE A REBOUND
09:36 06.07.2017

On the EUR/USD daily chart, there is a correction towards the upward near-term trend. If Bulls manage to consolidate above the level of 1.344 (78.6% from the downward near-term wave), the risks of the continuation of the rally towards the target 127.2% in the Crab pattern will increase. A downfall of the euro towards the area of 1.1255 – 1.129 can be used for opening long positions.

On the EUR/USD hourly chart, a downfall of quotes towards the lower borders of the short-term and near-term trading channels followed by the rebound will allow us to find the most beneficial entry point.

More:
https://fbs.com/analytics/articles/aud_usd:_aussie_supported_by_cloud_2003

 

[riki143]

USD/CHF: FRANC STUMBLED ACROSS DOJI-BAR
09:39 06.07.2017

On the USD/CHF daily chart, the formation of doji-bar with the long upper shadow tells us about the Bulls’ weakness. Bears are ready to restore the downward trend towards target 224%, 127.2% in the AB=CD and Crab patterns. But before this, they need to test the support at 0.9636 (88.6% from the XA wave).

On the USD/CHF hourly chart the inability of Bulls to push quotes beyond the borders of the downward trading channel and return of quotes to the borders of the upward trading channel will tell us about their weakness.

More:
https://fbs.com/analytics/articles/usd_chf:_franc_stumbled_across_doji_bar_2038

 

[riki143]

EUR/USD: CONSOLIDATION BETWEEN 34 & 55 MA

The 34 Moving Average has acted as support, so the price is consolidating. Also, there's a "V-Top" pattern, which has been confirmed. Therefore, the market is likely going to test the nearest support at 1.1307 - 1.1287 in the coming hours. If a pullback from this area happens, there'll be an opportunity to have an upward price movement towards the closest resistance at 1.1356 - 1.1398.

The price is consolidating between 34 & 55 Moving Averages. It seems like bulls are ready to achieve the next resistance at 1.1354 - 1.1365. However, if we see a pullback from these levels, bears will have a green light to deliver a decline in the direction of support at 1.1287.

More:
https://fbs.com/analytics/articles/eur_usd:_consolidation_between_34___55_ma_2040

 

[riki143]

GBP/USD: "V-BOTTOM" PATTERN
11:01 06.07.2017

Bears faced support at 1.2887, so there's a "V-Bottom" pattern, which pushed the price to the nearest resistance at 1.2947. Moreover, bulls are likely going to reach the next resistance at 1.2964 - 1.2976. Considering the previously formed "Double Top", bears will probably try to achieve support at 1.2926 - 1.2887 afterwards.

The price is consolidating near the 89 Moving Average, so bulls are likely going to test the nearest resistance at 1.2964 - 1.2976. If a pullback from this area happens, there'll be an option of having a decline towards the 89 Moving Average.

More:
https://fbs.com/analytics/articles/gbp_usd:_"v_bottom"_pattern_2041

 

[riki143]

THE US STOCK MARKET OVERVIEW
11:31 06.07.2017

US equities ended mostly higher yesterday in the post-holiday trade buoyed by gains in technology, healthcare in and financial shares. A recent drop in oil prices dragged energy stocks a bit lower but failed to divert the composite indices from their overall bull rally.

S&P500 is currently moving within the consolidation range of $2405 – 2450. Until the lower border of the range is still intact we expect it moving sideways.

Nasdaq ticked a few points higher today to $6150. It has a room for further extension towards $6343 (its all-time high). On the downside, there is a solid support at $5995 (18 May low).

A divided FOMC meeting minutes released overnight also helped the US shares to climb higher. The minutes indicated that some members are concerned with the inflation picking up in disaccord with the Fed’s monetary policy stimulus removal. As for the discussion on when to start the process of balance sheet wind down, the Fed is divided. Some suggest it can start as early as September, others are not willing to pre-commit to a start date this early. So, in the future, tepid economic data (a miss on the tomorrow’s NFP, e.g.), as well as inflation rate below the Fed's cherished target, may have a bearing on the Fed’s plans to hike one more time this year and to commence a balance sheet run-off. This would be extremely positive for the US equities as lower interest rates make them more attractive than saving money in a bank or holding government bonds.

While in the short-term there might be some retracements in the US equities, in the near-term we expect them to rise higher as soon as second quarter earnings data is published. Some analysts project surprisingly strong releases. The early results from the reporters like Nike, Oracle and Darden were truly impressive. Profits from the companies that have already posted their earning are up nearly 12% from the second quarter results of last year. These early indications might not be sufficient to be extremely bullish on the US equities though. Earning season has not really started yet. It won’t commence until July 14, when JPMorgan and Wells Fargo start reporting their profits, but we might be encouraged at least by this early reporting and wait for even better prints.

More:
https://fbs.com/analytics/articles/the_us_stock_market_overview_2042

 

[riki143]

EUR/USD: 4/8 MM LEVEL ACTED AS RESISTANCE TWICE
12:06 06.07.2017

The price has been declining in wave since a pullback from 3/8 MM Level was formed. The main bearish target is 0/8 MM Level, which could be a departure point for an upward correction.

4/8 MM Level has acted as resistance twice. In this case, wave ii of (iii) may have been ended, so bears are likely going to deliver wave iii of (iii) in the coming hours. Therefore, we should keep in mind 1/8 MM Level as an intraday target.

More:
https://fbs.com/analytics/articles/eur_usd:_4_8_mm_level_acted_as_resistance_twice_2043

 

[riki143]

GBP/USD: POUND TESTED CLOUD’S SUPPORT
14:25 06.07.2017

Technical levels: support – 1.2960, 1.2900; resistance – 1.3010.

Trade recommendations:

Buy — 1.2950; SL — 1.2930; TP1 — 1.3010; TP2 — 1.3050.
Reason: bullish Ichimoku Cloud, but falling Senkou Span A; a correctional dead cross of Tenkan-sen and Kijun-sen; the market is supported by the Cloud.

More:
https://fbs.com/analytics/articles/gbp_usd:_pound_tested_cloud’s_support_2048

 

[riki143]

USD/JPY: DOLLAR IS IN CONSOLIDATION
14:26 06.07.2017

Technical levels: support – 113.00, 112.40; resistance – 113.60.

Trade recommendations:

Sell — 113.20; SL — 113.40; TP1 — 112.40; TP2 — 112.10.
Reason: narrow bullish Ichimoku Cloud; a golden cross of Tenkan-sen and Kijun-sen with rising Tenkan-sen; the prices are under the strong resistance on daily timeframe.

More:
https://fbs.com/analytics/articles/usd_jpy:_dollar_is_in_consolidation_2049

 

[riki143]

WHEN THE EURO WILL RISE ABOVE 1.15 AND HIGHER?
15:12 06.07.2017

The euro has climbed to 1.1445 (its highest level in more than a year) due to improving the Euro area economic environment and Draghi’s hawkish commentaries at the last-week central banking conference in Sintra. According to some analysts, this was the peak; all the positive events have already been priced in and that 1.15 resistance is “unbreakable”. Analyst Carl Hammer of Skandinaviska Enskilda Banken (SEB) has a different point of view, he expects the EUR to rise well above 1.15 once one of the following conditions is met:

A fiscal collaboration within the Eurozone members should occur. That is, a banking union and a fiscal union will have to match the existing monetary union. Such a congruence should be announced no earlier than in May 2018. A fiscal union would mean a further stage in the European Union integration process; it would make the Eurozone more robust, more resilient to the spate of upcoming financial and economic crises;
The economic convergence within the Eurozone countries should be achieved. The internal imbalances in the levels of economic development should be eliminated. The Eurozone officials try hard to rectify these imbalances ever since the outbreak of Eurozone crisis. So far, their efforts are still not repaid.
The ECB becoming more hawkish not only in word by also in deeds. Meanwhile, the ECB officials believe that a monetary policy stimulus is still needed for the smooth economic recovery. Ewald Nowotny, a Governing Council member, has recently said that monetary policy should be normalized as soon as the economy allows. While inflation remains exceedingly volatile and most of the time subdued, the ECB will unlikely remove even a small degree of its monetary policy accommodation. The ECB’s policymakers admit though that sooner or later they will have to return towards a more neutral rate differential. And then, the euro will certainly spike above the 1.15 /1.20 levels much to ECB’s regret. Rapid euro appreciation would tighten financial conditions prematurely. That is something the ECB would like to occur, so it continues to accord truly great monetary stimuli instead of entering into the hawkish cycle.


One more condition we would like to add from our own part – the Fed moving away from monetary normalization and ceasing to raise rates. A non-provision of the long-awaited fiscal stimulus would also trim the USD potential for rising higher. The euro would certainly benefit from the USD weakness and finally break the resistances at 1.15/1.20.

More:
https://fbs.com/analytics/articles/when_the_euro_will_rise_above_1.15_and_higher__2050

 

[riki143]

EUR/USD: BULLISH "HARAMI"
15:50 06.07.2017

We've got a bullish "Harami" at the local low. This pattern has been confirmed, so the market is likely going to rise until any bearish pattern forms.

There're bullish patterns such a "Harami" and a "Tweezers", which both have been confirmed. Also, we don't have any reversal pattern, which means the pair is likely going to continue moving up.

More:
https://fbs.com/analytics/articles/eur_usd:_bullish_"harami"_2051

 

[riki143]

USD/JPY: "HIGH WAVE" AND "HAMMER"
15:58 06.07.2017

The price is consolidating, but we've got bullish patterns like a "High Wave" and a "Hammer". Therefore, the market is likely going to reach the nearest resistance level in the short term.

The upper "Window" has acted as resistance, so there's a bearish "Harami", which hasn't been confirmed yet. In this case, the price is likely going to test the 34 Moving Average, which could be a departure point for another bullish rally.

More:
https://fbs.com/analytics/articles/usd_jpy:_"high_wave"_and_"hammer"_2052

 

[riki143]

MORNING BRIEF FOR JULY 7
08:46 07.07.2017

USD/JPY edged higher in the Asian session as the Bank of Japan’s officials have recently said they will start buying unlimited amount of bonds to return the yield back to their zero target. JGB yields were on the, with the 100 year spiking above 0.105%. The pair rose above 113.65 on the announcement.

The euro spiked above 1.1425 (o.4% higher) overnight as the ECB minutes indicated that the ECB was on the edge of announcing a taper of its asset purchase program in the near future. The bank will hold its meeting on July 20 next time. ECB’s determinacy to remove its policy accommodation will be push the euro higher. The technical outlook for EUR/USD is neutral. A break of the resistance at 1.1445 will be an indication of the EUR moving into a bullish phase.

The British pound also gained some points in the past few sessions. It rose above 1.2970 as the Bank of England’s McCaffery (a dissenter at the last MPC meeting) said that the policy accommodation might be removed in the near-term future. Mostly likely, GBP/USD will trade sideways within the range of 1.2890 – 1.3030 in the upcoming sessions. And only clear break of the upper border of the range will indicate that the euro has moved into a bullish phase. The odds for such move do not appear to be high at the present moment, but they might increase if we get upbeat UK manufacturing production figures and passable goods trade balance figures.

Kiwi suffered some losses overnight sliding to 0.7240. We got plenty of US data yesterday. ADP Payrolls were 158K against expected 188K. It could signal downside risks for today’s non-farm payrolls. A stronger than expected non-manufacturing ISM from the US remedied USD losses though. At the present moment, NZD/USD trades at 0.7275. There is a scope for extension of kiwi’s gains to 0.7530. But we wouldn’t rush into longs at this point. The overall outlook for NZD/USD is still neutral.

US dollar/Loonie traded higher in Tokyo morning to 1.2990. Crude oil prices declined after a sharp but short-lived boost from a big decline in the US stockpiles faded. Canadian data coming at 3:30 pm will garner a special focus on the back of the next week Bank of Canada’s monetary policy meeting (at which a rate hike is expected). The major internal focus will on the US labor market report though. The market is currently expecting a payrolls growth of 178K and unchanged unemployment rate. Most analysts believe that NFP above 118K would still be enough for the Fed to continue the normalization of its monetary policy.

Other events that is coming up: a Fed monetary policy report is about to be presented to Congress ahead of Yellen’s testimony next week; the G-20 summit in Hamburg with the US President Donald Trump and his Russian homologue Vladimir Putin meeting to be held on its sidelines. Meanwhile, the investigations intro Trump’s presidential campaign collusion with Russia continues. It will be interesting to know whether Trump takes a hard line against Kremlin in the future or not.

More:
https://fbs.com/analytics/articles/morning_brief_for_july_7_2065

 

[riki143]

Banks’ preview: NFP, unemployment rate and average hourly earnings
BANKS’ PREVIEW: NFP, UNEMPLOYMENT RATE AND AVERAGE HOURLY EARNINGS
09:21 07.07.2017

The consensus expectation for the US NFP – 178K jobs. That is stronger than the 138K in May. A number like that (or any other number above 118K) will probably not deter the FED from their planned path. An additional hike is still expected this year as well as a run-off of the QE.

Our expectations in brief: the jobless rate is unchanged at 4.3%; average hourly earnings picking up slightly from 0.2% to 0.3%; probably weaker jobless claims.

Banks' preview:

More:
https://fbs.com/analytics/articles/...oyment_rate_and_average_hourly_earnings__2066

 

[riki143]

NZD/USD: KIWI IS ON THE CROSSROADS
09:49 07.07.2017

On the NZD/USD daily chart, there is a correction towards the uptrend. A break of the resistance at 0.7345 will increase the risks for the implementation of the target 113% in the Shark pattern. In contrast, an update of the July low will lead to the development of the correction.

On the NZD/USD hourly chart, it seems that Bulls took a break as there is a consolidation after the long-term uptrend. If we are talking about the process of distribution of the short positions, there will be a deep correction. In contrast, the accumulation of long positions will lead to the continuation of the rally.

More:
https://fbs.com/analytics/articles/nzd_usd:_kiwi_is_on_the_crossroads_2067

 

[riki143]

GBP/USD: POUND CANNOT GET HOME
09:51 07.07.2017

On the GBP/USD daily chart, there is a unique situation. Bears cannot return the quotes within the borders of the downwards trading channel. Bulls have no strength to return the pound to the upward trading channel. If target 88.6% of the Shark pattern is fulfilled and the 1-2-3 pattern is formed, there will be a rollback.

On the GBP/USD hourly chart, target 113% of the Shark pattern is fulfilled. If bears manage to test the support at 1.2893, there will be a transformation of the Shark pattern into the pattern 5-0.

More:
https://fbs.com/analytics/articles/gbp_usd:_pound_cannot_get_home_2068