Technical Analysis by Vistabrokers

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GOLD. Is Next Move for Bulls?!..

We did not trade actively in gold with good reason, first of all, to set the record straight on the future dynamics of the yellow metal. On the one hand, the correction looked a little unfinished due to the fact that the trend line has not been achieved, while on the other – the data on the US labor market had to affect on the dynamics of prices. Here we had some surprises. Non-farm payrolls grew in January much higher than it has been predicted and December values were revised from 352 thousand up to 329. As a result, quotes lost about $ 30 from the Friday's opening price and found a support at the above-mentioned trend line of growth in November 2014 - January 2015. Moreover, here is passing a 50% correction of the last upward wave in January.

At this stage, despite a very strong technical support, it is recommended to wait for signs of growth (eg, from indicators - as the price intersection of moving average) before opening long positions. If an acknowledgment is received, the stop loss should be placed under a Friday minimum (1228.00), and the first target will be a maximum of the last 6 months - 1308 dollars per troy ounce.



USD/JPY. Dollar Hit Ceiling

Statistics published by the US Department of Labor on Friday, apparently caused the most positive emotions of market players as for the US economy health. As a result, USD/JPY quotes in a few minutes have overcome a series of restrain levels and continued to grow almost to the end of the week trading. Perhaps the only limiting factor was the achievement of the upper boundary of a graphic consolidation figure "triangle", which was formed during the two-month correction to the last wave of growth. Thus, the only thing the price should do is to pass this line of resistance, and then the maximum number of participants will join to the movement.

Previously, we have called 120.69 a possible growth target, where the extension level 161.8% of the growth in the middle of January passes. This target remains relevant (its value is the same as another local resistance level at around 120.81), but it is not a right time for the next wave of purchases. For this is definitely worth to wait for a break of Friday's extreme values (119.20).

 

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GBP / USD. On the Frontline

Those market players who are closely monitoring the situation in the GBP/USD, surely have strategic thinking, because in this pair the defense of the dollar is the weakest. Suffice it to recall not only the current resistance trend line testing of the last seven months, but also quite specific positions of the Bank of England in monetary policy. The BOE apparently is not going to implement stimulation measures (as some other central banks did), but on the contrary is the next after the Fed on the list of rate hikes. At the same time, we can not say that technically everything is clearly, because the current correctional increase is difficult to correlate with the direction of the trend, especially since this growth is still within the long-term downtrend. But today some important data in the UK are expected, and this rise to any technical fix progress.

So, at 9.30 GMT we expect data on industrial production in the UK in December, and at 15.00 GMT – the quarterly data on GDP (unofficial) from NIESR. It is likely that if these data will be positive, quotations may again move closely to the trend line. In turn, the breakthrough of 1.5350 will mean a possible offensive full upward correction of the total descent during the period July 2014 - January 2015.


USD/JPY. Technical vs Fundamental Analysis

Current price consolidation near the resistance line, forming a side of either symmetric, or descending triangle (this is, in fact, does not matter) gives a reason to expect some developments in the USD/JPY. Moreover, the same rise in prices, which we have mentioned in the previous review, is already corrected enough to deduct this figure as a trend continuation pattern "flag". Going beyond its boundaries will be one more argument in favor of continuing an upward trend in the pair. From a fundamental point of view, the dollar is still supported by the good statistics on the US labor market and expectations of imminent interest rate increase by the Fed, which will be consistent in its actions and will not sway by insufficient rate of inflation. A nature of inflation reduce is the fall in energy prices and a matter of time.

Whatever reasons are given, the main obstacle to further growth is still the upper limit of the "triangle", and only its sustained break with overcoming level (119.20 - Friday's high) would rely on the consistent achievement of the objectives of growth. Recall, the first of them (120.69) corresponds to 161.8% Fibonacci extension of January pulse. Here goes another level of resistance (120.81) - a local extremum of December 23.

 

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AUD / USD. Reduction Targets are Worked out. What is Next?

We have fixed a rebound from achieved virtually at all significant time intervals corresponding resistance lines of current downward price channels. So channel lines were tested in the long-term, medium-term and short-term timeframes, which led to profit-taking by some market players due to the achievement of target levels. Note that the last powerful reduction wave occurred when the results of the Reserve Bank of Australia meeting have been published, and it became known that RBA had surprisingly decided to reduce the interest rate by 25 basis points to 2.25%. Some experts do not rule out a further decrease in the coming months, but it seems that the market has already taken this factor into account. Moreover, one can not deny the fact that sooner or later, energy prices, will finally grow up, thereby supporting inflation. The sooner it happens, the less chance of further easing by the RBA will remain.

Thus, it is time to cut short positions, and probably to hold hand, responding to coming market data. Among important data we can name tomorrow's publications of unemployment rate and employment change in 00.30 GMT. As expected, the unemployment rate in January has rose to 6.2%, while the number of jobs fell by 4.7 thousand. It is recommended to wait for the market reaction to the statistics, before setting any targets. With all of this, from a technical point of view quotes are now tending to achieve resistance lines, ie, to growth.


EUR / USD. It is Greece again

During the last trading weeks EUR/USD quotes did not undergo significant changes. So, after reaching minimum values for more than eleven years (1.1096), the bearish pressure eased somewhat, and now we have so called range trades. While we can not say for sure that the correction is complete, because even in such cases the minimum target level correction (38.2%) of the last large-scale declines in December and January, has not been reached. A tension is feed by the fact that so far the new Greek government can not find common ground with the euro zone leaders. First of all, we are talking about the current program of financial aid for the country. Greece in the person of Prime Minister Tsipras apparently refuses to fulfill its terms, at the same time wanting to get the other loan.

Today, finance ministers of the euro zone will meet on this occasion, which is very important not only from the point of view of the further pair dynamics, but in general, in the context of the fate of Greece as a member of the euro zone and the probability of default in the country. Good news certainly will support the single currency, which may lead quotes to 1.1650, where is the above-mentioned correction 38.2%.

 

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GOLD. Final Warning

Bears have made the final warning to everybody who continues to persevere and hold long positions even after previously indicated support line was overcomed by the price. The last line of customers defense (correctional Fibo level 61.8% from the growth in January – 1220) is currently being tested by the price. The decline is orderly and remains within the downtrend channel. In recent days, world stock indices receive a significant support that is reflected in the demand for gold, which, given its status of a safe haven, walks in opposition with these indices.

It is recommended to refrain from taking action in the market, waiting for appropriate signals to make an informed decision. So, we can expect continued decline in case of moving the price below current levels, where the mentioned correction Fibonacci level locates, because in this case we will have no arguments for up scenario. On the other hand, only a break of the current downward channel upper limit will give a reason to expect continuation of growth, where the first target is the January high of 1,308 dollars per troy ounce.


GBP / USD. Crouch Start

When the asset's market find a kind of price equilibrium, the situation may drastically change overnight, while sometimes left wondering what exactly it will be connected with. It is not always necessary to search for logic in it, but there are of course some through scenarios. Actual apparent consensus is one of those occasions when it's time to prepare for important changes, and today's publication of the Bank of England quarterly inflation report is a reason for scales to swing in one direction or another. Moreover, the subsequent press conference led by the Committee on Monetary Policy chairman Mark Carney may set the record straight on the question of possible changes in interest rates. Note that this question is key for the market, determining the direction of the asset.

It is recommended to wait for the aforesaid events (10.30 GMT) and be ready to work on the next breakthrough levels of support (1.5195) and resistance (local extremum 1.5300 and correctional level 50% from the decline in December 2014 - January 2015 - 1.5350). In case of breaking the resistance line, the first target of growth will be 1.5465 (a correction 61.8% from said pulse).

 

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USD / JPY. Bank of Japan Shows Correct Yen Rate to Market

Yesterday's downward movement in half figure looked very picturesque and dramatic, causing mild panic in bulls ranks. It was the result of some Bank of Japan representatives statements regarding the undesirability of further national currency devaluation and things like that. Apparently, the controller carefully monitors price changes, making adjustments to the yen value, using something like verbal interventions at the right time. Thus, now we do not expect more monetary stimulus incentives that cuts the ground from under the feet of those who are still counting that Japan will continue at any cost devalue the currency in favor of exporters. This means that mentioned earlier scenario after a graphic border of more than two months "triangle" breakthrough is up in the air again.

The primary target we had set earlier (120.69), was not been formally worked out, but the price was close to it. In any case, we have to fix a result of long positions, since quotes are back into boundaries of abovesaid figure, and thus we go into "sleep mode". We need to give the market an opportunity to choose a direction in new conditions.


GBP / USD. Rubicon was Passed

So, we see a long-awaited breakthrough of a long-term downtrend line, and the price has overcome the next important resistance level (1.5350), which increases the likelihood of further growth of the pair. Yesterday, the publication of the Bank of England quarterly report has done its job and became a foundation for a powerful movement to the north, which was confirmed with trend indicators.

We continue to hold yesterday's long positions opened for 1.5300 breakout with abovesaid target at 1.5465, where is the correctional Fibo level 61.8% of the descending wave in December 2014 - January 2015. Also note that in this area goes Fibonacci extension level 261.8% of the pulse on February 10-11. Using Fibo extensions often gives an opportunity to successfully build targets from the initial pulse, which is taken as 100%, and ttargets are set at 161.8%, 261.8% and 423.6% of the basic pulse. Also, this level is attractive because here is the target of the graphical turning figure "inverted head and shoulders" implementation.

 

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GOLD. Level Test

We continue to pay attention to the current situation in gold again and again. At this stage, the minimum program is executed – the reducing target is achieved (1197.25). It is a support line connecting a number of local minimums, marked during the previous few months. As a result, we can contemplate a fairly powerful rebound and, quite possibly, this is where the bulls can start a counteroffensive. However, in order to consider the possibility of buying, the price is to demonstrate the seriousness of intentions.

So, it is not recommended to take active steps at this stage. At the same time, it is worth considering the possibility of sales in case of a break below 1197.25 in order to achieve the yearly minimum - 1167 dollars. Purchases will be possible only in the case of relevant prerequisites appearance in the form of line of resistance breakthrough and the subsequent formation of growth signs in the form of gradually higher lows and highs.



EUR / USD. Market's Attention is Directed to ECB "Minutes" and Proud Greeks

After reaching eleven-year lows (1.1096) in January market players seem to have left the EUR / USD at rest, and some positions were closed. This led to a short time growth of the quotes, and a peak of buyers' activity was at 1.1532 . Now the pair has found a balance, moving in a narrow trading range. The nearest significant support is 1.1270, resistance - 1.1535. Fundamentally, the market continues to be uncertainty regarding the extension of funding Greece. Its representatives are still unable to find a compromise with the international lenders. Nevertheless, some progress is seen, because there is already a formal request to Brussels to extend the current program for 4-6 months (the period which is needed to develop a new program). We also can not forget about the possible impact of the minutes of the last ECB meeting publication (12.30 GMT), where the discussion of adopted at the January meeting quantitative easing program (60 billion euros per month) will be described in detail.

Thus, aforesaid levels of support (1.1270) and resistance (1.1535) remain delimiters between bulls and bears, and there is something like a buffer zone between them, which means that the recommendation to work on this range exit. As a possible target in the event of rising scenario, we name 1.1655 (38.2% correction from the reduction in December 2014 - January 2015), and then - 1.1800, where is the correction of 50%, and 161.8% extension of the upward momentum in late January - early February. Breakdown of support will lead to January lows testing (1.1096).

 

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GBP / USD Needs a Fuel to Move Further

The British currency is still feeling confident enough versus the US dollar - quotes are within the short-term but quite clear upward price channel. An important role in the development of this movement has played a publication of the last BOE meeting minutes on Wednesday. It became apparent that two members of the Monetary Policy Committee saw a reason for the rate hike from current levels (0.5%) this year. Also good data on the labor market has supported the pound. Thus, the unemployment rate fell and wages rose more than expected. We note that the factor of low wages previously was decisive for the Old Lady in its long periods of inactivity in the context of monetary tightening. In turn, the growth is limited by resistance levels: 61.8% Fibonacci correction of the decline in December 2014 - January 2015, as well as the expansion of 261.8% of the upward impulse that took place in mid-February.

It is recommended to work in a northerly direction, but we should wait for today's publication of retail sales data. It is likely that this data will cause a deeper correction to the area of the support line, which can be used to build up long positions. The enter on a breakthrough of the current local maximum at 1.5480 is also possible.


USD / JPY. Oriental Calm

As we have noted earlier, a situation with the pair is now more complicated due to some representatives of the Bank of Japan. Recall that once quotes have overcome strategically important resistance level (upper limit of the graphic figure "triangle"), in the news appeared comments of BOJ members with respect to the undesirability of further national currency reduce, as well as reflections on the possible negative impact of additional stimulation measures on consumer sentiment. Thus, some market players went out "to clarify" that led to the formation of a new consolidation figure having its own potential.

This figure can be realized in the next few hours and the exit direction is likely to provide the dominant trend in the near future. To confirm it is desirable to consolidate above / below the next resistance (119.40) or support (118.42) levels. We also can not ignore the formed upward price channel, boundaries of which can be boundaries of subsequent market movements.

 

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USD / CAD Shows Vital Signs

At the end of January saw the US dollar has established nearly six-year low value against the Canadian dollar, which became possible amid the large-scale decline in oil prices (Canada is one of the largest exporters in the world), and the subsequent reduction in key interest rates of the Bank of Canada. However, with the advent of the correction oil market conditions has changed, and the last wave of growth met with a correction, which has taken the form of "triangle". This graphic figure only shows a lull, because with the advent of new vehicle, boundaries of the pattern will be overcome by the price and this will indicate priority for action. At this point, it seems that the bulls in USD / CAD began to take the upper hand, which became the cause of Friday's data on changes in retail sales in Canada. The December value has fallen by 2%, despite the fact that expectations were reduced to decrease by only 0.3%.

It should be noted that the support for quotes is still provided by the trend line which has started on December 31 and which has repeatedly made the point for bulls' purchases. However, in this case, only the output of the aforementioned triangle boundaries will give us a signal to enter. So, on top the 1.2600 mark is still tighten growth, and the 1.2360 mark is doing it below.


EUR / USD. Cautious Optimism

The main currency pair has experienced some signs of turbulence, when on Friday the weak data on business activity in the industrial sector of the region's economy disappointed the market, bringing up quotes to the earlier indicated level of support (1.1270). No less dramatic was also a rebound from this mark after it became aware of a high probability of the current bailout program for Greece extension for another 4 months, which was rumored to be from the text of the agreement. Greeks asked for more (6 months), and the details of the agreement have not yet been disclosed, as well as not yet taken, however, it can take some of the risk out of the market in the context of what the country looks set to remain in the ranks of the eurozone. Thus, at the moment the pair is trading at usual levels, with in addition of a hidden growth potential, when the details of the agreement will be known.

There is nothing more permanent than temporary, so the work in a horizontal channel (1.1270 - 1.1450) on the rebound from its borders, at the moment, is one of the most appropriate trading tactics. In this case, it is useful to use addition signals from indicators such as stochastics to confirm. At the same time, the potential after the powerful motion beyond this range is very high, and we must remember this.

 

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GOLD. Is Trend our Friend Again?

While buyers are catching the bottom, the caravan slowly goes southward. As a result, not only the next final frontier was reached - the support line drawn through the last few months minimums, but also the first and probably not the last attempt to overcome it was made. Quotes remain within the downtrend channel of last few weeks, and moving averages confirm the priority of short positions. Despite the lack of the direct influence of fundamental publications in different countries, the today's speech of the Fed head Yellen ahead of the Senate could make adjustments to the current balance of power in the gold market.

It is recommended to open the order to sell from the last local minimum breakthrough at 1190.00 or when approaching the trend line. The next target is the January minimum (1167 dollars per ounce).



USD / CAD. About Graphic Figures in Context of Fundamental Events

We continue to monitor the situation in USD / CAD, where has recently formed a graphic shape of consolidation "triangle". Note that to "score" this pattern, we needed a previous trend with clear graphic boundaries and also we needed the price to come through one of these boundaries subsequently. In last 24 hours first two terms have added the third - bulls attempted to break through the upper boundary of the figure, breaking the previously designated threshold level 1.2600. It is likely that in recent days the loonie was pressured by reduction of oil prices, as well as very weak fundamental data recently published in relation to the Canadian economy.

There is a high probability that the dollar will continue to build up an advantage in USD / CAD, but today's speech of the Fed head ahead of the parliamentary committee in the Senate may be a stumbling block. Note that this event takes place only twice a year, so the impact on the market can be overwhelming. Investors are advised to carefully open position after this event (unless, of course, it would be appropriate in the context of Yellen statements), but for the short-term speculators it is an opportunity to buy just now, defending their positions by fairly short stops.

 

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GBP / USD Moves to New Heights

A speech of the Fed's head ahead of the Senate Banking Committee gave the "cable" an additional impetus through the weakening of the US dollar. So, Yellen did not give reasons to doubt that the tightening of monetary policy sooner or later will happen (though it is certainly not going to happen at the next two meetings), but it seems that markets were set to more bellicose rhetoric of the main figure for financial markets in this context. Whatever it was, the pair has broken another resistance level (1.5480), which only confirms the hypothesis about the development of a full-scale correction of more than six months GBP / USD falling.

Now, when the last correctional Fibonacci level 61.8% of the decline in December 2014 - January 2015 has left behind, we should consider opening long positions with an interim target 1.5620, where is the value of the nearest resistance level. Well, the first strategic target is 1.5800, where is a correction 38.2% of the decline in the period of July 2014 - January 2015.



USD / CAD. The Weather is Changing...

Yesterday a growth was a priority scenario (due to the upper border of the graphic pattern "triangle" overcome). However, yesterday's speeches of two most significant for the USD / CAD figures, namely the Fed chairman and the head of the Bank of Canada, have turned upside down ideas about further actions of these central banks. From Yellen the market has expected a tougher approach to interest rate policy, while Poloz has surprised markets, specifically making it clear that in the near future we should not expect rates cutting. A stormy reaction was expected, but now we have a new approach to the current situation. Thus, the false breakout of the above-mentioned figure backfires and dumps long positions by market participants. Now all the attention is drawn to the pair's dynamics and to the fact whether conditions be able to predict the start of a unprecedented in its scale correction of all the January movement.

At this point it is recommended to be out of the market, waiting for a possible overcome of a designated support line, which was more than once a decisive argument in favor of the bulls. If the breakthrough is destined to be, the price can quickly reach the recent local minimum at 1.2360 and then - the 38.2% Fibonacci retracement (1.2325), which together form a zone of support. Further reduction will give strong arguments in favor of that targets, corresponding to the next levels of correction of 50% (1.2180) and 61.8% (1.2030), will be achieved.

 

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GBP / USD. To Hold or to Fix

It is a new day and a new high for the pair. Buyers seem quite accustomed after the Fed's head did not persist with the promise to keep to head for the tightening of monetary policy by all means. Nobody wants to create problems to the own economy in the absence of the main object of the struggle (inflation). All the more reason the level of interest rates on government treasury bonds in USA is almost the highest in the developed world, so the rhetoric has become generally neutral. That is what bulls needed. Now they also have some comments from the Bank of England about a possible rate hike to 1% in 2017, and the unemployment rate, which is on the minimum of the last 5 years. To date, the quotes have reached the upper boundary of the rising channel.

Investors for who fluctuations within the channel are child's play, can continue to hold long positions. For those who prefer a short-term work, trying to take everything and every movement, the resistance line achieving would mean the intermediate results fixing and the possible entry to the purchase when the support line is reached. Targets remain the same - 1.5620 (the nearest resistance level), and then - 1.5800 (correction level 38.2% from a seven-month fall). Today, it is worth paying attention to revised UK GDP for the 4th quarter 2014 release.



GOLD. At the Intersection of Two Roads

The situation in the gold market is somewhat different - buyers feel uncertainty of bears in their course of action after reaching the support line that connects minimum values of all the ascent, we can see over the past few months. We also see daily candles without bodies and with very long shadows that in terms of the Japanese candlestick analysis language can be called "doji". This is a strong reversal pattern, especially when it appears near significant levels. On the other hand, a short-term descending channel is still relevant for us.

Taking into account the current technical picture, it is recommended to monitor the situation on a regular basis, ready to act, depending on the scenario. Given a strong support, sales are worthy of consideration only if the mark of 1190 dollars per troy ounce will be broken, while going beyond the downstream channel will give a signal to open long positions.

 

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Vista Brokers: Cautious Stance of Fed Disappoints Bulls

On Wednesday, the dollar has gotten a support after the release of statistics on the volume of home sales in the US primary market in January. Vista Brokers analysts point out that for the first month of the new year the volume of sales has declined slightly, though showing much stronger results than the market had expected. So, in percentage terms sales decreased by 0.2% against the expected 2.3%. Values for December were also revised slightly higher.

However, this positive did not keep the dollar from lower against its major counterparts after the speech of Janet Yellen ahead of the House of Representatives. Fed Chairman in her comments was again cautious, noting that wage growth and inflation have to accelerate before the Fed will raise rates, and labor market recovery is not a good reason to start this process. Fed fears that a premature rate hike could lead to negative consequences for the US economy.

Yesterday's speech was in sync with comments that Yellen has given on Tuesday ahead of the Senate. In the second day as well as in the first one after the Fed's head speech the dollar was under pressure. Thus, yesterday USD / JPY fell by 0.1% to 118.86, and the EUR / USD rose by 0.2% to 1.1362. The dollar index fell by 0.3%, to 85.20.

Analysts reminds that the next Fed meeting will be held on March 17-18. Perhaps, then, bulls will get some signals that rates will still be raised in the summer. While market participants are disappointed with the too cautious stance of the controller.

 

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Vista Brokers: On Thursday, Oil is Trading under Pressure Again

On Thursday, oil prices are falling again after its rally on Wednesday amid the publication of data on resource production growth in the United States. Vista Brokers analysts say that Brent crude oil has decreased by 0.62% to 61.25 dollars per barrel after Wednesday gained more than 5%. April futures for WTI crude oil has fallen by 1.06% to 50.45 dollars per barrel after rising 3% in the previous trading session.

A pressure to oil prices was put by the weekly US Department of Energy review, which showed that commercial oil reserves in the country are at 80-year highs. For the week ending on February 20 this indicator has risen by 8.4 million barrels to 434.1 million barrels, while analysts expected an increase by only 3.98 million barrels.

Earlier on Wednesday, oil has gained support from several fundamental factors. Firstly, Saudi Oil Minister Ali al-Naimi said that markets had calmed down, and demand for resources had begun to gradually increase. Secondly, it was reported that manufacturing activity in China has grown much stronger than expected, and Greece approved the list of reforms with the Eurogroup. This strengthened hopes for global economic recovery, and therefore the demand for fuel. And thirdly, it was the speech of the Federal Reserve head Janet Yellen ahead of the Senate, which showed a cautious position of the controller and put pressure on the dollar.

However, these factors have not been able to support the growth of oil for too long - today the market has returned to the theme of high levels of oil production and a falling demand. Note that in the United States the production is large-scale, despite the fact that now in the oil sector the largest since 1980 workers' strike takes place. It is a strike of several thousand workers at 15 oil companies.

Analysts say that despite some increase of oil over the past few weeks, in global terms, we still have a crash by almost 50%, which is the largest decline in the oil market over the past 20 years. The main reason is that the "shale revolution" and the growth of production in the United States, together with the return of Libyan oil to the market which led to a strong increase in demand. At the same time slowing economies of the euro zone, China and Japan led to lower demand.

 

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Vista Brokers: S & P Downgraded Outlook for Economic Growth in China and Japan

On Thursday, it was reported that the international rating agency Standard & Poor's lowered its forecasts for 2015 - 2016 years in Japan and China. At the same time, as Vista Brokers analysts say, the forecast for India was improved.

Thus, Standard & Poor's experts expect that by the end of 2015 Japan's GDP will grow by only 0.7% instead of 1.3% as it had been expected in earlier forecasts. The next year it is expected to grow by 1.3% against 2.1%. As for China, the forecast for GDP growth in 2015 was lowered by S & P from 7.1% to 6.9%, and in 2016 - from 6.7% to 6.6%. The rating agency has kept the rating of Chinaat the same level "AA-" with a stable outlook.

With regard to India, Standard & Poor's has revised its forecasts upstairs. Thus, for the fiscal year ending in March 2016, India's economy is expected to grow by 7.9% versus 6.2% previously expected. In the next fiscal year it is projected to grow by 8.2% instead of 6.6%.

 

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Market Pulse 26.02

Thursday will be a day with a highly charged fundamental background. Important statistics will be published in Germany, UK, USA, Canada, the euro zone, so that the market can be extremely volatile.

8:55 ** Unemployment Change - February (Germany)
8:55 ** Unemployment Rate - February (Germany)
8:55 ** Unemployment Data Released by Federal Labor Agency - February (Germany)

Moderate impact on the market (EUR). Data for Germany are expected to be quite positive - analysts suggest that the number of unemployed people in February, will reduce by 10K and the unemployment rate will remain the same.

9:30 *** Second Estimate GDP - Q4 (UK)

Strong impact on the market (GPB). The UK GDP growth in the final quarter of the last year is expected to reach 0.5% month on month and 2.7% year on year.

10:15 *** ECB Announces Allotment in 4-years TLTROs - February (euro zone)

Strong impact on the market (EUR). The value indicates the amount of loans that the ECB has issued to commercial banks. The large volume indicates an increased demand for liquidity from the ECB and may put pressure on the euro.

13:30 *** Consumer Price Index - January (Canada)
13:30 *** Core CPI - January (Canada)

Strong impact on the market (CAD). Analysts expect that the consumer price index in January in Canada has fallen by 0.3%, while the core index has risen by 0.1%. Not too optimistic forecasts for the economy and the actual data can be even worse if the Canadian dollar will be under pressure.

13:30 *** Consumer Price Index - January (USA)
13:30 *** Core CPI - January (USA)
13:30 *** Durable Goods Orders - January (USA)
13:30 *** Core Durable Goods Orders - January (USA)
13:30 *** Unemployment Claims - February (USA)
13:30 ** Continuing Claims - February (USA)

Strong impact on the market (USD). Such a large portion of statistics can seriously affect the dollar. The market attention will likely be turned to the data that are reference points for the Fed: the consumer price index and unemployment claims.

 

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GBP / USD. Close-in Objective

In the last review, we noted the fact that prices had reached the channel line of the current uptrend and a correction from achieved levels is probable. Actually, that is what has happened, and the formal start of reducing put quite projected data on the revised value of the UK GDP for the 4th quarter (0.5%). It is likely that the role in the doubt of buyers played another quarterly statistics on the volume of capital investments in the country (-1.4% against the expected growth of 2%). Anyway, the fall was limited by the achievement of the rising channel lower boundary, where the situation has stabilized.

This situation can be regarded as a godsend, because the market made it possible to build up a long position in the framework of the trend with a rather short stop. So, we recommend to open long positions, limiting the possible loss by the minimum value of yesterday's trading - 1.5392. As an interim target of purchases we can name 1.5620 mark, where is one of the important resistance levels. It is probably that in this area the price will reach the opposite border of the channel.


EUR / USD Bids its Time

We state qualitative changes in the balance of forces in the market - bears went on the offensive, and not without the influence of the Greek factor (today the German parliament will vote as for the Greek bailout approval for four months), as well as market awareness of the differences in the monetary policy of the Fed and the ECB. So if the Fed this year is expected to rise rate (which is manifested in the growth of government treasury bonds yields), the profitability of some European market (for example, German) – is currently in the negative zone. In the United States growth is still in a good level, which was confirmed by yesterday's data on orders for durable goods, while the eurozone is waiting for a long period of quantitative easing.

At the moment, the price has reached the lower limit of two downstream channels in which the slope is relatively flat. Here, from a technical point of view, the fate of the pair's future direction should be decided. In case of yesterday's low break we should await for the quotes to reach January lows (1.1098), whereas the pullback in the channels' depth may ultimately lead to the achievement of its upper limit (1.1350-1.1400). We still have more questions than answers, but the situation is changing and this is positive. Today it is recommended to draw attention to the publication of the US GDP for the 4th quarter, which perhaps, will be a decisive argument for toe market.

 

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GOLD. No Need to Hurry on the Edge of Breakthrough

Some eloquent indications of a possible upward movement has appeared at the gold market after the bears were not able to push a very important support line. Today quotes show signs of buyers' activity. They have finally succeeded to overcome a resistance line of a descending trend in which bids gold was traded for a month. Whether a breakthrough happens in fact, will show today's closing price, and it is better to wait for another day and the closing price above the resistance line.

Currently we do not recommend to perform active actions in the market, and short positions (if any) should be closed. We need additional arguments, one of which (in addition to the above-mentioned closing of few days outside the downtrend channel) can be a) the formation of a clear upward impulse; b) its subsequent correction; c) and then the breakthrough of its extremum. This sequence will give us successively higher lows and highs, which is the essence of the uptrend.


GBP / USD. Daily Routine of Buyers...

This week will be full of macroeconomic publications and it means new trading opportunities for us. So, today bears will tickle nerves to those who continue to buy from a support line formed in the last few weeks short-term uptrend, because as early as 9.30 GMT an independent research agency Markit will release data on business activity in the UK manufacturing sector. As practice shows, this leading indicator can predict changes in the real sector, which means that the market will closely follow the release of the news. It is likely that the impulse will be relevant until the Bank of England will announce its decision on the next Monetary Policy meeting on Thursday.

The 1.5380 mark, corresponding to the nearest local minimum as well as the 1.5330 mark are important support levels, possible breakthrough of which will give sellers an opportunity to seize the initiative. Thus, the trend remains upward, and the price is right on the trend line. It is recommended to decide after the publication of mentioned statistics, depending on the subsequent dynamics. Thus, we should sell from the 1.5330 level breakthrough and to buy if the price will move from the support.

 

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USD / JPY. Coincidence or not?

USD / JPY moves gradually start to look aesthetic within boundaries of the upward channel formed in last couple of weeks. We can also name the other, more far-reaching trend, the direction of which is similar and it is worth remembering that currently this trend is useful only for its vector. It is clearly evident in recent years that in the way of growth of the yen Japanese officials choose the right time and drop bulls from the top. This expression is figurative, but it is the real fact that at the approach of quotations to certain price levels, a representative of Japanese ruling elite suddenly appears with a particular statement. So today, the yen strengthened significantly after approaching of the upper channel boundary when Etsuro Honda, the economic adviser to Prime Minister Kuroda, expressed doubts about the feasibility of further quantitative easing volume increasing. He motivated this with the normal course of affairs regarding the achievement of the inflation rate of 2%. Honda also pointed out that the current rate of the yen is at the edge of the comfort zone. The market's reaction was appropriate – quotes started to reduce.

It is recommended to consider short positions in order to achieve the lower boundary of the rising channel. Stop order is at 120.26.


AUD / USD. Is Market Ready for Correction?

The pair continues to trade in the long-term and medium-term downward price channel. The latter rebound from the trend line was took place only a few days ago. Recall that, according to the results of the February RBA meeting, it was decided to reduce the rate for the first time since August 2013 to 2.25%, and it has led quotes to the lowest level since May 2009. So today, the another rate cut was expected, but the RBA did not go to new stimulation measures. Basic argument was a need to limit the growth in property prices. Overheating in the housing market could adversely affect the economic recovery of the Green continent. Amid this AUD / USD has increased significantly, threatening to retest the above-mentioned trend line.

It is too early to talk about it, but it should be noted that the breakthrough of the local high at 0.7910 will give a technical basis for the development of full correction of all decline. If to theorize further, the first target of this correction may be the level of 0.8330, where is the Fibo level of 38.2% of the descending wave in July 2014 - February 2015.

 

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GBP/USD. At the Crossroads Again

Despite the fact that there was no significant changes in the dynamics of the "cable" (in terms of the movement scale), we have a steady drift farther from overcoming support line of the last few weeks' trend. A level of support we have mentioned in one of previous reviews (1.5382) was also pushed through, and currently only one significant level is on bears' road - 1.5330. It should be noted that tomorrow will be a meeting of the Bank of England, that definitely keeps the tension of market players now (not allowing to take more decisive action), whereas immediately after the announcement of the results, we can count on more specific dynamics. We should also note the fact that the indicated level of support is strengthened by the Fibonacci correction level 38.2% of the above-mentioned pair growth in January and February of this year.

Overcoming and subsequent consolidation of quotes below 1.5330 would give rise to open short positions with the target of 1.5250 (50% correction) and then - 1.5180 (61.8%) of the ascending wave in January and February. In the case of rebound from current levels and return to boundaries of the abandoned channel, we can expect growth to the February maximum (1.5550).



EUR / USD. Investors Wait for Explanation...

In anticipation of tomorrow's ECB meeting market players try not to tempt fate, and quotes are near the lower boundary of two downstream channels that differ only with angle of inclination. Returning to the subject of the European Central Bank, it is worth noting that the market expects explanations on a number of points regarding the upcoming program of quantitative easing, which could seriously affect the single currency.

Thus, we recommend to wait for tomorrow's events and be ready to respond appropriately to changing market conditions after the new data. At the moment, the key support level is 1.1096 – the eleven-year minimum for EUR / USD, on top the growth is limited by 1.1270. In some degree the market can "swing" today due to the Services PMI publication.

 

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GBP/USD. Is it a Correction of Correction?

Yesterday, the US dollar buyers stepped up again, which resulted in the fall of the "cable" to the area of 50% correction (1.5250) after overcoming of the preceding Fibo level 38.2% (of the January-February growth in this year), as well as previously indicated support level 1.5330. The main reason could be the publication of the quite weak data on business activity in the services sector, however, apparently it was only an indirect factor, because purchases of the dollar yesterday prevailed in most areas. Today will be held the Bank of England meeting - a major factor that can cause strong fluctuations in the market, and this also should not be forgotten.

So, the next reducing target is 1.5180 (61.8%) from the abovementioned wave of growth. Will the achievement of the following target become the logical correction of the previous growth, which, in its turn, has become the first corrective wave of the second half of 2014 downtrend? The time will show us, but at this stage it is not necessary to persist in preferences, demonstrating a flexibility in tactical decisions.



EUR / USD. Is the Path Tabooed or Whether we should Wait a Little Longer?

The last bastion of bulls we have mentioned in the previous review fall. It is the established in January level of support corresponding to the minimum value over the past 11 years (1.1096). Together with it was finally won a support corresponding to a Fibonacci correction 61.8% of the total growth in 2000-2008 and it is quite a big deal because there is no other reasons for buyers to catch current levels. Today is held the ECB meeting, where will be announced details of the, adopted at the January meeting program of quantitative easing (12.45 GMT). And then at13.30 GMT the European Central Bank President will give the traditional press conference, where market players can hear a lot of interesting. However, the nature of this reduction lets us think that "the ice was broken," and it has come to stay no matter what would officials tell today. The US economy is growing on all fronts, as statistics says (which this year will result in the rates hike), while the euro zone only makes its first steps in quantitative easing. This is a long-term factor to be reckoned with for a long time.

If you have no open short positions, it is recommended to wait for the completion of the Dreghi press conference before entering the market. A new downstream channel was formed, in which boundaries we must look for the entry point, working on a rebound from the trend line.