Tifia Daily Market Analytics

[TifiaFX]

NZD/USD: the interest rate has not changed
23/03/2017
Overview and Dynamics
As already known, on Wednesday evening, the Reserve Bank of New Zealand saved the key rate unchanged at 1.75%. As RBNZ Governor Graham Wheeler said later, "monetary policy will remain soft for a long time." In New Zealand, property prices are steadily growing, while the growth of inflation and economy in the country, according to the RBNZ, is still insufficient. In general, such a decision of the bank was the expected market participants. The main attention of investors in the dynamics of the NZD / USD pair is now focused on the dynamics of the US dollar, which has significantly surrendered its positions in the foreign exchange market recently.
Nevertheless, today the US dollar can get support. At 12:45 (GMT), the speech of the head of the Federal Reserve, Janet Yellen, begins. If she gives a signal to accelerate the rate of rate hikes in the US, then the dollar's position may strengthen in the foreign exchange market.
Also worth paying attention to today's publication (at 21:45 GMT) of New Zealand's trade balance for February. It is expected that the trade surplus will be NZ $ 160 million (against NZ $ -285 million in January).
The main export item of the country is dairy products and especially dried milk. Against the backdrop of the negative dynamics of prices for milk powder, observed in February, expectations regarding the growth of the surplus balance may not be justified. If the trade balance data is weak, the New Zealand dollar may fall in the foreign exchange market.

Technical analysis
In the course of today's European session, the NZD / USD pair is declining. The pair could not develop an upward movement above the level of 0.7065 (EMA200 on the 4-hour chart).
Indicators OsMA and Stochastics on the 1-hour and 4-hour charts went to the side of sellers, signaling the completion of the upward correction, which began on March 9 from the level of 0.6890 (the lower limit of the descending channel on the 4-hour chart).
The NZD / USD pair also remains below the key resistance level of 0.7085 (EMA200 on the daily chart). Below this level, the negative dynamics of the NZD / USD pair will prevail.
Only in case of consolidation above the level of 0.7085 can long long-term positions in the NZD / USD pair with the growth probability to the levels of 0.7235 (EMA144 on the weekly chart), 0.7310 (EMA200 on the weekly chart) be considered. Below the level of 0.7065, short positions are relevant with targets at support levels of 0.6975 (November lows), 0.6900, 0.6870.
Support levels: 0.7015, 0.6975, 0.6940, 0.6900, 0.6870
Resistance levels: 0.7065, 0.7085, 0.7200, 0.7235, 0.7310, 0.7375

Trading recommendations
Sell in the market. Stop-Loss 0.7055. Take-Profit 0.7015, 0.6975, 0.6940, 0.6900, 0.6870
Buy Stop 0.7055. Stop-Loss 0.7025. Take-Profit 0.7065, 0.7085, 0.7200, 0.7235

 

[TifiaFX]

EUR/USD: the euro remains under pressure_31/03/2017
Current dynamics
During the day of active decline from the level of 1.0863, the pair EUR / USD lost about 1.8% (190 points). There is a small recovery in the opening of today's European session; however, the negative dynamics of the pair remains. This week, the most important macro data on the United States was published. The level of consumer confidence in the US in March reached a maximum in 16 years (125.6), surpassing the forecast of economists (114.0). Annual data on US GDP and price indices for the fourth quarter, published on Thursday, also proved very positive. GDP grew in the fourth quarter on updated data by 2.1%.
Today we are waiting for publication of important macroeconomic indicators for the USA, including inflation indices of personal consumption expenditure for February, from 15:30 to 17:00 (GMT + 3). However, gradually attention of investors is switching to the publication next Friday of data from the US labor market for March.
GDP growth, inflation dynamics and the labor market are key factors for the Fed in determining the need for and the rate of tightening (or easing) monetary policy in the US.
The US economy is recovering steadily after the crisis of 2007, and consumers are confident in the economic development of the country. Positive macro statistics coming from the US, as well as verbal intervention by the Fed representatives with regard to a further gradual increase in the interest rate in the US, contribute to the strengthening of the dollar.
On the part of the key representatives of the ECB, there are statements about the need to continue to maintain extra soft monetary policy in the Eurozone. The difference in monetary policy in the US and the Eurozone will continue to be the determining factor in the medium-term dynamics of the EUR / USD pair.
Support and resistance levels
The pair broke through the important support levels 1.0820 (EMA200 on the daily chart), 1.0765 (EMA200 on the 1-hour chart, EMA144 on the daily chart). At the beginning of today's European session, the pair EUR / USD is trying to stabilize at support level 1.0695 (EMA200 on the 4-hour chart). Bonding above this level will mean the EUR / USD pair's return to the upward correction trend, which began in January.
A further decline will mean the end of the upward correction and the EUR / USD pair's return to the downtrend with the targets of 1.0615, 1.0530, 1.0485, and 1.0350. Long positions can be considered only when the pair returns above the level of 1.0765.
If the EUR / USD pair returns to the zone above the level of 1.0820, you can return to the purchases with medium-term objectives of 1.0950, 1.1000. For now, the negative background for the EUR / USD pair prevails.
Support levels: 1.0695, 1.0675, 1.0615, 1.0530, 1.0485
Resistance levels: 1.0765, 1.0820, 1.0865, 1.0905

Trading Scenarios
Sell Stop 1.0670. Stop-Loss 1.0720. Objectives 1.0615, 1.0530, 1.0485
Buy Stop. Stop-Loss 1.0670. Objectives 1.0765, 1.0820, 1.0865, 1.0890, 1.0905, 1.0940

 

[TifiaFX]

USD/CAD: amid rising oil prices

11/05/2017



Current dynamics

According to data provided yesterday by the US Department of Energy, commercial oil reserves in the US fell by 5.247 million barrels in the week of April 29-May 5. Oil reserves in the US declined for the fifth week in a row, and this is the largest weekly decline this year. The forecast assumed a drop in inventories of 1.786 million barrels. The prices for oil in response to this message reacted with a sharp increase.

Commodity currencies, and above all, the Canadian dollar, have been supported by rising oil prices. The pair USD / CAD lost 40 points at the time of publication of this data, and the end of yesterday's trading day was already near the mark of 1.3650, which is almost 0.5% lower than the level of yesterday's trading day opening. At the beginning of today's trading day, the pair USD / CAD again rose, largely recouping yesterday's decline.

According to analysts of the oil market, the surplus of oil reserves in the world is still high. As expected, OPEC should extend or agree on a stronger production cut on May 25. If such an agreement is reached, then oil prices, and together with them, commodity currencies (including the Canadian dollar) will receive strong support. The expected OPEC agreement on the extension of agreements to reduce oil production is a strong "bearish" factor for the pair USD / CAD. The expected increase in the June Fed meeting (June 13-14) of the interest rate in the US is a strong “bullish” factor for the pair USD / CAD. As stated yesterday by the president of the Federal Reserve Bank of Boston, Eric Rosengren, "three increases in rates are justified during the current year, provided that the economy will grow in line with the forecasts".

Thus, the pair USD / CAD is on a kind of "balance of weights", and much will depend both on the decisions of the Fed and OPEC, as well as on accompanying statements. To determine the direction of further movement, the pair needs fundamental drivers.

From the news for today we are waiting for data from the USA and Canada. At 12:30 (GMT) will be presented:

• US data - Producer Price Index (PPI), which estimates the average change in wholesale prices determined by manufacturers at all stages of manufacturing. A high result strengthens the US dollar, low - weakens. Forecast: in April the index rose to 0.2% (against -0.1% in March); A weekly report from the US Department of Labor, containing data on the number of initial applications for unemployment benefits. The result above the expected indicates a weak labor market, which has a negative impact on the US dollar. The forecast is expected to increase to 245,000 versus 238,000 for the previous period, which should negatively affect the dollar;

• data for Canada - the price index for new housing for March. The high value of the indicator is a positive factor for CAD, and a low value is negative. Forecast: prices in March rose by 0.2%. At 14:30 (GMT) the quarterly report from the Bank of Canada is published, containing information on the state of the Canadian economy and the bank's policy.

Thus, during the publication of data (12:30 and 14:30 GMT), volatility in the USD / CAD pair is expected to grow.


Support and resistance levels

Since the beginning of the month, the pair USD / CAD is trading, basically, in the range between the levels 1.3750, 1.3650. Through the 1.3680 mark, at which the pair USD / CAD is trading in the middle of today's European session, the Fibonacci level is 23.6% (the downward correction for the pair's growth since early July 2014 and the 1.0650 mark) and EMA200 on the 1-hour chart.

Indicators OsMA and Stochastics on the 1-hour, 4-hour, daily charts were deployed to short positions.

In the event of a breakdown of the support level of 1.3680, the downside target will be support levels 1.3650, 1.3590 (November highs, December highs).

Nevertheless, there are all the prerequisites of a fundamental nature for the further growth of the US dollar against commodity currencies, including against the Canadian dollar.

The pair USD / CAD remains significantly above the key support level 1.3300 (EMA200 on the daily chart) in the uplink on the daily chart, the upper limit of which is near the 1.3900 level.

Much in the dynamics of the pair USD / CAD in the medium term will depend, first of all, on the dynamics of the US dollar and oil prices.

Support levels: 1.3680, 1.3650, 1.3590, 1.3510, 1.3300

Resistance levels: 1.3700, 1.3750, 1.3800, 1.3900, 1.3940, 1.4000



Trading Scenarios

Buy Stop 1.3715. Stop-Loss 1.3670. Take-Profit 1.3750, 1.3800, 1.3850, 1.3900, 1.3940

Sell Stop 1.3670. Stop-Loss 1.3715. Take-Profit 1.3590, 1.3510, 1.3300

 

[TifiaFX]

Brent: 2 key support levels 51.70, 50.70

12/05/2017



Current dynamics

After on Wednesday the US Energy Ministry presented data on commercial oil and petroleum products in the US for the previous week, oil prices rose sharply. Reserves in the US, contrary to forecasts, fell by 5.247 million barrels. This was the largest weekly decline this year. And the oil reserves in the US are declining for the fifth consecutive week.

Yesterday, the price of Brent oil on the positive received an attempt to break through the resistance level at 50.70 (the Fibonacci level of 61.8% correction to the decline from the level of 65.30 from June 2015 to the absolute minimums of 2016 near the 27.00 mark). However, the attempt failed, and Brent crude oil traded today in a narrow range near the mark of 50.70 dollars per barrel.

The optimism of the participants in the oil market also increased after the OPEC report, which showed that members of the cartel adhere to the established quotas. As expected, OPEC should extend or agree on a stronger production cut on May 25. If such an agreement is reached, oil prices will receive strong support. It seems that oil futures will finish the week with a rise of more than 3%, if the overall positive picture again does not spoil the report from the American oil service company Baker Hughes, which will be published today closer to the end of the US trading session (18:00 GMT). The number of active oil drilling rigs in the US earlier rose again (by 6 units to 703 units). The next growth will negatively affect oil prices.

According to analysts of the oil market, the surplus of oil reserves in the world is still high. OPEC raised its forecast for growth in oil production outside the cartel in 2017 to 950,000 barrels per day. Accelerating production in the US, Brazil, Canada, as well as Nigeria and Libya, which are part of OPEC, largely alleviates OPEC's efforts to create an artificial deficit in the oil market and stabilize oil prices.

At the same time, OPEC understands that oil producers in the above countries take the market share from the cartel, which is narrowing due to a decrease in oil production, which occurs within the framework of the OPEC agreement.

If the agreement on limiting production is not extended (the OPEC meeting will be held on May 25), the oil market may again rapidly return to the lows of 2016, when the barrel of Brent crude oil was just above $ 27.00.

From the news for today, also waiting for data on inflation in the US. At 12:30 (GMT) will be published data on retail sales and consumer price indices for April, which are one of the main inflation indicators in the US. A high result will strengthen the US dollar, and vice versa, a low result will weaken the USD. The forecast: + 0.6% (against -0.2% in March) and + 0.3% (against -0.3% in March), respectively. Evidence of accelerating inflation will increase the likelihood of an increase in interest rates by the US Federal Reserve System.

In this case, the attractiveness of the dollar for investors will grow, while prices for oil and other commodities, denominated in US dollars, will fall.


Support and resistance levels

Since the middle of last month, the price of Brent crude oil has fallen sharply and has lost almost 12% to the current moment. The negative dynamics prevails while the price is below the levels 51.70 (EMA200 on the daily chart), 50.70 (Fibonacci level 61.8% correction to the decline from the level of 65.30 from June 2015 to the absolute minimums of 2016 near the 27.00 mark).

On the daily chart, a downward channel formed, the lower boundary of which passes near the support level of 46.20 (50% Fibonacci level).

In the event of a breakout of the level of 50.70, the price that is currently at this level will rush down to levels 48.35, 47.10, 46.20. In the case of consolidation below 46.20 (50% Fibonacci level), the upward trend in the price of Brent crude oil will be canceled.

An alternative scenario for growth is associated with a return of the price above the level of 52.45 (EMA144 on the daily chart). So far, negative dynamics prevails.

Support levels: 50.70, 48.35, 47.00, 46.20

Resistance levels: 51.70, 52.45



Trading scenarios

Sell Stop 50.50. Stop-Loss 51.25. Take-Profit 50.00, 48.35, 48.00, 47.10, 46.20

Buy Stop 51.25. Stop-Loss 50.50. Take-Profit 51.70, 52.45, 55.60, 56.70, 57.00, 57.50

 

[TifiaFX]

FTSE100: Positive dynamics of the index persists

15/05/2017



Current dynamics

After in April British Prime Minister Theresa May unexpectedly announced early parliamentary elections the British stock market collapsed. The index of the London stock exchange FTSE100 has lost almost 2.9%. It was followed by all European major stock indexes. Early general elections in the UK would allow Prime Minister Theresa May to consolidate the dominant position of the Conservative Party in parliament on the eve of the June elections in order to negotiate with the EU on more favorable conditions for Brexit.

Despite the collapse in April, the FTSE100 index was able not only to recover completely, but to exceed the annual absolute maximum recorded in March near the 7447.0 mark.

At the beginning of today's European session, the FTSE100 index is declining; however, it is still in positive territory, trading near the 7444.0 mark with a rise after more than 1200 points (+ 19%) in the referendum on Brexit at the end of June.

The focus of traders will be today the speech of British Prime Minister Theresa May, which will begin at 19:00 (GMT). It is necessary to take into account the possibility of a sharp increase in volatility during the speech of Theresa May.

It is also worthwhile to be careful when opening trading positions tomorrow, when at 08:30 (GMT) inflation data are published in the UK for April. As expected, annual inflation accelerated to 2.6% from 2.3% in the previous month. The sharp increase in inflation in the country, gives grounds to assume that the Bank of England can again return to consideration of the question of raising the interest rate in the UK. And this is a negative factor for the British stock market.

Nevertheless, weak wage growth rates in the UK, which are lagging behind the rate of inflation in the country, can cause the British to cut their spending, which in turn can cause a slowdown in the national economy.

For this reason, the Bank of England will refrain from tightening monetary policy in the country, which is a positive factor for the British stock market. If the inflation data published in the UK tomorrow is below the forecast (+ 0.4% in April and + 2.6% in annual terms), the FTSE100 index will respond with growth.


Support and resistance levels

By mid-March, the FTSE100 index rose to its maximum near the 7447.0 level. Over the past two months, the FTSE100 index has fallen, adjusting to the support level of 7090.0. Nevertheless, recovering from a sharp fall after the statement of Theresa May about early parliamentary elections, the FTSE100 index is again rising in the uplink on the weekly chart.

Indicators OsMA and Stochastics on the 4-hour, daily and weekly charts recommend long positions.

While the FTSE100 index is above the short-term support level of 7295.0 (EMA200 on the 4-hour chart), positive dynamics remain.

In the event of a breakdown of this level, there may be risks of reducing the FTSE100 index to support levels of 7090.0 (February lows, October highs), 7050.0 (EMA200 and the lower border of the descending channel on the daily chart).

Breakdown of the level of 7050.0 and further decline will mean a reversal and the end of the upward trend of the FTSE100 index.

Nevertheless, the fundamental background creates the prerequisites for further growth of the index.

While the FTSE100 index is above 7295.0, long positions are more preferable.

The Bank of England maintains an extra soft monetary policy, which is a strong positive factor for the British stock market.

Support levels: 7386.0, 7295.0, 7200.0, 7090.0, 7050.0

Resistance levels: 7450.0, 7500.0



Trading Scenarios

Sell Stop 7365.0. Stop-Loss 7460.0. Take-Profit 7350.0, 7295.0, 7200.0, 7100.0, 7050.0

Buy Stop 7460.0. Stop-Loss 7365.0. Take-Profit 7500.0, 7520.0, 7550.0

*) Actual and detailed analytics can be found on the Tifia website

 

[TifiaFX]

S&P500: US indices rise against the backdrop of rising commodity prices

16/05/2017

Current dynamics

The recovery of prices for oil and other commodities supports US stock indices. The increase in prices for iron ore and base metals supported the shares of companies in the mining sector. In the oil market, positive dynamics has also been prevailing over the last week. After last Wednesday the Ministry of Energy of the United States presented data that showed a significant drop in oil and petroleum products in the United States, oil prices have appreciated by 8.5% by today. At the same time, investors do not lose hope for an extension of the agreement on the reduction of oil production in the framework of OPEC. So, recently the Saudi oil Minister Khaled Al-Falikh and the Russian energy Minister Alexander Novak expressed support for the extension of the agreement on the reduction of production for another 9 months. The next OPEC meeting will be held on May 25.

As a result, against the background of positive expectations on the oil market, WTI futures for NYMEX closed on Monday with an increase of $ 1.01 (or 2.1%) at $ 48.85 per barrel. The sub-index of the oil and gas sector in the S&P500 grew by 0.6%, which gave a positive momentum to the entire S&P500 index. As a result of yesterday's trading day, the S&P500 grew by 0.5%, Nasdaq Composite - by 0.5%, Dow Jones Industrial Average - by 0.4%.

From the US continue to receive positive macroeconomic data. Despite some deviation from the forecasted values in the smaller direction, in general, the indicators of inflation and the labor market of the USA point to the growth of the economy in the country. As long as the economy is growing, investors will prefer stocks and other asset-safe havens and other risky instruments.

Nevertheless, investors still believe that the Fed will raise interest rates in June. According to CME Group, the probability of a rate hike next month is estimated at 74% (last week the probability was at 83%). The likelihood of an early increase in the interest rate is holding back from more active purchases on the US stock market, which, nevertheless, is dominated by a positive trend.

From the news for today we are waiting for the data from the USA. At 12:30 (GMT), a report on the dynamics of new permits for the construction of houses in the US for April, which is an important indicator of the housing market, will be presented. The higher the value, the more positive the effect is on the stock indices. Forecast: 1.27 million new permits (against 1.26 million permits last month). If the data prove to be better than the forecast, then the US indices will grow. At 13:15 (GMT) the report of the Board of Governors of the US Federal Reserve on the volume of industrial production and use of production capacities for April is published. A high result may indicate the existence of inflationary expectations and, consequently, a rapid rate increase, so a high figure strengthens the US dollar.

But at the same time, strong macro data contribute to the growth of investor confidence in the stability and growth of the US economy. And this is a positive fundamental factor for the US stock market. In general, the positive background for stock indices remains.


Support and resistance levels

Since the opening of today's trading day, the S & P500 index has slightly decreased. Nevertheless, the positive dynamics of the S & P500 index remains. Since February 2016, the S & P500 index has been steadily growing and is in the ascending channels on the daily and weekly charts.

At the moment, the S & P500 again tests the resistance level of 2400.0, reached in early March, for breakdown.

Indicators OsMA and Stochastics on the daily, weekly, monthly charts went to the side of buyers. In case of resumption of growth, the nearest target will be level 2412.0 (the upper limit of the ascending channel on the daily chart).

The reverse scenario will be related to the breakdown of the short-term support level 2392.0 (EMA200 on the 1-hour chart) and the decrease with the nearest targets near the levels 2360.0 (the bottom line of the uplink on the daily chart), 2326.0 (April lows). The breakdown of support levels of 2275.0 (EMA200 on the daily chart), 2265.0 (Fibonacci level of 23.6% correction to growth since February 2016) will cancel the bullish trend of the index.

Support levels: 2392.0, 2375.0, 2360.0, 2326.0, 2275.0, 2265.0

Resistance levels: 2400.0, 2412.0



Trading Scenarios

Sell Stop 2390.0. Stop-Loss 2405.0. Objectives 2375.0, 2360.0, 2326.0, 2275.0, 2265.0

Buy Stop 2405.0. Stop-Loss 2390.0. Objectives 2412.0, 2420.0

*) Actual and detailed analytics can be found on the Tifia website

 

[TifiaFX]

Brent: Middle of the range and key level 51.70

17/05/2017



Current dynamics

Interrupted by a series of non-stop 4-day growth, the price for Brent crude oil finished yesterday's trading day with a decrease of 1% or $ 0.6 per barrel. Published at the end of yesterday's trading day, data from the American Petroleum Institute (API) was the final chord of yesterday's decline in the price of oil. According to the API, oil reserves in the US increased by 882,000 barrels in the week of May 6-12. The presented data again revived fears of investors that the growth of oil production in the US is negating the efforts of the Organization of the Petroleum Exporting Countries (OPEC) to restore the balance in the market.

Oil prices in different directions are pulling information on the growth of oil reserves and production outside the cartel and the expectation that OPEC and countries outside the cartel are supporting the extension of the deal to cut production. On Monday, it was reported that Saudi Arabia and Russia expressed a propensity to extend the agreement to reduce production for another 9 months. The OPEC meeting on this issue will be held next week (May 25).

The skepticism about the efficiency of the OPEC deal returned to the oil market after the International Energy Agency (IEA) published data on Tuesday that according to which in the 1st quarter commercial oil reserves in developed countries increased by 24.1 million barrels. IEA data also indicate the growth of stocks in oil storage facilities and in April.

According to analysts of the oil market, OPEC will be able to achieve the goal, and world oil reserves in the storage facilities will drop to an average of 5-year level provided that in the next year the supply of oil is reduced by 1 million barrels per day. Some of the economists are of the opinion that the OPEC reduction deal should be extended for 2018 as well.

The increase in the number of drilling rigs and the increase in production in the United States go faster and larger than expected, offsetting the efforts of OPEC. This could lead to the fact that production in the US will continue to grow, and support from OPEC in 2018 will end. In this case, the risks of a sharp drop in oil prices rise significantly against the backdrop of a growing surplus of oil supply.

Today at 14:30 (GMT) will be a report from the US Department of Energy on the change in oil and petroleum products in the US over the past week. It is expected that oil and petroleum products in the US fell by another 2.283 million barrels (after a recent weekly reduction of 5.247 million barrels). When confirming the forecast, the price of oil should rise.

Closer to the end of the US trading session (18:00 GMT) on Friday a report will be published from the American oil service company Baker Hughes on the number of active drilling rigs in the US. It is expected that the number of active oil drilling rigs in the United States has again increased (in the previous week their number was 712 units). The next growth will negatively affect oil prices.


Support and resistance levels

After a sharp decline at the beginning of the month to 47.00, the price of Brent crude oil was able to significantly adjust to today's expectations on the expectation that OPEC will be able to agree on an extension of the agreement to reduce oil production.

Today, Brent crude trades near the key resistance level at 51.70 (EMA200 on the daily chart). This level is also a kind of middle line of the range formed between the levels 52.35 (EMA144, EMA50 on the daily chart) and 50.70 (the Fibonacci retracement level of 61.8% correction to the decline from the level of 65.30 from June 2015 to the absolute minimums of 2016 near the 27.00 mark).

The price for Brent crude oil remains within the descending channel on the daily chart, the lower limit of which is near the support level of 46.20 (50% Fibonacci level).

If the support level breaks through 50.70, the price will go down to levels 48.35, 47.10, 46.20. In the case of consolidation below 46.20 (50% Fibonacci level), the upward trend in the price of Brent crude oil will be canceled.

An alternative scenario for growth is associated with a return of the price above the level of 52.35. Long-term goals in the case of this scenario are near 55.60 (EMA200 on the weekly chart), 56.70 (April highs), 57.50, 58.40 (highs of the year).

Support levels: 50.70, 48.35, 47.00, 46.20

Resistance levels: 51.70, 52.35



Trading Scenarios

Sell Stop 51.25. Stop-Loss 51.85. Take-Profit 50.70, 50.00, 48.35, 48.00, 47.10, 46.20

Buy Stop 51.85. Stop-Loss 51.25. Take-Profit 52.35, 54.00, 55.00, 55.60, 56.70, 57.00, 57.50

*) Actual and detailed analytics can be found on the Tifia website

 

[TifiaFX]

EUR/USD: short-term downward correction is likely

18/05/2017



Current dynamics

Aggravated in the US political uncertainty caused sales in global stock markets, especially American ones. Investors once again fear that the Trump administration will face difficulties in carrying out tax reform and budget incentives.

The dollar fell sharply in the foreign exchange market. The ICE dollar index, estimating its rate to the basket of six major currencies, fell by 0.4% to 97,685, being near the minimum mark since November 4. Yesterday was also associated with an increase in demand for asylum assets, such as the yen, gold, US government bonds. So, the yield of 10-year US Treasury bonds, according to Tradeweb, fell yesterday to 2.247% from 2.329%.

We are waiting for the data from the USA today. At 12:30 (GMT), the US Department of Labor will publish a weekly report on the number of new applications for unemployment benefits. The forecast: 240 000 (against 236 000 the previous week), which should negatively affect the dollar.

Also at the same time published an index of business activity in the manufacturing sector from the Federal Reserve Bank of Philadelphia in May. The result is higher than expected (19.5 against 22.0 in April) will strengthen the US dollar.


Support and resistance levels

Despite today's decline, the positive dynamics of the pair EUR / USD persists. On a strong positive momentum, the EUR / USD pair broke the upper border of the rising channel on the daily chart near 1.1100. In case of resumption of growth and renewal of the local and annual maximum near the 1.1170 level, the targets will be levels 1.1280 (Fibonacci level 23.8% corrective growth from the minimums reached in February 2015 in the last wave of global decline of the pair from the level of 1.3900), 1.1340 (EMA144 on a weekly basis Chart).

In case the EUR / USD pair returns to the zone below the support level 1.1100 (the upper line of the rising channel on the daily chart), the fall in the EUR / USD pair may accelerate into the channel. Strong levels of support are also levels 1.1035, 1.1000, 1.0950. Breakdown of support levels 1.0820 (EMA200), 1.0780 (EMA144 on the daily chart) will cancel the uptrend.

Support levels: 1.1100, 1.1080, 1.1035, 1.1000, 1.0950, 1.0900, 1.0875, 1.0820, 1.0800, 1.0780

Resistance levels: 1.1156, 1.1170, 1.1200, 1.1280, 1.1340



Trading Scenarios

Sell Stop 1.1115. Stop-Loss 1.1175. Objectives 1.1100, 1.1080, 1.1035, 1.1000, 1.0950, 1.0900, 1.0875, 1.0820, 1.0800, 1.0780

Buy Stop 1.1175. Stop-Loss 1.1115. Objectives 1.1200, 1.1280. 1.1340

*) Actual and detailed analytics can be found on the Tifia website

 

[TifiaFX]

DJIA: American stock market rebounds

19/05/2017

Current dynamics

World and, above all, American stock markets are recovering after a serious fall two days ago. The fall of the dollar and US stock indices on Wednesday was caused by reports in the media that Trump allegedly asked former FBI director James Komi, who was dismissed from his post a few days earlier, to stop the investigation against Michael Flynn, who previously held the position of adviser President for national security. The news came after reports that Trump handed classified information to Russian authorities, which could harm the US national security. Against this background, talk of possible impeachment of Trump increased.

Nevertheless, since yesterday, there has been a recovery of the dollar and US indices. Yesterday, US Treasury Secretary Stephen Mnuchin and the president of the Federal Reserve Bank of Cleveland, Loretta Mester, hastened to reassure investors.

Stephen Mnuchin said that "President Trump is determined to carry out the tax reform as quickly as possible". Loretta Mester, who is also a member of the FOMC of the Fed, gave a positive assessment to the US economy and said that the central bank will continue to raise interest rates to "avoid increasing risks to macroeconomic stability that may arise if the economy overheats".

The dollar and US indices received yesterday also support from published data on the number of applications for unemployment benefits in the US, which declined for the third consecutive week, indicating a steady increase in the number of jobs. The index of business activity for May, published by the Fed-Philadelphia, significantly exceeded the expectations of economists, which also gave confidence to investors (38.8 against the forecast of 19.5 and 22.0 in April).

Today, the economic calendar for the United States is empty; however, it is worth paying attention to the speech of FOMC member and head of the Federal Reserve Bank of St. Louis James Bullard (starts at 13:15 GMT). It is likely that Bullard, also following Mester, will point to a high probability of an early interest rate increase in the United States. The next meeting of the Federal Reserve on this issue will be held on June 13-14, and many investors are already laying a price hike on prices in this meeting.

According to the CME Group, the probability of an increase in rates next month is again estimated at 74%. On the one hand, the probability of an early increase in the interest rate is holding back from more active purchases on the American stock market, raising the rate makes the dollar more expensive. On the other hand, as the head of the Federal Reserve, Janet Yellen, pointed out more often, the rate increase speaks about the strength of the American economy, and this is a positive factor for the dollar and the US stock market, which, nevertheless, is dominated by positive dynamics.


Support and resistance levels

As a result of the recent fall, the DJIA index has lost all the achievements of recent weeks, falling below the opening level of the previous month near the mark 20650.0. The DJIA index broke through the support level of 20620.0 (the bottom line of the ascending channel on the daily chart), falling to the level of 20500.0.

With the opening of today's trading day and the beginning of the European session, the DJIA index continues to recover, once again returning to the upward channel on the daily chart, the upper limit of which passes above the level of 21170.0 (absolute and annual highs).

To confirm the upward dynamics, the DJIA index needs to gain a foothold above the level 20825.0 (EMA200 on the 4-hour and 1-hour charts).

The indicators OsMA and Stochastics on the 1-hour and 4-hour charts turned to long positions.

Positive dynamics of the index can fully recover already above the level of 20820.0. Long positions can be opened already in the zone above the resistance level 20750.0 (EMA50 on the daily chart).

In an alternative scenario, the index should drop below the local and May low near the 20500.0 mark

If the downward trend is to increase, the decline in the index may continue to support levels of 20360.0 (April lows), 19990.0 (December highs), 19850.0 (EMA200 on the daily chart and Fibonacci level of 23.6% correction to the wave growth from the level of 15660.0 after recovery In February of this year to the collapse of the markets since the beginning of the year. The maximum of this wave and the Fibonacci level of 0% is near the mark of 21170.0).

The change in the bullish trend for the bearish will occur only after the DJIA index falls below the level of 19850.0. So far, the bullish trend prevails.

Support levels: 20620.0. 20500.0, 20360.0, 20110.0, 19990.0, 19850.0

Resistance levels: 20750.0, 20820.0, 20885.0, 20980.0, 21170.0



Trading Scenarios

Buy in the market. Stop-Loss 20610.0. Take-Profit 20750.0, 20820.0, 20885.0, 20980.0, 21170.0

Sell Stop 20610.0. Stop-Loss 20760.0. Take-Profit 20500.0, 20360.0, 20110.0, 19990.0, 19850.0

*) Actual and detailed analytics can be found on the Tifia website

 

[TifiaFX]

Brent: Investors' optimism is growing

22/05/2017



Current dynamics

The previous week, oil prices continued to rise. Optimism of investors was caused by media reports that Saudi Arabia and Russia are in favor of a 9-month extension of the agreement. Other OPEC member countries support the extension of the deal to reduce production for 9 months, said Saudi Arabia's oil minister Khaled Al-Falih. According to Al-Falih, the extension of the deal until March 2018 will allow OPEC to achieve its goal and reduce world reserves to an average of 5-year level, and restore the balance in the oil market. As is known, at the end of last year, 13 OPEC countries and 11 countries outside the cartel agreed on a total reduction of oil production by almost 1.8 million barrels a day until June.

However, this was not enough to restore the balance of supply and demand in the oil market. Other major oil-producing countries, such as the United States and Canada, have been actively increasing production, while the countries participating in the agreement have reduced production.

Last week, the International Energy Agency (IEA) published data according to which in the 1st quarter commercial oil reserves in developed countries increased by 24.1 million barrels. IEA data also indicate the growth of stocks in oil storage facilities and in April.

The US continues to increase oil production, which largely neutralizes the efforts of OPEC. So, according to the data provided by American oil service company Baker Hughes on Friday, the number of active oil drilling rigs in the United States again rose to 720 units in the previous week.

Some economists doubt that the OPEC deal will have the desired effect on the supply surplus. The increase in the number of drilling rigs and the increase in production in the United States go faster and larger than expected. This could lead to the fact that production in the US will continue to grow, and support from OPEC in 2018 will end. In this case, the risks of a sharp drop in oil prices rise significantly against the backdrop of a growing surplus of oil supply.

Nevertheless, the oil market is on the rise. The next OPEC meeting will be held on May 25 in Vienna, and much in the future dynamics of oil prices will depend on the decisions taken at this meeting. If it is indeed decided to extend the agreement for another 9 months, and also expressed the intention to continue to actively influence the balance of the oil market in the direction of reducing the level of oil supply, then oil prices will be a powerful incentive for further growth.


Support and resistance levels

The previous week the price for Brent crude oil has significantly strengthened. The growth was almost 6%. The price has added 3 dollars per barrel, having risen to the level of 53.86 dollars.

Today's trading day began for oil with a small gap in price. However, in the future the momentum faded and the price for Brent crude at the beginning of the European session is close to the level of 54.00 (today's opening price).

Given that today the dollar is strengthening in the foreign exchange market, partially restoring its positions after a strong fall last week, it is also likely to reduce oil prices. Indicators OsMA and Stochastics on the 1-hour and 4-hour charts went to the side of sellers, signaling an overdue downward correction.

The price is on the upper border of the descending channel on the daily chart (level 54.00).

Withdrawal from this level will create prerequisites for further price reduction inside the channel to support levels of 52.35 (EMA144, EMA50 on the daily chart), 52.05, 51.70 (EMA200 on the daily chart). A stronger correction is possible to support level 50.70 (Fibonacci level 61.8% correction to decrease from 65.30 from June 2015 to absolute minimums of 2016 near the 27.00 mark).

If the support level breaks through 50.70, the price will go down to levels 48.35, 47.10, 46.20. In case of consolidation below level 46.20 (the Fibonacci level of 50% and the lower border of the descending channel on the daily chart), the upward trend in the price of Brent crude oil will be canceled.

The scenario for price growth is connected with the breakdown of the level of 54.00 and further strengthening to the levels of 55.60 (EMA200 on the weekly chart), 56.70 (April highs), 57.50, 58.40 (highs of the year).

On the daily and weekly charts, the OsMA and Stochastic indicators recommend long positions, and the price on the weekly chart is in the middle of the rising channel, the upper limit of which runs near the level of 62.00.

Support levels: 53.00, 52.35, 52.05, 51.70, 51.40, 50.70, 48.35, 47.00, 46.20

Resistance levels: 54.00, 55.60, 56.70, 57.50


Trading scenarios

Sell Stop 53.80. Stop-Loss 54.30. Take-Profit 53.00, 52.35, 52.05, 51.70, 51.40, 50.70

Buy Stop 54.30. Stop-Loss 53.80. Take-Profit 55.00, 55.60, 56.70, 57.00, 57.50

*) Actual and detailed analytics can be found on the Tifia website

 

[TifiaFX]

NZD/USD: commodity prices rose

23/05/2017



Current dynamics

Against the background of the weakening of the US dollar and the rise in commodity prices, the NZD / USD pair has significantly increased over the past 1.5 weeks. Despite the growth of expectations of an increase in the interest rate in the US, the US dollar demonstrates a large-scale decline in the foreign exchange market. According to the CME Group, investors are expecting an increase in the Fed's key rate at a meeting scheduled for June 13-14 at 78.5% against 59% in mid-April. The probability of an increase in the rate in July is 80.0%, in September 86%. Nevertheless, the US dollar is losing all acquisitions since November 8, when the new US president was elected. The index of the dollar WSJ, reflecting the value of the US dollar against 16 other currencies, decreased by 0.1% to 88.60.

The NZD / USD pair also rose on the eve of the publication of forecasts for milk powder prices for the New Zealand company Fonterra, the largest dairy producer in the country. As you know, milk powder is the main export item of New Zealand. It is expected that the forecast of Fonterra for milk powder prices will rise to 6.75 US dollars per kilogram.

In addition, on Thursday (02:00 GMT), the budget of the New Zealand government is published for the fiscal year 2017-2018. It is expected that the budget will show a moderate surplus and reflect the good state of the national economy. The growth of the budget surplus and the New Zealand economy leads to an increase in expectations about the increase in the key interest rate of the central bank of New Zealand, which will positively affect the New Zealand dollar.

Nevertheless, the RBNZ stated that it will keep its stake on the same level due to the uncertainty surrounding the US economic and foreign trade policy up to Q3 2018.

If the Fed starts a gradual increase in the rate in the US, then the hours of the balance will be steadily and gradually tilt in favor of the US dollar. The difference between the monetary policies of RBNZ and the Fed will remain the main fundamental factor in favor of the US dollar in the next few months.

From the news for today, we are waiting for data from the US, which are published between 12:55 and 14:00 (GMT). Business activity indices (PMI) in the US manufacturing and service sectors for May (preliminary release) should show a slight increase (53.0 and 53.1, respectively). Also today, comments Fed representatives - Neil Kashkari and FOMC member Patrick Harker, at 13:00, 19:00 and 21:00, respectively.

At 22:45 (GMT), the main articles of New Zealand's foreign trade balance for April will be published, which is expected with a decrease in surplus (NZ $ 268 million versus NZ $ 332 million in the previous month). In this case, the New Zealand dollar may decline.

Tomorrow, the attention of traders will be focused on the publication (18:00 GMT) of the protocol from the last meeting of the committee on open market operations of the Fed ("FOMC minutes"), which may contain indications of the future of US monetary policy. Volatility, as always, is expected at this time high for all dollar pairs.


Technical analysis

As a result of growth during the last three trading sessions, the NZD / USD pair came close to the resistance level 0.7030 (EMA200, EMA144 on the daily chart, the upper limit of the descending channel on the weekly chart). A little below this level, near the mark of 0.7000, the upper limit of the descending channel passes on the daily chart. It's not easy to pass this level to NZD / USD pair.

Only in case of fastening above the resistance level 0.7070 (EMA200 on the monthly chart) can consideration of long medium-term positions in the NZD / USD pair.

The most likely rebound from the current level of 0.7030. As the political tension in the US decreases, the US dollar will begin to recover in the foreign exchange market. In this case, the high probability of a rapid increase in the interest rate in the United States will again come to the fore, and this is a strong fundamental factor in favor of the US dollar.

The return of the pair NZD / USD under the support level 0.6945 (EMA200 on the 4-hour chart, March, April highs) will return the downward dynamics to the pair NZD / USD.

The targets will be the levels of 0.6885 (March lows), 0.6860 (the Fibonacci level of 23.6% of the upward correction to the global wave of decline of the pair from the level of 0.8800, which began in July 2014, the low of December 2016), 0.6818 (May minima and the bottom line of the downward channel on Day chart).

In case of breakdown of the support level of 0.6818, the global downtrend of the NZD / USD pair, which began in July 2014, will resume. The minima of the wave of this trend are close to the level of 0.6260, which were reached in September 2015, and from which the current upward correction began.

Support levels: 0.7000, 0.6945, 0.6900, 0.6885, 0.6860, 0.6818, 0.6800, 0.6680

Resistance levels: 0.7030, 0.7070

*) Actual and detailed analytics can be found on the Tifia website

 

[TifiaFX]

S&P500: US indices recovered after falling

24/05/2017



Current dynamics

The US stock markets recovered completely after a sharp fall in the middle of last week, which arose amid growing political tensions in the US, which could become an obstacle to the implementation of President Donald Trump's program. However, strong corporate reports and positive fundamental macroeconomic indicators of the US helped keep the stock indices from a deeper fall. An additional positive factor for the US stock markets was yesterday the decline in political confrontation in the US after US President Donald Trump presented the draft budget for 4.1 trillion dollars. According to the budget, which provides for major changes in the social security system, the amount of US government spending in the next 10 years will be reduced by 4.5 trillion dollars. Tax cuts will also help increase economic growth. All together will help to cover the budget deficit, as it is supposed, for 10 years.

Yesterday's hearings in the US Congress, which did not reveal the links of President Donald Trump's campaign headquarters with Russia, also contributed to a reduction in domestic political tension in the United States.

The growth of shares of financial companies and oil and gas companies contributed to the increase in US stock indices for the fourth consecutive session. The Dow Jones Industrial Average rose 0.2% to 20937.00 points yesterday, the S & P500 rose 0.2% to 2398.00 points, Nasdaq Composite - by 0.1% to 6138.00 points.

Today investors are waiting for the release of the minutes of the May meeting of the Fed (18:00 GMT), which will look for hints on the timing of the next rate hikes and on plans to reduce the balance of 4.5 trillion dollars.

As the head of the Fed-Philadelphia Patrick Harker said yesterday, "raising rates in June is quite possible". He considers it appropriate to raise interest rates this year two more times.

In itself, an increase in the interest rate will not be able to break the bullish trend of the US stock market, despite the fact that the dollar will receive strong support. As the head of the Federal Reserve, Janet Yellen, stated more than once, "a rate hike speaks about the strength of the American economy".

From the US continue to receive positive macroeconomic data. Despite some deviation from the forecasted values in the smaller direction, in general, the indicators of inflation and the labor market of the USA point to the growth of the economy in the country. As long as the economy is growing, investors will prefer stocks and other asset-seekers shares and other high-risk risky instruments.

In general, the positive background for the main US stock indices remains.


Support and resistance levels

As a result of the four-day growth, the S & P500 index fully recovered losses suffered earlier amid renewed hype around the US president. With the opening of today's trading day, the S & P500 index is trading in a narrow range, pending the publication of the minutes from the May meeting of the Fed. The positive dynamics of the S & P500 index is preserved. Since February 2016, the S & P500 index has been growing steadily and is in the ascending channels on the daily and weekly charts.

At the moment, the S & P500 again tests the resistance level of 2400.0, reached in early March, for breakdown.

The indicators OsMA and Stochastics on the daily chart again turned to long positions. In case of resumption of growth, the nearest target will be level 2415.0 (the upper limit of the uplink on the daily chart).

The reverse scenario will be associated with breakdown of the short-term support level 2386.0 (EMA200 on the 1-hour chart) and a decrease with the nearest targets near the levels 2355.0 (bottom line of the uplink on the daily chart), 2326.0 (April lows). Only the breakdown of support levels of 2275.0 (EMA200 on the daily chart), 2265.0 (Fibonacci level of 23.6% correction to growth since February 2016) will cancel the bullish trend of the index.

Support levels: 2386.0, 2375.0, 2355.0, 2326.0, 2305.0, 2275.0, 2265.0

Resistance levels: 2400.0, 2415.0



Trading Scenarios

Sell Stop 2385.0. Stop-Loss 2405.0. Objectives 2375.0, 2355.0, 2326.0, 2275.0, 2265.0

Buy Stop 2405.0. Stop-Loss 2385.0. Objectives 2415.0, 2450.0, 2500.00

*) Actual and detailed analytics can be found on the Tifia website

 

[TifiaFX]

Brent: in the focus of OPEC

25/05/2017



Current dynamics

As the Minister of Oil of Saudi Arabia, OPEC and countries outside the cartel stated in Vienna today, they will probably leave the amount of reduction unchanged under the 9-month extension of the deal. According to the minister, if necessary, OPEC may increase the volume of production reduction, but so far it is not necessary. After the Saudi oil minister's speech, oil prices fell sharply.

Meanwhile, the increase in oil production in the US and other major oil-producing countries, largely offset the efforts of OPE to limit oil production. After the entry into force of the OPEC agreement, other countries as a whole reduced production by about 1.8 million barrels a day. During the same time, the US increased production by 750,000 barrels per day to 9.3 million barrels a day, the maximum since the summer of 2015. In fact, by the efforts of the US alone, more than a third of the reduced production was offset. And this, apart other countries, such as Brazil, Libya, Canada.

In the US there is an active increase in oil production. So, according to the data provided by American oil service company Baker Hughes on Friday, the number of active oil drilling rigs in the United States again rose to 720 units in the previous week.

The number of drilling in the US has been steadily increasing since the summer of last year. American investment companies continue to invest in shale companies. At the same time, American drilling companies have developed a number of financial protection tools that insure against losses in the event of a fall in prices. Innovations in the oil industry of the US economy make it possible to achieve all the best results in oil production. The increase in efficiency makes it possible to reduce the cost of production to less than $ 40 per barrel against $ 63 in 2014. There are all prerequisites to the fact that the volume of supply of oil in the US will increasingly increase, further reducing the effect of the agreement within OPEC.

If, at the OPEC meeting, it is announced that it is possible to expand the volume of cuts and further extend after the expiration of the next 9-month period, the price of oil will be a powerful stimulus for growth.

In general, the extension of the deal to reduce production in the same volumes was expected by market participants, and it is mostly already taken into account in prices. It is possible that after a small increase in oil prices will return to a downward trend.


Support and resistance levels

The price of Brent crude oil could not gain a foothold above the level of resistance at 54.30 (the upper limit of the descending channel on the daily chart) and in the course of today's European session is declining.

Indicators OsMA and Stochastics on the 1-hour and 4-hour charts went to the side of sellers. On the daily chart, indicators also unfold to short positions.

After the speech of Saudi Arabia's oil minister, the price dropped sharply, reaching a short-term support level of 53.00 (EMA200 on the 1-hour chart). If the price roll is repeated downward, and support levels of 53.00, 52.50 (EMA200 on the 4-hour chart, EMA144 on the daily chart) will be broken, it is likely that the price will decline further to support level 51.90 (EMA200 on the daily chart).

In the event of a breakthrough in the support level of 50.70 (the Fibonacci level of 61.8% of the correction to the decline from the level of 65.30 from June 2015 to the absolute minimums of 2016 near the 27.00 mark) the price will go deeper into the descending channel on the daily chart and to levels 48.35, 47.10, 46.20. In case of consolidation below level 46.20 (the Fibonacci level of 50% and the lower border of the descending channel on the daily chart), the upward trend in the price of Brent crude oil will be canceled.

The scenario for strengthening the price is connected with the breakdown of the local resistance level at 54.30 and further growth in the uplink channel on the weekly chart, the upper limit of which passes near the level of 62.00.


Support levels: 53.00, 52.35, 52.05, 51.70, 51.40, 50.70, 48.35, 47.00, 46.20

Resistance levels: 54.00, 55.60, 56.70, 57.50



Trading Scenarios

Sell Stop 53.80. Stop-Loss 54.30. Take-Profit 53.00, 52.35, 52.05, 51.70, 51.40, 50.70

Buy Stop 54.30. Stop-Loss 53.80. Take-Profit 55.00, 55.60, 56.70, 57.00, 57.50

*) Actual and detailed analytics can be found on the Tifia website

 

[TifiaFX]

GBP/USD: pound is under pressure

26/05/2017



Current dynamics

Several fundamental factors that occurred this week contributed to the pound's weakening in the foreign exchange market. According to polls conducted on the eve of June 8, when early parliamentary elections will be held in Great Britain, the support of the ruling Conservative Party, led by Prime Minister Teresa May, declined.

In the middle of last month Teresa May unexpectedly announced early parliamentary elections. The purpose of these elections is to ensure the dominant position of the Conservative Party in the parliament on the eve of the June elections, in order to agree with the EU on more favorable conditions for Brexit. If the Conservative Party has more seats in the parliament, this will neutralize the influence of the supporters of the tough scenario Brexit.

However, among investors, there is growing doubt about the development of this scenario.

Another negative factor for the pound was the terrorist attacks in Britain, where explosions during the concert were blown up this week at the stadium in Manchester. Theresa May raised the level of the terrorist threat to a critical one.

From the side of the macro data, a portion of the negative also arrived. According to the data published yesterday, UK GDP growth for the first quarter was revised downward (+ 0.2% instead of 0.3%, + 2.0% instead of + 2.1% in annual terms, as reported in the first GDP estimate).

Thus, the pound was among the leaders of the fall this week. The GBP / USD pair seems to be closing this week with a decline of almost 1.0% or about 130 points.

From the news for today, we are waiting for data on the United States. At 12:30 (GMT) important macroeconomic indicators will be published: the adjusted value of the GDP index for the first quarter, orders for durable goods for April. If the value of GDP (the second estimate) is revised upward, the dollar will strengthen in the foreign exchange market, including in the GBP / USD pair. This will be another argument in favor of raising the interest rate in the US at a meeting of the Fed on June 13-14.

Conversely, if the indicators come out weaker than expected, this will lead to a decrease in the dollar. Today is Friday, the end of the last full trading week of the month. At the end of the US trading session, it is possible to fix short positions on the dollar, which can cause the dollar to rise and decline against it other major currencies, including the pound.


Support and resistance levels

The pair GBP / USD broke through the short-term support level of 1.2950 (EMA200 on the 1-hour chart) and falls to support level 1.2840 (EMA200 on the 4-hour chart). A little lower, at 1.2800 there is another strong support level of 1.2800 (EMA200 on the daily chart).

In the case of an increase in negative dynamics and breakdown of support levels of 1.2700 (bottom line of the upward channel on the daily chart), 1.2680 (EMA144 on the daily chart), the upward trend of the pair, which began in January 2017, could grow into a downtrend.

Indicators OsMA and Stochastics on the 4-hour and daily charts went to the side of sellers.

On the weekly chart, the indicators also unfold to short positions.

You can return to consideration of long positions for the GBP / USD pair after its return to the zone above the level of 1.2950. In case of breakdown of the local maximum near the 1.3050 mark, the GBP / USD pair growth will resume within the upward channel on the daily chart. The closest target will then be the level of 1.3210 (Fibonacci level of 23.6% correction to the decline in the GBP / USD pair in the wave, which began in July 2014 near the level of 1.7200).

Support levels: 1.2790, 1.2680, 1.2590, 1.2485, 1.2340, 1.2110

Resistance levels: 1.2990, 1.3000, 1.3100, 1.3210



Trading Scenarios

Sell in the market. Stop-Loss 1.2955. Take-Profit 1.2840, 1.2800, 1.2680, 1.2590, 1.2485, 1.2340

Buy Stop 1.2955. Stop-Loss 1.2890. Take-Profit 1.2990, 1.3050, 1.3100, 1.3210

*) Actual and detailed analytics can be found on the Tifia website

 

[TifiaFX]

GBP/NZD: at a strong support level

29/05/2017



Current dynamics

Last week, the US dollar strengthened strongly against the pound and about the same weakened against the New Zealand dollar (+ 1.8% and -1.9%, respectively).

The reason for this behavior of the dollar against the pound was associated with a massive decline in the pound in the foreign exchange market after the weak macro data on the UK came out and it became known that the gap between the Labor Party and the Conservative parties had significantly reduced before the elections to the country's parliament.

New Zealand's same currency strengthened after last week the New Zealand government has submitted a budget for 2017-2018. According to this document, a budget surplus is expected, strong GDP growth and tax cuts. The budget indicates that the Reserve Bank of New Zealand may soon begin to consider raising the interest rate in the country, which is currently one of the highest among the advanced economies (1.75%). The New Zealand dollar became the leader of growth last week.

Proceeding from the above, the fall of the pound against the New Zealand dollar is especially strong.

Today in the UK is a bank holiday. Important economic news in the calendar is also not contained.

Arguments for the growth of the NZD / USD pair:

• The GBP / NZD pair has reached an important support level of 1.8190 (200-period moving average on the daily chart). Even if there is a breakdown of this level and further reduction of the NZD / USD pair, before the further decline, a rebound from the level of support and corrective growth is possible.

• The GBP/NZD has been in an uptrend since the beginning of the year.

• After a strong multidirectional movement last week against the US dollar, some correction is expected this week in NZD / USD, GBP / USD pairs.


Tomorrow (20:00 GMT) RBNZ will publish a semi-annual report on financial stability. If the report contains information about the difficulties and problems of the effectiveness of the financial system of New Zealand, the New Zealand currency after strong growth last week could significantly adjust, including in the pair GBP / NZD.


Support and resistance levels

The pair GBP / NZD broke through the short-term support level 1.8460 (EMA200 on 1-hour and 4-hour charts) and fell to the key support level 1.8190 (EMA200 on the daily chart).

Near the level of 1.8460 also passes the bottom line of the rising channel on the daily chart.

Despite the fact that OsMA and Stochastic indicators on the daily and weekly charts recommend sales, on short-term periods (1-hour and 4-hour) the indicators turned to long positions, signaling an upward correction. If the NZD / USD pair returns to a zone above 1.8460, its further growth may resume. The closest target will be the recent May highs near the level of 1.8490. More distant targets will be the levels of 1.9300, near which there is an upper bound of the rising channel on the daily chart, 1.9750 (EMA200 on the weekly chart).

The key date in the further dynamics of the GBP / NZD pair will be June 8, when extraordinary elections to the British Parliament will be held. If the Conservatives win at the head of Prime Minister Theresa May, the pound may sharply strengthen in the currency market, including in the GBP / NZD pair.

The reverse scenario will be connected with the breakdown of the support level 1.8050 (EMA144 on the daily chart) and further decrease towards annual lows near the level of 1.6850.

Support levels: 1.8050, 1.7800, 1.7500, 1.7200, 1.6850

Resistance levels: 1.8460, 1.8940, 1.9300, 1.9750



Trading Scenarios

Sell Stop 1.8130. Stop-Loss 1.8210. Take-Profit 1.8050, 1.7800, 1.7500, 1.7200, 1.6850

Buy Stop 1.8210. Stop-Loss 1.8130. Take-Profit 1.8460, 1.8940, 1.9300, 1.9750

 

[TifiaFX]

AUD/USD: attention to retail sales data

30/05/2017



Current dynamics

The Australian dollar has recently remained one of the weakest against the US dollar. Despite the fact that earlier in the month the RBA retained the interest rate in Australia at 1.5%, among market participants the opinion is growing that the RBA can go on reducing the interest rate in the country due to a record household debt, a record low salary growth and a weak market Labor. Domestic consumption makes a big contribution to GDP growth. In view of the weak growth in consumption in Australia, some economists forecast zero or insignificant GDP growth for the first quarter.

From the protocol published at the beginning of the month since the last meeting of the RBA, it follows that the bank as a whole is still optimistic about the situation in the Australian economy. However, according to the bank, "an increase in the interest rate will complicate the correction of the economy."

On Thursday, important macro data for Australia will be published, including retail sales for April and companies' investments for the first quarter. A slight, almost zero growth in the level of retail sales is expected in April (+ 0.3%). Another weak data on sales will strengthen the opinion of market participants that the interest rate in Australia will soon be lowered.

The RBA's restrained position on the rate in Australia and, conversely, the Fed's positive view on the process of raising the interest rate in the US strengthen the position of sellers of the Australian dollar against the US dollar.

The negative medium-term dynamics of the AUD / USD pair remains.


Support and resistance levels

Indicators OsMA and Stochastics at different time intervals show mixed dynamics.

Nevertheless, the pair AUD / USD continues to remain within the downward channel on the daily chart, trading below the important resistance levels 0.7460 (Fibonacci level of 23.6% correction to the wave of decline of the pair since July 2014), 0.7470 (EMA200 on the 4-hour chart), 0.7510 (EMA200 on the daily chart).

Fundamental factors create the prerequisites for further reduction of the AUD / USD pair.

The nearest target in case of further decline of the pair will be the level of 0.7330 (November minima and the bottom line of the ascending channel on the weekly chart). The next target in case of breakdown of this support level is the level of 0.7155 (May, December minima of 2016). The minimum wave of the last global decline of the pair since July 2014 is close to the level of 0.6830.

The alternative scenario is related to the return of the pair AUD / USD to the zone above the level of 0.7510 and further growth to the resistance levels of 0.7610, 0.7680, 0.7760, 0.7840 (Fibonacci retracement of 38.2% correction to the fall wave from July 2014).

Meanwhile, the negative dynamics of the pair AUD / USD prevails.


Support levels: 0.7420, 0.7330, 0.7300, 0.7200, 0.7155

Resistance levels: 0.7460, 0.7470, 0.7510, 0.7545, 0.7570, 0.7610, 0.7680



Trading Scenarios

Sell Stop 0.7410. Stop-Loss 0.7465. Take-Profit 0.7330, 0.7300, 0.7200, 0.7155

Buy Stop 0.7465. Stop-Loss 0.7410. Take-Profit 0.7500, 0.7535, 0.7545, 0.7570, 0.7600

 

[TifiaFX]

EuroStoxx50: decline in the fifth consecutive session

31/05/2017

Current dynamics

It seems that the main European stock indexes can finish this week in a negative territory. The election of the president of France is already behind, and the positive momentum begins to fade as weak macro statistics from the Eurozone arrive.

ECB President Mario Draghi earlier this week confirmed that economic recovery is accelerating, but core inflation is still too weak to change the monetary policy of the bank. Here and today in the Eurozone came some macro statistics, which confirm the words of Mario Draghi. So, the preliminary index of consumer prices (CPI) of the Eurozone in May grew by 1.4% (against the forecast of + 1.5% and + 1.9% in April). Unemployment in the Eurozone in April fell by 0.1%, but still remains high (9.3%).

Decrease in indices is observed throughout the world. So, the US stock indexes on Tuesday fell under the pressure of shares of oil and gas and financial companies. The oil and gas subindex in the S & P500 showed the worst results for the day, falling by 1.3%. The European StoxxEurope600 index lost another 0.3% on Tuesday, with banks and insurance companies leading the decline. The EuroStoxx50 index was down yesterday for the fifth consecutive session.

At the beginning of today's European trading session, the EuroStoxx50 index is trading in a narrow range near the mark of 3554.0, however, is under pressure from incoming weak macro statistics for the Eurozone.

As has been repeatedly announced by the leaders, the ECB is unlikely to go on winding up the extra soft monetary policy at the moment. The ECB management believes that the growth of the Eurozone economy is still weak enough to begin curtailing the QE program in the Eurozone. So far, this supports European indices. And still, among investors, there is talk that the ECB may announce the curtailment of the QE program in the Eurozone. The ECB's next meeting on monetary policy will be held on June 8. As ECB leaders said earlier, the rate hike will not begin earlier than the quantitative easing program, at which the European Central Bank will buy European assets worth 60 billion euros a month, will be completed.


Support and resistance levels

At the beginning of the month against the backdrop of the election of the new French president, the EuroStoxx50 index reached a new annual maximum near the mark of 3680.0. After that, a gradual decline in the index started, and at the moment the EuroStoxx50 index is traded at the short-term support level of 3550.0 (EMA144 and the bottom line of the uplink on the 4-hour chart).

Indicators OsMA and Stochastics on the 4-hour, daily, weekly charts went to the side of sellers.

If the EuroStoxx50 index falls further, the next target will be the support level of 3525.0 (EMA200 on the 4-hour chart, EMA50 on the daily chart).

The level is strong enough. In general, the positive dynamics of the EuroStoxx50 index remains. In case of rebound from the level of 3525.0, the growth of the EuroStoxx50 index may resume. At least, the ECB's propensity to continue the extra soft monetary policy contributes to this.

Medium-term short positions will become relevant only after the EuroStoxx50 index falls below the level of 3500.0 (March and April highs on the eve of the first round of presidential elections in France). The reduction targets will be support levels 3435.0 (Fibonacci level 23.6% correction to the wave of growth since June 2016), 3380.0 (EMA144), 3325.0 (EMA200 on the daily chart).

Support levels: 3525.0, 3500.0, 3435.0, 3380.0, 3325.0

Resistance levels: 3580.0, 3680.0, 3700.0



Trading Scenarios

Sell Stop 3520.0 Stop-Loss 3590.0. Take-Profit 3500.0, 3435.0, 3380.0, 3325.0

Buy Stop 3590.0. Stop-Loss 3520.0. Take-Profit 3600.0, 3680.0, 3700.0

 

[TifiaFX]

AUD/USD: Against the background of weak macro data from China

01/06/2017



Current dynamics

After extremely volatile trading, the Australian dollar fell sharply during the Asian session today. After the release of optimistic data on retail sales in Australia in April (+ 1.0% vs. the forecast + 0.3%), the Australian currency strengthened. This is the largest monthly increase in more than two and a half years. However, soon the Australian dollar fell sharply after China's production report, which turned out to be weak, was published. The index of supply managers (PMI) for China's manufacturing sector from Caixin Media Co. In May, it fell to 49.6 (against 50.3 in April).

China is Australia's largest trade and economic partner and a consumer of Australian iron ore and coal. The growth of the Australian economy still depends heavily on the commodity sector. And the decline in commodity prices, as well as the slowdown in the economy of the Australian partner countries, have a strong impact on the Australian dollar, undervaluing its value.

At the same time, despite the unexpected growth in retail sales in April, other statistics still indicate a limited increase in consumer spending. Domestic consumption makes a big contribution to GDP growth. In view of the weak growth in consumption in Australia, some economists forecast zero or insignificant GDP growth for the first quarter.

The consumer confidence index is weak, salaries are growing slowly, and purchasing power is limited. House prices also began to decline, which unleashes the hands of the RBA in the matter of lowering the interest rate.

Earlier this month, the RBA retained its interest rate in Australia at 1.5%. However, the RBA can go on reducing the interest rate in the country due to record household debt, a record low salary growth and a weak labor market.

At the same time, the US dollar is showing growth today in the foreign exchange market.

Despite the problems that have arisen with the administration of the US President in implementing the plans for a new economic policy, investors focus on positive macro statistics coming from the United States.

President of the Fed-San Francisco and FOMC member John Williams today expressed confidence that the strengthening of the US economy justifies "three or four rate hikes" this year.

Thus, the difference between the monetary policy of the Fed and the RBA is the main driver for reducing the pair AUD / USD.

Today we are waiting for data from the USA. Between 12:15 and 14:00 (GMT) a whole block of important macroeconomic indicators is published. Among the data - the index of business activity ISM in the manufacturing sector (in May) and the index of gradual acceleration of inflation. We expect weaker indicators than in the previous month, which could negatively affect the dollar. Nevertheless, in absolute terms, the figures look very positive. Also worth paying attention to the report of ADP on the level of employment in the private sector of the US for May. Investors often consider it a harbinger of the NFP, although no direct correlation with Non-Farm Payrolls is usually noted. Strong data positively affects the dollar. Here the growth is expected (185,000 versus 177,000 in April), which will support the US dollar. In general, macro statistics are expected to be very positive, which will have a positive impact on the US dollar, including in the pair AUD / USD.


Support and resistance levels

Since mid-March, the AUD / USD pair is actively declining in the downlink on the daily chart. The pair AUD / USD is below the important resistance levels 0.7510 (EMA200 on the daily chart), 0.7460 (Fibonacci level of 23.6% correction to the wave of decline of the pair since July 2014, as well as the upper limit of the descending channel on the daily chart, EMA200 on the 4-hour Chart).

The negative dynamics prevails.

Indicators OsMA and Stochastics on the 1-hour, 4-hour, daily charts went to the side of sellers.

The closest target in case of further decline of the pair will be the level of 0.7330 (November, May minima and the bottom line of the rising channel on the weekly chart). The next target in case of breakdown of this support level is the level of 0.7155 (May, December minima of 2016). The minimum wave of the last global decline of the pair since July 2014 is close to the level of 0.6830.

The alternative scenario is related to the return of the pair AUD / USD to the zone above the level of 0.7510 and further growth to the resistance levels of 0.7610, 0.7680, 0.7760, 0.7840 (Fibonacci retracement of 38.2% correction to the fall wave from July 2014).

Fundamental factors create the prerequisites for further reduction of the AUD / USD pair.


Support levels: 0.7380, 0.7330, 0.7300, 0.7200, 0.7155

Resistance levels: 0.7420, 0.7460, 0.7510, 0.7545, 0.7570, 0.7610, 0.7680



Trading scenarios

Sell Stop 0.7380. Stop-Loss 0.7420. Take-Profit 0.7330, 0.7300, 0.7200, 0.7155

Buy Stop 0.7420. Stop-Loss 0.7380. Take-Profit 0.7460, 0.7510, 0.7535, 0.7545, 0.7570, 0.7600

 

[TifiaFX]

XAG/USD: pending publication of data from the labor market

02/06/2017

Current dynamics

The focus of attention of all participants of financial markets today is the publication of data from the US labor market, which is scheduled for 12:30 (GMT). Very positive data are expected. Thus, according to the forecast it is expected that the growth of the average hourly wage will be 0.2% (against 0.3% in April), unemployment will not grow (4.4% against 4.4% in April).

But perhaps the main focus will be on Non-Farm Payrolls (the number of new jobs created in the non-agricultural sector of the US economy).

Yesterday Automatic Data Processing Inc. And Moody's Analytics reported data that in May the number of jobs in the private sector in the US increased by 253,000, which is significantly better than the forecast (185,000 and 174,000 in the previous month). This is the highest growth in the number of jobs since 2014.

Recent positive macro data from the US significantly strengthened investors' opinion that the Fed will raise the interest rate by 0.25% to 1.25% on June 13-14. So, positive ADP data on employment contributed to the growth of the dollar and the yield of treasury bonds. The index of the dollar WSJ rose by 0.2%, and the yield of 10-year Treasury bonds rose to 2.225% from 2.198% recorded on Wednesday.

Investors are not so much worried about slipping into plans to reform the tax system and stimulate budget spending in the US, focusing on macroeconomic indicators. So, the index of business activity ISM published in the manufacturing sector (for May) released yesterday with a value of 54.9 (the forecast was 54.5 and 54.8 in April). The index of business activity ISM in the manufacturing sector of the US economy is an important indicator of the state of the American economy as a whole. Along with the data from ADP, the publication of the ISM index further stimulated the closing of short positions in the dollar on the eve of today's NFP publication.

The Fed pays particular attention to data on the number of jobs, and by many investors they are perceived as the most important indicator of the state of the American economy. Now, many investors expect the Fed to raise rates more rapidly.

That's the president of the Fed-San Francisco and FOMC member John Williams today, that the strengthening of the US economy justifies "three or four rate hikes" this year.

If the data from the labor market, which are published today, really "do not disappoint", then the dollar will receive a powerful positive impulse before the Fed meeting on June 13-14. Then the market participants will have no doubt that the Fed will raise the rate at this meeting. Higher interest rates make dollar assets more attractive to investors. Precious metals, which do not bring interest income, become cheaper in the conditions of the rate increase; the cost of their acquisition and storage is growing.

With disappointing data on the US labor market, the dollar may weaken significantly in the foreign exchange market, and demand for precious metals, particularly silver, with the continuing political tension in the US around President Donald Trump will grow again.


Support and resistance levels

The pair XAG / USD could not gain a foothold above the key resistance level of 17.35 (EMA200 and the upper limit of the descending channel on the daily chart) and the third day is falling.

Indicators OsMA and Stochastics on the 4-hour, daily, weekly charts went to the side of sellers.

The pair XAG / USD is in the zone of short-term support levels 17.18 (EMA200 on the 1-hour chart), 17.14 (EMA200 on the 4-hour chart). If the NFP data prove to be strong, the pair XAG / USD will break through the levels of 17.18, 17.14 and go to the support level of 16.85 (Fibonacci level of 23.6% of corrective growth to fall in the pair since August 2016 and level 20.59) with the prospect of a downward movement - 15.72 (low of 2016).

You can return to consideration of long positions after fixing a pair above the level of 17.35.

Support levels: 17.18, 17.14, 16.85, 16.20, 15.72

Resistance levels: 17.35, 17.58, 18.17, 18.55, 18.75



Trading Scenarios

Sell Stop 17.10. Stop-Loss 17.28. Take-Profit 17.00, 16.85, 16.20, 15.72

Buy Stop 17.28. Stop-Loss 17.10. Take-Profit 17.35, 17.58, 18.17, 18.55, 18.75

 

[TifiaFX]

GBP/USD: on the eve of parliamentary elections

05/06/2017



Current dynamics

The PMI index (or the index of business activity) for the UK services sector in May was 53.8 (the forecast was 55.0, which is lower than the April index of the index 55.8). This index is an indicator of the economic situation in the service sector of Great Britain. The PMI of the UK service sector does not have such a strong impact on GDP as PMI in the manufacturing sector or the level of retail sales and consumer activity in the UK. At the same time, the decline in the PMI index for the service sector negatively affects the British currency. After the publication (08:00 GMT) of this index, the pound declined in the foreign exchange market.

Nevertheless, the GBP / USD pair closed its sharp decline (with a gap of 30 points after the next terrorist act in Great Britain last weekend) during today's European session at the opening of today's trading day.

Against the backdrop of the weakening dollar, the GBP / USD pair remains positive ahead of the June 8 elections to the UK Parliament.

As you know, in mid-April, British Prime Minister Theresa May unexpectedly announced early parliamentary elections to ensure the dominant position of the Conservative Party in Parliament.

It is likely that in these 3 days before the election to the UK Parliament the frequency of various sociological polls of the country's population will increase, which will cause an increase in the volatility in the pound trades.

The elections, which will be held in the UK on June 8, attract the attention of investors. In the case of a significant advantage of conservatives in parliament, British Prime Minister Theresa May will probably be able to agree with the EU on more favorable conditions for Brexit. If this happens, then the pound may significantly strengthen in the foreign exchange market.

This Thursday also will be a meeting of the European Central Bank on monetary policy, and next week will be a meeting of the Fed. It is widely expected that the Fed will raise the rate by 0.25% to 1.25%. Nevertheless, the dollar remains under pressure in the foreign exchange market. Probably, all the same, that the risks associated with the implementation of the new economic policy of President Donald Trump, as well as his statements about the desirability of a cheaper dollar, outweigh the sellers of the dollar.

Thus, if conservatives manage to get a convincing majority in the June 8 elections, then the GBP / USD pair can significantly strengthen. Otherwise, the pound and GBP / USD pair are expected to weaken in the foreign exchange market.

In any case, this week, especially on the eve of June 8, the pound is expected to have increased volatility with sharp movements in both directions.


Support and resistance levels

The GBP / USD pair is currently trading near the balance line and the level of 1.2885, through which the 200-period moving average passes on the 1-hour chart. The GBP / USD pair keeps positive dynamics, trading in the uplink on the daily chart, above the key support levels of 1.2840 (EMA200 on the 4-hour chart), 1.2800 (EMA200 and the bottom line of the rising channel on the daily chart).

Indicators OsMA and Stochastics on the 1-hour, 4-hour, daily charts went to the side of buyers.

In case of breakdown of the local resistance level 1.2925, the pair GBP / USD growth will resume, and the GBP / USD pair will go to the resistance levels 1.3050 (May highs), 1.3210 (Fibonacci level 23.6% correction to the GBP / USD decline in the wave, which began in July 2014 near the level of 1.7200).

In the case of breakdown of the support level 1.2800 and further reduction in support, the level will be 1.2700 (EMA144 on the daily chart).

Further GBP / USD dynamics will in many respects be determined by the dynamics of the dollar and the comments of the Fed, which will be sounded on June 14, after the decision on the interest rate in the US is made.

Support levels: 1.2885, 1.2840, 1.2800, 1.2760, 1.2700, 1.2680, 1.2590, 1.2485, 1.2340, 1.2110

Resistance levels: 1.2925, 1.3000, 1.3050, 1.3100, 1.3210



Trading Scenarios

Sell Stop 1.2855. Stop-Loss 1.2910. Take-Profit 1.2840, 1.2800, 1.2760, 1.2700, 1.2680, 1.2590, 1.2485, 1.2340, 1.2110

Buy Stop 1.2910. Stop-Loss 1.2855. Take-Profit 1.2925, 1.3000, 1.3050, 1.3100, 1.3210