LiteForex Market Analytics

[LiteForexTeam]

USD/JPY: the pair is likely to experience temporary correction

Current trend

On Tuesday the currency pair USD/JPY traded with high volatility. In the morning the price fell to the level of 101.49 due to the release of the US consumer price index, which rose to 0.2% and 1.5% on monthly and annual basis accordingly, which was against the forecast. Later, the pair reversed and started to rise. The pair is being growing up to date.

Chinese statistics had a negative impact on the price of Yen. GDP in China amounted to 7.4% in Q1 (the lowest index since 2012), volume of industrial output in March was below the forecast, at the level of 8.8%. The decline in the Yen was also triggered by the statement of the head of the Bank of Japan, Haruhiko Kuroda, who said that the Bank would take all necessary measures to raise inflation rate to the target level of 2%.

Support and resistance

The price had reached weekly highs of 102.36 and broke down the upper line of Bollinger bands indicator, suggesting probability of correction to the level of 102.07. Stochastic indicator also indicates correction, as its lines are ready to cross and go down. At the same time, MACD histogram has moved to the positive zone, forming a strong buy signal; Bollinger bands are diverging, confirming uptrend. We can conclude that downward correction will be of short term and the price will continue to rise up to 102.55 and 102.80.

Trading tips

Short-term short positions with the target of 102.07 can be opened at the current price. Pending buy orders with take profit at the level of 102.55 are recommended at the level of 102.07.



Dmitriy Zolotov
Analyst of LiteForex Group of Companies

[LiteForexTeam]

GBP/USD: new highs are in prospect

Current trend

As expected, following deep correction the pair GBP/USD went up again. The rise interest to the USD was only temporary. As soon as the pair reached the bottom limit of the ascending channel, demand for the Pound has increased. Even weak data on retail sales in Britain could not put pressure on the pair, while positive consumer price index, which met expectations, provided support to the pair. Favourable US statistics, released on Tuesday, has not changed the situation. This morning the pair soared up to the local highs of 1.6810 due to positive statistics on the British labour market.
It is expected that the pair will continue to move in the ascending channel with the targets of 1.6880 and 1.6930. The pair may receive additional support today due to decline in the USD caused by the decrease in the US industrial output.

Support and resistance

Support levels: 1.6770, 1.6700, 1.6660 and 1.6600.
Resistance levels: 1.6810, 1.6880, 1.6930 and 1.7000.

Trading tips

It is recommended to trade in accordance with trend, placing pending buy orders from the bottom limit of the channel at 1.6770 with take profit at 1.6880 (1.6930).



Dmitry Likhachev
Analyst of LiteForex Group of Companies

[LiteForexTeam]

EUR/USD: Leaders of Eurozone are concerned about high exchange rate of Euro

Current trend

Investor interest to European currency is growing significantly despite the statement of ECB leaders that high exchange rate of Euro is not favourable for exporters of Eurozone and it also slows down economic growth rate. Rumours says that, due to strengthening in Euro, Central Bank of China has transferred part of the assets from American currency to Euro.
Meanwhile, the rise in the major pairs is obviously associated with the decline in the USD caused by outflow of investors’ assets. Reduction in the volume of assets purchase program in the USA was aimed at increasing exchange rate of the national currency; however the result was the opposite. Even negative German statistics does not put much pressure on the pair EUR/USD. As became known consumer price index in Germany was -0.3%. The news on number of the initial applications for unemployment benefits in the USA will be released today; the index is expected to rise.

Support and resistance

It is expected that the price will continue to move in the ascending channel, experiencing deeper corrections. It is unlikely that ECB will let significant rise in European currency, Psychological level can be set at the line 1.4200. In the nearest future pair can go up to the upper limit of the ascending channel at the level of 1.4000.

Support levels: 1.3820, 1.3700, 1.3640 and 1.3570.
Resistance levels: 1.3950, 1.4000, 1.4100 and 1.4200.

Trading tips

It is recommended to trade in accordance with existing trend, placing buy orders from the bottom limit of the channel at 1.3700 with take profit at 1.4000 (1.4200).



Dmitry Likhachev
Analyst of LiteForex Investments Limited

[LiteForexTeam]

Brent: general analysis

Current trend

Yesterday quotes of the crude oil Brent had reached the upper limit of the trading channel at the level of 110.26 and started to decline. At the moment oil is trading at the level of 109.61. Important support level of Murrey 8/8 is at the level of 109.39. If the price breaks down this level today, downward movement can continue up to108.59.
Note that oil prices are supported by instability in Ukraine. Aggravation of the situation in the East of the country and activization of pro-Russian sentiments as well as threat of large-scale military operation pushes up quotes of the black gold. Emergency meeting of UNO, which was held on Monday and aimed at finding ways to stabilize situation in Ukraine was not effective. Russian Federation has opposed any military actions in the East of Ukraine and Western countries keep accusing Russia is escalation of tension. Today a meeting of four parties will be held in Geneva. Russia, Ukraine, USA and EU will discuss ways to settle situation in Ukraine. In the near future quotes of oil will be determined by developments in Ukraine.

Support and resistance

The nearest resistance level is 110.30 – the upper limit of the trading channel.
Support levels are 109.38 – 8/8 Murrey level .

Trading tips

It is recommended to open long positions after breakdown of the level of 110.26 with stop-loss at 110.00 a target of 112.20.



Dmitriy Agurbash
Analyst of LiteForex Investments Limited

[LiteForexTeam]

USD/CAD: The pair is traded in the narrow channel

Current trend

This week the pair has traded in the narrow sideways channel of 1.0958-1.1020, (which coincides with Fibonacci lines of 23.6% and 38.2%). The quotes have been smoothly moving to the upper limit of the channel. The USD was supported by strong statistics on US retail sales for March. This index has reached the level of 1.1%, which is the highest level since February 2013. On the other hand, Canadian dollar was supported by data on consumer price index in Canada for March. The index fell to 0.6%. At the moment there is a lull in the market, due to Easter holiday.

Support and resistance

In the near future sideways movement may continue in the channel of 1.0958-1.1020. Note, that the pair has tested the level of 1.1020, but failed to break down this level, which coincides with the key Fibonacci line of 38.2%, suggesting that downward movement to the level of 1.0958 can resume.

Technical indicators confirm a chance of downward movement. Bollinger bands are directed upwards, while the price chart is testing the moving average line. MACD histogram is in the positive zone; it has crossed the signal line from top to bottom. Stochastic lines have also crossed and are directed downwards.

Trading tips

In the current situation it makes sense to open short positions from the level of 1.0998 with the target of 1.0958.



Dmitriy Zolotov
Analyst of LiteForex Investments Limited

[LiteForexTeam]

GBP/USD: The USD continues to weakening; next target is the level of 1.7000

Current trend

On Wednesday positive data on British labour market had provided significant support the pair GBP/USD, due to which the pair soared up to the key resistance level of 1.6810. Demand for the British currency continues to increase despite lack of important macro-economic news and the fact that the Pound is significantly overbought. The pair has broken down key resistance level, but failed to consolidate above this level, going down to support level of 1.6770. Support to the weak USD was provided by favourable data on industrial output and labour market of the USA. Today is a holiday in the USA and UK, therefore, only investor sentiments can cause changes in price.

Support and resistance

It is expected that the pair will experience deep correction to the next support level of 1.6750, which is the bottom limit of the ascending channel. After that the pair will continue ascending movement to the levels of 1.6900 and 1.7000. Weak economic statistics and pessimistic statements of the chairman of the US Fed put pressure on the USD, increasing sales and causing further weakness in the American currency.

Support levels: 1.6770, 1.6750, 1.6700 and 1.6660.
Resistance levels: 1.6810, 1.6900, 1.6950 and 1.7000.

Trading tips

In the current situation it makes sense to trade in accordance with trend, placing pending order to buy from the from the bottom limit of the channel 1.6750 (1.6700) with take profit at 1.6900 (1.7000).



Dmitry Likhachev
Analyst of LiteForex Investments Limited

[LiteForexTeam]

EUR/USD: review and analysis

Current trend

Following sluggish trading last Friday, due to Easter holidays, currency pair EUR/USD slightly went up today reaching the moving average line of Bollinger bands indicator at the level of 1.3823. Today is also a day off; therefore economic releases are not expected. Volatility in the market will be low.

Support and resistance

On the four-hour chart Bollinger bands are directed sideways, demonstrating the lull in the market. MACD histogram is in the negative zone; its volumes are decreasing; however it is too early to say that buyers start to dominate.
Support levels: 1.3795, 1.3770 and 1.3745.
Resistance levels: 1.3830, 1.3865 and 1.3900.

Trading tips

If the pair breakdown resistance level of 1.3830, next target of the bulls will be the level of 1.3865. If downward movement starts to develop, sell positions can be opened after breakdown of the level of 1.3795 with the targets of 1.3770 and 1.3745.



Vadim Smarzh
Analyst of LiteForex Investments Limited

[LiteForexTeam]

USD/JPY: short term correction is possible

Current trend

Within last week currency pair USD/JPY traded in the ascending channel. Today quotes have reached two-week highs at the level of 102.70. The Yen was under pressure from negative Japanese statistics. It became known that trade balance deficit in the country has reached 1.71 trillion yen in March. The figure is close to the record of the whole period of crisis. At the moment, market is experiencing downward correction, which may continue up to the level of 102.35 (moving average line of Bollinger bands) or 102.55 (bottom limit of the channel). From this level the price is likely to reverse and continue upward movement to the levels of 102.80 and 103.00.

Support and resistance

Technical indicators give mixed signals. Bollinger bands are directed upward, the price chart has pushed off from the top moving average line, suggesting the decline to the level of 102.35. MACD histogram is in the positive zone, its volumes are increasing. Stochastic lines are directed upwards, but they may cross and reverse in the near future.

Support levels: 102.35, 102.25 and 102.00.
Resistance levels: 102.80, 103.00 and 103.25.

Trading tips

In the current situation it makes sense to open short positions from the current price level with the target of 102.35. It also advisable to place pending buy orders at the levels of 102.35 and 102.25 with the target of 103.00.



Dmitriy Zolotov
Analyst of LiteForex Investments Limited

[LiteForexTeam]

GBP/USD: Investors are in anticipation of the economic growth rate estimates by the Bank of England

Current trend

As expected, on Monday the pair did not demonstrate high volatility, trading in the range of 1.6790 – 1.6820. The Pound has strongly maintained positions only slightly going down amid positive US data. It became known that US index of leading indicators rose by 0.8%, which was above the forecast. This morning the Pound has regained losses and come close to the local highs. Demand for the British currency is still growing.
Today’s attention shall be focused on the US news. The data on housing price index for February, as well as the data on housing sales in the secondary market in March will become known.

Support and resistance

On Monday the pair has again reached the bottom of the ascending channel and pushing off from this level started to go up. Today, the pair will probably significantly rise, as demand for the Pound is expected to grow due to the release of the minutes of the meeting of the Bank of England. The minutes will show whether the British regulator is going to raise interest rate in the near future. Even vague hint on probability of changes in monetary policy of UK will add support to the pair and increase demand for the Pound. In the medium-term the pair will continue to move in the ascending channel to the target level of 1.7000.

Support levels: 1.6770, 1.6750, 1.6700 and 1.6660.
Resistance levels: 1.6820, 1.6900, 1.6950 and 1.7000.

Trading tips

In the current situation it makes sense to place buy orders from the lower limit of the channel 1.6750 (1.6700) with take profit at the level of 1.6900 (1.7000).



Dmitry Likhachev
Analyst of LiteForex Investments Limited

[LiteForexTeam]

USD/CAD: general analysis

Current trend

The Canadian dollar continues to trade in the narrow range of 40-50 points. Since the beginning of this week the pair has traded at 1/8 Murray level. Important resistance level is 1.1052, which is a moving average line with the period 200. The nearest support level is 1.0986, which coincides with 8/8 Murray level.
Yesterday US leading economic indicators have been released. Although the index was above the forecast, reaching the level of 0.8%, it did not have significant impact on the market.
Today, the data on the volume of wholesales sales in Canada for February will be released. According to preliminary forecast the index will amount to 0.7%, which will be below the previous one. The data on sales of existing homes in the USA will be also known today. The index is expected to fall to 4.55 million. Based on the preliminary data, strong volatility in the market is not expected.

Support and resistance

The nearest resistance level is 1.1052 – moving average with the period 200.
Support level is 1.0986 – 8/8 Murray level.

Trading tips

It is advisable to open short positions after breakdown of the level of 1.0986 with protective order of 1.1025 and a target of 1.0932.



Dmitriy Agurbash
Analyst of LiteForex Investments Limited