LiteForex Market Analytics

[LiteForexTeam]

GBP/USD: technical analysis

Current trend

This week has been one of the most difficult for the Pound in the time period of the downtrend. Monthly chart shows that the price currently reached one of the most important level of 1.5200.
Given current price movement in the downtrend within correction, the levels of 1.5200-1.5230 is the zone of Fibonacci retracement of 23.6%, which is the first level of correction. A lot will depend on the results of today’s election in the UK, and the American labor market statistics, which will become known tomorrow.
If the price goes up, next resistance level will be 1.5600, which coincides with 38.2% of Fibonacci retracement. If downtrend in the Pound resumes (which will be possible in case of breakdown of the levels of 1.5130 and 1.5030), the Pound will go to the local lows at the level of 1.4630.

Support and resistance

On the daily chart histogram OsMA is declining trying to reach zero level. As soon as it goes to the negative zone, it makes sense to open sell positions. Stochastic is in the sell zone; however the fact line has crossed the slow line from top to bottom, which gives a buy signal.

Resistance levels: 1.5250, 1.5370, 1.5440 and 1.5530.
Support levels: 1.5130, 1.5030 and 1.4940.

Trading tips

It makes sense to buy the pair in case of breakdown of the level of 1.5250 with take profit at 1.5440 and 1.5530. Sell positions can be opened after breakdown of the level of 1.1530 with the targets of 1.5060, 1.5030, 1.4940 and 1.4630.





Analytics of LiteForex Investments Limited

[LiteForexTeam]

Forex: Ichimoku Clouds. Review of Brent

Brent, H4

Let’s look at the four-hour chart. Tenkan-sen line has crossed Kijun-sen from above, forming trend reversal pattern “Dead Cross”. Chinkou Span line has crossed the price chart from above; current Kumo-cloud is ascending. The pair is trading around Senkou Span A (65.69) line and is trying to enter the cloud. The closest resistance level is Tenkan-sen line (66.91). The next obstacle for the price on its way down will be the lower border of the cloud at 64.02.



Brent, D1

On the daily chart Tenkan-sen line is above Kijun-sen, both lines are horizontal. Chinkou Span line is above the price chart; current Kumo-cloud is ascending. After long fall, the pair has been corrected under Tenkan-sen line, which is now a resistance level (66.94). Kijun-sen line will be a support level (61.97).



Key levels

Support levels: 64.02, 61.97.
Resistance levels: 66.91, 66.94.

Trading tips

On the four-hour chart the pair is going to enter the cloud, on the daily chart the pair is falling towards Kijun-sen line. Targets for the sell positions are around 61.97.

Analytics of LiteForex Investments Limited

[LiteForexTeam]

USD/CAD: trading signal

Current trend

Yesterday, volatility both of the USD and its major counterparts was high, which was caused on the one hand, by the fact that Conservatives won the parliamentary election in the UK, and on the other hand, by rapid decline in the pair NZD/USD. The fall in NZD/USD was provoked by the statement of the representatives of RBNZ about probability of the decrease in interest rate in June. EUR/USD is still under pressure from outstanding problems in Greece. Following yesterday’s strong fluctuation, the cross-pairs can undergo correction today, as well as the other currencies against the USD.
Let’s look at the charts of the pair USD/CAD. The indicators give signals for opening short positions.

USD/CAD:Н1 и H4

Histogram OsMA is below the zero line and is going down. Stochastic is in the sell zone. The trend indicator (lower window) on the periods of Н1-Н4-Daily is of the red color. The price is below the moving average lines of ЕМА144 and ЕМА200. The line SDL (fast and slow) is red.



USD/CAD:D1

On the daily chart the price is in the zone between 23.6% and 38.2% Fibonacci retracement. The price is moving towards the resistance level, which coincides with the moving average ЕМА144 (1.2040).



Hedging

In order to hedge risks it is recommended to open the opposite equivalent position in lots on the pair AUD/CAD. The rise in the pair AUD/USD against the USD and versus the New Zealand dollar in the cross-pair AUD/NZD speaks in support of long positions on the pair AUD/CAD. The position can be closed either when the estimated total profit is achieved on both pairs, or if the trend is being changed in the market.





Support and resistance

Resistance levels: 1.2040, 1.1965 and 1.1870
Support levels: 1.2110, 1.2140, 1.2180 and 1.2280

Trading tips

It is recommended to sell the pair USD/CAD on the current price with the targets of 1.2000, 1.1980, 1.1910 and 1.1710. If resistance level of 1.2140 is broken down and the price consolidates above the level of 1.2180, it makes sense to open long positions with the targets of 1.2280, 1.2430 and 1.2790.

Analytics of LiteForex Investments Limited

[LiteForexTeam]

USD/CAD: prices of futures for oil are increasing

Current trend

On Tuesday, the American Petroleum Institute (API) reported the decline in the commercial inventories of oil in the USA by 2 million barrels. Futures prices of oil are rising despite negative forecast of the International Energy Agency (IEA). The decline in the USD against other currencies, which continues since mid-April, provides support to the oil prices. Recall that the Canadian dollar is considered a commodity currency; therefore it is very sensitive to the fluctuation in oil prices.

Current situation is favourable for the Canadian currency; therefore it is strengthening against the USD. If we take 18 March as a starting point, the decline amounted 800 points. Currently, the pair is traded at the level of 1.1970, which coincides with 38.2% Fibonacci. Breakdown of this level can trigger further decline in price. A strong indication of the downtrend will be the consolidation of the price below the level of 1.1870, which goes along the line ЕМА200 on the daily chart. In this case the targets will be at the levels of 1.1720 (Fibonacci 50%) and 1.1470 (Fibonacci 61.8%). Indicators (OsMA, Stochastic channels and trend) on the periods of Н1, Н4 and Daily will suggest that short positions are advisable.

Support and resistance

Resistance levels: 1.1970 and 1.1870.
Support levels: 1.2025, 1.2040, 1.2085, 1.2110, 1.2140 and 1.2180.

Trading tips

Limit sell orders are recommended at the levels of 1.2000, 1.2025 and 1.2040. Sell positions can be opened after breakdown of the level of 1.1970 with the target of 1.1930.
Buy positions are advisable after breakdown of the level of 1.2085 with the targets of 1.2110, 1.2140, 1.2180 and 1.2280.





Dmitriy Zolotov
Analyst of LiteForex Investments Limited

[LiteForexTeam]

GBP/USD: analysis and forecast

Current trend

The main driver of yesterday’s movement in the market was poor data on the US retail sales for April. This index (which shows the changes in the volume of retail sales) was below the forecast, as it fell to 0.0% against expectations of 0.2%. Retail sales index excluding sales of the automobiles amounted to 0.1% against the forecast of 5%.
Some important British news was also released yesterday: in the monthly inflation report, the Bank of England has downgraded forecast of GDP growth from 2.7% to 2.4% for 2016 and from 2.9% to 2.6% for 2017. The timing of the interest rate increase was rescheduled for the mid-2016. After the release of the report by the British regulator, the Pound fell to 1.5647, and later reached the level of 1.5633, amid the American news. Nevertheless, by the end of the day the pair GBP/USD has regained lost positions rising up to 1.5743.
At today’s Asian session the USD declined versus all major currencies, and after breaking down resistance level of 1.5750, the pair GBP/USD is traded at the level of 1.5780. It is expected that the pair will move in the uptrend, as there is no important news scheduled for the release on Thursday.

Support and resistance

The indicator OsMA also suggests buy positions (rising histogram in the daily timeframe). Stochastic and trend indicator of the green color shows long positions on D1.
However, it is worth paying attention to the daily chart of the cross-pair EUR/GBP, where the Pound is declining against the USD. Therefore, it is recommended to open buy positions if the pair GBP/USD rebounds to the levels of 1.5750, 1.5725 or 1.5700. The nearest targets can be at the levels of 1.5800 and 1.5900 (Fibonacci 50%). The signal of the completion of the downtrend and development of the uptrend is the breakdown of Fibonacci level of 38.2% (1.5595). In case of the uptrend the pair will be targeted at the level of 1.6200. As an alternative scenario we can consider the decline in the Pound to 1.5595 (Fibonacci 38.2%) or further down to 1.5540 (ЕМА200). After breaking down EMA144 (1.5380) the Pound can continue downtrend.

Resistance levels: 1.5750, 1.5900, 1.6000 and 1.6160.
Support levels: 1.5595, 1.554 and, 1.5380.

Trading tips

It is preferable to place buy orders with the nearest targets of 1.5800, 1.5850 and 1.5900. However, it is better to enter into long positions at the rebound to the levels of 1.5750, 1.5725 or 1.5700. Sell positions with the targets of 1.5540 and 1.5440 are advisable after breakdown of the level of 1.5595.





Analystics of LiteForex Investments Limited

[LiteForexTeam]

EUR/USD: technical reversal of the trend has increased demand for Euro

Current trend

Throughout a month European currency has been growing against the USD amid weakening in the American currency. The data on all sectors of the American economy shows slowdown of economic growth. The decrease in demand for the USD has provoked investors into buying the Euro and the Pound.
Additional support to European currency has added favourable data on the key indices of Germany, France and Europe as a whole. The number of industrial orders on Germany has grown. GDP of France has exceeded all expectations. From the technical point of view the pair EUR/USD has broken down all possible resistance and technically reversed downward trend.
Attention today shall be focused on the US news on the industrial production, capacity utilization and consumer sentiment index. The rise in yields on government bonds in Germany will add attraction to the Euro.

Support and resistance

It is likely that the USD will win back some of the losses and the pair will reach the level of 1.1280. The trend will remain upward. Next week, information on the key indices of Eurozone can inspire investors and the pair may continue upward movement with the target of 1.1600. Most of the indicators show the rise in the pair; the volume of the long positions continues to grow. In the medium-term uptrend will continue with the transition to the consolidation stage.

Support levels: 1.1280, 1.1215, 1.1150, 1.1075, 1.1020 and 1.0920.
Resistance levels: 1.1385, 1.1450, 1.1540, 1.1600 and 1.1670.

Trading tips

It is recommended to open long positions at the current price from the key support levels of 1.1250 and 1.1150 and take profit at the level of 1.1600.



Analytics of LiteForex Investments Limited

[LiteForexTeam]

GBP/USD: the pair remains in the ascending channel

Current trend

In the mid-April the pair had reached the local lows, after which the pair reversed and went up. The rise in the pair was caused by favourable macro-economic British data. Over a couple of weeks the Pound gained over 900 points versus the USD and after that the pair corrected downwards. Later, the pair continued to rise and exceeded the key resistance level. Investors noticed the change in trend and started to open long positions. Last week, the Pound traded at the level of 1.5815 (the local highs of last November) against the USD.

During this week the British currency fell against the USD amid negative data on the key British indices. The pair had dropped over 150 points and continued to decline.
Today, attention should be paid to the data on the US construction sector. On Wednesday the minutes of the Bank of England will become known, The UK retail sales data will be released on Thursday. Mark Carney, the head of ECB will make a speech on Friday. First of all focus attention on the minutes of the Bank of England. If they reflect favourable economic situation in Q2, it will add support to the British currency.

Support and resistance

Despite significant decline in the pair today, uptrend continues and the Pound is still rising against the USD to the resistance levels of 1.5875, 1.5920 and 1.6000. However, it is possible that the pair will sharply go down after the release of the minutes of the Bank of England.

Support levels: 1.5530, 1.5495, 1.5440, 1.5355, 1.5300 and 1 .5250.
Resistance levels: 1.5610, 1.5675, 1.5750, 1.5800, 1.5815, 1.5875, 1.5920 and 1.6000.

Trading tips

It is recommended to open long positions with stop-loss below the key support level of 1.5495 and take profit at the levels of 1.5815, 1.5920 and 1.6000. In addition, it is also advisable to place pending sell orders below the level of 1.5495, on the breakout caused by fundamental data.



Analystics of LiteForex Investments Limited

[LiteForexTeam]

USD/JPY: the East is a delicate matter

Current trend

Despite the ups and downs of the world currencies against the USA, the pair USD/JPY is notable for the stable movement in the channel of 122.00–116.00. Deviations in both directions as a rule do not exceed 120 points. On the one hand, it is easy to make forecast in this conditions, supposing further movement in price in the range of 121.20–118.80; on the other hand, it is difficult as in the long-term a lot will depend of the interest rate decision of the Bank of Japan.
Currently, the interest rate of Japan is 0.1%. In the short-term monetary policy of the Bank of Japan will remain soft; however, in case of deterioration of economic statistics the interest rate can be lowered.
This morning at 02:50 (GMT+3) the pair was supported by the Japanese GDP for Q1 (real GDP rose by 2.4% in January-March against the forecast of growth by 1.5%).Tokyo stocks and Nikkei went up.
At 21:00 (GMT+3) the minutes of the US Open Market Committee (FOMC) will be released. If the minutes give positive assessment of the economic and financial situation in the USA, the pair will get additional support and in case of breakdown of the level of 121.20, the price will reach the level of 121.50, the growth can continue up to 122.00 until the end of the week.
If the US news is negative, the pair will go to the bottom limit of the channel at 118.80, on its way breaking down the levels of 120.00, 119.80 and 119.30. However, it is unlikely that the pair will go further down.

Support and resistance

Support levels: 118.80, 119.60 and 120.00.
Resistance levels: 121.20 and 121.50.

Trading tips

It is recommended to place pending orders BuyStop at the price 121.20 with the targets of 121.50 and 121.75.
Alternative scenario: pending orders SellStop at the price of 120.50 with the targets of 120.00, 119.60, 119.30 and 118.80.



Ilya Lashenko
Analyst of LiteForex Investments Limited

[LiteForexTeam]

USD/CHF: after the 15th of January

Current trend

If we trace movement of the pair USD/CHF since 15 of January when the National Bank of Switzerland decided to decouple the rate of the national currency from the Euro, we will notice that the pair is trying to reach 0.9450, moving in the channel of 0.9720-0.9120. Despite the efforts of the Swiss regulator to weaken the national currency, Swiss Franc continues to act as a safe haven. Nevertheless, the pair remains vulnerable to the events in the USA and Eurozone.

During today’s Asian session the USD has corrected versus the major currencies after the release of the minutes of the US Fed meeting on Wednesday, which says that the increase in the interest rate is unlikely in the mid of the year. The leaders of the US Fed expressed doubts about the necessity of the interest rate increase after the release of the US negative statistics last week.

In the medium-term the pair is supported by positive attitude of the market to the USD, negative interest rates of Switzerland and the threat of intervention from the National Bank of Switzerland.

However, the rise in the pair USD/CHF is restricted by the demand for Franc in the declining pair of EUR/CHF. In May, the index of economic sentiments in Switzerland demonstrated growth (–0.1 versus –23.2 in April, as per ZEW Credit Suisse), which also supports Franc.

Support and resistance

On the four-hour chart the price has rebounded from the levels of 0.9410 (ЕМА200) and 0.9365 (ЕМА144) and is now moving down to the nearest resistance level of 0.9285. The indicators OsMA and Stochastic are in the sale zone.

Уровни поддержки: 0.9365, 0.9410, 0.9450
Уровни сопротивления: 0.9285, 0.9245, 0.9120

Trading tips

For the period while the market is affected by the minutes of the US FOMC meeting, it makes sense to open short positions with the nearest targets of 0.9285 and 0.9245 and long-term target of 0.9120. Future dynamics will depend on the market’s attitude to the USD. The bottom limit of the downward channel (green color on the daily chart) is at the level of 0.8900. Alternative scenario is the movement in the pair to 0.9720, after breakdown of strong resistance level of ЕМА200 and the price level of 0.9450.





Analystics of LiteForex Investments Limited

[LiteForexTeam]

EUR/USD: Mario Draghi calls for more vigorous actions

Current trend

During the European session the USD was not declining any more to the major currencies except for the Euro, which has significantly grown. At 09:00(GMT+3) GDP of Germany became known. In Q1 this index rose by 0.3% on the quarterly basis and by 1.1% on annual basis, which shows economic recovery in Eurozone. Note that according to the forecast, GDP of Eurozone will rise by 1.5% and in 2016 and 2017 by 2%.
The chairman of the European Central Bank Mario Draghi asked governments of the European countries to apply all efforts for reforming economies in their countries. The pair EUR/USD has reached the level of 1.1200 and now the chances of growth in the pair has increased due to the uncertainty of the US Fed in regards to the issue of tightening momentary policy.

Support and resistance

On the last trading day of this week volatility is high, which has been demonstrated at the Asian and European sessions. The currencies demonstrate mixed trading against the USD. Technical picture can be changed by the fundamental data today. It is better to stay off board today.
On the four-hour chart Euro is traded near support level of 1.1090 (ЕМА200) and 1.1125 (ЕМА144). If the US data, which are going to be released today, will be negative, Euro will rise and go up to the today’s highs at the level of 1.1200 and can go further up to the resistance level of 1.1290 (23.6% Fibonacci). On the daily chart the pair is near the middle line of the upward corrective channel (green color). The Upper limit of this channel goes across resistance level of 1.1525 (ЕМА144). The bottom limit of the channel is at the level of 1.0860.

Resistance levels: 1.1200, 1.1290, 1.1350 and 1.1410
Support levels: 1.1090 and 1.1125

Trading tips

If the resistance level of 1.1090 is broken down, the pair will go down to 1.1020 and 1.0860 and 1.0720. Sell Stop orders can be placed at the level of 1.1050 with the nearest targets of 1.1020 and 1.0980.
As an alternative scenario the pair can go up to 1.1200 and 1.1290. Breakdown of the level of 1.1290 (23.6% Fibonacci) will open the way to 1.1450 and 1.1525 (ЕМА144).






Analystics of LiteForex Investments Limited