"Fort Financial Services"- fundamental and technical analysis.
31.10.2016
Euro
General overview
Investors were cautious ahead of the US GDP and did not hurry to trade on Friday. The weak Eurozone data weighed on the euro. Despite the positive GDP the EUR/USD remained under pressure. The dollar fell by the end of Friday trades when FBI discovered new emails relating to Hillary Clinton case.
Current situation
The price modestly recovered during the past Asian session and traded slightly above 1.0900 during the European hours on Friday. The pair reached the mark 1.0926 and immediately rolled back Post-European open. The pair rallied upwards in the middle of the European session. The EUR/USD broke 1.0950 and advanced towards 1.1000. The moving averages extended their decline in the 4 hours chart. The price broke the 50-EMA and tested the 100-EMA in the same chart. The resistance comes in at 1.1000, the support lies at 1.0950.
MACD moved into the positive area. MACD grew which indicates the sellers’ positions weakening. The RSI moved upwards.
Trading recommendations
The pair now seems to be heading towards its immediate resistance near 1.1000. If the upwards pressure persists buyers will break the level. After broking the level bulls may lead the price towards 1.1050. We do not exclude a roll back towards 1.0950.
Pound
General overview
There were no major events on the UK schedule on Friday. The stronger-than-expected GDP in the UK supported the pound. Meanwhile the dollar slightly weakened on the back of the mixed U.S. statistics.
Current situation
The pound remained under pressure in its intraweek trading range. The price stayed below the level 1.2200 on Friday. Sellers pushed the price lower and tested the level 1.2100 later the day. After testing the level the GBP/USD pair bounced from it and returned to the 1.2200 region. The moving averages keep heading lower in the 4 hours chart. The current resistance is seen at 1.2200, the support is at 1.2100.
MACD is in the negative area. MACD decreased which confirms the strength of the sellers’. RSI is within the oversold area.
Trading recommendations
Despite a recovery the price returned some of its losses by the end of the week. Should the GBP/USD break the level 1.2200 the pair may extend its gains towards 1.2250. Sellers might try to push the prices lower. Their primary goal is the level 1.2100.
Yen
General overview
The yen traded steady on Friday following Japanese consumer prices data which came in largely as expected.
Current situation
USD/JPY edged higher on Friday. Buyers tested the level 105.50, but failed to break it. The price bounced downwards after testing the mark. Sellers broke 105.00 and tested the level 104.50. The moving averages are still pointing higher in the 4-hours chart. The resistance can be found at 105.00, the support comes in at 104.50.
MACD is in the positive area. MACD remained at the same level which confirms the strength of buyers. RSI is in the overbought area.
Trading recommendations
Sellers seem to have returned in the game. If the price maintains its bearish tone sellers will break 104.50 and will break through 104.00.
AUD/USD
General overview
The Aussie traded lower on Friday as home sales in Australia did not meet traders’ expectations and moved from the previous month's pace.
Current situation
The price maintained its bearish tone in the European session on Friday. The AUD/USD tested the level 0.7570 in the middle of the European trades. After testing the level the pair continued heading lower and refreshed the weekly low at 0.7562. However, the downward pressure eased right after the test, the AUD rolled back and erased a minor part of its losses. The price broke the 200- EMA on its way downwards, but soon returned back. The 100 and 200 EMAs are neutral, the 50-EMA is turning downwards in the 4 hours chart. The resistance is at 0.7600, the support can be found at 0.7570.
MACD is in the negative area. MACD decrease which indicates the buyers’ positions weakening. The RSI is within oversold area.
Trading recommendations
We recommend going short with the first target – 0.7570. When the price consolidates below the first target it may go to the level 0.7540.
XAUUSD
General overview
Gold prices strengthened as disappointing Initial Jobless Claims and Durable Goods releases rose uncertainty over the timing of future rate hike
Current situation
The bearish scenario prevailed the first part of the day. Gold prices met a barrier in the 1270 region which limited its further gains. Gold futures bounced from the level and moved lower, staying around 1265 ahead of the US opening. The yellow metal bounced from 1265 in the New York session, the price jumped to 1270 dollars per ounce. After breaking the level gold prices tested 1280. The yellow metal broke the 50 and 100 EMAs in the 4 hours chart. The 50 and 100 EMAs are neutral, the 200-EMA kept heading lower. The resistance is at 1280, the support comes in at 1270 dollars per ounce.
MACD indicator is at the centerline. If the histogram enters the negative territory, that will indicate sellers’ growing strength. If MACD returns into the positive area the buyers will take control over the market.
Trading recommendations
The pair now seems to be heading towards its immediate resistance near 1280. After breaking 1280 the level 1290 will come back to the radar.
Brent
General overview
Brent futures traded lower on Friday due to uncertainty over OPEC output agreement.
Current situation
Brent oil futures bearish trend remained intact. Oil prices remained in a near-term descending channel and stayed around 50.50 in the European session on Friday. Brent futures tried to recover after a sharp drop on Thursday. However, the recovery was weak and was caused by profit taking. Oil prices moved lower ahead of the North American session and tested the level 49.50 by the end of the trades. The 100 and 50 EMAs are moving downward, the 200-EMA is pointing higher. The resistance is at 50.50, the support comes in at 49.50 dollars per barrel.
MACD is in the negative area. MACD declined which confirms the sellers’ positions strengthening. The RSI is within oversold area.
Trading recommendations
We suppose the Brent oil prices will go to 49.50 first. Having overcome the first target the price might advance towards 48.50.
DAX
General overview
European stocks closed lower on Friday, reaching one week low. According to corporate earnings reports Novo Nordisk Gemalto shares lost about 10%.
Current situation
DAX gapped lower at the open and continued moving lower after the gap on Friday. The index extended its losses towards 10600 during the day. The 50-EMA crossed the 100-EMA downwards in the 4 hours chart. The 100 and 200 EMAs are neutral, while the 50-EMA is heading south. The resistance is seen at 10700, the support is at 10600.
MACD is in the negative area. MACD declined which confirms the sellers’ positions strengthening. The RSI is within oversold area.
Trading recommendations
As the most probable scenario, we consider further moving downwards towards the level at 10600.
NASDAQ
General overview
Despite the positive GDP Q3 the U.S shares closed the week bearish. FBI reopened Hillary Clinton probe after finding new emails related to her closed investigation.
Current situation
Sellers continued to dominate in the market. NASDAQ index broke the level 4800 on its way downwards. After breaking the level the index continued to lose its value and refreshed the weekly low at 4788. After setting a new low the price rolled back in the 4835 region. However, buyers failed to stay there and the quotes returned back to 4800. The moving averages are neutral in the 4 hours. The resistance is seen at 4835, the support is at 4800.
MACD is in the negative area. The histogram remained in the same level which confirms the strength of the sellers’. RSI oscillator is within oversold area.
Trading recommendations
The level 4800 seems the next probable bearish target. The level 4770 is the second sellers’ target.
*Analytical review is presented by the leading analyst of the broker Fort Financial Services, Alexander Kofman