"Fort Financial Services"- fundamental and technical analysis.
28.12.2016
Euro
General overview
The dollar strengthened on Tuesday when some traders decided to take their chance to trade before New Year holidays.
Current situation
The pair maintained a neutral stance trading around Friday's closing levels on Tuesday. The euro struggled around 1.0450 during the day. The 4 hours chart showed that the price tested the 50-EMA. All moving averages maintained their bearish slope. The resistance is at 1.0450, the support comes in at 1.0400.
MACD indicator is at the centerline. If the histogram returns the negative territory, that will indicate sellers’ growing strength. If MACD enters into the positive area the buyers will take control over the market. RSI remained within neutral territory.
Trading recommendations
An advance beyond 1.0450 will help buyers to extend their gains towards 1.0500. On the other hand the price could fall to 1.0350 if sellers return control.
Pound
General overview
The dollar strengthened versus the pound on Tuesday due to low volatility as British markets were closed amid Christmas celebration.
Current situation
The pound was in a consolidation during the first part of Tuesday. The pair was hanging below 1.2300 before a fresh selling interest weighed on the major. Traders pushed the pair lower towards last week low at 1.2227. According to the 1 hour chart the price bounced off the 50-EMA downwards. The moving averages kept heading lower in the same chart. The resistance lies at 1.2300, the support comes in at 1.2200.
MACD declined which indicates the sellers’ positions strengthening. The RSI indicator remained within oversold readings.
Trading recommendations
If the bearish tone persists we expect a breakout of the level 1.2200 in the short-term. If the pair manages to make a breakout the next sellers’ target for this pair is the support level of 1.2100.
Yen
General overview
The yen ignored a bunch of Japanese inflation data staying around its recent lows on Tuesday. The BoJ published National Consumer Price Index, Unemployment Rate and Overall Household Spending.
Current situation
The overall bullish structure remained intact on Tuesday. USD/JPY traded sideway yesterday amid low liquidity due to Christmas holidays. The price was flirting with the 50-EMA in the 4 hours chart. The pair was between the 50 and the 100-EMAs during the day. The 50, 100 and 200 EMAs pointed higher. The resistance is highlighted at 118.00, the support comes in at 117.00.
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. RSI remained within neutral territory.
Trading recommendations
USD/JPY is having difficulties to go any higher. The pair now seems to be heading towards its immediate support near 116.00. Meanwhile, we believe the pair will continue a weak trading until the end of the week.
USD/CAD
General overview
Canadian markets were closed in observance of Boxing Day. Meanwhile, last week's GDP and CPI releases seem to have renewed speculations that the Canadian regulator may ease its monetary policy further in the nearest time.
Current situation
Buyers are still in control holding the pair around 6 week highs. The U.S. dollar reversed some of its losses when traders moved the price from 1.3500 to 1.3540. The upward momentum faded around the current hurdle as buyers met sellers' resistance. USD/CAD remained above the moving averages in the 4 hours chart. We note that the 50-EMA crossed the 100 and the 200-EMA upwards. The 100 and the 200-EMA were neutral while the 50 EMA pointed higher. The resistance is at 1.3540, the support comes in at 1.3470.
MACD decreased which indicates the buyers’ positions weakening. The RSI indicator remained within overvalued readings.
Trading recommendations
A failure to break above 1.3540 may lead to a downward correction which will start as soon, as the pair drops below the support level 1.3470. The potential sellers’ target is 1.3400. If buyers succeed to make higher the pair may extend their gains to 1.3589.
XAU/USD
General overview
Gold prices grew in the light market ahead of the New Year holidays.
Current situation
Gold prices were able to recover on Tuesday. The price started the day with a slow growth from last week lows. The pair accelerated ahead of the Europe opening when the yellow metal spiked through 1140 towards 1150 dollars per ounce. After testing the level prices moved back and returned to 1140 at the start of the NY session. According to the 4 hours chart the price broke the 50-EMA and tested the 100-EMA. XAU/USD stayed between the 50 and the 100-EMAs during the day. All moving averages pointed lower. The resistance exists at 1140, the support stands at 1130 dollars per ounce.
MACD entered the positive area. If MACD remains in the positive territory, buyers’ positions will strengthen. The RSI indicator remained within overvalued readings.
Trading recommendations
The overall outlook remains bearish, for decline towards 1130 handle area. Buyers need to hold above 1140 to extend their bullishness.
Brent
General overview
Oil prices traded higher on Tuesday on expectations over the first output cut deal between OPEC and non-OPEC members in 15 years which will begin on Sunday.
Current situation
Sellers failed to regain 54.50 level on Tuesday. Having faced rejection the price turned around and returned to a growth. Brent was slowly moving upwards towards 55.50 dollars per barrel during the European session on Tuesday. The benchmark tested the level at the beginning of the New York session. The 4 hours chart showed that the price bounced off the 100-EMA and broke the 50-EMA upwards. The price advanced away from the moving averages. The 100 and the 200-EMAs pointed higher while the 50-EMA was neutral in the same chart. The resistance lies at 55.50, the support comes in at 54.50 dollars per barrel.
MACD indicator is at the centerline. If the histogram returns the positive territory, that will indicate buyers’ growing strength. If MACD enters into the negative area the sellers will take control over the market. The RSI indicator left the neutral territory upwards.
Trading recommendations
The price maintained its bearish tone in the 4 hours chart. In the scenario where the buyers keep control the benchmark will break above 55.50 and advance towards 56.50, en route 57.50 dollars per barrel.
DAX
General overview
European shares inched higher on Tuesday after Christmas holidays. Meanwhile Parmalat shares were on the upside when France's Lactalis launched a buyout offer for shares in Italian group Parmalat.
Current situation
The index traded range-bound to higher, staying in a tight range above 11400 on Tuesday. The price tested the 50-EMA in the 1 hour chart. DAX was above the moving averages which kept heading higher in the same chart. The resistance exists at 11500, the support stands at 11400.
MACD decreased which indicates the buyers’ positions weakening. The RSI indicator remained within overvalued readings.
Trading recommendations
The bullish trend remained intact. A break above 11500 would open the way to 11600.
NASDAQ
General overview
Wall Street futures opened higher getting support from energy stocks.
Current situation
After a consolidation around 4940 during the day the index rallied towards 4980 at the beginning of the NY session. The benchmark kept growing higher after the break and headed towards 5020. According to the 4 hours chart the price bounced from the 50-EMA. The moving averages maintained their bullish slope. The resistance is at 5020, the support comes in at 4980.
The MACD histogram grew which indicates buyers’ strength. The RSI indicator left the neutral territory and headed upside.
Trading recommendations
A bullish tone prevailed in the 4 hours chart. After a close above the resistance at 4980 the price may extend its growth to 5020.
*Analytical review is presented by the leading analyst of the broker Fort Financial Services, Alexander Kofman