The market has been pushing lower aggressively after breaking below major DEMAND LEVELS around 1.2000 and 1.1860 where historical bottoms were previously established back in 2012 and 2010.
Further actions from the ECB regarding QE are still doubted due to the ECB’s policy meeting on January 22. EUROZONE current account stepped down to €18.1 billion which is eight-month low.
All of this is strongly affecting the market leading to the current long-term negative sentiment of the EUR/USD pair. Moreover, today, the U.S. markets are closed for celebration of Luther King Day.
The pair has lost almost 490 pips since the beginning of 2015, as the market has revisited the lowest rates since November 2003.
The market currently looks oversold below the price level of 1.2000 and 1.1900 (prominent psychological SUPPORT and the lower limit of the movement channel on the H4 chart).
Currently, SELLING the EUR/USD pair should be avoided as much as possible at such historically low prices.
On the other hand, BUYING the pair is considered a low-risk opportunity but with low probability after such strong bearish trend. That is why bullish pullback should be anticipated looking for better prices to sell the pair off.
The price zone of 1.1750-1.1820 is the recently established SUPPLY zone. Short-term SELL positions can be taken there. Stop loss should be placed above the price level of 1.1880.
Many previous lows were established around 1.5550 where the GBP/USD pair found temporary DEMAND in November 2014. A bearish breakout was expressed after many unsuccessful attempts back in 2014.
A bearish breakout scenario similar to what happened back in October was successfully executed shortly after. The final bearish target was expected to be around the price level of 1.5140.
The market has already pushed further below this level on Friday reaching the lower limit of the depicted bearish channel around 1.5050.
The GBP/USD pair has shown bullish recovery off the price level of 1.5050 which is manifested in the successive bullish hammer daily candlesticks. This was enhanced by the positive UK Manufacturing production data that emerged last week.
The price level of 1.5100 has been defended by bulls since the start of 2015. Bullish fixation above 1.5130-1.5180 is mandatory to maintain the current corrective movement towards 1.5400.
Consolidation movement range between the price levels of 1.5770 and 1.5550 represented the state of indecision on the market after such a long bearish rally that started off 1.7100 and 1.6500.
As anticipated, the bearish breakout below 1.5550 exposed lower targets directly. Bears have already reached the price level of 1.5050 that has not been hit since August 2013.
For RISKY traders, LONG entries were suggested around the price level of 1.5100. Stop Loss remains below the price level of 1.5075 (Tuesday's and recently Thursday's low).
Conservative traders should wait for a bullish pullback towards the recent SUPPLY zone around 1.5480-1.5550 for a low-risk SELL entry. The stop loss should be located above 1.5560.
Overview:
The GBP/USD pair has been moving downwards respecting the depicted bearish channel since mid-September 2014 when the ongoing channel was initiated.
On December 17, the market failed to express a bullish breakout above the upper limit of the daily bearish channel. Shortly after, an extensive bearish pressure was applied against the price levels of 1.5540-1.5560 on December 23.
Daily closure below the recent bottoms established around 1.5540-1.5560 rendered the previous consolidation range as a bearish flag pattern with projection target at 1.5300.
The market has already pushed further below this level reaching down to 1.5030 where the lower limit of the channel provided significant support for the pair.
Bullish recovery was manifested by the ascending bottoms being established on the H4 chart. Since the pair hit the recent high around 1.5260, successive bearish pressure has been applied resulting in the flag pattern on the H4 chart.
The key-support zone for today's movement is located at 1.5100-1.5160 (the lower limit of the short-term flag pattern). Fixation above it enhances the bullish side of the market towards 1.5260 and 1.5380.
However, within such strong bearish trend you should not exclude the other scenario that the H4 fixation below 1.5150 and 1.5100 indicates further bearish tendency on the market, probably, new lows below 1.5030 are going to be hit.
Trading recommendations:
Price zone of 1.5350-1.5380 (50% - 61.8% Fibonacci Levels and the upper limit of the daily channel) should be watched for new SELL entries with SL as daily closure above 1.5400.
Overview:
During the past few weeks, the USD/CAD pair established a temporary consolidation zone between the price levels of 1.1560 and 1.1670. This price zone roughly corresponds to 61.8% prominent WEEKLY Fibonacci level bullish breakout above which allowed bulls to reach the price levels of 1.1850, 1.1950 and recently 1.2045 where new highs have been established.
The nearest H4 support that is the price zone of 1.1800-1.1750 provided excellent SUPPORT for the pair on Thursday. LONG positions were suggested at retesting.
Note the newly established short-term channel being expressed since the price level of 1.1750 extended up to 1.2050. It happened because the market looks quite overbought since bulls have pushed further above the upper limit of the long-term movement channel. Hence, bulls should be conservative with their targets.
This minor channel pattern may indicate bearish reversal, if confirmed, with H4 bearish breakdown of the lower limit and the recent support around the levels of 1.1870-1.1900.
Otherwise, if bulls keep defending the recent INTRADAY SUPPORT around 1.1920 down to 1.1850, the market bias will remain positive probably targeting at 1.2090.
Trading recommendations:
LONG positions are suggested at retesting the lower limit of the DAILY channel and 61.8% Fibonacci level (1.1750 - 1.1700) with SL placed below 1.1650.
Counter-trend risky traders can wait either for a bullish spike towards 1.2090, or for the H4 bearish breakdown below 1.1850 to SELL the pair aiming for 1.1750 and 1.1700.
Technical outlook and chart setups:
The EUR/JPY pair is seen to be bouncing off just ahead of its major support at 134.00 levels. The pair touched lower at 134.70/80 levels last week but did not penetrate below 134.00 levels. The bigger picture depicted here is clearly indicating that a long-term support trend line has been broken. A possible test of the support turned into resistance line could be due now at least 140.00 levels and could extend up to 143.00 levels. It is recommended to remain long from last week and also add fresh longs now, risk remains below 134.00 for now. Intraday dips could be regarded as buying opportunities. Immediate support is seen at 134.00 levels while resistance is seen at 138.80 levels respectively. Bulls might be preparing for a counter trend rally for now.
Trading recommendations:
Remain long, stop below 134.00, target is open.
Good luck!
Technical outlook and chart setups:
The GBP/CHF pair has been trading in a wide and volatile range between 1.2600 and 1.3400 levels and is forming a cone type consolidation on the H4 chart view (a monthly chart view has been depicted here for the bigger picture). The shorter time frames are indicating a potential counter trend rally from the current levels. Immediate support is seen at 1.29/10 levels, followed by 1.2800 and 1.2650 while resistance is seen at 1.3380 levels, followed by 1.3500 and higher respectively. It is recommended to initiate 50% long positions at the current price (1.3170/80), risk remains at 1.2850/60 for now.Looking at the larger picture here, it looks like the pair has hit Fibonacci 0.618 resistance at sub 1.5500/50 levels last week and the next lower target would be below 1.1500 levels in the weeks to come.
Trading recommendations:
Initiate 50% long positions now, stop at 1.2850/60, target is open.
Good luck!
Overview:
In our last analysis EUR/NZD was trading sideways around the price of 1.4900. According to the daily time frame, we can observe strong supply in an ultra high volume (selling climax) in the background, so selling EUR/NZD at this stage looks very risky. Our Fibonacci expansion 161.8% at the price of 1.4900 is on the test. Be careful when selling since we may expect reaction from buyers. According to the H1 time frame, we can observe selling climax in the background and demand in an average volume. Any larger demand in a high volume may confirm further larger bullish corrective phase. I found resistance around the price of 1.5050 (swing low like resistance). Anyway, if the price breaks the level of 1.4900 in a stong price action, we may see a potential testing of the level of 1.4425.
Daily Fibonacci pivot levels:
Resistance levels:
R1: 1.4904
R2: 1.4937
R3: 1.4990
Support levels:
S1: 1.4798
S2: 1.4765
S3: 1.4712
Trading recommendations: Be careful when selling the EUR/NZD pair at this stage since the price is testing Fibonacci expansion 161.8%.
Technical outlook and chart setups:
Silver pushed through the initial resistance at the $17.80/82 levels on Friday. The metal is unfolding into a potential inverted head and shoulder reversal as it has been discussed earlier. The metal could retrace lower through $16.75/$17.00 levels again, before rallying higher towards $18.20/30 and $19.20 levels respectively. It is still recommended to hold positions taken earlier and look for adding further on dips, some profits could be fixed around $18.30 levels. Immediate support could be seen around $16.60/70 levels followed by $16.20/30 and lower while resistance is seen around $18.30 levels and $19.20 respectively (Fibonacci levels).
Trading recommendations:
Remain long, move stop to $16.00 levels, target is $18.30 and $19.20.
Good luck!
Technical outlook and chart setups:
Gold has raised through the $1,282.00 levels as seen here, and is testing the sloping trend line resistance at the moment. Also the initial Fibonacci extension has been met at the $1,279.00 levels, hence a pullback could be expected. It is recommended to remain flat for now and watch for a reaction at the trend line resistance around the $1,278.00/79.00 levels. On the flip side, a push higher from here could reach the $1,304.00/05.00 levels as depicted here. Immediate support is now seen at the $1,235.00/40.00 levels, followed by $1,210.00, $1,170.00 and lower while resistance is seen at $1,300.00/05, followed by $1,320.00, $1,340.00 and higher respectively.
Trading recommendations:
Remain flat for now and look for buying on dips.
Good luck!
Overview :
Since our last analysis gold has been trading upwards. As we expected, the price has tested the level of 1,281.30 in a high volume. Our Fibonacci expansion 161.8% at the price of 1,265.00 got broken, so we may expect testing the level of 1,292.00. According to the H4 time frame, we can observe sideways market around the price of 1,277.00. Be careful when selling gold and watch for potential buying opportunities on the lows. We got support level at the price of 1,266.00 (swing high like support).
Daily pivot Fibonacci points:
R1: 1,281.24
R2: 1,282.70
R3: 1,285.07
Support levels :
S1: 1,276.50
S2: 1,275.04
S3: 1,272.07
Trading recommendations: Watch for potential buying opportunities after retracement (buy on the dips).
General overview for 19/01/2015 10:50 CET
The corrective cycle in shape of the triangle formation in the corrective wave 4 green is in progress and now another wave down is being anticipated. This kind of a corrective structure might get complex and time consuming, so caution is advised. Only a sustained breakout below the intraday support at the level of 1.1802 invalidates the view.
Support/Resistance:
1.1802 - Intraday Support
1.1853 - WS1
1.1949 - Weekly Pivot
1.2001 - Intraday Resistance
1.2045 - Intraday High
1.2097 - WR1
Trading recommendations:
Daytraders and swingtraders should consider buying the dips in this corrective structure as long as the level of 1.1802 is not violated. SL should be placed below the level of 1.1799 and TP at the level of 1.2100 with a possible upside extension.
The material has been provided by InstaForex Company - www.instaforex.comGeneral overview for 19/01/2015 10:40 CET
Despite possible downside wave development completion, the market still trades inside the bearish zone, below the weekly pivot at the level of 136.80 and below the intraday resistance at the level of 137.02. These two levels must be broken to start an upward move, but the confirmation will come with the level of 138.90 violation. Otherwise, there is still a chance the market will fall lower, below the 134.74 intraday support level.
Support/Resistance:
134.74 - Intraday Support
136.80 - Weekly Pivot
137.02 - Intraday Resistance
138.90 - WR1
Trading recommendations:
Daytraders and swingtraders should consider opening buy orders if the level of 137.02 is broken, with SL below the level of 134.72 and TP at the level of 138.90 with a possible upside extension.
The material has been provided by InstaForex Company - www.instaforex.comThe Dollar index remains in a long-term uptrend and has produced a new high above 93 as expected after breaking above 92.40 as signaled last week. The short-term trend is neutral as prices pull back from recent highs.
The Dollar index is above the Ichimoku cloud support. This is a bullish sign. Price is trading below the tenkan-sen which implies short-term weakness that could push price towards 92.40 or even to 92.10 where the top of the cloud support is found. The long-tailed candle is a bearish sign but overall the chart is bullish and a pullback is considered as another buy opportunity.
On the monthly chart as I show above, the trend remains strongly bullish. The break out above the 38% retracement was critical as I had mentioned in previous posts and the rise could continue towards the 50% retracement near 95.50. This second leg up from 79.75 relative to the first rise from 72.70 to 83.50 in 2011 and 2012 is bigger. It increases the chances of this upward move being an extended rise that could reach our next target of 95.50. Important support of this longer term uptrend is 90.50.
Gold price has managed to reach $1,280 and is showing signs of weakness at the start of this week. A pullback towards $1,260-65 is justified as price is close to important channel resistance.
Blue lines = price channel
Gold price remains inside the short-term upward sloping channel that started at $1,160. The price channel shows that we have reached a short-term trend resistance level and that is why Gold price is pulling back lower. The pullback could reach $1,260 before the uptrend resumes higher towards $1,300.
Blue line = trend line resistance
On the weekly chart above, I observe two important things. The downward sloping trend line from $1,800 has been broken. The Ichimoku cloud is still above the current price but it is thin, thus vulnerable. At the same area where the Ichimoku cloud is, we find the 61.8% retracement of the decline from $1,393. If we clear above the Ichimoku cloud and the 61.8% retracement resistance at $1,292, then we could see the upward move extend towards the 38% retracement of the decline from $1,800.
