USD/CAD intraday technical levels and trading recommendations for January 6, 2016 Market Analysis Review

Overview:

A bullish breakout above the previous consolidation zone between 1.2400 and 1.2800 was performed on July 15 (shown on the weekly chart). A long-term bullish target was projected towards the level of 1.3270.

A significant bearish rejection was observed around 1.3450. Since then, another consolidation range was established between 1.2800 and 1.3400.

Few weeks ago, a bearish breakout below the support level of 1.3075 was needed to enable a further bearish decline towards 1.2900. However, an evident bullish rejection was expressed around this level.

A bullish breakout above 1.3400 (the upper limit of the recent consolidation range) was performed on December 7.

Daily fixation above 1.3400 enhanced the bullish side of the market.

A bullish visit towards the next resistance level of 1.4100 (Fibonacci Expansion 100%) should be expected. Hence, a valid sell entry should be expected around this level.

On the other hand, the price zone of 1.3370-1.3400 remains a significant support zone to be watched for a valid buy entries if a bullish pullback occurs.

Trading recommendations:

Risky traders can have a counter-trend sell position around 1.4100 (Fibonacci Expansion 100%) if enough bearish rejection is expressed when retesting takes place.

On the other hand, conservative traders should wait for the USD/CAD pair to retrace towards the zone of 1.3380-1.3400 looking for a low-risk buy entry. S/L should be placed below 1.3300.

The initial T/P levels should be placed at 1.3500 and 1.3600. The long-term bullish target is projected towards 1.4100.

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Technical analysis of USD/JPY for January 06, 2016 Market Analysis Review

USD/JPY is under pressure. Overnight, US stocks managed to end with small gains, helped by shares in telecoms, utilities and consumer staples sectors. The Dow Jones Industrial Average added 0.1% to 17,158, the S&P 500 rose 0.2% to 2,016, while the Nasdaq Composite was down 0.2% to 4,891.

Nymex crude oil fell 2.2% further to $35.97 a barrel, gold gained 0.3% to $1,077 an ounce, and the benchmark 10-year Treasury yield was broadly flat at 2.248%.

Meanwhile, the US dollar continued to strengthen against other major currencies with the Wall Street Journal Dollar Index once reaching 90.89, the highest level since November 2002. EUR/USD dropped another 0.8% to 1.0746, GBP/USD fell 0.3% to 1.4671, USD/CHF rose 0.7% to 1.0081, and USD/CAD was up 0.3% to 1.3995. However, USD/JPY declined a further 0.3% to 119.05.The pair remains capped by both the 20-period (30-minute chart) moving average and the key resistance at 119.30. It is currently trading around the 20-period moving average, while the intraday relative strength index is hovering around the neutrality level of 50 lacking upward momentum. If the pair keeps on failing to break above 119.30, it stands a higher chance of returning to the first downside target at 118 (around yesterday's low). The second downside target is set at 117.60 (last seen on October 15).

Trading recommendations:

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 118. A break of that target will move the pair further downwards to 117.60. The pivot point stands at 119.30. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 119.70 and the second target at 120.10.

Resistance levels: 119.70, 120.10, 120.75

Support levels: 118, 117.60, 117.35

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Technical analysis of USD/CHF for January 06, 2016 Market Analysis Review

USD/CHF is expected to trade in a higher range as bias remains bullish. Currently trading at 1.0080, the pair seems more likely to be forming a "bullish flag" pattern after the recent advance. Even though a continuation of the consolidation cannot be ruled out at the current stage, its extent should be limited by its key support at 1.0060. Furthermore, the 50-period moving average is on the upside, and should limit any downward attempts. To sum up, as long as 1.0060 is not broken, expect a new rise to 1.0115 and 1.0140 in extension.

Trading recommendations:

The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. As long as the price holds above its pivot point, it is recommended to open long positions with the first target at 1.0115 and the second target at 1.0140. In the alternative scenario, it is recommended to open short positions with the first target at 1.0030, if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 1.00. The pivot point is at 1.0060.

Resistance levels: 1.0030, 1.0, 0.9965

Support levels: 1.0115, 1.0140, 1.0175

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Technical analysis of NZD/USD for January 06, 2016 Market Analysis Review

NZD/USD is under pressure. The pair remains on the downside, capped by its descending 50-period moving average. The formation of lower highs and lows is still intact and it should confirm a negative outlook. Besides, the relative strength index lacks upward momentum. Even though a technical rebound cannot be ruled out, its extent should be limited before further decline to 0.660 and 0.6560 in extension.

Trading recommendations:

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 0.6600. A break of that target will move the pair further downwards to 0.6560. The pivot point stands at 0.6715. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 0.6760 and the second target at 0.6790.

Resistance levels: 0.6760, 0.6790, 0.6830

Support levels: 0.660, 0.6560, 0.6525

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Intraday technical levels and trading recommendations for GBP/USD for January 6, 2016 Market Analysis Review

Few months ago, the market was pushed above the weekly key zone around 1.5550 in an attempt to reach the area of 1.5900, which provided significant bearish resistance.

Recent weekly candlesticks came as bearish engulfing candles, closing below the level of 1.5220 (the neckline of the Head and Shoulders pattern). This supported the bearish side of the market in the long term.

A quick bearish decline towards the weekly demand level of 1.4950 was expected as a result of the bearish breakdown below 1.5200.

Weekly persistence below 1.4950 exposed the way towards 1.4800 while the price levels of 1.4650 and 1.4600 (the depicted demand levels) wait for a bearish visit as long as the market keeps trading below 1.4800 (the lower limit of the depicted bearish channel).

Given the previous bullish rejection expressed around 1.4600 on April 2015, a new bullish swing off current price levels should not be excluded.

On the other hand, bullish re-closure above 1.4950 allows another bullish pullback to occur towards 1.5350.

During 2015, significant bearish rejection was expressed around 1.5770 and 1.5230 where a bearish Head and Shoulders reversal pattern was established. Since then, the market has been trending down within the depicted bearish channel.

The price level of 1.4950 was broken to the downside few weeks ago, constituting a significant supply level. As anticipated, it offered a valid sell entry on December 24.

Daily persistence below 1.4800 (the lower limit of the current bearish channel) allowed further bearish decline towards 1.4680 and 1.4610 where previous prominent bottoms are located on the GBP/USD daily chart.

This week, the GBP/USD pair looks oversold as it is being pushed further below the lower limit of the depicted bearish channel.

That's why, early signs of a bullish reversal around the price zone of 1.4660-1.4610 should be considered as a valid buy signal.

Trading Recommendation:

Risky traders can have a valid BUY entry anywhere around the price zone of 1.4650-1.4610 if enough bullish rejection is expressed on short-term charts (H4 and H1 charts).

S/L should be located below 1.4550 to limit our risk. Initial T/P levels should be located at 1.4800 and 1.4950.

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Technical analysis of GBP/JPY for January 06, 2016 Market Analysis Review

GBP/JPY is under pressure on an intraday basis. The pair has accelerated to the downside after breaking down its previous support at 175.10, which should now play a key resistance role. The first target to the downside is set at the horizontal support and overlap at 173. A break below this level would open the way to further weakness toward 172.40.

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 173. A break of that target will move the pair further downwards to 172.45. The pivot point stands at 175.10. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 176.15 and the second target at 176.90.

Resistance levels: 176.15, 176.90, 177.50

Support levels: 173, 172.40, 172

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Intraday technical levels and trading recommendations for EUR/USD for January 6, 2016 Market Analysis Review

Previously, the EUR/USD pair moved lower after breaking below the major demand levels around 1.2100 and 1.2000 where historical bottoms were previously established back in July 2012 and June 2010.

EUR/USD bears pushed the price slightly below the monthly demand level of 1.0550 (established in January 1997). Bullish recovery was observed shortly after.

April's candlestick came as bullish engulfing one. However, next monthly candlesticks (August, September, October, and November) reflected strong bearish pressure, which existed around the level of 1.1450.

Hence, a long-term projected target is still seen at 0.9450 if a bearish breakout below the monthly demand level of 1.0570 occurs before the end of this month (January).

On August 24, the EUR/USD pair looked overbought as the market spiked above the level of 1.1500 (daily supply level).

Shortly after, the intraday supply zone of 1.1360-1.1400 provided significant bearish pressure. An intraday sell entry was suggested. All T/P levels are located at 1.1150 and 1.1050 were already reached.

A bearish breakout of the depicted uptrend was performed on October 23. This enhanced a long-term bearish scenario with targets at 1.0800 and 1.0600.

One month ago, daily persistence below the level of 1.0800 and 1.0700 (key levels) ensured enough bearish momentum towards 1.0550 (prominent monthly level) where the recent bullish pullback was initiated.

Last week, the level of 1.1000 was considered a significant supply level to offer a valid sell entry, and it already did.

A Head and Shoulders reversal pattern was established around the mentioned supply level.

A bearish closure below 1.0800 (neckline) confirmed the depicted reversal pattern. Hence, the S/L for our sell entry should be lowered to 1.0850 to secure some profits.

Bearish persistence below 1.0800 (neckline of the depicted reversal pattern) allows a further bearish decline towards 1.0730 and 1.0550 again.

On the other hand, the price level of 1.0800 (reversal pattern's neckline) will probably offer another valid SELL entry if bullish pullback occurs today.

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