Intraday technical levels and trading recommendations for EUR/USD for January 8, 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.

Bearish closure below 1.0800 (neckline) confirmed the depicted reversal pattern. Hence, the S/L for our sell entry should be lowered to 1.0900 to secure some profits.

The price zone of 1.0800-1.0850 (reversal pattern's neckline) could offer another valid SELL entry as long as the EUR/USD pair keeps trading below 1.1000 (the origin of the reversal pattern).

Note that bearish persistence below 1.0800 (neckline of the depicted reversal pattern) is needed to allow further bearish decline towards 1.0730 and 1.0550 again.

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Technical analysis of EUR/USD for January 08, 2016 Market Analysis Review

Market Overview:

The Fed may still raise interest rates. The weakening economy in the eurozone is characterized by the slowdown in inflation, so the EUR/USD pair could weaken further. Today, the report on US Non-Farm Payrolls and US Unemployment Rate will be released. If the unveiled data does not match expectations and support the policy of interest rate hikes of the Fed, it can lead to reversal bias for the pair. From the technical point of view, we see a pattern "Three Little Indians" (picture-circle blue) on intraday charts, which indicates potential weakening.

Economic Data:

Today, the reports on French Trade Balance, French Industrial Production m/m, German Trade Balance, and German Industrial Production m/m will see the light of day. the United States will release its data on Consumer Credit m/m, Wholesale Inventories m/m, Unemployment Rate, Non-Farm Employment Change, and Average Hourly Earnings m/m. Amid this data, EUR/USD is likely to move with medium to high volatility today.

Technical Data's

Weekly Bias: Ranging

Daily Bias: Ranging

Today Technical Levels:

Breakout BUY Level: 1.0969

Strong Resistance:1.0963

Original Resistance: 1.0952

Inner Sell Area: 1.0941

Target Inner Area: 1.0916

Inner Buy Area: 1.0891

Original Support: 1.0880

Strong Support: 1.0869

Breakout SELL Level: 1.0863

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial adviser if you have any doubts.

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Daily analysis of major pairs for January 8, 2016 Market Analysis Review

EUR/USD: This pair made a northward journey of about 200 pips – just from under the support line at 1.0750. This put the recent bearish outlook in a serious jeopardy, though the EMA 11 is still below the EMA 56, while the Williams' % Range period 20 is now in the overbought region. Today or Monday would prove whether this is a false breakout or it would be a sustained trending movement.

USD/CHF: After much futile attempt to go above the resistance level at 1.0100, the USD/CHF performed a pullback of about 170 pips. While the bullish outlook remains valid, it is being threatened. Today, price should turn north again, because another drop of 100 pips would invalidate the bullish trend.

GBP/USD: Since the middle of last month, the Cable has gone down by over 600 pips. There is a clean Bearish Confirmation Pattern in the chart, which means the price could continue its downward journey. The current rally attempt is very shallow, and it does not mean a bullish trend is here: It means an opportunity to sell at a better price.

USD/JPY: The USD/JPY has gone down by 250 pips this week, and right now, the price threatens to break down further. There is a lot of trading activity around the accumulation territory of 117.50, which might be easily broken to the downside. Further downward movement is possible in the market, and therefore, short trades ought to be sought.

EUR/JPY: This week so far, the EUR/JPY dropped by 350 pips, tested the demand zone at 127.00, and then bounced upwards. From that demand zone, the price has moved upwards seriously, now it is above the demand zone at 128.50. While the upward bounce may continue, the bias would be bearish as long as the price does not close above the supply zone at 130.00.

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Technical analysis of NZD/USD for January 08, 2016 Market Analysis Review

Overview:

• The NZD/USD pair was calling for the bearish market from the level of 0.6707 since yesterday. The level of 0.6707 is representing resistance 1.
• As it is known, history will probably repeat itself at this level again.
• Therefore, it will be a good sign to sell below 0.6707 with the first target of 0.6601 (the daily pivot point). It will call for uptrend in order to continue its bearish movement towards 0.6534.
• Stop loss should never exceed your maximum exposure amounts. Consequently, the stop loss should be placed above the double top at the price of 0.6725.

Notes:

• Strong resistance will be set at the level of 0.6707.
• The double top is going to set at 0.6725 level.
• The price hit the weekly pivot point and the support 1 yesterday.
• We expect a range of 71 pips today.
• The daily pivot point (0.6601) represents the key level this week.

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Technical analysis of GBP/USD for January 08, 2016 Market Analysis Review

Trading recommendations:

• According to the previous events, the price of GBP/USD is going to move between the levels of 1.4665 and 1.4532. The resistance has set at the level of 1.4656 (1.4686: 38.2% Fibonacci retracement level). So, sell below the level of 1.4665 which represents the resistance in H1 chart with the first target at 1.4579, then the trend will be able to continue towards the level of 1.4532 in order to test the double bottom. Notwithstanding, the stop loss should be set at 1.4750.

Notes:

• If the trend is of an upside character, then the strength of the currency will be defined as follows: GBP is an uptrend and USD is a downtrend.
• Fibonacci retracement is used to determine accurate psychological levels of support and resistance. The period of time should be taken into account. Fibonacci is in a range trade; it looks like the trend is trapped and going up or down. If you sell or buy for a long term in this period, you will surely lose your profit.

Tips:

• R3 and S3 are considered to be clear indicators of the maximum range of extreme volatility, though it is possible to pass them through. Pivot lines work well on the sideways markets as the prices are most likely to be located between the R1 and S1 lines. Within a strong trend, the price is expected to be lower than the pivot point line and continue moving. If the breaking news released may affect the market, the price is likely to go straight through R1 or S1 and even reach R2 and R3 or S2 and S3.

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Daily analysis of USDX for January 08, 2016 Market Analysis Review

USDX is currently trading into a very strong intraday bearish bias, after a decline held since the start of yesterday's Asian session. The uncertainty around the world regarding geo-political topics are on the floor and producing a kind of risk aversion on most of the trading assets. We can expect a strong bottom to be found around the 98.10 level. MACD indicator is at negative territory.

H1 chart's resistance levels: 98.39 / 98.79

H1 chart's support levels: 98.10 / 97.82

Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the USD Index breaks with a bullish candlestick; the resistance level is at 98.39, take profit is at 98.79, and stop loss is at 97.99.

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Daily analysis of GBP/USD for January 08, 2016 Market Analysis Review

There is a bullish recovery above the support zone of 1.4555, after a strong decline held by GBP/USD since the start of the year. Currently, we can expect a testing of the resistance level of 1.4702, which is very close to the 200 SMA price area, but the bears are still getting favored by the overall fractal structure on the Cable. MACD indicator is at positive territory.

H1 chart's resistance levels: 1.4608 / 1.4702

H1 chart's support levels: 1.4555 / 1.4464

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the GBP/USD pair breaks a bearish candlestick; the support level is at 1.4555, take profit is at 1.4464, and stop loss is at 1.4643.

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