Technical analysis of USD/JPY for December 31, 2015

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USD/JPY is expected to trade in a lower range as key resistance is seen at 120.75. Overnight, US stock indices dropped as energy shares were pulled down by falling oil prices. The Dow Jones Industrial Average declined 0.7% to 17603, the S&P 500 also lost 0.7% to 2063, while the Nasdaq Composite was down by 0.8% to 5065. Nymex crude oil slid 3.4% to land at $36.60 a barrel.

Gold fell 0.7% to $1,060 an ounce, and the 10-year Treasury yield edged down to 2.305% from 2.310% in the previous session.

Along with renewed slide in oil prices, the US dollar advanced against commodity currencies: USD/CAD rose 0.3% to 1.3877, AUD/USD declined 0.2% to 0.7283, and NZD/USD fell 0.4% to 0.6835. On the other hand, EUR/USD edged up 0.1% to 1.0929, while USD/CHF was down 0.5% to 0.9881. The pair continues to stay below the key resistance at 120.75 (a price base seen on December 22-23). Intraday technical signals (20- and 50-period moving average on a 30-minute chart, relative strength index) remained mixed. As long as 120.75 holds as the key resistance, the intraday outlook should remain bearish and the pair is expected to decline toward the first downside target at 120.20. The second one is seen at 120.00 (the low of December 25).

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 120.20. A break of that target will move the pair further downwards to 120.00. The pivot point stands at 120.75. 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 121 and the second target at 121.30.

Resistance levels: 121.00, 121.30, 121.75

Support levels: 120.20, 120.00, 119.75

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Technical analysis of USD/CHF for December 31, 2015

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USD/CHF is expected to trade with a bullish bias above 0.9890. The pair challenged the first upside target at 0.9925 overnight before entering a consolidation zone. Currently, it is trading around the 20- and 50-period moving averages, and the relative strength index is hovering around the neutrality level of 50. As long as the key support at 0.9890 is not surpassed, the pair is expected to keep trading on the upside and challenge 0.9990 again.

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 0.9970 and the second target at 0.9990. In the alternative scenario, it is recommended to open short positions with the first target at 0.9855, 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 0.9830. The pivot point is at 0.9890.

Resistance levels: 0.9970, 0.9990, 1.0020

Support levels: 0.9850, 0.9830, 0.98

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Technical analysis of NZD/USD for December 31, 2015

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NZD/USD is expected to trade in a higher range as the bias remains bullish. The pair is supported by its 50-period moving average and stands above its key support at 1.3845. Meanwhile, the relative strength index lacks downward momentum. Further upside is therefore expected with the next horizontal resistance and overlap set at 0.6885. A break above this level would call for a further advance toward 0.6920.

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 0.6885 and the second target at 0.6920. In the alternative scenario, it is recommended to open short positions with the first target at 0.6805, 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 0.6780. The pivot point is at 0.6825.

Resistance levels: 0.6885, 0.6920, 0.6950

Support levels: 0.6805, 0.6780, 0.6755

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Technical analysis of GBP/JPY for December 31, 2015

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GBP/JPY is under pressure. The pair remains under pressure below its key resistance at 179, and is moving sideways. Meanwhile, the relative strength index lacks strong upward momentum. The first target to the downside is set at the horizontal support and overlap at 178.10. A breakout below this level would open the way to further weakness toward 177.70.

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 178.10. A break of that target will move the pair further downwards to 177. The pivot point stands at 179.00. 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 179.55 and the second target at 180.05.

Resistance levels: 179.55, 180.05, 181

Support levels: 178.10, 177.70, 177

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NZD/USD intraday technical levels and trading recommendations for December 31, 2015

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The daily chart shows a bullish Flag pattern that was initiated around the level of 0.6230 on September 23.

On November 30, a bullish engulfing candlestick was expressed around 0.6520 where the depicted uptrend came to meet the NZD/USD pair.

Shortly after, a bullish breakout above 0.6600 (the upper limit of the flag pattern) took place. This enhanced the bullish side of the market towards 0.6800.

A temporary bearish rejection should be expected around 0.6840 (daily resistance level).

Actually, an earlier bearish rejection was expressed around 0.6840 few weeks ago. That's why, a similar bearish reaction should be expected this week.

On the other hand, an estimated projection target for this flag pattern remains at 0.6950 only if the NZD/USD pair manages to keep trading above 0.6840.

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Two weeks ago, an obvious bullish breakout above 0.6600 was executed via a full-body bullish candlestick on the H4 chart.

Shortly after, the NZD/CAD pair faced resistance between 0.6700 and 0.6750 providing evident bearish rejection.

For the NZD/USD conservative traders, a valid buy entry was suggested around 0.6600 (corresponding to the depicted uptrend and the upper limit of the broken consolidation range).

Shortly after, another valid buy entry was suggested around the level of 0.6700 (the depicted uptrend line as well as a recent support level). It is already running in profits now.

Last week, lack of bullish pressure above 0.6800 was manifested. That is why a bearish pullback took place towards 0.6770 where an ongoing bullish swing was initiated.

Bullish fixation above 0.6845 enhances the bullish side of the market.

Long-term bullish targets are located at 0.6950 as long as the NZD/USD pair keeps pushing above 0.6845.

On the other hand, another bearish fixation below 0.6840 brings the pair back to 0.6750 where a valid buy entry can be offered (where the depicted uptrend line comes to meet the NZD/USD pair).

S/L is to be located below 0.6700. Initial T/P level remains located at 0.6840.

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USD/CAD intraday technical levels and trading recommendations for December 31, 2015

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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 enhances the bullish side of the market.

A bullish visit towards the next resistance level of 1.4100 (Fibonacci Expansion 100%) should be expected.

Significant bearish rejection and 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 open counter-trend sell position cans 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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Intraday technical levels and trading recommendations for GBP/USD for December 31, 2015

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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 the GBP/USD pair with significant 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 long-term bearish target is projected towards the level of 1.4800 for this reversal pattern.

The previous demand level of 1.5200 (the origin of a previous bullish engulfing weekly candlestick) was broken to the downside a month ago. This bearish tendency was confirmed by the Shooting Star pattern and the bearish engulfing weekly candlesticks of previous weeks.

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

Note that a weekly persistence below 1.4950 exposes the way towards 1.4800 and 1.4650 (long-term bearish targets).

On the other hand, re-closure above 1.4950 allows another bullish pullback to occur towards 1.5350 especially after the previous weekly bullish rejection at 1.4800 (the lower limit of the current bearish channel).

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Recently, the key level of 1.5200 was temporarily breached to the upside before a daily bearish engulfing candlestick was expressed around 1.5330 on November 20.

Bearish persistence below 1.5200 and then below 1.5050 (previous weekly bottom) enhanced a further bearish decline towards the weekly demand level of 1.4950 (corresponding to the lower limit of the depicted channel).

A bullish engulfing daily candlestick was expressed around 1.4950 earlier this month on December 3.

A bullish pullback towards 1.5200-1.5230 was expressed as the GBP/USD pair managed to hold above 1.5000 and 1.5100.

Two weeks ago, a significant bearish rejection was expressed around 1.5230. Many bearish engulfing daily candlesticks had been already expressed.

The level of 1.4950 was broken to the downside last week, thus constituting the significant supply level. As anticipated, this level offered a valid sell entry earlier this week. It is already running in profits now.

The level of 1.4950 was broken to the downside last week constituting a significant supply level. As anticipated, this level offered a valid sell entry last week. It is already running in profits now.

Daily persistence below 1.4800 is needed to open the way towards 1.4700 and 1.4650 where a previous prominent bottom was located.

Trading Recommendation:

Risky traders can sell the GBP/USD pair at retesting of the broken demand level at 1.4950. S/L should be lowered to 1.4880 to secure profits.

Initial bearish targets should be located at 1.4850 and 1.4800 where the lower limit of the depicted channel is located.

Next T/P levels are located at 1.4700 and 1.4650 as long as the GBP/USD pair keeps trading below 1.4800.

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Intraday technical levels and trading recommendations for EUR/USD for December 31, 2015

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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 rejection, 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 1.0555 occurs before the end of this month (December).

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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.

Three weeks ago, daily persistence below the level of 1.0700 (key level) ensured enough bearish momentum towards 1.0550 (prominent monthly low) where the current bullish pullback was initiated.

This week, the level of 1.1000 constitutes to act as the significant supply level to offer a valid sell entry. A Head and Shoulders reversal pattern is established around the depicted supply level.

S/L should be located above 1.1050. Initial T/P levels should be located at 1.0900 and 1.0810.

An obvious bearish closure below 1.0820 (the neckline of the depicted reversal pattern) is needed to enable a further bearish decline towards 1.0730 and 1.0550 again.

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EUR/NZD analysis for December 31, 2015

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Overview:

Recently, EUR/NZD has been moving sideways around the level of 1.5910. In the daily time frame, I found a supply bar and a strong head-and-shoulders confirmed formation (a broken neckline). In the H4 time frame, the pair is trading well below 50, 100, and 200 SMA. I found 2 climatic actions in a background and a strong up-thrust bar in a ultra-high volume (sign of weakness). In the M30 time frame, I found a bearish flag, and we may expect further downward continuation. First support is found at the level of 1.5865. Strong support held like strong resistance at the level of 1.5990. Be careful when buying EUR/NZD at this stage since lower prices are expected. I placed Fibonacci expansion to find potential support levels. I got Fibonacci expansion 61.8% at the level of 1.6070 (broken), Fibonacci expansion 100% (almost tested) at the level of 1.5840, and Fibonacci expansion 161.8% seen at the level of 1.5470. If the price breaks the level of 1.5800 in a high volume, we may see potential testing of 1.5470.

Fibonacci Pivot Points:

Resistance levels:

R1: 1.5990

R2: 1.6010

R3: 1.6050

Support levels:

S1: 1.5910

S2: 1.5880

S3: 1.5850

Trading recommendations : Buying EUR/NZD looks very risky at this stage since the price confirmed the head-and-shoulders formation. Watch for potential selling opportunities.

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Gold analysis for December 31 , 2015

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Overview:

Since our last analysis, gold has been trading downwards. The price tested the level of $1,059.22 in a high volume. In the daily time frame, I found a supply bar in a volume below an average. An intraday trend is downward. Short- and mid-term trends are also downward. In the H1 time frame, the price is well below all MACs 50,100,150,200 in the short-term time frames. I found symmetrical triangle (trend continuation pattern).I expect testing of $1,050.00. I would like to see a breakout in a high volume at $1,046.00 confirming the trend-continuation pattern, .

Daily Fibonacci pivot points:

Resistance levels:

R1: 1,068.70

R2: 1,071.70

R3: 1,076.60

Support levels:

S1: 1,058.80

S2: 1,055.80

S3: 1,050.90

Trading recommendations: Watch for potential selling opportunities, buying looks risky.

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Technical analysis of NZD/USD for December 31, 2015

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Trading recommendations:

  • The NZD/USD pair is still moving between 0.6762 and 0.6880 (a narrow range but in an uptrend channel). It should be noted that the key level is seen at 0.6762, which represents a ratio of 38.2% Fibonacci retracement levels in the H4 chart. Equally important, the double top will be formed at the level of 0.6880. As it is known, history will probably repeat itself at this level again. Therefore, it will be a good idea to buy above 0.6762 with the first target at 0.6880. If the trend is able to break the double top at 0.6880. Then, it will call for an uptrend in order to continue its bullish movement towards 0.6949 later. On the other hand, the stop loss should never exceed your maximum exposure amounts, consequently the stop loss should be set below 0.6762 at 0.6740.

Notes:

  • We expect a new range about 80 pips today.
  • The key level will set at 0.6760.
  • The resistance will set at 0.6780.
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Technical analysis of GBP/USD for December 31, 2015

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Overview:

  • The GThe GBP/USD pair is still moving between in the area of 1.4859 -1.4785. The levels of 1.4841 and 1.4785 represent the support and the double bottom in the H1 chart. So, resistance had set at the levels of 1.4859 (23.6% Fibonacci retracement levels). Therefore, sell below the level of 1.4859 with the first target at 1.4815 then It will call for a downtrend in order to continue its bearish movement towards 1.4785 in order to test the double bottom. At the same time, the stop loss should be placed at the level of 1.4866 (above the support).

Observations:

  • The resistance will set at the level of 1.4859 today.
  • The double top is going to set at 1.4785.
  • The area of 1.4859 is a useful spot to sell in the long term.
  • We expect a range of 74 pips on December 31, 2015.
  • It should be noted that if there is no significant news to influence, the market price will be moving from pivot point to resistance 1 or support 1. But if there is significant news to influence, the market price may go straight through resistance 1 or support 1 and reaches resistance 2 or support 2 and even resistance 3 or support 3.
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Global macro overview for 31/12/2015

Global macro overview for 31/12/2015:

TThe US pending home sales data was released yesterday and they came in worse than market had expected. According to the National Association of Realtors, the pending home sales index fell 0.9% to 106.9, compared with a 0.5% gain expected by market participants.The decreases in recent months could indicate slower growth in buying homes in 2016, because the pending home contracts become sales after a month or two so anyone willing to buy a house should be in hurry as the Fed is starting to raise interest rates gradually. This would mean, the mortgage rates will follow the Fed's actions soon, but for now they have only inched higher since the Fed hiked the benchmark rate.This kind of events might suggest that the growth in the housing market may be cooling.

The EUR/USD pair is slowly trading in the middle of a range during the last day of 2015. The next support is seen at the level of 1.0795 and the next resistance is seen at the level of 1.1012.

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Global macro overview for 31/12/2015

Global macro overview for 31/12/2015:

Crude Oil Inventories data were released yesterday and the data on a surplus of 2.6 million barrels surprised the market, which had expected a loss of 1.8 million barrels. The US and OPEC continue to oversupply the markets and oil-producing nations are pumping out oil at high levels. Please notice, that earlier in December, crude dropped below $35, which is its lowest level since February 2009, and according to the latest report of the OPEC, prices might drop even further towards $20 before any meaningful reversal takes place. Moreover, the triple- digit oil prices might not be seen for years.

Oil is trading just above the technical support at the level of 36.55. The next resistance is seen at the level of 38.17.

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Technical analysis of USD/CAD for December 31, 2015

General overview for 31/12/2015 09:10 CET

A triangle pattern might continue in a tight range as the market is consolidating around the weekly pivot at the level of 1.3870. To confirm one of the counts, traders must wait for a breakout at the level of 1.4000or for a further downside move to the level of 1.3621.

Support/Resistance:

1.4041 - WR2

1.4000 - Intraday Resistance

1.3927 - WR1

1.3870 - Weekly Pivot

1.3815 - Intraday Support

1.3748 - WS1

1.3693 - WS2

Trading recommendations:

Day traders should continue buying on dips in this market with SL below the level of 1.3815 and TP at the level of 1.4000.

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Technical analysis of EUR/JPY for December 31, 2015

General overview for 31/12/2015 09:00 CET

The market is consolidating in a narrow range around the intraday support at the level of 131.34. Further downside wave progression is expected as an impulsive cycle has not been completed yet. A projected target for wave c purple is at the level of 130.68.

Support/Resistance:

129.87 - WS3

130.68 - WS2

131.02 - Technical Support

131.14 - WS1

131.34 - Intraday Support

131.96 - Weekly Pivot

132.44 - WR1

132.77 - Intraday Resistance

133.26 - WR2

133.74 - WR3

Trading recommendations:

Day traders should keep sell orders open with SL above 131.96 and TP at the level of 130.68 and below.

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Technical analysis of EUR/USD for December 31, 2015

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When the European market opens, there is no economic news to be released today. The US will publish the economic data on the Natural Gas Storage, Chicago PMI, and Unemployment Claims. So amid the reports, EUR/USD will move with low to medium volatility during this day.

TODAY TECHNICAL LEVELS:

Breakout BUY Level: 1.0988.

Strong Resistance:1.0982.

Original Resistance: 1.0971.

Inner Sell Area: 1.0960.

Target Inner Area: 1.0935.

Inner Buy Area: 1.0910.

Original Support: 1.0899.

Strong Support: 1.0888.

Breakout SELL Level: 1.0882.

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 advisor if you have any doubts.

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Technical analysis of USD/JPY for December 31, 2015

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In Asia, Japan will not release any economic data, but the US will publish some economic data such as Natural Gas Storage, Chicago PMI, and Unemployment Claims. So, there is a strong probability that the the USD/JPY will move with low volatility during the Asian session, but with low to medium volatility during the US session.

TODAY TECHNICAL LEVELS:

Resistance. 3: 121.06.

Resistance. 2: 120.82.

Resistance. 1: 120.59.

Support. 1: 120.29.

Support. 2: 120.05.

Support. 3: 119.82.

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 advisor if you have any doubts.

The material has been provided by InstaForex Company - www.instaforex.com

Daily analysis of major pairs for December 31, 2015

EUR/USD: This currency pair has only moved sideways this week so far. It would be better to stay off the market because the price action does not show supremacy of bulls or bears at the moment. Momentum would return to the market early next week, which would make the price go either above the resistance level of 1.1000 or below the support level of 1.0850.

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USD/CHF: This currency trading instrument is generally in an equilibrium phase, though the current price action is a threat to an ongoing bias. A move above the resistance level of 1.0000 would result in invalidation of the bearish bias in the market leading to a Bullish Confirmation Pattern. If the price fails to do this, the price is likely to continue its southward effort when there is a breakout in the market.

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GBP/USD: The GBP/USD pair simply went flat on Wednesday. The bias is strongly bearish on the market, and the current upwards bounce is simply a rally in the context of a downtrend. The accumulation territory would be tested again: it could even be breached to the downside this week or next week.

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USD/JPY: What has happened this week is best called a 'base.' Indeed, the price has formed a base, which is likely to send the price either south or north, depending on what happens to the yen next week. An upturn is much more likely in the market.

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EUR/JPY: Here, the EMA 11 is below the EMA 56, and the RSI period 14 is below the level of 50. There is a Bearish Confirmation Pattern in the market; and therefore, further bearish movement on the EUR/JPY is not ruled out.

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Daily analysis of USDX for December 31, 2015

On the H1 chart, the USDX is trying again a bullish consolidation above the 200 SMA, looking to rally towards the resistance level of 98.66. However, at the current stage we can expect a pullback to resume the short-term bearish bias, because an overall structure is still favoring this scenario. There is a strong demand zone around the level of 97.86.

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H1 chart's resistance levels: 98.66 / 98.90

H1 chart's support levels: 98.14 / 97.86

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USDX breaks with a bearish candlestick; the support level is found at 98.14, take profit is at 97.86, and stop loss is at 98.43.

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Daily analysis of GBP/USD for December 31, 2015

The GBP/USD pair is currently finding strong support at the level of 1.4802, where buyers remain active on a short-term basis. We are keeping our outlook in a bearish mode, because the cable is already consolidated below the 200 SMA. A breakout below the level of 1.4802 will expose the next level 1.4702. The MACD indicator is entering the negative territory.

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H1 chart's resistance levels: 1.4918 / 1.4999

H1 chart's support levels: 1.4802 / 1.4702

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 found at 1.4802, take profit is at 1.4702, and stop loss is at 1.4908.

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