Technical analysis of USD/JPY for January 08, 2016

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USD/JPY is expected to trade with bullish bias. Overnight, US stocks failed to halt their slide and posted the biggest decline since September. The situation in China, which saw another activation of a stock market circuit breaker yesterday, weighs on markets. Chinese authorities announced overnight that such a mechanism will be suspended. The Dow Jones Industrial Average dropped another 2.3% to 16,514, the S&P 500 fell 2.4% to 1,943, while the Nasdaq Composite lost 3.0% to 4,689.

Nymex crude oil lost another 2.1% to settle at $33.27 a barrel, gold gained 1.4% to $1,109 an ounce, and the benchmark 10-year Treasury yield eased to 2.153% from 2.177% in the previous session.

Meanwhile, the US dollar gave back some gains made in previous sessions with EUR/USD rising 1.5% to 1.0934, USD/JPY falling 0.7% to 117.66, USD/CHF sliding 1.4% to 0.9932. On the other hand, it continued strengthening against commodity-related currencies with USD/CAD gaining 0.3% to 1.4113 and AUD/USD plunging another 0.9% to 0.7009. Traders will be paying close attention to tonight's US non-farm payrolls reports (+200K in December expected).The pair is seeing a continuation of its rebound initiated yesterday. It has kept challenging the upper Bollinger band and is currently trading above the 20-period moving average, which is well above the 50-period one. And the intraday relative strength index stays above the neutrality level of 50. The first upside target at 118.80 is in sight, and a break above this level would call for further rising towards 119.30.

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 118.80 and the second target at 119.30. In the alternative scenario, it is recommended to open short positions with the first target at 116.75, 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 116.10. The pivot point is at 117.35.

Resistance levels: 118.80, 119.30, 119.75

Support levels: 116.75, 116.10, 115.75

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Technical analysis of USD/CHF for January 08, 2016

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USD/CHF is expected to trade in a higher range as the pair is rebounding. The pair is moving sideways above its key support at 0.9920. Meanwhile, the relative strength index is mixed to bullish. Further upside is therefore expected with the next horizontal resistance and overlap set at 1.0040 at first. A break above this level would call for further advance towards 1.0080.

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 1.0040 and the second target at 1.0080. In the alternative scenario, it is recommended to open short positions with the first target at 0.9890, 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 0.98300.9855. The pivot point is at 0.9920.

Resistance levels: 1.0040, 1.0080, 1.0110

Support levels: 0.9890, 0.9855, 0.98

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Technical analysis of NZD/USD for January 08, 2016

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NZD/USD is expected to trade in a lower range as the key resistance is at 0.6665. The pair remains under pressure below its key resistance at 0.6665, and it seems likely to post a new decline to test its support at 0.6590, representing the previous swing low. A break below this threshold would trigger a new pullback to 0.6560. The relative strength index lacks upward momentum. To sum up, as long as 0.6665 holds on the upside, look for 0.6580 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 0.6590. A break of that target will move the pair further downwards to 0.6560. The pivot point stands at 0.6660. 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 0.6710 and the second target at 0.6760.

Resistance levels: 0.6710, 0.6760, 0.6790

Support levels: 0.6580, 0.6560, 0.6525

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Technical analysis of GBP/JPY for January 08 , 2016

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GBP/JPY is expected to trade with bearish bias as the pair is under pressure. The pair remains below the key resistance at 173 while being capped by the descending 50-period moving average. And the 20-period moving average stands below the 50-period one. As long as 173 is not surpassed, the pair is expected to return to the first downside target at 170.70 (around yesterday's low) before falling further to 169.60 (last seen on September 8).

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 170.470. A break of that target will move the pair further downwards to 169.60. The pivot point stands at 173. 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 174.00 and the second target at 175.10.

Resistance levels: 174.00, 175.10, 175.75

Support levels: 170.70, 169.60, 169

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Daily analysis of USD/JPY for January 08, 2016

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Overview

A temporary low is in place at 117.32 and intraday bias is neutral for the moment. A break of the 119.69 resistance is needed to indicate short-term bottoming. Otherwise, the outlook will stay bearish and a deeper fall is still expected to the 116.13 key support level. At this point, we expect a strong support from there to bring a rebound. Price actions from 125.85 are still viewed as a sideway consolidation pattern. Nonetheless, a sustained break of 116.13 will indicate that it is a deeper medium-term correction. The consolidation pattern from the 125.85 medium-term top is still in progress. In case of a deeper fall, we expect a strong support between the 116.13 and 38.2% retracement of 101.08 to 125.85 at 116.38 to contain the downside. An eventual break of 125.85 is still anticipated at a later stage. Nonetheless, a sustained break of the 116.13/38 zone will indicate that the corrective fall from 125.85 would extend to 38.2% retracement of 75.56 (the low of 2011) to 125.85 at 106.63.

Daily Pivots: (S1) 117.07; (P) 117.91; (R1) 118.50

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Daily analysis of Silver for January 08, 2016

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Overview

The silver price continues moving within the sideways range, which lines are represented by the 13.65 support and 14.25 resistance, pointing to a contradiction between the positive EMA50 and stochastic's negativity. It makes us expect more sideways moves on an intraday basis, waiting for a breach of one of the mentioned levels to detect the next destination clearly. Note that a break of the 13.65 support will support the chances of continuing the main bearish trend that will target 13.00. Meanwhile, breaching of the 14.25 level represents the key of the beginning bullish correction, which targets begin at 15.30 and extend to 16.35. The sideways range will remain dominant on the intraday trading until surpassing one of these range lines that are represented by the 13.65 support and 14.25 resistance, reminding you that breaking the mentioned resistance will push the price to 13.00 initially, while breaching 14.25 will lead the price to make a bullish correction that targets the 15.30 levels mainly.

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Daily analysis of GBP/JPY for January 08, 2016

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Overview

A temporary low is in place at 170.74 and intraday bias is turned neutral. Some consolidations would be seen but the outlook will remain bearish for the moment. A fall from 195.86 is seen as a medium-term correction pattern and is expected to target next long-term Fibonacci level at 165.67 later. The break of the 174.86 support affirmed that case of medium-term topping at 195.86 on the bearish divergence condition in the weekly MACD. The fall from 196.85 is currently viewed as a correction and would first target 38.2% retracement of 116.83 to 195.86 at 165.67. We asses the depth of correction based on reactions to 165.67 and the structure of the decline. A break of 180.36 will bring a rebound but we expect the strong resistance to limit the upside and bring another fall to extend the corrective pattern.

Daily Pivots: (S1) 170.56; (P) 172.15; (R1) 173.56

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EUR/NZD analysis for January 08, 2016

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Overview:

Recently, EUR/NZD has been moving upwards. As I expected, the price tested the level of 1.6478 in an average volume. In the daily time frame, I found broken 200 SMA and 50 SMA (sign of strength). In the H4 time frame, I found a change in behavior from downward to upward. Selling EUR/NZD at this stage looks risky. Watch for potential buying opportunities. The resistance level is at the price of 1.6750.

Fibonacci Pivot Points:

Resistance levels:

R1: 1.6530

R2: 1.6615

R3: 1.6750

Support levels:

S1: 1.6250

S2: 1.6175

S3: 1.6040

Trading recommendations: Selling EUR/NZD looks very risky at this stage since the price has broken our daily 200 SMA in the H4 and daily time frames. Watch for potential buying opportunities on the dips.

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Technical analysis of EUR/USD for January 08, 2016

EUR/USD continues moving downwards and moves strictly within the descending channel. According to the weekly chart, the price rejected the 50% Fibs after which it started to print new lower highs and lower lows.

Yesterday, the price rejected the upper trend line of the ascending channel and immediately dropped lower. Overall, there are no signs of a potential longer-term trend reversal to the upside and the downtrend is very likely to continue.

Consider selling EUR/USD while the price is between R1 (1.0890) and R2 (1.1000), targeting a potential double bottom that could be formed near the 1.05 support level. Stop loss should be just above R3 (1.1120 - 61.8% Fibs).

Support: 1.0750, 1.0500

Resistance: 1.0900, 1.1000, 1.1120

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Technical analysis of USD/CHF for January 08, 2016

The USD/CHF trend is obviously up and continues moving within the ascending channel. The price rejected the 61.8% Fibonacci retracement level. Apparently, this is the same level where the previous level of resistance was formed and then broken - S1 (0.9800).

After yesterday's corrective move down it seems that bulls will continue taking over, thus sending the price higher and higher. Consider buying USD/CHF while the price is between R1 (1.0000) and S2 (0.9800), targeting an area near 261.8% Fibs (R3 - 1.0440) applied to the last corrective wave that tested the lower trend line of the ascending channel. Stop Loss should be well below S1.

Support: 0.9800, 0.9680

Resistance: 1.0000, 1.0130, 1.0330, 1.0440

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Gold analysis for January 08, 2016

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Overview:

Since our last analysis, gold has been trading upwards. The price tested the level of $1,112.58 in a high volume. In the daily time frame, we can observe testing of Fibonacci retracement 38.2% and price action resistance and testing of SMA 100. Buying at this stage looks risky since the price is at the strong resistance. The intraday trend is upward, but the mid-term trend is still downward. I placed Fibonacci retracement to find resistance levels and got Fibonacci retracement 38.2% at the price of $1,102.00 (on the test) and Fibonacci retracement 61.8% at the price of $1,136.00. Intraday selling positions are preferable. The first support level is around the price of $1,088.50.

Daily Fibonacci pivot points:

Resistance levels:

R1: 1,110.20

R2: 1,114.40

R3: 1,121.20

Support levels:

S1: 1,096.60

S2: 1,092.40

S3: 1,085.60

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

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USDX technical analysis for January 8, 2016

The US dollar index has reversed as expected towards the short-term trend line and cloud support. It is preferred to be neutral today as we await for the NFP data release from the US.

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Blue line - trend-line support

The US dollar index is testing the cloud and trend-line support at 98.30. Breaking below it will open the way for a move below 97. On the other hand, an important resistance is found at 99.60. If it is broken, then we should expect previous highs to be tested.

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The daily chart has turned neutral in Ichimoku terms as the price closed inside it yesterday. There are increased chances now to see the lower boundary of the cloud if yesterday's highs are not broken upwards. Important news will come out today that will influence the trend so traders should be patient.The material has been provided by InstaForex Company - www.instaforex.com

Gold wave analysis for January 8, 2016

The gold price has reached important short-term resistance levels in the $1,100-$1,110 area. A pullback is justified, but for bulls to remain in control, the price should not fall below $1,080 and overlap the high of the wave 1.

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There are two possibilities regarding the wave count for gold. My favorite scenario that the long-term low is in, implies a new impulsive move has started that will change the long-term trend to bullish again. However, in order for it to hold, we need first to see an impulsive rise in gold. Up to now, we have seen only a rise in 3 wave as shown on the 4-hour chart above. It is a good sign that the gold price has manged to break above the Ichimoku cloud, but bulls need to see a pullback of the wave 4 and then a new high for the wave 5 to complete the first impulsive wave of the new trend.

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Finally the weekly chart shows some movement. As expected by the oversold stochastic, the price has moved higher towards the important short-term resistance of the kijun-sen (yellow indicator). A weekly close above it will open the way for a move towards the Ichimoku cloud. Bulls should be cautious now.The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of USD/JPY for Januari 08, 2016

Market Overview:

As the oil reserves in the USA increased reaching the highest level during the last 22 years (63.9 million barrels), the oil price around the world is experiencing a decline to $40 / barrel (actually reaching $34 / barrel). Due to the excess supply and the uncertainties in geo-politics, oil prices become depressed so that's why in the short term the economy in Japan is much affected by the oil price movements. So the Japanese Yen in the short term is undergoing strengthening, but the trend's weakening in the world economy, led by China of course, also will hold the Yen's rise in the future. Although the Chinese government to intervene through their central bank, the market participants see its actions more than a signal that the country is in the middle of the confusion facing the departure of foreign fund flows. So the market participants see there is a possiblity of economic slowdown in China. This also restrains the strengthening of the Yen in the short term. But what must be considered is the release of the US Non-Farm Payrolls and US Unemployment Rate today which is very volatile and potentially change the direction in the market, especially for the USD/JPY.

Today's Economic Data's:

During the Asian session, Japan will release Leading Indicators, Average Cash Earnings y/y and the US will publish Consumer Credit m/m, Wholesale Inventories m/m, Unemployment Rate, Non-Farm Employment Change, Average Hourly Earnings m/m, amid this data the USD/JPY today have a probability moving in medium to high volatility.

Today's Technical Data:

Weekly Bias is: Ranging.

Daily Bias is: Ranging.

Today's Technical Level:

Resistance. 3: 118.64.

Resistance. 2: 118.41.

Resistance. 1: 118.18.

Support. 1: 117.89.

Support. 2: 117.66.

Support. 3: 117.43.

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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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Global macro overview for 08/01/2016

Global macro overview for 08/01/2016:

In his yesterday speech, Bank of Canada Governor Stephen Poloz highlighted that the BOC would continue conducting an independent monetary policy in response to Canada's own economic developments in order to achieve the 2% inflation target. He also mentioned that the BOC has a number of conventional and unconventional financial tools to its disposal and will not hesitate to fight threats to the inflation target or to Canada's financial system. He also added, that the decline in commodity prices partially offset the depreciation of the loonie and boosts Canadian dollar revenues for exporters.

Crude oil prices reached a new 12-year low at the level of 32.09 yesterday, after breaking below all support levels on the weekly chart. Currently, crude oil is bouncing slightly to the upside and the weekly candle might close above the support at the level of 33.80 today. Nevertheless, it is too early to claim the downtrend is over.

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Global macro overview for 08/02/2016

Global macro overview for 08/01/2016:

The main fundamental event of this week, the NFP figures from the US job market, are scheduled for release today at 01:30 GMT. Markets expect another bunch of strong reports for December with 202K jobs created, earnings growing by 0.2% and unemployment remaining at 5%. If the data coincides with the consensus or even better than the expectations, then the Federal Reserve might take into account another gradual rake hike as soon as March 2016. The data release will be closely watched by market participants.

Meanwhile, the EUR/USD pair has bounced off the 61% Fibo support and hit the resistance at the level of 1.0933. Currently, the pair is trading in the middle of the daily range awaiting the NFP data release.

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Technical analysis of USD/CAD for January 8, 2016

General overview for 08/01/2016:

The top for the wave -v- of the wave 5 might be in place, but this possibility will be confirmed only if the level of 1.4045 is violated. The bearish divergence supports this view and the recent drop in the price is the biggest one since the corrective cycle between the waves -i- and -ii-, so the price overbalance is present as well. The next projected target level is the technical support at the level of 1.4000.

Support/Resistance :

1.4168 - Swing High

1.4122 - Intraday Resistance

1.4058 - WR3

1.4045 - Intraday Support

1.4000 - Round Number Support

1.3932 - WR2

1.3872 - Weekly Pivot

Trading recommendations:

Buy orders opened on Monday this week should now be closed with profit after trailed SL at the level of 1.4107 was hit overnight.

Currently, day traders should consider selling this pair only if the level of 1.4045 is clearly violated.

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Technical analysis of EUR/JPY for January 8, 2016

General overview for 08/01/2016:

An anticipated yesterday, the downtrend finally reversed to the upside in an impulsive fashion. To keep the reversal valid, the price must not break below the level of 128.17. Please notice there is an unfilled gap at the level of 130.75, which might be the next near-term target.

Support/ Resistance :

127.98 - WR3

128.17 - Intraday Support

129.07 - Intraday Resistance

129.31- WS2

Trading recommendations:

The buy orders from yesterday should be still kept open with SL moved higher to the level of 128.16. TP is open for now, but the nearest good level to take out partial profits is 129.50.

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Elliott wave analysis of EUR/NZD for January 8, 2016

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Wave summary:

The rally of the wave ii low at 1.5794 continues progressing higher. We have now seen the resistance at 1.6445 tested, but not broken clearly. We think that the minor support at 1.6238 will be able to protect the downside for the next rally through resistance at 1.6445 for continuation higher to 1.6583 and likely even higher to 1.6736 as next upside targets.

Only a break below the support at 1.6131 would arouse concerns.

Trading recommendation:

We are long EUR from 1.5810 and will move our stop higher to 1.6125. If you are not long EUR already, then buy EUR near 1.6290 and use the same stop at 1.6125.

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Elliott wave analysis of EUR/JPY for January 8, 2016

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Wave summary:

The correction in red wave (iv) has unfolded well as an expanding flat correction. As red wave (ii) was a simple zigzag correction, some kind of flat or triangle was expected in red wave (iv) due to the alternation principle. Wave c of red wave (iv) could move slightly higher to 129.36, but we are close to the termination of this correction and the downside pressure can be resumed.

A short-term break below the minor support at 128.32 will be the first indication of renewed downside pressure while a break below 127.81 confirms the ending of red wave (iv) and more downside pressure towards 125.84.

Trading recommendation:

We are short EUR from 130.95 with stop placed at 129.50. If you are not short EUR yet, then sell near 129.36 or upon a break below 128.32 and use the same stop at 129.50.

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NZD/USD intraday technical levels and trading recommendations for January 8, 2016

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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.

As anticipated, temporary bearish rejection existed around the price level of 0.6840 (daily resistance level) similar to what happened previously on December 16.

On the other hand, an estimated projection target for this flag pattern remains at 0.6950 when the NZD/USD pair manages to keep trading above 0.6750 and 0.6840.

On the other hand, a daily closure below 0.6750 invalidated the depicted uptrend, allowing a quick bearish decline initially towards the price level of 0.6600 where significant bullish rejection should be expected.

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Few 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/USD pair faced resistance between 0.6700 and 0.6750 providing temporary bearish rejection.

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

Last week, lack of enough bullish pressure was seen above 0.6800. That is why, the current bearish decline is pushing the pair even below the depicted support level at 0.6700.

A valid buy entry was suggested around the price zone of 0.6750-0.6700 where the depicted uptrend came to meet the NZD/USD pair.

Shortly after, an evident bearish breakdown of the depicted uptrend line occurred. This invalidated the previous bullish scenario.

Hence, a quick bearish decline was expected towards the prominent support level of 0.6600 where a new bullish swing and a valid buy entry should be expected.

S/L should be set as daily closure below 0.6580.

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USD/CAD intraday technical levels and trading recommendations for January 8, 2016

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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 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 which is being tested today.

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 bearish correction occurs.

Trading recommendations:

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

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 January 8, 2016

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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 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) waited for a bearish visit after the market pushed further below the level of 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 the current price zone should be expected.

Note that a bullish closure above 1.4700 is needed to allow a bullish pullback to occur towards 1.4950.

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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 as well as the prominent demand levels at 1.4600.

That is why, early signs of a bullish reversal around the price zone of 1.4650-1.4570 should be considered as a valid buy signal.

Trading Recommendation:

Risky traders can have a valid BUY entry anywhere around the price zone of 1.4650-1.4570 if enough bullish rejection is expressed on short-term charts (H4 and H1).

S/L should be located below 1.4520 to minimize our risk. Initial T/P levels should be located at 1.4700, 1.4800 and 1.4950.

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Intraday technical levels and trading recommendations for EUR/USD for January 8, 2016

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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 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).

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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.

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 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

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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

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.

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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.

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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.

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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.

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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

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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

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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

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.

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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

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.

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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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Daily analysis of EUR/JPY for January 07, 2016

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Overview

The outlook for the EUR/JPY pair is unchanged for the moment. While further fall is expected, we stay cautious about the strong support from 126.09. A break of the 129.66 support turned into resistance will indicate short-term bottoming and turn bias back to the upside for the 134.58 resistance. However, a decisive break of 126.09 will extend the larger decline from 149.76. The strong rebound after failing to sustain below 38.2% retracement of 94.11 to 149.76 at 128.50 points to the development of a sideways pattern. We expect more range trading between 126.09 and 149.76 in the medium term. An upside breakout should follow it at a later stage. Nevertheless, a decisive break of 126.09 would extend the correction towards the 61.8% retracement at 115.36.

Daily Pivots: (S1) 127.09; (P) 127.63; (R1) 128.25

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Daily analysis of Silver for January 07, 2016

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Overview

The silver price has been trading sideways since yesterday. As long as the price is below the 14.25 level, we will still suggest the bearish trend on an intraday and short-term bases. its main targets begin at 13.50 followed by 13.00. Note that breaching the 14.25 level will make the price begin a bullish correctional wave, the targets of which start at 14.65 followed by 15.30. The silver price shows bearish bias in an attempt to trade below 13.96 again, which supports the continuation of our bearish overview for the upcoming period that targets the levels of 13.50 and then 13.00 mainly.

The EMA50 supports the suggested decline, and holding below 14.25 conditions its continuation.

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Daily analysis of GBP/JPY for January 07, 2016

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Overview

According to the attached H4 chart, GBP/JPY is expanding its fall. The 100% projection of 195.86 to 180.36 from 188.79 at 173.9 has already been met. Intraday bias remains on the downside for the next long-term Fibonacci level at 165.67. On the upside, breaks above the minor resistance at 174.11 will turn bias neutral and bring consolidations before another drop takes place. The tumble from 196.85 is currently viewed as correction and would first target 38.2% retracement of 116.83 to 195.86 at 165.67. We asses the depth of correction based on reactions to 165.67 and the structure of the decline. A break of 180.36 will bring rebound, but we expect the strong resistance to limit the upside and bring another fall to extend the corrective pattern.

Daily Pivots: (S1) 172.64; (P) 173.77; (R1) 174.46

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