Gold analysis for January 22, 2016

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Overview:

Since our last analysis, gold has been trading sideways around the level of $1,098.00. In the daily time frame, we can observe a weak demand bar with a weak close. Also, the price rejected our 100 SMA at the level of $1,107.00. Buying at this stage looks risky since the price is at the resistance level. An intraday trend is upward, but short-term and mid-term trends are still bearish. I found an upward trend line in the area around $1.094.00. If the price breaks the level of $1,094.00, we may see further downward movement. Downward support is found at the levels of $1,092.00, and $1,085.00. The resistance level is set in the area of $1,115.00.

Daily Fibonacci pivot points:

Resistance levels:

R1: 1,103.15

R2: 1,105.40

R3: 1,109.00

Support levels:

S1: 1,095.00

S2: 1,093.65

S3: 1,090.00

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

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Technical analysis of EUR/JPY for January 22, 2016.

Technical outlook and chart setups:

The EUR/JPY pair moved lower from days' high of 128.40. The pair is trading around the level of 127.80 now, looking for an opportunity to retrace further before gaining momentum towards fresh highs. The pair could still break above the level of 128.70 before producing meaningful retracement. A breakout above major immediate resistance at 128.70 would confirm that bulls are back and could extend a rally further. It would be a safe strategy to buy on dips there after. Hence it is recommended to take profits off the long positions initiated earlier and remain flat for now. Immediate support is seen at the level of 126.00, while resistance is seen at 128.70.

Trading recommendations:

Take profits off the long positions taken earlier and remain flat.

Good luck!

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Technical analysis of GBP/CHF for January 22, 2016.

Technical outlook and chart setups:

The GBP/CHF pair has raised through the level of 1.4510 as discussed and expected earlier. The pair should face initial resistance around 1.4600. Bulls should be poised to push through 1.4800/50 as depicted here, before producing a meaningful retracement. It is recommended to take partial/full profits for longs taken earlier and watch for an opportunity to enter on a pullback again. Immediate support is seen at the levels of 1.4130/50 followed by 1.3850 and lower, while resistance is seen at 1.4600 followed by 1.4800 and higher.

Trading recommendations:

Take profits on long positions taken earlier and remain flat now.

Good luck!

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Technical analysis of Gold for January 22, 2016.

Technical outlook and chart setups:

Gold is trading around $1,097.00 after bouncing off a low of $1,092.00 yesterday. The metal is poised to rally from current levels until prices remain above $1,080.00 at least. Please also note that the metal bounced off the Fibonacci 0.618 support of a rally between $1,082.00 and $1,109.00. It is hence recommended to remain long for now with risk at the level of $1,080.00. Immediate support is seen at $1,082.00 followed by $1,070.00 and lower, while resistance is seen at $1,113.00 and higher. If the above-wave count is true, gold should move higher through at least $1,125.00.

Trading recommendations:

Remain long with stop at $1,080.00, a target is seen at $1,125.00.

Good luck!

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Technical analysis of Silver for January 22, 2016

Technical outlook and chart setups:

Silver rose through the level of $14.15 today after forming a base around $13.90 yesterday. The metal bounced off the Fibonacci 0.786 support levels and along the trend line support of the consolidation structure. A push above the level of $14.20 will be extremely encouraging for bulls and the metal should be able to move through $14.30 easily. It is hence recommended to remain long with risk at $13.75. Immediate support is seen at $13.90 followed by $13.75 and lower, while resistance is seen at $14.30 and higher respectively. Bulls should remain in control until prices stay above at least $13.75.

Trading recommendations:

Remain long with stop at $13.75, a target is at $14.30/50/60+

Good luck!

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EUR/NZD : analysis for January 22, 2016

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Overview:

Recently, EUR/NZD has been moving downwards. The price tested the level of 1.6520 in a high volume. In the daily time frame, we can observe neutral bar and testing of Fibonacci retracement 50%. In the H1 time frame, we found a support trendline which the price should break to confirm potential upward movement. If the price doesn't break the trendline, a further downward movement will be possible. Fibonacci retracement 61.8% is at the price of 1.6390. The resistance level is seen at 1.7260. The trend is neutral but intraday momentum is downward.

Fibonacci Pivot Points:

Resistance levels:

R1: 1.6910

R2: 1.7010

R3: 1.7180

Support levels:

S1: 1.6570

S2: 1.6470

S3: 1.6300

Trading recommendations: Intraday trend is downward. As long as the support trendline holds watch for potential selling opportunities.

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Technical analysis of CHF/JPY for January 22, 2016

The CHF/JPY trended downwards and showed lower lows and lower highs. The pair has broken below the strong support near 117.00 and currently this area is acting as resistance. The Fibonacci applied to the corrective wave up after the support breakout shows support levels.

The price moved within the descending channel, and yesterday under the heavy volume the pair broke both the lower trendline of the channel and technical and psychological support at 116.00.

While pair is trading in the resistance area near 117.00, consider selling CHF/JPY with targets either near S3 (115.00) or S4 (114.00). It is recommended to set stop loss just above the R1 (117.60).

Additionally, EUR and CHF could weaken substantially against other currencies.

Support: 116.60, 116.00, 115.00, 114.00.

Resistance: 117.60.

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Daily analysis of major pairs for January 22, 2016

EUR/USD: There is now a Bearish Confirmation Pattern in the market, which means the price could begin to trend further downwards. There is a potential bearish target at the support line of 1.0750, while the resistance line at 1.0950 is a formidable barrier for bulls.

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USD/CHF: There is a clear bullish signal on the USD/CHF pair for the price has moved upward. The price moved above the EMA 11, which in its turn is above the EMA 56. The Williams' % Range period 20 is not too far from the overbought region. Since the important market level at 1.0100 is being successfully breached, it might be logical to assume that the price would continue moving northwards.

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GBP/USD: The cable has found a strong support around the accumulation territory of 1.4100. The price has been going upwards in the context of a downtrend. As long as the price is below the distribution territory of 1.4400, it will not be safe to open long positions here.

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USD/JPY: The USD/JPY pair trended downwards testing the demand level of 116.00 and bounced upwards later. From that demand level, the price has moved upwards by 200 pips, now around the supply area of 118.00. A further upward movement of another 200 pips is likely to result in a new bullish bias on the market.

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EUR/JPY: The outlook for this market remains bearish, though there are mixed signals observed. It is better to stay away from this market until there is a directional signal. There may be a breakout today or next week, which would be influenced by the events affecting the euro.

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Global macro overview for 22/01/2016

Global macro overview for 22/01/2016:

In addition to the ECB rate decision, the important data from the US labor market was released yesterday as well, including the unemployment and continuing claims. According to the report of the US Labur Department, initial claims for unemployment benefits in the US surged to 293K (278k expected; 283k prior), which is the highest level in six weeks. Continuing claims slightly decreased to the level of 2208K coming in below the market expectations of 2253K. Nevertheless, please notice that only a sustained increase in unemployment claims will be able to signal some weakness in the US labor market.

The US dollar index is just in the middle of a trading range trying to break out above the recent local high. The next daily support is seen at the level of 97.18 and the next resistance is seen at the level of 99.98.

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Global macro overview for 22/01/2016

Global macro overview for 22/01/2016:

At yesterday's ECB meeting, ECB President Mario Draghi dropped a very clear and deliberate hint that further monetary stimulus are likely at the next meeting scheduled for March. It looks like serious moves are going to be necessary in order to overcome the new deflationary pressure and downside risks arising in the euro area. Nevertheless, please notice that there are still some serious and influential hawkish members of the ECB board, so do not expect too much from the next ECB meeting.

Following dovish statements of Draghi, the EUR/USD pair fell, but managed to bounce back to the pre- ECB levels. Currently, the pair is trading just below the important resistance level of 1.0858.

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Technical analysis of USD/CAD for January 22, 2016

General overview for 22/01/2016:

An alternative count has been added to the scenario in order to indicate the next best count if the main count is invalidated. The invalidation line is seen at the level of 1.4187 ( wave (1) top), so any violation would mean the top for the wave (50 blue and 5 black) might be in place.

Support/Resistance:

1.4835 - WR1

1.4690 - Local High

1.4445 - Weekly Pivot

1.4323 - Intraday Resistance

1.4292 - WS1

1.4226 - Intraday Support

1.4187 - Invalidation Level

Trading recommendations:

Day traders should refrain from trading in this market and wait for a better trading setup to occur.

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Technical analysis of EUR/JPY for January 22, 2016

General overview for 22/01/2016:

The higher time frame counts was updated, yet there are still two wave scenarios for this pair with the very important invalidation line at the level of 126.09. Any breakout below this level would immediately invalidate the main impulsive count and put an alternative count in play. As long as this level is not violated, the base scenario of one more wave to the upside to develop over the next few weeks is still possible (main count). A breakout lower, would mean wave three is in progress and a sell-off is highly possible in this market.

Support/Resistance:

126.37 - WS2

126.84 - WS1

126.78 - Technical Support

127.52 - Intraday Support

127.78 - Weekly Pivot

128.29 - WR1

129.07 - Intraday Resistance

129.25 - WR2

Trading recommendations:

Swing traders might consider placing buy orders from the current market levels with SL below the level of 126.08 and TP open for now.

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USDX technical analysis for January 22, 2016

The US dollar index spiked higher towards 99.80 during the press conference of ECB president Mario Draghi. Mainly because of the weak EUR/USD pair, the index rallied, but got rejected at the upper resistance boundary of a bearish wedge formation I pointed out a couple days ago.

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Blue lines - bearish wedge pattern

The index continues to trade above the Ichimoku cloud support of 98.90. The rejection was not a good sign for dollar bulls yesterday, but the fact that sellers did not manage to breakout below the cloud was also not a good sign for bears. The index is trapped inside this wedge pattern, so only in case of a breakout above or below it, things will clear up.

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On a daily basis, the price remains above the Ichimoku cloud and this is a positive sign. However, bulls will need to breakout above 100.50 for a new short-term trend to start. Otherwise, they can see the index reversing and pushing lower towards 97. I'm bearish as long as the price is below 100.50.The material has been provided by InstaForex Company - www.instaforex.com

Gold technical analysis for January 22, 2016

Gold price continues to trade around $1,100 without any clear direction despite the fact that it remains inside an upward sloping channel. The level at $1,130 remains our short-term target, while the weekly chart confirms that we should expect another move higher.

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Red lines - bullish channel

Green rectangle - target area

Gold price is trading above the - hour Ichimoku cloud. The price is moving towards higher highs and higher lows. A short-term trend is bullish but not in an impulsive form that would imply a longer-term reversal. So, if prices reach $1,130,we should think of taking profits and exiting long positions because a rise from $1,050 could just be a part of a bigger upward correction.

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In the weekly chart, gold prices are trapped between the kijun- and tenkan-sen indicators. The support and resistance levels are clearly visible on a weekly basis, so a weekly close above or below them will set the tone for the trend over coming weeks.The material has been provided by InstaForex Company - www.instaforex.com

Elliott wave analysis of EUR/NZD for January 22, 2016

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Wave summary:

Hints made by ECB president Draghi that further easing could be necessary made the EUR tumble in late afternoon. The important support level of 1.6637 was broken indicating a different pattern unfolding. An expanded flat is unfolding as red wave ii. If this is correct, then we are likely to see a move slightly lower to 1.6480 before the next rally above 1.6785 confirming a new rally to 1.7273 and above towards 1.7646 should be seen. Only a direct breakout above 1.6785 indicates that the expanded flat correction has already terminated and the impulsive rally towards 1.7646 is unfolding.

Trading recommendation:

Our stop at 1.6635 was hit for a loss. We will re-buy EUR at 1.6485 with stop placed at 1.6365 or we will buy EUR upon a direct breakout above 1.6785

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Elliott wave analysis of EUR/JPY for January 22, 2016

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Wave summary:

Red wave ended a little earlier than we had expected. The bottom of red wave (v) and wave [iii] was seen at 126.14. That means a correction in wave [iv] is unfolding now. An ideal target for this correction is seen at the 38.2% corrective target of a decline from 133.25 to 126.14 and this target comes in at 129.07, which is the top of red wave (iv) of one lessor degree.

In the short term, we are going to look for a minor set-back to 126.92 before the next minor rally towards 129.07 ends wave [iv] and sets a stage for the next impulsive decline in wave [v].

Trading recommendation:

We are short EUR from 130.95 and will move our stop lower to 127.90 or take profit at 127.05.

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NZD/USD intraday technical levels and trading recommendations for January 22, 2016

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On December 30, a significant bearish rejection took place around the level of 0.6840 (daily resistance level) similar to what happened previously on October 23.

Moreover, a daily closure below 0.6750 allowed a quick bearish decline to occur initially towards the level of 0.6500, which was broken to the downside as well.

The depicted chart illustrates a double-top reversal pattern. The depicted support level at 0.6430 should be broken downwards in order to confirm the reversal pattern.

However, traders should note that the level of 0.6400-0.6350 constitutes a significant support zone, which corresponds to the backside of a broken downtrend line.

Hence, a strong bullish rejection and a valid buy entry were expected in the zone of 0.6400-0.6380.

Significant bullish reaction has been manifested around 0.6380 (a bullish engulfing daily candlestick) on the daily chart earlier this week.

Today, bullish persistence above 0.6500 is mandatory to keep pushing the NZD/USD pair towards higher bullish targets.

On the other hand, a bearish daily closure below 0.6500 brings the pair again towards the level of 0.6420.

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USD/CAD intraday technical levels and trading recommendations for January 22, 2016

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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.

A few weeks ago, a bearish breakout below the support level of 1.3075 was needed to enable a further bearish decline to take place 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) enhanced the bullish side of the market on December 7.

A bullish visit towards the resistance level of 1.4150 (Fibonacci Expansion 100%) was expected as a result of a bullish breakout above 1.3400.

Bullish persistence above 1.4150 enhanced the bullish side of the market towards 1.4600-1.4650 (141.4% Fibonacci expansion) where bearish rejection should be expected.

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

Trading recommendations:

As we expected, a valid sell entry was offered around 1.4650 (141.4% Fibonacci expansion). It is already running in profits now. S/L should be located above 1.4700.

Next T/P levels should be located at 1.4280 and 1.4150.

On the other hand, conservative traders should wait for a bearish engulfing candlestick closure below the level of 1.4100 (Fibonacci Expansion 100%) to sell the USD/CAD pair. S/L should be located above 1.4150.

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Intraday technical levels and trading recommendations for GBP/USD for January 22, 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 previous weekly level of 1.4950 was expected as a result of a bearish breakout below 1.5200.

Extensive bearish pressure has been applied to demand levels located at 1.4620, 1.4360, and 1.4220. All of them have been breached to the downside.

The next demand zone to meet the GBP/USD pair is located around 1.3840-1.3660, which corresponds previous bottoms established back in May 2009. However, early signs of bullish recovery can be seen off 1.4075.

On the other hand, bullish persistence above 1.4220 and 1.4360 is mandatory to bring bullish strength into the market again. The first bullish target is seen at 1.4615.

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

The 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) favored a bearish decline towards 1.4680 and 1.4610 where previous prominent bottoms are located on the GBP/USD daily chart.

Currently, the GBP/USD pair looks oversold as it is being pushed further below the prominent demand levels of 1.4620, 1.4360, and 1.4220.

That is why any signs of bullish rejection around the depicted demand level of1.4220 should be considered a valid buy signal.

Trading Recommendation:

Risky traders can have a valid buy entry when the GBP/USD pair maintains a daily closure above the level of 1.4220.

Trading Recommendation:

Risky traders can have a valid buy entry when the GBP/USD pair maintains a daily closure above the level of 1.4220.

S/L should be located below 1.4150 to minimize our risks.

Initial T/P levels should be located at 1.4360, 1.4440 and 1.4500.

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Intraday technical levels and trading recommendations for EUR/USD for January 22, 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) where bullish recovery was initiated.

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

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 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 towards 1.0800 and 1.1000.

During the last few weeks, the level of 1.1000 was considered to be a significant supply level to offer a valid sell entry. Moreover, a Head and Shoulders reversal pattern was established around the mentioned supply level.

The previous bearish closure below 1.0800 (the reversal pattern neckline) confirmed the depicted reversal pattern. An estimated bearish target is located at 1.0620.

Today, bearish persistence below 1.0800 (neckline of the depicted reversal pattern) is mandatory to allow more bearish decline to occur towards 1.0730, 1.0620, and 1.0570.

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Technical analysis of EUR/USD for Januari 22, 2016

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When the European market opens, economic news on the Flash Services PMI, Flash Manufacturing PMI, German Flash Services PMI, German Flash Manufacturing PMI, French Flash Services PMI, and French Flash Manufacturing PMI is due to be released. The US will deliver economic data on the CB Leading Index m/m, Existing Home Sales, and Flash Manufacturing PMI. So amid the reports, EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.0905.

Strong Resistance:1.0899.

Original Resistance: 1.0888.

Inner Sell Area: 1.0877.

Target Inner Area: 1.0852.

Inner Buy Area: 1.0827.

Original Support: 1.0816.

Strong Support: 1.0805.

Breakout SELL Level: 1.0799.

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 Januari 22, 2016

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In Asia, Japan will release the Flash Manufacturing PMI and the US will deliver some economic data on the CB Leading Index m/m, Existing Home Sales, and Flash Manufacturing PMI. So, there is a strong probability that the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 118.21.

Resistance. 2: 117.98.

Resistance. 1: 117.74.

Support. 1: 117.46.

Support. 2: 117.23.

Support. 3: 117.00.

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

Technical analysis of NZD/USD for January 22, 2016

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Overview:

  • The NZD/USD pair is expected to find minor support at the level of 0.6512 (a daily pivot point) considering strong support at 0.6437, which represents the weekly support this week. So, the strong support will set at the spot of 0.6437 and 0.6400 today. Besides, you have to consider the level of 0.6606, which represents strong resistance and a double top at the same time. We expect a range about 105 pips today. The market will probably indicate a bullish opportunity at the level of 0.6510 and the weekly pivot point will act as minor support around the area of 0.6512. So, according to the previous events, the price is likely to move above the level of 0.6512. From the source previously mentioned, the area above 0.6512 looks for a further upside move with the first target at 0.6565 and continue towards 0.6606.

Intraday technical levels:

  • R3: 0.6728
  • R2: 0.6647
  • R1: 0.6583
  • PP: 0.6502
  • S1: 0.6438
  • S2: 0.6357
  • S3: 0.6293
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Technical analysis of EUR/USD for January 22, 2016

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Overview:

  • According to previous events, we expect a wider trading range today because the market showed sins of high volatility yesterday. Hence, this range will probably start from the level of 1.0880 in order to continue towards the strong support at 1.0780. Additionally, the volatility was found at 210.50. Therefore, the market indicates the higher volatility. The first strong support is found at 1.0780 and the double bottom was formed at 1.0777. Moreover, the weekly support 2 is seen at the level of 1.0721.

Trading recommendations:

  • The EUR/USD pair is still moving between 1.0880 and 1.0721.
  • Below the level of 1.0880, look for moving further downside with 1.0780 and it might resume to 1.0721 in order to test the weekly support 2. However, stop loss must set above the weekly pivot point at the level of 1.0925.
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Daily analysis of USDX for January 22, 2016

The USDX had a very volatile session on Thursday, as the index did a strong pullback after a bullish momentum gained above the 200 SMA on the H1 chart. However, the moving average is still acting as dynamic support and a push higher could move the index to the level of 100.00 in order to test it in a mid-term term. The MACD indicator is in the negative territory.

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H1 chart's resistance levels: 99.22 / 99.49

H1 chart's support levels: 98.79 / 98.39

Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the USDX breaks with a bullish candlestick; the resistance level is seen at 99.22, take profit is at 99.49, and stop loss is at 98.94.

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Daily analysis of GBP/USD for January 22, 2016

On the H1 chart, GBP/USD performed a strong rebound from the support level of 1.4080. Currently we can see a consolidation above the level of 1.4198. A breakout above the level of 1.4198 can push the pair towards the level of 1.4309, where the 200 SMA is located in this time frame. The MACD indicator is reaching overbought territories.

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H1 chart's resistance levels: 1.4309 / 1.4373

H1 chart's support levels: 1.4198 / 1.4080

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 1.4198, take profit is at 1.4080, and stop loss is at 1.4309.

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Daily analysis of Silver for January 21, 2016

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Overview

The silver price shows slight bullish bias to continue approaching from the 14.25 level, while the price is still confined inside the sideways range that appears on the chart. the range's lines are represented by the 13.65 support and 14.25 resistance, which keeps the sideways move scenario valid until now. We are waiting for the price to exit this range and detect the next targets clearly. We remind you that breaching the 14.25 resistance will lead the price to achieve some gains that start at 14.67 followed by 15.30, while breaking the support will resume the main bearish track, the next target of which is located at 13.00. The silver price has been fluctuating negatively since morning to move near 13.96 again, and the price did not show any strong moves until now. It keeps the sideways trading scenario valid as it is without any changes, until the price manages to breach one of the key levels represented by the 13.65 support and 14.25 resistance to detect the next targets clearly. The expected trading range for today is between the 13.65 support and 14.40 resistance.

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Daily analysis of USD/JPY for January 21, 2016

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Overview

We remain cautious on strong support at 116.13 moving downside. Price actions at 125.85 are viewed as a sideways consolidation pattern. Above 118.10, minor resistance will indicate near term reversal and turn bias back to the upside support ( 120.33) turned resistance first. Nonetheless, a sustained breakout of 116.13 will indicate that there is a deeper medium-term correction. At this point, we consider this pattern to be sideways and expect strong support around 116.13 to keep moving downside. However, a sustained breakout of 116.13 will indicate that the corrective fall from 125.85 would extend to 38.2% retracement of 75.56 (2011 low) to 125.85 at 106.63 and below.

Daily Pivots: (S1) 116.05; (P) 116.86; (R1) 117.75;

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Daily analysis of GBP/JPY for January 21, 2016

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Overview

GGBP/JPY continues to fall and reaches as low as 164.68 so far. The long-term Fibonacci level at 165.67 has been already hit. An intraday bias remains on the downside for 161.8% projection of 195.86 to 180.36 from 188.79 at 163.71 next. A break will target 200% projection at 157.79. On the upside, above 169.09 minor resistance the bias will turn neutral and bring consolidation. A fall from 195.86 is currently viewed as a correction. A 38.2% retracement of 116.83 to 195.86 at 165.67 is already met. Based on the current momentum, the correction is likely to extend to 61.8% retracement at 147.01 before completion.

Daily Pivots: (S1) 165.53; (P) 167.31; (R1) 168.29;

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