USD/CAD intraday technical levels and trading recommendations for May 17, 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 significant bearish rejection was observed around 1.3450. Hence another consolidation range was established from 1.3450 down to 1.2800.

On December 7, a bullish breakout above 1.3450 (upper limit of the recent consolidation range) enhanced the bullish side of the market.

Hence a bullish visit to the resistance at 1.4120 (Fibonacci Expansion 100%) occurred.

Bullish persistence above 1.4150 enhanced the bullish side of the market towards 1.4650 (141.4% Fibonacci expansion) where an evident bearish rejection was expected (bearish engulfing weekly candlestick).

The 1.4120 level (Fibonacci Expansion 100%) stood as a significant resistance level where a significant bearish rejection was applied.

Although the area of 1.3050-1.3250 was expected to offer bullish support for the USD/CAD pair, the same price zone was broken below as depicted on the daily chart.

Shortly after, the 1.3300 level stood as a significant resistance as it corresponds to the 50% Fibonacci level and the backside of the broken weekly uptrend where a valid sell entry was suggested on March 24.

Since then, the USD/CAD pair has been trapped within the consolidation range between 1.3300 and 1.2970 until a bearish breakout took place on April 11.

Shortly after the quick bearish decline took place below 1.2970, signs of bullish recovery were expressed around 1.2460.

Conservative traders were advised to consider the current pullback towards 1.2970 (61.8% Fibonacci level) as a valid signal to sell the USD/CAD pair.

Target levels should be located at 1.2700 and 1.2550 while S/L should be placed above 1.3050.

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NZD/USD Intraday technical levels and trading recommendations for May 17, 2016

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On January 28, the depicted support at 0.6400 acted as a prominent key level offering a valid buy entry.

The 0.6550 level was broken above a few weeks ago.

Bullish persistence above 0.6550 (depicted recent support) was necessary to keep the price moving towards higher bullish targets.

The price zone of 0.6750-0.6840 constituted a significant resistance zone where signs of a bearish rejection were seen during the previous few weeks (triple-top reversal pattern).

On February 9, the NZD/USD pair failed to consolidate below the depicted support level at 0.6550.

Moreover, an obvious bullish recovery was expressed around the depicted temporary support level. Hence, the recent bullish swing towards 0.6750 and 0.6860 was initiated.

In March, obvious bullish breakouts above 0.6750 and 0.6860 were executed. Hence, the price level of 0.6750 constituted a significant support level where a bullish hammer daily candlestick was expressed on Tuesday.

The previous daily closure below the 0.6850 level (May 6) enhanced a quick bearish movement towards 0.6750 where a valid BUY entry is being offered. T/P levels to be located at 0.6850 and 0.6920 while S/L can be set as a daily closure below 0.6750.

This week, bullish persistence above 0.6850 is mandatory to maintain enough bullish momentum in the market.

Otherwise, sideways consolidations will continue between the price levels of 0.6750 and 0.6850.

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Intraday technical levels and trading recommendations for GBP/USD for May 17, 2016

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Since January 2016, bullish persistence above 1.4500 was mandatory to maintain enough bullish strength in the market.

However, the previous weekly candlesticks maintained their bearish persistence below the depicted weekly supply zone (below 1.4470) which allowed further bearish decline to occur.

The prominent demand level located at 1.3845 (historical bottom that goes back to March 2009) provided a significant bullish rejection on February 26.

As expected, an evident bullish recovery and a bullish engulfing weekly candlestick were expressed around 1.3845 (prominent weekly demand level) where a significant bullish swing was initiated on March 1.

On the other hand, the price zone of 1.4475-1.4670 has been standing as a significant supply zone during the past few weeks.

Two weeks ago, the depicted long-term downtrend line came to meet the GBP/USD pair around the same price zone.

Hence, significant bearish rejection and bearish weekly candlesticks were executed around the upper limit of it (1.4670 level).

The next bearish destinations for the GBP/USD pair would be located at 1.4300, 1.4220, 1.4050, and finally 1.3845.

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In February 2016, a lower high was achieved around the level of 1.4530. This applied extensive bearish pressure against the price level of 1.4470.

The GBP/USD pair looked oversold when the previous bearish decline extended below 1.4040 (temporary support). That is why, a significant bullish recovery and a profitable long entry were suggested around 1.3845.

On April 7, the market failed to push below the price level of 1.4050. Moreover, a bullish movement was executed again towards the price levels of 1.4750 (slightly above the 61.8% Fibonacci level).

As anticipated, significant bearish rejection was expressed around the price zone of 1.4700-1.4750 (61.8% Fibonacci level) resulting in a strong bearish shooting-star daily candlestick.

Last week, daily persistence below 1.4470 was needed to enhance further bearish decline initially towards 1.4350.

On Friday, a bearish engulfing daily candlestick was expressed by the end of the day (the weekly closure as well).

As long as the GBP/USD pair keeps trading below 1.4470, bearish decline in the direction of the price levels of 1.4300, 1.4220, and 1.4050 should be expected.

Price action should be watched carefully around 1.4050 for a possible bullish rejection and a valid BUY entry.

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Intraday technical levels and trading recommendations for EUR/USD for May 17, 2016

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In January 2015, the EUR/USD pair moved below the major demand levels near 1.2100 and 1.2000 where historical bottoms had been previously set in July 2012 and June 2010. Hence, a long-term bearish target is projected towards 0.9450.

In March 2015, the EUR/USD bears challenged the monthly demand level of 1.0570 which had been previously reached in August 1997.

Later in April 2015, a strong bullish recovery was observed around the mentioned demand level.

April's monthly candlestick came as a bullish engulfing one. However, next monthly candlesticks (September, October, and November) reflected a strong bearish rejection around the area of 1.1400-1.1500.

In February, the depicted price levels around 1.1400-1.1500 acted as a significant supply zone during the current bullish pullback.

Hence, another bearish rejection should be expected around the current price levels. If not, further bullish movement towards 1.1700 should be expected.

In the long-term prospect, the level of 0.9450 will remain a projected bearish target if a monthly candlestick comes to close below the depicted monthly demand level of 1.0570.

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In December 2015, a consolidation range between 1.1000 and 1.0800 was established on the daily chart.

On February 3, a bullish breakout was executed above this consolidation range.

Bullish fixation above 1.1000 was mandatory to allow bullish movement to continue.

Similar to what happened in October 2015, the supply zone of 1.1410-1.1550 should constitute a significant resistance zone for the EUR/USD pair.

On May 5, the 1.1600 level corresponded to the backside of the broken uptrend line depicted on the chart where the shooting-star daily candlestick appeared, indicating significant bearish rejection.

Last week, daily persistence below the 1.1400 level was needed to ensure further bearish momentum towards 1.1330 level.

A strong bearish daily candlestick was achieved on Friday. Hence, a quick bearish decline towards 1.1210 and 1.1100 levels should be expected as long as the EUR/USD pair keeps pushing below 1.1400.

Please note that any bearish pullback towards the level of 1.1000 (depicted uptrend line and previous consolidation range) should be considered for a valid BUY entry.

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EUR/NZD analysis for May 17, 2016

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Recently, EUR/NZD has been moving downwards. The price reached my downward target at the price of 1.6545. I found that strength came in at the price of 1.6550. The price rejected strongly, but now the resistance level at the price of 1.6650 is on the test. Buying EUR/NZD at this stage still looks risky, since we may see potential re-test of 1.6550. Watch for weak demand bars to confirm further downward continuation.

Fibonacci Pivot Points:

Resistance levels:

R1: 1.6735

R2: 1.6765

R3: 1.6815

Support levels:

S1: 1.6640

S2: 1.6610

S3: 1.6565

Trading recommendation for today: Watch for weak demand bars to confirm further downward continuation.

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Gold analysis for May 17 , 2016

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Since our previous analysis, gold has been moving downwards. The price tested the $1,268.91 level in a high volume. On the daily time frame chart, I found a strong sign of weakness. I found a bullish bar in an average volume bit with very weak close. The bar closed below the middle, which is a strong sign of weakness. I also found a supply trend line, which held successfully. According to the 15M time frame, there is potential bearish flag formation. So, watch for potential breakout of the bearish flag to confirm further downward continuation. Targets are set at the price of $1,269.00 and $1,257.80.

Daily Fibonacci pivot points:

Resistance levels:

R1: 1,284.70

R2: 1,288.00

R3: 1,294.00

Support levels:

S1: 1,273.30

S2: 1,269.80

S3: 1,264.00

Trading recommendations for today: be careful when buying gold and watch for selling opportunities on the rallies.

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Technical analysis of EUR/USD for May 17, 2016

EUR/USD found the top near 1.6000 where a selloff begun. While moving lower, EUR/USD broke below the uptrend channel suggesting the continuation of the decline.

The Fibonacci applied to the channel breakout point shows that the rate failed to test any of the downside support levels while today it rejected the channel breakout point - R1 (1.1335). The Fibonacci applied to the first corrective wave after the channel breakout shows that the 261.8% retracement corresponds to the 23.6% level of the channel breakout Fibs. In addition the downtrend trend line was also rejected today.

Consider selling EUR/USD at the current rate (1.1315) targeting S2 (1.1185) support level or even lower - S3 (1.1050). The stop loss should be just above R2 (1.4000).

Support: 1.1270, 1.1185, 1.1050

Resistance: 1.1335, 1.4000

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Technical analysis of USD/CHF for May 17, 2016

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USD/CHF is expected to post some further gains. The pair stands firmly above its nearest support at 0.9740, and seems likely to post a new rise. A test of the next resistance at 0.9795 is expected in the coming trading hours, as the rising 20-period and 50-period moving averages play well support roles, and should continue to push the prices higher. Besides, the relative strength index is also bullish above its neutrality area at 50. Hence, as long as 0.9740 holds on the upside, look for further advance to 0.9850 and 0.9890 in extension.

Trading recomendations:

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. Therefore, long positions are recommended with the first target at 0.9850 and the second one, at 0.9890. In the alternative scenario, short positions are recommended with the first target at 0.97 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 0.9660. The pivot point is at 0.9740.

Resistance levels: 0.9850, 0.9890, 0.9935

Support levels: 0.97, 0.9660, 0.9625

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Technical analysis of USD/JPY for May 17, 2016

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USD/JPY pair is supported by a rising trend line. Overnight US stock indices rebounded, paring losses made in the previous session. Investors were cheered up by rising oil prices, multi-billion dollar merger-and-acquisition deals in the pharmaceutical and energy sectors, as well as Berkshire Hathaway's reported $1 billion stake in Apple Inc. (AAPL). The Dow Jones Industrial Average rallied 1.0% to 17,710, the S&P 500 gained 1.0% to 2,066, and the Nasdaq Composite was up 1.2% to 4,775.

Nymex crude oil surged 3.3% lower to a year-to-date high at $47.72 a barrel. Goldman Sachs, which has recently been among the most bearish banks on oil prices, said it now expects oil prices to rise to $50 a barrel in the second half of the year, compared with its previous projection of $40-45, citing a supply shortfall caused by recent outages.

Gold was broadly flat at $1,273 an ounce although it had reached $1,288 in the session. And the benchmark 10-year Treasury yield climbed to 1.751% from 1.705% in the previous session.

On the economic data front, the US Empire State Manufacturing Survey posted -9.02 in May (vs. +6.50 expected, +9.56 in April).

Regarding forex trading, the US dollar softened after rallying for 2 sessions. EUR/USD edged up 0.1% to 1.1316 (daily high at 1.1342) and GBP/USD rebounded 0.2% to 1.4396.

Commodity currencies also enjoyed a boost generated by stronger oil prices. USD/CAD slid 0.4% to 1.2893, AUD/USD rebounded 0.3% to 0.7287, and NZD/USD was up 0.4% to 0.6788 (but still below its 200-day moving average).

The pair has managed to trade above the key support at 108.20. Currently it is riding on a rising trend line while being supported by the ascending 50-period (30-minute chart) moving average. The intraday outlook remains bullish and the pair is expected to re-test the immediate resistance at 109.90 before rising further to 110.50.

Trading Recommendation:

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. Therefore, long positions are recommended with the first target at 109.90 and the second one, at 110.50. In the alternative scenario, short positions are recommended with the first target at 108.20 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 107.40. The pivot point is at 108.65.

Resistance levels: 109.90, 110.50, 110.95

Support levels: 108.20, 107.40, 107

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Technical analysis of NZD/USD for May 17, 2016

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NZD/USD is expected to trade in a higher range as bias remains bullish. The pair posted a rebound yesterday, and now stands above its nearest support at 0.6775. The relative strength index seems to have lost its upward momentum, calling for caution. Nevertheless, as long as 0.6775 is not clearly broken, even though a continuation of the consolidation cannot be ruled out, its extent should be limited. The intraday outlook is mixed with the bullish bias. Our next up targets are set at 0.6850 and 0.6890 in extension.

Trading recommendations:

The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 0.6850 and the second one, at 0.6890. In the alternative scenario, short positions are recommended with the first target at 0.6740. 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 0.6710. The pivot point is at 0.6775.

Resistance levels:0.6850, 0.6890, 0.6935

Support levels: 0.6740, 0.6710, 0.6665

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Technical analysis of GBP/JPY for May 17, 2016

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GBP/JPY is expected to trade with bullish bias. The pair has just broken above the key resistance at 157.30 and is proceeding to 159.10 on the upside. Currently, the pair is trading above the upper Bollinger band while being supported by the ascending 20-period moving average. Therefore acceleration to the upside is expected. Above 159.10, the next resistance would be found at 159.50.

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. Therefore, long positions are recommended with the first target at 159.10 and the second one, at 159.50. In the alternative scenario, short positions are recommended with the first target at 156.70 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 157.30. The pivot point is at 157.30.

Resistance levels: 159.10, 159.50, 160.35

Support levels: 156.70, 156.30, 155.35

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Technical analysis of NZD/USD for May 17, 2016

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overview:

  • The NZD/USD pair faced resistance at the level of 0.6842, while minor resistance is seen at 0.6825. Support is found at the levels of 0.9794 and 0.9754. Yesterday, the trend rebounded from the resistance of 0.4842 to bottom at 0.6794. Equally important, the NZD/USD pair is still moving around the key level at 0.6794 today. Hence, the NZD/USD pair continues moving downwards from the levels of 0.4842 and 0.6794. In consequence, the level of 0.6842 is expected to act as the major support today. We expect the NZD/USD pair to continue trading in the bearish trend towards the target level of 0.6842 and 0.6794. In the H1 time frame, if the pair succeeds to pass through the level of 0.6794, the market will indicate a bearish opportunity below the level of 0.6794. So, the market will decline further to 0.6754 and 0.6735 to return to the daily support. Moreover, a breakout of that target will move the pair further downwards to 0.6715 in order to test the double bottom. On the other hand, if a breakout happens at the support level of 0.6842, then this scenario may be invalidated.
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Technical analysis of USD/CHF for May 17, 2016

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overview:

  • The USD/CHF pair broke resistance, which turned into strong support at the level of 0.9735 last week. The level of 0.9715 coincides with a golden ratio (78.6% of Fibonacci), which is expected to act as major support today. The Relative Strength Index (RSI) is considered overbought because it is above 70. Additionally, the RSI is still calling for a strong bullish market as well as the current price is also above the moving average 100. So, the USD/CHF pair continues moving upwards from the levels of 0.9715 and 0.9735. Yesterday, the pair rose from the level of 0.9750 to the top around 0.9789. Today, the first resistance level is seen at 0.9877 followed by 0.9961, while daily support 1 is seen at 0.9735. According to the previous events, the USD/CHF pair is still moving between the levels of 0.9735 and 0.9877. Consequently, the USD/CHF pair is showing signs of strength following a breakout of a high at 0.9750. So, buy above the level of 0.9750 with the first target at 0.9877 in order to test the daily resistance 1 and move further to 0.9961. On the contrary, in case a reversal takes place and the USD/CHF pair breaks through the support level of 0.9735, then stop loss should be placed at 0.9700.
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Global macro overview for 17/05/2015

Global macro overview for 17/05/2016:

The Chinese data regarding industrial production, retail sales and investment disappointed investors worldwide. The National Bureau of Statistics revealed that industrial output increased only 6.0% in April, down from 6.8% in March, way below the expected gain of 6.6%. Retail sales increased 10.1% in April , which was again lower than 10.5% in March. Moreover, fixed-asset investment in urban areas grew by 10.5% on the quarterly basis, less than the 10.7% expected figure. In conclusion, despite the aggressive easy-money policy these undershoots might cause a concern about future prosperity of the Chinese economy as it tries to fight with significant headwinds. In a situation like this, investors might be more willing to invest in safe-haven assets like gold, rather than risky assets like stocks.

This is why we will take a look at the technical picture of Gold after the data release. On the daily time frame we can clearly see that Gold has been rallying more than $250 since December 2015, and the bulls are in control over this market. The growing bearish divergence, however, might cause a temporary correction in this market. The main important support at the orange rectangle area is the key level for bulls after the golden trend line is violated.

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Technical analysis of USDX for May 17, 2016

The Dollar looks like it has run out of fuel and needs to see some selling before another attempt to the upside. The Dollar index is breaking below the black trend line support and this implies more short-term weakness ahead.

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Black line - trend line support

Short-term support is found at 94.2 and at 94. The stochastic and the RSI are downward-sloping coming from overbought levels. Some more downside should be expected for the Dollar index.

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On the weekly basis, the Dollar has a lot of potential to the upside as long as we hold inside the Kumo. The price is above the tenkan-sen (red line indicator) and is now re-testing the cloud boundaries. The stochastic is turning upwards from the oversold divergent area, and this is another sign that pullbacks should be bought. So short-term weakness is possible but the longer-term outlook remains positive.The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of Gold for May 17, 2016

Gold bulls tried to break above the trend line resistance yesterday at $1,290 but got rejected. The price remains above the critical support of $1,260 but yesterday's rejection is an important weakness sign. A confirmation of this weakness will come once the price breaks below support at $1,260.

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Black line - resistance

Green line - support

Gold is still trading around the Kumo and above the green trend line support and below the black resistance trend line. The stochastic is showing that more downside should be expected after marking a short-term top. $1,270 is short-term support.

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On the daily chart, the Gold price is trapped between the tenkan- and kijun-sen (red and yellow line indicators). A break above or below either of the lines could signal more strength towards that direction. I continue to believe that Gold should be heading towards $1,230 at least to test daily cloud support.

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Global macro overview for 17/05/2016

Global macro overview for 17/05/2016:

The Reserve Bank of Australia's Monetary Policy Meeting Minutes have been released overnight. The RBA has expressed concerns in two main fields of the Australian economy: inflation and unemployment. According to the minutes from its May meeting, where the cash rate was cut to 1.75%, the RBA was worried about ongoing inflation trends as the recent reading was way below the RBA's projections. This means the Australian economy might be edging towards the deflationary territory as the data cannot be explained entirely by temporary factors. The second RBA concern is the slowing employment growth in the first quarter of 2016. The current unemployment rate is at the level of 5.7%, but the low wage growth is supporting the job insecurity as well. In conclusion, economists are now betting the RBA will continue to cut the cash rate after being surprised by the depth of the latest inflation reading. For example, the Commonwealth Bank is predicting two more cuts in 2016 taking the cash rate to 1.25%, with some other large institutions such as JP Morgan forecasting the cash rate at 1% or lower.

Let's now take a look at the AUD/USD technical picture on the daily timeframe. After the breakout below the brown trendline, the bears have managed to push the price below 50% Fibo and it looks like the next important technical support at the level of 0.7212 might be tested soon as well. Please note that the current technical resistance at the level of 0.7382 is the key level to the upside.

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Technical analysis of USD/CAD for May 17, 2016

General overview for 17/05/2016:

The current corrective structure might be evolving into a more complex pattern as the top for the wave (b) green has been established at the level of 1.2960. An impulsive breakout above this top must occur to invalidate the complex pattern that is now unfolding. The projected target for the wave (c) green is again near the technical support at the level of 1.2757, but it might extend even lower towards the level of 1.2675.

Support/Resistance:

1.3160 - WR2

1.3065 - WR1

1.3014 - Technical Resistance

1.2918 - Weekly Pivot

1.2872 - Intraday Resistance

1.2821 - WS1

1.2757 - Technical Support

Trading recommendations:

Day traders should consider buying at the dips in this market with SL below the level of 1.2757 and TP open for now, because we expect an impulsive wave progression to the upside to continue in the near term.

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Technical analysis of EUR/JPY for May 17, 2016

General overview for 17/05/2016:

After the lading diagonal wave (i) has been made, the first corrective cycle to the upside looks completed as well. Nevertheless, please remember that the invalidation of this structure is at the level of 124.65, so as long as the internal corrective cycle in a potential wave (ii) green is developing below this level, the chances for a downward trend continuation are high. On the other hand, in case of the violation of the 124.65 level, the market might evolve into a more complex and time-consuming structure in wave (b) blue.

Support/Resistance:

121.47 - Swing Low

121.56 - WS1

122.67 - Intraday Support

123.11 - Weekly Pivot

123.79 - Intraday Resistance

124.08 - WR1

124.55 - Wave (b) High

125.61 - WR2

Trading recommendations:

Day traders should consider selling the rally in this market with SL above the level of 125.65 and TP open for now, because we expect an impulsive wave progression to the downside to continue in the near term.

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Elliott wave analysis of EUR/NZD for May 17 - 2016

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Wave summary:

Blue wave ii is becoming more complex that first anticipated, as blue wave ii has turned into a double zig-zag correction. The important short-term support at 1.6479 still needs to protect the downside to keep this count as the preferred count.

In the short term, we are looking for a break above the minor resistance near 1.6685 as a confirmation that blue wave ii is over and blue wave iii higher to 1.7254 is unfolding.

Only a break below the important support at 1.6479 will indicate that the rally from 1.6062 was a leading diagonal 1.6391 before moving higher again.

Trading recommendation:

Our stop at 1.6600 was hit for a nice profit on long positions from 1.6315. We will re-buy EUR at 1.6550 or upon a break above 1.6685 with stop placed at 1.6475.

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Elliott wave analysis of EUR/JPY for May 17 - 2016

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Wave summary:

After a perfect 61.8% correction of wave [i] to 122.61, we are now looking for wave [iii] higher towards at least 125.78 and possibly even higher.

In the short term, we will ideally see minor support near 123.20 protect the downside for a break above minor resistance at 123.510 and, more importantly, a break above resistance at 123.81 confirming that a low is in place at 122.61 for a rally towards 125.78.

Only an unexpected break below 122.91 indicates that a more complex correction is unfolding in wave [ii].

Trading recommendation:

We are long in EUR from 123.10 and will move our stop higher to 122.90. If you are not long in EUR yet, then buy a break above 123.51 and use the same stop at 122.90.

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Technical analysis of EUR/USD for May 17, 2016

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When the European market opens, some economic news will be released such as the German Buba Monthly Report, Trade Balance, and Italian Trade Balance. The US will release economic data too such as the Industrial Production m/m, Capacity Utilization Rate, Housing Starts, Core CPI m/m, CPI m/m, and Building Permits. So amid the reports, EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1371.

Strong Resistance: 1.1364.

Original Resistance: 1.1353.

Inner Sell Area: 1.1342.

Target Inner Area: 1.1315.

Inner Buy Area: 1.1288.

Original Support: 1.1277.

Strong Support: 1.1266.

Breakout SELL Level: 1.1259.

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 May 17, 2016

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In Asia, Japan will release the Revised Industrial Production m/m, and the US will release some economic data such as the Industrial Production m/m, Capacity Utilization Rate, Housing Starts, Core CPI m/m, CPI m/m, and Building Permits. So there is a probability the USD/JPY will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance. 3: 109.53.

Resistance. 2: 109.32.

Resistance. 1: 109.10.

Support. 1: 108.84.

Support. 2: 108.63.

Support. 3: 108.41.

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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Daily analysis of major pairs for May 17, 2016

EUR/USD: This pair went slightly upwards on Monday – an insignificant thing in the context of a downtrend. As it was mentioned last week, the outlook on this pair is bearish, and further southward movement is expected this week, which could make the price go towards the support lines at 1.1250 and 1.1200.

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USD/CHF: The market went slightly upwards yesterday, going above the support level at 0.9750 and targeting the resistance level at 0.9800. The bulls are still determined to push the price higher, and since there is a Bullish Confirmation Pattern on the chart, it is logical to expect further rally.

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GBP/USD: This is a flat market, but there is a possibility that the price could go further downwards at a closer look. The EMA 11 is below the EMA 56, and the RSI period 14 is below the level 50. The market should move further southwards, testing the accumulation territories at 1.4350 and 1.4300.

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USD/JPY: The bias on the USD/JPY, which simply went flat on Monday, is bullish, though this is something precarious. Unless the price goes above the supply level at 110.00, the bullish bias would remain weak. On the other hand, a movement below the demand level at 107.50 would mean a new lease of the bearish outlook. Today or tomorrow would determine what the market will do.

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EUR/JPY: The bulls made a faint attempt to go upwards on May 16; and this has caused mixed signals on the 4-hour chart. It is better to stay away from the market until there is a strong movement in one direction. This week, a strong movement in one direction is expected any moment.

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Daily analysis of USDX for May 17, 2016

USDX is looking to re-test the support level of 94.35, after the Index has been rallying for several days. However, bear in mind that the correction could be extended, and eventually the price could reach the 200 SMA on the H1 chart in order to gain momentum. Otherwise, if USDX does a breakout of the May 11th lows, then it could invalidate the proposed bullish outlook.

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H1 chart's resistance levels: 94.61 / 94.81

H1 chart's support levels: 94.35 / 94.06

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 94.61, take profit is at 94.81, and stop loss is at 94.41.

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Daily analysis of GBP/USD for May 17, 2016

The Cable has been doing a rebound since the start of the week, as it's very close to the 200 SMA price zone, where a resistance can be found. If GBP/USD does a pullback around it, then we can expect another decline to test the support level of 1.4316. Another scenario could be a possible breakout above the 1.4330 level, a volatile price level, that could push the pair higher to the 1.4549 level.

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H1 chart's resistance levels: 1.4430 / 1.4549

H1 chart's support levels: 1.4316 / 1.4222

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 1.4316, take profit is at 1.4222 and stop loss is at 1.4408.

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Daily analysis of USD/JPY for May 16, 2016

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Overview

The USD/JPY pair found difficulty to confirm surpassing of the 109.00 barrier to trade negatively again. It is hovering around the 108.60 level as the price is affected by the negative momentum. We are waiting for positive momentum that will push the price to resume the bullish wave again. In general, we will continue to suggest the bullish trend on the intraday and short-term basis as long as the price is above 106.63, waiting to test the 110.35 level. It is necessary to remember that breaking of the 106.63 level will put the price under more bearish correctional pressure. Its next target is located at 100.69.

The expected trading range for today is between the 108.00 support and the 110.00 resistance.

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