Technical analysis of USD/JPY for May 20, 2016

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USD/JPY is expected to trade in a higher range as bias remains bullish. Overnight US stock indices closed lower, although they had bounced back from deeper declines seen earlier in the session. Concerns about the US Federal Reserve raising interest rates again as soon as June deepened as New York Fed President William Dudley and Richmond Fed President Jeffrey Lacker gave hawkish comments.

The Dow Jones Industrial Average slid 0.5% to 17,435, the S&P 500 dropped 0.4% to 2,040, while the Nasdaq Composite was down 0.6% to 4,712. Gains in utilities and consumer staples shares were offset by losses in industrials and financials. Wal-Mart (WMT) rose 9%, its biggest gain since 2008, after posting stronger-than-expected Q1 earnings.

Nymex crude oil edged down 0.1% to $48.16 a barrel (daily low at $46.73). Gold declined another 0.3% to $1,254 an ounce, and silver plunged 2.1% further to $16.48 an ounce. US government bonds stabilized as the benchmark 10-year Treasury yield fell to 1.845% from 1.882% in the previous session.

On the forex front, the US dollar charged higher against major currencies yesterday, but its up-surge lost momentum toward the session's end. EUR/USD dropped 0.1% to 1.1202 (daily low at 1.1178), USD/CHF charged 0.3% higher to another 2-month high of 0.9901. USD/CAD was up 0.5% to 1.3092 while it had surged up to 1.3153 earlier. The pair kept trading yesterday between the immediate resistance at 110.50 and the key support at 109.25, chalking a daily high of 110.38. Currently, it has broken above both the 20- and 50-period (30-minute chart) and is around the upper Bollinger band. Also the intraday relative strength index has surged past the neutrality level of 50. Therefore the intraday outlook remains bullish and the pair is on track to re-test 111 on the upside, above which the next resistance would be found at 111.45.

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 111 and the second one, at 111.45. In the alternative scenario, short positions are recommended with the first target at 109.25 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 108.65. The pivot point is at 109.65.

Resistance levels: 111, 11.45, 111.90

Support levels: 109.25, 108.65, 108.20

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Technical analysis of USD/CHF for May 20, 2016

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USD/CHF is expected to trade in higher range as bias remains bullish. The intraday technical outlook is still positive, as the pair remains supported by its rising 20-period and 50-period moving averages, and is likely to challenge its nearest resistance at 0.9945 in sight. The relative strength index is above its neutrality area at 50. Last but not least, the process of higher highs and lows remains intact on the prices. In these perspectives, as long as 0.9860 is not broken, the price is likely to advance to 0.9945 and 0.9980 in extension.

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 0.9945 and the second one at 0.9980. In the alternative scenario, short positions are recommended with the first target at 0.9805 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 0.9775. The pivot point is at 0.9860.

Resistance levels: 0.9945, 0.9980, 1.0125

Support levels: 0.9805, 0.9775, 0.9750

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Technical analysis of NZD/USD for May 20, 2016

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NZD/USD is expected to trade in a lower range as the key resistance stands at 0.6780. The pair remains under pressure below its nearest horizontal resistance at 0.6780, which maintains the strong selling pressure. The relative strength index is mixed, calling for caution. As long as resistance at 0.6775 is held, look for choppy price action with a bearish bias. Our next down targets are set at 0.6710 and 0.6680 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 0.67. A break of this target will move the pair further downwards to 0.6680. The pivot point stands at 0.6780. 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 0.6815 and the second target at 0.6840.

Resistance levels: 0.6815, 0.6840, 0.6890

Support levels: 0.6710, 0.6680, 0.6625

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Technical analysis of GBP/JPY for May 20, 2016

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GBP/JPY is expected to trade with bullish bias above 160.10. The pair remains on the upside. The support lies at 160.10, and it allows for a temporary stabilization. Even though a consolidation cannot be ruled out at the current stage, its extent should be very limited before the price bounces again. In which case, as long as 160.10 holds on the downside, the intraday outlook remains positive with targets at 161.65 and 162.70 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 161.65 and the second one at 162.70. In the alternative scenario, short positions are recommended with the first target at 159 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 158.30. The pivot point is at 160.10.

Resistance levels: 161.65, 162.70, 163.50

Support levels: 158.30, 157.25, 156.70

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USD/CAD intraday technical levels and trading recommendations for May 20, 2016

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On December 7, a bullish breakout above 1.3450 (upper limit of the recent consolidation range) enhanced the bullish side of the market. Hence, the price reached the resistance at 1.4120 (Fibonacci Expansion 100%).

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 occured.

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 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 1.3300 until a bearish breakout took place on April 11.

Shortly after the price had declined sharply to the levels below 1.3000, signs of bullish recovery were expressed around 1.2460.

The current bullish pullback towards 1.3000 (61.8% Fibonacci level) was expected to offer a valid signal to sell the USD/CAD pair. However, lack of significant bearish rejection was manifested during this week's consolidations.

That's why, bullish persistence above 1.3000 (61.8% Fibonacci level) opens the way towards 1.3300 (50% Fibonacci level) where price action should be watched for a better SELL position.

Bearish persistence below 1.3000-1.2970 (61.8% Fibonacci level) will be needed to maintain enough bearish momentum on the market.

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NZD/USD intraday technical levels and trading recommendations for May 20, 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 a few weeks ago.

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

During February's consolidations, the price zone of 0.6750-0.6840 constituted a significant resistance zone where signs of a bearish rejection were seen (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 0.6750 level constituted a significant support level where a bullish hammer daily candlestick was expressed on May 10.

Recently on May 6, a daily candlestick closure below the 0.6850 level enhanced a quick bearish movement towards 0.6750 where bullish rejection was expected to occur.

That's why, bullish persistence above 0.6750 and 0.6850 is mandatory to maintain enough upward momentum in the market.

On the other hand, bearish persistence below 0.6750 allows a quick decline towards 0.6670.

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Gold analysis for May 20 , 2016

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Since our previous analysis, gold has been downwards. As I expected, the price tested the level of $1,243.62 in a high volume. According to the 15M time frame, I found weakness and resistance cluster at the price of $1,257.50. There are few bullish bars in a high volume but with weak close, which is a sign that sellers are in control. All bullish bars that I marked on the chart closed in the middle, which is a sign of weakness. Intraday downward target is set at the price of $1,252.30 and $1,244.00.

Daily Fibonacci pivot points:

Resistance levels:

R1: 1,259.55

R2: 1,262.90

R3: 1,267.70

Support levels:

S1: 1,250.30

S2: 1,247.30

S3: 1,242.50

Trading recommendations for today: Downward pressure on the market. Watch for selling opportunities on pullbacks.

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Intraday technical levels and trading recommendations for EUR/USD for May 20, 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 was 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 constituted 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 trading below 1.1400.

Please note that any bearish pullback towards the level of 1.1000 (the depicted uptrend line and previous consolidation range) should be considered for a valid BUY entry. S/L should be placed below 1.0950.

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EUR/NZD analysis for May 20, 2016

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Recently, EUR/NZD has been moving downwards. As I expected, the pair tested the level of 1.6531 in a high volume. According to the 4H time frame, I found a downward channel. The price broke the upward diagonal and I am expecting a downward continuation. Our Fibonacci expansion 100% at the price of 1.6530 held successfully. Anyway, the trend is downward and buying looks risky. If the price breaks the level of 1.6530 in a high volume, we may see potential testing of 1.6380.

Fibonacci Pivot Points:

Resistance levels:

R1: 1.6655

R2: 1.6675

R3: 1.6710

Support levels:

S1: 1.6585

S2: 1.6560

S3: 1.6530

Trading recommendation for today: Watch for selling opportunities on rallies.

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Intraday technical levels and trading recommendations for GBP/USD for May 20, 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.

On May 3, 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).

As long as the GBP/USD pair keeps trading below 1.4680, the next bearish destinations for the pair will be located at 1.4300, 1.4220 and 1.4050. Bearish persistence below 1.4475 is needed to maintain enough bearish momentum.

On the other hand, a weekly closure above 1.4680 allows a quick bullish movement to occur towards 1.4950 initially.

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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.

Daily persistence below 1.4470 was needed to enhance further bearish decline initially towards 1.4350, 1.4220 and 1.4050.

However, On May 16, lack of enough bearish momentum below 1.4330-1.4350 resulted in the current bullish breakthrough above 1.4470.

Please note that the price zone of 1.4700-1.4750 corresponds to 61.8% Fibonacci level and the depicted downtrend line. Hence, significant bearish rejection and a valid SELL entry can be offered around these price levels.

Please note that the GBP/USD pair may become trapped between the price levels of 1.4480 and 1.4700 (61.8% Fibonacci level) until a breakout occurs (most likely a bearish one).

Daily persistence below 1.4470 will be needed to enhance further bearish decline towards 1.4350 and 1.4220.

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Daily analysis of major pairs for May 20, 2016

EUR/USD: The EUR/USD moves in the opposite direction to USD/CHF. The price has gone down so far this week, and it could continue moving further downwards. Price is in the overbought area in the William's % Range period 20. The EMA 11 is below the EMA 56. This is a bear market.

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USD/CHF: As it was forecasted at the beginning of this week, the USD/CHF pair was able to move upwards. The price has gone up by 170 pips; now above the support level at 0.9900, targeting the resistance level at 0.9950. Since there is a Bullish Confirmation Pattern in the chart, it is logical to conclude that the bullish effort would hold out today.

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GBP/USD: It is still rational to conclude that this is a strong market, irrespective of the bearish correction we now see (which might be transient). There is a Bullish Confirmation Pattern on the 4-hour chart: The present bearish correction could offer a good opportunities to buy at better prices, in the context of an uptrend.

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USD/JPY: This market is bullish – having moved upwards by 170 pips this week. The EMA 11 is above the EMA 56, while the RSI period 14 is above the level 50. Further upwards movement is anticipated. The price is now above the demand level at 110.00, and the next target is the supply level at 110.50.

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EUR/JPY: The EUR/JPY pair has moved simply sideways so far this week, with price not going above the supply zone at 124.50 or going below the demand zone 122.50. A breakout would possibly happen today or surely happen next week, which would take the market out of the equilibrium zones.

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Technical analysis of NZD/USD for May 20, 2016

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Overview:

    • The NZD/USD pair showed signs of instability. Amid the previous events, the price is still moving between the levels of 0.6841 and 0.6747. The daily resistance and support are seen at the levels of 0.6841 and 0.6747 respectively. In consequence, it is recommended to be cautious while placing orders in this area. Thus, we should wait until the sideways channel has completed. So, the strong support has been already faced at the level of 0.6747 and the pair is likely to try approaching it in order to test it again and form a double bottom. Hence, the NZD/USD pair continues trading in a bullish trend from the new support level of 0.6747 to form a bullish channel. According to the previous events, we expect the pair to move between 0.6747 and 0.6841 in order to retest it again. Major resistance is seen at 0.6841, while immediate resistance is found at 0.6781. Then, we may anticipate potential testing of 0.6781 to take place soon. Moreover, if the pair succeeds in passing through the level of 0.678, the market will indicate a bullish opportunity above the level of 0.6841. A breakout of that target will move the pair further upwards to 0.6910. Buy orders are recommended above the area of 0.6709 with the first target at the level of 0.6841 and later 0.6910.
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Technical analysis of USD/CHF for May 20, 2016

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Overview:

  • The USD/CHF pair is showing signs of strength following a breakout of the highest level of 0.9846.
  • On the daily chart the level of 0.9846 coincides with 61.8% of Fibonacci, which is expected to act as a minor support today. Since the trend is above the 61.8% Fibonacci level, the market is still in an uptrend.
  • But, major support is seen at the level of 0.6771.
  • Furthermore, the trend is still showing strength above the moving average (100).
  • Thus, the market is indicating a bullish opportunity above the mentioned support levels for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside.
  • Therefore, strong support will be found at the level of 0.9846 providing a clear signal to buy with a target seen at 0.9952.
  • If the trend breaks the minor resistance at 0.9952, the pair will move upwards continuing the bullish trend development to the level 1.1018 in order to test the daily resistance 1.
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Global macro overview for 20/05/2016

Global macro overview for 20/05/2016:

The core machinery orders data from Japan has been released overnight and it has surprised investors. Core orders, a leading indicator of business investment, surged 5.5% from the previous month, stronger than a 0.7% increase expected by economists. Moreover, on an annual basis, core orders surged 3.2%, much more than 0.8% expected by market participants. Despite the good figures, the firms predict orders to drop in the current quarter as companies become increasingly cautious due to a surging Japanese yen and weakness in overseas economies. The Prime Minister Shinzo Abe urges firms to spend more for future growth in order to return to the levels seen prior to the global financial crisis.

Let us now take a look at the USD/JPY technical picture on the daily time frame. Bulls have managed to retrace the recent fall up to the nearest technical resistance at the level of 110.62, but bears are still in control over this market. The golden trend line might provide another dynamic resistance around this area, so a failure and a return to the downtrend are expected here.

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Global macro overview for 20/05/2016

Global macro overview for 20/05/2016:

Another set of data had been released yesterday from the UK and this time it was retail sales with auto fuel. The figures were better than expected as the sales surged 1.3% vs. 0.6% expected and -0.5% prior. Moreover, the Office for National Statistics revealed that on the year-to-year basis the retail sales climbed 4.3%. In conclusion, the data suggests that after a sluggish start of the year, the British economy might be heading towards a mild economic growth in the second quarter. Nevertheless, the shopping spree will not hide the uncertainty surrounding the UK's future in the EU, with the nation's referendum on the matter due on June 23.

Let us now take a look at the GBP/USD technical picture after the data release. The bulls have managed to retrace the recent drop almost to the 78% Fibo at the level of 1.4674 and now the market is trading at the level of 1.4546 which is another technical support. The low at the level of 1.4330 looks like another higher low in the sequence, but no higher high has been made yet, so the labeling is only temporary. As long as it is not violated, bulls are still in control over this market.

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Technical analysis of EUR/JPY for May 20, 2016

General overview for 20/05/2016:

Another alternative count had been added to incorporate the latest developments. The market is still trading inside the neutral zone between the levels of 122.62 and 124.16. 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 downtrend continuation are high.

Support/Resistance:

121.47 - Swing Low

121.56 - WS1

122.67 - Intraday Support

123.11 - Weekly Pivot

124.17 - 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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Technical analysis of USD/CAD for May 20, 2016

General overview for 20/05/2016:

The wave iii of the wave (iii) is still in progress as the projected target has not been hit yet. For the internal sub-wave development the invalidation line is at the level of 1.2988; so as long as this level is not broken the market should rally higher towards the level of 1.3218.

Support/Resistance:

1.3161 - WR2

1.3148 - Intraday Resistance

1.3065 - WR1

1.3014 - Intraday Support

1.2918 - Weekly Pivot

1.2821 - WS1

1.2757 - Technical Support

Trading recommendations:

Day traders should set TP for all open buy orders this week at the level of 1.3218 and trail SL accordingly. The impulsive structure is about to complete.

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Technical analysis of EUR/JPY for May 20, 2016

Technical outlook and chart setups:

The EUR/JPY pair is seen to be drifting sideways between 122.50 and 124.00 levels respectively. The pair needs to break out of the cone structure depicted here and subsequently the immediate support or resistance levels to determine its next big move. Immediate resistance is seen at 124.50 levels, while support is at 122.50 levels respectively. Please note that a higher probability is seen for a break lower towards the major trend but a trading decision should be taken on further evidence only. It is hence recommended to remain flat for now and wait for a clear breakout on either side. Please note that a break above 124.75 levels would be extremely encouraging to bulls.

Trading recommendations:

Remain flat for now.

Good luck!

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Technical analysis of GBP/CHF for May 20, 2016

Technical outlook and chart setups:

The GBP/CHF has pushed higher against expectations taking stops earlier. The pair is seen to be trading at 1.4440 levels for now, still looking good to push through 1.4450 and subsequently 1.4709 levels. The wave structure indicates that the pair is now heading to complete its counter trend rally towards 1.4700/50 levels, which is also Fibonacci 0.618 resistance as depicted here. Hence, it is recommended to look to go long again on dips from here. Bulls may remain in control till the price stays above 1.4000 levels. Immediate resistance is seen at 1.4700 levels, while support is at 1.4000 levels.

Trading recommendations:

Remain flat for now and look to go long on dips above 1.4000 levels.

Good luck!

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Technical analysis of Silver for May 20, 2016

Technical outlook and chart setups:

Silver has dropped lower as expected and is now seen to have found support at the fibonacci 0.50% retracement levels of the rally between $14.80 and $18.00 levels respectively. The metal is seen to be trading at $16.50 levels and might drop to $16.00 levels before resuming its rally. Please note that the corrective wave structure that began from $18.00 levels might be coming to an end. Bulls could regain control from here on and push prices higher to fresh peaks in the coming weeks. It is hence recommended to remain long again with risk below $16.00 levels. Immediate resistance is seen at $17.50 levels, while support is at $16.00 levels respectively.

Trading recommendations:

Remain long again, stop below $16.00, target is open.

Good luck!

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Technical analysis of Gold for May 20, 2016

Technical outlook and chart setups:

Gold has bounced off the fibonacci 0.618 support of the rally between $1,208.00 and $1,303.00 levels at $1,244.00/45.00 yesterday. The metal is seen to be trading at $1,253.00/54.00 levels for now, and it should be looking to continue the rally further towards fresh highs. Also please note that the metal has bounced off a trend line support as depicted here. Bulls are poised to remain in control till prices stay above $1,244.00 levels from here on. It is now recommended to remain long, with stop below $1,244.00 levels. Immediate support is seen at $1,237.00 levels, while resistance is at $1,290.00 levels respectively.

Trading recommendations:

Remain long now, stop at $1,243.00, target is open.

Good luck!

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Technical analysis of USDX for May 20, 2016

The Dollar index continues to trade in an uptrend. However, there are signs that a short-term reversal is coming so Dollar bulls should not forget to take profits from this upward move.

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Blue lines - bullish channel

The price is above the Kumo (cloud) support and inside the blue bullish channel. The stochastic and RSI are diverging but we still have no reversal confirmation. Support is at 95. The next support is at 94.30. Resistance is at yesterday's highs of 95.50.

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The weekly channel remains very bullish after the bullish reversal off the 38% Fibonacci retracement. We may see a pullback for a day or two, but it is very possible that the overall trend has reversed to the upside again. We remain bullish on the Dollar as long as the price is above 92 for the long term.The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of Gold for May 20, 2016

Gold price has broken down yesterday as we expected towards $1,240 and bounced. Price stabilized for a few hours around $1,260-55 and then broke to new lows. Price is expected to move even lower as I believe the big correction towards $1,150 has started.

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Black line - resistance

Gold price is below the Kumo (cloud) and below the black trend line resistance. As long as price is below them I remain bearish. Price has bounced towards the short-term resistance of $1,260. Next resistance is at $1,269. I expect price to move lower towards $1,230 at least over the coming days. Bounces are opportunities to sell.

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The weekly stochastic is turning lower and a break below the 80 level will be a bearish signal. Price is testing the weekly tenkan-sen (red line indicator) and a weekly close below it will confirm the bearish reversal and that an important top is in. I expect at least a pull back towards the $1,180 level where the upper cloud boundary is found.The material has been provided by InstaForex Company - www.instaforex.com

Elliott wave analysis of EUR/NZD for May 20 - 2016

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Wave summary:

EUR/NZD, as has been the case for EUR/JPY, failed to rally after the break above minor resistance at 1.6675. This has prolonged the corrective decline from 1.6931, but as long as important short-term support at 1.6479 is able to protect the downside, the upside will remain in focus.

To ease the current corrective downside pressure, a break above minor resistance at 1.6625 and, more importantly, a break above resistance at 1.6704 is needed. A break above the latter will call for a return to the 1.6931 high and higher to 1.7237 and above.

Trading recommendation:

Our stop at 1.6535 was hit for a small loss, but we will re-buy EUR upon a break above 1.6625 and place stop at 1.6475 expecting to be able to raise it soon.

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

Elliott wave analysis of EUR/JPY for May 20 - 2016

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Wave summary:

EUR/JPY failed to rally after the break above minor resistance at 123.64 indicating that a more prolonged zig-zag correction in red wave [ii] was unfolding. We are still expecting support at 122.61 will be able to protect the downside for a break above minor resistance at 123.78 confirming the next rally higher to 126.47 and above.

Should support at 122.61 be broken, that would indicate that wave [ii] is still developing, and a decline to 122.11 should be expected before the next rally higher.

Trading recommendation:

Our stop at 122.90 was hit for a loss. We will re-buy EUR here at 123.30 with stop placed at 122.60.

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

Technical analysis of EUR/USD for May 20, 2016

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When the European market opens, some economic news will be released such as the German PPI m/m. The US will release economic data too such as Existing Home Sales. So amid the reports, EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1256.

Strong Resistance: 1.1249.

Original Resistance: 1.1238.

Inner Sell Area: 1.1227.

Target Inner Area: 1.1200.

Inner Buy Area: 1.1173.

Original Support: 1.1162.

Strong Support: 1.1151.

Breakout SELL Level: 1.1144.

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 USD/JPY for May 20, 2016

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In Asia, today Japan will not release any economic data but the US will release some economic data such as Existing Home Sales. So there is a probability the USD/JPY will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance. 3: 110.57.

Resistance. 2: 110.35.

Resistance. 1: 110.14.

Support. 1: 109.87.

Support. 2: 109.66.

Support. 3: 109.44.

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

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

Daily analysis of USDX for May 20, 2016

USDX had a rest after the FOMC meeting's rally during Wednesday's session, and the Index is pointing to test the resistance zone of 95.68, where a breakout can happen to test the 96.14 level. However, Friday could be flat for the Index, and it can still look to correct the recent upward moves on a short-term basis. The MACD indicator remains at negative territory, which does not coincide with the overall outlook on the US Dollar.

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H1 chart's resistance levels: 95.68 / 96.14

H1 chart's support levels: 95.22 / 94.89

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 95.68, take profit is at 96.14, and stop loss is at 95.20.

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

Daily analysis of GBP/USD for May 20, 2016

The pair has been trading into a bullish tone below the resistance zone of 1.4622, where we're expecting a pullback toward the 1.4549 level. However, a deeper corrective move can happen, and that could be into a 50% Fibonacci retracement from the May 16th lows, the but bullish bias is still strong, and the Cable can push higher to the 1.4686 level. The MACD indicator is at negative territory.

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H1 chart's resistance levels: 1.4622 / 1.4686

H1 chart's support levels: 1.4549 / 1.4430

Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.4622, take profit is at 1.4686 and stop loss is at 1.4558.

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