Gold analysis for December 21, 2016

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Recently, the gold has been trading sideways at the price of $1,133.00. Using the market profile, I found today's point of control at the price of $1,134.00 on the 30M time frame. According to the 30M time frame, I found that price is trading below the 21SMA and that there is sluggish demand in the background, which is a sign of weakness. Watch for selling opportunities on the pullbacks. Downward targets are set at the levels of $1,129.40 and $1,125.85.

Resistance levels:

R1: 1,133.20

R2: 1,134.85

R3: 1,137.50

Support levels:

S1: 1,127.80

S2: 1,126.00

S3: 1,123.50

Trading recommendations for today: watch for selling opportunities on the pullbacks.

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EUR/NZD analysis for December 21, 2016

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Recently, EUR/NZD has been moving sideways at the price of 1.5022. Using the market profile, I found today's point of control at 1.5015 on the 30M time frame. The price is trading above the 21SMA and there is successful test of supply, which is a sign of strength. My advice is to watch for buying opportunities on dips. I placed Fibonacci expansion to find potential upward targets. I got Fibonacci expansion 100% at the price of 1.5070 and Fibonacci expansion 161.8% at the price of 1.5105.

Fibonacci Pivot Points:

Resistance levels

R1: 1.5050

R2: 1.5070

R3: 1.5100

Support levels:

S1: 1.4999

S2: 1.4975

S3: 1.4945

Trading recommendations for today: watch for buying opportunities.

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Global macro overview for 21/12/2016

Global macro overview for 21/12/2016:

The Bank of Japan has left the overnight call rate unchanged at the level of -0.10% just as expected. Moreover, the 10-year JGB yield target is left at around zero %, and the buying of JGBs is still targeted at an annual pace of 80T Yen. In the Monetary Policy Statement, we can read, that vote on yield curve control was made by 7-2 vote (Sato, Kiuchi opposed decision on yield curve control). Moreover, there was an upgrade in the Bank's assessment of the economy. BOJ said Japan's economy continues to recover moderately as a trend and they revise up view on exports and output as they are picking up. Japan economy is likely to turn to a moderate expansion in the near future, but the risks to the outlook include developments in US economy, especially the impact of US monetary policy on global markets. In conclusion, nothing new from the Bank of Japan for this month, expect slightly bullish tone regarding the economic outlook.

Let's now take a look at the USD/JPY technical picture at the daily time frame. The bulls are clearly in control over this market for now as the price trades above all of the moving averages. In order to reverse the immediate bullish trend, the bears would have to push the price lower toward the level of min. 114.85. The current immediate support comes at the level of 116.14 and the next resistance is seen at the level of 118.65.

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Technical analysis of USD/CHF for December 21, 2016

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Overview:

  • The USD/CHF pair is still placed above strong support at the level of 1.0266. This support has been rejected several times confirming strong bullish momentum. The current price is seen at 0.6616, which represents a key level, because the level of 0.6616 will act as the first resistance today 1.0290. For this reason, major support is seen at the level of 1.0266 because the trend is still showing strength above it.
  • Accordingly, the pair is still in the uptrend from the area of 1.0266 and 1.0345. The USD/CHF pair is trading in a bullish trend from the last support line of 1.0266 toward the first resistance level at 1.0300 in order to test it. This is confirmed by the RSI indicator signaling that we are still in the bullish market. The pair is likely to begin an ascending movement to the point of 1.0300 and further to the levels of 1.0345. The level of 1.0345 will act as second resistance so as to test the double top. Also, it should be noted that we still prefer the bullish scenario.
  • On the other hand, stop loss should always be taken into account, accordingly, it will be of beneficial to set the stop loss below the last bottom at 1.0215.
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Global macro overview for 21/12/2016

Global macro overview for 21/12/2016:

The trade Balance data from New Zealand had been released overnight and it disappointed the market participants. The merchandise trade deficit widened to $705 million in November, down from $815 million in October while market analysts expected a slight tightening to -$500 million. Moreover, compared to the previous year, the value of goods exports went down by $219 million $3.86 billion. The main reason behind the shortfall was the decrease in the shipments of meat and offal that felt 31%. Exports of milk powder, butter and cheese, in turn, advanced 2.6%, but the overall New Zealand exports to the European Union dropped 32% and to the United States by 23%, while other export destinations, including China, Japan and Australia, were little changed.

Let's now take a look at the NZD/USD technical picture at the daily time frame. After the golden trend line test and rejection the price is trading below all of the moving averages, so, the bears are in full control over this market. The next immediate support is seen at the level of 0.6879, but if broken, then there is no important technical support down to the level of 0.6674.

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Technical analysis of NZD/USD for December 21, 2016

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Overview:

  • In the long term, the NZD/USD pair continued to move downwards from the level of 0.6983 (38.% Fibonacci) to the bottom around 0.6920.
  • The NZD/USD pair is still set below the daily pivot point (0.6920).
  • The trend has already broken the bullish channel at the levels of 0.7073 and 0.6983.
  • The first resistance level is seen at 0.6983 followed by 0.7030, while daily support 1 is seen at 0.6865.
  • Furthermore, the moving average (100) starts signaling a downward trend; therefore, the market is indicating a bearish opportunity below 0.6920.
  • It will be good to sell at 0.6920 with the first target of 0.6865. It will also call for a downtrend in order to continue towards 0.6814.
  • According to the previous events, we expect the NZD/USD pair to trade between 0.6920 and 0.6814 in coming hours.
  • The price area of 0.6983 remains a significant resistance zone. Thus, the trend is still bearish as long as the level of 0.6983 is not broken.
  • On the contrary, in case a reversal takes place and the NZD/USD pair breaks through the resistance level of 0.6983, then a stop loss should be placed at 0.6703.
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Technical analysis of USD/CAD for December 21, 2016

General overview for 21/12/2016:

The bottom for the wave (ii) (green) might be in place at the level of 1.3322, but the bearish divergence indicates the intraday correction is going to occur shortly. Nevertheless, the next intraday resistance is seen at 78% Fibo at the level of 1.3479, but the market has failed to test this resistance as the volatility is getting lower just before the Christmas holidays. The market got back to the trading range and now trades are around 615 Fibo at the level of 1.3394.

Support/Resistance:

1.3503 - WR1

1.3433 - Intraday Resistance

1.3322 - Intraday Support

1.3292 - Weekly Pivot

1.3269 - Intraday Support

1.3167 - WS1

Trading recommendations:

The buy orders should be still kept open. TP should be set at the level of 1.3479.

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Global macro overview for 21/12/2016

General overview for 21/12/2016:

The intraday bounce toward the weekly pivot at the level of 123.01 has failed. Bulls have managed to retrace almost 61% of the downswing and it looks like the market is evolving to a more complex and time-consuming corrective pattern like the triangle. Any breakout below the intraday support at the level of 121.66 will lead to the immediate test of the wave a low at the level of 120.89.

Support/Resistance:

124.43 - WR1

124.07 - Technical Resistance

123.01 - Weekly Pivot

122.79 - intraday Resistance

121.66 - Intraday Support

121.93 - WS1

120.52 - WS2

Trading recommendations:

Daytraders should consider opening sell orders only if the intraday support at the level of 121.66 is clearly violated. TP should be set at the level of 120.89.

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Elliott wave analysis of EUR/NZD for December 21, 2016

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Wave summary:

We continue to look for a break above resistance at 1.5092 and more importantly a break above resistance at 1.5162 as confirmation that a long-term bottom is in place with the test of 1.4654 and a new long-term impulsive rally higher is developing.

Short-term, we see support at 1.4934 and just below at 1.4895, which we expect will protect the downside for the break above 1.5092.

Trading recommendation:

We are long EUR from 1.4830 with stop placed at break-even. If you are not long EUR yet, then buy near 1.4934 or upon a break above 1.5092 and use the same stop at 1.4830.

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Elliott wave analysis of EUR/JPY for December 21, 2016

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Wave summary:

As long as minor resistance at 123.01 is able to cap the upside, we will be looking for more downside pressure toward 119.70 to complete the correction in wave (iv) and set the stage for the final rally higher toward 126.54 in wave (v) and 3.

Short-term, we will ideally seen minor resistance at 122.63 cap the upside for the final decline closer to 119.70.

Trading recommendation:

We are short EUR from 123.50 with stop placed at 123.05 and take profit at 120.25.

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Technical analysis of GBP/USD for December 21, 2016

GBPUSD is near important long-term support. There are several bullish divergence signals that provide a big warning to GBPUSD bears. A full scale trend reversal is very close. Traders need to be on high alert.

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Red lines - trading range

Green horizontal line - support

The GBP/USD is inside its trading range and approaching the lower boundary of this range. A bounce off this area is justified and highly probable if we take into account the bullish divergence signs of the oscillators. Support is at 1.23 and next is found at 1.2130.

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Blue line - short-term resistance

Short-term resistance is found at 1.2380-1.2390. A clear break above it will open the way for a bounce toward 1.2550. Trend remains bearish as price is making lower lows and lower highs. In the 4 hour chart we see bullish divergence signs as oscillators do not make lower lows as price does.

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Technical analysis of USD/JPY for December 21, 2016

The USD/JPY got rejected at the short-term resistance area of 118-118.30 and is pulling back downwards. A pull back is justified toward 116-115. Trend remains bullish in all time frames.

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Red line - resistance

Short-term resistance is at 118. Support is at 117.40. Breaking below support will open the way for a move toward 116.50. Breaking above the red trend line resistance will open the way for a push toward 119-120.

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Red line - support

Bearish divergence in the daily chart provides a warning for USD/JPY bulls. We should not ignore the huge rally from 100 and the possibility that will someday end, and provide an equally strong and sharp pull back. Confirmation of trend change will come once the red trend line support is broken.

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Technical analysis of USDX for December 21, 2016

The Dollar index made another minor pull back towards 103 after making new highs at 103.65. The pull back could extend towards 102-101 but overall trend remains bullish.

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Blue line - short-term resistance

The Dollar index is testing short-term resistance at 103.25. A break above it could signal the end of the correction and the start of the next leg up toward 104. Support is at 103.05. If broken could push price toward 102.

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Red lines - bullish channel

Green line - long-term support

On a daily basis, trend remains bullish as price is still inside the bullish channel and making higher highs and higher lows. There are bearish divergence signals from the oscillators that provide a warning for bulls. 101.50 is important short-term support that if broken will change short-term trend to bearish.

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Technical analysis of gold for December 21, 2016

Gold remains in bearish trend targeting $1.120-$1,100. As long as price remains below $1,150-60 the target is lower. Longer-term view remains unchanged waiting for a big trend reversal.

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Red lines - bearish channel

Gold price is trading below the Ichimoku cloud and inside the bearish channel. Price continues to make lower lows and lower highs. Resistance is at $1,143 for the short-term. Short-term trend changes however only on a break above $1,150-60. Support is at $1,125. Breaking it will push price towards $1,100.

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Red lines - downward sloping wedge

Gold price is close to the 78.6% Fibonacci retracement support. Wedge resistance is at $1,160. Breaking above this area will open the way for a full scale reversal towards the lower cloud boundary at least. Gold price is very close to important reversal levels. Bears need to be very cautious.

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Technical analysis of USD/JPY for December 21, 2016

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USD/JPY is expected to trade with bullish bias above 117.10. The pair stays above its horizontal support at 117.10, and lacks downward momentum. Even though a continuation of the consolidation at the current stage cannot be ruled out, its extent should be limited.

On Tuesday, U.S. indices closed higher as the Nasdaq and the Dow Jones reached all-time highs. The Dow Jones Industrial Average rose 92 points (+0.5%) to 19,974, the S&P 500 added 8 points (+0.4%) to 2,271 and the Nasdaq Composite was up 27 points (+0.5%) to 5,484.

Shares in the banks, diversified financials and consumer durables & apparel sectors ended on a positive note while shares in the food, beverage & tobacco, energy and health care equipment & services sectors were in the negative territory.

Thus, as long as 117.10 is not broken, a new bounce is expected with 118.00 and 118.20 as the next targets.

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 118.00 and the second one at 118.20. In the alternative scenario, short positions are recommended with the first target at 116.80 if the price moves below its pivot point. A break of this target is likely to push the pair further downwards, and one may expect the second target at 116.50. The pivot point lies at 117.10.

Resistance levels: 118.00, 118.40, 118.65

Support levels: 116.80, 116.50, 116.15

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Technical analysis of USD/CHF for December 21, 2016

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USD/CHF is expected to trade with bullish bias above 1.0260. The pair is in a consolidation mode around its 20-period and 50-period moving averages. Meanwhile, the relative strength index is bearish below 50 and lacks upward momentum. Nevertheless, 1.0260 is playing a key support role which should limit the downside potential. Even though a continuation of consolidation cannot be ruled out, its extent should be limited. On the economic data front, there were no major news to report in the US.

As long as 1.0260 is not broken down, further bounce is preferred with 1.0300 and 1.0320 as targets.

Resistance levels: 1.0300, 1.0320, 1.0345

Support levels: 1.0235, 1.0210, 1.0180

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Technical analysis of NZD/USD for December 21, 2016

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NZD/JPY is expected to trade with bearish bias. The pair is rebounding above its 20-period and 50-period moving averages. The relative strength index is above its neutrality level at 50. However, 0.6965 is playing a key resistance role. We are cautious now. As long as 0.6965 is not surpassed, we keep our negative view unchanged with a first downside target at 0.6890. If the price breaks below it, look for a further decline towards 0.6850 as possible.

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 0.6890. A break below this target will move the pair further downwards to 0.6850. The pivot point stands at 0.6965. In case the price moves in the opposite direction and bounces back from the support level, it will go 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 0.6990 and the second one at 0.7040.

Resistance levels: 0.7000, 0.7045, 0.7080

Support levels: 0.6890, 0.6850, 0.6800

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Technical analysis of GBP/JPY for December 21, 2016

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GBP/JPY is under pressure. The pair broke below the lower boundary of a symmetric triangle which emerged on December 19. The declining 50-period moving average is playing a resistance role and maintains the downside bias. As long as 146.20 holds on the upside, we expect a new drop towards 144.90. If the price breaks below, look for a further decline towards 144.50 as possible.

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 144.90. A break below this target will move the pair further downwards to 144.50. The pivot point stands at 146.20. In case the price moves in the opposite direction and bounces back from the support level, it will go 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 146.55 and the second one at 147.30.

Resistance levels: 146.55, 147.30, 147.65

Support levels: 144.90, 144.50, 144.00

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Technical analysis of EUR/USD for Dec 21, 2016

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When the European market opens, some economic data will be released such as consumer confidence index and Belgian NBB business climate index. The US will also publish some reports such as crude oil inventories and existing home sales. Therefore, amid the reports EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.0439.

Strong Resistance:1.0433.

Original Resistance: 1.0423.

Inner Sell Area: 1.0413.

Target Inner Area: 1.0389.

Inner Buy Area: 1.0365.

Original Support: 1.0355.

Strong Support: 1.0345.

Breakout SELL Level: 1.0339.

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 Dec 21, 2016

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In Asia, Japan will release the all industries activity index m/m while the US will releal the crude oil inventories and existing home sales reports. So there is a probability the USD/JPY will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance. 3: 118.27.

Resistance. 2: 118.04.

Resistance. 1: 117.81.

Support. 1: 117.52.

Support. 2: 117.29.

Support. 3: 117.06

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

Intraday technical levels and trading recommendations for NZD/USD for December 21, 2016

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During August and September, a consolidation range was established from the price level of 0.7250 up to 0.7350.

Later on October 20, the lower limit of the consolidation range (0.7250) stood as a temporary resistance which initiated a bearish movement toward 0.7100 (lower limit of the depicted channel).

Bullish recovery was expressed around the price level of 0.7100 on October 28. Hence, a double-bottom pattern was seen on the chart.

Bullish fixation above 0.7250 and 0.7350 was needed to allow further advance toward the projected target of the reversal pattern around 0.7450.

However, significant signs of a bearish reversal were expressed around the upper limit of the price range (0.7350).

The bearish breakdown of 0.7250 (lower limit of the depicted range) enhanced the bearish side of the market toward the price level of 0.7100 (recent bottom of October 28) which was broken as well.

Bearish persistence below 0.7100 allowed a quick decline toward 0.6960 (BUY zone) where bullish rejection and a valid BUY entry were expected. All T/P levels were successfully achieved.

Once again, bearish persistence below the price level of 0.7100 was needed to pursue toward lower target levels around 0.7060 and 0.6990 (upper limit of the depicted BUY zone).

Price action should be watched around the current price levels (0.6990) either for bullish rejection or bearish continuation toward 0.6860 (lower limit of the depicted BUY zone).

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USD/CAD intraday technical levels and trading recommendations for December 21, 2016

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On August 18 signs of bullish recovery were manifested around the price level of 1.2830 which led to the current bullish breakout above 1.3000.

The USD/CAD pair was trapped between the price levels of 1.3000 (61.8% Fibonacci level) and 1.3360 (50% Fibonacci level) until a bullish breakout took place one month ago.

Note that the USD/CAD pair challenged the upper limit of the depicted channel around 1.3360-1.3400 which succeeded to apply enough bearish pressure on the pair.

Shortly after, bearish engulfing weekly candlestick was expressed by the end of the week indicating strong resistance around 1.3550.

Bearish persistence below the price level of 1.3300 (50% Fibonacci Level) was achieved.

This allowed a further decline toward 1.3200, 1.3090, and 1.2990 (61.8% Fibonacci Level) where bullish rejection was expressed as anticipated.

On the other hand, the current bullish breakout above 1.3360 (50% Fibonacci level) will probably liberate a quick bullish movement toward 1.3700-1.3750 (the upper limit of the depicted channel).

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Intraday technical levels and trading recommendations for GBP/USD for December 21, 2016

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The price zone between 1.3845 and 1.3550 (historical bottoms set in January 2009) was considered a significant demand zone to be watched for bullish recovery.

However, by the end of June a significant bearish break below 1.3550 was expressed as seen on the depicted charts (fundamental reasons). Bearish persistence below the demand level at 1.3550 enhanced the bearish scenario towards the price levels around 1.2700 (Bearish projection target).

Since then, the GBP/USD pair has been trapped inside the depicted consolidation range above 1.2700 until a bearish breakout took place on October 6.

Daily persistence below 1.2700 confirmed the bearish Flag pattern. That is why, a bearish projection target would be located around 1.2020.

Recently, bullish recovery was manifested around 1.2080. That is why, a bullish pullback was executed towards 1.2700-1.2750.

Risky traders could consider the recent bullish pullback towards the price zone of 1.2700-1.2750 for a valid SELL entry. S/L should be set at the daily closure above 1.2750. T/P levels should be located at 1.2300 and 1.2100.

This SELL entry should be carried out cautiously as the ascending bottoms around the price levels of 1.2120 and 1.2320 will probably apply significant bullish pressure on the supply zone of 1.2700-1.2750 thus threatening the suggested trade.

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Intraday technical levels and trading recommendations for EUR/USD for December 21, 2016

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

In March 2015, EUR/USD bears challenged the monthly demand level around 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.

However, next monthly candlesticks (September, October, and November) reflected a strong bearish rejection around the area of 1.1400-1.1500.

Again in February 2016, the depicted price levels around 1.1400-1.1500 acted as a significant supply zone during the bullish pullback.

That is why, recent bearish rejection was expected around the depicted supply levels (note the monthly candlesticks of May, August, and October 2016).

In the longer term, the level of 0.9450 remains a projected target if the current monthly candlestick maintains its bearish closure below the depicted monthly demand level of 1.0570.

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The long-term outlook for the EUR/USD pair remains bearish as the monthly chart illustrates. Bearish persistence below 1.0825 is needed to enhance this scenario.

In September 2016, temporary bullish breakout above 1.1250 was expressed again, but evident bearish pressure was applied on the EUR/USD pair on September 16.

Closure below 1.1250 (supply level 1) maintained enough bearish pressure and enhanced the downside momentum towards the price level of 1.1000 (key level 1).

On November 9, an obvious bearish break of the 1.1000 price level occurred (Shooting Star daily candlestick). Moreover, further decline below 1.0825 (Fibonacci Expansion 100%) was expressed.

Bearish persistence below 1.0825 allowed a further fall to occur at 1.0570 (demand level) where bullish rejection and a valid BUY entry were expressed on November 24.

The price level of 1.0825 (Fibonacci Expansion 100%) constituted a recent supply level which offered a valid SELL entry on December 8. Stop Loss should be lowered to 1.0600 to secure some profits.

On the other hand, bearish persistence below the depicted demand level around 1.0570 allows further bearish decline. The first bearish target would be located around 1.0220.

The price level of 1.0570 constitutes a recent supply level to be watched for SELL entries if a bullish pullback occurs above 1.0500.

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Daily analysis of USDX for December 21, 2016

The index remains alive in the bullish bias, as it still trades around 14-year highs across the board and the H1 chart shows us that the 200 SMA is still acting as dynamic support. If USDX manages to break above the 103.98 level, it can attempt to reach as long as the 105.00 handle. However, another decline to test the 102.56 level cannot be ruled out.

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H1 chart's resistance levels: 103.98 / 104.69

H1 chart's support levels: 102.56 / 101.40

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 103.98, take profit is at 104.69 and stop loss is at 103.26.

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Daily analysis of GBP/USD for December 21, 2016

The pair broke yesterday's lows and it's now facing support around 1.2327. Currently, we can expect bearish continuation towards the 1.2249 level, but corrective moves could take place in coming days, as the sterling is getting exhausted in the current bias and MACD indicator is favoring this recovery scenario across the board.

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H1 chart's resistance levels: 1.2397 / 1.2462

H1 chart's support levels: 1.2327 / 1.2249

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 1.2327, take profit is at 1.2249 and stop loss is at 1.2407.

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Daily analysis of Gold for December 20, 2016

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Overview

The gold price has been trading negatively after it found solid resistance at 1,140.00. Stochastic keeps approaching oversold areas, waiting to help the price rebound bullishly to resume the expected bullish trend to 1,154.76 levels on the intraday and short-term basis. A breach of 1,154.76 levels will extend the bullish wave to 1,172.68. In general, we will keep our positive overview for the upcoming period unless we witness a clear break and holding below 1,124.88. The expected trading range for today is between the 1,124.88 support and the 1,154.75 resistance.

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