Trading plan for EUR/USD and GBP/USD for August 21, 2017

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Technical outlook:

A short-term view has been depicted here for EUR/USD, with the most probable wave counts. The pair might be looking to produce a wave 4 corrective structure (zigzag) labelled as A-B till now. Wave C might be looking to push lower towards 1.1550 levels at least. Also please note that a resistance trend line is also passing very close to the current price action and pushes prices lower again. Furthermore, be prepared for a more complex correction in wave 4, since the second wave was pretty sharp (not seen here). We shall present alternate scenarios of wave counts as it unfolds here. For now, the resistance should be strong around 1.1850 levels, while the interim support is seen at 1.1650. A simple trade strategy could still be to sell on rallies through 1.1850 levels. Broadly speaking, bears should remain in control till prices stay below 1.1900 levels going forward.

Trading plan:

Please remain short and add more around 1.1840/50, stop at 1.1920, target 1.1600 and lower.

GBP/USD chart setups:

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Technical outlook:

The GBP/USD pair and chart setups are still looking sideways, with possibilities of yet another lows at 1.2800 levels before producing the much awaited counter trend rally as depicted here. We would like to present the current sideways movement and declare a no-trading zone for now unless prices spike lower towards 1.2800 levels producing a long opportunity. On the flip side, if 5 wave is already complete, as an alternate, a counter trend rally could come into play from current levels and push through 1.3100 levels as depicted here. Please note that 1.3100 level is the Fibonacci 0.618 resistance for the entire drop from 1.3270 through 1.2850 levels respectively. For now, the immediate resistance should be seen at 1.3000 levels while the interim support is found around 1.2850 levels.

Trading plan:

Please remain flat for now. Shall be looking to sell higher around 1.3000 and 1.3100 levels respectively.

Fundamental outlook:

No major event lined up for the day.

Good luck!

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Analysis of GBP/USD for August 21, 2017

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Recently, the GBP/USD pair has been upwards. The price tested the level of 1.2897. Anyway, according to the 30M time frame, I found that the price is breaking the upward trendline and that there is a strong resistance cluster in the background, which is a sign that buying looks risky. The Stochastic oscilator is in the oberbought condition, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.2845 and 1.2830.

Resistance levels:

R1: 1.2900

R2: 1.2935

R3: 1.2990

Support levels:

S1: 1.2845

S2: 1.2820

S3: 1.2765

Trading recommendations for today: watch for potential selling opportunities.

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Analysis of EUR/JPY for August 21, 2017

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Recently, the EUR/JPY pair has been trading sideways at the price of 128.20. According to the 30M time frame, I found a fake breakout of supply trendline in the background and successful testing of the intraday supply trendline, which is a sign that buying looks risky. The stochastic oscilator is showing an overbought condition, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 127.55 and 127.00.

Resistance levels:

R1: 129.10

R2: 129.90

R3: 131.00

Support levels:

S1: 127.95

S2: 127.55

S3: 126.40

Trading recommendations for today: watch for potential selling opportunities.

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NZD/USD intraday technical levels and trading recommendations for August 21, 2017

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Daily Outlook

In February 2017, the depicted short-term downtrend was initiated around the depicted supply zone (0.7310-0.7380).

However, a recent bullish breakout above the downtrend line took place on May 22. Since then, the market has been bullish as depicted on the chart.

The price zone of 0.7150-0.7230 (key zone) stood as a temporary resistance zone until a bullish breakout was expressed above 0.7230.

This resulted in a quick advance towards the next supply zone around 0.7310-0.7380 which was temporarily breached to the upside.

The recent bearish pullback was executed towards the price zone of 0.7310-0.7380 (newly-established demand zone) which failed to offer enough bullish support for the NZD/USD pair.

Re-consolidation below the price level of 0.7300 enhances the bearish side of the market. This brings the EUR/USD pair again towards 0.7230-0.7150 (the key zone) where the recent bullish recovery is being manifested.

Currently, the NZD/USD pair remains trapped between the price levels of 0.7240 and 0.7320 until a breakout occurs in either directions.

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Intraday technical levels and trading recommendations for EUR/USD for August 21, 2017

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Monthly Outlook

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2100 (multiple previous bottoms set in July 2012 and June 2010). Hence, a long-term bearish target was projected toward 0.9450.

In March 2015, EUR/USD bears challenged the monthly demand level around 1.0500, which had been previously reached in August 1997.

In the longer term, the level of 0.9450 remains a projected target if any monthly candlestick achieves bearish closure below the depicted monthly demand level of 1.0500.

However, the EUR/USD pair has been trapped within the depicted consolidation range (1.0500-1.1450) until the current bullish breakout was executed above 1.1450.

The current bullish breakout above 1.1450 allows a quick bullish advance towards 1.1850 and 1.2000-1.2100 where the price action should be watched for evident bearish rejection and a valid SELL Entry.

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Daily Outlook

In January 2017, the previous downtrend reversed when the Head and Shoulders pattern was established around 1.0500. Since then, evident bullish momentum has been expressed on the chart.

As anticipated, the ongoing bullish momentum allowed the EUR/USD pair to pursue further advance towards 1.1415-1.1520 (Previous Daily Supply-Zone).

The daily supply zone failed to pause the ongoing bullish momentum. Instead, the evident bullish breakout is being witnessed on the chart. The nearest supply level to meet the pair is located around 1.2080 (Level of previous multiple bottoms) where bearish rejection can be anticipated.

However, recent bearish pressure was expressed around lower price levels (1.1880) which managed to initiate the current bearish corrective movement.

On the other hand, the price zone of 1.1415-1.1520 stands as a prominent DEMAND zone to be watched for a valid BUY entry during the current bearish pullback.

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Fundamental analysis of EUR/USD for August 21, 2017

EUR/USD has been quite volatile and corrective recently while bouncing back from 1.1900 resistance area. There has been good amount of confusion going on in the market, though the euro is expected to be strong and the dollar is trying to regain its lost strength via the stock market boom. There is still a good amount of choppiness in the market which is expected to provide a directional bias very soon, whereas the single currency is expected to gain over the US dollar. Today German BUBA Monthly report is going to be published which is expected to be neutral in nature due to neutral economic reports being published. On the other hand, USD do not have any economic events today which might lead to more corrective moves of this pair. Tomorrow we have the German ZEW Economic Sentiment report which is expected to decrease to 15.3 from the previous value of 17.5. Additionally, the ZEW Economic Sentiment is also expected to show a slight decrease to 34.2 from the previous value of 35.6. On the USD side, tomorrow HPI report is going to be published which is expected to be unchanged at 0.4% and the Richmond Manufacturing Index is expected to decrease to 12 from the previous figure of 14. To sum up, both Europe and the US have posted mixed economic review which is expected to result in more corrective and volatile price action in the coming days. As long as any currency of this pair comes up with high-impact positive economic reports in the coming days to set any direction, the pair is expected to be corrective and volatile in nature.

Now let us look at the technical view. The pair is still residing in a corrective structure, being supported by the dynamic level of 20 EMA which has been pushing the price higher recently. The pair is expected to proceed higher with a target towards 1.2140 resistance level in the coming days but if we see any daily close below the dynamic level of 20 EMA we will be looking forward to sell with a target towards 1.1620 support level. The bullish bias is expected to continue further as the price remains above the 1.1500 level.

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Daily analysis of major pairs for August 21, 2017

EUR/USD: In the short term, this currency trading instrument has become neutral, for it has been consolidating in the last few weeks. The neutrality is supposed to be ended this week or next week, as price either goes above the resistance line at 1.1850 (creating a Bullish Confirmation Pattern) or goes below the support line at 1.1650 (creating a Bearish Confirmation Pattern). As long as price stays between the aforementioned support and resistance lines, the neutrality in the market would continue.

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USD/CHF: This pair did not move in a directional mode last week, though a short-term bearish signal has been generated in the market. The bearish signal would become stronger once the support levels at 0.9600 and 0.9550 and breached to the downside. There could also be a bullish movement, which may render the short-term bearishness invalid, for USD is supposed to go upwards this week, while CHF becomes weak.

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GBP/USD: The cable went downwards smoothly last week, testing the accumulation territory at 1.2850 several times, but it was not able to break it to the downside. The outlook on GBP pairs is bearish for this week, and the accumulation territory that has been tested several times would eventually be breached to the downside, as the price targets other accumulation territories at 1.2800, 1.2750 and 1.2700.

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USD/JPY: The movement on USD/JPY last week was quite similar to the movement on EUR/JPY. Price made some bullish attempts in the first few days of the week, and then fell downwards, starting from August 16, closing below the supply level at 109.50 (after testing the demand level at 109.00). Further bearish movement is expected this week, and thus the demand levels at 109.00, 108.50 and 108.00 could be tested.

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EUR/JPY: The EUR/JPY went generally bearish last week. It lost about 200 pips and then bounced upwards on Friday. The upwards bounce has given another good opportunity to sell short at a better price. The demand zones at 128.00, 127.50 and 127.00 may be tested this week. The demand zone at 128.00 was tested last week.

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Elliott wave analysis of EUR/NZD for August 21 - 2017

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Wave summary:

Another sideways consolidation is unfolding between 1.6010 to 1.6110. We favor a break above the resistance at 1.6110 for a rally to above 1.6236 confirming continuation higher towards 1.6969. A break of the support at 1.6010 will call for a move closer to 1.5920 before the renewed upside pressure should be expected.

R3: 1.6349

R2: 1.6236

R1: 1.1610

Pivot: 1.6050

S1: 1.6000

S2: 1.5920

S3: 1.5832

Trading recommendation:

We will buy EUR at 1.5950 or upon a break above 1.6125.

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Global macro overview for 21/08/2017

Global macro overview for 21/08/2017:

The UK Prime Minister Theresa May's government declared that it's stepping up pressure on EU to move the Brexit negotiation into trade agreements as soon as in October. According to Brexit Secretary David Davis "with the clock ticking, it wouldn't be in either of our interests to run aspects of the negotiations twice", he wrote in UK newspaper Sunday Times. Moreover, he argued that "it is simply not possible to reach a near-final agreement on the border issue until we've begun to talk about how our broader future customs arrangements will work. Furthermore, if we get the comprehensive free trade agreement we're seeking as part of our future partnership, solutions in Northern Ireland are easier to deliver." From the EU side, the chief Brexit negotiator Michel Barnier responded: "the quicker we can discuss customs & future relationship, the quicker an agreement was found on the breakup topics".

In a paper called "Future Customs Arrangements", the UK government started releasing a series of policy documents for Brexit negotiations, covering topics such as Northern Ireland and the customs union. One of the most important issues of the UK-EU negotiations, an arrangement that allows movements of goods across the borders of EU member states without tariffs, had been often criticized by UK businessmen. They argued that without a practical and convenient way to regulate the customs, the paper indicated that leaving the EU represents leaving the EU Customs Union, which is not in the interest of the UK business and might heavily impact the UK trade balance, sales, and consumer spending. As a result, it might heavily influence the British Pound exchange rate as well. The next round of Brexit talks will start on 29th of August.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. The market is trading in a narrow range between the levels of 1.2831 - 1.2932 after a bounce from the 61%Fibo at the level of 1.2847. The whole zone between the levels of 1.2793 - 1.2861 is a strong support zone and any violation of this zone will open the road towards the level of 1.2709 and 1.2635.

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Elliott wave analysis of EUR/JPY for August 21, 2017

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Wave summary:

We are still looking for a final dip closer to 127.19 to complete the X-wave from 131.40. Once completed, a new impulsive rally towards 137.36 is still expected to complete wave D of the large triangle consolidation.

Only a direct break above the minor resistance at 128.45 will indicate that the X-wave already finished with the test of 127.52 and the final zig-zag rally towards 137.36 is developing.

R3: 128.79

R2: 128.45

R1: 128.10

Pivot: 128.00

S1: 127.52

S2: 127.19

S3: 127.00

Trading recommendation:

We are short EUR from 128.89 and will move our stop+revers lower to 128.50, while take profit is placed at 127.25.

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Global macro overview for 21/08/2017

Global macro overview for 21/08/2017:

The focal point on the economic calendar will be the Jackson Hole symposium at the end of the week, while the U.S. politics and geopolitical factors may become sidebars. The main theme of the speech will be the stability of the financial system. Among the speakers there will be US Fed Chairperson Janet Yellen and ECB President Mario Draghi. Groundbreaking declarations are unlikely, but investors will carefully analyze the smallest suggestions on the future of major central banks' monetary policy. It is worth to mention last week's speech of Fed Vice President William Dudley which was less dovish than the content of the July FOMC minutes. Dudley and Yellen were often very consistent in assessing the processes in the economy and the optimum shape of politics. Both of them also represent the "center of gravity" of the Fed views. Therefore, Yellen's speech may be a stepping stone to the belief that, despite mixed data from recent weeks, the Federal Reserve remains on the path of gradual normalization. Key will be the interpretation of pricing processes in the US and assessment of the sustainability of inflation slowdown. Any mention of growing imbalances, overly high valuations of assets or under tight financial conditions should be interpreted as a hawkish signal in anticipation of another rate hike.

Global investors are still underestimating the possibility of the Fed hiking the interest rate more often than quarterly and the current anticipation of another interest rate hike in December is quite low (40% implied probability of a rate hike to 1.5% according to CME FedWatch Tool). Almost the same anticipation level is currently set on March 2018: only 43% chances for a hike to 1.5%. This figures can quickly change if Yellen gives any hawkish clues in Jackson Hole.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market is moving inside of a blue channel and bulls are unable to break out above the golden trend line resistance around the level of 94.11. The market is in the critical moment and a breakout in either direction is expected.

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The Euro switched to Jackson Hole

Forex analysis review
The Euro switched to Jackson Hole

Trading plan for 21/08/2017

Trading plan for 21/08/2017:

On Monday 21st of August, the event calendar is light in important data releases. Only during the US session, the global investors will focus on Wholesale Sales data from Canada.

USD/CAD analysis for 21/08/2017:

The Wholesale Sales data are scheduled for release at 12:30 pm GMT and market participants expect the value of sales to decrease from 0.9% last month to 0.6% in the reported month. Wholesalers sell to industries and retailers in quantities far larger than most consumers are willing to purchase. Given that growth in Wholesale Trade usually precedes increases in retail trade and consumption, changes in Wholesale Sales can be used as an early indicator for the overall direction of the retail sector, consumption, and the economy. Last month, the Bank of Canada decided to hike the interest rate from 0.5% to 0.75%, which was the first rate hike since 2010. More importantly, the BoC did not close the road for further tightening. In the current situation, the low unemployment rate, high GDP projections (if the Wholesale Sales data will beat the expectations) and the inflationary pressures are supporting the Bank of Canada's intention for one more rate hike in October.

Let's now take a look at the USD/CAD technical picture at the H4 time frame. Bulls have managed to retrace 23% of the previous swing down and were stopped at the level of 1.2770. Then the market reversed and tested the technical support at the level of 1.2576. The question remains, whether this was just a dead cat bounce that will lead to another lower low or the beginning of some more substantial correction. The next technical resistance is seen at the level of 1.2858 and 38%Fibo is seen at the level fof 1.2941. The market conditions look oversold with a visible bullish divergence at the momentum indicator. The bias is slightly bullish (as long as no new low is made).

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Market Snapshot: Gold rejected at $1296 resistance

The price of gold has broken through the important technical resistance at the level of $1,296 but got immediately rejected and tested the previous support at the level of $1,280. The market conditions are overbought and there is a visible bearish divergence between the price and the momentum oscillator, which supports the downside bias. The next technical support is seen at the levels of $1,274 and $1,267.

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Market Snapshot: SPY fills the gap

After filling the gap between the levels of 242.16 - 243.31, the SPY ( SP500 ETF) tried to rally higher, but was rejected at the level of 244.18 and the shooting star candlestick formation was made at an hourly time-frame chart. Since then, the price dropped towards the lows and it is getting close to the golden trend line dynamic support around the level of 241.61.

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Ichimoku indicator analysis of USDX for August 21, 2017

The dollar index continues to trade mostly sideways. The short-term support is held so we could not rule out another move towards 94-94.30. As long as the price holds above 93.30, trend is bullish.

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Red lines - bullish channel

The dollar index is trading above the 4 hour Kumo (cloud) and inside the bullish channel. The up trend is fragile. Support at 93.30 should not be broken. If this happens, then we expect the price to move towards 91. Resistance is at 94.25-94.50.

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Red lines - bullish channel

On a daily basis, the price is trying to overcome the tenkan-sen (red line indicator). The fact that we got rejected last week by the kijun-sen (yellow line indicator) is a bearish sign. Daily trend remains bearish. However this does not rule out a bounce towards 94.50. Critical short-term support is at 93.30. If broken, we go to 91-90.

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Ichimoku indicator analysis of gold for August 21, 2017

Gold price remains in a bullish trend. The price touched $1,300 last week and pulled back towards $1,280. The correction could already be over. I'm very bullish on gold expecting a move towards $1,320-$1,340 to happen late August or early September.

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Gold is trading above the Kumo. The tenkan-sen has crossed the kijun-sen. Price is making higher highs and higher lows. Support is at $1,277 and next at $1,268. Resistance is seen at $1,300.

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Black line - long-term resistance (broken)

Blue line -long-term support

Gold is breaking above the important long-term resistance levels. Any pullback towards $1,260 is a buying opportunity. Gold bullish trend is expected to continue throughout 2017 and early 2018.

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Technical analysis of GBP/USD for August 21, 2017

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Overview:

  • The GBP/USD pair will probably keep moving downwards from the level of 1.2928 (resistance 1). The pair fell from the level of 1.3008, which coincides with the ratio of 61.8% Fibonacci retracement, to the bottom around 1.2848. The first resistance level is seen at 1.2928 followed by 1.3008, while daily support 1 is found at 0.6817. Besides, the level of 1.2848 represents a weekly pivot point for that it is acting as minor resistance. Amid the previous events, the pair is still in a downtrend. The GBP/USD pair is declining from the new resistance line of 1.2928 towards the first pivot level at 1.2848 in order to test it. Hence, we recommend to sell below 1.2848 with the first target at 1.2748. If the pair succeeds to pass through the level of 1.2748. Then, the market will indicate a bearish opportunity below the level of 1.2748 in order to continue towards the next objectives of 1.2668 and 1.2588. However, if a breakout happens at the resistance level of 1.3008, then you'd better set your stop loss at 1.3028.
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Technical analysis of EUR/USD for August 21, 2017

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Overview:

  • The EUR/USD pair faced strong support at the level of 1.1693 because the resistance turned into support last week. So, the strong resistance has been already faced at the level of 1.1693 and the pair is likely to try to approach it in order to test it again. The level of 1.1693 represents a weekly support 1 as it is acting as minor support this week. Furthermore, the EUR/USD pair is continuing to trade in a bullish trend from the new support level of 1.1693. Currently, the price is in a bullish channel. According to the previous events, we expect the pair to move between the levels of 1.1801 and 1.1693. Also, it should be noticed that the double top is set at 1.1901. Additionally, the RSI is still signaling that the trend is upward as it remains strong above the moving average 100. This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend. Therefore, buy orders are recommended above 1.1722/1.1801 with the first target at the level of 1.1801. If the trend breaks the weekly pivot at the level of 1.1801, then the market will continue rising towards the weekly resistance 1 at 1.1880. However, the stop loss should be placed below the level of 1.1614 (weekly support 2).
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Technical analysis of EUR/USD for Aug 21, 2017

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When the European market opens, some economic data will be released such as German Buba Monthly report. The US will not unveil any important economic data, so amid the reports EUR/USD will move with a low volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1813.

Strong Resistance:1.1806.

Original Resistance: 1.1795.

Inner Sell Area: 1.1784.

Target Inner Area: 1.1756.

Inner Buy Area: 1.1728.

Original Support: 1.1717.

Strong Support: 1.1706.

Breakout SELL Level: 1.1699.

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 Aug 21, 2017

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In Asia, Japan will release the All Industries Activity index but the US today will not post any significant economic news today. So there is a probability the USD/JPY will move with low volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance. 3: 109.84.

Resistance. 2: 109.63.

Resistance. 1: 109.41.

Support. 1: 109.15.

Support. 2: 108.94.

Support. 3: 108.72.

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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EUR/USD approaching major resistance, prepare to sell

Price is approaching the major resistance at 1.1793 (Fibonacci retracement, horizontal swing high resistance, descending resistance) and we expect the pair to have a strong reaction off that level to push it down to at least 1.1691 support (Fibonacci extension, horizontal swing low support).

Stochastic (21,5,3) is seeing the major resistance below 94% and we expect a corresponding reaction off that level similar to the one we expect on price.

Sell below 1.1793. Set stop loss at 1.1842 aand take profit at 1.1691.

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USD/CHF bouncing perfectly off support and approaching profit target, prepare to sell

Price touched our buying area from Friday and has bounced off perfectly whilst continuing its rise towards our profit target. We prepare to sell below major resistance at 0.9697 (Fibonacci retracement, horizontal overlap resistance) for a push down to at least 0.9588 support (Fibonacci extension, horizontal swing low support).

Stochastic (21,5,3) is seeing the major resistance below 97% and we expect a corresponding reaction from that level similar to the one we expect on price.

Sell below 0.9697. Set stop loss at 0.9732 and take profit at 0.9588.

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NZD/USD testing major resistance, remain bearish

Price is now testing the major resistance at 0.7337 (Fibonacci retracement, horizontal swing high resistance, bearish divergence) and we expect a drop from this level to at least 0.7223 support (Fibonacci extension, horizontal swing low support).

Stochastic (34,5,3) is reversing nicely below our 96% resistance and we also see bearish divergence vs price signalling that a reversal is impending.

Sell below 0.7337. Set stop loss at 0.7373 and take profit at 0.7223.

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USD/JPY profit target reached perfectly, prepare to buy again

Price has bounced off our support at 108.85 previously to reach our profit target. Now, it has come to test this major level of support once again. Our plan is to buy above 108.85 support (Fibonacci extension, horizontal swing low support) for a push up to at least 110.28 resistance (Fibonacci retracement, horizontal overlap resistance).

Stochastic (21,5,3) is bouncing off nicely from our 2.3% support with good upside potential.

Buy above 108.85. Set stop loss at 108.28 and take profit at 110.28.

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AUD/JPY profit target has been reached perfectly, prepare to sell

Price has bounced up perfectly from our buying area and has reached our profit target. We prepare to sell on major resistance at 87.39 (Fibonacci retracement, horizontal overlap resistance, Fibonacci extension) for a push down to at least 86.02 support (Fibonacci retracement, horizontal swing low support).

Stochastic (21,5,3) is seeing resistance at 93% and we expect a corresponding reaction off that level similar to the one we expect on price.

Sell below 87.39. Set stop loss at 88.08 and take profit at 86.02

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AUD/USD profit target has once again been reached, prepare to sell

Price has bounced up perfectly from our buying area and has reached our profit target. We prepare to sell on major resistance at 0.7964 (Fibonacci retracement, horizontal swing high resistance, Fibonacci extension) for a push down to at least 0.7874 support (Fibonacci retracement, horizontal overlap support).

Sell below 0.7964. Set stop loss at 0.7997 and take profit at 0.7874.

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Daily analysis of USDX for August 21, 2017

The index had a bearish journey on Friday and remains supported by the 93.28 level. Overall, the greenback is hovering around the 200 SMA at H1 chart and it's looking for a clear path in the short term. However, as long as it doesn't form any other lower low pattern, USDX could rally to test the resistance level of 94.11.

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H1 chart's resistance levels: 93.72 / 94.11

H1 chart's support levels: 93.28 / 92.97

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 93.72, take profit is at 94.11 and stop loss is found at 93.33.

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Daily analysis of GBP/USD for August 21, 2017

The pair will have an interesting week given that the sideways range remains intact and one could expect a break of this area soon. If GBP/USD manages to break below 1.2850, it can open the doors to test the 1.2761 level, which is our preferred scenario as the 200 SMA at H1 chart continues to stay above the current price.

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H1 chart's resistance levels: 1.2958 / 1.3021

H1 chart's support levels: 1.2850 / 1.2761

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 1.2850, take profit lies at 1.2761 and stop loss is found at 1.2938.

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GBP/USD analysis for August 18, 2017

Forex analysis review
GBP/USD analysis for August 18, 2017

The Euro switched to Jackson Hole

If the minutes of the July meeting of the ECB scared the bulls for the euro, then it was only for a little while. The European Central Bank expressed its concern about the future strengthening of the exchange rate, saying that the current EUR/USD movement is in line with the recovery process of the euro-zone economy. Actually, the GDP growth of the Euro monetary bloc, although not much, still outstripped the growth of its American counterpart, and the low level of political risks after the defeat of Eurosceptics in France contributes to the capital inflow. In contrast to the Old World, things in the New World are going, to put it mildly, not very well.

Positive data on the labor market and retail sales did not add optimism to the supporters of the US dollar. Judging by the minutes of the last meeting of the FOMC, the Fed's fears about inflation are still high. At the same time, the "dovish" rhetoric of the head of the Federal Reserve Bank of Dallas Robert Kaplan, urging the U.S. central bank to be patient in the conditions of slowing CPI and PCE, lowered the chances of a December monetary tightening from 48% to 42%.

Pressures on the USD index was created due to the political strife within the United States. Dissatisfied with the position of Donald Trump on a number of issues, business leaders began to leave the president's economic councils, which resulted in their liquidation. Discontent with the actions of the head of the White House was expressed not only by politicians, including representatives of their own Republican Party, but also by economists, which undermines confidence and contributes to the further collapse of the dollar. Correlation of these indicators convinces that the market has recently reacted more to rumors and gossip of a political nature than to macroeconomic statistics.

The dynamics of the dollar index and the mistrust index of Donald Trump

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Source: Bloomberg.

By August 26, the focus of investors' attention will be on the meeting of heads of central banks in Jackson Hole. Following the June speech of Mario Draghi about the victory over deflation, the markets praised the ECB excessively. The media called him a more influential figure than Janet Yellen, the man who provoked the minimum peak of hysterics. In this respect, the traditional summit at the end of August was compared with past events, when ex-Fed Chairman Ben Bernanke announced the end of the QE, and at the same Draghi announced the launch of the quantitative easing program. The record of the last meeting of the ECB has shown that there are no surprises waiting for the "bulls" for the euro.

The Governing Council examined the problem of communicating information. Supporters of the gradual preparation of investors for the normalization of monetary policy, led by Benoit Coeure, were forced to retreat. Considering this as the slightest signal about the winding up of the QE, raised EUR/USD quotes. Over the past three months, the trade-weighted euro rate has soared by 5%, which creates serious problems for inflation, export and financial conditions and allows the projection a slowdown in the euro area's GDP.

Technically, the exit of quotes beyond the descending short-term channel and a successful resistance push ahead of 1.181-1.182 will be the evidence of the completion of the retreat and will open the way for the EUR/USD upwards. On the contrary, the update of the corrective low near 1.167 will increase the risks of development of the bearish counterattack in the direction of 1.15.

EUR / USD, daily chart

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Technical analysis of USD/JPY for August 18, 2017

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USD/JPY is under pressure and expected to trade with bearish outlook. The pair remains in consolidation, and the nearest resistance at 109.25 maintains the strong selling pressure on the prices. Furthermore, the relative strength index is mixed to bearish below its neutrality area at 50.

To sum up, as long as 109.14 holds on the upside, look for a return to 108.30. A break below 108.30 would trigger a new drop towards 108.10.

Alternatively, if the price moves in the opposite direction, a long position is recommended above 109.25 with a target at 109.65.

Chart Explanation: The black line shows the pivot point. The current price above the pivot point indicates a bullish position, while the price below the pivot point is a signal for a short position. The red lines show the support levels and the green line indicates the resistance level. These levels can be used to enter and exit trades.

Strategy: BUY, Stop Loss: 109.25, Take Profit: 1

Resistance levels: 109.65, 109.90, and 110.25

Support Levels: 108.30, 108.10, 107.50

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Technical analysis of USD/CHF for August 18, 2017

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USD/CHF is expected to continue the downside movement. The pair is trading below its declining 20-period and 50-period moving averages, which play resistance roles and maintain the downside bias. The relative strength index is bearish below its neutrality level at 50.

To conclude, as long as 0.9660 is resistance, a further downside to 0.9550 and even to 0.9500 seems more likely to occur.

Chart Explanation: The black line shows the pivot point. The present price above the pivot point indicates the bullish position, and the price below the pivot points indicates the short position. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Strategy: SELL, Stop Loss: 0.9660, Take Profit: 0.9550

Resistance levels: 0.9685, 0.9715, and 0.9750

Support levels: 0.9550, 0.9500, and 0.9475

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Technical analysis of GBP/JPY for August 18, 2017

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All our targets which we predicted yesterday were met. GBP/JPY is still under pressure and expected to continue the downside movement. The pair remains weak below its falling 20-period and 50-period moving averages, and is expected to post further downsides. The process of lower highs and lows remains intact, which should confirm a negative outlook. Besides, the relative strength index is still bearish, without showing any reversal signals.

To conclude, as long as 141.20 is not surpassed, the risk of a slide below 139.20 remains high. Our next down target is set at 138.65.

Alternatively, if the price moves in the opposite direction as predicted, a long position is recommended above 142.25 with the target at 142.65.

Strategy: SELL, Stop Loss: 139.20, Take Profit: 138.65.

Chart Explanation: the black line shows the pivot point. The price above the pivot point indicates the bullish position; and when it is below the pivot points, it indicates a short position. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 141.50, 142.05, and 143.00

Support levels: 139.20, 138.65, and 138.00

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Technical analysis of NZD/USD for August 18, 2017

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NZD/USD is expected to trade with bullish outlook above 0.7275. The technical picture of the pair is positive as the prices are supported by a bullish trend line. The upward momentum is further reinforced by both ascending 20-period and 50-period moving averages. The relative strength index is bullish and calls for a further upside.

Therefore, while the price holds above 0.7275, look for a new challenge to 0.7350 and even to 0.7370 in extension.

The black line shows the pivot point. Currently, the price is above the pivot point which indicates the bullish position. If it remains below the pivot point, it will indicate the short position. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 0.7350, 0.7365, and 0.7400

Support levels: 0.7250, 0.7225, and 0.7175

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GBP/USD analysis for August 18, 2017

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Recently, the GBP/USD pair has been trading sideways at the price of 1.2875. Anyway, according to the 15M time frame, I found a fake breakout of resistance cluster and yesterday's high at 1.2910, which is a sign that buyers got trapped and sellers took control. The RSI oscilator showed a hidden bearish divergence, which is another sign that sellers are in control. My advice is to watch for potential selling opportuntiies. The downwards targets are set at 1.2845 and 1.2810.

Resistance levels:

R1: 1.2905

R2: 1.2940

R3: 1.2970

Support levels:

S1: 1.2845

S2: 1.2815

S3: 1.2780

Trading recommendations for today: watch for potential selling opportunities.

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Analysis of EUR/JPY for August 18, 2017

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Recently, the EUR/JPY has been trading downwards. As I expected, the price tested the level of 127.83 (yesterday's first target). According to the 4H time frame, I found a breakout of support at 128.05, which is a sign that buying looks risky and that sellers are in control. I found weakness in the background (fake breakout, broken rising wedge), so my advice is to watch or potential selling opportunities. The downward targets are set at the price of 127.50 and 126.50.

Resistance levels:

R1: 129.35

R2: 130.25

R3: 130.80

Support levels:

S1: 127.95

S2: 127.40

S3: 126.50

Trading recommendations for today: watch for potential selling opportunities.

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Fundamental analysis of USD/CHF for August 18, 2017

USD/CHF has been impulsively bearish recently after bouncing back from the corrective range resistance of 0.9770 area. CHF economic reports were quite neutral in nature as well as the PPI report which published at 0.0% as expected which previously was at -0.1%. So this report had minor impact. On the other hand, the United States published both positive and negative economic reports which affected other currencies but could not stop the CHF growth. Today the US Prelim UoM Consumer Sentiment report is going to be published which is expected to show slight improvement to 94.0 from the previous figure of 93.4. Besides, FOMC Member Kaplan is going to speak today about the interest rates and future monetary policies. His comments are expected to be neutral in nature with no hints of recent rate hike decisions. To sum up, CHF did not have any high impact economic reports this week but managed to gain and maintain the bearish trend against USD which does hint that CHF is still quite stronger with the overall market sentiment in place. If USD reports provide any positive reports of high impact events in future we might see some USD gains or else CHF is expected to gain further in the coming days.

Now let us look at the technical view. The price has rejected the 0.9770 resistance level recently which lead to further impulsive bearish pressure in the pair. The price is currently residing below the dynamic level of 20 EMA and expected to reach 0.9450 support level in the coming days. As the price remains below the 0.9770 resistance level with a daily close, the bearish bias is expected to continue further in the coming days.

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Fundamental analysis of NZD/USD for August 18, 2017

NZD/USD has been quite volatile recently on the way to retesting the resistance area of 0.7370-0.7460. Yesterday, NZD has lost grounds due to positive economic reports from the United States which lead to more volatility in this pair recently. New Zealand posted a positive PPI input report published yesterday at 1.4% which previously was at 0.8% and expectation was at 0.9%. At the same time, the PPI Output was als positive at 1.3% which was expected to decrease to 0.7% from 1.4%. However, the currency has gained quite impulsively in the early hours of the market but could not sustain it long enough. On the other hand, today the Prelim UoM Consumer Sentiment report is going to be published which is expected to show a slight increase to 94.0 from the previous figure of 93.4. If the report shows a better than expected result, then we might see more bearish pressure in this pair in the coming days. NZD has been quite positive with the economic reports recently but could not maintain gains long enough against USD, which indicates that USD is stronger than NZD despite the variation of economic report effects.

Now let us look at the technical view. The price is currently proceeding higher with a target towards the resistance area of 0.7370-0.7460 but in a volatile corrective structure. The price is currently expected to reject the resistance area and then proceed lower towards 0.7050 support level in the coming days. As the price remains below the resistance level of 0.7460, the bearish bias is expected to continue further in the coming days.

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Intraday technical levels and trading recommendations for EUR/USD for August 18, 2017

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Monthly Outlook

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2100 (multiple previous bottoms set in July 2012 and June 2010). Hence, a long-term bearish target was projected toward 0.9450.

In March 2015, EUR/USD bears challenged the monthly demand level around 1.0500, which had been previously reached in August 1997.

In the longer term, the level of 0.9450 remains a projected target if any monthly candlestick achieves bearish closure below the depicted monthly demand level of 1.0500.

However, the EUR/USD pair was trapped within the depicted consolidation range (1.0500-1.1450) until the current bullish breakout was executed above 1.1450.

The current bullish breakout above 1.1450 allows a quick bullish advance towards 1.1850 and 1.2000-1.2100 where price action should be watched for evident bearish rejection and a valid SELL Entry.

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Daily Outlook

In January 2017, the previous downtrend reversed when the Head and Shoulders pattern was established around 1.0500. Since then, evident bullish momentum has been expressed on the chart.

As anticipated, the ongoing bullish momentum allowed the EUR/USD pair to pursue further bullish advance towards 1.1415-1.1520 (Previous Daily Supply-Zone).

The daily supply zone failed to pause the ongoing bullish momentum. Instead, an evident bullish breakout is being witnessed on the chart. The nearest supply level to meet the pair is located around 1.2080 (Level of previous multiple bottoms) where bearish rejection can be anticipated.

However, a recent bearish pressure was expressed around lower price levels (1.1880) which managed to initiate the current bearish corrective movement.

On the other hand, the price zone of 1.1415-1.1520 stands as a prominent DEMAND zone to be watched for a valid BUY entry during the current bearish pullback.

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NZD/USD Intraday technical levels and trading recommendations for August 18, 2017

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Daily Outlook

In February 2017, the depicted short-term downtrend was initiated around the depicted supply zone (0.7310-0.7380).

However, a recent bullish breakout above the downtrend line took place on May 22. Since then, the market has been bullish as depicted on the chart.

The price zone of 0.7150-0.7230 (Key-Zone) stood as a temporary resistance zone until a bullish breakout was expressed above 0.7230.

This resulted in a quick bullish advance towards the next supply zone around 0.7310-0.7380 which was temporarily breached to the upside.

The recent bearish pullback was executed towards the price zone of 0.7310-0.7380 (newly-established demand-zone) which failed to offer enough bullish support for the NZD/USD pair.

Re-consolidation below the price level of 0.7300 enhances the bearish side of the market. This brings the EUR/USD pair again towards 0.7230-0.7150 (Key-Zone) where recent bullish recovery is being manifested.

Currently, the NZD/USD pair remains trapped between the price levels of 0.7240 and 0.7320 until a breakout occurs in either direction.

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Global macro overview for 18/08/2017

Global macro overview for 18/08/2017:

Increasing risk aversion is again becoming a leading reason behind the current financial markets behavior. The positive result season in the US has encouraged the continuation of the indexes to a historic high, but there are now no new reasons to buy stocks at the current levels. With so many valuations and strong buyouts, the lack of information is no longer good information. The global investors are faced with the possibility of reducing the balance sheet total by the Fed, which over time will include the absorption of gigantic liquidity excess in the banking sector. Moreover, next week the US and South Korean will join for military maneuvers that have been carried out in North Korea in the past, which increases and geopolitical uncertainty. Finally, the rumors that Gary Cohn, the head of economic affairs in Donald Trump's administration, was about to resign. Such a decision would further reduce the probability of tax reform and the implementation of the stimulus package. The rumor was quickly denied, but it was not going to stop the decline in the US stocks yesterday, which also shows the strength of the supply side on Wall Street. This week close in the US markets might be very important for both bulls and bears.

Let's now take a look at the SPY technical picture (SP500 ETF) at the H1 time frame. The golden trend line dynamic resistance was strong enough to push the prices lower towards the unfilled gap between the levels of 244.65 - 245.54. Currently, there is only one gap left to fill, between the levels of 242.78 - 243.31 and this gap will act as a very important support zone for both bulls and bears.

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