Daily analysis of major pairs for January 4, 2017

EUR/USD: There is a bearish signal on the EUR/USD pair. The EMA 11 is below the EMA 56, and the RSI period 14 is below the level of 50. This means a Bearish Confirmation Pattern in the market, and the current upwards bounce could end up being another opportunity to sell short at a better price.

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USD/CHF: This pair is quite choppy right now. It is possible that price would move upwards by around 200 pips this week – an event that could emphasize the recent bullish bias on the market. The bullish bias would essentially remain valid as long as price stays above the support level at 1.0000.

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GBP/USD: This currency trading instrument is now trying to rally in the context of an uptrend. The rally may be checked at the distribution territories at 1.2400 and 1.2450. Normally, the outlook on the market remains bearish for this week, and the accumulation territories at 1.2200, 1.2150, and 1.2100 could be tested this week.

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USD/JPY: The USD/JPY pair went upwards on Monday and Tuesday, only to get corrected earlier today. All this happened in the context of an uptrend, and the supply levels at 118.50 and 119.00 could still be tested this week.

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EUR/JPY: This currency trading instrument could still go further upwards this week. Since EUR made some bullish attempts last week, price went upwards, closing above the demand zone at 122.50, and generating a nascent bullish signal, owing to a Bullish Confirmation Pattern in the market.

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Global macro overview for 04/01/2017

Global macro overview for 04/01/2017:

Another set of data from the United Kingdom has beaten the market expectations as the activity level of purchasing managers in the construction industry increased again. The UK Construction PMI came in at 54.2 in December, while market participants expected a slight decrease to 52.6 points after a rise to 52.8 a month ago. Construction has been one of the best sectors in the recovery from 2013. Although it had a soft 2016, there have been signs of optimism since the Brexit vote. In conclusion, markets cheered another good news on the UK economy after yesterday's PMI Manufacturing data, that is also better than expected.

Let's now take a look at the EUR/GBP technical picture in the daily time frame. We can clearly see the golden trend line is preventing bulls to rally higher as every attempt to break through was a failure. Currently, the market is trading below the 55 and 100 daily moving average, but still above the 200 moving average. A higher low might have been made at the level of 0.8300, but the trend is still bullish in the mid-term. The next support is seen at the level of 0.8333 and the next resistnace is seen at the level of 0.8667.

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Gold analysis for January 04, 2017

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Recently, gold has been trading upwards. The price tested the level of $1,167.60 in a high volume volume. According to the 30M time frame and using the market profile, I found yesterday's point of control at the price of $1,157.15. Intraday trend is bullish and my advice is to watch for buying opportunities on the dips. I have placed Fibonacci expansion to find potential upward targets. I got Fibonacci expansion 100% at the price of $1,173.65 and Fibonacci expansion 161.8% at the price of $1,184.00.

Resistance levels:

R1: 1,161.32

R2: 1,164.75

R3: 1,170.00

Support levels:

S1: 1,150.20

S2: 1,147.00

S3: 1,141.60

Trading recommendations for today: Watch for potential buying opportunities.

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EUR/NZD analysis for January 04, 2017

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Recently, EUR/NZD has been moving sideways at the price of 1.5000. My first take profit from yesterday's analysis has been met at 1.5060. According to the 30M time frame and using the market profile, I found yesterday's point of control at the price of 1.4995. My advice is to watch for selling opportunities on the pullbacks. I created a downward channel and the price respecting supply trendline successfully, which is a clear sign of weakness. A downward target is set at the price of 1.4960 (Fibonacci expansion 161.8%).

Fibonacci Pivot Points:

Resistance levels

R1: 1.5090

R2: 1.5120

R3: 1.5160

Support levels:

S1: 1.5005

S2: 1.4980

S3: 1.4940

Trading recommendations for today: Watch for selling opportunities.

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Global macro overview for 04/01/2017

Global macro overview for 04/01/2017:

The most important event of the day will be FOMC Meeting Minutes release at 07:00pm GMT. As we all remember, at their December meeting the Federal Open Market Committee hiked rates from 0.50% to 0.75%. The Meeting Minutes will be watched to get the first clues of any discussion of potential policy changes under the new administration, as well as the rationale behind the hawkish shift in the dot plot and the lack of a shift in economic forecasts. In conclusion, high volatility is expected in all US Dollar pairs during and after the Meeting Minutes release.

Let's now take a look at US Dollar index technical picture in the daily time frame. Another marginal higher high was made at the level of 103.83 yesterday, but then the market got back to the trading range between the levels of 102.86 - 10383 and now is awaiting the news release. The bullish trend sequence of higher highs and higher lows is still intact, and as long as the level of 99.43 is clearly violated, the outlook is still bullish.

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Technical analysis of NZD/USD for January 04, 2017

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Overview:

  • The NZD/USD pair will continue rising from the level of 0.6933 in the long term.
  • It should be noticed that the support is established at the level of 0.6905 which represents the daily pivot point on the H1 chart.
  • The price is likely to form a double bottom in the same time frame. Accordingly, the NZD/USD pair is showing signs of strength following a breakout of the highest level of 0.6933.
  • So, buy above the level of 0.6933 with the first target at 0.6977 in order to test the daily resistance 1. The level of 0.6977 is a good place to take profits.
  • The RSI is still signaling that the trend is upward as it remains strong above the moving average (100). This suggests that the pair will probably go up in coming hours. If the trend is able to break the level of 0.6977, then the market will call for a strong bullish market towards the objective of 0.7009 in coming hours.
  • However, in case a reversal takes place and the NZD/USD pair breaks through the support level of 0.6905, a further decline to 0.6860 can occur. It would indicate a bearish market.
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Technical analysis of USD/CAD for January 4, 2017

General overview for 04/01/2017:

The wave b (green) is now completed and the market is unfolding wave c (green) to the downside. The projected target levels for this wave are 50%Fibo at 1.3340 and 61%Fibo at 1.3278. When one of this levels is hit, then the uptrend should resume. The longer-term outlook remains bullish unless the technical support at the level of 1.03080 is clearly violated.

Support/Resistance:

1.3666 - WR2

1.3598 - Wave 1 Top

1.3539 - WR1

1.3470 - Weekly Pivot

1.3461 - Intraday Resistance

1.3387 - Intraday Resistance

1.3400 - 38%Fibo

1.3387 - Intraday Support

1.3340 - 50%Fibo

1.3278 - 61%Fibo

Trading recommendations:

Daytraders should still consider buying the dips in this market as the upward wave progression is uncompleted.

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Technical analysis of USD/CHF for January 04, 2017

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Overview:

  • The USD/CHF pair faced resistance at the level of 1.0302, while minor resistance is seen at 1.0275. Support is found at the levels of 1.0229 and 1.0196. Besides, it should be noted that a daily pivot point has already set at the level of 1.0229. Equally important, the USD/CHF pair is still moving around the key level at 1.0229, which represents a daily pivot in the H1 time frame at the moment. The price spot of 1.0275 remains a significant resistance zone. Therefore, there is a possibility that the USD/CHF pair will move to the downside and the fall structure does not look corrective. Resistance is seen at the level of 1.0275 today. So, sell below 1.0275 with the first target at 1.0229 to test the pivot. In overall, we still prefer the bearish scenario as long as the price is below the level of 1.0229. Furthermore, if the USD/CHF pair is able to break out the bottom at 1.0229, the market will decline further to 1.0196. However, it would also be wise to consider where to place a stop loss; this should be set above the second resistance of 1.0302.

Daily key levels:

  • Major resistance:1.0302
  • Minor resistance:1.0275
  • Intraday pivot point:1.0229
  • Minor support:1.0196
  • Major support:1.0164
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Technical analysis of EUR/JPY for January 4, 2017

General overview for 04/01/2017:

The corrective wave c (purple) has bottomed a little bit lower than anticipated, but the low is still way above the impulsive wave invalidation line at the level of 121.59. The whole structure between the levels of 123.85 and 122.25 looks corrective as it is full of whipsaws and false breakouts in both directions. The most important level is the weekly pivot at the level of 122.93 and intraday support at the level of 122.25. The bias remains bullish as there are unfinished waves to the upside.

Support/Resistance:

124.28 - WR1

123.85 - Intraday Resistance

122.92 - Weekly Pivot

122.25 - Intraday Support

122.04 - WS1

Trading recommendations:

Day traders should still consider buying the dips in this market as the upward wave progression is uncompleted.

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Technical analysis of USDX for January 4, 2017

The Dollar index made a new high but it was not confirmed by the RSI. The divergence pattern in RSI during the new highs is worrying for bulls specially if price breaks below 102.20. There are a lot of chances we saw a fake breakout and rejection.

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Blue line - resistance

Green line - support

The RSI is diverging on the 4 hour chart. A break below short-term support of 102.20 will give a new stronger sell signal that will at least push prices towards the next important support at 100. So bulls should be very cautious if price breaks below the 4-hour cloud and the green trend line support.

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The Dollar index is expected to make a pullback towards the 38% Fibonacci retracement near 100. Longer-term trend remains bullish. Only a break below 98 could put the long-term trend in danger. Oscillators are overbought and some relief is expected to be seen there.The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of gold for January 4, 2017

Gold price remains strong in the short-term chart as price is making higher highs and higher lows. Short-term trend has already changed to bullish and yesterday we saw a backtest of support and an upward reversal. This is a bullish sign. Minimum short-term upside target for Gold is at $1,180-$1,200.

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Green lines - support

Short-term support is at $1,144 and next at $1,126. Yesterday, price backtested cloud support as expected. Gold price has made a short-term important low at $1,126 and this could turn out to be a long-term important low as the $1,045 low in 2015 was.

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Red lines - downward sloping wedge

Gold price has given a weekly bullish reversal signal as price has broken out of the wedge to the upside. Oscillators are oversold, diverging and turning upwards. Strong weekly resistance is found at the lower cloud boundary at $1,200-$1,220 area. Bulls need to clear above that area in order to confirm that $1,122 is an important long-term low.

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NZD/USD Intraday technical levels and trading recommendations for January 4, 2017

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On November 8, significant signs of a bearish reversal were expressed around the upper limit of the depicted consolidation range (0.7350).

The bearish breakdown of 0.7250 (the 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 enabled the NZD/USD pair to pursue toward lower target levels around 0.6990 (the upper limit of the depicted BUY zone).

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USD/CAD intraday technical levels and trading recommendations for January 4, 2017

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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 and 1.3080 (the lower limit of the depicted channel) where bullish rejection was expressed as anticipated.

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) where bearish rejection should be expected.

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Intraday technical levels and trading recommendations for GBP/USD for January 4, 2017

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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 toward 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 toward 1.2700-1.2750.

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

This SELL entry should be monitored cautiously as the ascending bottoms around the price levels of 1.2120 and 1.2320 may apply significant bullish pressure against the supply zone of 1.2700-1.2750 thus threatening the suggested trade.

On the other hand, price action should be watched around the current price levels (1.2300-1.2260) where a previous top was recently established on October 19. Hence, bullish rejection is anticipated around the current price levels.

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Intraday technical levels and trading recommendations for EUR/USD for January 4, 2017

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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 1.0575 is needed to pursue this bearish 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 toward 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.

Bearish persistence below the depicted demand level around 1.0570 allows a further decline.

The first bearish target would be located around 1.0220.On the other hand, the price level of 1.0570 constitutes a recent supply level to be watched for a SELL entry during the current bullish pullback above 1.0500.

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Elliott wave analysis of EUR/NZD for January 4, 2017

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Wave summary:

The correction in wave [ii] has turned into an expanded flat. We could still wave [c] of [ii] move slightly lower towards 1.4900 as long as minor resistance at 1.5123 is able to cap the upside, but from 1.4900 or upon a break above 1.5123 a strong impulsive rally is expected. The rally in wave [iii] should become an extended wave and be at least 161.8% the length of wave [i], which calls for a rally towards 1.5911.

Trading recommendation:

We will buy EUR at 1.4925 or upon a break above 1.5123.

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Elliott wave analysis of EUR/JPY for January 4, 2017

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Wave summary:

The complex correction in wave (iv) continues to unfold in a very slow fashion. We are still looking for the possibility of a deeper corrective decline closer to 119.23. Since it is a wave four correction and we had a good idea that it would turn out to be complex from the onset of this wave, so no real surprise here.

Resistance is seen at 123.33, but only a break above 123.85 will indicate that this wave (iv) correction already has completed and wave (v) higher to 126.54 is developing.

Trading recommendation:

We are looking for a buying opportunity at 119.45 or upon a break above 123.85.

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Technical analysis of USD/JPY for January 04, 2017

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USD/JPY is expected to trade with a bullish bias above 117.75. The pair has bounced up from another test of support at 117.50 and broke above its 20-period moving average. The relative strength index is around its neutrality level at 50 and lacks downward momentum. A support base at 117.75 has formed and should limit the downside potential. As long as 117.75 holds on the downside, look for a further upside toward 118.35. A break above 118.35 would call for a further advance toward 118.60.

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 118.35 and the second one, at 118.60. In the alternative scenario, short positions are recommended with the first target at 117.50 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 117.25. The pivot point is at 117.75.

Resistance levels: 118.35, 118.60, 119

Support levels: 117.50, 117.25, 116.90

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Technical analysis of USD/CHF for January 04, 2017

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USD/CHF is expected to trade in a higher range as the movement is supported by a rising trend line. The technical picture of USD/CHF is bullish above a rising trend line, which emerged on Dec 30. The rising 50-period moving average is playing a support role and maintains the upside bias. The relative strength index is supported by an ascending trend line.

As long as 1.0245 is support, look for a further upside toward 1.0305 and 1.0335 in extension.

Resistance levels: 1.0305, 1.0335, 1.0375

Support levels: 1.0205, 1.0170, 1.0145

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Technical analysis of NZD/USD for January 04, 2017

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NZD/USD is expected to trade with a bearish bias. The pair is trading below its resistance, representing an intraday horizontal level. Both the 20-period and 50-period moving averages are heading downward and calling for further downside. In addition, the relative strength index is mixed to positive above its neutrality area at 50. Therefore, as long as 0.6925 is not broken, look for a new rebound to 0.6885 and 0.6860 in extension.

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 0.6885. A break below this target will move the pair further downwards to 0.6860. The pivot point stands at 0.6925. If 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 0.6940 and the second one at 0.6955.

Resistance levels: 0.6940, 0.6955, 0.6975

Support levels: 0.6885, 0.6860, 0.6835

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Technical analysis of GBP/JPY for January 04, 2017

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GBP/JPY is expected to trade with a bullish bias. The pair is bouncing off its support base around 143.90, representing an intraday horizontal level. Both the 20-period and 50-period moving averages are still heading upward, and are calling for further advance. In addition, the relative strength index is mixed to positive above its neutrality area at 50. Therefore, as long as 143.90 is not broken, look for a new rebound to 145 and 145.40 in extension.

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 145 and the second one, at 145.40. In the alternative scenario, short positions are recommended with the first target at 143.55 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 143.10. The pivot point is at 143.90.

Resistance levels: 145.00, 145.40, 146.00

Support levels: 143.55, 143.10, 142.50

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Technical analysis of EUR/USD for Jan 04, 2017

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When the European market opens, a batch of economic data will be released such as Italian Prelim CPI m/m, Core CPI Flash Estimate y/y, CPI Flash Estimate y/y, Final Services PMI, German Final Services PMI, French Final Services PMI, Italian Services PMI, Spanish Services PMI, and Spanish Unemployment Change. The US will release some economic news too such as FOMC Meeting Minutes and Total Vehicle Sales. So amid the reports, EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.0445.

Strong Resistance:1.0439.

Original Resistance: 1.0429.

Inner Sell Area: 1.0419.

Target Inner Area: 1.0395.

Inner Buy Area: 1.0371.

Original Support: 1.0361.

Strong Support: 1.0351.

Breakout SELL Level: 1.0345.

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 Jan 04, 2017

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In Asia, Japan will release the Final Manufacturing PMI. The US will release some economic data such as FOMC Meeting Minutes and Total Vehicle Sales. So there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance 3: 118.64.

Resistance 2: 118.41.

Resistance 1: 118.18.

Support 1: 117.89.

Support 2: 117.66.

Support 3: 117.43.

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 January 04, 2017

The index gained bullish momentum following strong US data posted during Tuesday's session and it managed to make a new 14 years high across the board. However, USDX was capped by the 103.81 level, where a pullback took place and sent the index to test the support zone of 103.15. If it does a breakout below that area, then we can expect a decline towards 102.82.

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H1 chart's resistance levels: 103.53 / 103.81

H1 chart's support levels: 103.15 / 102.82

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 103.53, take profit is at 103.81 and stop loss is at 103.25.

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Daily analysis of GBP/USD for January 04, 2017

The pair plummeted during Tuesday's session as the US dollar strengthened across the board amid positive data in the United States. The 200 SMA on H1 chart served as dynamic resistance and helped to resume the bearish bias in GBP/USD. Next support lies around 1.2205, where a breakout should open the doors to test the 1.2124 level. MACD indicator is on negative territory, favoring more declines ahead.

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H1 chart's resistance levels: 1.2260 / 1.2327

H1 chart's support levels: 1.2205 / 1.2124

Trading recommendations for today: Based on the H1 chart, sell (short) orders only if the GBP/USD pair breaks a bearish candlestick; the support level is at 1.2205, take profit is at 1.2124 and stop loss is at 1.2290.

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