USD/CAD intraday technical levels and trading recommendations for January 5, 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 recent bullish breakout above 1.3360 (50% Fibonacci level) allows bullish movement toward 1.3700-1.3750 (the upper limit of the depicted channel) where bearish rejection should be expected.

On the other hand, the current bearish pullback towards 1.3300 - 1.3250 (50% Fibonacci Level) should be watched for bullish rejection and a possible BUY entry. S/L should be placed below 1.3200.

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NZD/USD Intraday technical levels and trading recommendations for January 5, 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).

The price level of 0.6990 failed to apply enough bullish pressure. Instead, bearish continuation was achieved toward the lower limit of the depicted BUY zone (0.6860) which provided significant bullish rejection on December 23.

The NZD/USD pair remains trapped within the depicted price range (0.6860-0.6990) until breakout occurs in either directions. That's why, the current price level (0.6960) should be watched for a possible bullish breakout.

Bullish breakout above 0.6960 will allow the pair to pursue toward the price level of 0.7100 as initial target.

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Intraday technical levels and trading recommendations for GBP/USD for January 5, 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 5, 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 5, 2017

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Wave summary:

No change in view.

We are look for confirmation that the ongoing correction from 1.5235 is complete for the next impulsive rally higher towards into the 1.5837 - 1.5911 area.

As long as minor resistance at 1.5123 is able to cap the upside, we could still see a final spike just below support at 1.4960 before the correction completes and a new impulsive rally takes over.

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 5, 2017

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Wave summary:

No change in view.

We continue to look for a deeper correction, closer to the ideal corrective target near 119.23 from where the next impulsive rally higher to 126.54 is expected. That said, the decline from 123.85 is not overly convincing yet, but only a break above minor resistance at 123.12 and more importantly a break above resistance at 123.85 will indicate, that the final rally higher towards 126.54 is unfolding.

Trading recommendation:

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

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EUR/NZD analysis for January 05, 2017

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Recently, EUR/NZD has been moving sideways at the price of 1.5050. According to the 30M time frame and using the market profile, I found yesterday's point of control at the price of 1.5070. I found a 3-day balance, which is a sign that the market is searching for new clues before clear direction. My advice is to wait for a potential breakout and trade on the breakout direction. In case the price breaks higher, an upward target is set at the level of 1.5210. In case that the price breaks lower, a downward target is set at the level of 1.4870.

Fibonacci Pivot Points:

Resistance levels

R1: 1.5090

R2: 1.5110

R3: 1.5140

Support levels:

S1: 1.5015

S2: 1.4990

S3: 1.4955

Trading recommendations for today: Watch for breakout of a trading range to recognize further direction.

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Global macro overview for 05/01/2017

Global macro overview for 05/01/2017:

The Chartered Institute of Purchasing and Supply (CIPS) Construction Purchasing Manager's Index (PMI) data from the United Kingdom has beaten market expectations.The activity level of purchasing managers in the construction industry rose to the level of 54.2 points, while market participants expected a slight decrease to 52.6 points from 52.8 points a month ago. Moreover, the report reveals that this growth accelerates for the third straight month to 17-month high. New business increases at the fastest rate since July 2015 and output price inflation hits a 68-month record high. In conclusion, UK service sector ends 2016 with strong expansion and adds another good bunch of data to the overall good economic situation of the post-Brexit economy.

Let's now take a look at the GBP/USD technical picture in 4H time frame. The price is still hovering around the dashed black trend line, just in the middle of the trading range, as the market reaction for the news release was somewhat muted so far. The next support is seen at the level of 1.2200 and the next technical resistance is seen at the level of 1.2387.

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Gold analysis for January 05, 2017

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Recently, gold has been trading upwards. As I expected, the price tested the level of $1,179.15 in a high volume. According to the 30M time frame and using the market profile, I found yesterday's point of control at the price of $1,165.15. 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 161.8% at the price of $1,184.00. There is also an upward channel, which is a sign that buyers are in control. A good level for potential long positions is set at the price of $1,167.50.

Resistance levels:

R1: 1,165.00

R2: 1,167.70

R3: 1,170.40

Support levels:

S1: 1,158.40

S2: 1,156.30

S3: 1,153.30

Trading recommendations for today: Watch for potential buying opportunities.

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Daily analysis of major pairs for January 5, 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 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: The USD/CHF pair went down lower on Wednesday, threatening the recent bullish bias in the market. It is possible for price to go lower and lower; and unless the psychological level at 1.0000 is breached to the downside, the bias would not turn completely bearish.

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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: This pair came down a bit yesterday, though the bullish bias in the market is still valid. Further downward correction may be experienced. Unless it is a correction of about 200 pips, the bearish outlook cannot be rendered invalid. Price has topped at 118.60 this week, and that would be the next target for the next several trading days.

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EUR/JPY: This cross pair has been consolidating for a few weeks. Nevertheless, a closer look at the market reveals that bulls are still intent on driving price higher. There is a bullish signal in the market: The EMA 11 is above the EMA 56, and the RSI period 14 is above the level 50. Since the movement in the market would be determined by whatever happens to EUR, the supply zones at 123.50 and 124.00 might be reached soon.

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Global macro overview for 05/01/2017

Global macro overview for 05/01/2017:

The Federal Open Market Committee (FOMC) Meeting Minutes were released yesterday and they offered some interesting insights regarding further FED monetary policy as we are heading into an uncertain year. As we remember, the central bank raised interest rates from 0.50% to 0.75% and signaled an intention to do so again three times in 2017. The minutes indicate, that almost all officials saw upside risks to growth on expectations that fiscal policies will be more expansionary under Trump and about half of policymakers incorporated those assumptions into forecasts. Many saw the higher chance of a faster rate hike pace due to a bigger risk of sizeable undershooting of longer-run normal unemployment rate leading to higher inflation, which will be closely monitored. Moreover, almost all members saw unemployment rate running below longer-term normal level. In conclusion, the hawkish tone is clearly dominating in the minutes despite some policy members concerns regarding US growth under Trump presidency. Nevertheless, the interest rate hikes will be continued in 2017 and the bullish trend in the US Dollar has very strong fundamental reasons.

Let's now take a look at the US Dollar index technical picture at the daily time frame after FOMC Meeting Minutes were released. We can see another test of the 61%Fibo level, but this time from the upside and the current daily candle has a rather long shadow already. If this candle will close above its open, then it might be considered as a bullish pressure to the upside. All in all it would suggest another rally possibility towards the recent swing high at the level of 103.83 and even a possible break out higher.

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Technical analysis of USD/CAD for January 5, 2017

General overview for 05/01/2017:

The wave c (green) is now terminated at the level of 1.3254 and if the whole cycle in wave 2 (blue) is now completed, then the wave 3 (blue) to the upside should now unfold. The first important key resistance zone is the gray rectangular area between the levels of 1.3387 and 1.3400. Only a sustained breakout above this level would confirm the bullish impulsive scenario. Otherwise, the market might get back to the trading range and trade sideways.

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

1.3254 - Intraday Support

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 EUR/JPY for December 5, 2017

General overview for 05/01/2017:

The corrective cycle has made another marginal lower low, which means the cycle is getting more complex and time-consuming. Nevertheless, 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 like a double three corrective pattern 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

122.16 - 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 USD/CHF for January 05, 2017

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Overview:

  • The USD/CHF pair continues to move downwards from the level of 1.0221, which represents the ratio of 61.8% Fibonacci retracement on the H1 chart. Yesterday, the pair dropped from the level of 1.0221 to the bottom around 1.0159. The current price of 1.0190. Today, the first resistance level is seen at 1.0221 followed by 1.0265, while daily support is seen at the levels of 1.0159 and 1.0121. According to the previous events, the USD/CHF pair is still moving between the levels of 1.0221 and 1.0121. Hence, we expect a range of 100 pips in coming hours. The first resistance stands at 1.0221, for that if the USD/CHF pair fails to break through the resistance level of 1.0221, the market will decline further to 1.0159. This would suggest a bearish market because the RSI indicator is still in a negative area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.0121 in order to test the second support (1.0121). On the contrary, if a breakout takes place at the resistance level of 1.0265 (the double top), then this scenario may become invalidated.
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Technical analysis of NZD/USD for January 05, 2017

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Overview:

  • The NZD/USD pair has faced strong support at the level of 0.6925. So, the strong support has already faced at the level of 0.6925 and the pair is likely to try to approach it in order to test it again. The level of 0.6989 represents a daily pivot point for that it is acting as minor support today. Furthermore, the NZD/USD pair is continuing to trade in a bullish trend from the new support level of 1.1069. Currently, the price is in a bullish channel. According to the previous events, we expect the NZD/USD pair to move between 0.6925 and 0.7068. Besides, it should be noted that the first resistance is set at 0.7068. 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. In other words, buy orders are recommended above 0.6925 with the first target at the level of 0.7068. If the trend is able to break the double top at the level of 0.7068, then the market will continue rising towards the weekly resistance 2 at 0.7131.
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Technical analysis of USDX for January 5, 2017

The Dollar index has broken short-term support and is pulling back as expected. Dollar bulls were warned that the signs were there for a strong pullback in the Dollar index and it was time to protect their longs.

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Blue line - resistance

Green line - support

The Dollar index has broken through the green trend line support and is trading below the Ichimoku cloud on the 4-hour chart. The bearish divergence in the RSI was a warning I gave in my previous few posts and is now playing out. A backtest of the breakdown could be seen today with a bounce towards 102.40.

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Weekly overbought, diverging and turning lower oscillators is not a good sign for bulls. Price has reversed in the past two weeks and I can see a strong pullback towards the 38% Fibonacci retracement near 100. As long as price holds above the green long-term trend line support, long-term bulls will be safe.The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of gold for January 5, 2017

Gold price continues to trade in a bullish short-term trend as price is making higher highs and higher lows on the 4-hour chart and has already backtested and broken above the Ichimoku cloud. Resistance of great importance is now found at $1,203.

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The 38% Fibonacci retracement of the decline from the post-election highs to recent lows is found at $1,203. I believe we are going to test that area. Price has broken above the short-term Ichimoku cloud and this is the first step for a larger longer-term trend reversal as we have been expecting for some time.

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Red lines - downward sloping wedge

The weekly chart in Gold reminds us that weekly resistance is found at the lower cloud boundary at $1,220. Oscillators are oversold, diverging and turning upwards. We could very well have seen a long-term low in Gold similar to the one made in 2015 at $1,046.

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Technical analysis of USD/JPY for January 05, 2017

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USD/JPY is trading under pressure. The pair remains weak below its key resistance at 117.10. Both the 20-period and 50-period moving averages have already turned down, and should continue to push the prices lower. Besides, the relative strength index is mixed to bearish below its neutrality area at 50.

The minutes of the U.S. Federal Reserve's latest monetary policy meeting showed a less hawkish tone than expected by investors. The minutes stated, "Participants expected that, with gradual adjustments in the stance of monetary policy, economic activity would expand at a moderate pace and labor market conditions would strengthen somewhat further. Inflation was expected to rise to 2% over the medium term. Members agreed that there was heightened uncertainty about possible changes in fiscal and other economic policies as well as their effects."

The ICE U.S. Dollar Index eventually tumbled from the 103.00 level. It sank 0.5% on day to 102.70. The currency came under pressure after the Fed meeting minutes showed that central bankers were uncertain about how the U.S. economy would be influenced by the incoming presidential administration.

Hence, as long as 117.10 is not surpassed, look for a new pullback to 115.60 and 115.15 in extension.

Recommendation:

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 115.60. A break below this target will move the pair further downwards to 115.15. The pivot point stands at 117.10. 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 117.50 and the second one at 117.90.

Resistance levels: 117.50, 117.90, 117.50

Support levels: 115.60, 115.15, 114.65

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Daily analysis of GBP/USD for January 05, 2017

GBP/USD had a strong rally on Wednesday as the UK data continues to favor the bulls in the pound sterling across the board. Currently, the pair is finding a resistance around 1.2327, where it should resume the overall bearish bias to test once again the support level of 1.2268. If the Cable manages to break it, then a bearish continuation towards 1.2205 is likely to happen.

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H1 chart's resistance levels: 1.2327 / 1.2386

H1 chart's support levels: 1.2268 / 1.2208

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 1.2268, take profit is at 1.2208 and stop loss is at 1.2231.

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Daily analysis of Gold for January 04, 2016

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Overview

Gold is extending gains. The metal is likely to approach our first main target of $1,172.68. Let me remind you that it is important to monitor the price behavior when reaching this level. If this level is breached, it is a positive factor that will push the price to head for $1,211.31 in the short term. On the whole, the bullish trend will remain valid for today unless we witness a clear break. On the other hand, holding below $1,146.00 and breaking it represents a negative factor that will push the price to test $1,124.88 again before any new attempt to rise. The expected trading range for today is between $1,145.00 support and $1,180.00 resistance.

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Daily analysis of Silver for January 04, 2017

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Overview

Silver price resumes its bullish attempts to move to $16.56. Meanwhile, the metal aims to surpass this barrier, this will reinforce our expectations of extending the bullish wave towards $17.43. The price receives support from the EMA50, that reinforces the bullish scenario. Therefore, we still expect the bullish trend in the short term, unless $16.15 and the most important $15.49 are broken. The expected trading range for today is between 16.15 support and 16.70 resistance.

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