EUR/GBP Fundamental Analysis April 24, 2017

EUR/GBP opened the session on Monday with quite a big GAP following the first round of the presidential election in France. Currently, the pair is residing just above the 200 EMA. EUR today is notably stronger than GBP because Macron has won the first round in France. Besides, Germany's Ifo Business Climate report revealed a better-than-expected index at 112.9 against the forecast of 112.4. On the other hand, GBP did not have positive economic reports today as GBP Rightmove HPI showed a decreased value of 1.1% which previously was at 1.3%. CBI Industrial Order Expectations also showed a decreased value of 4 instead of a 9 gain. Though the market was quite corrective today after the big GAP in the EUR pairs, GBP failed to keep up with EUR in fundamental prospects. The pair is expected to rise much higher on the EUR side.

Now let us consider the technical view. After the bounce off the support 0.8330 last week, today price started above 200 EMA. With positive EUR economic reports and negative GBP economic reports, EUR has been viewed as the dominating currency in the pair. If the price remains above the 200 EMA with a daily close, then we will expect a further bullish move towards 0.8760 resistance level. The bullish bias will continue in this pair until the price breaks below 0.8330 with a daily close.

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Trading plan for EUR/USD and GBP/USD for April 24, 2017

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Technical outlook:

The EUR/USD pair gaped up today during early hours of trade towards 1.0935 levels but reversed lower after that. Please note that the pair has hit the Fibonacci 0.618 resistance of the entire drop from 1.13 to 1.0350. The bigger picture has been presented here on the daily chart. The entire rally started in January 2017 still looks corrective and hence a bearish reversal can be still expected around these levels. The waves (1) and (2) seem to be completed now and the overall bearish trend should resume.The resistance at 1.1300 is in place now for bears to remain in control.

Trading plan:

Please remain short and look to increase trading volume with the stop at 1.0950/60 and targets lower towards 1.03 and 1.0000. The trend should take several weeks to unfold.

GBP/USD chart setups:

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Technical outlook:

The GBP/USD pair is still moving sideways after breaking out of the triangle consolidation earlier. Please note that the pair had broken the last triangle after printing wave E at 1.2363 (labelled on 4H chart). Looking at the wave counts, the pair might be still looking to push higher one last time before reversing lower again. Please note that the bearish trend should resume any moment but we would like to see a top and reversal forming before selling again. Price support is seen at 1.2500 levels, followed by 1.2360, and a break there would be an extremely encouraging sign to bears. Importantly, the immediate trend line support is also coming around 1.2500 levels.

Trading plan:

Please remain flat for now and look to sell around 1.2950-1.3000 levels, stop placed at 1.3050 and the target is lower towards 1.2000. The short setup should be materializing in a day or two.

Fundamental outlook:

No major fundamental events lined up on the calendar for today. Unless some geopolitical news appears, the markets should remain quiet.

Good luck!

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GBP/USD analysis for April 24, 2017

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Recently, the GBP/USD pair has been trading sideways at the price of 1.2815. According to the 30M time frame, I found a strong sign of weakness in the background and a trading range between the price of 1.2755 (support) and 1.2860 (resistance). Since there is weakness in the background and hidden bearish divergence on the oscilator, my advice is to watch for potential breakout of support to confirm a downward movement. If the price breaks the level of 1.2755, watch for selling opportunities. The downward targets are set at the price of 1.2665 and 1.2520.

Resistance levels:

R1: 1.2845

R2: 1.2870

R3: 1.2885

Support levels:

S1: 1.2805

S2: 1.2785

S3: 1.2750

Trading recommendations for today: watch for potential selling opportunities.

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EUR/USD analysis for April 24, 2017

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Recently, the EUR/USD has been trading upwards. EUR/USD gapped about 100 pips and the price tested the level of 1.0919. According to the 4H time frame, I found a divergent bar and confirmation of the divergent bar, which is a sign that buying looks risky. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.0722 and 1.0685.

Resistance levels:

R1: 1.0900

R2: 1.0945

R3: 1.0965

Support levels:

S1: 1.0850

S2: 1.0830

S3: 1.0800

Trading recommendations for today: watch for potential selling opportunities.

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Elliott wave analysis of EUR/JPY for April 24, 2017

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Elliott wave analysis of EUR/JPY for April 24, 2017

Global macro overview for 24/04/2017

Global macro overview for 24/04/2017:

Interesting comments from external Bank of England MPC member Saunders hit the financial newswires last Friday. According to him, the post-Brexit economy in the UK will be able to grow steadily over the next 1-2 years. In Saunders' view, the target for the inflation will be raised from 2.2% to 3.0% minimum in late 2017 or early 2018. The economy could continue to log GDP growth rates around 2%, but there might be problems with customer spending growth. Nevertheless, this is likely to be offset by a stronger trend in exports and business investment. The Bank of England monetary policy will remain accommodative and there is still room for a considerable stimulus. In conclusion, the overall tone of the comments was slightly hawkish, nevertheless, the interest rate increase in May is highly unlikely mainly due to the beginning of an election campaign. Nevertheless, the possibility of more hawkish forward guidance from the BoE is still highly possible.

Let's now take a look at the GBP/USD technical picture on the H4 time frame. The technical support at the level of 1.2772 still works very well as the price has already bounced from this level three times. Nevertheless, the market is still consolidating the latest gains and no important moves have occurred yet. The next resistance is seen at the level of 1.2845, but the most important level is still the swing high at 1.2905. Please note that the trading conditions are overbought, so the rally might be limited in range.

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Technical analysis of GBP/USD for April 24, 2017

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Overview:

  • The market opened below the double bottom (1.2905). It continued to move downwards from the level of 1.2847 to the bottom around 1.2773. Today, the first resistance level is seen at 1.2973 followed by 1.3135, while daily support 1 is seen at 1.2744. Right now, the pair is trading below the level of 1.2905. It is likely to trade in a lower range as long as it remains below the support (1.2973) which is expected to act as major support today. This would suggest a bearish market because the moving average (100) is still in a negative area and does not show any signs of a trend reversal at the moment. Amid the previous events, the GBP/USD pair is still moving between the levels of 1.2847 and 1.2582. Therefore, the major resistance can be found at 1.2973 providing a clear signal to sell with a target seen at 1.2744. If the trend breaks the minor support at 1.2744, the pair will move downwards continuing the bearish trend development to the level of 1.2582 in order to test the weekly support 1. Overall, we still prefer the bearish scenario which suggests that the pair will stay below the zone of 1.2973 this week.

Weekly technical analysis:

  • Resistance 3:1.3364
  • Resistance 2:1.3135
  • Resistance 1:1.2973
  • Pivot Point:1.2744
  • Support 1:1.2582
  • Support 2:1.2353
  • Support 31.2191
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Trading plan for 24/04/2017

Trading plan for 24/04/2017:

The initial reaction to the outcome of the first round of presidential elections in France helped the euro to strenghen and improved market sentiment, which can lead to the weakening of the yen and gold. The stock market is higher. The Japanese Nikkei is up 1.4%, while US futures on the S&P500 gained 0.95%. The exception is the Shanghai Composite which has dropped by 1.6% after the national media reported that Beijing intends to tighten supervision of the financial markets.

On Monday 24th of April, the economic calendar is light, but market participants will pay attention to the IFO data from Germany (current situation, expectations, and business climate) and the report on wholesale sales from Canada.

EUR/JPY analysis for 24/04/2017:

The IFO data is scheduled for release at 08:00 GMT, and the global investors do not expect any important changes to the data. The Ifo business climate sub-index is expected virtually unchanged at the level of 112.3, the current assesment sub-index is also expected unchanged at the level of 119.2 and the expectations sub-index 105.9 (marginal improvement). The eurozone's biggest economy is still expected to present a high level of performance, no surprises here.

Let's now take a look at the EUR/JPY technical picture on the H4 timeframe. The price gapped up above the 61% Fibo at 119.81 and stopped at 120.71. The whole area between the levels of 117.14 and 120.71 is a gap zone that sooner or later will be filled. The current trading conditions look overbought, but there is no sigh of a bearish divergence yet. The next support is seen at the level of 119.97 and the next resistance lies at 120.71.

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Market snapshot: Support on Gold holds like a charm

The support zone between the levels of $1,263 - $1,270 provided support for the price after the gap down following the French presidential election results. The four-hour hammer candle low at the level of $1,265 should now act as an additional support for the price. The fight for dominance around the golden trend line with the larger time frame will now continue. The next technical resistance zone is seen between the levels of $1,295 - $1,308.

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Market snapshot: Crude Oil bounces from oversold zone

After the last Friday sell-off, the crude oil prices are now in a corrective cycle. The immediate technical resistance is seen at the level of 50.08 and only a sustained breakout above this level opens the road towards the next technical resistance at 51.00. Please notice, that the decline from the level of 53.78 is a clear, impulsive, five -wave structure, so the correction upward should develop in three waves only.

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Ichimoku indicator analysis of USDX for April 24, 2017

The US dollar index is testing the important support area at 99-98.80 as we expected last week. It has broken below the support in early trading but we focus on the daily close after today's session to confirm the support is broken. Therefore, dollar bears should be very cautious as a rapid reversal could start from current levels.

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Blue lines - bearish channel

The dollar index remains below both the tenkan- and kijun-sen indicators. Support is at 98.80-99 and resistance lies at 99.70. The short-term oscillator justifies even a gap close at 99.70.

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Red line - resistance

Green line - long-term support

Black line - trend line support

The dollar index is right on top of the important support. The chances of a full scale reversal to the upside are high. Bears should be very cautious. Important long-term resistance is at 100.80 and 101.30. Confirmation of a bullish reversal for the longer-term trend will come with a break above 102.30. Weekly close below 98.80 will be a clear bearish sign.

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Ichimoku indicator analysis of gold for April 24, 2017

Gold price as expected is pushing lower towards $1,260 as we justified a correction from last week. The causation today are the French election results. Technically Gold price could continue lower towards $1,260 or even $1,250 but my longer-term view remains unchanged.

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The gold price has reached the 61.8% Fibonacci retracement of the last move up from $1,240 and the lower cloud boundary. If support at $1,260 fails we should expect the Gold price to move towards the 38% Fibonacci retracement of the rise from $1,180. This support level is at $1,245.

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Black line - resistance

Blue line - support

As we expected from last week Gold price got rejected at the upper cloud boundary and at the black long-term trend line resistance. Weekly support is at the red tenkan-sen indicator at $1,245. My longer-term view remains bullish. This downward move is most probably the last chance for long positions in Gold before the big breakout.

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Technical analysis of EUR/USD for April 24, 2017

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Overview:

  • On the one-hour chart, the EUR/USD pair is indicating to a bullish trend from the support levels of 1.0801 and 1.0701. Currently, the price is in a bullish channel. Yesterday, the market opened above the levels of 1.0801 and 1.0701 with the reason for the gap. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. As the price is still above the moving average (100), immediate support is seen at 1.0801. Consequently, the first support is set at the level of 1.0801. So, the market is likely to show signs of a bullish trend around the spot of 1.0885. In other words, buy orders are recommended above the first resistance (1.0801) with the first target at the level of 1.0885. Furthermore, if the trend is able to breakout through the first resistance level of 1.0885. It should see the pair climbing towards the double top 1.0976. It would also be wise to consider where to place a stop loss; this should be set below the second support of 1.0701.

Weekly technical analysis:

  • R3: 1.0976
  • R2: 1.0876
  • R1: 1.0801
  • PP: 1.0701
  • S1: 1.0626
  • S2: 1.0526
  • S3: 1.0451
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Global macro overview for 24/04/2017

Global macro overview for 24/04/2017:

The results of the first round of the French Presidential Elections indicate a split win. The centrist Macron had polled around 24% with both National Front leader Le Pen at 21%. This two candidates will move ahead to the second round run-off due to be held on Sunday, May 7th. Socialist Party candidate Hamon quickly conceded defeat and endorsed Macron for the second round. Fillon also conceded within an hour of polls closing and backed Macron against Le Pen.In conclusion, two opposite political points of view will fight for the French presidency in two weeks. The win of Marcon is Euro positive (risk-on), the win of LePen is Euro negative (risk-off).

Let's now take a look at the EUR/USD technical picture at the H4 timeframe. The market gapped up to the level of 1.0918, but now is moving lower slowly.The Friday close at the level of 1.0730 might be tested again by the end of the week. The next support is seen at the level of 1.0777, and the next resistance is the gap high at the level of 1.0918. The bearish divergence between the price and the momentum oscillator supports the bearish bias.

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Elliott wave analysis of EUR/NZD for April 24 - 2017

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Wave summary:

After the expected minor correction to 1.5171 (the low came in at 1.5168), a strong rally above important resistance at 1.5347 has finally been seen to confirm that wave iii higher towards 1.6656 finally is developing.

The former important resistance at 1.5347 will now work as support for the next rally higher to 1.5764 on the way higher to 1.6656.

R3: 1.5764

R2: 1.5659

R1: 1.5516

Pivot: 1.5450

S1: 1.5347

S2: 1.5295

S3: 1.5168

Trading recommendation:

We are long EUR from 1.5350 and will move our stop higher to 1.5150. If you are not long EUR yet, then buy near 1.5347 and use the same stop at 1.5150.

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Elliott wave analysis of EUR/JPY for April 24, 2017

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Wave summary:

We saw the expected decline to the 61.8% corrective target at 116.52 (the low was seen at 116.42) from where a new very strong rally was seen. The rally from 116.42 does not resemble a fifth wave rally but is more in accordance with a third wave rally, so we have changed our count to fit this view calling for more upside closer to 120.62 and possibly even higher towards 121.92 before wave iii/ peaks. Support is now seen at 118.73, which is expected to hold for the expected push higher towards at least 120.62.

R3: 121.92

R2: 120.62

R1: 120.16

Pivot: 120.00

S1: 119.28

S2: 118.73

S3: 118.29

Trading recommendation:

We are long EUR from 115.25 and will move our stop higher to 116.40. If you are not long EUR yet, then buy near 118.73 and use the same stop at 116.40.

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EUR/USD Fundamental Analysis April 24, 2017

After the French Election in the weekend EUR/USD has opened today with an over 150 pips GAP upwards. In the Election, currently Macron is leading with 23.9% votes where Le Pen is a bit behind at 21.4%. Any candidate reaching over 50% will be announced as a winner. Today we have EUR German Ifo Business Climate report is going to be published, it is expected to be at 112.4 which previously was at 112.3 and on the USD side today we have FOMC Member Kashkari's speech where he is going to discuss about key interest rates decisions and future monetary policies. As the market opened with a large upward GAP in this pair, a daily close today will indicate the upcoming move in this pair this week.

Now let us look at the technical view, the price has opened today above 1.09 but bears have pressurized the price to fall back towards 1.0850. Currently, the price is residing just above 1.0850 and if we see a daily close below 1.0850 then we will be looking forward to selling with a target towards 1.0720. On the other hand, if the price remains above 1.0850 with a daily close then we will be looking forward to buy with a target towards 1.1010. As of the market gap in place, it is expected that the GAP will be filled up first before the price climb upwards again.

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USD/CAD intraday technical levels and trading recommendations for April 24, 2017

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Since April 2016, the USD/CAD pair has been trending upward within the depicted ascending channel.

In December 2016, a bullish breakout above 1.3300 (50% Fibonacci level) was expected to allow a further advance toward 1.3700-1.3750 (the upper limit of the depicted channel).

However, significant bearish rejection was expressed around 1.3580 (recently established top).

During the bearish pullback, the price level of 1.3300 (50% Fibonacci Level) failed to provide enough support to the pair.

This allowed a further bearish movement toward the price level of 1.2970 (61.8% Fibonacci level) where a valid BUY entry was offered in February 2017.

A few weeks ago, the bullish breakout above 1.3300 (50% Fibonacci Level) enhanced a further advance toward 1.3440 and 1.3530.

The next bullish target would be located around 1.3800 (upper limit of the depicted channel) if the pair maintains upside trading above 1.3300 (50% Fibonacci Level) which stands as a prominent support level.

On the other hand, if the USD/CAD pair moves below 1.3300, it may become trapped again within the depicted consolidation range (1.3300-1.2970).

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NZD/USD Intraday technical levels and trading recommendations for April 24, 2017

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The NZD/USD pair was trapped within the depicted price range (0.6860-0.6990) until a bullish breakout occurred.

A bullish breakout above 0.6960-0.7000 allowed the pair to head toward the price level of 0.7100 (the key level) which failed to provide sufficient bearish pressure on the pair.

Bullish persistence above 0.7100 allowed a further advance toward 0.7250-0.7350 (Sell-Zone) where the bearish price action was expected.

Bearish persistence below 0.7250 allowed a further decline toward 0.7100 then 0.6960 which failed to provide enough support for the pair.

That is why a further fall was expected toward 0.6860 (the lower limit of the depicted BUY zone) where a bullish position was suggested in previous articles.

Recently, a bullish breakout was achieved above the depicted key level (0.6960).

That is why the recent bearish pullback toward 0.6960 offered significant bullish rejection and a valid BUY entry which is running in profits now.

Note the depicted bullish 1-2-3 pattern with projection target around 0.7250 provided that bullish fixation above 0.7080-0.7100 (neckline) is achieved on a daily basis.

On the other hand, the price level of 0.7100 remains a significant key level to prevent a further bullish advance toward 0.7250.

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Daily analysis of major pairs for April 24, 2017

EUR/USD: The EUR/USD went upwards last week, reaching the resistance line at 1.0750. The upwards movement was not significant enough to bring about a Bullish Confirmation Pattern in the market unless the resistance line at 1.0800 is breached to the upside. The bearish correction that was experienced on Friday may bring good opportunities to go long at better prices, because the EUR/USD, as well as other EUR pairs, is expected to go further upwards this week.

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USD/CHF: This currency trading instrument is neutral in the long term, and bearish in the short-term. This month, the price has generally moved between the support level at 0.9900 and the resistance level at 1.0100. Movements above the psychological level at 1.0000 would cause short-term bullish signals, while movements below it would cause short-term bearish signals. For a directional bias to form in the long-term, there is a need for the price to either move above the resistance level at 1.0100 or below the support level at 0.9900.

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GBP/USD: The GBP/USD moved upwards by some 370 pips last week, testing the distribution territory at 1.2900 before price moved sideways until the end of last week. The sideways movement is merely a pause in the bullish journey; for momentum is expected to rise this week, pushing price towards the distribution territories at 1.2850, 1.2900 and 1.2950. The outlook on other GBP pairs is also bearish.

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USD/JPY: This pair was caught in a short-term equilibrium phase, in the context of a downtrend. The equilibrium phase may end this week as price goes further southwards, reaching the demand levels at 108.50 and 108.00. The outlook on JPY pairs is bearish for this week.

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EUR/JPY: In the context of a downtrend, this cross pair rose from the demand zone at 115.00 and reached the supply zone at 117.50 (a movement of 250 pips). Price got caught in some bearish retracement on Friday, and since the outlook on JPY pairs is bearish, what happened last week may bring nice opportunities to go short at better prices. This week, the cross could reach the demand zones at 116.00, 115.50 and 115.00.

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Daily analysis of USDX for April 24, 2017

The index had a strong bearish gap opening in the week, hovering around 98.83, where is located the nearest support across the board. We might expect a rebound to take place and it could go towards the 99.28 level, where a breakout can open the doors to reach the 100.00 handle. Also, there is located a 200 SMA at H1 chart.

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H1 chart's resistance levels: 99.28 / 99.97

H1 chart's support levels: 98.83 / 98.42

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USD Index breaks with a bearish candlestick; the support level is at 98.83, take profit is at 98.42 and stop loss is at 99.24.

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Daily analysis of GBP/USD for April 24, 2017

The pair is looking to break higher above 1.2875, as the bulls are trying to gather enough bullish momentum in order to invalidate that supply zone. However, GBP/USD has been in consolidation mode since April 18th and eventually, we could witness some corrective moves toward the 1.2728 level in a first degree. MACD indicator is turning positive.

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H1 chart's resistance levels: 1.2875 / 1.3029

H1 chart's support levels: 1.2728 / 1.2652

Trading recommendations for today: Based on the H1 chart, buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.2875, take profit is at 1.3029 and stop loss is at 1.2723.

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