Analysis of Gold for May 08, 2017

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Recently, Gold has been extending losses. The price tested the level of $1,220.91. Anyway, according to the Daily time frame, I found a successful test of the previous swing low and a gap filled, which is a sign that selling looks risky. Also, the RSI looks oversold and my advice is to watch for potential buying opportunities. The first upward target is set at the price of $1,255.00.

Resistance levels:

R1: $1,235.90

R2: $1,238.70

R3: $1,243.30

Support levels:

S1: $1,226.00

S2: $1,223.00

S3: $1,219.00

Trading recommendations for today: watch for potential buying opportunities.

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Fundamental Analysis of USDJPY for May 8, 2017

USD/JPY has been in a bullish non-volatile trend until it reached the resistance area of 112.50-113.00. In light of the French Election, USD/JPY also opened with a GAP today which was later filled up by the bears in this pair. Today, Japan presented Consumer Confidence report which revealed a negative index of 43.2 which was expected to be at 44.3. The US Labor Market Condition Index is going to be published later today, which was previously at 0.4. Despite negative economic reports from Japan today, JPY is gaining ground against USD. If the US Labor Market Condition Index comes out with a positive figure, we might see USD gaining some strength. Otherwise, JPY is expected to remain stronger throughout the week.

Now let us look at the technical chart. The price has rebounded from the trendline resistance at 112.50-113.00 resistance area. The pair is trading in a bearish bias until the price breaks above this resistance area with a daily close. If the price remains below this resistance area, we will expect a further bearish move towards 111.60 and 110.10 in the coming days.

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GBP/USD analysis for May 08, 2017

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Recently, the GBP/USD pair has been trading upwards. The price tested the level of 1.2989. Anyway, according to the Daily time frame, I found a false breakout of the 20-day high and overbought RSI (2 period). My advice is to watch for potential selling opportunities. The downward targets are set at the prices of 1.2835 and 1.2760.

Resistance levels:

R1: 1.2985

R2: 1.2990

R3: 1.3000

Support levels:

S1: 1.2960

S2: 1.2955

S3: 1.2945

Trading recommendations for today: watch for potential selling opportunities.

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Fundamental Analysis of EUR/USD for May 8, 2017

EUR/USD has gone through a good amount of bearish pressure after the GAP formed during the opening bell in the market today. Emmanuel Macron has been elected as the new president of France and the result is expected to strengthen EUR in the coming days. Today, amid the presidential election all the banks in France are closed today and along with it all other economic events were positive for EUR. Today, Germany's Factory Orders report was published with a positive figure at 1.0% which was expected to be at 0.7% and Sentix Investor Confidence report was also positive at 27.4 which was expected to be at 25.3. On the other hand, a Labor Market Conditions report is due in the US today which previously was at 0.4. Currently EUR is stronger than USD until USD finds support from very good economic data in the future.

Now let us look at the technical chart. The pair has been under an impulsive bearish pressure today since the market opened. In light of the French election yesterday, the market opened today with a GAP which was later filled up by the bears in this pair. Currently, the price is hovering below the important level of 1.0950. If we see a daily close below this level, then we will consider selling, viewing 1.0850 as the first target and 1.0720 as the second target. On the other hand, if the price reaches the next support of 1.0850 and rejects the bears off the level, then we might see another bullish move towards 1.0950 onwards.

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Daily analysis of Gold for May 08, 2017

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Overview

Gold price has not shown any strong move since morning. The metal is still fluctuating around 1,229.00. Thus, we do not expect any change in the bearish scenario that depends on holding below 1,244.00 and 1,250.00 levels. We are waiting for the target of 1,208.92 as the next main station. Please note that breaking the targeted level will extend gold price losses to reach 1,188.50 directly. The expected trading range for today is between 1,215.00 support and 1,240.00 resistance.

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Daily analysis of Silver for May 08, 2017

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Overview

Silver price is confined inside bearish pennant's pattern, which means that breaking this pattern's support at 16.25 will enable the price to resume the bearish trend, as the next target is located at 15.49. Therefore, the bearish scenario will remain dominant in the near term, supported by the negative pressure formed by the EMA50. Besides, traders should take into account that breaching 16.56 will stop the current negative pressure and push the price to start recovery attempts with the first target of 17.43. The expected trading range for today is between 16.00 support and 16.56 resistance.

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Technical analysis of GBP/USD for May 08, 2017

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Overview:

  • Pivot point: 1.2744.
  • The GBP/USD pair faced strong resistance at the level of 1.2973 because the double top is set around the spot of 1.2986. So, the strong resistance has been already formed at the level of 1.2973 and the pair is likely to try to approach it in order to test it again.
  • However, if the pair fails to pass through the level of 1.2973, the market will indicate a bearish opportunity below the new strong resistance level of 1.2973. Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength above the moving average (100) and (50). Thus, the market is indicating a bearish opportunity below 1.2973 so it will be good to sell at 1.2973 with the first target at 1.2744 (pivot). It will also call for a downtrend in order to continue towards 1.2582 in coming days. The daily strong support is seen at 1.2582.
  • On the other hand, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.3135 (major resistance).
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Global macro overview for 08/05/2017

Global macro overview for 08/05/2017:

Emmanuel Macron won a decisive victory in the second round of France's presidential election, but the market response to such a scenario has been modest so far. Finally, the entire political risk premium was erased after the second round results. Today, the EUR/USD pair managed to beat Friday's peak by mere 25 pips. A few minutes later after the opening bell, the common currency began to lose value under profit-taking action. So, there is no room for the common currency to gain on the fading political risk premium. Moreover, the market might start to price in the possible ECB monetary policy normalization and positive trends in the Euro area balance of payments. There is only a month until the next ECB meeting and about a month and a half to the next FED meeting.

Let's take a look at the EUR/JPY technical picture on the H4 timeframe. The pair fell about 150 pips from the top at the level of 124.51 and now is trading at the technical support of 122.88. The market conditions are overbought and there is a visible bearish divergence between the price and the momentum oscillator, so the bias is to the downside. In a case of a breakout below 122.88, the next support is seen at the level of 121.97.

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Technical analysis of EUR/USD for May 08, 2017

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Overview:

  • The EUR/USD pair continues to move downwards from the level of 1.1022. The pair dropped from the level of 1.1022 (this level of 1.1022 is coincided with the double top) to the current point around 1.0935. Today, the first resistance level is seen at 1.0979 followed by 1.1022, while daily support 1 is seen at 1.0921. According to the previous events, the EUR/USD pair is still moving between the levels of 1.0945 and 1.0868; for that we expect a range of 77 pips at least. If the EUR/USD pair fails to break through the resistance level of 1.0979, the market will decline further to 1.0868. This would suggest a bearish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.0868 with a view to test the daily support one. Other supports are seen at the levels of 1.0820 and 1.0731. On the contrary, if a breakout takes place at the resistance level of 1.1022 (the double top), then this scenario may become invalidated.
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Global macro overview for 08/05/2017

Global macro overview for 08/05/2017:

Another set of good data from the US job market was delivered on Friday. The Non-Farm Payrolls increased 211k in April compared with expectations of a gain around 190k for the month. The March data was revised to 79k from the 98k reported previously and the 3-month average was little changed to 174k from 176k.The unemployment rate decreased to fresh 10-years low, from 4.5% to 4.4%.The participation rate declined to 62.9% from 63.0%. One of the key components of the reports, the average hourly earnings, rose 0.3% in the reported month. In conclusion, due to the upbeat jobs report, the odds for June interest rate hike are at the level of 87.7%, which is almost certain.

Let's now take a look at the USD/JPY technical picture on the H4 timeframe. The price is still hovering around the 61%Fibo at the level of 112.68, but the market conditions are overbought and there is a visible divergence between the price and the momentum oscillator. The next support is seen at the level of 112.06 and if violated, then the next technical support is seen at the level of 110.85.

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Trading plan for 08/05/2017

Trading plan for 08/05/2017:

E. Macron won more than 65 percent in the second round of the election. Originally, the Euro rallied in response to such outcome on the French political scene, but currently, the common currency is losing ground against all major currencies outside the Australian dollar. EUR/USD is trading at 1.0975, which is still above the previous level when US labor market report was posted. On Asian markets, there is a mixed sentiment. Shanghai Composite dropped 1% drop, but Japanese Nikkei 225 revealed a strong rebound of almost 2.5%. Precious metals are rising in value. An ounce of Gold is up 0.25% and is priced at $1231. Crude Oil continues to rebound and the price is approaching key resistance ($47 for WTI and $50 for Brent).

On Monday 8th of May, the event calendar is light in important economic releases, but global investors will pay attention to Sentix Investor Confidence data from the Eurozone and Housing Starts data from Canada.

EUR/USD analysis for 08/05/2017:

The Sentix Investor Confidence data are scheduled for release at 08:30 am GMT and market participants expect the mood to improve from 23.9 to 25.3 points. Nevertheless, the main news that will be played today is the result of the French Presidential Elections, so other news and data will not have such an influence on markets. On Friday, the financial markets were very optimistic on Macron victory, so the mood was positive and EUR/USD surged higher towards the level of 1.1000. Now, after the fact, the bears might try to take control over the markets.

Let's take a look at the EUR/USD technical picture on the H4 timeframe. The price managed to establish a new marginal high at the level of 1.1022, but since then no follow through occurred and now the price is trading at the level of 1.0950, the important technical support. Any breakout lower will open the road towards the level of 1.0854. There is even a possibility of a gap fill later of the week if the downside momentum is strong enough. In that case, the potential target for the price would be at the level of 1.0730.

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Market snapshot: GBP/USD trading around the swing highs

The British Pound is still trading at the elevated levels around the recent highs of 1.2988, just below the round psychological level of 1.3000. Nevertheless, the upward momentum is fading and there is visible a clear bearish divergence between the price and the momentum oscillator. In a case of a downside breakout, the next support is seen at the levels of 1.2859 and 1.2828.

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Daily analysis of GBP/USD for May 08, 2017

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Daily analysis of GBP/USD for May 08, 2017

Ichimoku indicator analysis of USDX for May 8, 2017

The Dollar index is trading below important long-term support but it shows reversal signs. As said in previous posts, the downside is limited as the RSI indicators are on the oversold territory and diverging in the short term, justifying a bounce towards 99.

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Red line - resistance

The Dollar index is trading below the 4-hour Kumo. Trend remains bearish. Short-term resistance is at 99. Support is at 98. If we break above 99, we could see a stronger bounce towards 100. However medium-term trend will change to bullish only on a break above 101.40.

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Red line - resistance

Green line - long-term support trend line

I expect the Dollar index to produce a bounce from current levels towards the weekly kijun- and tenkan-sen indicators around 100.20-100 where we also find the red trend line resistance. As long as price is below the red trend line resistance and below 101.40, I will tend to favor the bearish scenario for a move towards 94. Confirmation will come with the break below 97.

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Ichimoku indicator analysis of gold for May 8, 2017

Gold price made a lower low in early Asian trade this morning but the RSI is showing some glaring divergence signs. Gold price reversed sharply upwards implying that the downside is most probably limited and a bounce has started.

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Gold is oversold and is showing divergence signs in the both RSI indicators. Price is trading below both the tenkan- and kijun-sen. Trend remains bearish but I expect Gold price to make a strong bounce towards $1,260at least for the shortterm.

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Gold price remains trapped inside the long-term triangle. Price is inside the weekly cloud confirming trend is neutral on a weekly basis. Price bounced from the lower cloud boundary and remains above the weekly kijun-sen. I expect support at $1,220-$1,210 to hold and produce a move towards at least the upper cloud boundary at $1,260.

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NZD/USD Intraday technical levels and trading recommendations for May 8, 2017

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In December 2016, 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). However, the pair failed to express enough bullish momentum above 0.7050.

That's why, the NZD/USD pair became trapped within the depicted consolidation range (0.6860-0.6960) once again.

Note the depicted bullish 1-2-3 pattern remains valid as long as bullish fixation above 0.6900-0.6850 is maintained on a daily basis.

On the other hand, bullish breakout above 0.6960 is needed to allow further bullish movement. Expected projection target for the pattern is located around 0.7250.

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USD/CAD intraday technical levels and trading recommendations for May 8, 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 1.3580.

As long as, the USD/CAD pair maintains bullish trading above 1.3580 (confluence of prominent tops), expected bullish target would be located around 1.3950 (upper limit of the depicted channel and FE 100%).

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Daily analysis of major pairs for May 8, 2017

EUR/USD: The EUR/USD pair moved sideways from Monday to Wednesday and then broke upwards on Thursday. Price is now close to the resistance line at 1.1000, and once it goes above it, it would go towards another resistance line at 1.1050 and 1.1100. Along the way, any show of stamina in the USD could send the market tumbling.

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USD/CHF: This currency trading instrument moved lower last week in the context of a downtrend. Price has oscillated between the resistance line at 0.9950 and the support line at 0.9850. The market would continue to go down as long as EUR/USD goes up. However, the USD is expected to gain stamina before the end of this week or early next week. That is a factor that can reverse the movement of the market.

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GBP/USD: The Cable consolidated from Monday to Wednesday, and then rose further upwards on Thursday and Friday. There is a huge Bullish Confirmation Pattern on the 4-hour chart, and a further bullish movement is possible this week, which would take price towards the distribution territories at 1.3000, 1.3050, and 1.3100. The outlook on the market remains bullish for the week.

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USD/JPY: The USD/JPY pair went upwards last week, testing the supply level at 113.00. The supply level would be tested again and possibly breached to the upside, as price targets other supply level at 113.50 and 114.00. On the other hand, there is also a possibility of a bearish correction this week or next, which could threaten the existing bullish outlook.

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EUR/JPY: This cross gained 250 pips last week, now laying siege to supply zone at 124.00. Once that supply zone is broken to the upside, other supply zones at 124.50, 125.00, and 125.50 would be reached this week. There would be some pullbacks along the way, which are expected to be transitory. Only a pullback of about 300 pips could threaten the current bullish outlook.

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Elliott wave analysis of EUR/NZD for May 8, 2017

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Wave summary:

The failure to extend the rally beyond 1.6020 does imply that an alternate count is unfolding. This count is even more bullish than our previous count, but it does call for a set-back to 1.5644 before higher again. If this count is correct that will most likely propel us right through resistance at 1.6655 for a continuation higher towards at least 1.7196 and possibly even closer to 1.7564, but it all depends on whether a decline to 1.5644 is seen before the next rally higher.

If a direct break above minor resistance at 1.5958 and more importantly a break above resistance at 1.6020 is seen, then we should continue to keep an eye on the former 1.6655 target.

R3: 1.6172

R2: 1.6072

R1: 1.6021

Pivot: 1.5850

S1: 1.5792

S2: 1.5747

S3: 1.5644

Trading recommendation:

We are long EUR from 1.5940. We will take our stop here at 1.5850 for a small loss and place a new EUR-buy order at 1.5665 or upon a direct break above 1.6020.

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Elliott wave analysis of EUR/JPY for May 8, 2017

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Wave summary:

The extension has pushed EUR/JPY higher as expected, but not only to 124.06, but slightly higher to 124.30 before prices turned lower. The following break back below minor support at 123.60 indicates that wave A has just peaked and wave B is unfolding. The minimum target to expect in wave B is seen at the 38.2% corrective target at 120.69, which by the way also marks the bottom of wave iv of A. So this would certainly be a support worth keeping an eye on.

R3: 124.52

R2: 124.08

R1: 123.80

Pivot: 123.65

S1: 123.36

S2: 122.88

S3: 122.60

Tradig recommendaton:

Our stop at 124.10 was hit for a loss. We will sell EUR again at 124.08 or upon a break below 123.50. Our stop will be placed at 124.65.

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Technical analysis of USD/JPY for May 8, 2017

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USD/JPY is expected to continue its rebound. The pair is going on with its rebound which started at about 112.10 last Friday. Currently, it remains on the upside while being well supported by the 50-period moving average. The relative strength index continues to stay above its neutrality level of 50 showing no downward momentum.

The level at 112.45 holds up well as the key support. On the upside the pair should target 113.05, a high seen on last Thursday, and in extension 113.40.

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 113.05 and the second one at 113.40. In the alternative scenario, short positions are recommended with the first target at 112.10 if the price moves below its pivot points. A break of this target may push the pair further downwards, and one may expect the second target at 111.90. The pivot point lies at 112.45.

Resistance levels: 113.05, 113.40, and 113.85

Support levels: 112.10, 111.90, and 111.70

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Technical analysis of USD/CHF for May 8, 2017

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USD/CHF is under pressure as the key resistance is set at 0.9915. The pair stays below its resistance at 0.8490, and is capped by its 50-period moving average. Meanwhile, the 20-period moving average is still below the 50-period moving average, and the relative strength index is around its neutrality area at 50, lacking upward momentum.

The U.S. Labor Department reported that nonfarm payrolls increased by 211,000 in April, higher than +188,000 expected. The jobless rate edged down 0.1 percentage point to 4.4% (vs. 4.6% expected), its lowest level since May 2007.

As long as the key resistance at 0.9915 is not broken above, the risk of a break below 0.98660 remains high. A further down leg to 0.9840 and 0.9810 is also likely.

Resistance levels: 0.9930, 0.9950, and 0.9975

Support levels: 0.9860, 0.9840, and 0.9810

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Technical analysis of NZD/USD for May 8, 2017

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NZD/USD is expected to trade in a higher range as the bias remains bullish. The pair is consolidating and has broken below its 20-period moving average. The relative strength index is below its neutrality level at 50. Nevertheless, the rising 50-period moving average is still playing a support role and maintains the upside bias. In addition, 0.6885 is playing a key support role, which should limit the downside potential.

As long as 0.6885 is support, look for a technical rebound toward 0.6940 and even 0.6955 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 0.6940 and the second one at 0.6955. In the alternative scenario, short positions are recommended with the first target at 0.6870 if the price moves below its pivot points. A break of this target may push the pair further downwards, and one may expect the second target at 0.6855. The pivot point is at 0.68885.

Resistance levels: 0.6940, 0.6955, and 0.6970

Support levels: 0.6870, 0.6855, and 0.6800

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Technical analysis of GBP/JPY for May 8, 2017

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GBP/JPY is expected to extend its upside movement. The pair has been supported by a rising trend line, and also remains supported by its rising 20-period moving average, which has crossed above the 50-period moving average. And the relative strength index is still above its neutrality area at 50 and is well directed.

As long as 145.70 is not broken down, further advance is preferred with 146.55 and 147.00 as targets.

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 146.55 and the second one at 147.00. In the alternative scenario, short positions are recommended with the first target at 145.15 if the price moves below its pivot points. A break of this target may push the pair further downwards, and one may expect the second target at 144.85. The pivot point is at 145.70.

Resistance levels: 146.55, 147.00, and 147.65

Support levels: 145.15,144.85, and 144.00

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Technical analysis of EUR/USD for May 08, 2017

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When the European market opens, some economic data will be released such as Sentix Investor Confidence and German Factory Orders m/m. The US will also present a few economic reports such as Labor Market Conditions Index m/m and Mortgage Delinquencies. So amid the reports, EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1016.

Strong Resistance:1.1010.

Original Resistance: 1.0999.

Inner Sell Area: 1.0988.

Target Inner Area: 1.0963.

Inner Buy Area: 1.0938.

Original Support: 1.0927.

Strong Support: 1.0916.

Breakout SELL Level: 1.0910.

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 May 08, 2017

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In Asia, Japan will release the Consumer Confidence Index. The US will present few economic reports such as Labor Market Conditions Index m/m and Mortgage Delinquencies. 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: 113.30.

Resistance 2: 113.09.

Resistance 1: 112.86.

Support 1: 112.58.

Support 2: 112.36.

Support 3: 112.14.

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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Daily analysis of USDX for May 08, 2017

USDX is looking to extend the bearish bias below 99.00, as the index weakened during Friday's session despite good NFP numbers. So far, the next support lies at the 98.42 level, where a breakout should open the doors to test the 97.93 level, while a rebound can produce another visit of the 200 SMA on H1 chart. MACD indicator remains on the negative territory, supporting the downside idea.

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H1 chart's resistance levels: 98.89 / 99.28

H1 chart's support levels: 98.42 / 97.93

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 98.42, take profit is at 97.93 and stop loss is at 99.24.

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Daily analysis of GBP/USD for May 08, 2017

The pair is extending the bullish bias across the board and it's shifting the focus towards the 1.3000 handle, as GBP/USD managed to break above 1.2957. The next key resistance lies at 1.3029, where possibly we can expect some bearish reaction, but the overall structure remains untouched and that's why we expect further strength in coming days. To the downside, the next support is placed around the 200 SMA zone on H1 chart.

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H1 chart's resistance levels: 1.2957 / 1.3029

H1 chart's support levels: 1.2855 / 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 1.2957, take profit is at 1.3029 and stop loss is at 1.2887.

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