Trading plan for EUR/USD and GBP/USD for May 15, 2017

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Technical outlook:

The story continues from where we left last week where a counter trend rally was on cards. It materialized last Thursday, accelerated on Friday and looks to be terminating today. Longs positions, if taken should be done with profit bookings and trading should be on the short side now. The wave count also suggests that the earlier drop from 1.1022 through 1.0840 levels was wave (1), followed by a 3 wave counter trend rally A-B-C labelled as wave (2). If this wave count holds to be true, the next leg wave (3) should resume in a few hours and drag prices down towards 1.0580 levels at least as first leg. Further drop should take it towards parity levels easily. Please also note that prices have stalled at fibonacci 0.786 resistance levels and a bearish turn here is on cards.

Trading plan:

Please book profits on long positions if taken last week. Remain short from current price, with stop above 1.1022 levels targeting at least 1.0580 levels. Should reach there this week or early next week.

GBPUSD chart setups:

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Technical outlook:

The GBP/USD pair also looks to have completed its counter trend rally with today's highs hitting over 1.2940 levels, just like EURUSD potential top. The wave count also suggests that earlier drop from close to 1.2988 through 1.2838 levels was an impulse, labelled as wave (1), while the rally henceforth has unfolded into 3 waves, corrective A-B-C, which is labelled as potential wave (2). An alternate count could be wave (2) hitting another lower high around fibonacci 0.786 levels as depicted here. Till the time prices remain below 1.2988 levels, the GBPUSD bears should look forward to regain control back. Immediate resistance is seen at 1.2950 levels while support is at 1.2840 levels respectively. Traders should be looking to sell here and on rallies through 1.2960/70 levels.

Trading plan:

Remain short with risk above 1.3000 levels, targeting much lower around 1.2500 and 1.2000 levels.

Fundamental outlook:

With no majr events today, trading should remain without much volatility. Look forward to the key reports releases lined up for tomorrow.

Good luck!

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Analysis of Gold for May 15, 2017

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Recently, Gold has been trading sideways at the price of $1,228.00. According to the daily time frame, I found a broken sideways range today, which is a sign that selling looks risky. I also found hidden bullish divergence on the 2-period rate of change, which is another sign of strength. My advice is to watch for buying opportunities. The upward targets are set at the price of $1,240.00 and $1,1245.30 (Fibonacci retracement 38.2%).

Resistance levels:

R1: $1,232.50

R2: $1,233.50

R3: $1,235.00

Support levels:

S1: $1,230.40

S2: $1,228.40

S3: $1,226.90

Trading recommendations for today: watch for potential buying opportunities.

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NZD/USD Intraday technical levels and trading recommendations for May 15, 2017

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In December 2016, 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 keep 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.

Any daily candlestick closure below 0.6850 invalidates the bullish scenario for the current time clearing the way initially towards 0.6770.

On the other hand, bullish breakout above 0.6960 is needed to allow a 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 15, 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 and 1.4030 (the upper side of the depicted channel and FE 100%).

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USD/JPY analysis for May 15, 2017

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Recently, the USD/JPY pair has been trading sideways at the price of 113.50. According to the daily time frame, I found that price didn't have power to break Friday's low, which is a sign of strength. I also found that there is a flip from bearish to bullish on the 2-period rate of change, which is another sign of strength. My advice is to watch for buying opportunities today. The upward targets are set at the price of 113.95 and 114.30.

Resistance levels:

R1: 113.35

R2: 113.40

R3: 113.45

Support levels:

S1: 113.15

S2: 113.10

S3: 113.05

Trading recommendations for today: consider potential buying opportunities.

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Global macro overview for 15/05/2017

Global macro overview for 15/05/2017:

According to the Statistics New Zealand, the first quarter retail sales from New Zealand were better than anticipated. Market participants expected a 1.1% increase from a 0.9% rise a month ago, but the figure revealed was at the level of 1.5%. The total value of sales increased 2.6% quarter-on-quarter. Besides, March was the 18th consecutive quarter when retail sales contributed positively to the economy. It is worth to notice, that the consumer spending in New Zealand accounts for 60% of the overall economy and retail sales are the important part of the consumer spending. In conclusion, the next GDP reading should beat market expectations.

Let's now take a look at the NZD/USD technical picture in the H4 timeframe. The market bounced from the technical support at the level of 0.6818, broke out above the technical resistance at the level of 0.6879 and now is trading back in the congestion zone between the levels of 0.6946 - 0.6879. Nevertheless, despite the stochastic indicator bouncing up from the oversold levels, the price is still trading below all of the moving averages and as long as the technical resistance at the level of 0.6946 is not violated, the chances for any strong bullish rally are minimal.

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EUR/USD bouncing off major support, remain bullish

Forex analysis review
EUR/USD bouncing off major support, remain bullish

Global macro overview for 15/05/2017

Global macro overview for 15/05/2017:

Important news regarding the oil industry has hit the newswires this morning. Saudi Arabia and the Russian Federation support an extension of the agreement to reduce oil production by another nine months expiring in March 2018 "under current conditions". Those are the two most influential countries in the oil market as their daily output is around a fifth of the total daily output on the globe. Besides, they hope that more oil producers would join them in cutting when the extension begins in June.

Let's now take a look at the Crude Oil technical picture on the H4 timeframe. Both Brent Oil and WTI Crude Oil hot up over 1.60% immediately after the statement and continue to trade near their intraday highs at $51.88 and $49.02 at the time of writing. The next technical resistance for crude oil is seen at the level of $50.08, which was a very important level before the sell-off occurred. Moreover, just below, there is a 61%Fibo at the level of $49.93, so this zone will be the key level for both bulls and bears. The next support is seen at the 50%Fivo at the level of $48.75.

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Trading plan for 15/05/2017

Trading plan for 15/05/2017:

Overall, there was a quiet trading session in Asia. The Shanghai Composite's stock market is up 0.3% with generally positive moods. The Japanese Nikkei is down 0.2% under pressure of depreciated USD/JPY. The USD remains without direction, still feeling a slight disappointment with the US data published on Friday.

On Monday 15th of May, the event calendar is bereft of important news releases. However, global investors will pay attention to the Empire State Manufacturing Index data from the US and digest the weekend political and economic developments.

Analysis of EUR/USD for 15/05/2017:

The Empire State Manufacturing Index data is scheduled for release at 12:30 pm GMT, and market participants expect an increase from 5.2 points a month ago to 7.2 points for the reported month. This index is a monthly survey of manufacturers in New York conducted by the Federal Reserve Bank of New York. Any number better than expected would mean the sentiment in this sector of economy is positive and the manufacturing contribution to the overall GDP in the next quarter might be bigger than expected.

Let's now take a look at the EUR/USD technical picture on the H4 timeframe. After bouncing from the technical support at 1.0851, the price is now testing the golden trend line from below. This is the key moment for the market as any violation of the golden trend line would mean that bulls are in control over this market and they will likely try to test the recent local high at the level of 1.1020. Please notice that the weekend gap still hasn't been filled.

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Market snapshot: GBP/USD rebounds from the trend line support

After the plunge caused mostly by the Bank of England's interest rate decision and statement, GBP/USD is now rebounding towards the local swing high at the level of 1.2990. Importantly, the market conditions look overbought on the daily chart, so a failure at the current levels would cause a strong corrective sell-off in this pair.

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Market snapshot: USD/JPY bounces from the nearest support

The USD/JPY pair has bounced from the support at the level of 113.05 and now is testing the nearest technical resistance at 113.62. The momentum is biased slightly towards the upside, but the stochastic clearly shows that the prices has not reach the oversold levels just yet. If the level of 113.62 is not clearly violated, then the market might get back to the sell-off mode fairly quickly, targeting the levels of 113.05 and 112.06.

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Ichimoku indicator analysis of USDX for May 15, 2017

The Dollar index is following our path. Price bounced off the 98.60 area and found resistance and got rejected at 99.60 area. Our first target for a pullback was at the 99 level where we are right now. If the Dollar index is to reverse upwards, it needs to do it early this week and not move much lower.

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Red line - resistance (broken)

The Dollar index is still trading above the Ichimoku cloud on the 4-hour chart and is now testing important short-term support. The Dollar index should bounce from current levels, otherwise we should expect the test of May lows and why not break below them as last week we did not manage to close above weekly support.

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Red line - resistance

Green line - long-term support

The Dollar index weekly candle of last week did not manage to close above the long-term green trend line support. Price is now trading below the trend line which is now resistance. The most important however resistance is the downward sloping red trend line at 100.50. Weekly support is now at 98 where the Kumo (cloud) is found.

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Fundamental Analysis of USD/JPY for May 15, 2017

USD/JPY has been in a bullish non-volatile trend since the bounce off from 114.00-50 resistance area. Today, JPY had positive economic report of PPI which came in at 2.1% instead of the expected 1.8% gain. Prelim Machine Tool Orders also showed an increased figure at 34.7% which previously was at 22.8%. On the other hand, USD Empire Estate Manufacturing Report is due later today which is expected to be at 7.2 which previously was at 5.2 and NAHB Housing Market Index is expected to be unchanged at 68. Overall, JPY has an upper hand over USD today comparing the economic events, forecasts and results. JPY is expected to gain more ground in the coming trading days.

Now let us look at the technical chart. The price is currently showing some bullish pressure after two days of bearish price action taking the price below 114.50 resistance area. Currently, the pair is trading with a bearish bias with a target towards 111.60 as the price remains below 114.50. On the other hand, if the price breaks above 114.50 with a daily close above it, then we will consider buy positions with a target towards 116.

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Ichimoku indicator analysis of gold for May 15, 2017

Gold price as expected has bounced off the $1,210-20 support area and is breaking out of the bearish channel. Price could make a pullback early this week and provide a double bottom but overall I'm pretty confident the bounce towards $1,250-60 has started.

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Blue lines - bearish channel

Gold price is trading below the 4-hour Kumo (cloud) and this is bearish. We could see a rejection at the cloud and a pullback today for a double bottom at $1,217. A break above $1,242 will open the way for a move towards the important resistance of $1,250-60.

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Red rectangle - target area

Green rectangles- oversold signs

In the daily chart we posted in our past posts, I showed the reversal signals I was seeing and also pointed out the minimum target area for the bounce that has already started. A break above the daily cloud will be a bullish long-term sign and will put an end to the bearish scenario which is waiting for a deeper pullback towards $1,160.

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Fundamental Analysis of EUR/USD for May 15, 2017

EUR/USD aroused the interest of bulls on Friday after bouncing off from 1.0850 support level. EUR is currently stronger than USD in light of negative US CPI and Retail Sales reports published on Friday. Today, no economic reports are due in the eurozone, but on the USD side Empire State Manufacturing Index is expected to increase to 7.2 which previously was at 5.2. Besides, NAHB Housing Market Index is expected to be unchanged at 68. The economic reports from the US are not quite a high impact events but could bring some volatility in the market during the release. A daily close today will determine the upcoming move in the market where EUR is expected to gain ground against USD in the coming days.

Now let us look at the technical chart. The price is currently residing in the corrective area between 1.0850 and 1.0950. As of the bullish engulfing candle on Friday, the price is expected to move more up towards 1.1160 resistance level. For better confirmation, we will be looking forward for a daily close above 1.0950 for buying in this pair with a target towards 1.1160 level. On the other hand, if the price rejects off the 1.0950 with a daily candle, then we will consider sell positions with a first target towards 1.0850 and later at 1.0720 level. The bias in this pair is bullish until the price takes out 1.0850 with a daily close below it.

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Elliott wave analysis of EUR/NZD for May 15, 2017

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Wave summary:

The corrective decline in wave [ii] could have completed with the test of 1.5796 and if this is the case, then we should soon seen a strong rally beyond 1.6020 towards 1.6655. That said, we have to take into consideration that the correction in wave [ii] will need a little longer to unfold and in this case, we will need to allow for a move closer to 1.5764 before wave [iii] takes over for the next impulsive rally higher.

R3: 1.6469

R2: 1.6200

R1: 1.6020

Pivot: 1.5900

S1: 1.5843

S2: 1.5795

S3: 1.5764

Trading recommendation:

We are long EUR from 1.5665 with stop placed at 1.5885. If you are not long EUR yet, then buy EUR near 1.5764 or upon a break above 1.6020 and use the same stop at 1.5585.

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Elliott wave analysis of EUR/JPY for May 15, 2017

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Wave summary:

EUR/JPY failed to move below minor support seen at 123.29, which indicates that a triangle consolidation could be unfolding as wave B. If this is the case, then we should see a move slightly higher to 124.25 before a final decline in wave e of B to near 123.46 from where the next impulsive rally towards 138.52 should take off. That said, we have to keep in mind that we are in the midst of a correction and they can take on every thinkable and unthinkable shape, so we still have multiple possibilities from here, but the triangle option is becoming the preferred possibility.

R3: 124.25

R2: 124.10

R1: 123.97

Pivot: 123.95

S1: 123.76

S2: 123.65

S3: 123.55

Trading recommendation:

We will buy EUR at 123.55 or upon a break above 124.54

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Daily analysis of major pairs for May 15, 2017

EUR/USD: The EUR/USD pair did not move significantly last week. The support line at 1.0850 has been tested, as price closed above the support line at 1.0900 on Friday. A movement above the resistance line at 1.1000 would strengthen the existing bullish bias, while a movement below the support line at 1.0700 would result in a clean bearish signal.

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USD/CHF: This currency trading instrument went upwards by 230 pips last week, almost testing the resistance level at 1.0100, before the pullback that was witnessed on Friday. The initial bullish movement of the last few days of the week undermined the recent bearish outlook on the market; whereas the pullback that was witnessed on Friday scuttled the bullish effort of the week. There ought to be a directional movement of at least, 200 pips to the upside or downside before a directional bias can be formed. Right now, the bias is neutral in the short term.

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GBP/USD: The Cable consolidated throughout last week in the context of an uptrend. Price tested the accumulation territory at 1.2850, but closed above it. A closer look at the market reveals that the uptrend is getting tired, thereby increasing chances of a large pullback, which could happen this week. A movement below the accumulation territory at 1.2800 would result in a bearish bias.

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USD/JPY: This pair went upwards by 160 pips last week, going briefly above the supply level at 114.00, and then coming down by 80 pips. Price closed below the supply level at 113.50 on Friday, moving close to the demand level at 113.00. The supply levels at 113.50, 114.00 and 114.50, could be reached this week, as price turns to rally again. Otherwise, a strong pullback would be witnessed.

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EUR/JPY: In the context of a downtrend, price moved generally between the demand zone at 123.00 and the supply zone at 124.50. The market went sideways last week, and further sideways movement would result in a short-term neutral outlook. A rise in momentum is also a possibility this week, which may propel price further north (to lay emphasis on the recent bullish outlook), or propel price southwards, to create a bearish signal.

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Technical analysis of EUR/USD for May 15, 2017

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When the European market opens, no economic data will be released from the Euro zone. However, the US will release some economic news such as TIC Long-Term Purchases, NAHB Housing Market Index, and Empire State Manufacturing Index. So amid the reports, EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.0979.

Strong Resistance: 1.0973.

Original Resistance: 1.0962.

Inner Sell Area: 1.0951.

Target Inner Area: 1.0926.

Inner Buy Area: 1.0901.

Original Support: 1.0890.

Strong Support: 1.0879.

Breakout SELL Level: 1.0873.

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 15, 2017

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In Asia, Japan will release the Prelim Machine Tool Orders y/y and PPI y/y. On the dollar's front, the US will release some economic reports as well such as TIC Long-Term Purchases, NAHB Housing Market Index, and Empire State Manufacturing Index. 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: 113.99.

Resistance 2: 113.77.

Resistance 1: 113.54.

Support 1: 113.27.

Support 2: 113.05.

Support 3: 112.82.

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

Technical analysis of EUR/USD for May 15, 2017

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Overview:

  • The EUR/USD pair continues to move upwards from the level of 1.0881. Last week, the pair rose from the level of 1.0881 (the level of 1.0881 coincides with a ratio of 23.6% Fibonacci retracement) to a top around 1.0930. Today, the first support level is seen at 1.0881 followed by 1.0838, while daily resistance 1 is seen at 1.0952. According to the previous events, the EUR/USD pair is still moving between the levels of 1.0881 and 1.0952; for that we expect a range of 71pips (1.0952 - 1.0881) at least. On the one-hour chart, immediate resistance is seen at 1.0952, which coincides with a ratio of 61.8% Fibonacci retracement. Currently, the price is moving in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. The price is still above the moving average (100) and (50), Therefore, if the trend is able to break out through the first resistance level of 1.0952, we should see the pair climbing towards the second daily resistance at 1.1000 to test it. It would also be wise to consider where to place stop loss; this should be set below the second support of 1.0838
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Technical analysis of GBP/USD for May 15, 2017

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Overview:

  • 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 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. The daily strong support is seen at 1.2582.
  • On the contrary, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.3175 (major resistance).
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Daily analysis of USDX for May 15, 2017

USDX is piercing the support level of 99.23, which means a further consolidation below the 200 SMA on H1 chart. However, the overall picture remains bullish, as long as the index holds the lows from May 8th. The current move should be taken as a corrective one in favor of the bulls, but a continuation lower can produce a decline to test the 98.77 level. To the upside, the key resistance is at the 99.63 level.

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H1 chart's resistance levels: 99.63 / 99.97

H1 chart's support levels: 99.23 / 98.77

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 99.63, take profit is at 99.97 and stop loss is at 99.28.

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Daily analysis of GBP/USD for May 15, 2017

GBP/USD is set to follow a clear path this week, as the support zone of 1.2855 continues to block the bearish advance across the board. The pair should break below that zone in order to strengthen the acceleration towards the 1.2772 level, while a rebound can put the Cable in the focus to target the key handle of 1.3000.

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H1 chart's resistance levels: 1.2910 / 1.2957

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 1.2910, take profit is at 1.2957 and stop loss is at 1.2887.

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