AUD/JPY forming a nice reversal, time to start selling

Price is about to find major resistance below the 83.09 resistance (Fibonacci retracement, horizontal overlap resistance, Elliott wave theory) and we expect a strong drop from this level towards 81.77 support (Fibonacci extension, horizontal swing low support, Elliott wave theory).Stochastic (21,5,3) is seeing major resistance below the 93% where we expect price to continue to drop from.Correlation analysis: We're expecting general JPY strength with USD/JPY expecting a drop too.

Sell below 83.09. Stop loss at 83.51. Take profit at 81.77.

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USD/CAD profit target reached perfectly, prepare to buy

Price has dropped and reached our profit target perfectly. We prepare to buy above 1.3503 support (Fibonacci retracement, Fibonacci extension, horizontal overlap support, Elliott wave theory) for a push up to 1.3641 resistance (Fibonacci retracement, horizontal overlap resistance).

RSI (34) sees strong horizontal support above our 36% level.

Buy above 1.3503. Stop loss at 1.3419. Take profit at 1.3641.

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Technical analysis of USD/JPY for May 22, 2017

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USD/JPY is expected to trade with a bullish bias above 111.00. The pair is trading above the key support at 111.00 (the low of May 19), which should limit the downside potential. The relative strength index lacks downward momentum.

Hence, as long as 111.00 is not broken, look for a rebound to 111.75 (the high of May 18). A break above this level would trigger another upside to 112.20.

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 111.75 and the second one at 112.20. In the alternative scenario, short position is recommended with the first target at 110.65 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 110.25. The pivot point is at 111.00.

Resistance levels: 111.75, 112.20, and 112.50

Support levels: 110.65, 110.25, and 110

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Technical analysis of USD/CHF for May 22, 2017

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USD/CHF is expected to extend its downside movement. The pair is holding on the downside. The downward momentum is further reinforced by the declining 20-period and 50-period moving averages. The relative strength index is mixed to bearish.

On the economic data front, the economic calendar lacks first-tier economic reports from the US. In Europe, the preliminary figure of eurozone consumer confidence index in May reached -3.3 vs -3 expected and -3.6 in April.

Therefore, as long as 0.9765 holds on the upside, I expect a further drop to 0.9660 and even to 0.9635 in extension.

Resistance levels: 0.9790, 0.9825, and 0.98555

Support levels: 0.9660, 0.9635, and 0.9600

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Technical analysis of NZD/USD for May 22, 2017

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NZD/USD is expected to trade in a higher range. The pair recorded higher tops and higher bottoms since May 19, which confirmed the bullish outlook. The upward momentum is further reinforced by the rising 20-period and 50-period moving averages. The relative strength index is mixed to bullish.

To conclude, as long as 0.6930 holds on the downside, look for a new rise to 0.7000 and even to 0.7015 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 0.7000 and the second one at 0.7015. In the alternative scenario, short position is recommended with the first target at 0.6915 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 0.6900. The pivot point is at 0.6930.

Resistance levels: 0.7000, 0.7015, and 0.7045

Support levels: 0.6915, 0.6900, and 0.6855

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Technical analysis of GBP/JPY for May 22, 2017

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GBP/JPY is expected to trade with a bearish outlook. The pair broke below a declining trend line, and is holding on the downside. The rising 50-period moving average is playing a resistance roles and maintains the downside bias. The relative strength index is below its neutrality level at 50 and lacks upward momentum.

As long as 145.40 holds on the upside, look for a further downward towards 144.30. A break below this level would call for a further downside towards 125.50.

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 144.30. A break below this target will move the pair further downwards to 143.75. The pivot point stands at 145.40. 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 145.80 and the second one at 146.30.

Resistance levels: 145.80, 146.30, and 147.00

Support levels: 144.30,143.75, and 143.00

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Fundamental Analysis of USD/JPY for May 22, 2017

USD/JPY showed a great amount of bearish pressure last week that is also expected to continue this week as well. Today, Japan released Trade Balance report which revealed a trade surplus of 0.10 trln yen, down from the forecast for a 0.25 trln surplus. The worse-than-expected trade proficit affected JPY today and the pair is currently residing inside a corrective structure. On the USD side today, FOMC policymakers Kashkari and Harker are due to sleak on an interest rate decision and further monetary policies. Their comments are expected to bring in good amount of volatility in the pair today. A positive outcome in US events today is likely to cap further gains in JPY.

Now let us look at the technical chart. The price is currently below 111.60-112.20 resistance area. Following the bearish pressure last week, a further bearish move in this pair is expected until the price breaks above 112.20 with a daily close. As the price remains below 111.60-112.20 resistance area, the pair will ride a bearish bias. USD/JPY is expected to move towards 110.10 in the coming days.

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Fundamental Analysis of EUR/USD for May 22, 2017

EURUSD has been in non-volatile bullish trend after bouncing off from 1.0850. Today, this pair has shown a good amount of bullish pressure as the Eurogroup's meeting is taking place today among 19 member states of the eurozone. The meeting will co-ordinate their initiatives and decisions for the overall economic health in the eurozone. Currently, the meeting is unfolding well in favor of EUR and it is also reflected in the chart. On the USD side today, FOMC policymakers Harker and Kashkari are due to speak about an interest rate decision and further monetary policies. The pair is expected to trade with higher volatile during these events. If USD fails to gain over EUR today, then further bullish pressure in this pair will continue in the coming days.

Now, let us look at the technical chart. The price has retraced towards 1.1160 area today before showing some bullish pressure. Currently, the pair is riding a strong bullish bias and it is expected to reach 1.1350 resistance in the coming days. Meanwhile we might see some corrective moves along the way though today the bullish pressure is quite impressive but the dynamic level of 20 EMA is quite far from the current price which indicated an upcoming retracement in this pair before heading much higher towards 1.1350.

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EUR/JPY analysis for May 22, 2017

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Recently, the EUR/USD pair has been trading upwards. The price tested the level of 1.1246. According to the 30M time frame, I found broken Friday's high at the price of 1.1210. Buyers are in control on this currency pair. My advice is to watch for potential buying opportunities. I have placed Fibonacci expansion to find potential upward targets. I got Fibonacci expansion 100% at the price of 1.1290.

Resistance levels:

R1: 1.1195

R2: 1.1215

R3: 1.1230

Support levels:

S1: 1.1160

S2: 1.1143

S3: 1.1120

Trading recommendations for today: watch for potential buying opportunities.

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USD/JPY analysis for May 22, 2017

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Recently, the USD/JPY pair has been trading sideways at the price of 111.40. Anyway, I found a supply trend line, which is holding very well. My advice is to watch for potential selling opportunities. The short-term trend is still downward. Downward targets are set at the price of 111.05 (Friday's low) and 110.25.

Resistance levels:

R1: 111.35

R2: 111.42

R3: 111.55

Support levels:

S1: 111.10

S2: 111.00

S3: 110.90

Trading recommendations for today: watch for potential selling opportunities.

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NZD/USD Intraday technical levels and trading recommendations for May 22, 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, a bullish breakout above 0.6960 is needed to allow a further bullish movement. The 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 22, 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 1.3525-1.3580 (confluence of prominent tops), the market remains strongly bullish. Otherwise, bearish pullback should be expected towards 1.3300.

The expected bullish target would be located around 1.3950 and 1.4030 (the upper limit of the depicted channel and FE 100%).

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Global macro overview for 22/05/2017

Global macro overview for 22/05/2017:

The next Organization of the Petroleum Exporting Countries (OPEC) meeting is scheduled for this Wednesday, Thursday, and Friday, as part of a panel to discuss the different scenarios ahead of the Thursday, May 25 meeting with non-OPEC members. There are still rumors that there is no agreement on the final scenario with an option of additional cuts as US shale production continues to increase. Nevertheless, market participants assume that the supply cut would not only be extended into next year but might also be deepened in order to tighten the market and prop up prices.The outcome of the meeting will be undoubtedly important for the whole oil industry and will increase the crude oil price volatility.

Let's now take a look at the USD/CAD technical picture on the H4 timeframe as this currency pair is highly correlated to the oil prices. The price stopped at 50%Fibo at the level of 1.3508, however, the bulls do not have the strength to outline the upward rebound. This indicates a continuation of the move towards 61%Fibo in the 1.3440 area. The resistance for a possible upwards correction will be at the level of 1.3575, where we find 23.6%, 38.2% retracement levels and local lows from May 16-17.

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Global macro overview for 22/05/2017

Global macro overview for 22/05/2017:

In the late Friday comments, St Louis Federal Reserve President Bullard said, that since the last FOMC meeting in March the job market conditions have deteriorated significantly and the inflation is not growing as strong as expected. After the March interest rate increase, the inflation is not rising as fast and the long-term yields are in decline. This is why he suggest the FOMC is moving too fast for rising interest rates at the next meeting. Bullard is a well-known supporter of low interest rates, belonging to the doves' camp, so he thinks one interest rate hike per year should be enough for the current economic conditions. This is why his dovish comments are no surprise, but the impact on FOMC Chairperson Jannet Yellen might be quite important. Interestingly, earlier this year FOMC announced two of three interest rate hikes in 2017.

Let's now take a look at the US Dollar index technical picture on the H4 time frame. Since the last interest rate hike, the index keeps making lower highs and lower lows and now is trading quite close to the important support at the level of 95.91, when the results of the US presidential election were announced. So far the lowest low has been made at the level of 97.07 and now the price is trying to bounce above the technical resistnace at the level of 97.31. Nevertheless, to reverse the trend, the bulls would have to push the price above the level of 98.48 and then above the level of 99.90.

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Technical analysis of USD/JPY for May 22, 2017

Forex analysis review
Technical analysis of USD/JPY for May 22, 2017

Trading plan for 22/05/2017

Trading plan for 22/05/2017:

Markets are beginning the new week in a positive mood, and the Asian stock exchanges are at the highest levels in a month. The political turmoil in Washington is still weighting on the US Dollar. Crude oil remains strong, gold opened with a gap up is coming back to the range.

On Monday 22nd of May, the economic calendar is light, later in the week market participants will pay attention to the Bank of Canada's interest rate decision, FOMC meeting minutes, New Zealand's annual budget data and the national CPI data from Japan.

Market snapshot: EUR/USD trading at the highs

The Friday high was at the level of 1.1212, but it was made as a part of a negative divergence between the price and the momentum indicator in overbought market conditions. Currently, the pair is trying to test the technical support at the level of 1.1169. If this support is breached, then the next one will be seen at the level of 1.1075. On the other hand, the price is very close to the next technical resistance at 1.1298 from November last year, so the selling pressure might increase.

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Market snapshot: GBP/USD just below 1.3000 level

The GBP/USD pair is still trading at elevated levels, just below the 1.3000 resistance. Last week, this pair managed to make a new high at the level of 1.3047, but the clear negative divergence and overbought trading conditions are indicating a possible corrective pullback towards first the level of 1.2881 and then possibly towards the level of 1.2828. The technical support zone between the levels of 1.2706 - 1.2772 still remains the most important support for the bulls.

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Market snapshot: crude oil broke above the 61%Fibo

The crude oil prices have made a new high at the level of $50.88, which is above the 61%Fibo at the level of $49.93. Nevertheless, the market conditions look overbought now and there is a bearish divergence visible between the price and the momentum indicator. Corrective pullback towards the level of $50.23 or even $49.94 is expected soon.

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Market snapshot: Gold opens with $3 gap, but gets back to the range

Gold had opened with a weekend $3 gap up, but quickly got back to the range zone after being capped by the navy trend line resistance. The key zone for the bulls between the levels of $1,259 - $1,271 was tested but hasn't been clearly violated yet. The sellers pushed the price lower at the level of 61% at $1,264, but buyers still try to break through. The momentum indicator remains above fifty level so there is still a chance for another leg up before any bigger correction will occur.

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Ichimoku indicator analysis of USDX for May 22, 2017

The Dollar index is oversold, diverging and is expected to move higher this week towards at least 99 - 99.50. Price is expected to reverse upwards this week so I prefer to be Dollar bullish. Price is at important weekly support.

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Red lines - bearish channel

The short-term trend remains bearish as price is inside the bearish red channel and price below both the tenkan- and kijun-sen. I expect the Dollar index to bounce at least towards the Kumo (cloud) at 99.

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Red line - resistance

Green line - long-term trend line support (broken)

The Dollar index is at the weekly Kumo. Trend is about to turn bearish with price having broken the long-term trend line support. In the short-term, I expect a strong bullish reversal as the RSI (5) is oversold and about to turn higher. Price at the weekly Kumo should at least make a technical reflex bounce to 99. So I would wait for a bounce higher before re-entering short Dollar positions.

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Ichimoku indicator analysis of gold for May 22, 2017

Gold price is overbought in the short-term and justifies a pullback towards $1,240. It is important for Gold bulls to hold above $1,230 and create a new short-term base of a higher low in order to move above $1,280-$1,300 which is the long-term resistance.

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Gold price is trading above the Ichimoku cloud support. Price got rejected at the resistance of the 61.8% Fibonacci retracement. Short-term support is at $1,247 and next at $1,230. Price is expected to move lower before higher.

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Gold daily chart shows price above daily cloud but below the 61.8% Fibo level resistance. I expect a pullback and a higher low to be created over this week. As long as price is above $1,213 we target $1,230-40 and next $1,280-$1,300. If the $1,213 low is broken, expect a move towards $1,150-60.The material has been provided by InstaForex Company - www.instaforex.com

Daily analysis of major pairs for May 22, 2017

EUR/USD: This currency pair gained 290 pips last week, closing slightly above the support line at 1.1200. This week, the price may target the resistance lines at 1.1250, 1.1300 and 1.1350. Some EUR pairs would trend higher, while some would trend lower this week. However, EUR/USD is supposed to move higher.

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USD/CHF: This currency trading instrument lost 270 pips last week, closing below the resistance level at 0.9750. The price has lost 340 pips since May 12 – something that has resulted in a strong Bearish Confirmation Pattern in the market. The outlook on the USD/CHF remains bearish for this week, and further southwards movement would be witnessed as the support levels at 0.9700, 0.9650 and 0.9600 are being tested.

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GBP/USD: This pair consolidated in the first few days of the last week. Then it trended upwards to emphasize the recent bullish outlook on the market. The price is now above the accumulation territory at 1.3000, going towards the distribution territory at 1.3050, which should be breached this week as the price rallies more and more.

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USD/JPY: This pair experienced a major pullback last week. In the first few days of the week, the price lost about 300 pips, before consolidating in the first few days of last week. There is a bearish outlook on the market, and it will remain valid as long as the price does not go above the supply level at 114.00 (which would, however, require extraordinary buying pressure).

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EUR/JPY: This cross pair went upwards on Monday and Tuesday, but retreated on Wednesday and Thursday, and then moved up again on Friday. Unlike its USD/JPY counterpart, the EUR/JPY cross has not gotten bearish, and one factor helping the situation is a measure of strength in the EUR itself. The price could gain additional 200 pips this week, especially if the yen becomes weak.

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Elliott wave analysis of EUR/NZD for May 22, 2017

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Wave summary:

EUR/NZD continues to gain a little, but we are still not seeing the expected acceleration, which is a bit of a concern. That said, we will continue to look for more upside and ideally acceleration higher towards 1.6655 as long as minor support at 1.5987 is able to protect the downside. A break below 1.5987 will delay the expected upside pressure, but likely only for a test of 1.5836 before pushing higher again.

R3: 1.6445

R2: 1.6354

R1: 1.6237

Pivot: 1.6150

S1: 1.6086

S2: 1.5987

S3: 1.5908

Trading recommendation:

We are long EUR from 1.5665 with stop placed at 1.5800. If you are not long EUR yet, then buy near 1.5987 and use the same stop at 1.5800.

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Elliott wave analysis of EUR/JPY for May 22, 2017

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Wave summary:

The correction in wave B is likely not complete yet and we are looking for one more spike to a new low closer to 122.10 to complete wave B. If this count is correct, then minor resistance at 124.94 ideally should be able to cap the upside for a break below minor support seen at 124.09 and more importantly a break below support at 123.34 confirming the expected decline to 122.10.

If, however the minor resistance at 124.94 is broken, that will shift the count in favor of wave B already having completed with the test of 122.53 and wave C higher towards 138.52 already developing.

R3: 127.33

R2: 125.82

R1: 124.94

Pivot: 124.75

S1: 124.48

S2: 124.09

S3: 123.34

Trading recommendation:

We are short EUR from 124.00 with stop placed at 125.00. Take profit will be placed at 122.25.

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Technical analysis of EUR/USD for May 22, 2017

When the European market opens, some economic events will take place such as the Eurogroup's meetings and the German Buba monthly report. At the same time, the economic calendar of the United States is bereft of any first-tier news. Therefore, amid the reports EUR/USD will move with low to medium volatility today.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1255.

Strong Resistance:1.1249.

Original Resistance: 1.1238.

Inner Sell Area: 1.1227.

Target Inner Area: 1.1201.

Inner Buy Area: 1.1175.

Original Support: 1.1164.

Strong Support: 1.1153.

Breakout SELL Level: 1.1147.

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 22, 2017

In Asia, Japan will release the trade balance report, while the economic calendar of the United States is bereft of any first-tier news. So there is a probability that the USD/JPY pair will move with low to medium volatility today.

TODAY'S TECHNICAL LEVELS:

Resistance. 3: 112.07.

Resistance. 2: 111.85.

Resistance. 1: 111.63.

Support. 1: 111.36.

Support. 2: 111.14.

Support. 3: 110.92.

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 EUR/USD for May 22, 2017

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Overview:

  • The EUR/USD pair is showing signs of strength following a breakout of a high at 1.1129. On the H4 chart, the level of 1.1129 coincides with 78.6% of Fibonacci, which is expected to act as a minor support today. Since the trend is above the 78.6% Fibonacci level, the market is still in an uptrend. At the same time, the major support is seen at the level of 1.1129. Furthermore, the trend is still showing strength above the moving average 100. Thus, the market is indicating a bullish opportunity above the support levels, for this reason the bullish outlook remains valid as long as the 100 EMA is headed to the upside. Therefore, strong support will be found at the level of 1.1129 providing a clear signal to buy with a target seen at 1.1211. If the trend breaks the minor resistance at 0.6621, the pair will move upwards continuing the bullish trend development to the level of 1.1272 in order to test the daily resistance 1.
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Technical analysis of GBP/USD for May 22, 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 1.3047. Consequently, the strong resistance has already been formed at the level of 1.2973 and the pair is likely to trade around the spot of 1.2973 and 1.3047. However, if the pair fails to pass through the level of 1.3047, the market will indicate a bearish opportunity below the new strong resistance level of 1.3047. Moreover, the RSI starts signaling a downward trend which is still showing strength above the moving averages 100 and 50. Thus, the market is indicating a bearish opportunity below 1.2973, so it will be good to sell at 1.3047 with the first target at 1.2744. 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 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 1.3075.
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Daily analysis of USDX for May 22, 2017

The US dollar index remains strongly bearish, now looking for a consolidation below the 97.00 psychological level. The nearest support lies around 96.90, which should open the doors to test the level of 96.25. This is the preferred scenario, taking into consideration that the 200 SMA on the H1 chart is pointing to the downside. MACD indicator is in the negative territory, favoring the bearish scenario.

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H1 chart's resistance levels: 97.41 / 98.11

H1 chart's support levels: 96.90 / 96.25

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 found at 96.90, take profit is at 96.25 and stop loss lies at 97.56.

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Daily analysis of GBP/USD for May 22, 2017

The GBP/USD pair is struggling to consolidate above the 1.3000 handle, as the sterling moved with a bullish bias last week. The resistance zone of 1.3038 is still strong and it's capping further gains in GBP/USD. If we witness a breakout above 1.3038, then a rally towards 1.3105 is expected to happen.

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H1 chart's resistance levels: 1.3038 / 1.3105

H1 chart's support levels: 1.2984 / 1.2928

Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.3038, take profit lies at 1.3105 and stop loss is found at 1.2970.

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