USD/CAD intraday technical levels and trading recommendations for May 25, 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 1.3450-1.3500 (confluence of prominent tops and the recent uptrend line), the market remains 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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NZD/USD Intraday technical levels and trading recommendations for May 25, 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 towards 0.7250-0.7350 (sell zone) where the bearish price action was expected.

Bearish persistence below 0.7250 allowed a further decline towards 0.7100 then 0.6960 that 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 is 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.

The current bullish breakout above 0.6960 should be defended to enhance further bullish movement.

An expected projection target for the pattern is located around 0.7250 provided that bullish breakout above 0.7100 (key level) is achieved on a daily basis.

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Global macro overview for 25/05/2017

Global macro overview for 25/05/2017:

The Bank of Canada has left interest rates on hold at 0.5% that was in line with consensus forecasts. In the statement released after the decision, the BoC stated that inflationary pressures are in line with the expectations as the core inflation remains below 2.0% and wages growth remains subdued which is consistent with on-going excess capacity. The BoC view on the economy is positive as the Canada and the rest of the world is on the right track to sustain the economic rebound. The recent economic data has been encouraging as the consumer spending and housing market remain robust and the labour market is improving as well. The current monetary stimulus is considered appropriate, however, the past measures have not had a substantial cooling effect on housing markets yet and this will be a key focus over the next few months. In conclusion, an optimistic statement suggested some minor clues regarding the possibility of the next monetary policy easing.

Let's now take a look at the USD/CAD technical picture on the H4 time frame. After a short-lived attempt to rally, the price was capped at the level of 1.3530 (golden channel lower boundary) and reversed towards the 61%Fibo at the level of 1.3441. This level was violated and the price tested the next technical support at the level of 1.3410 and made a low at the level of 1.3387. The trading conditions are oversold and there is a visible bullish divergence between the price and the momentum oscillator. The key resistance is seen at the level of 1.3455 and the bulls must break out above it in order to rally towards the next resistance at the level of 1.3526.

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Global macro overview for 25/05/2017

The FOMC Meeting Minutes have revealed the dovishness among the policymakers. Despite the fact, that FED seems content to hike rates again in June, the minutes reflected more uncertainty over the trajectory for rates. The main reason for this change in the mood is uncertain inflation outlook. Some policymakers are becoming concerned that the unemployment rate is running below the full-employment level which could pose upside risks to inflation. Other policy members, in contrast, keep seeing the downside risks to the inflation outlook, particularly given the low inflation print and still-low measures of inflation expectations. Moreover, their other concern is the possible labour market tightening without giving rise to inflationary pressures. This is why this sentence from the minutes: "prudent to await additional evidence indicating that the recent slowing in the pace of economic activity had been transitory" was the key clue regarding a further wait-and-see approach made by FED policymakers and the main reason of the lack of the hawkish tone in the minutes. In conclusion, the June rate hike is still possible, but further rate hikes are now slightly less possible as the FED will await further economic data to justify the hike later this year.

Let's now take a look at the US Dollar technical picture on the H4 time frame. Since the FED interest rate hike in March, the US Dollar index keeps making lower highs and lower lows. Moreover, any attempt to rally is quickly faded by the bears, so the price is now quite close to the very important support at the level of 95.91. This was the level from the US Dollar surged after the presidential election campaign was won by Donald Trump. The index is trading below all of the moving averages and the momentum indicator is pointing to the downside. The next immediate support is seen at the level of 96.80 and the next immediate resistance is seen at the level of 97.48.

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GBP/USD analysis for May 25, 2017

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Recently, the GBP/USD has been trading upwards. The price tested the level of 1.3015. Anyway, according to 15M time frame, I found a fake breakout and strong rejection of the yesterday's high at 1.3000. There is also a hidden bearish divergence on the moving average oscillator, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the prices of 1.2927 and 1.2890.

Resistance levels:

R1: 1.2995

R2: 1.3015

R3: 1.3040

Support levels:

S1: 1.2940

S2: 1.2920

S3: 1.2890

Trading recommendations for today: watch for potential selling opportunities.

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Fundamental Analysis of AUD/USD for May 25, 2017

AUD/USD is currently trading with higher volatility on the break or retest of 0.7500-0.7550 area. Due to recent negative reports from Australia, the currency is expected to lose some ground against other currencies. Today, RBA Deputy Governor Debelle made a speech on key interest rates and future policy shifts of the country. His speech tends to be dovish, as a result AUD has been on the back foot. On the other hand, the US is due to release Unemployment Claims report later today which is expected to show an increase to 238k from 232k previously. Besides, Goods Trade Balance report is expected to show a slight decrease in deficit to -64.7B from a -64.8B deficit earlier. If the US economic reports today reveal positive figures, then we might see a further downward move in this pair in the coming days.

Now let us look at the technical chart. The price is currently being rejected off the resistance of 0.7500 area. Amid higher volatility after a short-term bullish move towards 0.7500, we foresee a further downward move in this pair. Currently, we will be looking for a daily close below 0.7500 today. If that happens, we will expect the price to move down towards 0.7160 support level in the coming days. We will be in bearish bias until the price breaks above 0.7550 with a daily close.

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EUR/USD analysis for May 25, 2017

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Recently, the EUR/USD has been trading upwards. As I expected, the price tested the level of 1.1250. Yesterday's target at the price of 1.1230 has been reached. Anyway, today I found a broken upward channel, a fake breakout of the yesterday's high and a hidden bearish divergence on the osilator. These are signs of weakness and my advice is to watch for potential selling opportunities. The downward target is set at the price of 1.1170.

Resistance levels:

R1: 1.1225

R2: 1.1240

R3: 1.1260

Support levels:

S1: 1.1180

S2: 1.1170

S3: 1.1150

Trading recommendations for today: watch for potential selling opportunities.

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Fundamental Analysis of EURGBP for May 25, 2017

EUR/GBP is currently in a bullish non-volatile trend, which is expected to continue till the price climbs up to the 0.8850 resistance level. Today French and German banks are closed due to the Ascension Day which means no EURO economic events today. On the other hand, today the Second Estimate GDP in the UK was at 0.2% (vs. 0.3% expected), the Prelim Business Investment was somehow positive at 0.6% (vs. 0.3% expected); BBA Mortgage Approval was at 40.8k in line with expectations (vs. 40.9k previously); and the Index of Services was negative at 0.2% (vs. 0.3% expected). Overall, the UK had mixed economic reports today, which did helped the euro gain some momentum against the sterling today and in the coming days.

Now let us look at the technical view. The price is currently in a non-volatile bullish trend where the momentum is quite impulsive against GBP. Amid negative GBP economic reports from the UK today, EUR is expected to extend gains in the coming days with a target towards the 0.8850 resistance level. We are currently in bullish bias until the price takes out 0.8550 with a daily close.

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Ichimoku indicator analysis of USDX for May 25, 2017

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Ichimoku indicator analysis of USDX for May 25, 2017

Trading plan for 25/05/2017

Trading plan for 25/05/2017:

Not much volatility on financial markets during the night takes place, but the US Dollar is losing ground slightly as the FOMC minutes have shown increased Fed cautiousness over the pace of monetary tightening. Sentiment in the stock market is positive despite the recent terrorist attack in the UK. Crude oil remains high before the OPEC meeting.

On Thursday 25th of May, the event calendar is quite busy in important data release, so market participants will pay attention to Second GDP Estimate and Business Investment from the UK, Unemployment and Continuing Claims from the US, and the National CPI Index data from Japan later in the night.

GBP/USD analysis for 25/05/2017:

The Second GDP Estimate and Business Investment data are scheduled for release at 08:30 am GMT and market participants expect no change in GDP estimate at the level of 0.3% for the first quarter. On the other hand, Business Investment data are expected to increase to the level of 0.3% after -0.9% decrease last quarter. If both data are in line with expectations or better than expected, then GDP is likely to beat the expectations with ease.

Let's now take a look at the GBP/USD technical picture on the H4 time frame. The price is still trading above the golden trend line support, but the upwards momentum is almost gone. The swing high at the level of 1.3047 has been already tested three times, but the bulls were not strong enough to break out above it. Currently, the bias is to the downside and worse than expected data might trigger the move towards the next support at the level of 1.2881 and 1.2844.

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EUR/USD analysis for 25/05/2017:

Another set of data from the US job market such as Unemployment Claims and Continuing Claims is scheduled for release at 12:30 pm GMT. The overall trend in the US job market is positive with low unemployment rate and high NFP figures.The same situation is observed in claims as the average number keeps hovering around 220k every week. This is why market participants expect 238k claims which are 6k more than a week ago. The Continuing Claims (unemployed workers that qualify for benefits under unemployment insurance) is expected to increase slightly to 1,925k from 1,898k a week ago. Only a dramatic change in the claims data would change the outlook for worse in the US job market. NFP Payrolls data are scheduled for release next Friday.

Let's now take a look at the EUR/USD technical picture on the H4 time frame. The market has bounced again from the support at the level of 1.1170 and now the bulls are trying to test the local swing high at the level of 1.1266. Nevertheless, the momentum indicator does not point to the upside and the stochastic oscillator is reversing from the overbought territory as well. Any violation of the level of 1.1170 will be a clear sign that the bears have the control over the market and they are going to push the price to the level of 1.1075 minima.

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Market snapshot: USD/JPY in rising wedge formation

The USD/JPY pair is forming a rising wedge pattern after the big falls we experienced from May 10-18. This is only a correction before returning to the downtrend. Therefore, a breakout should be to the downside, which will allow testing the another Fibonacci at 61% at the level of 110.50. Another support is the 78%Fibo at the level of 109.45. The resistance in the event of a surprising spike is the 61%Fibo at the level of 112.80.

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Ichimoku indicator analysis of USDX for May 25, 2017

The US dollar index bounced as expected but found formidable resistance at 97.50 and got rejected. As long as we hold above the May lows, bulls have some hopes for a bigger bounce towards 99.

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Red lines - bearish channel

Though the price broke out of the bearish channel, the bounce reached only the kijun-sen (yellow line indicator) in the 4 hour chart but not the Kumo (cloud) as we hoped. However, the bounce might still be incomplete so we have to be patient as long as we trade above the May lows.

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Red line - resistance

Green line - support

The weekly chart is dangerously turning weekly trend to bearish, especially if this week closes below the Kumo cloud. We are at the very important weekly support. I continue to believe that a bounce is quite possible towards 99. One need to be patient and wait and see.

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Technical analysis of GBP/JPY for May 25, 2017

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GBP/JPY is expected to trade with a bullish bias. The technical picture of the pair remains positive above a rising trend line, and is holding on the upside. The relative strength index is above a rising trend line and is above its neutrality level at 50. In addition, 144.50 is playing a key support role, which should limit the downside potential.

As long as this key level is not broken, look for a further advance towards 145.20 and even 145.45 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 145.20 and the second one at 145.45. In the alternative scenario, the short position is recommended with the first target at 144.05 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 143.75. The pivot point is at 144.50.

Resistance levels: 145.20, 145.45, and 146.00

Support levels: 144.05,143.75, and 143.00

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Technical analysis of NZD/USD for May 25, 2017

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Overview:

  • The NZD/USD pair called for a bullish trend from the support level of 0.6985. Currently, the price is in a bullish channel. 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 0.6985, which coincides with a golden ratio (61.8% of Fibonacci). Moreover, the second support is set at the level of 0.6953 (major support). So, the market is likely to show signs of a bullish trend around the spot of 0.6985. In other words, buy orders are recommended above the golden ratio at 0.6985 with the first target at the level of 0.7057. Furthermore, if the trend is able to breakout through the first resistance level of 0.7057. We should see the pair climbing towards the double top (0.7089) to test it. Besides, it should be noted that the major weekly resistance is seen at the 0.7135 price. It would also be wise to consider where to place a stop loss; this should be set below the major support of 0.6953 .
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Technical analysis of USD/CHF for May 25, 2017

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Overview:

  • The USD/CHF pair.
  • The first resistance level is seen at 0.9787 followed by 0.9847, while daily support 1 is seen at 0.9691. The USD/CHF pair broke support which turned to strong resistance at 0.9787. The market is still set to trade around the daily pivot point of 0.9739. This week, it continued to move downwards from the level of 0.9787 to the bottom around 0.9739. The pair is trading below this level. It is likely to trade in a lower range as long as it remains below the resistance of 0.9787 which is expected to act as major resistance. Amid the previous events, the USD/CHF pair is still moving between the levels of 0.9787 and 0.9691. For that reason, the major resistance can be found at 0.9787 providing a clear signal to sell with a target seen at 0.9691. If the trend breaks the minor support at 0.9691, the pair will move downwards continuing the bearish trend development to the level of 0.9645 and 0.9600 in order to test the daily support 3. Overall, we still prefer the bearish scenario which suggests that the pair will stay below the area of 0.9787 (resistance).
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Daily analysis of major pairs for May 25, 2017

EUR/USD: The EUR/USD pair has not made any serious directional movement this week in the context of an uptrend. Price has moved between the support line at 1.1150 and the resistance line at 1.1250 (which has been tested several times this week). The resistance line is supposed to be breached to the upside as the market trends upwards.

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USD/CHF: A bearish signal remains valid on USD/CHF, although price has moved largely sideways this week (in the context of a downtrend). A rise in momentum is anticipated, which would happen this week or next, and which would most probably favor bears.

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GBP/USD: The GBP/USD pair has consolidated so far this week. The market is quite choppy with no clear direction, and further consolidation may change the bias on the market to a neutral bias. There are no many fundamental data today, and thus, we may not witness serious movements in the market.

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USD/JPY: There is still a Bearish Confirmation Pattern on the USD/JPY 4-hour chart. The EMA 11 is below the EMA 56 and the RSI period 14 is below the level 50. There could be a further bearish movement, which could take price towards the demand levels at 111.00 and 110.50; or there could be a rally, which might threaten the currently precarious bearish bias.

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EUR/JPY: Just like USD/JPY, this cross pair has also consolidated so far this week. There is a bullish indication on the 4-hour chart. The EMA 11 is above 56, while the RSI period 14 is above the level 50. A breakout to the upside is expected before the end of this week or early next week, which may enable the supply zones at 125.50, 126.00, and 126.50 to be tested.

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Ichimoku indicator analysis of gold for May 25, 2017

Gold price has held above the support level and reversed higher again today as we expected. Now it is testing important highs. The resistance between $1,257-$1,265 is critical for the short-term trend. Breaking it will open the way for a rise towards $1,280 at least.

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The price is trading above the 4 hour Kumo. The trend is bullish. Gold back-tested the cloud support and shows reversal signs, indicating that the price is ready to break above $1,265 and test the major weekly resistance at $1,280-$1,300. Support at $1,245 remains the key one. If it is broken, we will test $1,220.

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On the daily chart we still have no breakout. The price is trying to breach above the daily cloud and if it succeds, this will be a bullish sign. Holding the lower cloud boundary intact is a sign of strength. The correction looks like it wants to be a sideways one rather than a deep one. The levels of $1,280-$1,300 are seen as the next targets.The material has been provided by InstaForex Company - www.instaforex.com

Elliott wave analysis of EUR/NZD for May 25, 2017

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Wave summary:

After an almost perfect test of the 61.8% corrective target 1.5836 (the low has been seen at 1.5852), a corrective low should be in place for a break above minor resistance seen at 1.6014 and more importantly a break above resistance at 1.6093 that confirms renewed upside pressure towards 1.6655 and above in the longer term.

R3: 1.6237

R2: 1.6154

R1: 1.6014

Pivot: 1.5996

S1: 1.5886

S2: 1.5852

S3: 1.5803

Trading recommendation:

We are long EUR from 1.5665 with stop placed at 1.5800. If you are not long yet, then buy a break above 1.6014 and use the same stop at 1.5800.

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Elliott wave analysis of EUR/JPY for May 25, 2017

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Wave summary:

We continue to look for a minor correction closer to the 123.59 - 123.92 support-zone before the next impulsive rally higher towards 134.30 and 138.52 sets in. Short term, a break below minor support seen at 125.01 will confirm the expected minor correction is developing.

R3: 127.30

R2: 125.82

R1: 125.57

Pivot: 125.01

S1: 124.51

S2: 123.92

S3: 123.52

Trading recommendation:

We are looking to re-buy EUR at 124.10.

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Technical analysis of USD/JPY for May 25, 2017

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USD/JPY is expected to trade with a bullish bias above 111.30. Although the pair broke below the 20-period and 50-period moving averages, it is still trading above the key support at 111.30, which should limit the downside potential. Even though a continuation of consolidation cannot be ruled out, its extent should be limited.

Hence, as long as 111.30 is not broken, look for a further rise to 111.90 and even to 112.20 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 11.90 and the second one at 112.20. In the alternative scenario, short position is recommended with the first target at 111.10 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 110.80. The pivot point is at 111.30.

Resistance levels: 111.90, 112.20 and 112.60

Support levels: 111.10, 110.80, and 110.50

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Technical analysis of USD/CHF for May 25, 2017

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USD/CHF is under pressure. The pair broke below the rising trend line since May 23 and both 20-period and 50-period moving averages. Additionally, the bearish cross between 20-period and 50-period moving averages has been identified. The relative strength index also broke below a bullish trend line since May 22.

On the economic data front, MBA mortgage applications increased 4.4% in week ended May 19 from a decline of 4.1% in the previous week. In other news, the FHFA House Price Index improved 0.6% month-on-month in March (estimated +0.5%) compared with an increase of 0.8% in February. Separately, existing home sales decreased to 5.57M units in April (forecasted 5.65M) from 5.70M units in the prior month.

Hence, as long as 0.9775 (the high of May 24) is not surpassed, expect a return to 0.9700 and even to 0.9680 in extension.

Resistance levels: 0.9790, 0.9805, and 0.9835

Support levels: 0.9700, 0.9680, and 0.9650

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Technical analysis of NZD/USD for May 25, 2017

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NZD/USD is expected to trade in a higher range as the movement is supported by a rising trend line. The pair has been riding a bullish trend line since May 19, which confirmed a positive 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 0.6980 holds on the downside, look for a new advance to 0.7080 and even to 0.7095 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 0.7080 and the second one at 0.7095. In the alternative scenario, the short position is recommended with the first target at 0.6960 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 0.6930. The pivot point is at 0.6980.

Resistance levels: 0.7080, 0.7095, and 0.7135

Support levels: 0.6960, 0.6930, and 0.6900

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Daily analysis of GBP/USD for May 25, 2017

GBP/USD is finding support around 1.2928 following the FOMC minutes' release, as the US dollar went under selling pressure across the board. A consolidation below the 200 SMA on the H1 chart is happening and we can expect a testing of the resistance level of 1.2992, as the bears are losing steam. MACD indicator remains to favor the downside scenario.

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H1 chart's resistance levels: 1.2992 / 1.3038

H1 chart's support levels: 1.2928 / 1.2872

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 1.2992, take profit is at 1.3038 and stop loss is at 1.2945.

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Daily analysis of USDX for May 25, 2017

USDX was capped by the resistance level of 97.41, as it remained in a sideways range during Wednesday's session. A pullback happened after the FOMC minutes were released and made the greenback to resume the bearish bias. The critical level is still placed at 96.90, where a breakout should deliver more bears' power toward the 96.25 level.USDXH1.png

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

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Daily Video Technical Analysis | USD/JPY | 24th May 2017

We take a nice detailed look at USD/JPY and see if there are any trading opportunities for us to make some juicy pips!

We combine the art of Fibonacci retracements, Fibonacci extensions, Support & Resistance along with Stochastic and the RSI to determine the best entry, stop loss and profit targets.

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