Trading Plan for EUR/USD and GBP/USD for May 31, 2017

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Technical outlook:

The EUR/USD continues to consolidate after hitting an interim high at 1.1263 levels last week. It looks more probable that the pair is into its second leg B, as labelled here, within the A-B-C correction. You can observe that the pair is stalling right at the trend line resistance and also the fibonacci 0.618 levels are into play now. The pair should be looking lower until prices remain below 1.1263 going forward. On the flip side, a break above 1.1263 would delay such developments and the pair would want to test 1.1300 levels before reversing lower again. For now, resistance is strong at 1.1263 and interim support is seen at 1.1110 levels respectively. Please note that a break below the counter trend line would accelerate a further decline. As to the wave pattern, it looks to be working out a 3-3-5 flat.

Trading plan:

Please remain short now, stop above 1.1263 levels targeting 1.1000.

GBPUSD chart setups:

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Technical outlook:

The GBP/USD pair's bearish story continues just in a while though. The pair seems to be pulling back/retracing a bit maybe towards 1.2900/50 levels, which is also fibonacci 0.618 resistance of the drop between1.3047 through 1.2770 levels respectively. The wave count indicates that GBP/USD might have just completed its wave 1 lower (not labelled) towards 1.2770 levels today before pulling back. The current rally is probably wave 2 and is expected to terminate around 1.2950 levels before wave 3 resumes lower again. Please also note that the pair has broken below its immediate trend line support and that prices are well into the sell zone for now. It makes good sense to prepare to sell again on intraday rallies through 1.2900/50 levels. Price resistance is seen at 1.3047 levels while interim support is at 1.2770 levels respectively.

Trading plan:

Sell around 1.2900/50, stop above 1.3047, target lower below 1.2770 levels.

Fundamental outlook:

With no major events for the rest of the day, expect markets to trade normally without higher volatility. The US Non-Farm Payrolls are due on June 02, 2017, so be ready for a good volatile day.

Good luck!

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Daily Video Technical Analysis | AUD/NZD | 31st May 2017

We take a nice detailed look at AUD/NZD 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 RSI to determine the best entry, stop loss and profit targets.

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AUD/JPY forming a strong reversal, remain bullish

Price bounced perfectly above our stop loss and is forming a strong bullish reversal. We remain bullish above major support at 82.59 (Fibonacci retracement, horizontal support, bullish divergence) and we expect a strong bounce above this level to at least 83.27 resistance (Fibonacci retracement, horizontal pullback resistance).

Stochastic (89,5,3) is seeing strong support above the 8% level where stochastic is bouncing nicely and also displays bullish divergence versus price signalling that a bounce is impending.

Correlation analysis: Mixed view on JPY today with AUD/JPY expecting a bounce but EUR/JPY and USD/JPY expecting drops.

Buy above 82.59. Stop loss at 82.21. Take profit at 83.27.

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AUDNZD above major support, prepare to buy

We look to buy above major support at 1.0491 (ibonacci retracement, Fibonacci extension, long term horizontal support) for a push up to at least 1.0606 resistance (Fibonacci retracement, horizontal pullback resistance).

Stochastic (34,5,3) is seeing strong support above 1.9% and has also made a recent bullish exit signalling that a change in momentum is starting to take shape for our bullish rise in price.

Buy above 1.0491. Stop loss at 1.0430. Take profit at 1.0606.

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AUD/USD bouncing up nicely, remain bullish

Price has started to bounce up really nicely. We remain bullish above 0.7441 support (Fibonacci retracement, horizontal swing low support, bullish divergence) for a push up to at least 0.7510 resistance (Fibonacci retracement, Fibonacci extension, horizontal overlap resistance).

Stochastic (34,5,3) is seeing strong support above the 5.1% where stochastic is bouncing up nicely from and also sees bullish divergence versus price signalling that a bounce is impending.

Buy above 0.7441. Stop loss at 0.7397. Take profit at 0.7510.

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Fundamental Analysis of EUR/GBP for May 31, 2017

Recently, EUR/GBP has been trading in a non-volatile bullish trend without any deeper pullbacks. EUR is currently quite stronger than GBP fundamentally despite having mixed economic reports from both the eurozone and the UK. Today, the following data was released in the eurozone. German Retail Sales report was negative at -0.2% instead of the consensus for a 0.4% rise, French Prelim CPI was unchanged at 0.1%, down than the forecast for a 0.2% gain. German Unemployment Change showed a decrease in the unemployment rate to -9k which was expected to be at -14k. EUR CPI Flash Estimate was published at 1.4% which was expected to be at 1.5%. Besides, Core CPI Flash Estimate also showed a lower figure at 0.9% which was expected to be at 1.0%. On the EUR side, only Italian Monthly Unemployment Rate was positive at 11.1% which was expected to rise to 11.6% from 11.5% and EUR Unemployment Rate was positive at 9.3% which was expected to be at 9.4% which previously was at 9.5%. On the GBP side, today Net Lending to Individuals report was published with a weaker figure of 4.3B which was expected to be at 4.5B, M4 Money Supply was positive at 1.2% which was expected to be at 0.4% and Mortgage Approvals did not show any notable change and came in at 65k which was expected to remain at 66k. Today, both the eurozone and the UK presented mixed economic reports. Nevertheless, the eurozone has better reports than the UK which has already been translated in the chart well. Currently, EUR is expected to gain more ground against GBP in the coming days.

Now let us look at the technical chart. The price is currently residing above the 20 EMA dynamic support and it is quite impulsive in bullish pressure. As the price remains above 20 EMA, price is expected to reach 0.8850 resistance level in the coming days. Market is currently in a bullish bias until the price breaks below 0.8500 support level.

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USD/JPY analysis for May 31, 2017

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Recently, the USD/JPY pair has been trading sideways at the price of 110.90. Anyway, according to the 30M time frame, I found a breakout of the key swing low in the background, which is a sign that buying looks risky. My advice is to watch for potential selling opportuntiies. The downward target is set at the price of 110.30.

Resistance levels:

R1: 111.20

R2: 111.40

R3: 111.65

Support levels:

S1: 111.70

S2: 110.50

S3: 110.25

Trading recommendations for today: watch for potential selling opportunities.

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Fundamental Analysis of USD/CAD for May 31, 2017

USD/CAD has been in a bearish non-volatile trend since the break below 1.3600 level. Currently, the pair is undergoing a short-term correction which can lead to a temporary bullish move in this pair. Today, Canada released an important GDP report which is expected to be show a 0.3% growth from 0.0% previously. As the data is the broadest measure of economic activity and the primary gauge of economy's health, a good amount of volatility is expected to hit the pair today during the news release. On the USD side, today FOMC Member Kaplan is going to speak today about key interest rates and future monetary policies, he is expected to be more hawkish than usually which may lead to a further gain on the USD today. Moreover, Chicago PMI report is also due later today which is expected to show a decreased value at 57.0, down from 58.3 previously. Moreover, Pending Home Sales report is expected to show a positive change of 0.7%, much stronger than -0.8% earlier. To sum up, amid a batch of first-tier economic data from Canada and the US, the market is expected to be very volatile today. Traders will find out some signals of a further dynamic in this pair after the market absorbs all the news.

Now let us look at the technical chart. The price is currently residing in a medium-term corrective structure after the break below 1.3600 level. Currently the price is below short-term resistance of 1.3540 and as the price remains below this level in a bearish move. The first downward target of 1.3260 is expected.

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Analysis of GBP/USD for May 31, 2017

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Recently, the GBP/USD pair has been trading sideways at the price of 1.2840. Anyway, according to the 30M time frame, I found a fake breakout of the yesterday's high and strong buyers' reaction. There is also a hidden bullish divergence on the moving average oscilator and confirmed double bottom formation. These are signs of strength. My advice is to watch for potential buying opportunties. The upward target is set at the price of 1.2885.

Resistance levels:

R1: 1.2885

R2: 1.2910

R3: 1.2945

Support levels:

S1: 1.2810

S2: 1.2785

S3: 1.2750

Trading recommendations for today: watch for potential buying opportunities.

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Daily analysis of major pairs for May 31, 2017

EUR/USD: This pair made a faint bearish attempt on Monday, and then rallied slightly on Tuesday. Needless to say, the rally was helpful enough to help restore the recent bullish bias on the market. There are possibilities of price reaching the resistance lines at 1.1250 and 1.1300 today or tomorrow. However, things would eventually come down.

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USD/CHF: The shallow rally that was seen on Monday has been rejected as soon as price rammed into the EMA 56. Price has been corrected lower. The outlook on the market is bearish, and it would be difficult for price to go seriously upwards this week (in spite of the imminent weakness of EUR/USD); owing to the expected weakness in the Greenback and the expected stamina in CHF.

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GBP/USD: On Monday and Tuesday, there was a weak rally in the context of a downtrend, and that would turn out to be another good opportunity to sell short. Price might reach the accumulation territories at 1.2800, 1.2750, and 1.2700 this week, as it goes more and more bearish. That is the current outlook on GBP/USD.

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USD/JPY: This is a bear market – though things are currently consolidating. The EMA 11 is below the EMA 56, and the RSI period 14 is below the level 50. When momentum returns to the market, it would most probably be in favor of bears. After all, the outlook on JPY pairs is generally bearish for June.

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EUR/JPY: Although the market is currently fluctuating, a short-term bearish signal has been generated on EUR/JPY. The fluctuation would continue this week, as the market goes gradually southward, forming a Bearish Confirmation Pattern on the 4-hour chart. The demand zones 123.50, 123.00, and 122.50, could be tested this week

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Global macro overview for 31/05/2017

Global macro overview for 31/05/2017:

The CB Consumer Confidence data decreased unexpectadly in May. Market participants expected the CB Consumer Confidence (a monthly survey of about 5,000 US households regarding their opinion of the economy) will rise again from the level of 119.4 points to 120.1 points, but it turned out the general mood of the US consumers decreased to 117.9 points. Moreover, April's reading was revised down to 119.4 from initially reported 120.1 points. In the details, we can read that the number of consumers saying business conditions were "good" fell to 29.4% from 30.8% in April, whereas the share of those saying business conditions were "bad" remained unchanged at 13.7%. The number of consumers expecting business conditions to improve over the next six months fell to 21.3% from 25.1% in April, whereas the share of those expecting more jobs to be created over the same period of time declined to 18.6% in May from 21.9% in the preceding month. In conclusion, the general mood among the US consumers deteriorated slightly on May, but it is worth to notice the CB Consumer Confidence index peaked to 17-year highs in March 2017, so this slight deterioration is nothing serious yet. The vast majority of US consumers remain optimistic that the economy will continue expanding into the summer months.

Let's now take a look at the USD/CHF technical picture on the daily time frame. Bulls have tested the technical resistance at the level of 0.9811 and were rejected, so now the price is heading towards the golden trend line support around the level of 0.9650. Please notice, that 50 DMA has crossed 200DMA around the level of 0.9950.

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Global macro overview for 31/05/2017

Global macro overview for 31/05/2017:

The Reserve Bank of New Zealand published its Financial Stability Report (FSR) overnight. The Financial Stability Report is published every six months and it assesses efficiency of the New Zealand financial system. In the latest issue, the main topic was the overheated housing market which is the key challenge to the New Zealand financial system. The Reserve Bank of New Zealand siad: " The outlook for the housing market remains uncertain", but the government is still trying to tighten loan-to-value ratio (LVR) on investment properties. Nevertheless, the real estate values rose 13% last year, which is far more than in the other countries (except Australia). The fasted advance was among homes with price over one million dollars. On the other hand, the RBNZ mentioned other problems. One of them is the bank sector and the other one is the diary sector of the economy, which is a major driver of the country's export sector.

The bank's next FSR report will be released on November 29. If the RBNZ does not cut the interest rates, the outlook for the New Zealand Dollar will remain positive. The more so if the Fed will keep rising interest rates on a more or less regular basis. The biggest threat for NZD is the overheated property market and a possible housing bubble.

Let's now take a look at the NZD/USD technical picture on the daily timeframe. The market is trading above all of the moving averages, but still below the important technical resistance at the level of 0.7129. The market conditions are starting to look overbought and the next technical support is seen at 0.7089 and 0.7036.

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Global macro overview for 30/05/2017

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Global macro overview for 30/05/2017

Ichimoku indicator analysis of USDX for May 31, 2017

The Dollar index strength was short lived as price fell back towards short-term support at 97.25 area. Price remains inside a sideways channel and trading range. We need a clear break above 97.75 or below 97 to see a clear trending move.

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Blue lines - sideways channel

The Dollar index is trading inside the 4-hour Kumo. Trend is neutral as we also mentioned yesterday. Unless the trading range boundaries are broken, we will remain in the range until Friday and the announcement of the NFP data.

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Red line - resistance

Green line - support (broken)

The weekly candles are at important Kumo (cloud) support. I expect a bounce from the 97 area and the Friday NFP data could be the trigger behind the expected Dollar bounce. I would not be bearish at current levels.

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Trading plan for 31/05/2017

Trading plan for 31/05/2017:

Not much changes across the financial markets overnight. The Asian session was noted with low volatility, Shanghai Composite is up 0.2% and the Japanese Nikkei is losing 0.3%. On FX market only the British Pound is losing ground as the YouGov poll for The Times pointed out that Tories could run out of 16 seats to reach a majority in parliament.

On Wednesday 31st of May, the event calendar is quite busy with important economic releases, so global investors will pay attention to PMI Manufacturing data from China, German Unemployment Rate, and Retail Sales data, Net Lendings to Individuals and Mortgage Approvals from the UK, CPI and Unemployment Rate in the Eurozone, Gross Domestic Product from Canada and Pending Home Sales from the US.

EUR/USD analysis for 31/05/2017:

The Consumer Price Index data from the Eurozone are scheduled for release at 09:00 am GMT and market participants expect the annual rate of consumer inflation for the euro area is set to decelerate from 1.9% to 1.5%. The projected 1.5% increase is also moderately below the ECB's target of just below 2.0%. The decrease in inflation was spotted first in the CPI data from Germany and Spain, where the CPI weaken in April (German CPI decreased from 2.0% to 1.4%). Today's data might justify the ECB monetary policy outlook which includes further monetary stimulus and low interest rates.

Let's now take a look at the EUR/USD technical picture on the H4 time frame. The market has bounced from the technical support at the level of 1.1108 and got back inside of the golden channel. Nevertheless, as long as the upper boundary of the channel around the level of 1.1200 is not clearly violated, the corrective cycle continues. The market conditions are oversold and the market is bouncing higher, but the momentum indicator is still below fifty level. Worse than expected data will result in further deterioration towards the next technical support at the level of 1.1075 or below.

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USD/JPY analysis for 31/05/2017:

The Pending Home Sales data are scheduled for release at 02:00 pm GMT and market participants expect a good start of the second quarter with 0.7% gain after -0.8% decrease in the last month. Residential housing construction and existing home sales both fell in April, but if today's data meet the consensus, then it will be close to its highest level since the recession ended. Moreover, if it beats the consensus, then the expectations for the second-quarter GDP growth will increase as well (current expectations for the GDP are a 3.2% increase in output in Q2, sharply above Q1's sluggish 1.2% advance). The equation is simple here: if the data beat, the US Dollar will fly up.

Let's now take a look at the USD/JPY technical picture on the H4 time frame. After the rising wedge formation breakout, the market is trading sideways and no new low or high has been made yet. The golden trend line is still providing a dynamic resistance around the level of 111.15, but the oversold market conditions might suggest another test of the nearest technical resistance at the level of 111.44. The next technical support is seen at the level of 110.54.

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Market Snapshot: SPY (SP500 ETF) gaps up again, but no momentum is present

The US SP500 index (SPY) gapped up at the beginning of the week and made a new higher high at the level of 242.05. Nevertheless, there is no bullish momentum present and the trading conditions look overbought. The price is still trading above all of the moving averages, but there is still an unfilled gap (marked as a gray rectangle) that need to be filled. The next technical support is seen at the level of 240.63.

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Ichimoku indicator analysis of gold for May 31, 2017

Gold price is trading between $1,270-60. Overall Gold bullish strength has weakened. Although we may see a new higher high towards $1,280-90, I do not believe Gold is ready to break above $1,300. I believe it is more probable to see a pullback towards $1,200-$1,230 first.

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Blue lines - trading range

Gold price is holding above the Ichimoku cloud and the kijun-sen on the 4-hour chart. In cloud terms, we are still in a bullish trend. Short-term support is at $1,259. Resistance is at $1,265. Next resistance is at $1,270. Important support levels below $1,259 are at $1,247 and at $1,235.

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Gold price continues to trade around the 61.8% Fibonacci retracement and back inside the daily Kumo. A break to new highs will open the way for a push towards $1,280-90. Daily support is at $1,244 if $1,259 is broken. My longer-term bullish view remains intact even if we make a deeper pullback towards $1,200.The material has been provided by InstaForex Company - www.instaforex.com

Elliott wave analysis of EUR/NZD for May 31, 2017

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Wave summary:

We continue to look for a dip below support seen at 1.5588, ideally closer to 1.5537, to complete the expanded flat correction and setting the stage for a new impulsive rally in wave iii/ towards 1.6655.

Short term, a break above minor resistance seen at 1.5869 and more importantly a break above resistance at 1.6002 will confirm wave iii/ higher is developing.

R3: 1.6088

R2: 1.6002

R1: 1.5869

Pivot: 1.5800

S1: 1.5660

S2: 1.5588

S3: 1.5537 - Target for wave ii/

Trading recommendation:

We are looking for re-buy EUR at 1.5550 or upon a break above 1.5869

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Elliott wave analysis of EUR/JPY for May 31, 2017

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Wave summary:

The low of wave ii was seen at 123.12 just above our ideal target seen at 123.02. We are now looking for a break above minor resistance seen at 124.65, confirming wave iii higher is developing for a rally to above 125.81 for a continuation higher to 134.30.

Short term, we could see a minor dip closer to 123.61 before the next move higher to above 124.65.

R3: 124.93

R2: 124.65

R1: 124.39

Pivot: 124.00

S1: 123.61

S2: 123.45

S3: 123.12

Trading recommendation:

We missed our buying opportunity by just 7 pips. We will buy EUR at 123.65 or upon a break above 124.65.

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Technical analysis of USD/CHF for May 31, 2017

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Overview:

  • The USD/CHF pair is still calling for a strong bearish market from the area of 0.9787 and 0.9847. The bias remains bearish in the nearest term testing 0.9691 or 0.9645. 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. The bearish scenario which suggests that the pair will stay below the spot of 0.9787.
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Daily analysis of USDX for May 31, 2017

USDX struggled to consolidate above the 200 SMA at H1 chart, as the bears were the main driver of the index during Tuesday's session. Currently, it's targeting the support zone of 96.90 with bearish projections towards the 96.25 level. To the upside, the next resistances are still placed around 97.41 and 98.11. MACD indicator still supports the bearish's 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 at 96.90, take profit is at 96.25 and stop loss is at 97.56.

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Daily analysis of GBP/USD for May 31, 2017

GBP/USD woke up from the thin trading action witnessed on Monday's session and it's challenging the resistance zone of 1.2866. A breakout over there can help to extend the corrective move towards 1.2911, which is slightly above the 200 SMA at H1 chart. By the other hand, if the level of 1.2791 gives up, then a continuation lower should happen to test the 1.2718 level.

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H1 chart's resistance levels: 1.2866 / 1.2911

H1 chart's support levels: 1.2791 / 1.2718

Trading recommendations for today: Based on the H1 chart, sell (short) orders only if the GBP/USD pair breaks a bearish candlestick; the support level is at 1.2791, take profit is at 1.2718 and stop loss is at 1.2865.

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Daily analysis of USD/JPY for May 30, 2017

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Overview

The USD/JPY pair did not show any strong moves yesterday and remained near to the bearish channel's resistance. Thus, we expect no change in the bearish scenario that depends on holding below 111.60, supported by the EMA50 and stochastic's negativity. Now we are waiting until the pair visits 109.00 as the first target. Breaking the targeted level represents the key to extend the bearish wave towards 106.63, while breaching 111.60 will push the price to turn to rise on the intraday basis to test 113.97 mainly. The expected trading range for today is between 110.00 support and 112.00 resistance.

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Daily analysis of GBP/JPY for May 30, 2017

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Overview

The GBP/JPY pair made a new negative close below the neckline of the double top at 143.30. We could notice a new negative level by reaching 141.80. We expect a new round of bearish attempts in the near and medium term to target 38.2% Fibonacci correction level at 140.20. A sharp decline of Stochastic from 20 level reinforces bearish expectations, which provides extra negative momentum that makes the pair resume bearish attempts until achieving the suggested target. The expected trading range for today is between 142.75 and 140.20.

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Daily analysis of Gold for May 30, 2017

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Overview

Gold price is fluctuating within a tight range keeping its stability above the bullish channel's support. Please be aware that stochastic begins to provide a positive overlapping signal on the chart of the four-hour time frame. This cements expectations of a further bullish trend that gains continuous positive support from the EMA50. Therefore, we are waiting for the upward bias today. Let me remind you that our next main target is located at 1,295.37. Since it is achieved, it enables the price to hold above 1,263.00. The expected trading range for today is between 1,250.00 support and 1,280.00 resistance.

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USD/JPY remains bearish below our major resistance

We remain bearish below major resistance at 111.43 (Fibonacci retracement, horizontal overlap resistance) for a further push down to 110.21 support (Fibonacci extension, horizontal swing low support).

RSI (34) sees a bearish exit made signalling that we should be seeing further bearish movement.

Correlation analysis: We're expecting general JPY weakness, so we need to exercise caution on USD/JPY's drop.

Sell below 111.43. Stop loss at 112.13. Take profit at 110.21.

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AUD/USD testing major support, remain bullish

Price is testing major support and hovering around that level. We remain bullish above 0.7441 support (Fibonacci retracement, horizontal swing low support) for a push up and reintegration into the bullish channel for a rise to at least 0.7510 resistance (Fibonacci retracement, Fibonacci extension, horizontal overlap resistance).

Stochastic (34,5,3) is seeing strong support above the 5.1% where stochastic is bouncing up nicely from.

Correlation analysis: AUD/USD has a strong positive correlation with NZD/USD which means they usually move together. We are expecting a bounce on AUD/USD but a drop on NZD/USD. Hence, it is best to exercise caution on this trade.

Buy above 0.7441. Stop loss at 0.7397. Take profit at 0.7510.

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Daily analysis of Silver for May 30, 2017

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Overview

Silver price has settled at the key resistance of 17.43, and the metal is showing sideways trading in an attempt to get rid of its negative momentum. Silver aims to gather enough positive momentum so that the price is pushed to breach the mentioned level. Now we are waiting until the bullish wave is extended to reach 18.30 as the next main station. In general, the bullish trend will remain valid for the upcoming period unless breaking 17.00 followed by 16.56 levels and holding below them. The expected trading range for today is between 17.20 support and 17.60 resistance.

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