EUR/USD analysis for June 01, 2017

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Recently, the EUR/USD pair has been trading upwards. The price tested the level of 1.1256. Anyway, I found a fake breakout of yesterday's high and a strong divergent bar, which is a sign that buying look risky today. There is also a bearish divergence on the moving average oscillator, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward target is set at the price of 1.1170 (yesterday's low).

Resistance levels:

R1: 1.1250

R2: 1.1270

R3: 1.1300

Support levels:

S1: 1.1180

S2: 1.1165

S3: 1.1130

Trading recommendations for today: consider potential selling opportunities.

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GBP/USD analysis for June 01, 2017

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Recently, the GBP/USD pair has been trading upwards. As I expected, the price tested the level of 1.2921. Anyway, according to the 30M time frame, I found a fake breakout of Tuesday's high and a strong divergent bar, which is a sign that buying look risky today. My advice is to watch for potential selling opportunities. The downward target is set at the price of 1.2770 (yesterday's low).

Resistance levels:

R1: 1.2915

R2: 1.2950

R3: 1.3005

Support levels:

S1: 1.2800

S2: 1.2765

S3: 1.2705

Trading recommendations for today: watch for potential selling opportunities.

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Intraday technical levels and trading recommendations for NZD/USD for June 1, 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.

As anticipated, the current bullish breakout above 0.6960 enhanced further bullish movement towards 0.7100.

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

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Intraday technical levels and trading recommendations for USD/CAD for June 1, 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, a 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, a 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 continues trading above 1.3450-1.3500 (confluence of prominent tops and the recent uptrend line), the market remains bullish. Otherwise, a 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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Technical analysis of NZD/USD for June 01, 2017

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Overview:

  • The NZD/USD pair is in a bullish trend from the support levels of 0.7001 and 0.7053. Hence, the first and second support levels are seen at 0.7053 and 0.7001 respectively. Currently, the price is in a strong 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), major support is seen at 0.7005, which coincides with a golden ratio (61.8% of Fibonacci retracement levels). Consequently, the second support is set at the level of 0.7001. So, the market is likely to show signs of a bullish trend around the spot of 0.7001/0.7053. In other words, buy orders are recommended above the level of 0.7053 with the first target at the level of 0.7121. Furthermore, if the trend is able to breakout through the first resistance level of 0.7121, we should see the pair climbing towards the second resistance (0.7166) to test it. It would also be wise to consider where to place a stop loss; this should be set below the second support of 0.7001.
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Technical analysis of USD/CHF for June 01, 2017

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Overview:

  • Pivot point : 0.9739.
  • The USD/CHF pair is still indicating a strong bearish market from the area of 0.9787 and 0.9739. 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 0.9739, while daily support 1 is seen at 0.9691. The USD/CHF pair broke support which turned into 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. According the previous events, the USD/CHF pair is still moving between the levels of 0.9787 and 0.9645. Consequently, 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. The bearish scenario which suggests that the pair will stay below the spot of 0.9787. So, the stop loss should be placed at the price of 0.9815.
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Daily analysis of major pairs for June 1, 2017

EUR/USD: The EUR/USD pair went upwards to test the resistance line at 1.1250 several times, but unable to break it to the upside. The resistance line would eventually be broken, as price targets another resistance line at 1.1300. Some fundamental reports due later today and they will make an impact on the market.

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USD/CHF: The shallow bullish effort on this pair was quickly rejected once it tested the resistance level at 0.9800 (in the context of a downtrend). Price has dropped 120 pips since then, now below the resistance level at 0.9700. A further bearish movement is possible, especially as long as the EUR/USD pair goes upwards. The EUR/USD pair could eventually go downwards, and that is when USD/CHF would rally.

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GBP/USD: The Cable has become a very volatile market with no clear direction in the short term. The EMAs 11 and 56, and the RSI period 14, are giving a conflicting signals. Thus, it is OK to stay away from the market right now, until there is a clear directional movement, which would be established before the end of this week or early next week.

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USD/JPY: This is a short-term bear market, though the market has not gone seriously downwards this week. The EMA 11 is below the EMA 56, and the RSI period 14 is below the 50 level. Given the bearish expectation on the JPY pairs for this week and the month of June 2017, the pair is supposed to continue going downwards when momentum returns to the market.

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EUR/JPY: This cross went upwards yesterday, and this has almost generated a new "buy" signal on the 4-hour chart. The EMA 11 has almost crossed to the EMA 56 to the upside and the RSI period 14 is already above the level 50. This means that a Bullish Confirmation Pattern would be generated once price goes above the supply zone at 125.50.

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USD/JPY analysis for May 31, 2017

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USD/JPY analysis for May 31, 2017

Global macro overview for 01/06/2017

Global macro overview for 01/06/2017:

The Fed's Beige Book data appears to support the interest rate hikes in the future, but the Devil is in the details. The latest Federal Reserve Summary on Current Economic Conditions (Beige Book) said the economy expanded at a "modest to moderate" pace through late May but that growth slowed in some regions. The manufacturing sector continued to expand at a modest pace and there was steady growth in most non-financial services sectors. The decline was noted in consumer spending, that softened in many states. The job market is still performing well among all other sectors of the economy as most US states reported that employment continued to grow at a modest to moderate pace. Wages are not growing as fast as expected, but most of the companies reported a willingness to increase wages where workers shortages were most severe. Nevertheless, in the near future, the tight job market should provide a boost to the wage growth, but for now, there is still no official uptrend in wages. Last, but not least, the FED is concerned about a lack of inflationary pressures despite the increase in final demand prices.

In conclusion, the Beige Book report might start raising questions about whether the FED will rethink its strategy after an expected increase in interest rates in mid-June. Despite a tight labour market, a lack of inflation grow and poor wages growth might indicate a pause in the interest rate hike cycle expected further this year. This would indicate the US Dollar's further depreciation after a failure on the highly anticipated Trump's economic reforms.

Let's now take a look at the US Dollar Index technical picture on the H4 time frame. The market is trading below all of the moving averages, close to the important support at the level of 96.80. Momentum indicator points down and the next support is seen at the level of 95.91. On the other hand, the nearest technical resistance is seen at the level of 97.20 and 97.80.

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Global macro overview for 01/06/2017

Global macro overview for 01/06/2017:

An abrupt contraction of activity among small industrial companies in China puts the pressure on markets. The Chinese Caixin PMI index fell to 49.6 points and it was below 50 points for the first time in 11 months (reading above means expansion of the sector). This came as a surprise as yesterday (governmental) PMI for large companies sustained April's level at 51.2, a decent growth rate of activity. Prior to the latest drop, China's manufacturing sector remained in an expansion cycle for ten straight months. The data showed only a small rise in a production output and new orders amid a renewed drop in input prices and output charges. The sub-indices of output and new business weakened to their lowest level since last June. Moreover, employment fell at the fastest pace since September.

In conclusion, the debate over how much government data can be trusted is not new and the data may be a reason to worry that the Middle East is a worse condition than the statistics shows. China's manufacturing sector has come under pressure and it might be an early sign of the beginning of a slowdown. The currencies with the greatest ties to the Chinese economy, like AUD and CAD, will be affected the most by the slowdown and might drop even further if the situation gets worse.

Let's now take a look at the AUD/USD technical picture on the H4 time frame. The price is trading just above the golden channel upper boundary after a false breakout towards the level of 0.7515. There is still a room for a further downside move. The next support is seen at the level of 0.7388 and then at the level of 0.7328.

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Fundamental analysis of AUD/USD for June 1, 2017

The bearish trend in AUD/USD seems to continue again after a corrective growth towards the resistance at 0.75. Today the Australian AIG Manufacturing Index was published with a reduced figure at 54.8 which previously was at 59.2. The Australian Private Capital Expenditure showed a rise of 0.3% which previously was at -1.0%. These reports put the aussie under pressure. Besides, the Australian Retail Sales report showed a growth of 1.0% which was expected to be at 0.3%. Previously, the reading was at -0.2%. Though Australia published mixed reports today, AUD could not gain against USD. A spike and rejection of the bulls in the market signal that USD may extend profits against AUD in the future. The United States will unveil the ADP Non-Farm Employment Change data which is an important economic indicator as it represents the conditions in the jobs market. Currently the positive figure is expected to be at 181k which previously was at 177k. The unemployment claims report is also going to be published. It is expected to rise to 239k from the previous value of 234k. If the Unemployment reports comes positive, further USD gains in this pair can be observed in future. Along with the employment reports, the ISM Manufacturing PMI is due to be delivered today which is expected to have a slight change to 54.7 from 54.8. Furthermore, the Crude Oil Inventories report is expected to show a lower deficit to -2.7M which was at -4.4M previously. Overall, a good number of economic reports is going to be published on the USD side which is expected to help USD to gain more against the AUD today. Though a good amount of volatility can be observed during the economic events, USD is expected to have an upper hand over AUD.

Now let us look at the technical view. The price is currently below 0.7420 after rejecting off 0.7500 resistance area. The volatile bearish trend is developing. The price is currently expected to reach 0.7160 support level if it remains below 0.7420 with a daily close today. The bearish bias will continue as long as the price holds below 0.7500.

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Ichimoku indicator analysis of USDX for June 1, 2017

The Dollar index remains above support at 97. I continue to favor at least a short-term bounce towards 99. I'm not bearish at current levels and at least I prefer to be neutral.

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Blue lines - trading range

The Dollar index is below the Kumo (cloud). Support is at 97. Resistance is at 97.30-97.40 and next at 97.70. I continue to expect a stronger bounce towards 99 but for that to happen we will need confirmation with a break above 97.70.

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Red line - resistance

Green line - broken long-term support

The Dollar index is still trading on top of the weekly Kumo(cloud) support. This level should produce at least a short-term bounce before price moving lower. Maybe tomorrow's NFP report will be the trigger.

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Ichimoku indicator analysis of gold for June 1, 2017

Gold price has reached the upper trading range boundary resistance and is pulling back down. Short-term traders could try and profit from short positions with tight stops at $1,275 as a pullback towards the lower boundary level is justified.

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Blue lines - trading range

Gold price got rejected at the upper blue trading range boundary. Price remains above both the tenkan- and kijun-sen indicators. Trend remains bullish. As said in previous posts, we could see a slow grind higher but overall I expect price to pull back towards $1,255.

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Gold price remains inside the daily Kumo (cloud). Trend is neutral. Price is expected to pull back at least towards the lower cloud boundary and just below the 38% Fibonacci retracement around $1,244. My longer-term view remains bullish but I do not see the bullish breakout to happen soon.The material has been provided by InstaForex Company - www.instaforex.com

Trading plan for 01/06/2017

Trading plan for 01/06/2017:

After the poor data from China, AUD was heavily sold. The Shanghai Stock Exchange moved down, but the rest of the indexes are trading flat. GBP/USD is coming down from the highs as the political issues are setting the tone for trade. Crude Oil rebounded after better-than-expected stockpiles data.

On Thursday 1st of June, the event calendar is quite busy with important news releases, so global investors will pay attention to PMI Manufacturing data from the Eurozone and the UK, ADP Non-Farm Employment Change, Unemployment Claims, and ISM Manufacturing PMI from the US.

GBP/USD analysis for 01/06/2017:

The PMI Manufacturing from the UK data are scheduled for release at 08:30 am GMT and market participants expect a slight decrease from 57.3 points last month to 56.5 points for the month of May. Importantly, April saw a substantial upside surprise with the PMI rising to a 3-year high of 57.3 points, so a slight decline from the highs is not the end of the world. Since consumer spending is looking softer, the UK will need to see more growth from the manufacturing sector to compensate, which should be supported by a softer Pound and stronger foreign demand. If today's data will meet the expectations, then some profit taking might occur on GBP main pairs and crosses.

Let's now take a look at the GBP/USD technical picture on the H4 time frame. The price has tested the golden trend line resistance from below and reverse. Currently, the price is trading close to the old known supports levels at 1.2828 and 1.2844, but the most important support is seen at the level of 1.2772. Any breakout below this level would lead to the test of another support at the level of 1.2706. The momentum indicator are still trading around the fifty level, but stochastic is bouncing from the oversold zone.

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EUR/USD analysis for 01/06/2017:

The ADP Non-Farm Employment Change and Unemployment Claims from the US are scheduled for release at 12:30 pm GMT and market participants expect a tick down on the US job market. The number of unemployed people in the US is expected to increase slightly from 234k to 239k and the number of newly employed people in the US, excluding workers in the farming industry, is expected to increase slightly from 177k to 181k people. The Continuing Claims (unemployed workers that qualify for benefits under unemployment insurance) are expected to be a tad lower, down from 1923k to 1920k. It looks like the general outlook for the US job market remains solid and today's and tomorrow's data should continue to provide a good justification for FED to hike the interest rates in June.

Let' now take a look at the EUR/USD technical picture on the H4 time frame. The bulls have managed to break out of the flag pattern, but the price is still trading below the important resistance at the level of 1.1266. A breakout higher will open the road to the level of 1.13000 and this might be the level of reversal because the momentum indicator shows little interest in the higher prices and the bearish divergence is forming. Only a way worse than expected data would send the EUR/USD pair soaring above the 1.1300 level toward the important technical resistance at the level of 1.1363.

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Market snapshot: Crude Oil bounce from 50% Fibo

The price of Crude Oil has bounced from the 50% Fibo at the level of $47.88, which creates strong support together with two technical levels at $48.01 and $48.24. The momentum indicator is showing a bullish divergence in this time frame, so a further rebound is expected. In order to rally, the price must breakout above the psychological level of $50.00, otherwise, it will get back to the range.

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Fundamental Analysis of EUR/AUD for June 1, 2017

EUR/AUD has been in a non-volatile bullish trend recently which has surpassed and retested 1.51 recently. Today, Australian AIG Manufacturing Index was released with a worse figure of 54.8 from 59.2 previously, Private Capital Expenditure showed a rise to 0.3% from -0.1% which has affected by the currency growth but Retail Sales report showed growth of 1.0%, much stronger than the forecast for a 0.3% rise. The Retail Sales report is seen as a gauge of consumer spending which has a positive impact. Nevertheless, some bearish pressure is observed in the pair currently. On the Euro side, today Spanish Manufacturing PMI is due later which is expected to show a rise to 54.9 from 54.5 previously, Italian Manufacturing PMI is expected to be roughly the same at 56.1 which was 56.2 earlier, French Final Manufacturing PMI is expected to be unchanged at 54.0 whereas German Final Manufacturing PMI is expected to be unchanged at 59.4 and Eurozone Final Manufacturing PMI is also expected to remain flat at 57.0. Though the reports from the eurozone have not been released yet, but the most of forecasts suggest flat readings, any positive changes in these fundamental data could enable growth of AUD and promote gains of EUR in the coming days. The market is currently in a bullish bias which is expected to remain steady until Australia presents some positive reports in the future.

Now let us look at the technical chart. The price is currently in a non-volatile bullish trend which has recently broke above 1.5100 resistance level. Currently the price is expected to show some corrective moves along the way towards 1.5650 resistance. As the price remains above 1.4900, we will be in a bullish bias with a target towards 1.5650 until price breaks below 1.4900 with a daily close.

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Trading Plan for EUR/USD and GBP/USD for June 01, 2017

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Technical outlook:

The EUR/USD pair continues to probe a meaningful lower high before reversing lower again. The pair has inched higher a bit and printed a lower high at 1.1254 levels today before retracing lower. Please note that the rally from 1.1162 levels yesterday still looks to be corrective in nature, completing 3 waves a-b-c as labelled here. Looking at the entire wave count on the hourly chart, EUR/USD might have carved A and B waves of the corrective drop that began from 1.1263 levels earlier. If this wave count holds true, the pair should be looking to print lower lows and lower highs going forward. A break below 1.1230 levels and subsequent break below the interim support trend line further confirms our bearish outlook. The pair should be on its way to complete 3-3-5 A-B-C wave structure before finding support around 1.1000 levels. On the flip side though, a break of 1.1263 levels would delay matters further for a bearish decline.

Trading plan:

Remain short, stop above 1.1263 levels, targeting 1.1000 at least.

GBPUSD chart setups:

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Technical outlook:

The GBP/USD hit above 1.2925 levels yesterday as expected and discussed. Please note that the pair hit the back side of the support turned resistance trend line at 1.2925 levels and reversed lower again. It is quite possible that GBP/USD has found a meaningful top around these levels. If so, prices should continue drifting lower gradually towards 1.2600 and 1.2350 levels respectively. On the other side, the pair can also push higher towards 1.2950 levels, hitting fibonacci 0.618 resistance and then dropping lower. In either case, GBP/USD should remain below 1.3047 levels if bears want to remain in control. Immediate resistance is seen at 1.3047 levels, while interim support is seen at 1.2775 levels respectively. Selling on rallies should be considered as a preferred trading strategy.

Trading plan:

Holding shorts from 1.2900/25 yesterday, stop above 1.3047, target 1.26 and 1.23 respectively.

Fundamental outlook:

Watch out for USD ISM Manufacturing numbers at 10:00 AM EST today.

Good luck!

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Elliott wave analysis of EUR/NZD for June 1, 2017

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Wave summary:

The break above minor resistance seen at 1.5869 was the first indication that wave ii/ completed early in a running flat instead of the expected dip below 1.5588 in an expanded flat. To confirm that wave iii/ is indeed developing, we still need to see a break above 1.6002, but once seen that will call for a continuation higher towards 1.6655 as the next upside target.

R3: 1.6157

R2: 1.6088

R1: 1.6002

Pivot: 1.5900

S1: 1.5800

S2: 1.5773

S3: 1.5689

Trading recommendation:

We are long EUR from 1.5869 and will place our stop at 1.5650.

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Elliott wave analysis of EUR/JPY for June 1, 2017

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Wave summary:

The break above minor resistance seen at 124.65 has confirmed that wave iii/ higher towards at least 127.50 now is developing. Short term, we should see support in the 124.53 - 124.65 area protecting the downside for a continuation higher to and above 125.81 for the rally higher to 127.50 as the next minor upside target.

R3: 125.81

R2: 125.50

R1: 125.18

Pivot: 125.00

S1: 124.65

S2: 124.53

S3: 124.12

Trading recommendation:

Again we missed the buying opportunity at 123.65 by just 7 pips, but instead bought EUR at 124.65 and stop will be placed at 124.10.

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