EUR/USD drops perfectly and remains bearish

EUR/USD has reached our selling area and reversed perfectly as expected. We remain bearish below the major resistance at 1.1264 (Fibonacci extension, horizontal swing high resistance) for a further drop towards 1.1159 support (Fibonacci retracement, horizontal overlap support).

Stochastic (55,5,3) has reversed nicely off our 95% resistance and has good downside potential.

Sell below 1.1264. Set stop loss at 1.1301 and take profit at 1.1159.

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AUD/JPY bounces perfectly and remains bullish

AUD/JPY has dropped to our buying area and bounced off perfectly. We remain bullish above the major support at 81.90 (Fibonacci extension, horizontal swing low support, bullish divergence) and we expect a strong bounce above this level to at least 82.90 resistance (Fibonacci retracement, horizontal swing high resistance).

Stochastic (34,5,3) is seeing strong support above the 8% level and also sees bullish divergence vs price signalling that a bounce is impending.

Correlation analysis: We're expecting overall JPY strength today in the USD/JPY and EUR/JPY pairs, hence it is best to exercise caution on this trade.

Buy above 81.90. Set stop loss at 81.67 and take profit at 82.90.

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USD/JPY profit target reached perfectly, time to start selling

USD/JPY has shot up and reached our profit target perfectly. We prepare to sell below major resistance at 111.62 (Fibonacci retracement, minor pullback resistance) for a drop towards at least 110.49 support (Fibonacci extension, horizontal swing low support).

Stochastic (55,5,3) is approaching major resistance at 94% where we have seen the multiple price reaction.

Correlation analysis: We're expecting general JPY weakness with drops expected on EUR/JPY and USD/JPY.

Sell below 111.62. Set stop loss at 112.18 and take profit at 110.49.

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EUR/USD analysis for June 02, 2017

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Recently, the EUR/USD has been trading downwards. As I expected, the price tested the level of 1.1202. According to the 30M time frame, I found a broken bearish flag, which is a sign of bearish continuation. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.1200 and 1.1170.

Resistance levels:

R1: 1.1245

R2: 1.1280

R3: 1.1300

Support levels:

S1: 1.1190

S2: 1.1169

S3: 1.1135

Trading recommendations for today: watch for potential selling opportunities.

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GBP/USD analysis for June 02, 2017

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Recently, the GBP/USD has been trading sideways at the price of 1.2850. Anyway, according to the 30M time frame, I found confirmed resistance at the price of 1.2915, which is a sign that buying looks risky. My advice is to watch for selling opportunities. There is also a divergent bar in the background, which is another sign of weakness. The downward targets are set at the price of 1.2830 and 1.2770.

Resistance levels:

R1: 1.2925

R2: 1.2960

R3: 1.3000

Support levels:

S1: 1.2840

S2: 1.2790

S3: 1.2755

Trading recommendations for today: watch for potential selling opportunities.

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Intraday technical levels and trading recommendations for USD/CAD for June 2, 2017

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Since April 2016, the USD/CAD pair has been trending upwards 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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Intraday technical levels and trading recommendations for NZD/USD for June 2, 2017

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In December 2016, a bullish breakout above 0.6960-0.7000 allowed the pair to head towards the price level of 0.7100 (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 towards 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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Global macro overview for 02/06/2017

Global macro overview for 02/06/2017:

Purchasing Manager's Index (PMI) by the Chartered Institute of Purchasing and Supply (CIPS) Construction from the UK surprised market participants. Investors expected a worse PMI in the construction sector at 52.7 points from 53.1 points, but the print revealed was at the level of 56.0 points. This is another set of a good data from the UK that was released this week and the biggest contributor was the housing market. The residential work replaces civil engineering as the best performing category. The latest survey also revealed a sustained recovery in new construction work, following the soft patch sawn during the first quarter of 2017.

Interestingly, the fresh score is the highest level since January 2016. Let's not forget that a reading above 50 indicates expansion in the construction industry; a reading below indicates contraction. It indicates health of the construction section in the UK. Moreover, Construction PMI is a leading indicator of overall economic performance, so it can give an early glimpse of the economic conditions.

Let's take a look at the GBP/JPY technical picture on the H43 time frame. The price failed to break out above the golden channel upper trend line and now the market is reversing. The overall reaction for data is muted amid expectations for data from the US labor market. The next support is seen at the level of 143.08 and the next resistance is seen at the level of 144.05.

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Ichimoku indicator analysis of USD/CAD for June 2, 2017

The USD/CAD pair has made an important low at 1.3385 area and a clear reversal. Trend is bullish. Price is making higher highs and higher lows. I expect to see 1.36 even today and higher towards 1.39 over the coming weeks.

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Blue line - broken resistance TL

The USDCAD has broken above the trend line and Kumo resistance. Short-term resistance is now at 1.3540 where a previous high is found and next at 1.3630. Support is at 1.35 and next at 1.3475.

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Red lines - bullish channel

The USD/CAD pair is holding above the daily Kumo and is reversing off the 61.8% Fibonacci retracement of the latest rise. Bouncing off this support area is a very important bullish sign that cements my view for a move towards 1.39-1.40 in June.

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Global macro overview for 02/06/2017

Global macro overview for 02/06/2017:

The latest Energy Information Administration (EIA) data reported bigger than expected draw in Crude Oil inventories. Market participants expected an inventory draw of -2,700k barrels after a slump of -4,432k barrels last week, but the draw was even bigger than expected and it was at the level of -6,428k barrels and it was the largest draw this year. The Crude Oil inventories declined to 50,990k barrels and are at the lowest level for close to 4 months. This data was a relief for the producers as it means there will be a sustained reduction over the next few weeks. After the production cuts were extended again by OPEC and non-OPEC countries in late May this year for another nine months, the oil ministers including Saudi Arabia's Khalid al-Falih confirmed deeper curbs had been debated. The current proposal is to cut OPEC's supply by about 300,000 barrels per day (bpd). In the result, it would cut the overall monthly production by 32 million bpd and increase the total of OPEC cut from 1.2 million bpd to 1.5 million bpd.

In conclusion, OPEC still expects the production cuts to help to get rid of the supply glut that should ease in the next few months as they perceive the economic fundamental to be close to the balance. Nevertheless, if this situation on the oil market extends further, OPEC will have to introduce even more drastic measures at its next meeting in November. The price of the Crude Oil is still being affected by various news from the financial media stream but keeps oscillating around the $50 level.

Let's now take a look at the Crude Oil technical picture on the H4 time frame. The reaction for news wasn't so strong as expected, as the bulls couldn't break above the $50.00 level. Currently, the price has violated the technical support at the level of $48.01 and is heading towards the next support at the level of $46.90.

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Ichimoku indicator analysis of EUR/USD for June 2, 2017

EUR/USD is making higher highs and higher lows but there are several warning signs in both the 4-hour and daily charts implying a pullback is imminent towards 1.1050 at least.

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Orange line - horizontal resistance

EUR/USD is trading above the 4-hour Kumo but has made a double top rejection so far at the 1.1260 area. The RSI provides negative divergence. We could see a new higher high but overall I expect EUR/USD to give a sell signal by breaking back inside the Kumo at 1.12 and moving lower.

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Blue lines - bullish channel

Red line - long-term trend line support

On a daily basis, EUR/USD is trading inside a bullish channel. Trend is bullish. However, short-term indicators point to a pullback towards at least the lower channel boundary above 1.1050 before the resumption of the uptrend. There are daily divergence signs supporting this view.

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Ichimoku indicator analysis of USDX for June 2, 2017

The Dollar index remains above critical support at 97. Price held support yesterday and is bouncing towards short-term resistance. Trend remains bearish and there is still no confirmation of a trend change. We could see a trend reversal today after the NFP.

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Blue lines - trading range

The Dollar index is trying to get back inside the neutral trend zone of the Ichimoku cloud in the 4-hour chart. Resistance is here at 97.20-97.30. Next important resistance is at 97.50. A breakout and above the cloud could be a trend reversal signal.

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Red line - resistance

Green line - broken trend line support

The Dollar index is at important weekly support. A bounce of this area is expected. The target is the broken green trend line or the downward sloping red trend line. I would not be bearish on the Dollar at current levels. I would prefer to short the Dollar after a strong bounce.

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Ichimoku indicator analysis of gold for June 2, 2017

Gold price is pulling back as expected. Price is now testing important short-term support. If this support fails to hold, we should expect Gold price to move towards $1,245. My target for a pullback has been for some time this level and I continue to believe that Gold is not yet ready for a break above $1,300.

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Blue lines - trading range

Gold price has broken below both the tenkan- and kijun-sen indicators and is testing the 4-hour Kumo (cloud) support. We could see a bounce towards the tenkan- and kijun-sen today but overall I do not believe the pullback is over yet. Critical 4-hour support at $1,250.

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On a daily basis Gold price is getting rejected off the upper Kumo boundary. Price is expected to pull back towards at least the 38% Fibonacci retracement level at $1,250 while I give a lot of chances of seeing the lower cloud boundary at $1,244. I remain longer-term bullish

about Gold.

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Trading plan for 02/06/2017

Trading plan for 02/06/2017:

Strong data from ADP and ISM are supporting the US Dollar, but the market is in the waiting mode ahead of the key event of the week, Non-Farm Payrolls report. USD/JPY climbs above 111.50, followed by the Nikkei breaking 20,000 for the first time since December. Gold weakens under strong Dollar pressure and WTI crude oil is unable to hold higher.

On Friday 2nd of June, the event calendar is busy with important news releases, so global investors will pay attention to PMI Construction data from the UK, Producer Price Index from the Eurozone, Trade Balance from Canada and Unemployment Rate and Non-Farm Payrolls data from the US.

EUR/USD analysis for 02/06/2017:

The key event of the day is the US job market data scheduled at 12:30 pm GMT. Market participants expected the Unemployment Rate to stay unchanged at the level of 4.4% and the Non-Farm Employment Change to drop from 211k jobs to 181k jobs. Nevertheless, besides the headline Non-Farm Payrolls data, market participants will take notice of the Average Hourly Earnings that should decrease from 0.3% to 0.2% and Participation Rate that should remain close or above 62.9%. The expected NFP figure would be close to the average monthly gain seen during the past couple of years, and certainly, enough for the Federal Reserve to view the labour market as healthy and still improving (which in turn justifies the interest rate hike). On the other hand, wages keep improving, but there are no signs of upward pressure for wages to rise more. Moreover, the latest inflation reading was below expectations and remains a concern for the FED. If today's data beats the expectations, then the US Dollar will have a chance to rally across the board.

Let's now take a look at the EUR/USD technical picture on the H4 time frame. Currently, the price is trading sideways as it awaits the NFP data. If the NFP beats the expectations, then a sell-off is expected towards the technical support at the level of 1.1108. If the NFP report is worse than expected, then EUR/USD might rally towards the nearest technical resistance at the level of 1.1266 and 1.13000 and even higher.

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Market snapshot: GBP/USD fails to rally again

The bulls were trying to break out above the golden trend line resistance again, but they failed and now the price is turning back towards the level of 1.2828. The level of 1.2920 is the key technical resistance for the price. As long as the price trades below it, the chances for another sell-off are increasing.

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Market snapshot: Gold fails to extend the rally

The price of Gold has broken above the technical resistance at the level of 1,270, but the breakout was false and short-lived. Currently, the price is trading near the important support at the level of 1,259. If this level is clearly violated, then the next technical support will be seen at the level of 1,245. Please notice the clear bearish divergence between the price and the momentum oscillator that supports the bearish bias.

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Intraday technical levels and trading recommendations for NZD/USD for June 1, 2017

Forex analysis review
Intraday technical levels and trading recommendations for NZD/USD for June 1, 2017

USD/JPY approaching profit target, prepare to buy above major support

The price has been dropping perfectly towards our profit target. We prepare to buy above major support at 110.21 (Fibonacci extension, horizontal swing low support, bullish divergence) for a push up to the 111.43 resistance (Fibonacci retracement, horizontal overlap resistance).

The RSI (34) is displaying bearish divergence, while the price signalling that a bounce is impending.

Correlation analysis: We are expecting general JPY weakness on AUD/JPY and USD/JPY so this goes in line with our view.

Buy above 110.21. Stop loss at 109.72. Take profit at 111.43.

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AUDJPY approaching major support, prepare to buy

The price is approaching major support at 81.90 (Fibonacci extension, horizontal swing low support, bullish divergence) and we expect a strong bounce above this level to at least the 82.53 resistance (Fibonacci retracement, horizontal overlap resistance).

Stochastic (34,5,3) is seeing strong support above the 8% level and bullish divergence, while the price is signalling that a bounce is impending.

Correlation analysis: We are expecting general JPY weakness with USD/JPY similarly expecting a bounce from the key level.

Buy above 81.90. Stop loss at 81.67. Take profit at 82.53.

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