Technical analysis of USD/JPY for July 17, 2017

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USD/JPY is under pressire. The pair has recorded lower tops and lower bottoms since July 14, which confirms a negative outlook. The declining 50-period moving average is playing a resistance role. The relative strength index is below its neutrality level at 50.

Therefore, as long as 112.85 holds on the upside, look for a further downside to 112.25 and even to 111.90 in extension

Alternatively, if the price moves in the opposite direction than predicted, a downside long position is recommended above 112.85 with a target at 113.15.

Chart Explanation: The black line shows the pivot point. The current price above the pivot point indicates a bullish position while the price below the pivot point is a sign for a short position. The red lines show the support levels and the green line indicates the resistance level. These levels can be used to enter and exit trades.

Strategy : SELL , Stop Loss: 112.85, Take Profit: 112.25

Resistance levels: 113.15, 113.55, and 113.95

Support levels: 112.25,111.90, and 111.45

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Technical analysis of USD/CHF for July 17, 2017

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USD/CHF is expected to trade in a lower range as the pair is under pressure. The pair retreated from 0.9700 (the high of July 14) and broke below its 20-period and 50-period moving averages. In addition, the bearish cross between 20-period and 50-period moving averages has been identified, which indicates a negative signal. The relative strength index is bearish below its neutrality level at 50.

To conclude, below 0.9660, look for a new drop to 0.9585 and even to 0.9570 in extension.

Chart Explanation: The black line shows the pivot point; the present price above pivot point indicates the bullish position and below pivot points indicates the short position. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Strategy: SELL, Stop Loss: 0.9660, Take Profit: 0.9585

Resistance levels: 0.9675, 0.9700, and 0.9750

Support levels: 0.9585, 0.9570, and 0.9525

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Technical analysis of GBP/JPY for July 17, 2017

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GBP/JPY is expected to trade with a bearish outlook. The pair broke above its 20-period moving average but is still capped by the 50-period one. The relative strength index is below its neutrality level at 50 and lacks upward momentum. In addition, 147.60 is playing a key resistance role, which should limit the upside potential.

As long as 147.60 holds on the upside, the pair is likely to return to its next support at 146.60. A break below this level would call for a further decline towards 146.00.

Alternatively, if the price moves in the opposite direction as predicted, a long position is recommended above 147.60 with the target at 148.10.

Chart Explanation: the black line shows the pivot point. The price above pivot point indicates the bullish position and when it is below pivot points, it indicates a short position. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Strategy: SELL, Stop Loss: 147.60, Take Profit: 14.60.

Resistance levels: 148.10, 148.50, and 149.05

Support levels: 146.60, 146.00, and 145.50

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Technical analysis of NZD/USD for July 17, 2017

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NZD/USD is expected to trade with a bearish outlook. The pair broke below its former key support at 0.7370, which becomes a key resistance now, and is consolidating on the downside. The relative strength index is below its neutrality level at 50 and lacks upward momentum. The declining 50-period moving average is playing a resistance role and maintains the downside bias.

As long as 0.7370 holds on the upside, look for a further drop towards 0.7315 and even 0.7295 in extension.

Strategy: SELL Stop Loss: 0.7370 Take Profit: 0.7315

Chart Explanation: The black line shows the pivot point. Currently, the price is above the pivot point which indicates the bullish position. If it is below the pivot points, it indicates the short position. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 0.7400, 0.7440, and 0.7475

Support levels: 0.7315, 0.7295, and 0.7235

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EUR/USD analysis for July 17, 2017

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Recently, the EUR/USD pair has been upwards. As I expected, the price tested the level of 1.1475. I found an upward channel that means that buyers are in control today. My advice is to watch for potential buying opportunities. I have placed Fibonacci expansion to find potential upward targets. I got Fibonacci expansion 61.8% at the price of 1.1500 and Fibonacci expansion 100% at the price of 1.1540.

Resistance levels:

R1: 1.1465

R2: 1.1480

R3: 1.1490

Support levels:

S1: 1.1435

S2: 1.1420

S3: 1.1405

Trading recommendations for today: watch for potential buying opportunities.

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USD/JPY analysis for July 17, 2017

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Recently, the USD/JPY has been downwards. As I expected, the price tested the level of 112.26. The first downward target at 112.85 has been reached. Anyway, according to the 4H time frame, I found a successful breakout of support and re-test, which is a sign that sellers are in control. My advice is to watch for potential selling opportunities with the target at the price of 111.75.

Resistance levels:

R1: 112.75

R2: 112.88

R3: 112.93

Support levels:

S1: 112.50

S2: 112.40

S3: 112.25

Trading recommendations for today: watch for potential selling opportunities.

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EUR/GBP intraday technical levels and trading recommendations for March 17, 2017

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Based on the daily chart, the pair has a prominent Supply Zone between 0.8870 – 0.9050 which applied significant bearish pressure on the pair in the previous visit in

November 2016.

Since May 2017, the EUR/GBP pair has been trending-up above the depicted short-term uptrend.

A few days ago, a significant bearish pressure was applied over the pair allowing initial bearish reversal signs to appear.

Note that the price level of 0.8750 (Demand Level) may hinder further bearish decline. That's why obvious bearish breakdown below of 0.8750 is needed to enhance the bearish side of the market.

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Recent Bearish breakdown of the lower limit of the depicted bullish channel that was established in June 2017.

Supply Zone existing around 0.8810-0.8860 has succeeded to pause the ongoing bullish momentum. This may indicate a possible bearish reversal opportunity.

Conservative traders can wait for a bullish pullback towards the mentioned supply-zone (0.8810-0.8860) for a valid SELL entry. S/L to be placed above 0.8880.

Projection Target should be expected near the price level of 0.8650 provided that early bearish breakdown of 0.8750 is achieved.

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USD/CHF ready for a mega bounce? | Daily Forex Technical Analysis | 17th July 2017

We caught the juicy drop on USD/CHF and have bagged some pips in our bags. Now it looks like USD/CHF is preparing for a mega bounce, do you guys agree that we'll be seeing a bounce soon?

Subscribe to me for more daily technical analysis!

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Elliott Wave Ananlysis of EUR/NZD for July 17, 2017

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Wave summary:

After the spike down to 1.5419, we are looking for a new rally to and above resistance at 1.5899 for a continuation to 1.6236 and even higher longer-term.

Support is now seen at 1.5419 and is expected to be able to protect the downside.

Trading recommendation:

We are long EUR from 1.5510 with stop placed at 1.5410. Buy near 1.5419 if possible and use a close stop at 1.5410.

The material has been provided by InstaForex Company - www.instaforex.com

Elliott Wave Ananlysis of EUR/JPY for July 17, 2017

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Wave summary:

EUR/JPY continues to point lower in a correction, which ideally will reach a low of 126.39 before turning higher again towards at least 1.3346. Short-term minor resistance is seen at 129.52, which we expect will cap the upside for a deeper corrective decline.

Trading recommendation:

We are short EUR from 129.85 with stop placed at 129.70 and take profit will be placed at 126.50.

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Daily analysis of major pairs for July 17, 2017

EUR/USD: This pair has been able to maintain its bullishness so far; though price moved in a zigzag manner. The pair closed above the support line of 1.1450 on July 14, now targeting the resistance line at 1.1500 (the initial target for the week). As soon as price exceeds the resistance line, it would go upwards to target additional resistance lines.

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USD/CHF: This market is neutral in the short term and bearish in the long term. The neutrality in the market would continue as long as price does not go above the resistance level at 0.9750; and as long as it does not go below the support level at 0.9550. A movement above the aforementioned resistance level would result in a bullish bias, while a movement below the support level at 0.9550 would strengthen the current bearish bias.

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GBP/USD: The GBP/USD pair moved sideways early last week, and it shot seriously skywards in the last few days of the week. The distribution territory at 1.3100 has been tested and it would soon be breached to the upside, for price can move further upwards by 200 pips this week. The outlook on certain other GBP pairs is also bullish.

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USD/JPY: The movement on this currency trading instrument was bearish last week, and that has become a threat to the recent bullish bias. Only an upwards movement from here would save the bullish bias. A movement below the demand level at 111.50 would invalidate the recent bullish bias, creating a clear "sell" signal. That is the expectation for this week.

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EUR/JPY: The EUR/JPY pair moved downwards last week, in the context of an uptrend. Price first went upwards to test the supply zone at 130.50, before it got corrected by 180 pips. The demand zone at 128.50 has tried to halt further correction, but price may break below it as it goes further southwards, thus invalidating the uptrend. We should bear in mind that the outlook on JPY pairs is bearish for July.

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Global macro overview for 17/07/2017

Global macro overview for 17/07/2017:

The UK Business Confidence is at the lowest level in six years. In a report published on Monday, IHS Markit chief economist Chris Williamson noted: "Companies have become increasingly worried about the business outlook, largely as a result of heightened political uncertainties and the potential impact of Brexit". He added: "Business optimism about future prospects has sunk to its lowest for nearly six years, adding to a growing body of data which points to a slowing economy". A fragile business sentiment which is related to Brexit negotiations anxiety, growing domestic political uncertainty and deteriorating consumer budgets have caused UK business confidence to drop to its lowest point in years. This drop in confidence made a pressure on UK optimism and pushed it below the current levels in the Eurozone, especially Germany. Moreover, the level of the UK optimism is in a clear contrast with multi-year high levels of optimism in the United States and Japan, so the UK economy is in risk to fall behind the overall good-looking global economic outlook.

The recent economic data supports a bleak view of the UK economy. The number of firms expecting to increase in the business activity has deteriorated to only 35% in June from 54% in February which is the lowest reading since October 2011. According to EY Item Club think tank, the UK GDP growth forecast was revised down from 1.8% to 1.5% and it is susceptible for further revisions. And last, but not least, the inflationary squeeze on consumers is getting more painful, so the UK consumer spending, the biggest contributor to the GDP, is now facing a strong headwind as it continues to lose the momentum. Inflation is expected to reach up to 3.3% this autumn – well ahead of the growth in average earnings.

In conclusion, the outlook for the UK economy is getting darker and darker, so it will rather sooner than later make an impact on the British Pound exchange rate. The depreciation of the Pound after the last year's Brexit vote is clear and despite the recent corrective moves, triggered mostly by the Bank of England interest rate hike expectations, the longer-term outlook remains bearish.

Let's now take a look at the GBP/USD technical picture on the H4 time frame. After the recent breakout above the technical resistance zone at the level of 1.3029 - 1.3057 the market is now reversing from the local high at the level of 1.3113 in order to test the support zone. The market conditions are overbought, but the negative divergence has been noted yet.

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NZD/USD Intraday technical levels and trading recommendations for July 17, 2017

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Daily Outlook

The NZD/USD pair has been trending up within the depicted bullish channel since January 2016.

In November 2016, early signs of bullish weakness were expressed on the chart when the pair failed to record a new high above 0.7400.

A bearish breakout of the lower limit of the channel took place in December 2016.

In February 2017, the depicted short-term downtrend was initiated in the depicted supply zone (0.7310-0.7380).

However, a recent bullish breakout above the downtrend line took place on May 22. Since then, the market has been bullish as depicted on the chart.

The price zone of 0.7150-0.7230 (SUPPLY ZONE in confluence with 61.8% Fibonacci level) stood as a temporary resistance zone until a bullish breakout was expressed above 0.7230.

This resulted in a quick bullish advance towards the next supply zone around 0.7310-0.7380 where evident bearish rejection and a valid SELL opportunity can be offered if enough bearish rejection is expressed.

Currently, the NZD/USD pair remains trapped between the price levels of 0.7230 - 0.7310 until a breakout occurs in either direction.

Trade recommendations:

Risky traders can have a valid SELL entry at retesting of the price level of 0.7310. S/L should be placed above 0.7400.

Conservative traders can wait for a bearish closure below 0.7230 then 0.7150 (61.8% Fibo level) for a valid SELL position.

S/L should be placed above 0.7250 while T/P levels should be placed at 0.7050, 0.6970, and 0.6850.

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Global macro overview for 17/07/2017

Global macro overview for 17/07/2017:

Good news came from China as the economy expanded faster than anticipated. The National Bureau of Statistics revealed, that the second quarter Chinese GDP grew by 1.7%q/q, up from 1.3% printed a quarter earlier. The world's biggest emerging market's growth improved to 6.9% on a yearly basis. The retail sales rose by 11.0% year-on-year in June, the industrial production unexpectedly expanded by 7.6%y/y in the same month from 6.5% a month earlier.

Over the past four quarters, the Chinese economy has relied on government spending and access to cheap credit provided by the Bank of China in order to fuel a faster than expected economic expansion. At the same time, efforts to stop a red hot housing market did not bring any substantial results, because of the strong demand. Buyers anticipating further restrictions on housing have flooded the market after authorities introduced limits back in March. Nevertheless, the NBS expects property investment growth to stabilize over the time.

In the other note from SBS, we can read, that: "Prudent and neutral monetary policy will provide necessary liquidity in the economy, but also prevent a rise in debt levels". The economy continues steady, improving momentum in the first half of 2017 and the economic growth lays a solid foundation for achieving the full-year GDP target despite international uncertainties and domestic structural problems.

Let's now take a look at the AUD/USD technical picture on the daily time frame. The Australian Dollar is strongly connected to the Chinese economy, as most of the commodities are being exported from there. The AUD/USD pair soared to 0.7836, the highest level in more than a year as carry traders are in charge of the market. The daily relative strength index is entering the overbought territory, indicating that a short-term correction could be underway. Yet, the downside potential appears to be limited.

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Intraday technical levels and trading recommendations for EUR/USD for July 17, 2017

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Monthly Outlook

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2100 (multiple previous bottoms set in July 2012 and June 2010). Hence, a long-term bearish target is projected toward 0.9450.

In March 2015, EUR/USD bears challenged the monthly demand level around 1.0500, which had been previously reached in August 1997.

In the longer term, the level of 0.9450 remains a projected target if any monthly candlestick achieves bearish closure below the depicted monthly demand level of 1.0500.

Currently, the EUR/USD pair remains trapped within the depicted consolidation range (1.0500-1.1450) until a breakout occurs in either direction.

Any bullish breakout above 1.1450 will probably liberate a quick bullish advance towards 1.1500 and 1.1600.

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Daily Outlook

In January 2017, the previous downtrend reversed when the Head and Shoulders pattern was established around 1.0500. Since then, evident bullish momentum has been expressed on the chart.

The next daily supply level for the EUR/USD pair is located between 1.1400-1.1520 where the price action should be watched for possible bearish rejection.

Recently, the price levels around 1.1280-1.1295 stood as an intraday resistance where recent bearish correction was initiated towards 1.1120.

Evident bullish rejection was expressed around 1.1120 where the current bullish movement towards 1.1400 was initiated.

As anticipated, the ongoing bullish momentum allowed the EUR/USD pair to pursue further advance towards 1.1415-1.1520 (Daily Supply-Zone) where a valid SELL entry can be offered if enough bearish rejection is expressed.

On the other hand, the price zone of 1.1260-1.1130 stands as a prominent DEMAND zone to be watched when bearish pullback occurs.

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Technical analysis of USDX for July 17, 2017

The Dollar index has broken below horizontal support at 95.50. Price is now trying back test the break out area. If the break down was real, we should see a rejection and a move lower.

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Red lines -resistance

Blue lines - support (broken)

The Dollar index has bearish target of 94.70. If however we see price break above 95.50 and 95.90 we should consider the breakdown as a false one. This would be a very bullish sign.

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Blues lines -bearish channel

On a weekly basis the RSI continues to diverge and provide warning signs. Price makes lower lows but is trading on top of the lower channel boundary. I continue to expect a bounce towards the weekly Kumo (cloud) and upper channel boundary before committing to a short position.

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Technical analysis of gold for July 17, 2017

The Gold price as we expected has broken out of the bearish short-term channel. The trend has reversed to bullish and my minimum expected target is at $1,260 this week. There we could see a pull back but overall I believe a larger degree move higher has started.

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Blue lines - bearish channel

The Gold price has broken out of the bearish channel and is trading above the Ichimoku cloud. The trend is bullish. Short-term support is at $1,215. Resistance is at $1,260. I expect Gold to reach $1,250-60 these weeks.

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Red lines - wedge pattern

The Gold price has broken the wedge pattern upwards and the minimum target is the daily Kumo (cloud) level at $1,250-60. Breaking the wedge was timely notified by our analysis combined with the warning signs of the oversold conditions of the RSI (5).

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The euro has the potential to grow

Eurozone

The coming week may bring a revision of the euro's prospects and the market as a whole due to the fact that the European currency will get an additional opportunity to continue growth. In one of his recent speeches, ECB President Mario Draghi said that in order to understand the dynamics of inflation, it is necessary to look at the process from two sides - the impact of monetary policy on aggregate demand and on the other side, the impact of the demand for inflation.

According to the first factor, the situation is clear - the rapid growth of the euro area PMI indicates the tightening monetary policy lags behind the growth of the economy. Therefore, the markets as a whole are guided by the fact that the ECB will, willy-nilly, be forced to take steps in favor of tightening which is a factor for the euro to grow.

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On the second issue, there are different estimates. The labor market in the euro area, despite some improvement, is still weak. This gives the ECB the right to take a break and not announce the imminent completion of the asset repurchase program at the upcoming meeting in Thursday, July 20. It should be noted here that central banks appear to be governed by the rule of Philips, an English economist who showed that unemployment rate depends on the growth of the average wage and, as a consequence, the growth of inflation. A number of central banks have already begun to tighten the policy based on the growth of the economy which should also contribute to inflation. Investors proceed from the fact that the statement of the ECB following the meeting will somehow contain items on the discussion on the issue of reducing incentives.

These expectations will support the euro.

On Monday, the report on inflation in the eurozone for June will be published. Expectations are neutral with a bias towards the probability of a price increase compared to May. On Tuesday, the ZEW economic sentiment for Germany and the euro area was published. It is expected that they will confirm the growth of activity and will also contribute to the growth of demand for euro.

In general, the European currency has no reason to decline. Internal factors contribute to the growth of the euro. External factors are primarily data from the US which look unfavorable for the dollar. The appearance of a driver for its growth in the short term is unlikely. The euro can rise by the end of the week to 1.1650.

United Kingdom

The pound finished the week with strong growth facilitated by the joint effect of several factors at once, The first of these is the weak data on consumer inflation in the US for the month of June which contributed to the decrease in expectations in the growth rate of the Fed. Meanwhile, there is an increase in the probability that the Bank of England will tighten monetary policy.

The second factor is somehow connected with the Brexit. The markets have positively accepted the desire of the British authorities to find a compromise with the EU. On Thursday, the British government sent a statement to the parliament noting the existence of mutual commitments between the EU and the UK. Therefore, there is a need to work together to find a fair settlement of disputes. This statement shows that the probability of a "soft" exit is growing, which in turn, reduces risks for investors.

Tuesday is a key day for the pound. A report on producer prices and consumer inflation in June will be published which will allow to adjust the expectations for the rate. While the markets are set to the fact that the data will not be worse than the May data and will show an increase in price pressure, and if these expectations are justified, the pound will be able to continue its growth. Data output that is worse than expectations can trigger a correction as the pound has updated to a 10-month high and the need to break increases.

Oil and Ruble

The phase of the rapid strengthening of the ruble has apparently ended. At the current stage, the inflow of foreign capital has become noticeably weaker, investors are trying to fix profit on the background of uncertain prospects for the dynamics of oil prices and the future of the economy.

On Friday, the Central Bank approved the inflation forecast of 4.3%. This estimate coincides with the forecast of the Ministry of Economic Development. The growth of inflation in May, according to the Central Bank, will not prevent the achievement of the previously announced goal that will be reached by the end of the year. Therefore, the potential for further rate cuts remain. The ruble will trade in the sideways range at around 60 rubles per dollar before a new driver appears.

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Divergences Analysis GBP / USD on July 17

4h

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On the 4-hour chart, the GBP/USD pair completed consolidation above the correction level of 161.8% - 1.3076. As a result, on July 17, the process of a growth in prices can be continued in the direction of the next correction level of 200.0% - 1.3305. Emerging divergences are not currently observed in any indicator. The consolidation of the pair's rate below the Fibonacci level of 161.8% will work in favor of the US currency and a fall of the pair in the direction of a correction level of 100.0% - 1.2707.

Daily

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On the 24-hour chart, without the formation of a bullish signal, the pair fulfilled the growth to a correction level of 161.8% - 1.3105. The pair's retracement from the Fibonacci level of 161.8% will allow traders to count on a reversal in favor of the US currency and a slight fall towards the corrective level of 200.0% to 1.2653. The bearish divergence of the CCI indicator is emerging: the last peak of prices is higher than the previous one, and a similar peak of the indicator may turn out to be lower. Fixing the prices above the Fibonacci level of 161.8% will raise the chances of continuing growth towards the next correction level of 100.0% - 1.3835.

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The dollar remained without support

Forex analysis review
The dollar remained without support

Trading plan for 17/07/2017

Trading plan for 17/07/2017:

The SP500 closed with a daily candle close to all time highs, so the overall mood on the financial markets is very positive. EUR/USD is trading close to 1.1450, USD/JPY is trading around 112.50 level. GBP/USD broke above the important resistance at 1.3045 and now is trading around this level. The WTI oil costs $46.65 and which is 0.3% up. On modest gains are also precious metals as an ounce of gold is valued at 1,231 USD. After the weekend, commodities are trading lower, especially wheat and corn, which are about 1.0% under the line.

On Monday 17th of July, the economic calendar is light in important data releases, but market participants will keep an eye on Empire State Manufacturing Index data from the US and Wholesale Sales data from Canada.

EUR/USD analysis for 17/07/2017:

The Empire State Manufacturing Index data that might influence the EUR/USD rate are scheduled for release at 12:30 pm GMT. This month, the survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York is expected to decline from 19.8 points to 15.2 points. Nevertheless, the manufacturing activity continued to expand in June and a pair of sentiment indexes for the sector, like the ISM Manufacturing Index, jumped to a three-year high last month, so the prospects for this sector of the economy remains positive. On the other hand, according to the PMI Manufacturing data from the last week, the uptrend might start to weaken, but so far all the benchmarks are still above the fifty level. Today's data should bring more clarification whether the expected slight pullback will be enough to start to worry about.

Let's now take a look at the EUR/USD technical picture on the H4 time frame. The price is trading inside of the tight range between the level of 1.1489 - 1.1368 and the market conditions will soon get overbought again. There is a visible negative divergence between the price and the momentum oscillator, which suggests the technical support at the level of 1.1368 might be tested next. Better than expected data from the US economy might trigger a downward correction, but the overall trend remains bullish as long as the level of 1.1290 is not clearly violated.

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Market Snapshot: SP500 closes at all time highs

The price of SPY (SP500 ETF) has closed at the level of 245.70, which is the new all time high for this index. At the hourly time frame, there is still no sign of any divergence between the price and the momentum indicator, however, the price is trading in overbought market conditions. The next support is seen at the level of 245.01 and this level will be the target of an eventual pullback.

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Market Snapshot: US Dollar Index makes yet another lower low

The price of DXY has made another low at the level of 95.05 and it does not look like any form of a bounce is currently forming despite severely oversold market conditions.The most important technical support at the level of 95.91 has been already violated, so the next important one is seen at the level of 94.47.

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Technical analysis of EUR/USD for July 17, 2017

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When the European market opens, some Economic Data will be released, such as Final Core CPI y/y and Final CPI y/y. The US will release the Economic Data, too, such as Empire State Manufacturing Index, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1530.

Strong Resistance:1.1523.

Original Resistance: 1.1512.

Inner Sell Area: 1.1501.

Target Inner Area: 1.1474.

Inner Buy Area: 1.1447.

Original Support: 1.1436.

Strong Support: 1.1425.

Breakout SELL Level: 1.1418.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of USD/JPY for July 17, 2017

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In Asia, today Japan will not release any Economic Data, but the US will release the Empire State Manufacturing Index data. So, there is a probability the USD/JPY will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 113.14.

Resistance. 2: 112.92.

Resistance. 1: 112.70.

Support. 1: 112.42.

Support. 2: 111.20.

Support. 3: 111.98.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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Daily analysis of USDX for July 17, 2017

USDX remains offered and it looks like the downside breakout should come in the next days. The support zone of 95.10 is helping to cap further bearish advance and if we witness a break below there, then another selling wave could impact the greenback to test the 94.16 level. MACD indicator is entering the oversold territory, calling for some rebounds.

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H1 chart's resistance levels: 95.57 / 96.24

H1 chart's support levels: 95.10 / 94.16

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 95.10, take profit is at 94.16 and stop loss is at 96.05.

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Daily analysis of GBP/USD for July 17, 2017

GBP/USD had a strong momentum during Friday's session, as the greenback weakened across the markets and sent the pair to test the resistance zone of 1.3106. Such move opens the doors to reach the 1.3238 level as the next target to the upside. MACD indicator remains in the positive territory and the 200 SMA still points to the north.

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H1 chart's resistance levels: 1.3106 / 1.3238

H1 chart's support levels: 1.3026 / 1.2968

Trading recommendations for today: Based on the H1 chart, buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.3106, take profit is at 1.3238 and stop loss is at 1.2971.

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EUR/USD profit target reached perfectly, prepare to sell

The price has shot up and reached our profit target perfectly. We prepare to sell below 1.1485 resistance (Fibonacci extension, horizontal swing high resistance) for a push down to at least 1.1419 support (Fibonacci retracement, horizontal pull back support).

Stochastic (34,5,3) is testing major resistance at 97% signaling that a reversal is fast approaching.

Correlation analysis: EUR/USD and USD/CHF are negatively correlated, meaning they move in opposite directions. It's good to see a drop on EUR/USD and a corresponding bounce in USD/CHF.

Sell below 1.1485. Stop loss is at 1.1511. Take profit is at 1.1419.

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USD/CHF dropped perfectly towards profit target, prepare to buy for a bounce

The price dropped absolutely perfectly from our selling area last week and is fast approaching our profit target. We prepare to buy above major support at 0.9606 (Multiple Fibonacci extensions, horizontal swing low support) for a push up to at least 0.9659 resistance (Fibonacci retracement, horizontal overlap resistance).

Stochastic (34,5,3) is seeing major support above 6% where we expect a bounce soon to happen.

Correlation analysis: EUR/USD and USD/CHF are negatively correlated, meaning they move in opposite directions. It's good to see a drop on EUR/USD and a corresponding bounce in USD/CHF.

Buy above 0.9606. Stop loss is at 0.9591. Take profit is at 0.9569.

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NZD/USD expecting one last push up

The price has formed a new Elliott structure leading us to believe that we should be seeing one last push up before a drop. The goal is to buy above 0.7326 support (Fibonacci retracement, horizontal overlap support) for a push up to at least 0.7398 resistance (Fibonacci extension, Elliott wave theory).

RSI (55) is seeing support above 50% where we expect it to hold the price up as long as it remains above this level.

Buy above 0.7326. Stop loss is at 0.7296. Take profit is at 0.7398.

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AUD/USD testing major resistance, prepare to sell

The price is testing major resistance at 0.7833 (2 years high, Fibonacci extension) and we expect a reaction off this level to at least 0.7769 support (Fibonacci retracement, Elliott wave theory). We would require the price to break this level first before we can confirm any further drop.

Stochastic (34,5,3) is testing 96% resistance and we expect it to drop soon along with the price.

Sell below 0.7833. Stop loss is at 0.7862. Take profit is at 0.7769.

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AUD/JPY approaching major resistance, prepare to sell

The price is approaching major resistance at 88.26 (Fibonacci extension, Elliott wave theory) and we expect to see a reaction of this level for a drop to at least 87.27 support (Fibonacci retracement, horizontal pull back support).

Stochastic (34,5,3) has been testing out 98% resistance for quite some time and we expect a drop on it soon.

Correlation analysis: AUD weakness is expected today with AUDUSD similarly testing major resistance and expecting a drop.

Sell below 88.26. Stop loss is at 88.68. Take profit is at 87.27.

analytics596c21038a916.png

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

Last week price has continued its drop perfectly towards our profit target. We prepare to buy above major support at 111.90 (Fibonacci retracement, Fibonacci extension, Elliott wave theory, horizontal overlap support) for a push up to at least 114.32 resistance (Fibonacci extension, horizontal swing high resistance).

Stochastic (34,5,3) is approaching major support at 1.2% which corresponds with the bounce we're expecting at price.

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Technical analysis of GBP/USD for July 17, 2017

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Overview:

  • The GBP/USD pair continues to rise from the level of 1.3001 in the long term. It should be noted that the support is established at the level of 1.3001 which represents the 78.6% Fibonacci retracement level on the H4 chart. The price is likely to form a double bottom in the same time frame. Accordingly, the GBP/USD pair is showing signs of strength following a breakout of the highest levels of 1.3000 and 1.3051. So, buy above the level of 1.3051 with the first target at 1.3177 in order to test the daily resistance 1 and further to 1.3242 in coming days. Also, it might be noted that the level of 1.3242 is a good place to take profit because it will form a new double top this week. On the other hand, in case a reversal takes place and the GBP/USD pair breaks through the support level of 1.3001, a further decline to 1.2851 can occur which would indicate a bearish market.
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Technical analysis of EUR/USD for July 17, 2017

EURUSDH1.png

Overview:

  • The EUR/USD pair bullish trend from the support levels of 1.1421 and 1.1400. 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 1.1421, which coincides with a golden ratio (61.8% of Fibonacci retracement levels). Consequently, the first support is set at the level of 1.1421. So, the market is likely to show signs of a bullish trend around the spot of 1.1421/1.1400. In other words, buy orders are recommended above the golden ratio (1.1421) with the first target at the level of 1.1488. We should see the pair climbing towards the double top (1.1488) to test it. Furthermore, if the trend is able to break out through the first resistance level of 1.1488, then the EUR/USD pair will continue towards the next targets of 1.1530 and 1.1550 in coming hours. It would also be wise to consider where to place a stop loss; this should be set below the second support of 1.1400.
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The dollar remained without support

The US dollar finished the week with large-scale sales, never seeing a single factor that could support it. The formal reason for the decline in investor confidence was the report of the Bureau of Labor Statistics on inflation, but this was not the only reason.

Consumer prices remained unchanged in June while annual inflation slowed to 1.6% from 1.9% a month earlier. Both indicators were worse than expected.

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Also an unpleasant surprise was the decline in retail sales for the second month in a row. Experts expected a slight increase. The slowdown in consumer activity is an alarming factor as it indicates that incoming signals, one after another, about slower economic growth are not accidental and will likely cause a crisis to develop.

The preliminary value of the consumer confidence index according to the University of Michigan was significantly lower than expected at 93.1 points in July against the forecast of 95.0 points and last month's figure of 95.1 points. The subindex of expectations are declining at the fastest rate, indicating that consumers are preparing for a deterioration in the outlook for the coming months.

The GDPNow model from the Federal Reserve Bank of Atlanta forecasts the US GDP growth for the second quarter at 2.4%. This is higher than the result of the first quarter but significantly below expectations. The first estimate, which was presented in May, came out at 4.3%. At the time, it seemed that the positive momentum in the economy will develop but for two months in a row, the key macroeconomic indicators are worse than forecasts.

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The Federal Reserve Bank of New York expects that GDP growth will be at 1.9% in Q2. However, this estimate may be too optimistic. At any rate, Fed Chairman Janet Yellen, speaking in Congress, said that achieving an economic growth of 3% "will be pretty hard."

Recalling the basic scenario by the Congressional Budget Office (CBO), the average annual growth is set at 4%. Even in this case, the budget deficit in the next ten years will grow to 1.5 trillion dollars and reach a GDP of 5.2%. Weaker growth will significantly accelerate the development of a negative scenario. It can only be overcome through swift and decisive reforms while the situation develops in the opposite way. As indicated in the report of the Ministry of Finance published on Thursday, the budget deficit in June amounted to 90.233 billion dollar within the nine months of the current fiscal year. The negative balance grew by 31% and reached 523 billion. There is no reason to expect that the situation may change as the collection of taxes is reduced. Against the background of a drop in consumer activity, there is no chance of an increase of tax collection.

Actually, it was the reassessment of the player's prospects for the development of the situation that caused the dollar to fall sharply on Friday. It's not just a matter of low inflation. The fact is that even optimistic models (and the optimistic CBO forecast) do not see good exit scenarios. The Fed may begin to reduce the balance sheets in the coming months. In any case, the preparation of public opinion for this step is being carried out purposefully. Yesterday, the head of the Federal Reserve Bank of Dallas, Robert Kaplan, said that it is necessary to start reducing the Fed's balance sheet "very soon", possibly in September. Low inflation, in his opinion, is temporary. He also added that the achievement of full employment will contribute to higher prices.

The beginning of the reduction in the balance of the Fed means terminating the practice of refinancing revenues. In other words, the Fed will gradually reduce the repayment of government debts which, against the background of a growing budget deficit and a reduction in the collection of taxes, can have extremely unpleasant consequences for the Trump administration. In September, the government should already receive a result regarding the level of borrowing from the Congress. This will exhaust the latest resources for financing current activities and will make them face the prospect of technical default. However, in order for the Congress to meet Trump and raise the ceiling of national debt, it will be necessary to convince him of the feasibility plans for reforming the tax and health policies. It is necessary to present these plans formally.

Thus, for the dollar, there is still no reason to resume growth.

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