Intraday technical levels and trading recommendations for EUR/USD for July 27, 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.

The EUR/USD pair remains trapped within the depicted consolidation range (1.0500-1.1450) until a breakout in either direction is confirmed.

The current bullish breakout above 1.1450 allows a quick bullish advance towards 1.1710, 1.1850 and 1.2000.

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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.

As anticipated, the ongoing bullish momentum allowed the EUR/USD pair to pursue further advance towards 1.1415-1.1520 (Daily Supply-Zone).

The daily supply zone failed to pause the ongoing bullish momentum. Instead, a temporary bullish breakout is being witnessed on the chart.

The nearest supply level to meet the pair is located around 1.1720 (August 2015 Highest level) where price action should be watched for a bearish pullback.

On the other hand, the price zone of 1.1410-1.1515 stands as a prominent DEMAND zone to be watched if a bearish pullback occurs.

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NZD/USD Intraday technical levels and trading recommendations for July 27, 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 in 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 which is temporarily breached to the upside.

Now the price zone of 0.7310-0.7380 turns to be a newly-established demand-zone to be watched for possible bullish rejection and a possible BUY entry if any bearish pullback occurs.

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USD/JPY analysis for July 27, 2017

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Recently, the USD/JPY has been trading upwards. The price tested the level of 111.43. Anyway, according to the 30M time frame, I found potential bearish flag formation, which is a sign that buying looks risky. My advice is to watch for a potential breakout of a bearish flag to confirm further downward movement. I would like to see a breakout of 111.25. I have also placed moving averages 144 and 240 to see short term trend and the price is testing these averages at the moment. Downward target is set at the price of 110.80.

Resistance levels:

R1: 111.90

R2: 112.60

R3: 113.00

Support levels:

S1: 110.75

S2: 110.30

S3: 109.60

Trading recommendations for today: watch for potential selling opportunities.

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EUR/USD analysis for July 27, 2017

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Recently, the EUR/USD pair has been downwards. The price tested the level of 1.1702. On the 30M time frame chart, I found a strong support at the price of 1.1700 (round number). My advice is to watch for potential buying opportuntiies. The RSI is looking oversold, which is a sign of potential strength. The upward targets are set at the price of 1.1760 and 1.1775.

Resistance levels:

R1: 1.1780

R2: 1.1825

R3: 1.1910

Support levels:

S1: 1.1650

S2: 1.1565

S3: 1.1520

Trading recommendations for today: watch for potential buying opportunities.

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Global macro overview for 27/07/2017

Global macro overview for 27/07/2017:

The UK second quarter growth data were in line with expectations. The market participants expected a slight increase in GDP from 0.2% to 0.3% on monthly basis and a slight decrease from 2.0% to 1.7% on a yearly basis. The biggest contribution to the GDP was noted in the services sector, which registered 0.5% growth for the quarter from 0.1% in the first quarter ( strength come from distribution, leisure, and retail spending). On the other hand, the industrial output declined 0.4% in the latest 3 months while construction output declined 0.9%.

The contraction in the industrial and construction sectors might trigger a significant concern over the underlying structural weaknesses and weak investment, although there will be doubts surrounding the data's accuracy given GDP survey evidence. Nevertheless, the overall confidence in the UK GDP growth is still fragile as the lack of increase in wages will influence the consumer spending, the major sector of the overall UK economy. In this context, strength in other sectors of the economy will be crucial to support overall growth and the latest release will trigger further doubts whether the rebalancing is achievable. In the result, as noted many times before, the recent disappointing data set from the UK economy and a big miss in inflation readings will put more pressure on the British Pound across the board.

Let's now take a look at the EUR/GBP technical picture at the H4 timeframe. After establishing a marginal new high at the level of 0.8994 the price is reversing towards the next technical support at the level of 0.8898. Breakout below this zone will open the road towards the next important support area between the levels of 0.8717 - 0.8754.

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Global macro overview for 27/07/2017

Global macro overview for 27/07/2017:

The US Federal Reserve Bank (FED) decided to leave the interest rate unchanged at the level of 1.25%. The changes in the statement have been small and consistent with comments by FED members over the weeks since the June FOMC meeting. the statement released after the rate decision, the key phrase was: "The Committee expects to begin implementing its balance sheet normalization program relatively soon, provided the economy evolves broadly as expected". The market participants believe that "relatively soon" means, that an announcement will come in September. Inflation, meanwhile, has recently declined and is running below 2%, whereas in June it was running somewhat below 2%. At the same time, it was reaffirmed that the inflation target in the broader horizon was not threatened. That's a very subtle change in rhetoric, but not one which will scare US Dollar bears. The FED is also more optimistic about the labor market situation, assessing employment growth as "solid".

After the FOMC statement, the market expectations regarding another rate hike in 2017 has dipped below 40%. The FOMC message went without surprises but did not stop the global investors from another round of US Dollar sell-off. This suggests that the market reaction had more to do with back to building a position for which the FOMC meeting was just an obstacle. Investors have been skeptical of the Dollar for a week, seeing fewer and fewer arguments (inflation weakness, fiscal policy failure) for the continuation of interest rate hikes in the Fed set the pace. It will be difficult to persuade the global investors to change its mind until we see a clear reversal on macro data, primarily on inflation.

Let's now take a look at the US Dollar Index technical picture at the H4 timeframe. After the FOMC decision, the index fell to the level of 93.15 which is just above the technical support at the level of 93.03. The market conditions remain oversold, but the momentum still can not break out above the fifty level.

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Elliott wave analysis of EUR/NZD for July 27, 2017

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Wave summary:

The trading range has finally been broken. A little surprising it was broken towards the downside for a deeper correction in red wave ii/, but short-term important support at 1.5419 should continue to cap the downside for renewed strength and a break above minor resistance at 1.5729 and more importantly a break above 1.5780 that will call for a rally higher to 1.6232 and above.

At no point can a break below 1.5419 be accepted under this count.

Trading recommendation:

We are long EUR from 1.5510 with a stop placed at 1.5410. If you are not long EUR yet, then buy EUR upon a break above 1.5729 or 1.5780 and start by using the same stop at 1.5410.

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Elliott wave analysis of EUR/JPY for July 27, 2017

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Wave summary:

We continue to look for a break above minor resistance at 130.77 to confirm the next part of the rally higher towards the ideal 133.34 target.

Short-term minor support is seen at 129.90 which is expected to be able to protect the downside for the break above 130.77. It will, however, only be a break below support at 129.22 that will delay the expected rally higher.

Trading recommendation:

We are long EUR from 129.75 with stop placed at 129.15.

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Trading plan for 27/07/2017

Trading plan for 27/07/2017:

The Asian session was dominated by a weakness of the US Dollar, which was under pressure from the FOMC yesterday. In the morning, the EUR/USD pair managed to break through its local highs, but currently the rate returns from 1.7777 to around 1.1715, thus returning to levels from yesterday's closing. Wall Street rallied were led by Dow Jones (0.5%) and Nasdaq 100 (0.3%). Stock market optimism on Asian markets breaks out the Shanghai Composite Index, which loses 0.1%.

On Thursday 27th of July, the event calendar is light in important economic releases, but the market participant will pay attention to Durable Good Orders and Unemployment Claims data from the US.

EUR/USD analysis for 27/07/2017:

The Durable Good Orders and Unemployment Claims data are scheduled for release at 12:30 pm GMT and the market participants expect an increase in orders from the level of -1.1% to 3.5% on monthly basis and from 0.1% to 0.4% on yearly basis. If the data will be released in line or better than expected, then it will be considered as an encouraging change in the trend for durable goods orders, because the year-over-year change for orders is due to surge to a three-year high. This optimistic forecast is being backed up by the survey data for July, which an acceleration in orders. This month's flash reading of the US Manufacturing PMI increased to 53.4 points, a four-month high that signals a moderate pace of economic activity for the sector. IHS Markit noted on Monday that new orders for companies posted the strongest print in six months.

Let's now take a look at the EUR/USD technical picture at the H4 timeframe. After the FOMC Interest Rate Decision yesterday, the price has broken above the technical resistance at the level of 1.1714 and made a new local high at the level of 1.1776. Currently, the market is testing this level as it will now act as a technical support, so better than expected data from the US economy might help to violate this level and move lower towards the next technical support at the level of 1.1654.

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Market Snapshot: Gold back above $1250

The price of Gold has broken above the technical resistance at the level of $1258, which is just below the 61%Fibo at the level of $1260. The odds for a downside pull back are quite high, due to the visible bearish divergence and overbought market conditions.

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Market Snapshot: USD/CHF bounces from multi-month support

The price of USD/CHF had hit the technical support at the level of 0.9442 and now is trying to bounce higher towards the next technical resistance at the level of 0.9641. Only a sustained breakout above this level will give a chance to bulls to take back the control over this market. Otherwise, the near-term outlook is still bearish.

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The fundamental weakness of the dollar

The US Federal Open Market Committee, fully in line with expectations, left the federal funds rate unchanged at 1.00%-1.25%. The final comment was subject to minor changes that did not change the overall meaning of the document, but the players saw signs of weakness in it, which ultimately led to a large-scale sale of the dollar across the entire spectrum of the market.

The first change relates to core inflation, in the new edition of the FOMC sees the risks of a lower level by the end of the year than before. As for the growth prospects for the rate, the FOMC announced the probability of its being below the expected long-term "some time" levels, which indicates a possible change in the rate forecasts at the next meeting in September. Both changes in the text are pigeon-like and contribute to the further sale of the US dollar.

Eurozone

At the same time, signals coming from the eurozone are noticeably more positive. The index of business optimism from IFO rose in July to 116 p, setting a new record for the third month in a row, and the satisfaction of companies with the current business situation is the highest since the unification of Germany.

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Record levels are observed in the construction and manufacturing sectors, a slight decrease in the retail sector did not affect the overall assessment.

The ECB is finding it increasingly difficult and more difficult to justify the stimulus policy against the backdrop of strong growth in optimism. Most of the key macroeconomic indicators of the eurozone show steady growth, which can not be said about statistics from overseas, where there is a further gap between overstated expectations and real data.

The euro remains the favorite pair with the dollar, despite a noticeable overbuying. In favor of a correction, technical factors can speak, and not fundamental, so any reduction will be used by players for new purchases.

United Kingdom

Preliminary data on UK GDP in the second quarter came in line with expectations, growth was at 0.3%, at an annual rate of 1.7%, and slightly below 2.0% a quarter earlier. But this does not indicate a failure in the economy, which investors feared very recently.

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The pound continues to rise, primarily due to the currency's excessive decline in the first six months after Brexit. As time has shown, the collapse of the British economy did not happen, and the pound returns to fundamentally grounded levels.

Oil and ruble

Oil prices are rising after the US Energy Ministry again reported a drop of 7.21 million barrels in the reserves, which eventually led to the lowest level of reserves since the beginning of the year.

Saudi Arabia's efforts to reduce production among the OPEC countries led to the reduction of supplies announced by Kuwait, a little earlier about a 10% reduction reported by the United Arab Emirates.

Also it is necessary to note the ever more active signals from the US shale companies.

Halliburton has een announced that a number of drilling rigs have stopped, indicative of a reduction in investment.

On July 28, the Bank of Russia will hold a regular meeting. The probability of a pause in the rate reduction cycle has increased, as inflation in June increased from 4.1% to 4.4%, and inflation expectations failed to decline.

The ruble continues to move sideways at levels just below 60 rubles / dollar, and there are no reasons for expect sharp movements.

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Breaking forecast: Orders for durable goods USA 13.30 London time

Breaking forecast: Orders for durable goods USA 13.30 London time.

Orders: Forecast + 3.5% (to the previous month). The previous value was -1.1%. The forecast range is +1.5 + 6.0%.

Orders of the previous year + 2.7%, excluding transport + 5.5% and investment goods + 5%.

Why is it important?

Orders for durable goods reflect the opinions of business and consumers about the medium-term prospects of the economy. In case of optimistic expectations, citizens and businesses buy large and expensive goods. Business invests in development.

The forecast is strong for the dollar, and we can expect a significant correction at the rate of EUR/USD and other assets, in favor of the US dollar.

The euro has reached the upper limit of the trend corridor at 1.1785, which makes a strong pullback possible.

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Technical analysis of USDX for July 27, 2017

The Dollar index bounced yesterday towards the upper channel boundary but got rejected and reversed lower making a new lower low. The trend remains bearish. No reversal sign yet, although bullish divergence signs are there as a warning for bears to be cautious.

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Blue lines - bearish channel

The Dollar index is making lower lows and lower highs. Resistance is now at 94 and next at 94.30-94.90. Support is at 93.15. The trend is clearly bearish. A break above 94.30 will be the first important signal of a dollar reversal.

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Green rectangle - long-term support area

The Dollar index has reached the long-term support area between 92-93. We could make new lower lows, but a strong bounce is justified. Daily resistance is found at 94.20, next at 95.40 and finally at 97. If the Dollar index reverses from current levels, 97 is my preferred target area.

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Technical analysis of gold for July 27, 2017

The Gold price reversed from $1,247 support area and made a new higher high above $1,260. Our minimum target since $1,205 has been reached. A break below $1,245 confirms the upward move is complete and correction will have started.

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Red rectangle - support

Blue trend line - support

The Gold price remains in a bullish trend as the price is above both the tenkan- and kijun-sen. Price is making higher highs and higher lows. Support at $1,245, where the previous highs were, was held and price reversed higher as expected for a new high.

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Daily price action is about to turn trend to bullish as the price is trying to break above the daily Kumo(cloud). Resistance is at $1,265. Support is at $1,255. Bulls now need to be cautious and raise stops to yesterday's lows.The material has been provided by InstaForex Company - www.instaforex.com

Daily analysis of major pairs for July 27, 2017

EUR/USD: The EUR/USD has again, set out riding northwards this week, just as it did last week. The price has gained roughly 100 pips, and it is now testing the resistance line at 1.1750 (which was briefly breached yesterday). The current price action indicates further bullish movement.

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USD/CHF: A sudden weakness in CHF caused a bullish movement of 130 pips on the USD/CHF (other CHF pairs also rallied, saved the CHF/JPY, which plummeted). However, the bullish movement was halted before it posed a serious threat to the recent bearish bias. Price has come down again and things have gone bearish. Only a protracted weakness in the EUR/USD can bring about a protracted rally on the USD/CHF.

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GBP/USD: Since GBP/USD tends to be positively correlated with the EUR/USD in certain cases, we can see that the former has rallied, just as the latter has done. There is a Bullish Confirmation Pattern in the 4-hour chart, and further bullish movement is anticipated. Some fundamental figures are expected today and they can have an effect on USD pairs, thereby affecting the GBP/USD as well.

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USD/JPY: On this currency trading instrument, the rally that happened on Monday and Tuesday has proven to be a great opportunity to sell short at a better price. Price plummeted yesterday as the bearishness in the market continued. The EMA 11 is now below the EMA 56, and the RSI period 14 is below the level 50, thus indicating more southward journey.

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EUR/JPY: This cross has held out its bullishness so far, in spite of the short-term consolidation being witnessed. One reason the cross is able to remain bullish till now is the strength in the EUR itself, and things would begin to drop once the EUR loses strength. There could be a reversal within the next several trading days.

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What did the Fed decide? (Commentary to the Fed's decision of July 26, 2017)

What did the Fed decide? (Commentary to the Federal Reserve's decision of July 26, 2017)

While maintaining the base interest rate in the target range of 1.00% -1.25%, the Federal Open Market Committee of the US Federal Reserve commented on its decision and the current economic condition in the country:

The Fed noted the continued increase in economic activity at a moderate pace this year, further improving the situation in the labor market due to a stable average growth of jobs since the start of the year and a reduction in unemployment.

The Fed states that during the period between the policy meetings, both household spending and business investments continued to grow.

The Fed continues to view long-term inflation expectations as stable. At the same time, the overall inflation and basic inflation estimated on a 12-month basis, which does not take into account energy and food prices, have declined and remain below 2%. However, offsetting the same impact on the inflation from the markets' side continues to be achieved at a small extent.

The Fed aims, in accordance with its authority, to promote maximum employment and price stability. The Fed still expects that the gradual normalization of monetary policy will help economic activity expand at a moderate pace and further strengthen the labor market. Annual inflation is expected to remain slightly below 2% percent in the near future, but should stabilize near the Fed's 2% target level in the medium term. Short-term risks for the economic outlook look looked fairly balanced, but the fed will continue to closely monitor inflation.

Taking into account the already achieved and expected parameters of the labor market and inflation, the Fed decided to keep the interest target rate for the federal funds at 1.00%-1.25%. The basic principles of monetary policy will continue to be flexible enough, thereby supporting further improvement, to some extent, of labor market conditions and a steady return of inflation to a level of 2%.

In determining the timing and scope of future regulation of the target interest rate range for federal funds, the Fed will be guided both by the achieved and the expected developments in moving towards long-term goals of full-employment and inflation at 2%. This approach will be based on a wide range of information, including parameters of market conditions, indicators of inflationary pressures and inflation expectations, financial and international events. The Fed will closely monitor the actual and expected inflationary process in relation to its proportional target inflation rate. The Fed expects that economic conditions will develop in a way that will ensure a smooth hike in the interest rate for federal funds, and it will likely remain, for some time, below the levels that are expected to persist over the long term. However, the actual trajectory for federal funds rate will depend on economic trends in accordance with the incoming data.

Currently, the Fed continues its current policy of reinvesting income from its mortgage and debt securities in its portfolio into agency mortgage securities and investing in auction proceeds from the repayment of existing Treasury securities to purchase their new volumes. The Fed is set to begin implementing a program to normalize its balance sheet in a relatively short time, provided that the pace of economic development coincides with the expected. This program was outlined in the accompanying annex, published on June 17, to the document outlining the main principles and plans of the normalization strategy.

The current fundamentals of monetary policy were adopted unanimously by the 9 voting members of the US Federal Reserve.

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Technical analysis of EUR/USD for July 27, 2017

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When the European market opens, some Economic Data will be released, such as Private Loans y/y, M3 Money Supply y/y, GfK German Consumer Climate, and Spanish Unemployment Rate. The US will release the Economic Data, too, such as Natural Gas Storage, Prelim Wholesale Inventories m/m, Goods Trade Balance, Durable Goods Orders m/m, Unemployment Claims, and Core Durable Goods Orders m/m, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1787.

Strong Resistance:1.1780.

Original Resistance: 1.1769.

Inner Sell Area: 1.1758.

Target Inner Area: 1.1730.

Inner Buy Area: 1.1702.

Original Support: 1.1691.

Strong Support: 1.1680.

Breakout SELL Level: 1.1673.

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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Technical analysis of USD/JPY for July 27, 2017

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In Asia, Japan today will not release any Economic Data, but the US will release some Economic Data, such as Natural Gas Storage, Prelim Wholesale Inventories m/m, Goods Trade Balance, Durable Goods Orders m/m, Unemployment Claims, and Core Durable Goods Orders m/m. So, there is a probability the USD/JPY will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 111.55.

Resistance. 2: 111.33.

Resistance. 1: 111.11.

Support. 1: 110.85.

Support. 2: 110.63.

Support. 3: 110.41.

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

EUR/USD right on channel resistance, prepare to sell

The price is right on major resistance at 1.1746 (Fibonacci extension, channel resistance) and we expect to see a reaction off this level for a drop towards 1.1617 support (Fibonacci retracement, multiple swing low support).

Stochastic (34,5,3) is seeing major resistance below 98% where we expect a corresponding reaction from.

Correlation analysis: USD/CHF and EUR/USD are negatively correlated. So it is nice to see a bounce on USD/CHF and a correlated drop on EUR/USD.

Sell below 1.1746. Stop loss is at 1.1782. Take profit is at 1.1617.

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USD/CHF approaching major support, prepare to buy for a bounce

The price is now testing major support at 0.9493 (Fibonacci retracement, horizontal overlap support) and we expect to see a bounce above this level to at least 0.9566 resistance (Fibonacci retracement.

Stochastic (34,5,3) is fast approaching 6.4% where we expect a bounce from that corresponds to price too.

Correlation analysis: USD/CHF and EUR/USD are negatively correlated. So it is nice to see a bounce on USD/CHF and a correlated drop on EUR/USD.

Buy above 0.9493. Stop loss is at 0.9451. Take profit is at 0.9566.

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NZD/USD right on resistance, sell for a corrective drop

The price has continued to rise and is now seeing strong resistance at 0.7528 (Multiple Fibonacci extensions) and we expect to see a corrective drop from this level to at least 0.7461 support (Fibonacci retracement, horizontal pullback support).

Stochastic (55,5,3) is seeing major resistance below 94% where we expect a reaction from soon.

Sell below 0.7528. Stop loss is at 0.7560. Take profit is at 0.7461.

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EUR/JPY right on major resistance, prepare to sell

The price is reacting off major resistance at 130.50 (Fibonacci extension, horizontal swing high resistance, bearish pride action) and we expect to see a reaction off this level for a drop towards 129.61 support (Fibonacci retracement, horizontal pullback support).

Stochastic (21,5,3) is seeing a reaction off our 95% resistance with good downside potential to play the drop in price.

Correlation analysis: We are seeing JPY strength with AUD/JPY, EUR/JPY and USD/JPY expecting drops.

Sell below 130.50. Stop loss is at 130.81. Take profit is at 129.61.

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AUD/JPY dropping nicely, remain bearish for a further drop

The price has dropped nicely from yesterday and we remain bearish below 88.92 resistance (Fibonacci extension, Fibonacci retracement, Elliott wave theory, bearish divergence) for a drop towards 88.17 support (Fibonacci retracement, horizontal overlap support).

Stochastic (34,5,3) is seeing major resistance below 95% where we expect a reaction from soon. We can also see bearish divergence vs price signaling that a reversal is impending.

Correlation analysis: We are seeing JPY strength with AUD/JPY, EUR/JPY and USD/JPY expecting drops.

Sell below 88.92. Stop loss is at 89.35. Take profit is at 88.17.

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USD/JPY change in structure, prepare to sell

We prepare to sell below 111.56 resistance (Fibonacci retracement, horizontal pullback resistance) for a push down to at least 110.29 support (Fibonacci extension, horizontal pullback support, Elliott wave theory).

Stochastic (21,5,3) is reacting nicely off our 93% resistance with good downside potential.

Correlation analysis: We are seeing JPY strength with AUD/JPY, EUR/JPY and USD/JPY expecting drops.

Sell below 111.56. Stop loss is at 112.27. Take profit is at 110.29.

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Technical analysis of USD/CHF for July 27, 2017

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Overview:

  • The USD/CHF is still trading around the area of 0.9579-0.9525. The trend probably will continue to trade downwards from the level of 0.9525 again. Today, the first resistance level is currently seen at 0.9525, the price is moving in a bearish channel now. According to the previous events, we expect the USD/CHF pair to trade between 0.9525 and 0.9400. So, the support stands at 0.9400, while daily resistance is found at 0.9525. Therefore, the market is likely to show signs of a bearish trend around the spot of 0.9525. In other words, sell orders are recommended below the spot of 0.9525 with the first target at the level of 0.9400 and continue towards 0.9360 in order to test the weekly support 1 on the H4 chart. On the other hand, if the USD/CHF pair fails to break through the first resistance level of 0.9525 today, the market will move upwards continuing the development of the bullish trend to the level 0.9579. Since the trend is below the 38.2% Fibonacci level, the market is still in a downtrend. Overall, we still prefer the bearish scenario.
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Technical analysis of NZD/USD for July 27, 2017

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Overview:

  • The NZD/USD pair is continuing to rise from the level of 0.7471 in the long term. It should be noted that the support is established at the level of 0.7471 which represents the 78.6% Fibonacci retracement level on the H1 chart. The price is likely to form a double bottom in the same time frame.
  • Accordingly, the NZD/USD pair is showing signs of strength following a breakout of the highest levels of 0.7471 and 0.7497. So, buy above the level of 0.7497 with the first target at 0.9560 in order to test the daily resistance 1 and further to 0.7587. Also, it might be noted that the level of 0.7587 is a good place to take profit because it will form a new double top.
  • On the other hand, in case a reversal takes place and the NZD/USD pair breaks through the support level of 0.7471, a further decline to 0.7424 can occur which would indicate a bearish market.
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Daily analysis of USDX for July 27, 2017

USDX is approaching the 200 SMA at H1 chart, where a bearish momentum could be gained in order to test levels below the psychological zone of 94.00. As long as the greenback stays below that moving average, we can expect weakness towards the support level of 93.29. To the upside, the nearest target lies at 94.85.

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H1 chart's resistance levels: 94.09 / 94.88

H1 chart's support levels: 93.71 / 93.29

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 93.71, take profit is at 93.29 and stop loss is at 94.12.

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Daily analysis of GBP/USD for July 27, 2017

GBP/USD made a rebound once again above the 200 SMA at H1 chart and the focus is now placed around 1.3106, where a resistance could be found. Overall, the bullish structure still remains strong and as long as the pair stays above the psychological level of 1.3000, we can expect further strength in the near-term.

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H1 chart's resistance levels: 1.3037 / 1.3106

H1 chart's support levels: 1.2968 / 1.2882

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 1.3037, take profit is at 1.3106 and stop loss is at 1.2968.

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The gold is caged

Having completed the week ending July 21 with the best results for the last two months, gold began to retreat amid rising yields on Treasury bonds and positive statistics on business activity and consumer confidence in the US. This recent successes are connected to the deteriorating political landscape in the United States, the fall of the USD index, and the rates of the US debt market. By the end of July, the situation had changed a little.

Despite the Republican vote losing in the Senate over the abolition of Obamacare, the matter got off ground and increased the chances of passing tax and budget reforms through Congress. This immediately affected the growth of treasury bond yields. If Donald Trump manages to realize at least a part of his election promises, then restoring confidence in the US president can return fans of the US dollar to the market. Indeed, if the idea of accelerating GDP to the level of 2.6-3% is looming on the horizon, gold will have to be unhealthy because it loses to risky assets.

Over the past four months, the XAU/USD quote dangled within 7.6% of the trading range, the narrowest in the last 10 years. The 120 day historical volatility, which, against the background of the referendum on Britain's membership in the EU, reached a two-year peak, has since collapsed by 10%, descending to the very bottom last seen in 2005. The low volatility of quotations is not the best factor for bulls in precious metals. In similar situations, as a rule, global appetite for risk increases. This means that gold cannot compete with assets such as shares if the waters in the financial markets are calm. Another thing is the storm which increases the demand for asylum. Simply put, if there were no scandals around Trump, the XAU/USD quote could well have dropped below $1,200 per ounce.

Dynamics of historical volatility in gold.

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Source: Bloomberg

Standard Chartered, on the contrary, believes that the "dovish" comments of the Fed following the July FOMC meeting will allow prices to rise around $1,300 per ounce. Probably, the company is betting on a weak dollar. The strengthening of the correlation has lately had a serious support from the buyers of precious metals. In my opinion, the euro looks oversold and needs correction, especially in the ECB's slow pace in monetary policy normalization and the deterioration of business activity in the euro area. In this regard, the "dovish" comments of the Fed can become a signal for locking in profits on long positions for EUR/USD. This will trigger a pullback.

We should not rule out the possibility that the financial markets will not respond to the FOMC statement since this event refers to those with zero risk. The futures market does not believe in an increase in the federal funds rate. Moreover, the Committee is unlikely to accelerate the normalization process in the context of slowing inflation.

Technically, "bears" for XAU/USD are trying to return beyond the neckline of the pattern "head and shoulders". If they succeed, the subsequent support tests at $1,228 and $1,218 per ounce will strengthen the risks of restoring a short-term downtrend.

Gold, daily chart

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