Technical analysis of AUD/USD for August 1, 2017

AUD/USD has recently broken out of a multi year consolidation triangle pattern and is in a weekly bullish trend heading for 0.87. Short-term trend is bullish but over the next few weeks, we might see a deeper pull back which will be a huge buying opportunity.

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Blue lines - bullish channel

The AUD/USD is trading inside the bullish channel making higher highs and higher lows. The RSI (5) is diverging but still, the price is in a daily bullish trend. I could justify a pull back towards the lower channel boundary in order for the oscillators to relieve the overbought conditions. However, in general, I would expect a back test of the broken triangle pattern around 0.77-0.78 and then resumption of the up trend.

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Red lines - triangle pattern

Magenda lines - target of triangle breakout

The AUD/USD is in a breakout mode heading towards 0.87. The trend is bullish in the weekly chart as the price is above the Kumo (cloud) and tenkan- sen has crossed the kijun-sen above the cloud. The length of the triangle base is now the target of the expected move of the breakout.

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Technical analysis of USDCAD for August 1, 2017

The USD/CAD pair has paused its strong decline just above 1.24 and shows signs of a possible reversal. The minimum bounce target is at 1.27 but if we get a confirmed reversal soon, I expect see this bounce to extend even towards 1.2850-1.29.

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Blue line - resistance and trend reversal levels

The short-term trend remains bearish as price is still below the 4 hour Kumo cloud. The short-term support lies at 1.24 while the resistance is found at 1.2575. The price has been moving sideways since 25th of July and bulls will need to break above the cloud and the recent high in order to confirm the change of trend .

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Red rectangle - target area

The daily oscillators are turning upwards from the oversold levels after showing bullish divergence signs. The trend remains bearish in the daily chart and only a daily close above the Tenkan-Sen (red line indicator) will be a bullish reversal confirmation. This price level is at 1.2530. Target for the reversal if it has already started lies at 1.28.

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Technical analysis of USDX for August 1, 2017

The Dollar index remains in a bearish trend making lower lows and lower highs. Price is at the same levels it was back in May of 2016 and major support area. Oscillators are in oversold territory but not diverging in the weekly charts, implying that even a strong bounce will be a shorting opportunity.

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Blue lines - bearish channel

The Dollar index remains inside the bearish short-term channel and below both the tenkan- and kijun-sen. Price cannot break above and out of the channel. Short-term resistance is at 93.20 and next at 93.60. A break above 93.60 will push price towards 94.

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Green rectangle - long-term support

The weekly candle has entered the weekly support area and is approaching the 200 MA at 92.32. This is a huge support. Oscillators are oversold. A bounce is hugely justified. Minimum bounce target is at 95.30. Bears need to lower their stops and be cautious.

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Technical analysis of gold for August 1, 2017

Gold price remains in a bullish trend. In the short-term price is moving sideways in a tight range between $1,271 and $1,265. There are more chances for an upward break out and an extended to move higher towards $1,295-$1,310.

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Short-term support by the kijun-sen (yellow line indicator) is found at $1,257. Cloud support on the 4-hour chart is at $1,252. Only a break below the Kumo (cloud) support would be a signal for a short-term reversal and correction.

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Black line -long-term resistance

Blue line - long-term support

The weekly Gold candle is above the weekly Kumo (cloud) but still below the long-term black trend line resistance. I continue to expect that Gold price will eventually break above the black trend line and in the longer-term will move towards $1,500-$1,600.

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Global macro overview for 01/08/2017

Global macro overview for 01/08/2017:

At the end of the month, the global investor's portfolio shuffles are mainly responsible for the last wave of US Dollar weakness, but the political information that comes out is not helpful either. The White House reports that Anthony Scaramucci, Director of Communications, has resigned only 10 days after his appointment. Circumstances remain unclear and are only blurring the picture of Trump's administration and whether it can effectively conduct economic policy. Meanwhile, the Health Bill can not go through Congress at all, because it can not even be supported by the Republicans. Just as Trump's victory was supportive of the US Dollar at the end of last year, now it looks like a ball in a leg. Currently, there is little hope of US Dollar bulls that US fiscal policy will revive reflux trends (and consequently lead to more restrictive FEDpolicy). Of course, nothing is definitively determined and autumn may look completely different both for Trump's success in tax reform and in the context of inflation shocks from one-off factors. But the market needs evidence, and neither Congress nor any US macro data do not deliver it at this time. The nearest hope for a trend reversal comes on Friday, but only if the dynamics of wages in the labor market report will positively surprise the market participants. Albeit of political influences, only this economic factor might change the current very negative outlook of the US Dollar in the near-term.

Let's take a look at the US Dollar Index technical picture at the H4 timeframe. The market dipped below the technical support at the level of 93.02 and despite the oversold market conditions is so far unable to bounce higher. The next technical support is seen at the level of 91.93.

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Trading plan for 01/08/2017

Trading plan for 01/08/2017:

The news of the day is the Reserve bank of Australia (RBA) interest rate decision. The RBA kept expectations unchanged at 1.5%. As a result, the AUD since the morning is the strongest currency against the dollar. Asian indexes started August on gains supported by a better read of the Chinese Caixin PMI for the industrial sector. Dow Jones has set a new historic high of 21,929.8 pts, but the S&P500 and the Nasdaq 100 closed below the open line. EUR/USD is above 1.1800 for the first time since January 2015.

On Tuesday, 1st of August, the event calendar is busy with important economic releases. During the London session, the set of PMI Manufacturing indicators will be released from Germany, France, Spain, UK and the Eurozone. A little bit later the Preliminary Eurozone GDP for the second quarter will be released as well. During the US session, Canada will provide RBC Manufacturing PMI and US economy will post ISM Manufacturing PMI data together with Personal Spending and Personal Income data.

EUR/USD analysis for 01/08/2017:

The Eurozone Prelim GDP data are scheduled for release at 09:00 am GMT and the market participants expect 0.6% increase in the second quarter and overall advance from 1.9% to 2.1% on yearly basis. The biggest source of the optimism regarding this increase in GDP was the last week GDP report from Spain that beat the market expectations, so more of the global investors are expecting a good data today (the Spanish output increased 0.9% while the expected number was 0.8%). Moreover, the three biggest Eurozone economies, Germany, France, and Italy are growing up as well, so the economic optimism might have a solid grounds as incoming data is bright. If today's data will be in line with expectations or better, then the prediction anticipates that economic activity will expand at or above the 0.5% mark for three straight quarters for the first time in nearly a decade.

Let's now take a look at the EUR/USD technical picture at the H4 timeframe. The market is in a strong uptrend, but it starts to lack the momentum and some deeper correction would be welcome. The growing bearish divergence between the price and the momentum indicator might suggest, that even if the data will beat the expectations, the market participants might start to begin the take profit process at the current levels above 1.1800. The immediate support is seen at the level of 1.1775, but in a case of a further breakout, the next one is seen at the level of 1.1711.

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Market Snapshot: USD/JPY bounces from 78% Fibo level

The price of USD/JPY had bounced from the Fibonacci 78% retracement of the last swing up at the level of 100.02 and not the price is trying to move higher to test the technical resistance at the level of 110.61. The oversold market conditions support this view, but due to the weakness of the bull camp, another failure at the resistance level is anticipated.

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Market Snapshot: DAX fills the gap

The German stock index DAX30 has filled the gap between the levels of 12093 - 12302 and not is trying to bounce from the oversold market conditions. In a case of a failure, the next technical support is seen at the level of 11957 points.

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Global macro overview for 01/08/2017

Global macro overview for 01/08/2017:

The Reserve Bank of Australia decided to keep the interest rate unchanged at the level of 1.5% as expected. In the monetary statement, the RBA expressed concerns regarding the recent rise in the Australian dollar, that is weighing on the outlook for output and employment. The strong national currency is restraining price pressures and would slow the economy. Moreover, the other source of uncertainty for domestic economy is the outlook for consumption as the RBA policy makers expect a gradual increase in underlying inflation. Forecasts for the Australian economy are largely unchanged and the economic growth is expected to pick up to around 3% later this year. Regarding the housing market, there are some signs indicating that housing market starting to cool down despite the fact that house prices are rising briskly in some markets and housing debt have outpaced slow growth in incomes. The job market situation looks solid, as forward looking indicators point to growth in employment. The last piece of the statement was related to the commodity prices, and the RBA policymakers mentioned that improving global economy boosts commodity prices, Australia's national income.

In conclusion, the RBA has been trying to talk down the recent AUD rally towards multi-months high by expressing some concerns weighing on employment and economic outlook, but market participants expected more dovishness in the overall statements. Nevertheless, the next possible move of the RBA is to hike the interest rates relatively soon, which is why AUD is still being supported across the board.

Let's now take a look at the AUD/USD technical picture at the H4 timeframe. The price keeps trading near multi-month highs around the level of 0.8065 with the nearest technical support seen at the level of 0.7934. As long as the navy trend line is not clearly violated, the outlook remains bullish.

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

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Wave summary:

Finally, EUR/NZD is moving higher again. The break above 1.5743 is the first good indication that the red wave ii/ completed with the test of 1.5527 and that the red wave iii/ higher to 1.6236 is developing now. Support is seen at 1.5680 with back-up support at 1.5587. The later should be able to protect the downside.

R3: 1.5897

R2: 1.5820

R1: 1.5779

Pivot: 1.5750

S1: 1.5682

S2: 1.5587

S3: 1.5527

Trading recommendation:

We are long EUR from 1.5510. Our stop will be moved higher to break-even. If you are not long EUR yet, then buy near 1.5685 or upon a break above 1.5779 and place your stop at 1.5575.

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

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Wave summary:

We have not much to add here. EUR/JPY remains struck just below resistance at 130.77 and only a break above here will clear the way for the next rally higher towards 133.46. Support is seen at 130,00 which is expected to be able to protect the downside for the break above 130.77. However, if the minor resistance at 130,00 is broken, the back-up support is seen just below at 129.53.

R3: 132.22

R2: 131.66

R1: 130.77

Pivot: 130,00

S1: 129,53

S2: 129.22

S3: 128.85

Trading recommendation:

We are long EUR from 129.75 with stop placed at 129.15. Take-profit is located at 133.20.

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EUR/USD on major resistance, prepare to sell

The price is testing major resistance at 1.1846 (multiple Fibonacci extensions, horizontal swing high resistance) and we expect to see an intermediate correction for a drop towards 1.1764 support (Fibonacci retracement, horizontal pullback support).

Stochastic (34,5,3) is seeing strong resistance below our 98% level where we expect a drop from too.

Correlation analysis: We are expecting EUR weakness with strong resistance seen on EUR/USD and EUR/JPY.

Sell below 1.1846. Stop loss is at 1.1880. Take profit is at 1.1764.

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AUD/USD remain bullish for a further rise

The price has made a recent bullish exit of our triangle formation. We remain bullish above major support at 0.7969 (Fibonacci retracement, horizontal overlap support) and we expect to see a bounce above this level for a rise at least to 0.8066 resistance (Fibonacci extension, horizontal swing high resistance).

RSI (34) is seeing pullback support to our descending resistance-turned-support line and also sees an intermediate ascending support line holding it up nicely.

Correlation analysis: We are expecting commodities strength with AUD/USD and NZD/USD both seeing bounces.

Buy above 0.7969. Stop loss is at 0.7911. Take profit is at 0.8066.

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NZD/USD remain bullish for a further rise

The price has made a bullish exit from a short term triangle formation. We remain bullish looking to buy on dips above 0.7484 support (Fibonacci retracement, horizontal overlap support) for a further push up towards 0.7549 resistance (Fibonacci extension, horizontal swing high resistance). We move our stop loss to 0.7457 to protect our profits.

RSI (34) sees good support above 45% and also a bullish exit of a recent descending resistance-turned-support line signaling that a rise is impending.

Correlation analysis: We are expecting commodities strength with AUD/USD and NZD/USD both seeing bounces.

Buy above 0.7484. Stop loss is at 0.7457. Take profit is at 0.7549.

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EUR/JPY profit target reached once again, prepare to sell

The price has bounced above our buying entry and is fast approaching our profit target once again. We prepare to sell below major resistance at 130.78 (Fibonacci extension, horizontal swing high resistance) for a drop towards 129.96 support (Fibonacci retracement, horizontal pullback support).

Stochastic (34,5,3) is seeing major resistance below 94% where we expect a strong drop from.

Correlation analysis: We are seeing JPY strength with AUD/JPY and EUR/JPY expecting drops. We are also expecting EUR weakness with strong resistance seen on EUR/USD and EUR/JPY.

Sell below 130.78. Stop loss is at 131.08. Take profit is at 129.96.

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AUD/JPY approaching profit target, remain bearish

The price has continued to drop nicely towards our profit target. We remain bearish looking to sell below 88.34 resistance (Fibonacci retracement, horizontal overlap resistance, descending resistance) for a further push down to at least 87.65 support (Fibonacci extension, horizontal swing low support).

Stochastic (34,5,3) is seeing intermediate resistance below 45% where we expect a further drop from.

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

Sell below 88.34. Stop loss is at 88.70. Take profit is at 87.65.

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USD/JPY approaching profit target, prepare to buy

The price has dropped nicely from our selling area and is fast approaching our profit target. Due to the changing elements, we close out our current positions and prepare to turn bullish looking to buy on dips above 109.80 support (Fibonacci extension, Fibonacci retracement, bullish divergence) for a push up to at least 111.59 resistance (Fibonacci retracement, horizontal overlap resistance).

RSI (34) sees bullish divergence signaling that a bounce is impending. The previous occurrence of such a bullish divergence led to a huge bullish rally.

Buy above 109.80. Stop loss is at 108.67. Take profit is at 111.59.

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Technical analysis of EUR/USD for Aug 01, 2017

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When the European market opens, some Economic Data will be released, such as Prelim Flash GDP q/q, Final Manufacturing PMI, German Unemployment Change, German Final Manufacturing PMI, French Final Manufacturing PMI, Italian Manufacturing PMI, and Spanish Manufacturing PMI. The US will release the Economic Data, too, such as Total Vehicle Sales, ISM Manufacturing Prices, Construction Spending m/m, ISM Manufacturing PMI, Final Manufacturing PMI, Personal Income m/m, Personal Spending m/m, and Core PCE Price Index 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: 1.1876.

Strong Resistance:1.1869.

Original Resistance: 1.1858.

Inner Sell Area: 1.1847.

Target Inner Area: 1.1819.

Inner Buy Area: 1.1791.

Original Support: 1.1780.

Strong Support: 1.1769.

Breakout SELL Level: 1.1762.

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 Aug 01, 2017

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In Asia, Japan will release the BOJ Core CPI y/y, 10-y Bond Auction, Final Manufacturing PMI data, and the US will release some Economic Data, such as Total Vehicle Sales, ISM Manufacturing Prices, Construction Spending m/m, ISM Manufacturing PMI, Final Manufacturing PMI, Personal Income m/m, Personal Spending m/m, and Core PCE Price Index 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: 110.91.

Resistance. 2: 110.70.

Resistance. 1: 110.48.

Support. 1: 110.20.

Support. 2: 109.99.

Support. 3: 109.77.

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/CHF for August 01, 2017

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Overview:

  • The USD/CHF pair broke resistance which turned to a strong support at the level of 0.9579 last week. The price of 0.9579 coincides with 38.2% of Fibonacci, which is expected to act as a major support today. Since the trend is above the 38.2% Fibonacci level, the market is still in an uptrend. From this point, the USD/CHF pair is continuing in a bullish trend from the new support of 0.9575. Currently, the price is in a bullish channel. According to the previous events, we expect the USD/CHF pair to move between 0.9579 and 0.9728. In the H4 chart, resistance is seen at the levels of 0.9666 and 0.9728. Also, it should be noticed that the level of 0.9666 represents the daily pivot point. Therefore, a strong support will be formed at the level of 0.9575 providing a clear signal to buy with the targets seen at 0.9666. If the trend breaks the support at 0.9666 (resistance 1), the pair will move upwards continuing the development of the bullish trend to the level 0.9728 in order to test the daily resistance 2. On the other hand, the stop loss is to be placed below the level of 0.9525.
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Technical analysis of NZD/USD for August 01, 2017

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Overview:

  • Pivot point: 0.7444.
  • The NZD/USD pair continues to move upwards from the level of 0.7490. Last week, the pair rose from the level of 0.7490 to a top around 0.7557. So, the first resistance level is seen at 0.7557 followed by 0.7600, while the daily support 1 is seen at 0.7444 (61.8% Fibonacci retracement). According to the previous events, the NZD/USD pair is still moving between the levels of 0.7490 and 0.7600; so we expect a range of 110 pips. Furthermore, if the trend is able to break out the first resistance level at 0.7557, we could see the pair climbing towards the double top (0.7600) to test it. Therefore, buy above the level of 0.7490 with the first target at 0.7557 in order to test the daily resistance 1 and further to 0.7600. Also, it should be noted that the level of 0.7600 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 0.7444, a further decline to 0.7375 can occur which would indicate a bearish market.
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Fundamental Analysis of USD/JPY for July 31, 2017

USD/JPY has been impulsively bearish after bouncing off the resistance level of 114.40. As of the recent bad economic reports of USD without any hint of a Rate hike in the coming days made JPY gain some momentum to dominate. The dollar is currently in a defensive mode due to political unrest in the country and long predicted policy of weakness of dollar communicated by Trump in the beginning of this year. Today JPY Prelim Industrial Production report was published with a positive figure as expected at 1.6% which previously was at -3.6% and Housing Starts report also showed positive report with an increase to 1.7% from the previous value of -0.3% which was expected to be at 0.1%. The positive economic reports of JPY did help the currency to keep the bearish momentum quite intact and signals further gains. On the USD side, today Chicago PMI report was published with the worst figure at 58.9 which previously was at 65.7 which was expected to decrease to 60.8 but Pending Home Sales report showed positive report with an increased figure at 1.5% from the previous value of -0.7% which was expected to be at 0.9%. To sum up, JPY has been quite dominating over USD recently which is expected to remain intact until any high impact report leading to corrective structure or retracement in this pair.

Now let us look at the technical view, the price is currently residing at the edge of support level of 110.20 which is expected to break below with a daily close today. If price breaks below 110.20 with a daily close today then we will be looking forward to selling with a target towards 108.00 in the coming days. On the other hand, if price rejects off the support level of 110.20 with a daily close today then we will be looking forward to buying with a target towards 20 EMA dynamic level resistance. As the price remains below 20 EMA dynamic level resistance we will be in bearish bias in this pair.

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Daily analysis of USDX for August 01, 2017

The greenback is weak ahead of the end of the month and the 200 SMA still provides the line in the sand in the index. The next target is placed at the 92.29 level, as the US Dollar Index is trying to consolidate below the support zone of 93.25. To the upside, the nearest resistance is provided by the 200 SMA at H1 chart and if the index manages to break it, then we can expect a continuation towards 94.57.

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H1 chart's resistance levels: 94.00 / 94.57

H1 chart's support levels: 93.25 / 92.29

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 93.25, take profit is at 92.29 and stop loss is at 94.20.

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Daily analysis of GBP/USD for August 01, 2017

The pair is rallying and showing that bulls remain stronger across the board, with a breakout above the key level of 1.3153, which opens the door to test the next resistance around 1.3257. To the downside, we're expecting a support to be found in the 200 SMA at H1 chart once GBP/USD breaks below 1.3153. MACD indicator still supports the bullish scenario.

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H1 chart's resistance levels: 1.3153 / 1.3257

H1 chart's support levels: 1.3058 / 1.2962

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 1.3153, take profit is at 1.3257 and stop loss is at 1.3051.

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