Technical analysis of USD/JPY for August 03, 2017

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USD/JPY is expected to trade with bullish outlook. The pair posted a rebound from 110.25 (the low of August 2) and broke above its 20-period and 50-period moving averages. The relative strength index is bullish and calls for a further upside.

Hence, as long as 109.90 is not broken, look for a further rise to 110.95 and even to 111.30 in extension.

Alternatively, if the price moves in the opposite direction, a short position is recommended below 109.90 with a target at 109.40.

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 signal 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: BUY, Stop Loss: 109.90, Take Profit: 110.95

Resistance levels: 110.95, 111.30, and 111.75 Support Levels: 109.70, 109.45, 109

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Technical analysis of USD/CHF for August 03, 2017

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USD/CHF is expected to trade with a bullish outlook. The pair recorded higher tops and higher bottoms since August 1, which confirmed a positive outlook. The upward momentum is further reinforced by both rising 20-period and 50-period moving averages. The relative strength index is supported by a bullish trend line.

On the economic data front, payroll processor ADP reported that 178,000 private jobs were added in the U.S. in July, compared with an addition of 180,000 jobs expected.

To conclude, as long as 0.9665 holds on the downside, a new advance to 0.9725 and even to 0.9765 seems more likely to occur.

Chart Explanation: The black line shows the pivot point. The present price above the pivot point indicates the bullish position and below the 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: BUY, Stop Loss: 0.9665, Take Profit: 0.9725

Resistance levels: 0.9725, 0.9765, and 0.9800

Support levels: 0.9630, 0.9590, and 0.9540

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Technical analysis of GBP/JPY for August 03, 2017

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GBP/JPY is under pressure, pair retreated quickly and now trading at 144.85. The pair broke below its lower boundary of Bollinger Bands, which confirmed a continuation of a bearish trend. The 20-period moving average is turning down. The relative strength index is heading downward.

Therefore, as long as 145.90 is not surpassed, look for a further drop to 144.45 and even to 144.00 in extension.

Alternatively, if the price moves in the opposite direction as predicted, a long position is recommended above 145.90 with the target at 146.60.

Strategy: SELL, Stop Loss: 145.90, Take Profit: 146.60.

Chart Explanation: the black line shows the pivot point. The price above the pivot point indicates the bullish position and when it is below the 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.

Resistance levels: 146.60, 146.80, and 147.35

Support levels: 144.45, 144.00, and 143.45.

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Technical analysis of NZD/USD for August 03, 2017

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We will retain our yesterday's negative outlook of the pair. NZD/USD is still under pressure and expected to trade in a lower range. The technical outlook of the pair is negative as the price broke below the lower boundary of Bollinger Bands. The declining 50-period moving average suggests that the pair has a potential for a further downside. The relative strength index shows downward momentum.

Hence, below 0.7460, look for a new test to 0.7380 and even to 0.7350 in extension.

Strategy: SELL Stop Loss: 0.7475 Take Profit: 0.7380

Chart Explanation:

The black line shows the pivot point. Currently, the price is above the pivot point which indicates the bullish position. If it remains below the pivot point, it will indicate 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: 0.7495, 0.7525, and 0.7575

Support levels: 0.7380, 0.7350, and 0.7300

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

EUR/USD analysis for August 03, 2017

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Recently, the EUR/USD has been trading sideways at the price of 1.1865. According to the 30M time frame, I found a bullish breakout of the intraday flat base, which is a sign that selling looks risky. My advice is to watch for potential buying opportunities. The short-term trend is bullish. The upward target is set at the price of 1.1910.

Resistance levels:

R1: 1.1915

R2: 1.1970

R3: 1.2035

Support levels:

S1: 1.1795

S2: 1.1735

S3: 1.1675

Trading recommendations for today: watch for potential buying opportunities.

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NZD/USD Intraday technical levels and trading recommendations for August 3, 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 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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Intraday technical levels and trading recommendations for EUR/USD for August 3, 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 was trapped within the depicted consolidation range (1.0500-1.1450) until the current bullish breakout was executed.

The current bullish breakout above 1.1450 allows a quick bullish advance towards 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, an evident bullish breakout is being witnessed on the chart. The nearest supply level to meet the pair is located around 1.2080 (Level of previous multiple bottoms) where price action should be watched for a bearish pullback.

On the other hand, the price zone of 1.1415-1.1520 stands as a prominent DEMAND zone to be watched if a bearish pullback occurs.

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GBP/USD analysis for August 03, 2017

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Recently, the GBP/USD has been trading downwards. The price tested the level of 1.3121. According to the 1H time frame, I found strong selling pressure after the interest rate decision from Bank of England. I found a breakout of the 20-day upward channel, which is a sign that buying looks risky. The RSI also confirmed strong selling pressure. My advice is to watch for potential selling opportunities. The downward target is set at the price of 1.2945.

Resistance levels:

R1: 1.3255

R2: 1.3285

R3: 1.3320

Support levels:

S1: 1.3190

S2: 1.3155

S3: 1.3125

Trading recommendations for today: watch for potential selling opportunities.

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

Daily analysis of USD/JPY for August 03, 2017

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Overview

The USD/JPY pair tested the key resistance 110.98 yesterday and kept its stability below it, to resume its negative trading now after facing solid resistance formed by the EMA50, waiting for more decline in the upcoming sessions. Therefore, we will continue to suggest the bearish trend on the intraday basis conditioned by holding below 110.98, as breaching this level will push the price to head towards 112.32 before any new attempt to decline, while the expected bearish wave targets begin by breaking 110.15 level to confirm extending the decline towards 108.80. The expected trading range for today is between 109.50 support and 111.20 resistance.

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Daily analysis of GBP/JPY for August 03, 2017

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Overview

Despite the frequent positive trading provided by the GBP/JPY pair recently, but we notice its move within tight range between 145.40 support and 147.60 resistance, while stochastic approach from 80 level allows us to suggest more bullish attempts until touching the key resistance followed by monitoring the price behavior to detect the main trend for the upcoming period. We remind you that breaching the key resistance will confirm the bullish bias domination for the upcoming trading and expect to target 149.80 followed by 150.95 levels. The expected trading range for today is between 145.60 and 147.60.

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Daily analysis of Gold for August 03, 2017

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Overview

Gold price trading settles near the neckline that appears in the image keeping its stability above this level, and the EMA50 continues to protect the price from suffering more of the losses, therefore, our bullish trend expectations will remain valid for today, and the positive effect of the inverted head and shoulders pattern remains active, waiting for targeting 1295.37 then 1312.00 levels mainly. Holding above 1254.56 represents an important condition for the continuation of the suggested rise, where breaking it will push the price to decline to 1229.32 levels before any new attempt to rise. The expected trading range for today is between 1254.00 support and 1280.00 resistance.

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Daily analysis of Silver for August 03, 2017

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Overview

Silver price moves below 16.56 level now, which requires being aware of the upcoming trading, where holding with a daily close below this level will stop the suggested positive scenario in our last reports and pushes the price to turn to the downside. Until now, the bullish trend remains preferred conditioned by stepping above 16.56 again, reminding you that our next main target at 17.43 The expected trading range for today is between 16.45 support and 16.75 resistance.

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Daily analysis of major pairs for August 3, 2017

EUR/USD: The EUR/USD is a bull market. The EMA 11 is above the EMA 56, and the Williams' % Range period 20 is not far from the overbought region. Further upwards movement is anticipated when volatility returns to the market. The resistance line at 1.1900, which has been tested before, may be tested again.

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USD/CHF: The USD/CHF has gone sideways so far this week, while the bullish signal that was generated last week is intact. As long as CHF is weak, the bullish signal in the market would be sustained. Some fundamental figures are still expected today, and they may have an impact on the market.

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GBP/USD: The GBP/USD is currently experiencing a pullback – in the context of an uptrend. Price is now close to the accumulation territory at 1.3150 and it may breach it to the downside as another accumulation territory at 1.3100 is targeted. However, this is not enough to render the uptrend invalid because the price could go upwards from here.

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USD/JPY: This is a weak market – though it has not gone seriously downwards this week. It is anticipated that the market would go further downwards in a slow and steady manner, reaching the demand level at 110.00. The demand level may even be breached to the downside, as the market goes on southwards. There is a Bearish Confirmation Pattern in the market.

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EUR/JPY: This cross has gone above the demand zone at 130.50. There is a bullish signal here, which is invariably threatened by the bear. A movement below the demand zone at 130.00 would result in a return to neutrality, while a movement upwards from here would help save the ongoing bullish signal.

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Technical analysis of NZD/USD for August 03, 2017

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Overview:

  • The NZD/USD pair will probably continue to move upwards from the level of 0.7409. Also, it should be noted that, сurrently, the pair is moving around the spot of 0.7409. However, the first resistance level is seen at 0.7494 and 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 0.7409 and 0.7600. Furthermore, if the trend is able to break out the first resistance level at 0.7494, 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 0.7494 in order to test the daily resistance 1 and further to 0.7557 (the double top). On the other hand, in case a reversal takes place and the NZD/USD pair breaks through the support level of 0.7375. For that, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 0.7350.
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Technical analysis of USD/CHF for August 03, 2017

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Overview:

  • This week, the USD/CHF pair broke resistance which turned to a strong support at the level of 0.9579. There are no changes in my technical outlook. The bias remains bullish in nearest term testing 0.9763 or higher The price of 0.9579 coincides with 38.2% of Fibonacci, which is expected to act as a major support this week. 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 0.9763. In the H4 chart, resistance is seen at the levels of 0.9728 and 0.9763. 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 0.9728. If the trend breaks the support at 0.9728 (resistance 2), the pair will move upwards continuing the development of the bullish trend to the level 0.9763 in order to test the daily resistance 3. On the other hand, the stop loss is to be placed below the level of 0.9623.
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Global macro overview for 03/08/2017

Global macro overview for 03/08/2017:

The recent Crude Oil inventories data recorded another draw in stockpiles. According to Energy Information Administration (EIA) data an inventory draw of -1.5M barrels for the week ending July 28th following a draw of -7.2M barrels the previous week. The market participants expectations were as well set for a draw of -3.4M barrels. although another unexpected build in the API data triggered a fresh round of uncertainty ahead of the EIA release.

The OPEC oil production increased in July to 2017 high and the main contributor was from Libya, one of the countries exempt from a production-cutting deal. The second country with the biggest output and export was Iran. The other country participating in a draw in stockpiles was Saudi Arabia, which was cutting exports to the US with the end goal appearing to be to cut inventories and grab markets attention.

After the joint OPEC and non-OPEC Ministerial Monitoring Committee (JMMC) meeting last month in Saint Petersburg, some interesting conclusions were made. The global crude oil demand will increase in the second half of 2017 by 2 million barrels per day, which will help drain commercial crude oil reserves. Moreover, JTC concluded, that as of June 2017, members of the OPEC/non-OPEC have complied with 98% of the total oil production cut requirement. Despite the agreement, the weekly data from EIA and API are still reporting draws, which is not particularly welcome if the OPEC and non-OPEC members deal is in operation on a daily basis. This situation might increase the price of Crude Oil ( and Brent Oil as well) to the levels above $50 with ease.

Let's now take a look at the USD/CAD technical picture at the daily timeframe. This pair is highly correlated with the price of Crude oil ( inverted correlation). The pair has bounced from the important multi-month technical support at the level of 1.2456, but so far did not manage to test the technical resistance at the level of 1.2653. If the bull camp will not manage to break out above this level, the bias remains to the downside and another leg down is expected.

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Technical analysis of EUR/USD for August 3, 2017

The EUR/USD is trading inside an upward sloping wedge pattern and inside a longer-term bullish channel. I expect the wedge pattern to break downwards and push price towards the lower channel boundary. The EUR/USD is overbought and diverging.

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Purple lines - bearish wedge

Blue lines - bullish channel

The EURUSD is in a bullish trend making higher highs and higher lows. 1.18-1,1780 is important short-term support. Price made a throw-over new high last night but the oscillators did not follow. This is a bearish sign. If support fails, expect the price to move towards the Ichimoku cloud between 1.17-1.1620.

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Blue lines - bullish channel

Daily trend is bullish. However, with bearish divergence signs even in the daily chart, we should prepare for a move lower towards 1.15-1.14 where the lower channel boundary is found. EURUSD bulls need to be very cautious as the time for a correction is approaching rapidly.

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Technical analysis of USD/CAD for August 3, 2017

The USD/CAD is making higher highs and higher lows. The trend is now bullish in the short-term. We gave the bullish signal a couple days back when we said that there were signs of a bullish reversal targeting 1.28.

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Blue line - resistance (broken)

Yesterday we saw price break out of the 4 hour Kumo (cloud) and the horizontal resistance at 1.2575. This confirmed our bullish reversal view and we are now looking for a move towards 1.27-1.28. Short-term support is at 1.2560. Resistance is at 1.2620.

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Red rectangle - resistance target

The Daily chart above shows our target at the 38% Fibonacci retracement of the decline. The RSI has broken out of the downward sloping wedge. The trend is bullish in the short-term. The RSI has not reached yet overbought levels. We have upside potential to 1.28.

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Technical analysis of USDX for August 3, 2017

The Dollar index made a new lower low yesterday. The trend remains bearish. There are important bullish divergence signals by the RSI. This is a warning for Dollar bears.

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The Dollar index is showing divergence signs. I believe the reversal is very close. Resistance is at 93.30. Next resistance is at 94. There is a bullish candlestick reversal formation on the 4-hour chart as the candle that provided the new low turned upwards and closed positive with a long tail.

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Green area - support

The Dollar index as we mentioned in previous posts, is trading inside the long-term support area of 92-93. Combined with the bullish divergence signs in the daily and 4-hour chart, we should expect a strong bounce at least towards 94.50 if not higher towards the Daily cloud resistance at 96.

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Technical analysis of gold for August 3, 2017

Gold price is pulling back towards $1,260-50 as we expected. Gold prices were showing signs of a weakening upward trend and a pull back was justified as we mentioned in previous posts.

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Gold price is above the Ichimoku cloud in the 4-hour chart. Price has broken below both the tenkan- and kijun-sen (red and yellow line indicators) and is heading towards short-term support at $1,250-55. Resistance is at $1,273. Breaking resistance will open the way for $1,300-$1,310.

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On a daily basis, Gold price is pulling back towards the Daily Kumo (cloud) as we expected in yesterday's analysis. Support is at $1,250 and next at $1,237. I remain longer-term bullish.The material has been provided by InstaForex Company - www.instaforex.com

Elliott wave analysis of EUR/NZD for August 3, 2017

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Wave summary:

EUR/NZD continues to rally as expected and should continue to move higher towards the next target at 1.6236. Support is now seen at the former resistance at 1.5880. This support should ideally protect the downside for the expected rally higher.

R3: 1.6236

R2: 161.54

R1: 1.6030

Pivot: 1.5977

S1: 1.5880

S2: 1.5830

S3: 1.5779

Trading recommendation:

We are long EUR from 1.5510. We will move our stop higher to 1.5770. If you are not long EUR yet, then buy near 1.5880 and use the same stop at 1.5770.

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

Elliott wave analysis of EUR/JPY for August 3, 2017

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Wave summary:

No change in our view here. We continue to look for a continuation higher towards 133.46 as the next upside target. Short-term, we expect minor support at 130.85 to be able to protect the downside for a break above minor resistance at 131.37 to confirm the next part of the rally higher.

A break below 130.85 will delay the expected rally higher, but back-up is seen nearby at 130.60.

R3: 133.46

R2: 132.22

R1: 131.37

Pivot: 130.85

S1: 130.76

S2: 130.60

S3: 130.35

Trading recommendation:

WE are long EUR from 129.75 with stop placed at 130.30. Upon a break above 131.37 we will move our stop higher to 130.80. Take-profit remains at 133.20.

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Global macro overview for 03/08/2017

Global macro overview for 03/08/2017:

A set of PMI data from the US economy is ready for the release today. The ISM Non-Manufacturing PMI is expected to slide from 57.4 points to 56. 9 points in July. The Composite PMI is expected to stay unchanged at the level of 54.4 points, together with Final Services PMI at the 54.4 as well. All of the PMI's are anticipated to stay way above the fifty level.

The IHS Markit reported last week, that "PMI survey respondents cited an improving economic backdrop and greater willingness to spend among clients in July. Reflecting this, the latest data revealed the strongest upturn in new work received by service sector firms for exactly two years". Today's data have a chance to confirm IHS Markit report and support the view, that outlook for moderate growth remains intact, even despite the expected slight decrease.

The services sector is expanding at a healthy pace and this is an important indicator of a general economic growth in the US. One can not say the same about the internal and international US politics development. After the election, it seemed that the pillar of the predecessor's presidency - the Obamacare health system - would disappear very quickly. At present many analysts are wondering if it will disappear at all. The problem is the lack of agreement among Republican senators. Despite the majority of 52:48 they lost the vote on the liquidation of the Obamacare system. As a result of breaking up as many as 3 Senators, there is a conflict on the Senate - President line. More and more investors are doubting the effectiveness of the Trump administration. They are afraid not only of the lack of the mentioned reform but also the failure of subsequent treatments including changes in the tax system. The effect of this fear is an ongoing global investor escape from the US Dollar to other currencies. The greatest beneficiary of this trend is the euro, which since the election has strengthened against the US currency by more than 10%.

Let's now take a look at the USD/JPY technical picture at the H4 timeframe. The price has failed to break back above the golden trend line around the level of 111.00 and reversed back below 61%Fibo level resistance. Despite the oversold market conditions, the market is unable to rally above the nearest resistance. The next technical support is seen at the level of 109.85.

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Europe is not afraid of sanctions

Eurozone

The euro continues to be a favorite in a pair with the dollar, relying on a steady growth in industrial production and the recovery of the labor market. While the US Congress is preparing to implement a package of sanctions against European firms, skillfully disguised as anti-Russian, European business reports on the growth of business activity.

According to IHS Markit, the index of business activity in the manufacturing sector in July was 56.6 p, which is slightly below the level of June, but still in the region of five-year highs. Industrial production is expected to grow at about 4% per year, and GDP growth in Q3 should exceed that of Q2.

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Despite the fact that the euro looks locally overbought, there is practically no reason to expect a trend reversal in favor of the dollar. The eurozone economy looks confident, while political risks in the US have risen sharply. The US Congress, according to some estimates, committed an anti-constitutional action by forcing Trump to sign a new sanctions bill. The likelihood of a quick resolution of the issue on the ceiling of the national debt is significantly reduced, same as Trump's chances of persuading lawmakers to change healthcare legislation. Investors rightly fear that the progress of the tax reform will drag on against the background of a fall in budget revenues, which could provoke a large-scale decline in the stock markets.

Bulls on the dollar need a strong unexpected driving factor, but the likelihood of its appearance in the current conditions is low. The euro will continue to grow, with a target of 1.21 in the medium term.

United Kingdom

Today the Bank of England will hold its monetary policy meeting, which will be accompanied by the publication of the quarterly report on inflation and the press conference of Mark Carney.

Investors are waiting for the result of the meeting unafraid. It is assumed that the interest rate will remain unchanged at 0.25%, while the main macroeconomic forecasts will be revised slightly downward. The Bank of England will have to admit that inflation after Brexit was higher than expected, and GDP growth slowed. The average wage growth remain low, which ultimately affects both the growth rates of consumer lending and the general purchasing power of the population.

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The distribution of votes of the Committee members regarding the rates is of interest. Voting with a result of 6/2 will be regarded by the market as a dovish signal, and the pound may react with a decline. The result of 5/3 will promote the growth of bullish sentiment.

In general, the pound looks confident, taking advantage of the weakness of the dollar and the growth of political risks in the US, and is able to update the maximum at the end of the day, reaching 1.3350/1.3400.

Oil and ruble

The report on commercial oil reserves in the US from the API, published on Wednesday, was of a moderately bearish nature and contributed to some decline in prices. Oil reserves for the reported week decreased by 1.5 million barrels, which turned out to be less than expected. Production slightly increased, while the volume of strategic reserves did not change. The market took the publication of the report calmly and used it for technical correction, as it did not perceive any strong driver.

On August 7 in Abu Dhabi a meeting of OPEC+ will begin, in which the implementation of obligations by the involved parties to the agreement will be considered. Low compliance rate hinders the results of the agreement, as some manufacturers have secretly increased production in June, which as a result reduces the impact of OPEC + on prices. Oil does not yet have a sustainable driver for growth.

The Russian ruble did not react to the signing by the US president of a new sanction law. Despite the growing risks for non-resident companies investing primarily in the oil and gas sector, capital outflows from Russian markets are not observed. The majority will will depend on how the sanctions will be implemented in practice, as well as in the stance of the European countries that may suffer almost more from the new US initiatives. At the moment, the Russian currency has no reason to leave the range of about 60 rubles/dollar.

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AUD/JPY profit target reached once again, turn bearish for a short term correction

Forex analysis review
AUD/JPY profit target reached once again, turn bearish for a short term correction

Trading plan for 03/07/2017

Trading plan for 03/07/2017:

During the night AUD and NZD lost about 0.4% against USD as the volatility of other currencies is minimal and barely exceeds 0.1%. Crude oil recouped all yesterday's losses, which we observed after reading the EIA report. Now WTI is trading at $49.40 level. On the Asian stock market the negative sentiment prevails, although the decline did not take on considerable size.

On Thursday 3rd of August, the event calendar is very busy with the important news release. The news of the day will be Bank of England Interest Rate Decision, Monetary Policy Summary, and BoE Governor Mark Carney's speech. Moreover, during the early London session, Services and Composite PMI readings will be released from across the Eurozone and the UK. During the US session, ISM Non-Manufacturing PMI, Factory Orders, and Unemployment Claims data will be released.

GBP/USD analysis for 03/08/2017:

The Bank of England Interest Rate Decision, Monetary Policy Summary, MPC Official Bank Rate Votes, MPC Asset Purchase Facility Votes, and Inflation Report are scheduled for release at 11.00 am GMT. BoE Governor Mark Carney is scheduled to speak at 11:30 am GMT. Market participants do not expect any change in the interest rates, so the BoE should leave them at the level of 0.25%. No change is expected in Asset Purchase Facility (435bln Pound) and Asset Purchase Facility Votes (0-0-8). Nevertheless, investors expect a change in the MPC Official Bank Rate Votes that should change from 3-0-5 to 2-0-6. The hawkish surprise was seen in June, when the MPC last convened and when three members dissented in favor of hiking the interest rate by 25 bp. It is not likely to be repeated this time around. The main reason is the recent data which strengthed dovish arguments, though it is expected to be a divided vote once again. The support for hawks might come from Governor Carney himself as he said many times before that the BoE is ready for the interest rate hike and it can even hike today. Another important factor will be the tone of the Monetary Policy Summary minutes, while the quarterly Inflation Report is likely to revise downwardly both GDP growth and inflation forecasts.

Let's now take a look at the GBP/USD technical picture at the H4 timeframe. From the swing low at the level of 1.2587 to the recent local high at the level of 1.3250, the market has made a clear geometric pattern called 1-to-1 (measured from the pennant pattern low at the level of 1.2811), so the market might be susceptible for at least a healthy pull back towards the technical support at the level of 1.3161 and 1.3113 after market participants take their profits. The overbought market conditions and visible bearish divergence support this view.

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Market Snapshot: NZD/USD breaks below the trend line

The price of NZD/USD has broken below the trend line support around the level of 0.7435 and now is testing the technical support at the level of 0.7398. The market conditions look oversold, so the price might now test the trend line from below and in a case of another failure, might continue the sell-off towards the next technical support at the level of 0.7333.

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Market Snapshot: Crude Oil bounces back

The price of Crude Oil had bounced from the technical support at the level of $48.39 and managed to retrace 61% of the recent sell-off. Another attempt to violate the 61%Fibo at the level of $49.61 will expose it to test the recent local high at the level of $50.41. On the other hand, any violation of the level of $48.39 will accelerate the sell-off towards $47.53 - $47.30.

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Gold was Paused

On the eve of the release of important data on the US labor market, the bulls for XAU/USD preferred to take a break. From the level of June lows, the precious metal rose by more than 5.2% against the backdrop of geopolitical and political risks, as well as the shift in the time frame for the Fed's monetary tightening to a later than initially expected period. The pressured yield of US treasury bonds, the weak dollar and the Federal Reserve's concern for the fate of inflation - what would be better for gold?

Dynamics of gold and the USD index

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Source: Trading Economics.

According to TD Securities, investors were overly optimistic about the idea of a mass normalization of monetary policy by the world's leading central banks. In fact, the Fed will gauge seven times before hiking the federal funds rate for the third time in 2017, while the ECB will gradually phase out its quantitative easing program. As a result, against the background of muted inflation, the real yield of US and European bonds will not repeat the June rally, which will bring about XAU/USD prices to $1,278 and $ 1,296 per ounce.

Standard Chartered noted that the rise in the precious metal's prices above $1,300 per ounce this year was due to the escalation of geopolitical conflicts. Therefore, until something like it occurs once again, gold would unlikely be able to move above the aforementioned mark.

In my opinion, further dynamics of the XAU/USD will depend on the development of the political turmoil in the United States. Congress holidays in August can reduce political tension, forcing investors to focus on economic indicators. In this regard, the acceleration of US GDP from 1.2% to 2.6% q/q in the second quarter and strong data on private sector employment from ADP for July (+178,000), which lays the foundation for a positive labor market report, creates prerequisites for the growth of the likelihood that the Fed tightens monetary policy, the yield of treasury bonds and the US dollar. These factors are "bearish" for the precious metal.

In September, the situation could radically change. The focus of investors will be on the problem regarding public debt ceiling. It was already reached in March. And in the beginning or in the middle of October, the Treasury will run out of reserves resources, which will lead to a technical default. We have already experienced all this in 2013. Back then, the US government was forced to leave for a two-week partial shutdown, which turned into a serious slowdown in the US economy at the turn of 2013-2014. In such conditions, as a rule, the demand for safe-haven assets is growing, and gold is able to acquire a second life.

Technically, the fate of XAU/USD will depend on the ability of the bulls to return prices to the borders of an upstream trading channel. The successful attack will raise the risks of continuing the rally in the direction of $1,295 with a subsequent uptrend recovery. On the other hand, the retreat will lead gold to form a support in the convergence zone $1248-1254 per ounce.

Gold, daily chart

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Technical analysis of EUR/USD for Aug 03, 2017

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When the European market opens, some Economic Data will be released, such as French 10-y Bond Auction, Spanish 10-y Bond Auction, Retail Sales m/m, Final Services PMI, ECB Economic Bulletin, German Final Services PMI, French Final Services PMI, Italian Services PMI, and Spanish Services PMI. The US will release the Economic Data, too, such as Natural Gas Storage, Factory Orders m/m, ISM Non-Manufacturing PMI, Final Services PMI, Unemployment Claims, and Challenger Job Cuts y/y, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1908.

Strong Resistance:1.1901.

Original Resistance: 1.1890.

Inner Sell Area: 1.1879.

Target Inner Area: 1.1851.

Inner Buy Area: 1.1823.

Original Support: 1.1812.

Strong Support: 1.1801.

Breakout SELL Level: 1.1794.

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 03, 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, Factory Orders m/m, ISM Non-Manufacturing PMI, Final Services PMI, Unemployment Claims, and Challenger Job Cuts y/y. So, there is a probability the USD/JPY will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 111.26.

Resistance. 2: 111.04.

Resistance. 1: 110.82.

Support. 1: 110.56.

Support. 2: 110.34.

Support. 3: 110.12.

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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USD/CAD on major support, look to buy for a long term position

The price is testing major support at 1.2460 (major swing low for past 2 years, Fibonacci extension, bullish price action) and we expect to see a long term correction from this level towards at least 1.3000 resistance (Fibonacci retracement, horizontal pullback resistance).

Stochastic (34,5,3) is bouncing nicely off our 0.85% support.

Buy above 1.2460. Stop loss is at 1.2142. Take profit is at 1.3000.

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AUD/USD remain bearish for a further drop

The price has broken our ascending support-turned-resistance line triggering a bearish move from here. We look to sell below major resistance at 0.7992 (Fibonacci retracement, horizontal overlap resistance, pullback resistance) for a push down all the way to 0.7875 support (Fibonacci retracement, Fibonacci extension, horizontal swing low support).

RSI (34) sees our ascending support-turned-resistance line broken triggering a bearish drop from here.

Correlation analysis: We are expecting commodities weakness with AUD/USD and NZD/USD both expecting drops.

Sell below 0.7992. Stop loss is at 0.8047. Take profit is at 0.7875.

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NZD/USD profit target reached perfectly, remain bearish for a further drop

The price has dropped perfectly and reached our profit target. We prepare to sell below 0.7459 resistance (Fibonacci retracement, horizontal overlap resistance) for a further push down to at least 0.7333 support (Fibonacci extension, horizontal swing low support).

RSI (34) sees a lot of resistance pushing it down really well.

Correlation analysis: We are expecting commodities weakness with AUD/USD and NZD/USD both expecting drops.

Sell below 0.7459. Stop loss is at 0.7500. Take profit is at 0.7333.

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EUR/JPY profit target reached for the 5th time, prepare to short

The price has shot up and reached our profit target for the 5th time in a row. We prepare to sell below 131.32 resistance (Fibonacci extension, bearish price action) for a push down to at least 130.63 support (Fibonacci retracement, horizontal pullback support).

RSI (34) sees resistance below 64% where we expect a drop from.

Correlation analysis: We are seeing intermediate JPY strength with corrections expected on AUD/JPY and EUR/JPY.

Sell below 131.32. Stop loss is at 131.60. Take profit is at 130.63.

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AUD/JPY profit target reached once again, turn bearish for a short term correction

The price has shot up and reached our profit target perfectly. We prepare to sell below 88.31 resistance (Fibonacci retracement, horizontal overlap resistance) for a push down to at least 87.71 support (Fibonacci extension, horizontal swing low support).

Stochastic (21,5,3) is seeing intermediate resistance below 85% where we expect a drop from.

Correlation analysis: We are seeing intermediate JPY strength with corrections expected on AUD/JPY and EUR/JPY.

Sell below 88.31. Stop loss is at 88.58. Take profit is at 87.71.

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USD/JPY bouncing up nicely from support, remain bullish for a further rise

THe price has started to bounce really nicely off our buying entry. We remain 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.

Correlation analysis: We are seeing JPY weakness across the board with bounces expected on USD/JPY, AUD/JPY and EUR/JPY.

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

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Daily analysis of USDX for August 03, 2017

The index is still supported by the 92.80 level, but it's trying to break it in order to extend losses. Overall, the bearish structure is still alive and one could expect a lower continuation. If that happens, the next target to the downside should be the 92.29 level. In the bullish scenario, the nearest resistance is at the 93.50 level. MACD indicator is in the negative territory, favoring to the bearish idea.

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H1 chart's resistance levels: 93.49 / 94.00

H1 chart's support levels: 92.80 / 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 92.80, take profit is at 92.29 and stop loss is at 93.31.

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Daily analysis of GBP/USD for August 03, 2017

The pair is waiting for the BoE's interest rate decision scheduled for today and it's currently hovering around the resistance zone of 1.3257. We should witness a breakout above it in order to reach the 1.3364 level, at which we could expect some consolidation moves. To the downside, the critical zone is placed at the 1.3129 level.

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H1 chart's resistance levels: 1.3257 / 1.3364

H1 chart's support levels: 1.3129 / 1.3058

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 1.3257, take profit is at 1.3364 and stop loss is at 1.3154.

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Fundamental Analysis of EUR/GBP for August 2, 2017

EUR/GBP is currently quite volatile and corrective around the edge of breaking above 0.8950 resistance level. EUR and GBP both are going through series of bad economic reports which confused the market sentiment to ensure a direct move in the coming days. ECB has been providing hints about rate hike and with its hawkish statement in recent conferences the sentiment has been quite with the EUR but GBP is also showing some hawkish sentiment as BOE is also looking forward to the rate hiking in the future. Today EUR Spanish Unemployment Change report was published with the worst figure at -26.9k from the previous figure of -98.3k which was expected to be at -66.5k and EUR PPI was also published as expected at -0.1% which previously was at -0.3%/. On the GBP side, today Construction PMI report was published with the worst figure at 51.9 from the previous figure of 54.8 which was expected to be at 54.3. Despite the worst figure at the GBP side, the currency is currently showing some gains over EUR in this corrective volatile structure. The market is still quite indecisive but GBP is expected to have an upper hand over EUR in the coming days.

Now let us look at the technical view, the price is currently quite corrective at the edge of 0.8950. After breaking above the important level of 0.8850 the price has been quite volatile recently which does indicate the bearish presence in the market which is currently stopping the existing bullish pressure to gain further. A daily close below or above 0.8950 will provide hints on the further move in this pair but by considering the corrective price action bearish pressure is expected in this pair with a target towards 0.8850 in the coming days. As the price remains above 0.8850 the bullish bias is expected to continue with short-term bearish pressure recently in sight.

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