Technical analysis of USD/CHF for August 17, 2017

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USD/CHF is under pressure and expected to trade with bearish outlook. The pair turned bearish as the prices broke below the rising trend line on August 15. The downward momentum is further reinforced by both declining 20-period and 50-period moving averages. The relative strength index shows downside momentum.

On the political front, Trump dissolved two business advisory councils after several corporate chief executives quit, causing worries over the administration's agenda of financial measures.

Meanwhile, minutes of the U.S. Federal Reserve's latest monetary policy meeting showed that policymakers appeared increasingly wary about recent weak inflation and some were hesitant to raise interest rates further.

To conclude, as long as 0.9700 holds on the upside, look for another drop to 0.9595 and even to 0.9550 in extension.

Chart Explanation: The black line shows the pivot point. The present price above the pivot point indicates the bullish position, and the price 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: SELL, Stop Loss: 0.9700, Take Profit: 0.9595

Resistance levels: 0.9755, 0.9780, and 0.9815

Support levels: 0.9595, 0.9550, and 0.9500

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Technical analysis of GBP/JPY for August 17, 2017

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GBP/JPY is under pressure and expected to trade in lower range. The pair is consolidating and broke below its 20-period and 50-period moving averages. The relative strength index is below its neutrality level at 50 and lacks upward momentum. In addition, 142.25 is playing a key resistance role, which should limit the upside potential.

As long as this key level holds on the upside, look for a further drop towards 141.20 and even 140.90 in extension.

Alternatively, if the price moves in the opposite direction as predicted, a long position is recommended above 142.25 with the target at 142.65.

Strategy: SELL, Stop Loss: 142.25, Take Profit: 141.20.

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: 142.65, 143.15, and 144.00

Support levels: 141.20, 140.90, and 140.00

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Technical analysis of NZD/USD for August 17, 2017

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NZD/USD is expected to trade in higher range. The pair is trading above its ascending 20-period and 50-period moving averages, which play support roles and maintain the bullish bias. The relative strength index is supported by a rising trend line.

To sum up, as long as 0.7280 is not broken, further upside to 0.7350 and even to 0.7365 seems more likely to occur.

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: 0.7350, 0.7365, and 0.7400

Support levels: 0.7250, 0.7225, and 0.7175

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Fundamental Analysis of AUD/JPY for August 17, 2017

AUD has been stronger than JPY recently with positive economic reports and market sentiment. AUD gained ground on the back of the employment data. On the other hand, JPY had been quite neutral with the economic reports which lead to further weakness of the currency. Today the Australian Employment Change report showed a rise to 27.9k from the previous value of 20.0k which was expected to decrease to 19.8k. Besides, the unemployment rate also decreased as expected to 5.6% which previously was at 5.7%. At the same time, Japan's Trade Balance report was also positive and showed a rise to 0.34T which previously was at 0.09T versus the expected reading of 0.20T. Both currencies had positive reports published today which lead to a corrective structure currently as the market sentiment has become neutral for both currencies now. The indecision after good economic reports from Australia is indicating that JPY is currently on the way for some gains in the coming days as Japan posted a better than expected trade balance report.

Now let us look at the technical view. The price is currently residing at the edge of 87.50 resistance level which is in indecision now. It has already rejected both buyers and sellers by now which does indicate a high probability of counter move in this pair. A daily close above 87.50 will enclose the bullish move towards 89.50 whereas a daily close below 87.50 will signal further bullish move with a target towards 86.30-00 support area.

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Fundamental Analysis of EUR/CAD for August 17, 2017

EUR/CAD has been impulsively bearish recently despite the bad Canadian economic reports published recently. EUR has been quite neutral with the economic reports this week which lead to further weakness of the currency without any favorable gains. Today EUR Final CPI report was published as expected with an unchanged value at 1.3%, Final Core CPI also followed the same path and published with an unchanged value at 1.2% but Trade Balance showed an increase to 22.3B from the previous figure of 19.0B which was expected to be at 20.4B. Currently, ECB Monetary Policy Meeting accounts are going on which is expected to be neutral as well because of no possible rate hike decisions are in sight. On the CAD side, today Manufacturing Sales report is going to be published which is expected to be negative at -1.0% which previously was positive at 1.1%. Before the CAD news gets published CAD has gained quite impulsively which is expected to continue further if CAD report comes out better than expected today. As the CAD remains hawkish with the sentiment further gains on the bearish pressure is expected in this pair.

Now let us look at the technical view, the price has been quite impulsively bearish since yesterday which is expected to continue further if price breaks below 1.4720 level with a daily close. As the price remains below 1.50 level the bearish bias is expected to continue further with a target towards 1.4500-1.4450 area.

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Euro, Pound, Oil: Markets Pending Driver

Eurozone

The GDP growth in the euro area for the second quarter was slightly higher than expected. the adjusted annual growth estimate increased from 2.1% to 2.2%, which supports the euro.

According to the published report in August from the economic bulletin, there was a slowdown in the inflation for the second quarter but it is sure that the problem is only in the reduction of energy prices and partly in food products. The basic level of inflation remains confidently high, although this point seems rather controversial. As can be clearly seen in the graph below, the prices of the services sector were the main reason. The price dynamics of the group of industrial products in the non-energy sector has a noticeable lower price growth compared to the period of 2011/13 when the deflationary pressure on still quite strong.

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The volume of imports of goods has declined and has become pronounced in the second quarter.

The ECB minutes of the meeting is also expected to be published today, which will be considered by the traders to look for possible hints in the internal discussion regarding the timing of the easing of the incentive program. Recent trends indicate that the concern of the ECB may even increase, as the industry and the export-oriented sector of the economy are under threat because of simultaneous pressure from several sides. In these conditions, there is no need to wait for hints to reduce the incentive program since the protocol will help to weaken the euro.

The likelihood of a correctional decline in EUR / USD pair is growing.

United Kingdom

The British pound has declined in reaction to weaker than expected data on consumer inflation. The price decrease in July was 0.1% with a year-on-year growth of 2.6%. Both indicators are worse than forecast.

At the same time, there are some positive points. The index of retail prices rose more than expected while the report on the labor market, published on Wednesday, showed a positive trend in most parameters. Applications for benefits have decreased in number and the unemployment rate also decreased from 4.5% to 4.4%. On the other hand, the average wage increased by 2.1%, which was better than forecasts and the level attained in June.

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The latter parameter can serve as the basis for optimism since it will contribute to the growth of inflation, which also increases the probability of a rate hike by the Bank of England. This factor will give some support to the pound.

The data on retail sales for the month of July will be published today which can induce the market to move in any direction. Although expectations are moderately negative, experts expect weaker indicators than a month ago.

The pound continues to be under pressure, despite the fact that bulls on the dollar will not get together for a full-fledged offensive. The move towards 1.28 followed by a slide to 1.25 will most likely happen than the resumption of growth.

Oil

Commercial crude oil inventories from the U.S. fell by 1.9% or 8.9 million barrels. The decline has significantly exceeded the forecasts of experts.

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Analysis of Gold for August 17, 2017

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Recently, the Gold has been trading upwards. The price has tested the level of $1,290.00. According to the 30M time frame, I found a breakout of rising channel and confirmed double top formation, which is a sign that buying looks risky. I also found series of doji candles in the creation of double top formatin, which is another sign that buyers got exhausted. My advice is to watch for potential selling opportunities. The downward targets are set at the price of $1,281.00 and $1,276.50.

Resistance levels:

R1: $1,290.55

R2: $1,298.40

R3: $1,307.00

Support levels:

S1: $1,274.30

S2: $1,265.50

S3: $1,257.95

Trading recommendations for today: watch for potential selling opportunities.

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

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Daily Outlook

In February 2017, the depicted short-term downtrend was initiated around 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 (Key-Zone) 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 was temporarily breached to the upside.

Recent bearish pullback was executed towards the price zone of 0.7310-0.7380 (newly-established demand-zone) which failed to offer enough bullish support for the NZD/USD pair.

Re-consolidation below the price level of 0.7300 enhances the bearish side of the market. This brings the EUR/USD pair again towards 0.7230-0.7150 (the key zone) where the recent bullish recovery is being manifested.

Currently, the NZD/USD pair remains trapped between the price levels of 0.7240 and 0.7320 until a breakout occurs in either directions.

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

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Monthly Outlook

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

However, the EUR/USD pair had been trapped within the depicted consolidation range (1.0500-1.1450) until the current bullish breakout was executed above 1.1450.

The current bullish breakout above 1.1450 allows a quick bullish advance towards 1.1850 and 1.2000-1.2100 where the price action should be watched for evident bearish rejection and a valid SELL Entry.

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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, the evident bullish momentum has been expressed on the chart.

As anticipated, the ongoing bullish momentum allowed the EUR/USD pair to pursue bullish trend towards 1.1415-1.1520 (the previous daily supply zone).

The daily supply zone failed to pause the ongoing bullish momentum. Instead, the evident bullish breakout is being witnessed on the chart. The nearest supply level to meet the pair is located around 1.2080 (the level of previous multiple bottoms) where bearish rejection can be anticipated.

However, the recent bearish pressure was expressed around lower price levels (1.1880) which managed to initiate the current bearish corrective movement.

On the other hand, the price zone of 1.1415-1.1520 stands as a prominent DEMAND zone to be watched for a valid BUY entry during the current bearish pullback.

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EUR/JPY analysis for August 17, 2017

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Recently, the EUR/JPY pair has been trading downwards. The price has tested the level of 128.77. According to the 4H time frame, I found a breakout of the rising wedge, which is a sign that sellers are in control and that buying looks risky. Another sign of weakness is the fake breakout of the resistance cluster in the background. There is a flip on the RSI oscilator from bullish to berish, which is an indication that buyers got exhausted. Watch for potential selling opportutnieis. The downward targets are set at128.00 and 127.50.

Resistance levels:

R1: 130.25

R2: 130.80

R3: 131.25

Support levels:

S1: 129.30

S2: 128.90

S3: 128.30

Trading recommendations for today: watch for potential selling opportunities.

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Daily analysis of major pairs for August 17, 2017

EUR/USD: Bears have made a commendable effort to push the price southwards, but the effort now and then is being scuttled by the bulls' machination. The market is quite choppy right now, and it would make sense to stay away from it, until price goes above the resistance line at 1.1800 or below the support line at 1.1700.

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USD/CHF: Bulls have made a commendable effort to push the price northwards, but the effort now and then is being scuttled by the bears' machination. The market is quite choppy right now, and it would make sense to stay away from it, until the price goes above the resistance level at 1.9750 or below the support level at 0.9600. Some fundamental figures are expected today and they may have impact on the market.

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GBP/USD: This is a bear market, which has gone downward by about 130 pips, and it has tested the accumulation territory at 1.2850 several times. The EMA 11 is below the EMA 56 and the RSI with period 14 is below the level 50. Since there is a Bearish Confirmation Pattern in the market, it is expected that the accumulation territory would eventually be breached to the downside as the price journeys further south.

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USD/JPY: The bullish effort that was seen in the last few days on the USD/JPY is currently being threatened. The price has gone up by 180 pips, almost reaching the supply level at 111.00, prior to the pullback that was witnessed last week. The pullback has become a threat to the extant bullish outlook, but it has not overridden it. A movement below the demand level at 109.50 would render the bullish effort completely invalid, while a movement of about 150 pips to the upside would help restore the short-term bullishness in the market.

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EUR/JPY: This pair has just generated a bearish signal, nullifying the bullish effort that was witnessed a few days ago. The price is now below the supply zone at 129.00, going towards the demand zones at 128.50 and 128.00. These are the ultimate targets for the week.

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Fundamental Analysis of USD/CAD for August 17, 2017

USD/CAD has been in a bullish retracement phase recently which is most probably came to an end after breaking below the 1.2700 with a daily close due to bad USD economic reports published yesterday. CAD has been quite stronger after the rate hike decision and hawkish statements from the Bank of Canada officials. The break below 1.2700 did confirm that the bearish trend is still intact and further bearish pressure in this pair is on the way. Today CAD Manufacturing Sales report is going to be published which is expected to be negative at -1.0% which previously was at 1.1%. If the report comes better than expected then we might see more impulsive bearish pressure. On the USD side, today Unemployment Claims report is going to be published which is expected to decrease to 240k from the previous figure of 244k, Philly Fed Manufacturing Index is expected to decrease at 18.3 from the previous figure of 19.5, Capacity Utilization Rate is expected to increase to 76.7% from the previous value of 76.6% and Industrial Production report is expected to decrease to 0.3% from the previous value of 0.4%. Along with these economic reports, FOMC Member Kaplan is going to speak today about nation's key interest rates and future monetary policies which are expected to be neutral in sentiment. To sum up, USD is expected to weaken today as of the forecasted figures today are quite negative in nature and CAD sentiment is still quite strong and remain like this for the coming days.

Now let us look at the technical view, the price is currently showing some bullish move after impulsive bearish move yesterday. Currently, the price is expected to move towards 1.2700 and if we see any bullish rejection off the level the price is expected to reach 1.2450 support level in the coming days. As the price remains below 1.2800 with a daily close the bearish bias will continue further.

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NZD/USD testing major resistance, prepare to sell

Forex analysis review
NZD/USD testing major resistance, prepare to sell

Global macro overview for 17/08/2017

Global macro overview for 17/08/2017:

A set of quite upbeat data from the UK has been released recently. The UK unemployment declined to 4.4% from 4.5% in June and this was the lowest unemployment rate since 1975. The employment increased by 125,000 in the last 3 months and by 338,000 over the year with the employment rate at a record high of 75.1% from 74.9% in the previous month. The jobless claimant count declined 4,200 in July, which was better than market participants expectations of 7,200 increase. The biggest surprise, however, came from wages as the headline year-on-year growth rate strengthened to 2.1% from an upwardly-revised 1.9% in the previous month.

The report from the British labour market was a big surprise. Actually, there was nothing to pin down, all the figures were better than expected. In spite of everything, the better data coming from the British economy seems to calm the biggest pessimists announcing stagflation (simultaneous rise in inflation and a slowdown in economic growth). The data will improve the confidence surrounding the UK economic outlook with market sentiment edging back towards the potential for higher rates. Nevertheless, the Bank of England policymakers might not be that optimistic as only a sustained improvement in economic data would change the point of view of the BoE officials and trigger the interest rate hike this year. The main obstacle, the lower than projected inflation readings, is still on the table and it still looks like the BoE will prefer the wait-and-see approach before committing to present any hawkish point of view regarding a possible interest rate hike.

Let's now take a look at the EUR/GBP technical picture on the H4 time frame. The market is trading relatively close to the swing high at the level of 0.9268 in overbought conditions. Moreover, there is a clear bearish divergence between the price and the momentum oscillator and the price is trading inside of the Ending Diagonal pattern. All these clues are pointing for a possible test of the level of 0.9088 and lower if the UK data are better than expected. The key techcnail support is still at the level of 0.9006.

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Global macro overview for 17/08/2017

Global macro overview for 17/08/2017:

The FOMC Meeting Minutes revealed policy makers debate regarding inflation, asset prices and financial stability. According to the minutes, most Fed members believe inflation may remain below 2.0% longer than initially expected. The additional risk prevails for a further decrease, but the Committee could afford to be patient in deciding whether to increase interest rates further despite the weak inflation. On the other hand, a delay in raising the interest rates might intensify financial stability risks (some members even pointed out, that high equity prices might be that risk). Despite all this, in the next few years, inflation should be on the projected target. Most policy makers backed the balance sheet at the next meeting, although they say they will only contribute little to monetary tightening.

Overall the meeting did not reveal anything new and the ongoing debate, whether the current weakness of US inflation is transitory or transitional had been noted in the previous statements. It is worth to notice, that there are clearly two camps within the committee: those that prefer a wait-and-see policy approach due to the uncertain inflation outlook and those that are happy to rely on traditional macro relationships like diminishing spare capacity (or above-trend growth) generating higher future inflation. This is why an option to reduce the balance sheet in September and then a small rate hike in December is still on the table. This scenario would, in turn, strengthened the US Dollar across the board for a short-term.

Let's now take a look at the US Dollar Index technical situation after the news release. The US Dollar bulls were too weak to violate the key technical resistance zone around the level of 94.11 and after the FOMC statement, the price moved lower towards the next support at the level of 93.25. The overall market conditions are overbought, so the price might test the lower channel boundary around the level of 93.00 before any bounce higher.

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Trading plan for 17/08/2017

Trading plan for 17/08/2017:

The FOMC Meeting Minutes release has clearly weakened the US Dollar, which is losing today to all major currencies. The strongest is JPY, which is up 0.34%, then NOK and AUD (+0.2%). Among precious metals, a positive sentiment is still present, the Gold ounce is at $1287 (+0.3%), Palladium climbs +1.1%, Silver +0.1%. On the Asian stock market mixed sentiment, Shanghai Composite rose 0.35%, but Hang Seng and Nikkei lost 0.2% respectively and 0.1%.

On Thursday 17th of August, the event calendar is busy with important data release. First, the UK will post Retail Sales With Auto Fuel data, then EU will post Trade Balance, Consumer Price Index data and ECB Monetary Policy Meeting Accounts from July. During the US session, Canada will reveal Manufacturing Sales data and US will present Unemployment Claims, Continuing Claims, Philly Fed Manufacturing Index and Industrial Production data. Later during the session, FOMC member Robert Kaplan will give a speech.

GBP/USD analysis for 17/08/2017:

The Retail Sales data from the UK are scheduled for release at 08:30 am GMT and the market participants expect a substantial decrease from 0.6% (2.9% on yearly basis) to 0.2% (1.4% on yearly basis) in the reported month. After yesterday's positive update on Britain's labour market ( unemployment rate down, claimant count down, wage growth edged higher), today's sales data are expected to decline. Retail Sales are responsible for a large part of the UK GDP, especially if bungled together with COnsumer Spending. Those two can not increase if the wages growth is small or none and the inflation are rising, but according to the recent data the current situation in the UK seems to be different than that. If the data will beat the expectations, it will suggest, that the UK economy, despite headwinds brewing due to Brexit, remains resilient. This, in turn, will strengthen the British Pound across the board in the short-term.

Let's now take a look at the GBP/USD technical picture at the H4 timeframe. Despite the better than expected labor data, the market is still trading below the important technical resistance at the level of 1.2932.This will be the key level for bulls after the data are released because only violation of this resistance will put the bulls back into control over the market. On the other hand, the technical support at the level of 1.2845 had been tested three times already, so if it breaks, then the sell-off will continue down to the level of 1.2811 - 1.2793.

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Market Snapshot: Gold bounces from 61%Fibo

After the FOMC Meeting Minutes release, the price of Gold had bounced from the 61%Fibo retracements of the previous swing up at the level of $1267 and now is trading again around the local high at the level of $1290. The market conditions are neutral to positive and the momentum indicator is pointing to the upside. The key resistance is seen at the level of $1296.

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Market Snapshot: SPY is back under the key resistance

After a drop from the all-time high at the level of 248.88 the price has made a lower low at the level of 243.73 and then bounced back up towards the level of 247.55, leaving behind the gap between the levels of 244.65 - 245.54. Currently, the market trades in overbought conditions around the lower high at the level of 247.55, just below the golden trend line. If this trend line is not violated soon, then the odd for filling the gap will increase.

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EUR/USD: Ready for growth.

EUR/USD: Ready for growth.

Morning review.

Minutes of the Fed and Eurozone GDP are in favor of the euro.

On Wednesday, August 16, the euro showed a reversal to growth. Having made a false break down to 1.1685, a sharp reversal and an increase of 1.1780.

At the level of 1.1680, a very strong "bottom" is formed. The pair is ready to attempt a breakthrough to the upper daily level of 1.1850 and then the weekly level of 1.1910.

What was the impetus? Eurozone GDP grew above the forecast + 2.2%. All analysts note the acceleration of the growth of the EU economy, in contrast to a clear slowdown in the US. This shifts investor attention to assets in euros.

"Minutes" of the Fed on Wednesday showed that many representatives of the Fed noted a slowdown in inflation. A clear excuse not to rush in raising rates. At the same time, the Fed believes that this phenomenon (price slowdown) is temporary.

We are now in the purchase of 1.1760 but subject to a down turn, we will sell from 1.1680.

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Elliott wave analysis of EUR/NZD for August 17, 2017

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Wave summary:

Once again EUR/NZD failed to break above resistance at 1.6236, which keeps the consolidation in the 1.6065 - 1.6236 alive. We continue to look for a break above 1.6236 soon to confirm continuation higher towards 1.6969.

Should support at 1.6065 be broken that could delay the expected rally for a deeper and more complex correction in wave ii/.

R3: 1.6470

R2: 1.6349

R1: 1.6236

Pivot: 1.6100

S1: 1.6065

S2: 1.5921

S3: 1.5840

Trading recommendation:

WE are long EUR from 1.5510 with stop placed at 1.6050. If you are not long EUR yet, then buy a break above 1.6236 and start by using the same stop at 1.6050.

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Elliott wave analysis of EUR/JPY for August 17, 2017

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Wave summary:

What looked like upside acceleration, was invalidated almost as quickly and support at 128.89 now needs to protect the downside for a break above 129.83 to confirm renewed upside pressure towards 131.40 on the way towards the ideal wave D-target at 137.36.

If support at 128.89 fails to protect the downside, that would call for a more downside pressure towards 127.00 and maybe even closer to 125.08.

R3: 130.82

R2: 130.40

R1: 129.83

Pivot: 129.50

S1: 129.14

S2: 128.89

S3: 128.53

Trading recommendation:

Our stop at 129.35 was hit. We will go with a break of either resistance at 129.83 or support at 128.89.

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USD/JPY dropping perfectly towards profit target, remain bearish while protecting our profits

The price has dropped really nicely from our selling area yesterday. We remain bearish looking to sell below resistance at 110.34 (Fibonacci retracement, horizontal pullback resistance) for a further push down to at least 108.77 support (Fibonacci extension, horizontal swing low support). We shift our stop loss to 111.09 which was yesterday's entry to protect our profits.

Stochastic (21,5,3) is turning down nicely from our 95% resistance level.

Sell below 110.34. Stop loss is at 111.09. Take profit is at 108.77.

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USD/CHF profit target reached perfectly, prepare to buy on major support

The price has shot down perfectly from our selling level and reached our profit targets. We prepare to buy above major support at 0.9598 (Fibonacci retracement, horizontal overlap support) for a push up to at least 0.9697 resistance (Fibonacci retracement, horizontal pullback resistance).

Stochastic (34,5,3) is seeing strong support above 2.3% where we expect a corresponding bounce in price from.

Buy above 0.9598. Stop loss is at 0.9557. Take profit is at 0.9697.

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NZD/USD testing major resistance, prepare to sell

The price is now testing major resistance at 0.7322 (Fibonacci retracement, horizontal overlap resistance) and we expect to see a reaction from this level for a push down to at least 0.7223 support (Fibonacci extension, horizontal swing low support).

Stochastic (34,5,3) is seeing major resistance below 96% level and we expect to see a corresponding drop in price from.

Sell below 0.7322. Stop loss is at 0.7372. Take profit is at 0.7223.

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EUR/JPY forming a nice reversal pattern, remain bearish

The price reversed nicely yesterday and is dropping nicely. We prepare to sell below resistance at 130.07 (Fibonacci retracement, horizontal overlap resistance, bearish price action, bearish divergence) for a push down to at least 128.92 support (Fibonacci retracement, horizontal swing low support).

Stochastic (34,5,3) is seeing a nice reversal below 94% and has bearish divergence vs price signaling that a strong reversal is fast approaching.

Correlation analysis: We're seeing JPY strength with drops on AUD/JPY, EUR/JPY, and USD/JPY.

Sell below 130.07. Stop loss is at 130.42. Take profit is at 128.92.

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AUD/JPY testing major resistance, remain bearish

The price is testing major resistance at 87.39 (Fibonacci retracement, horizontal overlap resistance, Fibonacci extension) and we expect to see a reaction from this level for a drop to at least 86.32 support (Fibonacci retracement, horizontal swing low support).

Stochastic (34,5,3) is seeing major resistance below 96% where we expect to see a corresponding reaction in price from.

Correlation analysis: We're seeing JPY strength with drops on AUD/JPY, EUR/JPY, and USD/JPY.

Sell below 87.39. Stop loss is at 88.08. Take profit is at 86.32.

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AUD/USD approaching major resistance, prepare to sell

The price is now approaching major resistance at 0.7938 (Fibonacci retracement, horizontal overlap resistance, Fibonacci extension) and we expect to see a strong reaction from this level to fuel the drop to at least 0.7877 support (Fibonacci retracement, horizontal pullback support).

Stochastic (34,5,3) is testing major resistance at 96% and we expect to see a corresponding drop in price from this level.

Sell below 0.7938. Stop loss is at 0.7982. Take profit is at 0.7877

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Technical analysis of USD/CHF for August 17, 2017

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Overview:

  • The USD/CHF pair continues moving upwards from the zone 0.9639. The bias remains bullish in the nearest term testing 0.9763 or 0.9800. The market has been trading around the area of 0.9639/0.9600 this week. The pair rose from the levels of 0.9639 and 0.9600 (the level of 0.9639 and 0.9600 coincide with the ratios of 61.8% Fibonacci retracement and 50%) to a top around 0.9733. The first support level is seen at 0.9639 followed by 0.9600, while daily resistance 1 is seen at 0.9763.
  • The USD/CHF pair is still moving between the levels of 0.9693 and 0.9763 in coming hours. On the one-hour chart, immediate resistance is seen at 0.9763 which coincides with the double top. Currently, the price is moving in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. The price is still above the moving average (100).
  • Therefore, if the trend is able to break out through the first resistance level of 0.9763, we should see the pair climbing towards the second daily resistance at 0.9800 to test it. However, it would also be wise to consider where to place stop loss; this should be set below the last support 0.9600. Overall, the trend is still calling for a strong bullish market as long as the trend is still above the spot of 0.9639/09600.
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Technical analysis of NZD/USD for August 17, 2017

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Overview:

  • The NZD/USD pair was moving downwards from the level of 0.7329. The pair dropped from the level of 0.7329 (the level of 0.7329 coincides with the ratio of 38.2%) to the bottom around 0.7224. But it rebounded towards the price 0.7288. Today, the first resistance level is seen at 0.7288 followed by 0.7328, while daily support 1 is seen at 0.7175. According to the previous events, the NZD/USD pair is still moving between the levels of 0.7288 and 0.7175; hence, we expect a range of 113 pips. If the NZD/USD pair fails to break through the resistance level of 0.7288, the market will decline further to 0.7175. This would suggest a bearish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 0.7175 with a view to testing the daily support 1. On the contrary, if a breakout takes place at the resistance level of 0.7329, then this scenario may become invalidated. Taking everything into account, we still look in the bearish market as long as the trend is below the spot of 0.7360 - 0.7329.
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Ichimoku indicator analysis of USDX for August 17, 2017

The Dollar index shows some reversal signs and although trend remains bullish the upside potential looks weak and the expected bounce could already have been completed. Bulls need to be very cautious.

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The price is back testing short-term support at the 4-hour chart. Support is at 93.40-93.20 level. The price has not made a lower low yet. A break below this support will open the way for a move towards 91. Resistance at 94.30.

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On a daily basis, it seems that we have a rejection at the daily kijun-sen (yellow line indicator) resistance. This is not a good sign and if we combine it with a daily close below the tenkan-sen (red line indicator) then we get a sell signal that will imply new lows are coming for the index.The material has been provided by InstaForex Company - www.instaforex.com

Gold retreats, but does not give up

Leaving the shadow of geopolitical risks and the growing US dollar has forced investors to turn their backs on gold. According to TD Securities, in order to continue the rally above $ 1,300 an ounce, it is necessary to see a revival of the conflict on the Korean Peninsula as well as low inflation in the U.S. In this case, the precious metal would be able to rise around $1375. On the other hand, the absence of such drivers would increase the risk of a return of the prices towards the direction of $1200 per ounce.

Pyongyang's intentions to attack Guam became far from the only factor in the XAU/USD rally. Investors shifted to concerns of some Fed representatives on the slowdown of inflation, which puts the sticks in the wheel of the process of normalizing monetary policy. As a result, the inability of July consumer prices to reach the median forecast of Bloomberg experts (1.7%) has reduced the chances of a monetary restriction in December to 36%, which is a bullish factor for gold. Unfortunately, the success of precious metals on this matter is over.

President of the Federal Reserve Bank of New York, William Dudley is ready to vote for a rate hike in 2017, given that the new macroeconomic data will match his expectations. In this respect, the fastest growth in retail sales in July (+ 0.6% m/m) made the leading indicator from the Atlanta Federal Reserve Bank to raise GDP growth estimates in the third quarter to 3.7% q/q, which favorably affected the trading instruments market. CME futures raised the likelihood for a December rate hike by the Fed to 53%, which deprived the precious metal of the ground beneath.

Strong data, the growth of the Citigroup U.S. Economic Surprise Index, as well as the "hawkish" rhetoric of Federal Reserve representatives extends a helping hand to the US dollar. In this context, the reverse correlation of gold with the USD index has become a strong argument in favor of selling.

Dynamics of the USD and gold index

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Source: Trading Economics.

The fact that during the second quarter the inflow of capital into SPDR Gold Shares amounted to about $870 million does not particularly help the bulls in XAU/USD. The assets of the fund have grown to $34 billion. However, their dynamics in August was behind the prices, which is a confirmation of the speculative nature of the rally.

Pressure on gold could increase if at the meeting of the heads of central banks in Jackson Hole on August, regulators will provide preference to the same rhetoric that was made at a similar conference in Sintra, Portugal back in the end of June. Back then, expectations of the normalization of monetary policy have inflated debt market rates around the world, which has dealt a serious blow to the positions of XAU/USD bulls. Nevertheless, in July, investors realized that the process of monetary tightening will likely be slow, which raised the volume of bonds with negative yield to $8.6 trillion (+ 25% m/m) and allowed gold to grope for the bottom.

Technically, the inability of bulls to return prices to the levels of the previous ascending channel indicates their weakness. If the "bears" manage to overcome support at $1,250 per ounce, activating the "Shark" pattern will raise the risk of continuing the descending trend.

Gold, daily chart

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Ichimoku indicator analysis of gold for August 17, 2017

The gold price held cloud support and reversed higher as expected. Gold is now most probably heading towards $1,300 and higher over the next weeks and has successfully back tested the long-term trend line resistance. However, we cannot rule out another back test in the future.

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The price is trading above the Kumo and has recently broken above the kijun-sen. The tenkan-sen is positively sloped and by crossing the kijun-sen will confirm the bullish short-term trend and strengthen it. Resistance is at the recent highs. Support at $1,275-70.

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Black line -long-term resistance

Blue line -long-term support

The gold price has broken out and above the long-term resistance trend line from its all time highs. We have been bullish gold for some time now and we now look for more upside. Any pull back to back test the broken trend line will be seen as a gift for bulls.

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Daily analysis of USDX for August 17, 2017

The index is looking to break above 94.11 in an effort to strengthen the bullish bias across the board. However, such resistance is limiting gains and if USDX pulls back at the current stage, then the 200 SMA at H1 chart can be re-tested, opening the doors to reach the support level of 93.28 in the worst-case scenario. MACD indicator is entering the neutral territory, calling for sideways.

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H1 chart's resistance levels: 94.11 / 94.58

H1 chart's support levels: 93.74 / 93.28

Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the USD Index breaks with a bullish candlestick; the resistance level is at 94.11, take profit is at 94.58 and stop loss is at 93.66.

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Daily analysis of GBP/USD for August 17, 2017

The sideways range made a come back to the GBP/USD pair's structure, as it holds the support zone of 1.2850. Overall outlook remains bearish as long as the pair stays below the 200 SMA at H1 chart, but it seems that bears are starting to lose some steam. However, if it manages to break below 1.2850, then it can plummet towards 1.2761.

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H1 chart's resistance levels: 1.2958 / 1.3021

H1 chart's support levels: 1.2850 / 1.2761

Trading recommendations for today: Based on the H1 chart, sell (short) orders only if the GBP/USD pair breaks a bearish candlestick; the support level is at 1.2850, take profit is at 1.2761 and stop loss is at 1.2938.

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Analysis of Gold for August 16, 2017

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Recently, the Gold has been trading downwards. As I expected, the price tested our first objective point at the level of $1,274.00. According to the Daily time frame, I found a breakout of support at $1,274.00, which is a sign that buying looks risky. The evening star formation in the background plus overbought condition on the Stochastic oscillator suggests further downwards price. My advice is to watch for selling opportunities. The first downward target is set at the price of $1,254.00.

Resistance levels:

R1: $1,287.00

R2: $1,295.00

R3: $1,302.00

Support levels:

S1: $1,272.40

S2: $1,265.00

S3: $1,257.40

Trading recommendations for today: watch for potential selling opportunities.

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EUR/JPY analysis for August 16, 2017

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Recently, the EUR/JPY has been trading upwards. The price tested the level of 130.40. Anyway, according to the 4H time frame, I found a fake breakout of resistance in the background, which is a sign that buying looks risky, most recently, there is a breakout of a rising wedge, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward target is set at the price of 128.05.

Resistance levels:

R1: 130.30

R2: 130.70

R3: 131.35

Support levels:

S1: 129.25

S2: 128.60

S3: 128.15

Trading recommendations for today: watch for potential selling opportunities.

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Trading plan for August 16, 2017

Trading plan 08/16/2017

The general picture: Everyone ran into bitcoins. Gentlemen, the best time for shopping is clearly not right now.

Before proceeding to our usual analysis of the foreign exchange market, let's talk about crypto currencies. We see the Bitcoin rate above 4000 dollars - 4053 current at 8.20 London time, which is lower than yesterday's high by 10% approximately (4390.70 high, if quotes in the terminal are true). About bitcoins, let's say taxi drivers and sellers on the market, in general, there is a clear sign that professionals should not enter the market at the moment (if you bought the crypt in January at a price of $ 1,300 - another matter).

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Bitcoin graph - the vertical take-off (recalls the schedule of Gazprom or the Savings Bank of the golden days of 2006-2007). Gentlemen, miracles happen, but do not last forever. Probably, we are on the verge of a very strong correction. Purchases are possible in order to repeat the maximum but with a reasonably small stop. Without stops, this is insanity. Find the graph of the previous strong retracement Bitcoin in late 2013 from 1090 to 171, a drop of 5 times the length of two years.

Over time, the crypto currency will calm down and begin to behave like a normal financial instrument. Can it be that there will be a new wave of powerful growth? Yes, and maybe not. It depends on the position of world regulators, the US and EU in the first place.

While the market capitalization of the crypt is 135 billion dollars, the Bitcoin share is about 50%, the share of the Ethereum is half of the rest, the share of the first 10 crypto currencies is 90% of the total capitalization.

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Let's return to the currency market.

EUR/USD

On Tuesday, strong data on US retail sales (+ 0.6% is much better than the forecast). The dollar showed growth. The pound fell to a three-month support line. The dollar shows a willingness to grow towards the franc and the yen.

But EUR/USD showed the strength of buyers. We were ready to sell at breakdown down to 1.1685, but the buyers resisted and without reaching just one point to this point, the rate went up.

We are ready to buy at the breakdown to the top of 1.1850 and sell at the breakdown of 1.1685.

Next week, the main event for the market is the meeting in Jackson Hall of the heads of the largest Central Bank.

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