Analysis of GBP/USD for August 23, 2017

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Recently, the GBP/USD pair has been trading downwards. The price tested the level of 1.2792. According to the 30M time frame, I found that resistance at 1.2810 is on the test and my advice is to watch for potential selling opportunities. The Stochastic oscilator is showing overbought conditions, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the levels of 1.2750 and 1.2700.

Resistance levels:

R1: 1.2885

R2: 1.2950

R3: 1.2990

Support levels:

S1: 1.2785

S2: 1.2745

S3: 1.2685

Trading recommendations for today: watch for potential selling opportunities.

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Analysis of EUR/JPY for August 23, 2017

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Recently, the EUR/JPY pair has been trading sideways at the price of 128.70. Anyway, according to the 30M time frame, I found a broken upward trendline and contraction between the swings, which is a sign that buying looks risky. The Moving average oscilator is showing a hidden bearish divergence, which is another sign of weakness. My advice is to watch for potential selling opportuntiies. The downward target projection is set at the price of 127.55.

Resistance levels:

R1: 129.30

R2: 129.70

R3: 130.25

Support levels:

S1: 128.35

S2: 127.85

S3: 127.45

Trading recommendations for today: watch for potential selling opportunities.

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NZD/USD Intraday technical levels and trading recommendations for August 23, 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.

The 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 (Key-Zone) where 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 direction.

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Intraday technical levels and trading recommendations for EUR/USD for August 23, 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 has 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 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, evident bullish momentum has been expressed on the chart.

As anticipated, the ongoing bullish momentum allowed the EUR/USD pair to pursue further bullish advance towards 1.1415-1.1520 (Previous 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 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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Technical analysis of USD/CHF for August 23, 2017

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Overview:

  • The USD/CHF pair is still moving upwards from 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.
  • The pair rose from the levels of 0.9639 and 0.9600 (these levels 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, the 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 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.
  • The trend is still calling for a strong bullish market as long as the trend is still above the level of 0.9639.
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Technical analysis of NZD/USD for August 23, 2017

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Overview:

  • The NZD/USD pair has dropped sharply from the level of 0.7282 towards 0.7207. Now, the price is set at 0.7218. It should be noted that volatility is very high for that the NZD/USD pair is still moving between 0.7238 and 0.7180 in coming hours. Furthermore, the price has been set below the strong resistance at the levels of 0.7257 and 0.7272, which coincides with the 38.2% and 50% Fibonacci retracement level respectively. Additionally, the price is in a bearish channel now. Amid the previous events, the pair is still in a downtrend. From this point, the NZD/USD pair is continuing in a bearish trend from the new resistance of 0.7238 which acts as a daily pivot point. Thereupon, the price spot of 0.7238/0.7257 remains a significant resistance zone. Therefore, a possibility that the NZD/USD pair will have downside momentum is rather convincing and the structure of a fall does not look corrective. In order to indicate a bearish opportunity below 0.7238, sell below 0.7238 or 0.7257 with the first targets at 0.7207, 0.7180 and 0.7154. However, the stop loss should be located above the level of 0.7300 (0.7282 represents the resistance 3).
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Dollar in search of a strong driver

The US dollar is traded in different directions this week. Investors are waiting for the Fed's symposium in Jackson-Hole to begin where several central bank executives, in particular, the head of the Federal Reserve Bank Janet Yellen and ECB head Mario Draghi, are expected to disclose plans for changing the monetary policy and assessment Economic situation in the world as a whole.

Most likely, there will not be anything new in the public speeches although the press conference promises to be more informative. Yet, it will be difficult to avoid critical issues.

The major concerns for the Fed include the consistency of the planned actions, the resilience of labor market recovery and the real economic situation which is primarily the inflation.

According to the latest employment reports, the labor market remains strong with the growth rate of new jobs remains high while the unemployment dropped low by 4.3% for long-term. The part-time employment is decreasing, and the number of vacancies is growing.

Moreover, the growth of the labor market did not lead to an increase in the average wage. The growth in the average hourly earnings in the non-agricultural sector has not increased with inflation since the beginning of 2015. A similar index from the Federal Reserve Bank of Atlanta also shows modest results.

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The trend is quite alarming considering the long-term plans of the Fed - a weak increase in average wages creates insufficient inflationary pressures to withstand the announced growth rates of the discount rate. As a result of the June meeting, the Fed announced target rate of 1.4% in 2017 and 2.1% in 2018, which implies 3 increases this year and in the next.

However, investors are more and more negative.

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The situation requires a quick resolution. In September, the US Congress should consider the budget release for the next financial year, and a decrease in consumer activity can significantly complicate the collection of taxes. On Tuesday, several media reported about two different subject matter regarding consultations of the Trump administration and key figures in the Congress that led to an interim success. The parties managed to agree on some parameters of the future tax reform, in particular, the issue of covering the declining income due to lower income tax. In other words, the Congress and the presidential administration found sources in financing the budget deficit. If Trump promises to announce this to the general public, the dollar will be able to receive substantial support against a background of lower political risks.

Against the backdrop of news expectations from Jackson-Hole, the actual macroeconomic news should not be forgotten. Today, Markit will present preliminary business activity data for the month of August. A rapid growth occurred amid a backdrop of tax reform expectations after it lost its momentum during the presidential election. Also, the indices fell back down from the maximum values, but are still at high levels. The period of uncertainty is about to an end. Experts predicted a bit of improvement over July, which may support the dollar.

Data on long-term orders for the month of July will be released on Friday. According to experts, pressure on the volume of orders could fall by 5.5% compared to June because of a slowdown in consumer demand and weak revenue growth.

The dollar has been on a prolonged weakness however, growth is far-fetched as long as the data remains strong.

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Global macro overview for 23/08/2017

Global macro overview for 23/08/2017:

The US political scene keeps influencing the financial markets worldwide. September is the month in which the budget for the next fiscal year should be approved. It is also the period when the issue of US debt limit will have to be resolved. Meanwhile, Donald Trump is treating the government shutdown to guarantee to fund the US-Mexico border wall project. For the time being, these declarations do not have a major, immediate and direct impact on the market, but with a view to addressing the key issues mentioned above, traders shouldn't move past them indifferently. The bigger the crisis is in the Trump administration and the Republican Party's rivalry is stronger, the less the chance of fulfilling the promises and the Dollar is getting weaker. In the current situation, investors have so much doubt in the stimulus of growth by cutting taxes and infrastructure package already, that any positive information in this field will support the US Dollar. For now, the continuation of acute rhetoric will, however, be interpreted as the inability to find consensus on key budget issues and US debt limit and is a major threat to the rejuvenating positive sentiment on Wall Street.

No opportunity for tax cuts means lower corporate profits. This, in turn, adversely affects the valuation of shares. To a large extent, the American stock market has plummeted recently, and more and more people are starting to talk loudly about the upcoming bigger correction. If we add an uncertain geopolitical situation in form of US-North Korea conflict, the recipe for a larger corrective cycle is ready.

Let's now take a look at the SPY index technical picture at the H1 time frame. After a lower low at the level of 241.80, the market rebounded from the oversold levels and moved higher towards the golden trend line resistance but did not manage to violate it and currently trades just in the middle of the range. The next technical resistance is seen at the level of 245.54 and 246.11.

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Global macro overview for 23/08/2017

Global macro overview for 23/08/2017:

Three Flash PMI numbers will be released today from the US. The most important one is PMI Manufacturing because it's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy. The market participants expect PMI Manufacturing to increase slightly from 53.3 to 53.4 points in the reported month. The data at this level reaffirm that this sector of the US economy is still expanding at a moderate rate, which is supported by yesterday's August report for the Richmond Fed's manufacturing benchmark, that held steady at 14 points (fifth straight month of expansion).

According to the July IHS Markit report, the manufacturing sector in the US has been improving at the fastest rate in four months. The upturn in business conditions was largely driven by marked and accelerated expansions in both output and new orders. Meanwhile, firms added to their payrolls and raised purchasing activity at the quickest rates since February. Business confidence reached a six-month high, as firms became more optimistic regarding future output. Inflationary pressures remained relatively muted, despite a pick up in the rate of input cost inflation. In conclusion, the solid and sustained pace of growth in manufacturing activity will positively affect the US GDP expectations for the third quarter and might start to strengthen the US Dollar across the board.

Let's now take a look at the USD/JPY technical picture at the H4 time frame. The market reversed from the technical resistance at the level of 109.84 and currently, it is on the way to test the technical support at the level of 108.79 for the fifth time. Despite the oversold market conditions, the bias remains bearish due to a lack of momentum growth at this time frame.

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Trading plan for 23/08/2017

Trading plan for 23/08/2017:

The weakest major currency today is the New Zealand Dollar, which is losing 0.55%. NZD / USD falls below 0.7250 and towards last week's minimum. EUR/USD is trading in a narrow, 20 pips range around the level of 1.1750. Wall Street's reflection is about 1.0%. Asia is also dominated by green, but the gains are more modest. The API report showed a drop in inventories of about 3.5 million barrels, which was accompanied by an increase in gasoline inventories. As a result, the WTI crude oil price has fallen to $ 47.50. The ounce of Gold is priced at $1285.

On Wednesday 23rd of August, the event calendar is busy with important news release during the London session. The set of Flash PMI Services and Manufacturing data from across the Eurozone is scheduled for release during the morning trading hours.Moreover, there is a speech from ECB President Mario Draghi in Lindau early in the morning as well. Later during the day, the US will post Flash PMI data and New Home Sales data as well.

EUR/USD analysis for 23/08/2017:

The Flash PMI Service, Manufacturing and Composite data from Eurozone are scheduled for release early in the morning. After the yesterday's much stronger than expected decline in the ZEW index, the global investors will be very interested in the PMI series. The general Flash PMI readings for the Eurozone are still expected to remain on the elevated levels (only PMI Manufacturing is expected to decline slightly), but the economic growth in the third and fourth quarter might be set to weaken somewhat and the peak of the business climate barometer is already behind us. Another scandal with German car makers spoiled sentiment in this sector. Therefore, PMI indices are expected to be slightly more stable. This does not change the fact that strong Euro and the rise of geopolitical risk imprints on business sentiment.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The breakout above the golden trend line around the level of 1.1785 turned out to be fake and currently, the market got back on the technical support at the level of 1.1775 again. The market is still trading in a narrow range and there are two levels to keep an eye on in a case of a breakout: technical support at the level of 1.1662 and technical resistance at the level of 1.1846. Any violation of this level will shot the future market direction.

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Market Snapshot: Crude Oil still bounces from trend line

The price of the Crude Oil did not manage to break out above the technical resistance at the level of $48.72 and felt down again towards the golden trend line. The key level to the downside is still $46.44, but the bull camp is defending the current support levels. Trading conditions are neutral with a little downside bias.

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Market Snapshot: GBP/USD is in the strong support zone

The price of GBP/USD has currently entered a strong support zone between the levels of 1.2793 - 1.2861. Any violation of the lower boundary of this zone will result in sell-off continuation towards the level of 1.2733 and below. Slight bullish divergence and somehow oversold market conditions are indicating a possible bounce, but it shouldn't last long when the down trend resumes.

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Ichimoku indicator analysis of USDX for August 23, 2017

The US dollar index broke below the cloud and the channel yesterday but right away we saw a bounce that is back testing the broken support and is trying to mark the breakdown as a false one.

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Red lines - bullish channel (broken)

The dollar index is trying to move back above the 4 hour Kumo and inside the bullish channel. This bounce is corrective and we should expect a rejection soon to turn the price lower. The support is found at 93.30 and resistance lies at 93.70.

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On a daily basis the dollar index is trying to break above the tenkan-sen. We are in the daily resistance area. I expect a rejection here. The dollar index is likely to break towards 91 over the coming weeks.The material has been provided by InstaForex Company - www.instaforex.com

USD/CHF approaching major resistance, prepare to sell

Forex analysis review
USD/CHF approaching major resistance, prepare to sell

Ichimoku indicator analysis of gold for August 23, 2017

Gold price has pulled back again towards $1,282 support yesterday but it did not break it. Price remains trapped inside a short-term trading range of $1,295-$1,282. We could push lower towards $1,275 but overall trend remains bullish and any pullback is seen as buying opportunity.

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Gold price is trading above the Kumo cloud. This is a bullish sign. However, the tenkan-sen has crossed the kijun-sen to the downside. This is mainly because of the sideways movement that gold has been making since early August. I expect the cloud support to hold and to be tested, and then a new move higher above $1,300 is possible.

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Black line - long-term resistance

Blue line - long-term support

Nothing new on the weekly chart. We have a weekly breakout. The price back tested the cloud support and is making higher highs. The trend is bullish and I expect gold to move towards $1,320-$1,350 over the coming weeks.

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Elliott wave analysis of EUR/NZD for August 23, 2017

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Wave summary:

EUR/NZD continues to work its way higher as expected. The break above resistance at 1.6236 indicates upside acceleration towards 1.6969. On the way, higher minor resistance will be seen at 1.6348 and again at 1.6636, but they should only prove to be temporary resistance on the way higher to 1.6969.

The former resistance at 1.6236 will now act as support, with back-up support seen just below at 1.6210.

R3: 1.6636

R2: 1.6464

R1: 1.6348

Pivot: 1.6236

S1: 1.6210

S2: 1.6144

S3: 1.6102

Trading recommendation:

We are long EUR from 1.6125 and will raise our stop to break-even. If you are not long EUR yet, then buy near 1.6236 and use the same stop at 1.6125.

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Elliott wave analysis of EUR/JPY for August 23, 2017

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Wave summary:

One can hardly say that the rally of the 127.52 low is convincing yet, but it is possible that either a series of ones and twos are building or a leading diagonal, so we continue to look for support at 127.52 to be able to protect the downside for a rally to and above minor resistance at 130.40, which will confirm more upside towards 137.36 in the third zig-zag rally from 109.48.

Only an unexpected break below 127.52 will delay the expected rally, but backup support is seen just below at 127.19.

R3: 130.40

R2: 129.50

R1: 129.15

Pivot: 129.00

S1: 128.63

S2: 128.42

S3: 128.04

Trading recommendation:

We are long EUR from 128.50 with stop placed at 127.75. If you are not long EUR yet, then buy near 128.28 and use the same stop at 127.75.

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Technical analysis of EUR/USD for Aug 23, 2017

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When the European market opens, some Economic Data will be released, such as Consumer Confidence, German 10-y Bond Auction, Flash Services PMI, Flash Manufacturing PMI, German Flash Services PMI, German Flash Manufacturing PMI, French Flash Services PMI, and French Flash Manufacturing PMI. The US will release the Economic Data, too, such as Unemployment Claims, Crude Oil Inventories, New Home Sales, Flash Services PMI, and Flash Manufacturing PMI, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1817.

Strong Resistance:1.1810.

Original Resistance: 1.1799.

Inner Sell Area: 1.1788.

Target Inner Area: 1.1760.

Inner Buy Area: 1.1732.

Original Support: 1.1721.

Strong Support: 1.1710.

Breakout SELL Level: 1.1703.

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 23, 2017

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In Asia, Japan will release the Flash Manufacturing PMI, and the US will release some Economic Data, such as Unemployment Claims, Crude Oil Inventories, New Home Sales, Flash Services PMI, and Flash Manufacturing PMI. So, there is a probability the USD/JPY will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 110.26.

Resistance. 2: 110.04.

Resistance. 1: 109.83.

Support. 1: 109.56.

Support. 2: 109.34.

Support. 3: 109.13.

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

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Daily analysis of major pairs for August 23, 2017

EUR/USD: The EUR/USD is still consolidating. A breakout that can put an end to the current neutrality would happen before the end of this week, and that could make the price go above the resistance line at 1.1900 or below the support line at 1.1650. A movement to the downside is more likely, but the support line at 1.1750 ought to be breached to the downside first (it has been tested many times without being broken).

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USD/CHF: Although the price tried to go upwards on Tuesday, it can be said that the market remains in a consolidation mode. For the current neutrality to end, the price would need to, either go above the resistance level at 0.9750 or below the support level at 0.9600. Either of this would happen within the next several trading days and it would require strong volatility.

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GBP/USD: After moving sideways on Monday, the Cable moved further downwards, as it has been anticipated. Price is below the distribution territory at 1.2850, going towards the accumulation territory at 1.2800. There is a Bearish Confirmation Pattern in the market, so this bearish journey would continue.

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USD/JPY: This currency trading instrument has been making some commendable bullish effort this week. Unless price falls from this point to help lay more emphasis on the extent bearish bias on the market, there would be a threat to the bearish bias once the supply level at 110.50 is breached to the upside.

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EUR/JPY: There are mixed signals on the EUR/JPY. The EMA 11 is below the EMA 56 (a bearish indication), but the RSI period 14 is above the level 50 (a bullish indication). One would need to wait to see which direction the market would go in the next few days.

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EUR/JPY approaching major level of resistance, prepare to sell

The price has reacted off our selling area perfectly. We remain bearish below the major level of resistance at 128.97 (Fibonacci retracement, horizontal overlap resistance, Fibonacci extension) and we expect to see a strong reaction off this level for a push down to first 127.56 support (Fibonacci retracement, horizontal swing low support) before 127.04 (Fibonacci extension).

Stochastic (34,5,3) is dropping nicely from our 93% resistance.

Sell below 128.97. Stop loss is at 129.54. Take profit is at 127.56 and 127.04.

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USD/CHF approaching major resistance, prepare to sell

The price is approaching a major level of resistance at 0.9699 (Fibonacci retracement, Fibonacci extension, horizontal overlap resistance) and we expect to see a major reaction off this level for a drop to at least 0.9589 support (Fibonacci extension, horizontal swing low support).

Stochastic (34,5,3) is seeing major resistance below 97% and we expect a corresponding reaction off that level soon.

Sell below 0.9699. Stop loss is at 0.9732. Take profit is at 0.9589.

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NZD/USD dropping perfectly towards our profit target, remain bearish for a further drop

The price has dropped absolutely perfectly from our selling area and is fast approaching our profit target. We remain bearish below 0.7304 resistance (Fibonacci retracement, horizontal overlap resistance) for a further drop towards 0.7223 support (Fibonacci extension, horizontal swing low support). We also shift our stop loss to 0.7340 to protect our profits.

RSI (34) sees a bearish change in momentum giving further conviction that we'll be seeing a much bigger drop in price.

Sell below 0.7304. Stop loss is at 0.7340. Take profit is at 0.7223.

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USD/JPY bouncing up perfectly, remain bullish for a further rise

The price has bounced up perfectly as expected. We remain bullish looking to buy above major support of 108.85 (Fibonacci extension, horizontal swing low support) for a push up to at least 110.28 resistance (Fibonacci retracement, horizontal overlap resistance).

Stochastic (34,5,3) is bouncing off nicely from our 2.3% support with good upside potential.

Buy above 108.85. Stop loss is at 108.28. Take profit is at 110.28.

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AUD/JPY prepare to buy on dips

We prepare to buy above major support at 86.02 (Fibonacci retracement, Fibonacci extension, horizontal swing low support) for a push up first to 87.01 (Fibonacci retracement, horizontal overlap resistance, Fibonacci extension) before a further push up to 87.38 resistance (Fibonacci retracement, Fibonacci extension, horizontal overlap resistance).

Stochastic (34,5,3) is seeing strong support above 1.5% where we expect a further bounce from.

Buy above 86.02. Stop loss is at 85.72. Take profit is at 87.01 and 87.38.

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AUD/USD dropping towards profit target, remain bearish for a further drop

The price has dropped perfectly from our selling area and is fast approaching our profit target, we can also see that it has broken a major support-turned-resistance line signaling that a change in momentum has occurred to bearish. We remain bearish below 0.7928 resistance (Fibonacci retracement, horizontal overlap resistance) for a further push down to at least 0.7874 support (Fibonacci retracement, horizontal overlap support). We move our stop loss to 0.7954 to protect our profits.

RSI (34) sees a bearish exit signal a major change in momentum to bearish.

Sell below 0.7928. Stop loss is at 0.7954. Take profit is at 0.7874.

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Daily analysis of USDX for August 23, 2017

The index recovered from Monday's low and it's challenging now the 200 SMA at H1 chart. The structure remains in sideways and there is no a clear path to follow in the short-term, other than a breakout of the range. If we witness a break above 93.72, further gains are expected to take place towards 94.11.

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H1 chart's resistance levels: 93.72 / 94.11

H1 chart's support levels: 93.28 / 92.97

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 93.72, take profit is at 94.11 and stop loss is at 93.33.

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Daily analysis of GBP/USD for August 23, 2017

Volatility seen on Tuesday helped GBP/USD to test new lows and to break the narrow range in which has been trapped. If the bears keep pushing lower to the pair, we can expect a target around 1.2761, while a rebound can help to re-test August 21st highs or even the 200 SMA at H1 chart. MACD indicator remains in the negative territory, supporting the bearish idea.

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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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Trading Plan for EUR/USD and GBP/USD for August 22, 2017

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Technical outlook:

EUR/USD continues to drift sideways and it is turning out to be a typical wave 4 correction which takes time to unfold, a general guideline of alteration. If short were initiated at a higher level, partial or full profit can be taken because the pair might be looking to push higher through 1.1840/50 levels and terminate into a wave B before collapsing lower again. As an alternate thought, EUR/USD may be unfolding into a triangle and take much longer time to terminate wave B, before again dropping lower into wave C towards 1.1550 and 1.1400 levels as discussed earlier. The bigger picture presented in the beginning of August still remains intact but the sideways scenario is taking much time. Broadly, till prices remain below 1.1915 levels, bears should remain in control. Immediate resistance is seen around 1.1840/50 levels, while support is at 1.1650 levels respectively.

Trading plan:

Please book partial profits on shorts taken earlier and also add on rallies through 1.1840/50 levels, stop at 1.1920, target 1.1600 and lower.

GBPUSD chart setups:

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Technical outlook:

The GBPUSD wave counts are more clear now. If you would have read yesterday's article, the last low was discussed as a possibility at 1.2800/10 levels. Maybe GBPUSD has carved an interim low today at 1.2810 levels before pulling back. Looking into the wave counts now, an impulse drop seems to be complete today and the most probable wave should be looking to push higher towards 1.2930 and 1.3000/1.3100 levels as depicted here. The much-awaited counter trend rally is expected to resume anytime now and aggressive traders would want to take benefit of that. Please note that immediate resistance is seen at 1.2930 levels and that support is seen at today's intraday low at 1.2810 levels respectively. The wave structure, as well as bullish divergences seen on 4H charts, are telling a clear story of a probable counter trend scenario in the making.

Trading plan:

Please remain long now (aggressive), with a stop below today's lows, target 1.2930 and 1.3050.

Fundamental outlook:

No major events lined up for the remaining of the day.

Good luck!

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Brent says goodbye to summer

Futures prices for the North Sea Fort continue to consolidate in the range of $50-54 per barrel amid uncertainty about further dynamics of global oil reserves. On one hand, the information from PetroLogistics about the reduction of OPEC production volume by 419,000 bpd in August and the decrease in the cartel's exports by 750,000 bpd, as well as the continuing peak of US stocks give grounds to assert that the ball in the market. The "bulls" rule, on the other hand, shows that investors greatly think about the question: what will happen when the summer is over?

From the level of the March highs, black gold reserves in the USA decreased by 13%, to 466 million barrels. Nevertheless, US production has risen to a level of 9.5 million b/d, the highest since July 2015. But there is a decrease in rigs by 5 per week indicated by signals on August 18, showing a gradual slowdown in the growth rate of the indicator in the future. These processes are seasonal in nature and are associated with the dynamic activity of car enthusiasts, which increases the demand for gasoline. The question is that when the car season is over, will this become the basis for the growth of stocks? If so, the gains of the bulls on Brent and WTI may be in the past.

The dynamics of US oil reserves and quotations WTI

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Source: Bloomberg.

OPEC has the same scenario as mentioned above, although, with regard to the cartel, it is necessary to talk about other time horizons. The agreement to cut production by 1.8 million bpd will end in March 2018, and now it is untimely to talk about its prolongation in November, which is accomplished by Kuwait's oil minister Essam al-Marzouq . Perhaps, he is trying to create a new growth driver for black gold, but it is expected to be done after the due date. Meanwhile, investors' attention is focused on the dynamics of US stocks and production. According to the forecasts of Bloomberg experts, the first indicator will continue to decline by -3.5 million barrels. However, as noted above, the efficiency of the seasonal factor captured the minds of participants in market battles.

Uncertainty and speculation in conditions when some players are on vacation, which allows us to talk about the thin market and lead to sharp movements of prices in different directions. So, the data from the CFTC stating that speculators cut the net-long by WTI for the second week in a row (-5 688, or 2% of the net long position in 274,441 contracts) became the reason for sharp oil sales.

In favor of consolidation development, the stabilization of the US dollar price also speaks. It crosses below the turning point of strong macroeconomic statistics and political risks. So far, further movement seems directionless.

Technically, the breakthrough of the upper border of the inner bar near the $53 mark per barrel will increase the risks of continuing the northern Brent march in the upstream trading channel. On the contrary, the return of prices to the lower border of the domestic bar at $51.3, with the successful consecutive tests on the diagonal support, is expected for a development of correction in the direction of at least $50 per barrel.

Brent Daily Chart

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Intraday technical levels and trading recommendations for NZD/USD for August 22, 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 (Key-Zone) where recent bullish recovery is being manifested.

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

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Intraday technical levels and trading recommendations for EUR/USD for August 22, 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 has 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 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, evident bullish momentum has been expressed on the chart.

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

The daily supply zone failed to pause the ongoing bullish momentum. Instead, 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 bearish rejection can be anticipated.

However, 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 22, 2017

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Recently, the EUR/JPY pair has been trading upwards. The price tested the level of 129.18. Anyway, according to the 30M time frame, I found a fake breakout of yesterday's high at the price of 128.80, which is a sign that buying looks risky. There is an upward trendline and my advice is to watch for potential breakout for downward confrimation. If the price breaks the upward trendline, watch for selling opportunties. The downward target will be set at the price of 127.55. The short-term trend is downward.

Resistance levels:

R1: 129.10

R2: 129.50

R3: 130.15

Support levels:

S1: 128.10

S2: 127.40

S3: 127.00

Trading recommendations for today: watch for potential selling opportunities.

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GBP/USD analysis for August 22, 2017

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Recently, the GBP/USD pair has been trading downwards. As I expected, the price tested the level of 1.2811 (reached first target). According to the 30M time frame, I found a downward breakout of 5-day trading range, which is a sign that sellers started distribution. There is also a breakout of upward trendline, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at 1.2800 and 1.2750.

Resistance levels:

R1: 1.2925

R2: 1.2950

R3: 1.2990

Support levels:

S1: 1.2860

S2: 1.2825

S3: 1.2780

Trading recommendations for today: watch for potential selling opportunities.

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