NZD/USD Intraday technical levels and trading recommendations for September 7, 2017

analytics59b1240bc6ae9.png

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 NZD/USD pair again towards 0.7230-0.7150 (Key-Zone) where recent weak bullish recovery was manifested on August 16.

On the other hand, an atypical Head and Shoulders pattern is being expressed on the depicted chart indicating a high probability of bearish reversal.

Breakdown of the neckline 0.7150 confirms the reversal pattern. Expected bearish targets are located around 0.7050, 0.6925 and eventually 0.6800.

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

Intraday technical levels and trading recommendations for EUR/USD for September 7, 2017

analytics59b1236e48f7c.png

Monthly Outlook

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2050-1.2100 (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 1.2100 where price action should be watched for evident bearish rejection and a valid SELL Entry.

analytics59b12379221d9.png

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 next Supply level to meet the pair is located around 1.2080 (Level of previous multiple bottoms) where bearish rejection can be anticipated.

On the other hand, the price zone of 1.1415-1.1520 should be watched for a valid BUY entry if bearish pullback persists below 1.1800 and 1.1700.

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

Draghi will determine the fate of the euro

Eurozone

Today, the ECB will hold a regular meeting on monetary policy. Investors are waiting for clarity on the further plans of the regulator. Particularly, the decision of Mario Draghi whether to give more or less clear guidance regarding the curtailment timing of the asset repurchase program, and whether the issue of a strong euro will be raised at the meeting.

Since January, the EURUSD rate has increased by more than 15%, and further growth caused an increasing concern among exporters, and also acts as a deterrent to the growth of inflation. While the economic state of the euro area still has no cause for concern. Business activity is at the multi-year highs, as the Sentix index for the euro area reached 28.2p. The current state estimate rose to 39.75p, which is the best result since 2008.

analytics59b0e4ebc63dc.png

The index notably improved its position in the US, which further reflects global growth. With a number of key parameters, the euro economy looks much more confident. The growth of the euro seems in good condition upon assessing the investors' prospects, together with the urgent need to abolish the incentive program.

On the opening of the ECB meeting which talks about the regulator's concern about high rate and the intention to consider the issue of increasing incentives in October or even December has somewhat cooled the ardor of bulls, however, there is no doubt for a reversal. Even if Draghi is able to evade any and will not give the bulls a single driver, even in this case the euro will look stronger and a reversal might occur only against the background of simultaneously relevant news from the US.

Yesterday, reports say that President Trump managed to agree with the Congress on postponing the decision of the state regarding the debt issue until December 15. This news was received positively by the market but its significance is not high because the Republicans did not support Trump generally, which shows the depth of the split in power circles

Disposition of the euro is as follows.

United Kingdom

The pound continues to hold in the ascending channel.

analytics59b0e65f329e5.png

Brexit negotiations still don't have any progress made, and in fact, the pound does not have many positive factors that can support its growth. Nevertheless, while the US receives mainly bearish signals, it is not necessary to wait for the pivot to turn southwards. The growth in the 1.3130 / 40 region is still possible, depending on the external situation, either correction or sideways range, an exit will follow.

Oil and ruble

US Crude oil reserves increased by 2.79 million barrels last week, according to the API. But the market ignored this clearly bearish factor. Brent climbed above $ 54/bbl while the WTI reach $ 49/bbl. As of this writing, the main driver is the recovery in production in Texas and the related increase in demand for oil. Moreover, as hurricane Irma approaches to the shores of Florida, it supports the demand for gasoline, hence, the decline in oil prices in the following days is improbable.

The growth of oil prices provide support to the Russian ruble, but in the current coordinates, this driver is far from the main one. The Department of Research and Forecasting of the Bank of Russia raised the forecast for GDP growth rates in 2017, from 1.5% to 2.0%. This is because of the combined drop in inflation to a historically low level of 3.3% and the outpacing real wage growth, which indicates the sustainability of the Russian economy that will lead to an increase in demand for ruble denominated assets. Expectations about the ability of the CBR to a more aggressive rate cut increase. The markets are waiting for an increase in capital inflows.

For the ruble, the conditions are more than favorable, as it moves towards the level of 56.1 rubles/dollar. It is still more likely to take the sideways range or correction.

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

GBP/USD analysis for September 07, 2017

analytics59b116015d5ec.png

Recently, the GBP/USD pair has been trading sideways at the price of 1.3064. Anyway, the price was rejected to go back into a trading range, which is a sign that selling looks risky and that buyers are in control on the market. The short-term trend is bullish and my advice is to watch for potential buying opportunities. The upward targets are set at the price of 1.3100 and 1.3150.

Resistance levels:

R1: 1.3080

R2: 1.3115

R3: 1.3150

Support levels:

S1: 1.3015

S2: 1.2985

S3: 1.2950

Trading recommendations for today: watch for potential buying opportunities.

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

USD/JPY analysis for September 07, 2017

analytics59b1135c5cfea.png

Recently, the USD/JPY pair has been trading downwards. The price tested the level of 108.83. According to the 30M time frame, I found bearish divergence and weak demand in the backgorund, which is a sign that buying looks risky. The short-term trend is bearish and my advice is to watch for potential selling opportunities. The price also broke upward trendline, which is another sign of weakness. The downward targets are set at the price of 108.50 and 108.00.

Resistance levels:

R1: 109.55

R2: 109.95

R3: 110.50

Support levels:

S1: 108.60

S2: 108.00

S3: 108.65

Trading recommendations for today: watch for potential selling opportunities.

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

Bitcoin analysis for 07/09/2017

Bitcoin analysis for 07/09/2017:

The Bank of Japan and the European Central Bank released the findings of their joint analysis of Distributed Ledger Technology (DLT) called Project Stella that was launched in 2016. The main objective was to: "assess the applicability of DLT solutions in the area of financial market infrastructures." After a year of study, three main findings can be concluded: DLT-based solutions could meet the performance needs of a Real-Time Gross Settlement (RTGS) system; DLT performance is affected by network size and distance between nodes; DLT solutions have the potential to strengthen resilience and reliability.

In conclusion, while the reports were favorable regarding the performance of Blockchain technology for international banking needs, they nevertheless concluded that the technology is not at a point of maturity to function as a solution for banking practices at this time. The early stage of the DLT development is currently incapable for large-scale applications like BOJ-NET and TARGET2.

Let's now take a look at the Bitcoin technical picture at the H1 time frame. The price has managed to bounce from the golden trend line support to the level of 61% Fibo at $,4,596. The zone between the levels of $4,615 - $4, 691 is a strong supply zone, so a reversal to the downside might happen anytime soon as the level of $4,650 might be the top for the corrective wave (b). Currently, the price is trading around the weekly pivot at the level of $4, 544, but the momentum is still pointing to the downside.

analytics59b1107cd3420.jpg

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

Bitcoin analysis for September 07, 2017

analytics59b10f8bbd81e.png

The Bitcoin (BTC) has been trading sideways at the level of $4,538. Anyway, most recent are not in favor of bitocin. People's Bank of China may move to freeze bank accounts associated with initial coin offerings (ICOs). The reports have surfaced following China's suspension of all ICOs operating within China's borders. This week, China began to carry out a sweeping crackdown on ICOs. China's central bank described ICOs as "an unapproved illegal public financing behavior," and has suspended all ICOs operating within China, and banned the practice of fundraising through token sales. Technical picture conrifming weakness in the background.

Trading recommendations:

According to the 1H time frame, I found a broken rising wedge in the background, which is sign of weakness. My advice is to watch for potential selling opportunties. The downward target is set at the price of $4,000 and $3,606. I found a hidden bearish divergence on the moving average oscilator, which is another sign of weakness.

Support/Resistance

$4.625 – Gap zone resistance

$4.924 – Major swing high (resistance)

$4.000 – Swing low (support)

$3.606 – Major short-term support

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

Global macro overview for 07/09/2017

Global macro overview for 07/09/2017:

The ISM Non-Manufacturing PMI was better than last month but did not meet investors' expectations. The number released yesterday was at the level of 55.3 points, which was better than 53.9 points a month ago but worse than 55.8 points expected by market participants. The ISM data reflect business conditions in non-manufacturing industries based on measures of employment trends, prices, and new orders.

Other news from the US was not that much straightforward. Information that Fed's Vice President Stanley Fischer will resign in mid-October was badly received, as he offered Trump an additional place of appointment in the Fed, and the US president enjoys a mild monetary policy. It was a small consolation to speculate that Gary Cohn's chances of replacing Yellen (who recently criticized the President) fell, but it is still unknown whom Trump will choose in return. On the other hand, the agreement between the President and the Democrats on raising the fiscal debt limit until December was a positive surprise, and the lawsuit was linked to Hurricane Harvey's rescue package. As a result, the risk of freezing public administration work has been diminished, but the battle in Congress will resume at the end of the year. Without political risk, but with continued uncertainty regarding the future of the conflict with North Korea and the uncertainty around the Fed's December interest rate decision, the US dollar position has not changed significantly and investors will not rush to buy it now.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The golden trend line remains the main dynamic resistance for the price as the market deteriorates further towards the technical support at the level of 91.93. A breakout below this level will open the road towards the next lower low at the level of 91.63.

analytics59b1077596e98.jpg

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

Global macro overview for 07/09/2017

Global macro overview for 07/09/2017:

The Bank of Canada has surprised global investors by hiking the interest rate from 0.75% to 1.0%. It has been the second successive rate hike this year, because the Canadian central bank already raised rates once this year in July, leaving analysts to expect that the central bank is in no rush to hike again so soon, but rather would wait until October 2017 or even later. Thus, Wednesday's meeting was expected to leave rates where they are at 0.75%. Nevertheless, according to the BoC rate statement, the recent data has been stronger than expected, supporting the bank's view that growth is becoming more broadly based and self-sustaining. The bank still expects growth to slow down, but the level of GDP is higher than expected. Data released last week showing Canada's economy saw second-quarter annualized growth of 4.5% beat expectations for a 3.3% expansion and underscored the supportive backdrop of the Canadian economy.

The future monetary policy will be determined by the development of the economy with close attention paid to the sensitivity of the economy to higher interest rates given elevated household debt. The Canadian housing market is booming now, but there are some areas that are causing concerns and giving some fresh signs of a possible bubble, like Vancouver or Toronto (event compared to US housing market in 2007).

Let's now take a look at the USD/CAD technical picture on the H4 time frame after the rate hike was made. The Canadian Dollar traded at a 26-month high against the US Dollar as the market sold off to the level of 1.2140. The current bounce did not bounce above 23% Fibo at the level of 1.2263, so the overall downside momentum remains strong. The key area for bulls is the resistance zone between the levels of 1.2401 - 1.2463.

analytics59b1021eb9ffa.jpg

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

Technical analysis of USD/JPY for September 07, 2017

USDJPYM30.png

USD/JPY is expected to trade with a bullish outlook. Despite the pair's retreat from 109.40 (the high of September 6), it is supported by a rising 50-period moving average. Even though a further consolidation cannot be ruled out, its extent should be limited.

Hence, above 108.50, we expect a rebound to 109.40. A break above this level would trigger a new advance to 109.80.

Alternatively, if the price moves in the opposite direction, a short position is recommended below 108.50 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: 108.50, Take Profit: 109.40

Resistance levels: 109.40, 109.80, and 110.35

Support Levels: 108.30, 107.95, 107.50

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

GBP/USD testing major resistance, prepare to sell

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

Technical analysis of NZD/USD for September 07, 2017

NZDUSDH1.png

Overview:

  • As expected, the NZD/USD pair continues to move downwards from the level of 0.7170. Amid the previous events, the price is still moving between the levels of 0.7170 and 0.7214. Also, the daily resistance and support are seen at the levels of 0.7170 and 0.7131 respectively. Therefore, it is recommended to be cautious while placing orders in this area. So, we need to wait until the sideways channel has completed. Yesterday, the market moved from its bottom at 0.7170 and continued to rise towards the top of 0.7262. Today, in the one-hour chart, the current rise will remain within a framework of correction. However, if the pair fails to pass through the level of 0.7170, the market will indicate a bearish opportunity below the strong resistance level of 0.7262 (the level of 0.7262 coincides with the double top too). Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 0.7262 with the first target at 0.7170. If the trend breaks the support level of 0.7170, the pair is likely to move downwards continuing the development of a bearish trend to the level 0.7131.
The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of USD/CHF for September 07, 2017

USDCHFM30.png

USD/CHF is expected to trade with a bullish bias above 0.9525. Athough the pair posted a pullback, a support base at 0.9525 has formed and has allowed for a temporary stabilization. The relative strength index lacks downward momentum.

The Institute for Supply Management (ISM) said its non-manufacturing index advanced to 55.3 in August from 53.9 in July. In its Beige Book, the U.S. Federal Reserve pointed out an increase in consumer spending with a modest to moderate growth in the overall economic activity in July and August. Meanwhile, U.S. Federal Reserve Vice Chairman Stanley Fischer announced his intention to resign before the end of his term, citing personal reasons.

To conclude, as long as 0.9525 holds on the downside, a further rebound to 0.9615 and even to 0.9640 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 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: BUY, Stop Loss: 0.9525, Take Profit: 0.9615

Resistance levels: 0.9615, 0.9640, and 0.9685

Support levels: 0.9490, 0.9460, and 0.9410

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

Technical analysis of USD/CHF for September 07, 2017

USDCHFH4.png

Overview:

  • Pivot: 0.9636.
  • The USD/CHF pair is trading with bullish bias from the support levels of 0.9558 on the H1 chart. Currently, the price is in a bullish channel and the price is seen at the spot of 0.9558- 0.9509. The USD/CHF pair will probably continue to move upwards from the level of 0.9558. Yesterday, the pair rose from the level of 0.9558 to a top around 0.9670. Today, the first resistance level is seen at 0.9693 followed by 0.9725, while daily support 1 is found at 0.9558 (38.2% Fibonacci retracement). The USD/CHF pair is still moving between the levels of 0.9550 and 0.9636. Furthermore, if the trend is able to break out through the first resistance level at 0.9693, buy above the level of 0.9558 with the first target at 0.9693 in order to test the daily resistance 1 and further to 0.9725. Also, it might be noted that the level of 0.9725 is a good place to take profit because it will form a major resistance today. However, on the H4 chart the market is shown a bearish trend for that if a breakout takes place at the support level of 0.9500, then this scenario may become invalidated.
USDCHFH1.png
The material has been provided by InstaForex Company - www.instaforex.com

What did the Fed say? No rate increase in September! (Beige Book)

What did the Fed say? No rate increase in September! (The Beige Book)

"Modest, Moderate, Decreasing" - in such terms, the Fed's regional banks again described the state of economic growth in different regions of the US. It is in the report "Beige Book", presented by the Fed on Wednesday, September 6.

(The report of the FRS "Beige Book" always comes out exactly two weeks before the decision of the Fed on rates).

The report included assessments of the effects of Hurricane Harvey, which caused enormous damage to the states of Dallas and Atlanta. And this is a report before the hurricane completely passes.

The hurricane destroyed a large number of buildings and closed 20% of the oil production in the Gulf. Supplies of oil decreased, and oil prices rose.

Nevertheless, inflation is low, prices are rising slowly. The labor market is strong, nor is the growth in the number of new jobs reduced.

Consumer spending is on the rise, but car sales are slowing, home sales are growing well.

In general, the review of the economy is very sluggish, there is no reason for the Fed to increase the rate or pull liquidity out of the market.

All the market's attention on the ECB today, September 7th.

The decision of the ECB at 12.45 London time, the press conference of the head of the ECB Draghi at 13.30 London time.

As expected, Draghi will not announce a concrete plan for completing the "quantitative easing" program.

The market's reaction is not predictable. The market seems to want to move towards 1.2100 - but surprises in the statement of Draghi can fully turn the picture down.

We are waiting for the breakthrough of the range 1.1865-1.1950 and we stand on the break at the borders of the range, with the expectation of strong movement.

analytics59b0f3ae23ad7.jpg

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

Trading plan for 07/09/2017

Trading plan for 07/09/2017:

The market volatility remains limited before the decision on interest rates in the euro area. Among the majors, the change does not exceed 0.2%. The strongest is JPY (+0.17%), then NOK (+0.14%) and NZD (+0.14%). It is distinguished by AUD (-0.11%), which is the only one losing to the US Dollar. The Asian stock market failed to continue its positive sentiment, Hang Seng and Shanghai Composite are down nearly 0.1% under the line. The Nikkei 225 is up 0.2%.

On Thursday 7th of September 2017, the event calendar is busy with important economic releases. During the London session, the main event will be the European Central Bank interest rate decision and Press Conference. Moreover, Germany will post Industrial Production data, France will present Trade Balance data, and the UK will reveal Halifax House Price Index data for last month. During the US session, Canada will post Building Permits and Ivey Purchasing Managers Index data. The US will present Unemployment Claims and Continuing Claims data.

EUR/USD analysis for 07/09/2017:

The ECB Interest Rate Decision, Deposit Facility Rate, Marginal Lending Facility, and Asset Purchase Target data are scheduled for release at 11:45 am GMT. The Press Conference is scheduled at 12:30 pm GMT. Global investors expect the ECB to leave the interest rate unchanged at the level of 0.0% and the other data should not be changed as well. The most important will be Mario Draghi's statement during the press conference. According to yesterday's leaks, it is unlikely that the Governing Council of the ECB will decide on loosening the monetary policy before the October meeting as it is said in an anonymous report. The ECB Technical Committees have simulations containing various combinations of timeframes and asset purchases, suggesting a continuation of the QE in 2018. What's more, the Governing Council will also focus on the legal constraints associated with loosening, ie: the exposure limit. The gloomy outlook of gossip moderates the tention of the planned debate on land preparation for rising interest rates.

Let's now take a look at the EUR/USD technical picture on the H1 time frame. Yesterday's leaks have made the exchange rate to move higher towards the level of 1.1915, but the bullish enthusiasm was capped very soon and the price got back to the horizontal zone. Currently, the price is trading in a narrow horizontal area between the levels of 1.1910 - 1.1950 as it awaits the ECB rate decision. In case the ECB mentiones sooner-than-expected roll-over of the QE programme, the reaction should be bullish and the level of 1.2000 could be easily hit. Any dovish statements from Mario Draghi will likely result in a deterioration towards the level of 1.1817 and below.

analytics59b0f5dd4f4e3.jpg

Market Snapshot: DAX breaks above the trend line

The price of German index DAX has broken above the golden trend line around the level of 12,100 and is currently trading just below the technical resistance at the level of 12,319, just at the level of 50 DMA. The market conditions are neutral, but biased to the upside, so the resistance level might be tested soon.

analytics59b0f5e755175.jpg

Market Snapshot: EUR/GBP is back to the channel

For a brief moment the price of EUR/GBP broke above the 10-months high at the level of 0.9300, but quickly returned back to the golden channel zone. Despite this behaviour, the larger time frame trend remains bullish, but the price must break out back above the level of 0.9236 in order to test the recent swing high. Otherwise, the deterioration might deepen even more to the level of 0.9088 and below.

analytics59b0f5ee88232.jpg

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

Ichimoku indicator analysis of USDX for September 7, 2017

The Dollar index remains under pressure in a clear bearish trend in the short and medium term. There are several warning signs of a possible reversal as the index is overbought.

analytics59b0f0b402f93.png

Blue line - short-term resistance

Price is below both the tenkan- and kijun-sen. Resistance is at 92.30 and the next is at 92.60. Support is at 92 and the next at 91.60. As long as price is below 92.60 we remain in a short-term bearish trend heading for new lows below 91.60.

analytics59b0f160de71a.png

Red lines - bearish channel

The Daily trend remains bearish. Price is below the tenkan-sen and is making lower lows and lower highs. 92.90 is the resistance level bulls need to break in order for the index to move towards 94. The oscillators justify an upward reversal but we have no confirmation or sign of it starting yet.

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

Ichimoku indicator analysis of Gold for September 7, 2017

Gold price remains in a bullish trend. Price pulled back towards $1,330 support and held above it. There are still chances of a pullback towards $1,300 over the coming weeks but overall we remain bullish.

analytics59b0ef8544f4b.jpg

Price in the 4-hour chart has broken below the tenkan-sen (red line indicator). This is not a good sign but as long as price holds above the kijun-sen (yellow line indicator) at $1,330, we could see another move to new highs closer to our 2nd target of $1,350.

analytics59b0efc50db08.jpg

Magenta line - trend line resistance

Blue line - trend line support

The weekly trend is bullish as price is above both tenkan- and kijun-sen. Price is approaching our target of the magenta trend line at $1,350. A pullback towards $1,300 is possible or at least towards $1,320. I remain bullish in the longer term.

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

Daily analysis of major pairs for September 7, 2017

EUR/USD: This pair continues to go sideways and the bias on the market could become neutral in case the situation continues as it is (unless price goes below the support lines at 1.1750). It is possible that when momentum returns to the market, it would most probably favor the current bullish signal, and thus, the resistance lines at 1.1950 and 1.2000 could be reached.

1.png

USD/CHF: There is a slight bearish signal on this currency trading instrument. The EMA 11 is below the EMA 56 and the Williams' % Range period 20 is not far from the overbought region. As the EUR/USD pair goes upwards, USD/CHF would go downward, targeting the support levels at 0.9550 and 0.9500.

2.png

GBP/USD: There is already a bullish signal on the GBP/USD pair. Price has gone upwards by 120 pips this week, and that has resulted in a bullish bias. The distribution territory at 1.3050 is being tested and after it is breached to the upside, another distribution territory at 1.3100 would be the next target.

3.png

USD/JPY: There is a Bearish Confirmation Pattern on the USD/JPY pair, owing to a smooth bearish run that was witnessed in the first few days of the week. Any rallies that are seen here would be taken as opportunities to sell short at better prices. Some fundamental data are expected today and they may have impact on the markets.

4.png

EUR/JPY: This cross is also bearish – though there is a bullish retracement in the context of a downtrend. The current bullish retracement may not be able to override the bearishness in the market unless the supply levels at 131.00 and 131.50 are breached to the upside. Normally, this cross is expected to trend downwards from here.

5.png

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

Technical analysis of GBP/JPY for September 07, 2017

GBPJPYM30.png

The pair has clearly reversed up, and is likely to post a new rise in the coming trading hours. A bullish cross has been identified between the 20-period and 50-period moving averages (a positive signal). Besides, the relative strength index stands firmly above its neutrality area at 50. Hence, as long as 141.50 is not broken, likely advance to 142.70 and 143.01 in extension.

Alternatively, if the price moves in the direction opposite to the forecast, a short position is recommended above 141.50 with the target at 141.35.

Strategy: BUY, Stop Loss: 141.50, Take Profit: 142.70.

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: 142.70, 143.00, and 143.75

Support levels: 141.15, 140.75, and 140.00

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

Brent made friends with hurricanes

Hurricane Harvey did not bring happiness, but this disaster helped the "bulls" in the North Sea and saved them by catching the straw, instead of forcing them to flee the battlefield. The experts of Bloomberg predicted that the US black gold reserves will grow by 2.5 million barrels by the end of the week by 1 September, while the Goldman Sachs announced that it will reach 40 million barrels within a month as the hurricane ends. The oil became a more serious driver of growth which returned refinery to life.

ExxonMobil, Phillips 66, Valero Energy and others reported about the resumption of refining operations. As of September 5, factories with a capacity of 3.8 million b/s (about 20% of the total value for the States) were closed, while at the height of the hurricane it was about 4.2 million b/s capacity. According to the US Energy Information Administration, the continuation process can take several days or weeks. Everything will depend on the damage found at the time of the resumption.

Along with the return to life of the oil refinery, oil has another important hidden driver of growth as the domestic energy increased its demand among the states affected by Harvey. The White House asked the Congress for about $ 7.9 billion in aid to Texas and Louisiana for restoration work, which is regarded as a "bullish" factor for black gold.

However, Goldman Sachs claims that the potential growth of oil is limited, as the current situation is likely to take advantage of mining companies from the States. The possible price hike will increase the hedging of price risks and production volumes, which will affect the global balance of the physical asset market and the futures market. The bank draws attention to the fact that companies have significantly reduced costs in recent years, and the level of revenue showed a growth in profits. This position corresponds to the opinion of the Alexander Novak, Minister of Energy of Russia, saying that in 2018 Brent will cost $45-55 per barrel.

Corrections to the current alignment of forces can make another hurricane. Irma is moving in the direction of Florida, but it is impossible that its impact will be more serious for the US oil industry than Harvey's influence.

Brent and WTI gained support from the weak dollar. The dovish statement of Lael Brainard and Neel Kashkari reduced the potential increase of the federal funds rate in December to 37%. The growth of geopolitical risks related to North Korea put pressure on the yields of US Treasury bonds by pushing futures for the North Sea grade to the maximum levels since May.

Dynamics of oil and the dollar index

analytics59afeb3b578be.png

Source: Trading Economics.

Technically, the "bulls" renewed July highs of Brent along with the activation of the AB = CD pattern increase the risks of continuing the northern campaign towards the target at 127.2% and 161.8%. This corresponds to $54.7 and $56 per barrel. On the contrary, the inability of buyers to keep prices above the levels of $53.7 and $52.9 will indicate weakness.

Brent Daily Chart

analytics59afeb49756e8.png

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

Daily analysis of Gold for September 06, 2017

GOLD-12.17H4.png

Overview

The gold price traded upwards yesterday in the late session in attempt to move away from the previously breached resistance of the bullish channel, reinforcing expectations for more gains in the upcoming period. The price is likely to touch the main bullish channel's resistance at 1,353.00. The EMA50 continues to support the price from below, thus boosting our expectations of the bullish trend continuation in the upcoming period. Breaking and holding below 1,335.00 might push the price to test the 1,295.37 areas before any new attempt to rise. The expected trading range for today is between the 1,330.00 support and the 1,353.00 resistance.

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

Daily analysis of Silver for September 06, 2017

SILV-9.17H4.png

Overview

The silver price shows sideways and tight-range trading since yesterday settling around 17.90, which means the price needs to get enough positive momentum to continue the main bullish trend. Stochastic generates overbought signals now that might lead to more sideways fluctuations. In general, we still forecast the bullish trend for the upcoming period unless breaking and holding 17.43 below levels. Our awaited positive targets begin at 18.30 and extend to 19.38. The expected trading range for today is between the 17.70 support and the 18.10 resistance.

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