Daily analysis of gold for October 16, 2017

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Overview

Gold price confirmed breaching 1,299.20 level after closing last week above it, reinforcing the expectations of continuing the bullish trend on the intraday and short-term basis. The way is open to target 1,321.49 level that represents our next main target, noting that the EMA50 supports the expected rise. Importantly, holding above 1,299.20 represents the first protecting factor to continuation of the suggested positive scenario, as breaking it will push the price to test 1,263.15 area again before any new attempt to rise. The expected trading range for today is between 1,290.00 support and 1,321.00 resistance.

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Daily analysis of silver for October 16, 2017

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Overview

Silver price touched 17.43 level and is still stable there. We should remind you that we are waiting for a break of this level to confirm rallying towards 18.30 that represents our next main target. Therefore, no change to the bullish trend scenario that depends on holding above 16.56, as breaking this level represents negative factor that will push the price to decline towards 15.49 before any new attempt to rise. The expected trading range for today is between 17.20 support and 17.50 resistance.

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Global macro overview for 16/10/2017:

Global macro overview for 16/10/2017:

Potential renewed US nuclear sanctions against Iran, as well as the conflict in Iraq, are currently supporting the prices of Crude Oil. Last Friday, the Trump administration refused to certify, that Iran is complying with the requirements agreed during 2015 meeting. On the other hand, independent inspectors claim that Iran's nuclear program meets the agreement limits. The last sanctions on Iran were significant as the output of 1mln barrels per day was cut off from the global supply market. This time the consequences of the situation might be different as the US is likely to act alone on sanctions to Iran.

Under US law regulations, the US president must certify every 90 days that Iran is complying with the deal. Congress will now have 60 days to decide whether to reimpose economic sanctions on Tehran. Moreover, OPEC should extend the production cuts to prevent a new surge in oversupply and a slide in the price of oil. As a result, Iran's economy might suffer a substantial loss as most of the economists estimate that if sanctions are implemented, it could put a few hundred thousand barrels of Iranian oil exports at risk. As a result of this situation, the price of oil cloud easily breaks out above 2017 high at the level of $55.25.

Let's now take a look at the Crude Oil technical picture in the H4 time frame. A strong reversal from 50% Fibo at the level of $49.22 has hit the gray supply zone between the levels of $51.98 - $52.86. There is a visible bearish divergence between the price and momentum indicator, so the intraday correction is due. The nearest technical support is seen at the level of $51.45.

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Global macro overview for 16/10/2017

Global macro overview for 16/10/2017:

The CPI inflation in the US increased slightly to 2.2% in September from 1.9% in August. Core inflation, excluding food and energy prices, remained at 1.7% on a yearly basis. Within a month, the overall CPI rose by 0.5%, reflecting a significant increase in fuel prices (by 13%) following Hurricane Harvey, but this will probably be reversed later in the year. The monthly increase in the core index (0.1% m/m) was modest. The core inflation is constrained by falling car prices and drugs that are unlikely to keep dropping for long. In the medium term, sustained economic growth should also result in accelerating core inflation.

Rebounded after hurricane recovery, retail sales in the US increased by 1.6% in September after a 0.1% drop in August, which was just slightly below expectations. Car sales rose by 3.6% on a monthly basis, which is a part of the recovery after the hurricane that destroyed at least 300,000 cars. Excluding automobiles, core sales increased by 1.0%, reflecting rising fuel prices. Real consumption growth may have slowed somewhat in Q3 of 2017 (to 2.0% from 3.3%), but its growth prospects in the coming quarters are very good given the current situation in the labor market and improving consumer sentiment. Impressed by optimism among US households, the University of Michigan index rose to 101.1 in October from 95.1 points in September and was clearly higher-than-expected and the highest since 2004.

Let's now take a look at the SPY (SP500 ETF) technical picture on the H1 time frame. The market has made a marginal new high at the level of 255.27, but the clear bearish divergence between the price and momentum indicator and overbought trading conditions are indicating a test of the support at the level of 253.43.

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Bitcoin analysis for October 16, 2017

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The Bitcoin (BTC) has been trading sideways at the price of $5.729. Most recently we got positve news for Bitocin from Austrailia. In recent months, the Australian government has sought to amend its bitcoin regulations – which were previously notoriously unfavorable to businesses and individuals seeking to use and adopt cryptocurrency. The Australian cryptocurrency industries have since shown signs of significant growth, with many industry insiders attributing the improving investor confidence to amendments made to federal legislation pertaining to bitcoin in Australia. Current techical picture looks bullish.

Trading recommendations:

According to the 30M time frame, I found a broken intraday bullish flag, which is sign that buyers are in control. The price is trading above the pivot point ($5.560), which is another sign of strength. I also found a hidden bullish divergence on the Stochastic oscilator. My advice is to watch for potential buying opportunities. The upward targets are set at the price of $5.860 (R1) and $6.140 (R2).

Support/Resistance

$5.560 – Pivot - support

$5.860 – Resistance 1 pivot

$6.140 – Resistance 2 pivot

$6.442 – Resistance 3 pivot

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EUR/USD analysis for October 16, 2017

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Recently, the EUR/USD pair has been trading sideways at the price of 1.1810. According to the 15M time - frame, I found an evening star formation in creation, which is warning that buying looks risky. The price is trading below the pivot point (1.1835). I found overbought Stochastic, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.1765 (S2) and 1.1725 (S3).

Resistance levels:

R1: 1.1862

R2:1.1904

R3: 1.1932

Support levels:

S1: 1.1792

S2: 1.1765

S3: 1.1725

Trading recommendations for today: watch for potential selling opportunities.

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GBP/USD analysis for October 16, 2017

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Recently, the GBP/USD pair has been trading sideways at the price of 1.3300. According to the 15M time - frame, I found doji candles and bearish enguling pattern around the pivot point (1.3290), which is a sign that a buying looks risky. There is an overbought stochastic oscilator, which is another sign of weakness. My advice is to watch for potential selling opportunties. The downward targets are set at the price of 1.3245 (S1) and the price of 1.3200 (S2)

Resistance levels:

R1: 1.3335

R2: 1.3382

R3: 1.3425

Support levels:

S1: 1.3245

S2: 1.3200

S3: 1.3150

Trading recommendations for today: watch for potential selling opportunities.

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NZD/USD Intraday technical levels and trading recommendations for October 16, 2017

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Daily Outlook

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 enhanced the bearish side of the market. This brought the NZD/USD pair again towards 0.7230-0.7150 (Key-Zone) which failed to pause the ongoing bearish momentum.

An atypical Head and Shoulders pattern was expressed on the depicted chart indicating a high probability of bearish reversal.

Bearish persistence below the neckline 0.7150 confirms the reversal pattern. Next bearish targets are located around 0.7050, 0.6925 and eventually 0.6800.

As expected, the price level of 0.7050 offered significant bullish support which allowed bullish pullback towards 0.7190-0.7230 (Key-Zone) to be watched for further decisions.

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Intraday technical levels and trading recommendations for EUR/USD for October 16, 2017

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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 allowed a quick bullish advance towards 1.2100 where recent evidence of bearish rejection was expressed (Note the previous Monthly candlestick of September).

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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 next Supply level to meet the pair is located around 1.2100 (Level of previous multiple bottoms) where bearish rejection and a valid SELL entry can be anticipated.

On the other hand, If the current bearish breakout persists below 1.1800 (the depicted uptrend line) and 1.1700, a quick bearish decline should be expected towards the price zone of 1.1415-1.1520 where BUY entries can be offered.

Trade Recommendations

Bullish pullback towards the price zone of 1.1835-1.1850 (the backside of the broken uptrend line) should be considered for a valid SELL entry.

S/L should be placed above 1.1950. Initial T/P level should be placed at 1.1550.

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Bitcoin analysis for 16/10/2017

Bitcoin analysis for 16/10/2017:

According to the news that broke through Russian Minister of Communications Nikolay Nikiforov, in a meeting behind the closed door, the Russian Federation President Vladimir Putin has officially stated that Russia will issue its own "CryptoRuble" digital currency. This cryptocurrency cannot be mined and will be issued, controlled and maintained only by the authorities. The CryptoRubles can be exchanged for regular Rubles at any time, though if the holder is unable to explain where the "CryptoRubles" came from, a 13% tax will be deducted. The same tax will be applied to any earned difference between the price of the purchase of the token and the price of the sale.

The reason behind this brave decision was explained by Nikiforov himself: "I confidently declare that we run "CryptoRuble" for one simple reason: if we do not, then after 2 months our neighbors in the EurAsEC will." So it looks like the recent news regarding a ban of all cryptocurrencies in Russian Federation were not true at all and Russia is another country joining the digital revolution.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The top of the wave (iii) had been established at the level of $5,833 and currently, the market is in the four-wave correction cycle. The key technical support is at the level of $5,384 and nay breakout lower will directly expose the level of $4,963 for a test. When the corrective wave (iv) is completed, the market should make another higher hight in order to complete wave (v).

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Trading plan for 16/10/2017

Trading plan for 16/10/2017:

The first trading hours this week bring little traffic to the currency market. Data from China have gone unnoticed; nervous reactions also are not seen after the election results in Austria. Crude Oil goes up for fear of new sanctions for Iran. EUR/USD is trading around the level of 1.1800, USD/JOY around the level of 111.70 and GBP/USD around the level of 1.3300.

On Monday 16th of October, the event calendar is light in important economic data releases, but the market participants will keep an eye on Wholesale Price Index data from Germany, Trade Balance data from the Eurozone, Empire State Manufacturing Index data from the US and Foreign Securities Purchases data from Canada.

EUR/USD analysis for 16/10/2017:

The Wholesale Price Index data from Germany were released early this morning and beat the market expectations of 0.4% with a number delivered at the level of 0.6%. On the yearly basis, the prices increased from 3.2% to 3.4% as well. Growth in wholesale prices usually precedes increases in retail prices, thus changes in Wholesale Prices can be used as an early indicator of inflationary pressures. While the CPI records price changes for retail goods, the WPI might pick up inflationary pressures before they reach the headline retail CPI report. The European Central Bank inflation target is at the level of 2.0% and only when this projected target exceeded, ECB might decide on interest rate hike or quantitative easing program roll-over or tapper. In the result, this situation would strengthen the Euro currency across the board.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The 61% Fibo at the level of 1.1876 was declined two times already, so now the down cycle in progress. Currently, the market is trading at the technical support at the level of 1.1790 and in a case of a further decrease, the next support is seen at the level of 1.1755 and 1.1700. The down-pointing stochastic and momentum indicators are supporting the view.

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Market Snapshot: Gold about to test 50% Fibo?

The price of Gold has broken above the 38% Fibo at the level of $1,297 and currently is heading towards the next Fibo at the level of $1,308. There is a clear, visible bearish divergence forming between the price and momentum oscillator, so the downward correction can occur any time now.

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Market Snapshot: USD/JPY slowly descending towards support

The price of USD/JPY is trading under the black trend line resistance around the level of 111.98 in oversold market conditions. The next technical support is seen at the level of 111.45, but the key support is still the area between the levels of 111.04 - 110.61. Please notice the bullish divergence starts to form between the price and momentum oscillator.

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Breaking forecast 10/16/2017

Breaking forecast 10/16/2017

EURUSD: Prepare to break the boundaries of the range.

The situation on EURUSD is uncertain. Last week, its rise stopped - buyers faced strong resistance from sellers in the zone of 1.1870-1.1880.

At the same time, it's too early to talk about a full reversal.

Formed a range within the boundaries of 1.1668 - 1.1880.

It is recommended to wait for an exit from the range and take positions in the direction of exit: buy at breakthrough of 1.1880 upward - or sell at breakthrough of 1.1668 down.

In a more aggressive move, you can sell from 1.1820.

The main news event of the week is the Fed's report on the economy "Beige Book" on Wednesday at 6:00 pm London Time.

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Trading plan 16 - 10/20/2017

Trading plan 16 - 10/20/2017

The general picture: News did not clarify.

Last week there were two main events: The ECB and news on inflation in the US.

The ECB unexpectedly merged information about the decline in the QE program 2 times since January (from 60 billion euros to the market every month to 30). The information is unofficial, but the probability is very high. Still, the official decision in a week, October 26.

News on the US: Inflation rose to + 2.2% per annum but without gasoline and products remained + 1.7%, below the lower FRS threshold of 2%. Retail sales, however, accelerated growth to + 1.6% for the month.

The market tried to push EUR/USD above 1.1880 but received strong resistance from sellers. Uncertainty.

EUR/USD: We are preparing to break the boundaries of the range.

The situation on EUR/USD is uncertain. Last week, growth stopped and buyers faced strong resistance from sellers in the zone 1.1870 - 1.1880.

At the same time, it's too early to talk about a full turn.

Formed a range with the boundaries of 1.1668 - 1.1880.

We propose to wait for an exit from the range and take positions in the direction of exit: Buy at the breakthrough level of 1.1880 upward or sell at breakthrough 1.1668 down.

The main news event of the week is the Fed's report on the economy "Beige Book" on Wednesday at 19.00.

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Ichimoku indicator analysis of USDX for October 16, 2017

The Dollar index has not managed yet to make a correction up to the 38% Fibonacci retracement. Price is below the Kumo (cloud) implying weakness and inability to bounce harder.

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The Dollar index is trading between the kijun- and the tenkan-sen. Price is below the Kumo (cloud) in the 4-hour chart. Trend is bearish and expect the downward move to resume once this corrective bounce is over. The Dollar index support is at 92.60 and resistance at 93.35.

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Black lines - bearish channel

On a weekly basis, trend remains bearish. Support is at 92.60. A weekly close below 92.60 will open the way towards 90 or lower. Even a daily close below 92.60 would be an equally important bearish sign. I believe a medium-term top was made around 94 and we have started the final leg down.

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Ichimoku indicator analysis of gold for October 16, 2017

Gold price is making new higher highs today in early trading. Price has broken through the 38% Fibonacci retracement very easily as it should, since we are in a bullish trend towards new highs. Longer-term view on gold price remains bullish looking for a move above $1,400.

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Gold price is trading above both the tenkan- and kijun-sen indicators (red and yellow trend lines). Gold price is making higher highs and higher lows. Support is at $1,298. Resistance is now at $1,308.50 and next at $1,320. Breaking above $1,320 will confirm our $1,400 view. Bulls need to break that level.

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The reversal bullish hammer pattern has played out very well as expected so far. The tenkan-sen is resistance (red line indicator). A weekly close above it will be a bullish sign. A rejection in the area of $1,320-$1,310 could bring a pullback in Gold prices towards $1,280.The material has been provided by InstaForex Company - www.instaforex.com