Bitcoin analysis for November 06, 2017

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The Bitcoin (BTC) has been trading sideways at the price of $7,343. After shutting down the country's bitcoin exchanges, the Chinese government is monitoring the booming cryptocurrency over-the-counter (OTC) market. A recent government report shows that 680 million yuan, approximately $103 million, were traded in the last two weeks of October on the top three international OTC trading platforms. Technical picture looks netural to bearish.

Trading recommendations:

According to the 1H time frame, I found the resistance cluster at the price of $7,462 on the test. There is a broken upward trendline in the bakcgorund, which is a sign of weakness. I also found a hidden bearish divergence on the RSI oscillator in the background, which is another sign of weakness. My advice is to watch for potential selling oppportunities. The downward targets are set at the price of $7,204 (pivot level) and $7,071 (siwng low).

Support/Resistance

$7.462 – Resistance cluster

$7.204 – Pivot level

$6.945 – Pivot support 1

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Global macro overview for 06/11/2017

The NFP payrolls headlight number was expected at the level of 312k, but the number revealed was at the level of 261k. Nevertheless, this result was far better than 18k a month ago. A report from the US labor market illustrating the condition of this economic sphere in October remained under the enormous influence of the September natural disasters. The anticipated change of employment has been reflected. As expected, it had to disappoint the dynamics of wages. As a result, the most persistent element is the drop in unemployment rates to cyclical minima and to 4.1% - definitely below any estimate of natural unemployment. This means that the December rate hike is decisive. With the current demographic trends, the rushed economy is able to create more jobs than the monthly labor force widens. Despite the advancement of the business cycle, the conditions in the labor market continue to tighten.

The Fed strongly believes in the Phillips curve, that is, the relationship between the unemployment rate and inflation has thus received another argument to remain faithful to its chosen strategy. And investors' reason for several days of rebounding is the strength of the US Dollar from the previous week considered in terms of correction. The choice of Powell for the Fed Chairperson was discounted by markets before it became official.

Currently, the CME FedWatch Tool shows a 97% probability of a target interest rate between the levels of 1.25-1.50%, which basically means an almost certain interest rate hike in 13th of December. This means the US Dollar might be still appreciating across the board.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market bounced from the technical support at the level of 94.47 and is heading to test the technical resistance at the level of 95.15. In a case of a further breakout, the next resistance is seen at the level of 95.45.

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Global macro overview for 06/11/2017

Market participants expect the RBA to hold the interest rate unchanged at the level of 1.50%, but in previous years November has been a very popular month for changing rates. Rates have not been adjusted in November since 2011. However, in the six years from 2006 to 2011, there was a rate move at every November RBA Board meeting. In the recent times, November has also been a popular month for market expectations of rate moves. Following the rate cut in August last year, markets were confident that there would be a follow-up cut in November.

The RBA Board will have the opportunity to review the Bank's own assessment of the revised weights on the inflation outlook and developments in residential property markets. Recent data shows that six-month annualized inflation in the Sydney market has fallen from 2.2% in January this year to –0.7% in October. Of particular interest for the Sydney, the market is going to be the behavior of investors going forward.

The Reserve Bank has indicated that interest rates will be targeted at inflation and growth, while monetary policy will address financial stability. Current trends indicate that financial stability concerns will be easing for the RBA. Interest rate increases may exacerbate weakness in real estate markets which might have a spillover impact on confidence and spending will also be unattractive. In conclusion, the overall outlook for RBA meeting is no change in interest rate yet.

Let's now take a look at the AUD/USD technical picture at the H4 time frame. The market failed to rally above the technical resistance at the level of 0.7732 and currently trades closer to the technical support at the level of 0.7625. In order to rally higher, the level of 0.7732 is the key for bulls, otherwise, the downtrend will continue.

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Technical analysis of EUR/USD for November 06, 2017

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Overview:

  • The EUR/USD pair continues to move downwards from the level of 1.1608. The pair dropped from this level of 1.1608 which coincides with the first resistance to the current point around 1.1587. Today, the first resistance level is seen at 1.1608 followed by 1.1638, while daily support 1 is seen at 1.1577. According to the previous events, the EUR/USD pair is still moving between the levels of 1.1608 and 1.1544; for that we expect a range of 64 pips at least. If the EUR/USD pair fails to break through the resistance level of 1.1608, the market will decline further to 1.1544. This would suggest a bearish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.1505 with a view to test the daily support one. Other supports are seen at the levels of 1.1544 and 1.1505. On the contrary, if a breakout takes place at the resistance level of 1.1676 (the double top), then this scenario may become invalidated.
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Technical analysis of GBP/USD for November 06, 2017

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Overview:

  • The GBP/USD pair is still trading upwards from the zone of 1.3017. The first support level is currently seen at 1.3017. The price is moving in a bullish channel now. Furthermore, the price has been set above the strong support at the level of 1.3017, which coincides with the 61.8% Fibonacci retracement level. This support has been rejected three times confirming the veracity of an uptrend. According to the previous events, we expect the GBP/USD pair to trade between 1.3017 and 1.3298. So, the support is seen at 1.3017, while daily resistance is found at 1.3298. Therefore, the market is likely to show signs of a bullish trend around the spot of 1.3017. In other words, buy orders are recommended above the zone of 1.3017 with the first target at the level of 1.3298; and continue towards 1.3655 in coming days. On the other hand, if the GBP/USD pair fails to break through the resistance level of 1.3298 today, the market will decline further to 1.2820.
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Analysis of EUR/USD for November 06, 2017

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Recently, the EUR/USD pair has been trading downwards. The price tested the level of 1.1588. According to the 15M time-frame, I found that price is trading below the pivot level (1.1633), which is a sign that sellers are in control. I also found bearish breakout of intraday trading range, which is another sign of weakness. My advice is to watch for potential selling opportunties. The downward targets are set at the price of 1.1542 (pivot support 2) and 1.1485 (pivot support 3, extreme target).

Resistance levels:

R1: 1.1667

R2: 1.1725

R3: 1.1760

Support levels:

S1: 1.1575

S2: 1.1541

S3: 1.1485

Trading recommendations for today: watch for potential selling opportunities.

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Technical analysis of USD/JPY for November 06, 2017

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USD/JPY is expected to trade with bullish outlook. Despite the recent pullback, the pair is still trading above the key support at 113.60, which should limit the downside potential. The relative strength index advocates for a further upside.

Hence, as long as 113.60 is not broken, look for a new rebound with targets at 114.70 and 115.00 in extension.

Alternatively, if the price moves in the opposite direction, a short position is recommended above 113.60 with a target at 113.3.

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: 113.60, Take Profit: 114.70

Resistance levels: 114.70, 115.00 and 115.50 Support Levels: 113.30, 112.95, 112.50

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Technical analysis of USD/CHF for November 06, 2017

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USD/CHF is expected to trade with bullish outlook. Although the pair posted a pullback from 1.0025 (the high of November 3), a support base at 0.9975 has been formed and has allowed for a temporary stabilization. The relative strength index is mixed with bullish bias.

The US Labor Department reported that the economy added 261,000 nonfarm payrolls in October, compared with an addition of 315,000 jobs expected. The jobless rate declined 0.1 percentage point to 4.1%, its lowest level since December 2000. Meanwhile, wages increased 2.4% on year, the weakest pace of growth since February 2016.

In addition, the Institute for Supply Management said its non-manufacturing purchasing managers' index reached 60.1 in October, its highest level since 2005. The Commerce Department reported that factory orders increased 1.4% on month in September, and durable goods orders rose 2.0% on month, compared with a 2.2% gain estimated previously.

To conclude, as long as 0.9975 holds on the downside, a further upside to 1.0040 and even to 1.0060 seems more likely to occur.

Chart Explanation: The black line shows the pivot point. The present price above the pivot point indicates a bullish position, and the price below the pivot points 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.

Strategy: BUY, Stop Loss: 0.9975, Take Profit: 1.0040

Resistance levels: 1.0040, 1.0060, and 1.0100

Support levels: 0.9945, 0.9900, and 0.9860

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Technical analysis of GBP/JPY for November 06, 2017

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GBP/JPY is expected to trade with bullish bias above 149.10. Although the pair posted a pullback from 148.70, a support base at 149.10 has been formed and has allowed for a temporary stabilization. The relative strength index is mixed with bullish bias.

To conclude, as long as 149.10 holds on the downside, a further upside to 149.90 and even to 150.30 seems more likely to occur.

Alternatively, if the price moves in the direction opposite to the forecast, a short position is recommended below 149.10 with the target at 148.70.

Strategy: BUY, Stop Loss: 149.10, Take Profit: 149.90

Chart Explanation: the black line shows the pivot point. The price above the pivot point indicates long positions; and when it is below the pivot points, it indicates short positions. 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: 149.90, 150.30 and 151.05

Support levels: 148.70, 148.20, and 147.55

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Analysis of GBP/USD for November 06, 2017

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Recently, the GBP/USD pair has been trading upwards. The price tested the level of 1.3127. Anyway, according to the 15M time-frame, I found successful rejection from the pivot resistance 1 at the price of 1.3125, which is a sign that buying looks risky. I also found a hidden bearish divergence on the stochastic oscillator, which is another sign of weakness. My advice is to watch for potential selling opportuntiies. The downward targets are set at the price of 1.3082 (pivot level) and 1.3032 (pivot support 1).

Resistance levels:

R1: 1.3125

R2: 1.3175

R3: 1.3218

Support levels:

S1: 1.3023

S2: 1.2989

S3: 1.2940

Trading recommendations for today: watch for potential selling opportunities.

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Technical analysis of NZD/USD for November 06, 2017

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NZD/USD is under pressure and expected to continue the downside movement. The technical outlook for the pair is bearish as the prices broke below the rising trend line since November 1. The 20-period moving average crossed below the 50-period one. The relative strength index is below its neutrality level at 50.

To conclude, as long as 0.6915 is resistance, look for another decline with targets at 0.6850 and 0.6830 in extension.

The black line shows the pivot point. Currently, the price is above the pivot point, which indicates long positions. If it remains below the pivot point, it will indicate short positions. The red lines are showing the support levels and the green line is indicating the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 0.6950, 0.6970, and 0.6995

Support levels: 0.6850, 0.6830, and 0.6800

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Intraday technical levels and trading recommendations for NZD/USD for November 6, 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.

This resulted in a quick advance towards the next price zones around 0.7150-0.7230 (key zone) and 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 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 high probability of bearish reversal as long as bearish persistence below the neckline 0.7150 is maintained.

As expected, the price level of 0.7050 failed to offer enough bullish support for the NZD/USD pair. That's why, further decline should be expected towards 0.6800 (Reversal pattern bearish target).

On the other hand, if the recent low (0.6817) remains defended by the bulls, a bullish pullback and a short-term BUY entry can be expected during this week's consolidations.

The next DEMAND level to meet the pair is located around 0.6710 that may be visited if enough bearish pressure is applied below 0.6800.

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Intraday technical levels and trading recommendations for EUR/USD for November 6, 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 advance towards 1.2100 where the 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 was reversed when the Inverted Head and Shoulders pattern was established around 1.0500. Since then, evident bullish momentum has been expressed on the chart.

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

The daily supply zone failed to pause the ongoing bullish momentum. Instead, evident bullish breakout was expressed towards the price level of 1.2100 where the depicted Head and Shoulders reversal pattern was expressed.

If the recent bearish breakout persists below 1.1700 (Neckline of the reversal pattern), a quick decline should be expected towards the price zone of 1.1415-1.1520 (Initial targets for the depicted H&S pattern).

Bearish target for the depicted Head and Shoulders pattern extends towards 1.1350. However, to pursue towards the mentioned target level, significant bearish pressure is needed to be applied against the mentioned zone (1.1415-1.1520).

Trade Recommendations

Price action should be watched around the price zone of 1.1415-1.1520 for evident bullish recovery and a possible short-term BUY entry.

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Daily analysis of major pairs for November 6, 2017

EUR/USD: This pair moved sideways from Monday to Thursday and then went further downwards on Friday, while the dominant bias remains bearish. This week, the support lines at 1.1600 (which has almost been tested), 1.1550 and 1.1500 may be tested owing to a strong bearish bias on EUR pairs for the week.

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USD/CHF: This currency pair did not move seriously last week, but it was able to maintain its bullishness. Price managed to close above the psychological area at 1.0000 on Friday, poised to move higher from there. The targets for this week are located at the resistance levels of 1.0050, 1.0100 and 1.0150. The resistance level at 1.0150 would require a very strong buying pressure to be breached to the upside.

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GBP/USD: This currency trading instrument went upwards from Monday to Wednesday last week, testing the distribution territory at 1.3300. More bullish journey was rejected at that distribution territory as price plummeted from there, losing 250 pips and testing the accumulation territory at 1.3050. The outlook on GBP pairs is bearish for this week, so more southwards movement is expected. The weak EUR/USD would also help to drag the GBP/USD further downwards.

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USD/JPY: This market went downwards on October 30, reversed on October 31, and consolidated for the rest of the week. This week, it is more likely for the price to go higher and then to go lower. First, because the outlook on USD pairs is bullish for this week, and also because of an existing Bullish Confirmation Pattern in the market. The supply levels at 114.50 and 115.00 would at least be reached.

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EUR/JPY: Last week the EUR/JPY pair rallied in the context of a downtrend, moving from the demand zone at 131.50 to test the supply zone at 133.00 and then coming downwards on Friday. The price closed at 132.40 (below the supply zone at 132.50). Owing to a bearish outlook on EUR pairs this week, the market is supposed to go further southwards.

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Bitcoin analysis for 06/11/2017

With the growing tension between Iran and the United States, the first one plans to incorporate the Bitcoin into its payment system. After the speech of Donald Trump who called the deal with Iran the worst transaction in history, Iran and the United States have no best relations. Iran still suffers from international sanctions that affect several sectors of its economy, including finance, energy and the maritime industry. These sanctions also hinder Iranian citizens from using online payment platforms such as PayPal, Venmo and Braintree. The Iranian government has devised a way to circumvent these repressive measures by implementing the Bitcoin as the basic online payment method. One of the main advantages of such a solution is that the currency is decentralized and can not be controlled by a central institution such as a corporation or government and therefore does not allow for blocking of payments originating in Iran. With the Bitcoin, Iranian citizens can easily bypass economic sanctions and be able to conduct international transactions. Recognition of the Bitcoin by the Iranian economy is a milestone for the cryptocurrency. This means that the government can begin to open up on the progress of payments and currency.

Amir Hossein Davaee, Deputy Minister for Information and Communication Technology of Iran said that the Bitcoin business involves creation of money, so the Central Bank of Iran should establish basic principles and supervise the activities associated with it. Otherwise, the decision to introduce this digital currency could disrupt the economic cycle. Iran is now completing the right infrastructure for not only Bitcoin, but also for other cryptocurrencies. At the end of the project the digital currency will be properly integrated and regulated.

Let's now take a look at the Bitcoin technical picture on the H4 time frame. The price is now developing w fifth wave extension with the projected target at the level of $8,356 - $8,545 zone. This projection is valid as long as the support at the level of $6,971 is not violated. In a case of a violation, the projections will be adjusted, and the price will head to test the technical support at the level of $6,176.

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Trading plan for 06/11/2017

The week starts with a slightly stronger US dollar, especially against the yen as USD/JPY hit 114.70 and the New Zealand Dollar hit 0.6900 level. Raw material prices continue to dominate the commodity markets. WTI close to $56, and there is a huge increase in natural gas prices and a sharp increase in copper prices. An ounce of gold is priced at $1,270.

On Monday, sixth of November, the event calendar is light in important news releases. However, market participants will pay attention to the PMI Services and Composite data released from across the Eurozone. During the US session, Canada will release Ivey Purchasing Managers Index data.

EUR/USD analysis for 06/11/2017:

The Eurozone PMI data are scheduled for release during the early stages of London session, between 07:00 am - 09:00 am GMT. Later on, the Eurozone will release the Sentix Investor Confidence data. This is a survey of about 2,800 investors and analysts which asks respondents to rate the relative 6-month economic outlook for the Eurozone. For this month there is an increase in sentiment expected, from 29.7 to 31.2 points, which would indicate that the overall mood across the Eurozone remains elevated.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The clear Bearish Flag pattern on the H4 time frame indicated another possible leg down in this pair. The bulls were unable to rally towards 50% Fibo at the level of 1.1705 and the momentum indicator is still oscillating around its fifty level. The outlook remains bearish and the sell-off might accelerate once the price breaks out below the 1.1575 support level.

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Market Snapshot: USD/CAD retraces 38%

The price of USD/CAD has retraced 38% of the precious swing up and bounced from the level of 1.2731. The next technical resistance is seen at the level of 1.2777. Market conditions are oversold, so a breakout above the resistance might lead towards the next technical level at 1.2802.

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Market Snapshot: Crude Oil at new highs

The price of crude oil has made a new high at the level of $56.27 after tensions in Saudi Arabia escalated. Nevertheless, the move up is starting to look stretched as there is a visible bearish divergence between the price and the momentum oscillator. The most likely level to be tested in a case of a correction is the support at the level of $55.27.

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Ichimoku indicator analysis of USDX for November 6, 2017

The dollar index marginally broke below the bullish channel last week but price held above the 4 hour Ichimoku cloud support. The trend remains bullish targeting towards 95.50.

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Blue lines - bullish channel

The dollar index is trading above the Kumo (cloud). The trend remains bullish. Support is at 94.75-94.50 and the next one is found at 94.10. As long as the price is above that levels, we should continue to expect the extension of this upward move towards 95.50-96.

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On a weekly basis nothing has changed. Price is heading towards our 1st target of the 38% Fibonacci retracement where we also find the kijun-sen (yellow line indicator). Important weekly support is at 93.30 and bears must break that level in order to have a confirmation for the resumption of the bearish trend.The material has been provided by InstaForex Company - www.instaforex.com

Ichimoku indicator analysis of gold for November 6, 2017

Gold price remains in a bearish trend. Price has broken again below the 4 hour Ichimoku cloud as it could not stay above $1,280 last week. Price got rejected at the important short-term resistance and that is why we closed near the lows.

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Black line -RSI support

Gold price is trading below the 4 hour Kumo. The trend remains bearish. Price must break above $1,277 and close above it in order for the trend to change to bullish. Gold price continues to hold above the $1,262 low but there are increased chances of breaking below it towards $1,250-45. If the RSI support is broken, we should expect price to move towards $1,250, otherwise a bounce will come towards $1,277.

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Although my longer-term view remains bullish, as long as price is below the tenkan- and kijun-sen indicators, we will tend to go towards $1,245-50. Last week price got rejected at the kijun-sen (yellow line indicator) and has broken again below the tenkan-sen (red line indicator). The trend is bearish.The material has been provided by InstaForex Company - www.instaforex.com

Elliott wave analysis of EUR/NZD for November 6, 2017

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Wave summary:

We are looking for more downside pressure in wave ii closer to support at 1.6545 before the next impulsive rally in wave iii should be expected.

Short-term resistance at 1.6914 is likely to cap the upside for expected decline lower. A break below minor support at 1.6831 will confirm renewed downside pressure.

R3: 1.6951

R2: 1.6914

R1: 1.6894

Pivot: 1.6831

S1: 1.6762

S2: 1.6712

S3: 1.6660

Trading recommendation:

We are short EUR from 1.6790 and we will place our stop at 1.6925.

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Elliott wave analysis of EUR/JPY for November 6, 2017

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Wave summary:

Our preferred count shows that wave (D) completed with the test of 134.45 and wave (E) now is developing for a final decline to 123.43 from where a strong impulsive rally is expected.

Short-term resistance at 133.15 should continue to cap the upside for a break below 132.29 for a continuation towards 128.36 and 125.29 as the next downside targets. Even if resistance at 133.15 is broken, overhead resistance will be seen just above at 133.32, which should cap for a new turn lower.

R3: 133.98

R2: 133.32

R1: 133.15

Pivot: 132.75

S1: 132.29

S2: 131.93

S3: 131.42

Trading recommendation:

We sold EUR at 132.59 with stop placed at 134.55.

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Trading plan for EUR/USD and USDX for November 06, 2017

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Technical outlook:

The 4H chart of EUR/USD is presented for a clear wave count from recent swing highs at 1.2092 levels. As labelled here, 2 wave counts are coming out quite prominent: either a potential leading diagonal is in the making or an A-B-C corrective drop is underway. In both cases, the common point is that EUR/USD could be looking to produce one more low at 1.1500/10 levels before turning higher. Please note that the pair is expected to retrace higher towards at least 1.1900 levels before providing a short opportunity again. As an alternate count though, the pair could go all the way towards 1.2100 levels as well before dropping lower again. We shall be looking through long opportunities around 1.1500 levels in the short term and then looking at price action to turn lower again.

Trading plan:

Aggressive traders might want to remain short from last week with risk at 1.1730 levels targeting 1.1500, while conservative traders would want to remain flat and look to go long lower around 1.1500.

USDX chart setups:

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Technical outlook:

Again, a 4H chart view for the US dollar index is presented here for a clear wave count since it has made lows at 91.00 levels. It is probably presenting a highly probable 5 wave (impulse) rally through 95.30/50 levels as labelled here. An alternate count is not required, since guidelines for an impulse are meticulously followed here. We are expecting one more high around 95.30/50 levels before the 5th wave terminates and pushes the US Dollar Index lower, to produce a meaningful retracement. Support is strong towards the 91.00 level and prices should ideally remain above that going forward. Both sides trading opportunities should be offered around 95.30/50 levels: initially short and then turn long.

Trading plan:

Please remain flat for now and look to go short around 95.30/50 levels with risk above 96.00, targeting 93.00 levels.

Fundamental outlook:

There are no major fundamental events lined up for the day.

Good luck!

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Technical analysis of EUR/USD for Nov 06, 2017

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When the European market opens, some economic data will be released such as Eurogroup Meetings, PPI m/m, and Sentix Investor Confidence, as well as German Final Services PMI, French Final Services PMI, Italian Services PMI, Spanish Services PMI, German Factory Orders m/m. The US will also unveil some reports such as Loan Officer Survey. So, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1662.

Strong Resistance:1.1655.

Original Resistance: 1.1644.

Inner Sell Area: 1.1633.

Target Inner Area: 1.1605.

Inner Buy Area: 1.1577.

Original Support: 1.1566.

Strong Support: 1.1555.

Breakout SELL Level: 1.1548.

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 Nov 06, 2017

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In Asia, Japan will release the monetary policy meeting minutes and the US will also unveil some reports such as the Loan Officer Survey. So there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance. 3: 115.12.

Resistance. 2: 114.90.

Resistance. 1: 114.67.

Support. 1: 114.39.

Support. 2: 114.17.

Support. 3: 113.94.

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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AUD/USD profit target reached once again, prepare for another bounce

Price has dropped absolutely perfectly as expected and has reached our profit target. We now prepare to buy above 0.7628 major support (Fibonacci extension, horizontal swing low support, long-term Fibonacci retracement) for a push up to at least 0.7730 resistance (Fibonacci retracement, horizontal overlap resistance).

Stochastic (34,3,1) is seeing major support above 0.6% where we expect a corresponding bounce from.

Buy above 0.7628. Set stop loss at 0.7556 and take profit at 0.7730.

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USD/JPY reverses perfectly as expected, remain bearish

We remain bearish looking to sell on strength below 114.37 resistance (Fibonacci extension, horizontal swing high resistance, bearish divergence) for a push down to at least 113.54 support (Fibonacci retracement, horizontal overlap support).

RSI (34) sees strong bearish divergence vs price signalling that a reversal is impending.

Sell below 114.37. Set stop loss at 114.76 and take profit at 113.54.

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Daily analysis of USDX for November 06, 2017

There are no major changes in the short-term structure for USDX, as it stays consolidated above the 200 SMA on the H1 chart. If the index manages to rebound over the moving average, it could be targeting the resistance zone of 95.85, while a pullback should make a lower extension to reach the 93.97 level.

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H1 chart's resistance levels: 95.14 / 95.85

H1 chart's support levels: 94.60 / 93.97

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 95.14, take profit is found at 95.85 and stop loss lies at 94.47.

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Daily analysis of GBP/USD for November 06, 2017

GBP/USD is currently forming a bearish pattern on the H1 chart below the 200 SMA. The support level of 1.3037 is helping to give a short-lived boost to the pair across the board, but if it gives up, then we might expect another leg lower towards the 1.2880 level. To the upside, the nearest resistance lies at 1.3201.

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H1 chart's resistance levels: 1.3201 / 1.3309

H1 chart's support levels: 1.3037 / 1.2880

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the GBP/USD pair breaks a bearish candlestick; the support level is at 1.3037, take profit lies at 1.2880 and stop loss is found at 1.3193.

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The dollar intends to continue the offensive

Published on Friday, the employment report led to a decline in the dollar, which, by the way, was short-lived. The number of new jobs in October was 261,000, which is slightly worse than forecasts. However, the indicator for September was revised upwards, and the unemployment rate was unexpectedly reduced to 4.1%.

The employment report did not lead to a reassessment of the outlook for the rate - investors are still convinced that in December the FOMC will take another step towards the normalization of monetary policy. Moreover, the probability of another hike in March 2018 has surpassed 40%, which is a sign that the market is confident the US economy will cope with a new cycle of tightening.

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At the same time, the employment report failed to leave a clear impression and showed that there is a risk that the market does not entirely appreciate. Yes, the actual pace of creating new jobs in the last two months was around the level of expectations, and the decline in the unemployment rate seems like a pleasant bonus. Focus will be on the fact that inflation expectations could be under pressure, as the current trend in terms of growth in the average wage will not contribute to growth, but instead to a decrease in inflation.

The graph below shows that two indicators of the health of the labor market, particularly, the average wage and the proportion of the labor force in the total population, are quite well correlated for at least the last 10 years, with any peak in the second indicator for several months. In general, it is ahead of the peak in the first. In other words, a significant decline in labor force participation to 62.7% to a 13-month low indicates a high probability of a drop in the average wage growth rate from the current 2.4% in the next few months, which will inevitably contribute to the development of deflationary sentiments.

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Therefore, the dollar is still on a rather unstable growth path, but there are still few reasons to doubt that this growth will continue.

On Thursday, the Republicans submitted a detailed plan to the Congress regarding the changes in the tax code, which will play the role of breaking the trend of low incomes and promote consumption growth. Taxation of personal incomes has been simplified. Standard tax deductions have been sharply increased, which will raise real incomes of the population. The tax rate for corporations will be lowered from 35% to 20%, this is the largest reduction in taxes in American history, from 39.6% to 25%. The minimum rate for small businesses is reduced, and most importantly - taxation of foreign assets is significantly simplified, which, according to the idea, should contribute to the repatriation of capital and also increase the attractiveness of US assets.

In the event that the bill is passed without significant difficulties, the Congress will certainly contribute to the growth of demand for the dollar.

On Thursday, another long-awaited event took place: US President Trump asked the current head of the Federal Reserve, Janet Yellen, to resign and then appointed Jerome Powell to replace her. It is believed that Powell is inclined to continue the current policy of the Fed. The market news regarding Powell's appointment was favorably received, which was reflected in the new wave of growth in the blue chip index Dow Jones and also contributed to the overall positive outlook for the dollar.

Published on Friday, the CFTC report expectedly showed that speculative demand for the dollar continues to grow. The Canadian and Australian Dollars began to take their positions, the sharp decline in the Swiss franc pulled back, while speculators of the euro also assessed the pessimism. The market seems to agree that the dollar, after a long fall since January 2017, is finally beginning to regain its initiative, and therefore, in the coming week will move forward under the sign of its dominance.

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The weakness of the pound is deceiving

Eurozone

In the absence of significant macroeconomic news, the euro continues to be under pressure. Investors are reacting to the indistinct results of the ECB meeting a week ago with the selling of the euro, as the prospects for a return to normal macroeconomic policies remain unclear, and especially the negative is beginning to materialize against the background of hawkish news from the United States.

On Monday business activity indices from Markit for the eurozone nations will be published, as well as an indicator of consumer confidence from Sentix. The forecasts are neutral, therefore the data release is unlikely to have a noticeable impact on the markets. On Tuesday, data for September on industrial production in Germany and retail sales in the eurozone in September will be released.

The eurozone economy is in a stable state, and there are no reasons for investors to worry. At the same time, the ECB, abandoning the initiative in matters of monetary policy, provokes the outpour of speculative capital from the eurozone and realizes the goal to stop the growth of the European currency. The market does not object and sees no reason to return to the upward movement. The euro will continue to trade in the range with a downtrend, next week may reduce EURUSD to 1.1550.

United Kingdom

The Bank of England, as expected, raised the interest rate by a quarter point for the first time since 2008. Concerning further plans, the bank preferred not to disclose the information, confining itself to a remark in the style of "we will closely monitor the incoming data."

Mark Carney said at the press conference that only a small adjustment was made, and noted that the horizon of expectations for inflation is increased due to uncertain prospects for Brexit.

Expectations on rates indicate an improvement in the pound's position if we take into account the dynamics of the spread between the Fed, the EBC and the Bank of England. Compared to August, the growth of rates in the UK is expected to be more dynamic, for the Fed, the forecast increase is slightly less, but for the euro, the forecast is revised downwards, that is, the Bank of England assumes that market expectations for aggressive actions of the ECB may not be justified.

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Such dynamics, if implemented, will lead to a faster demand for the pound, as it will increase the attractiveness of British assets, primarily against the European ones. This forecast looks at the true goal of Brexit, which is to create a more attractive investment climate for European capital, which will help the United Kingdom jump on the footsteps of the train leading to the "Brave New World" and create conditions for maintaining the pound's position as one of the world's reserve currencies.

However, this scenario still needs to be realized. Against the US dollar, the pound is under pressure amid profit taking after the Bank of England meeting and the overall positive for the dollar, the nearest target is 1.2850, but has a chance to resume growth against the euro, the nearest target is 0.8680.

The more distant and strong support is 0.8300, which the EURGBP can decline to already by the end of November.

Oil

Brent, for the first time in 28 months overcame the mark of 62 dollars per barrel, and it seems that this is still far from the limit. The growth in prices was not prevented by reports on the increase in production volumes in the US, as the market is gradually developing expectations of reaching a deficit that will result from the actions of the OPEC + agreement and the growing demand, primarily from the Asian countries.

Oil can continue to grow, as the effects of fundamental factors are not weakening yet. Technically, the daily overbought schedule has not yet been observed, a corrective decline to $60/bpd will be used with high probability for new buying.

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