Bitcoin analysis for December 28, 2017

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Bitcoin (BTC) has been trading downwards. As I expected, the price tested the level of $13,156. The government of South Korea held a meeting on Thursday to discuss measures to deal with the growing trend of cryptocurrency speculation. The regulators clarified the clampdown on virtual accounts as well as other measures to end anonymity. In addition, the Ministry of Justice suggested an even more extreme measure. The technical picture looks bearish.

Trading recommendations:

According to the 1H time - frame, I found that there is a successful rejection from the resistance and a confirmed head and shoulders formation, which is a sign that buying looks risky. My advice is to watch for potential selling opportunities. The projected downward targets are set at the price of $12,120 and at the price of $10,645.

Support/Resistance

$14,332 – Intraday resistance (price action)

$12,120 – First objective target

$10,645 – Second objective target

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Intraday technical levels and trading recommendations for EUR/USD for December 28, 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 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 bullish advance towards 1.1415-1.1520 (Previous Daily Supply-Zone).

The daily supply zone failed to pause the ongoing bullish momentum. Instead, evident bullish breakout 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 bearish 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).

However, In November, recent price action around the price zone of 1.1520-1.1415 indicated evident bullish recovery.

This hindered further bearish decline which allowed the current bullish pullback to occur towards the price level of 1.1900 where price action should be watched for a possible SELL entry.

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Global macro overview for 28/12/2017

It will take about a week to repair the damaged infrastructure in the Es Sider terminal after the explosion of the oil transporting pipeline in Libya last Tuesday. Oil production in Libya fell by 12.0% below 1 million barrels per day to 950 thousand bpd. Before the gas pipeline explosion, the crude oil production was 1.08 million bpd. Loading of oil in Es Sider dropped by 50.0%, and this month it was expected to load the raw material for 13 tankers, each for 600,000 barrels of oil.

On the other hand, the US received information that oil stocks fell last week. The American Petroleum Institute reported that inventories decreased by 5.96 million barrels. Today, market participants will receive another inventories data from the US Department of Energy (DoE) at 03:30 pm GMT. Analysts expect a drop in US oil stocks of 3.90 million barrels after another drop last week of 6.48 million barrels. Market participants can expect a slight decline in quotations and then a stable level, because despite the fact that the US oil stocks are declining, the price growth may halt the higher shale oil production in the US .

Let's now take a look at the Crude Oil technical picture at the H4 time frame. The market is still hovering around the level of $60.00 in overbought trading conditions. The nearest technical support is seen at the level of $59.04 and it looks like it might be tested soon. As long as the golden trend line is not violated, the trend remains bullish.

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Global macro overview for 28/12/2017

The sentiment of the American households was much stronger than it could have been deduced from the median forecasts by Bloomberg. In December the Conference Board index reached the level of 122.1 pts (consensus: 128.0 pts), which should be treated as the aftermath of a strong breakdown in perspective assessment (99.1 pts, previously: 111.0 pts). The above estimates slightly stifle optimism related to the dynamics of individual consumption in the following quarters, which were previously supported by a clearly sharpened trajectory of retail sales. In the meantime, the index of signed home purchase contracts has been published as well. Month by month, the volume of transactions surged by 0.2% (consensus: -0.5%), thus registering an annual increase of 0.6%.

Let's now take a look at the USD/JPY technical picture at the H4 time frame. The worse than expected data helped bears push the price to the level of 112.64, which is 61% Fibo retracement of the previous leg up. Currently, the market conditions are oversold, so a rebound from the support can occur shortly. The key level to the upside remains at the level of 113.74.

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EUR/USD analysis for December 28, 2017

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Recently, the EUR/USD pair has been trading upwards. The price tested the level of 1.1946. Anyway, according to the 1H time – frame, I found a rising wedge formation in creation, which is sign that buying looks risky. I also found a hidden bearish divergence on the moving average oscillator, which is anotherr sign of weakness. My advice is to watch for potential selling opportunities. The first downward target is set at the price of 1.1900 and if the price breaks the level of 1.1900, EUR/USD might visit 1.1740.

Resistance levels:

R1: 1.1915

R2: 1.1940

R3: 1.1970

Support levels:

S1: 1.1860

S2: 1.1830

S3: 1.1805

Trading recommendations for today: watch for potential selling opportunities.

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USD/JPY analysis for December 28, 2017

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Recently, the USD/JPY pair has been trading sideways downwards. The price tested the level of 112.66. Anyway, according to the 4H time – frame, I found a major upward trendline (support) on the test, which is a sign that selling looks risky. I also found a hidden bullish divergence on the stochastic oscillator, which is another sign of strength. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 113.35 and at the price of 113.63.

Resistance levels:

R1: 113.84

R2: 114.40

R3: 115.15

Support levels:

S1: 112.50

S2: 111.75

S3: 111.18

Trading recommendations for today: watch for potential buying opportunities.

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BITCOIN Analysis for December 28, 2017

Bitcoin has been impulsively bearish recently and currently residing below the $14,000 price area. The price did recover well from the drastic fall towards $11,100 price area but could not sustain the gains and currently heading towards the same price level again. The volatility in the Bitcoin is currently quite extreme which created a false break above the $15,500 price area before the impulsive bearish pressure. As for the current scenario, price is residing below the Kumo cloud support which was expected to hold the price for further bullish movement in the pair and push the price higher. Moreover, the dynamic levels of 20 EMA, Tenkan and Kijun line are currently working as resistance residing above the recent candles to hold a further bullish move in the future. As the price remains below $15,500 price area with a daily close, the bearish bias is expected to continue further with target towards $11,100 price area.

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Technical analysis of NZD/USD for December 28, 2017

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Overview:

  • The NZD/USD pair continues to move upwards from the level of 0.7032. Yesterday, the pair rose from the level of 0.7032 to a top around 0.7090. Today, the first resistance level is seen at 0.7100 followed by 0.7160, while daily support 1 is seen at 0.7032 (78.6% Fibonacci retracement). According to the previous events, the NZD/USD pair is still moving between the levels of 0.7050 and 0.7160; so we expect a range of 110 pips. Furthermore, if the trend is able to break out through the first resistance level at 0.7100, we should see the pair climbing towards the double top (0.7160) to test it. Therefore, buy above the level of 0.7062 with the first target at 0.9990 in order to test the daily resistance 1 and further to 0.7100. Also, it might be noted that the level of 0.7160 is a good place to take profit because it will form a new double top on the H4 chart. On the other hand, in case a reversal takes place and the NZD/USD pair breaks through the support level of 0.7032, a further decline to 0.6940 can occur which would indicate a bearish market.
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NZD/USD Intraday technical levels and trading recommendations for December 28, 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 bullish advance towards 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 which initiated bearish reversal.

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

Evident signs of bullish recovery was expressed around the recent low (0.6780). That's why, a bullish pullback is expected towards 0.7050.

Moreover, further bullish advance should be expected towards 0.7150 if enough bullish momentum is expressed above the price level of 0.7050.

Trade Recommendations:

An inverted Head and Shoulders pattern was established on the chart indicating high probability of bullish momentum.

That's why, the price zone of 0.6800-0.6830 was considered for a short-term BUY entry. Bullish persistence above 0.6950 and 0.7050 is mandatory to pursue towards next bullish targets.

S/L should be moved to 0.7010 to secure some profits. T/P level remains projected towards 0.7110 and 0.7240.

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Technical analysis of USD/CHF for December 28, 2017

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Overview:

  • The USD/CHF pair continues to move downwards from the level of 0.9884. Yesterday, the pair dropped from the level of 0.9884 to the bottom around 0.9800. But the pair could not rebound from the bottom of 0.9800; because it is still moving around the spot of 0.9800. Today, the first support level is seen at 0.9791, the price is moving in a bearish channel now. Furthermore, the price has been set below the strong resistance at the level of 0.9827, which coincides with the 38.2% Fibonacci retracement level. This resistance has been rejected several times confirming the veracity of a downtrend. Additionally, the RSI starts signaling a downward trend. As a result, if the USD/CHF pair is able to break out the first support at 0.9827, the market will decline further to 0.9763 in order to test the weekly support 2. Consequently, the market is likely to show signs of a bearish trend. So, it will be good to sell below the level of 0.9827 with the first target at 0.9763 and further to 0.9734. However, stop loss is to be placed above the level of 0.9856.
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Fundamental Analysis for EUR/CAD for December 28, 2017

EUR/CAD has been very volatile recently which lead to impulsive bullish and bearish pressure back to back within a short-period of time and range. The price is currently residing above the channel and horizontal support area of 1.50 whereas a break below this level with a daily close is expected to lead to series of bearish pressure in the pair. Today EUR ECB Economic Bulleting was held which did not quite contributed well to the EUR gains leading to further indecision in the pair. The pair is already very low in liquidity today and having no economic events or news from the CAD side the most waited bearish breakout is currently on hold. As of the current situation, the price is expected to have a break below the support area of 1.50 in the coming days which is expected to lead to a new bearish trend with a long-term view of shorting opportunities in the market.

Now let us look at the technical view, the price is currently residing above the Channel support and Horizontal Support level of 1.50 which is expected to break below very soon. As the price breaks below the level with a daily close then we will be looking forward to selling with the target towards 1.4750 support area in the future. As the price remains below 1.53 price area the bearish bias is expected to continue further.

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Fundamental Analysis of EUR/GBP for December 28, 2017

EUR/GBP has been trading inside the corrective range of 0.8750 to 0.9030 for a while now. Both currencies in the pair has been quite indecisive with mixed economic reports recently that have led to further correction and consolidation in this pair. Today, the ECB Economic Bulletin was published that did not encourage further EUR gains over GBP. On the other hand, today the UK High Street Lending report was published with a decreased figure of 39.5k from the previous figure of 40.4k that was expected to be at 40.6k. The price is currently very volatile and indecisive due to downbeat economic reports published today in the eurozone and the UK. Moreover, due to less liquidity in the market, the momentum is very slow and steady. As for the current scenario, a definite trend cannot be predicted now but EUR is expected to have an upper hand over GBP as upcoming economic reports and events are expected to be hawkish in the coming days.

Now let us look at the technical chart. The price is currently consolidating above the dynamic level of 20 EMA after the recent false break below the support level of 0.8750. Currently the price is expected to push higher with a target towards 0.9030 resistance area. As the price remains above 0.8750 price level, the bullish bias is expected to continue further.

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Bitcoin analysis for 28/12/2017

The controversial hard fork Bitcoin - SegWit2x - according to the official website of the project will be introduced on December 28th. The SegWit2x project, which caused months of debate and conflicts within the Bitcoin community, is to be carried out on block 501451.

The project's founder, Jaap Terlouw, stated on his site that fork is supposed to deal with issues of speed and transaction commission in the Bitcoin network, adding that currently, Bitcoin is practically unsuitable for use as a means of payment. Confirmation that the fork will actually take place is indicated both in the action plan on the project website, as well as in the Terlouw words: "Our team will perform a hard fork Bitcoin, which was scheduled for mid-November."

The founder also promised that in addition to the common practice of crediting BTC holders with equivalent new coin balances (B2X), they will also receive a proportional number of Bitcoins Satoshi Nakamoto as a reward for their commitment to development. The project's roadmap includes features such as Lightning Network support, intelligent contracts and anonymous transactions..

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market reversed from the level of $16.367 after three wave advance was made. The corrective cycle is continuing as the price is again dropping towards the local support at the level of $14,271. There is a high probability that the wave 4 will be in a shape of a triangle pattern.

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Trading plan for 28/12/2017

Just before the start of the London session, the EUR/USD rate breaks through the level of 1.1930. The New Zealand dollar (0.5%) and the Japanese yen (0.5%) are fighting for the name of the strongest gaining counterparts, which pushes the USD / JPY to the level of 112.80. At the far end, there is a pound sterling with 0.3% gain. The prospect of a lack of political reshuffles leaves the scenario of an attack by GBP / USD at a round level of 1.3500.

On Thursday 28th of December, the event calendar is light in important data releases, but during the US session, there is data worth of keeping an eye on: Unemployment Claims, Continuing Claims, Goods Trade Balance, Chicago Purchasing Manager Index and Crude Oil Inventories.

EUR/USD analysis for 28/12/2017:

Investors' attention was drawn to the latest estimates of the consumers' mood index by Conference Board. Based on newly published data, there is a more solid deterioration in sentiment than it would appear from the median forecasts by Bloomberg (consensus: 128.0 pts, previously: 128.6 pts). The index's drop to the level of 122.1 points is primarily the collapse of the prospects assessment (99.1 pts, previously: 111.0 pts), which partially melts the optimism, supported, among others, by the clearly sharpened trajectory of retail sales. On the other hand, on the US real estate market, the index of signed purchase contracts for a home rose unexpectedly by 0.2%. (consensus: -0.5%), thus complementing a series of good news flowing from both the secondary and primary market.

There are not many important data from the Eurozone today, but the pack of the US data later in the day might get the rates moving a little, especially if the data will be worse than expected.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market is testing the technical resistance zone at the level of 1.1941 and the momentum is strong, so another leg up is expected. The level of 1.1961 is the line in the sand for the bears, because any violation of this resistance will lead to the further rally towards the level of 1.2000.

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Market Snapshot: USD/CAD testing the lower range of the zone

The price of USD/CAD has reversed from the level of 1.2919 and now is testing the range zone at the level of 1.2618, which is a 61% Fibo retracement as well. Any extension of the drop would lead to the test of the important support zone between the levels of 1.2598 - 1.2556.

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Market Snapshot: Gold takes no prisoners

The price of Gold is rallying towards the next technical resistance at the level of $1,298, but the market conditions are overbought. The nearest technical support is seen at the level of $1,288.Moreover, there is a slight gap to fill up between the levels of $1,275 - $1,277.

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Technical analysis of USD/JPY for December 28, 2017

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Our first downside target which we predicted in yesterday's analysis has been hit. The pair is under pressure below the key resistance at 113.40. The relative strength index is below its neutrality level at 50 and lacks upward momentum. To conclude, as long as 113.40 isn't surpassed, look for a further drop to 112.40. A break below of this level would trigger another decline to 112.05.

Alternatively, if the price moves in the opposite direction, a long position is recommended above 113.40 with a target of 113.65.

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: SELL, Stop Loss: 113.40, Take Profit: 112.40

Resistance levels: 113.65, 113.85 and 114.10 Support Levels: 112.40, 112.05, 111.70

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Technical analysis of USD/CHF for December 28, 2017

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USD/CHF is expected to trade with a bearish outlook. The pair is clearly reversing down, capped by its falling 20-period and 50-period moving averages. The recent bearish breakout of a key horizontal level at 0.9885 should open the downside path toward 0.9810. Last but not least, the relative strength index is badly directed and calls for a new pullback.

To conclude, as long as 0.9875 isn't surpassed, look for further downsides to 0.9810 and 0.9795 in extension.

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: SELL, Stop Loss: 0.9875, Take Profit: 0.9810

Resistance levels: 0.9900, 0.9915, and 0.9935

Support levels: 0.9810, 0.9795, and 0.9750

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Technical analysis of GBP/JPY for December 28, 2017

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All our targets which we predicted in Yesterday's analysis have been hit. The pair managed to hold above its horizontal support at 151.20, and is likely to challenge the next resistance at 0.8895. A bullish breakout of this threshold seems more likely to occur, as both the 20-period and 50-period moving averages are turning up, and should confirm a positive outlook. The relative strength index calls for a new rise.

Hence, above 151.20, look for 152.10 and 152.35 in extension.

Alternatively, if the price moves in the direction opposite to the forecast, a short position is recommended below 151.20 with the target at 150.70

Strategy: BUY, Stop Loss: 151.20, Take Profit: 152.10

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: 152.10, 152.35, and 152.70

Support levels: 151.00, 150.75, and 150

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Technical analysis of NZD/USD for December 28, 2017

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Our first upside target which we predicted in Yesterday's analysis has been hit. NZD/USD is still expected to continue its upside movement. The pair remains bullish above its key support at 0.7050 and is likely to challenge the next resistance at 0.7115. The rising 50-period moving average maintains the strong buying pressure on the prices. In addition, the relative strength index is above its neutrality area at 50.

In which case, as long as 0.7050 holds on the downside, look for further advance to 0.7115 and 0.7135 in extension.

The black line shows the pivot point. Currently, the price is above the pivot point, which is a signal for 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: 0.7050, 0.7070, and 0.7100

Support levels: 0.6970, 0.6950, and 0.6920

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Daily analysis of major pairs for December 28, 2017

EUR/USD: The EUR/USD has been going upwards in a bullish movement continuation. Price has moved above the support line at 1.1900 and it may soon reach the resistance line at 1.1950. However, a strong buying pressure is needed for the price to break the resistance line at 1.1950 to the upside, and then propel it towards another resistance line at 1.2000. That is a possibility that could be attained next week.

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USD/CHF: This pair has broken southwards from its recent short-term consolidation. This has put more emphasis on the ongoing bearish outlook on the market, and the support level at 0.9800 could be reached this week, and possibly exceeded next week. The price has already gone below the resistance level at 0.9850.

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GBP/USD: This pair has not made any changes to the neutral bias on it. The price is thus expected to oscillate between the accumulation territory at 1.3250 and the distribution territory at 1.3500 within the next several trading days. However, a breakout will occur early January. A few fundamental figures are coming out today and they may have an impact on the market.

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USD/JPY: This currency trading instrument is moving lower and lower, but that is not yet strong enough to threaten the bullish outlook on the market. Once the demand level at 117.50 is breached to the downside, the bias on the market would turn bearish (and that could be the situation till the end of the year).

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EUR/JPY: This cross is bullish – and unlike the USD/JPY – it has been able to maintain its bullishness. The EMA 11 remains above the EMA 56, and the RSI period 14 remains above the level 50. This a Bullish Confirmation Pattern. Price is above the demand zone at 134.50 and would target the supply zone at 135.00.

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Elliott wave analysis of EUR/NZD for December 28, 2017

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Wave summary:

EUR/NZD likely bottomed with the test of 1.6800 and we are now looking for a break above minor resistance at 1.6876 and more importantly a break above resistance at 1.6927 to confirm wave ii has completed and wave iii is developing for a rally towards 1.7777.

At no point can a break below important support at 1.6744 be allowed under this count.

R3: 1.7064

R2: 1.6993

R1: 1.6927

Pivot: 1.6876

S1: 1.6800

S2: 1.6780

S3: 1.6744

Trading recommendation:

We are long EUR from 1.6873 with stop placed at 1.6795.

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Elliott wave analysis of EUR/JPY for December 28, 2017

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Wave summary:

EUR/JPY has seen a new high above 134.88 and more upside will remain expected as long as support at 134.17 is able to support EUR/JPY. The break above resistance seen at 134.50 calls for a possible move higher to 137.37 to complete wave (D) and set the stage for a final decline in wave (E) towards 123.43.

A direct break below 134.17 will indicate a top already is in place and the break above 134.50 was a bull-trap.

R3: 136.05

R2: 135.75

R1: 134.97

Pivot: 134.17

S1: 133.84

S2: 133.62

S3: 133.12

Trading recommendation:

We are long EUR from 134.10 and we will move our stop+revers higher to 134.10.

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Fundamental Analysis of AUD/JPY for December 28, 2017

AUD/JPY has been very non-volatile with the bullish gains since it bounced off the 84.00 support area and breached above the 85.70 level. AUD has been quite positive with its gains all over the market since it published positive Employment Change report in the recent week which did help the currency to gain sustainable momentum without any pullback against JPY. The most interesting thing was having JPY no chance to create any counter in the recent days despite JPY having some of its best economic reports results. Today in the morning, JPY had some gains over AUD which did look quite promising off the 88.00 price area after the positive economic reports were published including Prelim Industrial Production grew to 0.6% which was expected to be unchanged at 0.5% and Retail Sales which showed significant rise to 2.2% from the previous negative value of -0.2% which was expected to be at 1.1%. Additionally, today BOJ Core CPI report is yet to be published which is expected to be unchanged at 0.5%. Despite having positive economic reports already JPY failed to sustain the counter move in this pair whereas AUD is taking charge of the momentum already. On the other hand, AUD does not have any economic reports to be published today but tomorrow Private Sector Credit report is going to be published which is expected to be unchanged at 0.4%. Though the economic report is expected to be unchanged any positive shift in the value would result in further impulsive pressure from AUD over JPY. To sum up, AUD is currently expected to dominate JPY further despite any positive economic reports of JPY going to be published or not. Unless JPY comes up with any positive high impact economic report and something to change the market sentiment, AUD is expected to gain further momentum.

Now let us look at the technical view, price is currently residing inside the resistance area of 88.00 to 89.00 area where the price expected to have some corrections progressing higher. The non-volatile price structure that price has been maintaining so far do create some pre-breakout structure which hints about upcoming bullish breakout above 89.00 level in the coming days with target towards 90.50 area. As the price remains above 86.50 the impulsive bullish bias is expected to continue further.

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Gold got rid of the ballast

In order to soar to the sky, you need to drop the ballast. While most forex currencies behave quietly and peacefully at the end of the year, XAU/USD quotes jumped to a monthly high with a quick pace that gold previously showed back in August. However, by the end of the week on December 19, speculative net positions on precious metals moved confidently towards the area of the annual low. Extra passengers left the train, and it confidently went upwards.

Dynamics of speculative positions on gold

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Source: Bloomberg.

Expectations of Congress's approval of the tax reform and its signing ahead of Christmas by the US president forced hedge funds to pull out of long positions on gold. It cannot compete with treasury bonds and is sensitive to the dynamics of the dollar, therefore, the repair of the fiscal system was naturally perceived as a "bearish" factor for the XAU/USD. Indeed, the acceleration of GDP and inflation should compel the Fed to aggressively hike the rate on federal funds, which will result in an increase in the yield of US bonds and in the strengthening of the "greenback." At the same time, a reduction in tax revenues of the budget and an increase in its deficit will lead to a growth in the volume of borrowing. JP Morgan believes that in 2018, the United States will sell securities worth $1.3 trillion at auctions, which is the highest for the past 8 years. Investors will get rid of bonds in the secondary market with an outlook to acquire them in the primary at higher rates. This will lead to an increase in profitability and a drop in prices for precious metals.

Nevertheless, at the end of December something went wrong. One can, of course, refer to the growing geopolitical risks surrounding North Korea, which considered the new UN sanctions an act of declaring war, but the market has already developed immunity to this factor. This is clearly seen from the market's reaction towards the latest test of Pyongyang's missiles.

I believe that the main driver of the growth of XAU/USD quotes was the disappointment of market participants regarding the reluctance of the US dollar and the yield of treasury bonds to grow in response to positive news about the tax reform. While investors have doubts that the most massive repair of the fiscal system will lead to an aggressive monetary restriction of the Fed, the US currency will not be able to regain its former trust. At the same time, according to Nomura research, the largest growth of US GDP under the influence of the tax reform will appear in 2018 (additional +0.7 pp), and in 2019 the effect will decrease to +0.2 percentage points. Given the current FOMC forecasts (+2.5%), the US economy can accelerate to a stable 3% or higher, which is a negative factor for gold.

Another thing is that the normalization of monetary policy by the FED's central bank peers makes US dollar positions vulnerable. At the same time, the Fed's commitment to a slow and gradual increase in the federal funds rate, as well as the growing risks of correction of the S&P 500, are able to support the "bulls" for XAU/USD.

Technically, the "Deception-Emission" pattern was implemented. As a result, the risks of activating the "Shark" pattern and the continuation of the rally in the direction of its target increased by 88.6%.

Gold, daily chart

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Major resistance broken, time to go long

The price has broken a key level of resistance opening a strong bullish move. We look to buy above 0.7733 support (Fibonacci retracement, horizontal overlap support) for a strong push up to at least 0.7881 resistance (Fibonacci retracement, horizontal overlap resistance).

RSI (34) sees an ascending support line hold bullish momentum up.

Buy above 0.7733. Stop loss is at 0.7628. Take profit is at 0.7881.

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Prepare to sell below major resistance

The price is approaching major resistance at 113.76 (76.4% Fibonacci retracement, Fibonacci extension, horizontal overlap resistance) and we expect a strong reaction off this level to push the price down to at least 112.13 support (Fibonacci retracement, multiple horizontal swing low support).

Stochastic (55,3,1) is dropping nicely from our 97% resistance with good downside potential.

Sell below 113.76. Stop loss is at 114.54. Take profit is at 112.13.

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Technical analysis of EUR/USD for Dec 28, 2017

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When the European market opens, some Economic Data will be released such as Italian 10-y Bond Auction and ECB Economic Bulletin. The US will release the Economic Data too, such as Crude Oil Inventories, Natural Gas Storage, Chicago PMI, Prelim Wholesale Inventories m/m, Goods Trade Balance, and Unemployment Claims, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1962.

Strong Resistance:1.1955.

Original Resistance: 1.1943.

Inner Sell Area: 1.1931.

Target Inner Area: 1.1903.

Inner Buy Area: 1.1833.

Original Support: 1.1875.

Strong Support: 1.1851.

Breakout SELL Level: 1.1844.

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 Dec 28, 2017

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In Asia, Japan will release the BOJ Core CPI y/y, Retail Sales y/y, Prelim Industrial Production m/m, and BOJ Summary of Opinions data, and the US will release some Economic Data such as Crude Oil Inventories, Natural Gas Storage, Chicago PMI, Prelim Wholesale Inventories m/m, Goods Trade Balance, and Unemployment Claims. So, there is a probability the USD/JPY will move with a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 113.75.

Resistance. 2: 113.53.

Resistance. 1: 113.30.

Support. 1: 113.03.

Support. 2: 112.81.

Support. 3: 112.59.

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

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Daily analysis of USDX for December 28, 2017

USDX has been making a breakout of the support zone of 93.30 and looks forward to testing the 92.83 level. The 200 SMA continues to giving dynamic resistance across the board and it looks like we can expect a lower greenback at the end of the year. However, if it manages to make a rebound, then the next path should be pointing to test the 94.09 level.

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H1 chart's resistance levels: 94.09 / 94.85

H1 chart's support levels: 93.30 / 92.83

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USD Index breaks with a bearish candlestick; the support level is at 93.30, take profit is at 92.83 and stop loss is at 93.76.

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Daily analysis of GBP/USD for December 28, 2017

GBP/USD has gained momentum above the 200 SMA and it's on the way to reach the resistance zone of 1.3444. If that level gets broken, the pair could scope to test the next barrier at 1.3516. To the downside, there is still located a critical level at 1.3303, at which a breakout should deliver bears in order to test the support level of 1.3234.

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H1 chart's resistance levels: 1.3444 / 1.3516

H1 chart's support levels: 1.3303 / 1.3234

Trading recommendations for today: Based on the H1 chart, buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.3444, take profit is at 1.3516 and stop loss is at 1.3372.

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Fundamental Analysis for USD/CHF for December 28, 2017

USD/CHF has been quite bearish recently in the volatile market condition above the support area of 0.9850. CHF has been quite positive with the economic reports which helped the currency to gain good momentum over USD recently. Yesterday, UBS Consumption Indicator report was published with a slight decrease to 1.67 from the previous figure of 1.68 and a significant increase in Credit Suisse Economic Expectation to 52.0 from the previous figure of 40.7. Whereas on the other hand, USD CB Consumer Confidence report was published with a decrease to 122.1 from the previous figure of 128.6 which was expected to be at 128.2 and Pending Home Sales also showed a decrease to 0.2% from the previous value of 3.5% which was expected to be negative at -0.4%. Having negative economic reports USD struggled to gain momentum whereas CHF maintained the pressure which helped the currency to dominate USD. As of the current scenario, CHF is expected to gain further over USD which will lead to further bearish pressure in the pair with an objective to break below the support area of 0.9850.

Now let us look at the technical view, the price is currently quite impulsive with the bearish pressure inside the corrective structure which is expected to reach and break below 0.9850 support area. If the price breaks below 0.9850 with a daily close the bearish pressure is expected to push lower towards 0.9780 support level in the coming days. As the price remains below 0.9910 the bearish bias is expected to continue further.

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BITCOIN Analysis for December 27, 2017

Bitcoin is currently residing below the $15,500 area after having a spike above the area with a daily close. The price is observed to be struggling near $15,000-$16,000 area which is expected to break higher with the target towards $20,000 in the coming days. The gain is currently quite steady and slow, but the main fact is that price is climbing after the drastic fall. As the year is coming to an end and due to holidays being observed, most of the market players are currently away of the market which has been speculated as the main reason for the indecision and slow market conditions. As of the current market situation, the price is being held by the Kumo Cloud along with the trendline support, dynamic level of 20 EMA, Tenkan, and Kijun which is also acting as good support for the price currently. As the price remains above $13,500 price area the bullish bias is expected to continue further with the target towards $20,000 price area in the coming days.

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Fundamental Analysis of AUD/USD for December 27, 2017

AUD has been dominating USD for a few days now and currently, the price is residing inside the resistance area of 0.7750 to 0.7850 area. The bullish pressure was very impulsive in this pair whereas the pullbacks were very limited which lead to a non-volatile price action as well. Today there was no AUD based economic report or event to help the currency to gain momentum but on Friday Private Sector Credit report is going to be published which is expected to be unchanged at 0.4%. The economic report may have a very little impact on the AUD if it comes negative but if it results to be better than expected than it may work as a fuel to upcoming impulsive move in this pair. On the USD side, today CB Consumer Confidence report was published with significant decrease to 122.1 from the previous figure of 128.6 which was expected to have slight decrease to 128.2 and Pending Home Sales report was also published with decrease to 0.2% from the previous value of 3.5% which was expected to be negative at -0.4%. As of the current scenario, AUD is expected to dominate USD further in the coming days due to several worse economic reports of USD published recently which weakened the momentum of the currency.

Now let us look at the technical view, the price is currently residing inside the resistance area between 0.7750-0.7850. The bullish trend is non-volatile which is expected to reject off the 0.7850 area and proceed down towards 0.7500 support area in the coming days. As the price remains below 0.7850 the bearish bias is expected to continue further.

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Euro does not want to be the leader of the foreign exchange market

Eurozone

The ECB will begin 2018 in a desperate struggle for the current level of the euro, as the need to complete a super-soft monetary policy becomes apparent.

The eurozone's GDP is growing steadily, the labor market has a positive dynamic, the trade balance is confidently adept. Inflation remains below the target, but negative dynamics has been overcome, and deflation at this stage of the economy of the eurozone is under pressure. The rise in the cost of energy resources supports the growth of consumer prices. In 2018, according to the opinion of both the ECB and a number of major banks, such as Danske Bank, the root value of inflation will remain stable or even slightly increase.

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Under these conditions, a reduction in the program on the repurchase of assets from 60 to 30 billion euros appears to be a measure that is clearly inadequate, and the market comprehends this. The next step is to break out of negative interest rates, but the ECB continues to struggle desperately in preventing the growth of yields of government bonds as well as the rise of the euro.

The ECB, most likely, will begin to change its rhetoric into a more hawkish one only if the tax reform in the US starts to influence the situation towards a more positive direction and will increase the demand for the dollar.

The euro will not be able to resume its movement to 1.20 and, most likely, will begin to decline. The release of macroeconomic data at the beginning of the first week of 2018 are expected to be neutral, the market will unlikely exit the state of stability.

United Kingdom

The British pound played all that it could in order to win, and will end the year without any idea that it can lead itself out of the range.

Nevertheless, negotiations on Brexit by the end of the year came to an expected intermediate result. Brussels has shown resolve, and Britain will not receive any special status after leaving the EU. Besides, it will have to pay a round sum, the amounts of which will be determined in the next phase of the negotiations.

In any case, the emerging situation does not contribute to the enthusiasm of the bulls. The Bank of England could go for another rate hike in 2018, but there is no economic basis for tightening the policy. The growth of inflation, given the low level of income, will cease by itself. The GDP growth rate is weak, the trade balance is deteriorating, the labor market is questionable - that's the end of the year with such results. While it is supported by rising prices for raw materials, however, in the event of an increase in anti-risk sentiment, the pound would be able to withdraw to 1.32 in the first half of January. An apparent weakness of the dollar, which is not taken into account by the market, would be the only factor that could abolish this scenario.

Oil

Brent crude oil, as expected, has updated its two-year high, a resistance storm of $70/bbl is on the line. There are many reasons for the growth in the demand for oil, and at the moment, the question is urgent - where is the growth limit? Do we observe the balancing of the market or, conversely, speculative growth?

The answer is provided by the graph below, which compares the growth of consumer inflation in the US and the dynamics of domestic prices for gasoline.

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Most of the time, gasoline prices increased at a rate near the overall price growth. By 2008, the first oil bubble occurred, which led to a rapid collapse of prices. The second bubble with a subsequent correction to the normal level took place in 2014.

At the moment, the price of gasoline (and therefore oil) is growing faster than the general inflation. This means that oil growth is excessive and is more speculative rather than following the balance of supply and demand. The question should be put this way - do speculators have the power to create a third bubble?

The balance of oil prices is in the range of 50-60 dollars per barrel, this is a market objective range, and therefore it is impossible to confidently forecast the growth of oil in 2018 given its current stage.The material has been provided by InstaForex Company - www.instaforex.com

The dollar looks insecure towards the end of the year

The US dollar ends the year with a decline. Despite the fact that the Fed is pursuing the most aggressive policies among all major central banks, investors are slow to buy the dollar. To put it in another way, the prerequisites for reorienting financial flows have not yet been created.

If you focus on the CME futures market, the forecast on the rate still looks convincing, while the probability of the next increase in March is more than 50%. This seems to be optimistic, given the weak inflation indices and the market may not have taken well the words of Janet Yellen, spoken at the last press conference this year.

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According to Yellen, the period of low inflation may extend for a longer period than previously thought, and its causes are deeper than it is commonly believed.

Fed Representatives in their public statements repeatedly referred to the so-called dependence of Phillips, according to which the inflation will necessarily begin to grow if the labor market grows. This is logical, as the reduction in unemployment means the growth of jobs, the demand for labor, the growth of wages, which indicates consumer activity. However, something went wrong in practice. The reduction in unemployment to multi-year lows has not led to either an outpacing increase in wages or an improvement in the structure of the labor market.

The ratio of the number of jobs and the number of people dropping out of the workforce has positively improved somewhat in the recent years. The ratio for November is 1.54 and roughly corresponds to September 2010. At present, the pre-crisis levels are completely inaccessible. In other words, low unemployment is a fiction created by an "improvement" in the counting methodology and not by a real growth in the economy.

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The same conclusion follows from a change in the level of savings. In November, the savings volume of citizens fell to 426.2 billion dollars. This is the minimum level since August 2008 which clearly means a lack of income. How can inflation grow in these conditions?

Thus, Trump's signature on the tax reform law will have a crucial role for the United States. Reform should contribute to real improvement in the labor market, rather than formal. It should also increase the real incomes of the population and help increase consumer activity. In the corporate sector, the most important expectations are related not even to the reduction of taxes but to the repatriation of capital. The growth of the US economy, the growth of the stock market and three-time increases of the rate in 2017 did not contribute to increase the demand for the dollar. This situation needs to be changed, and therefore the possible return of several trillion dollars is exactly the necessary element of the entire reform, for which everything was started. Without the capital inflow, the Trump administration simply will not have the money either for reforms, for new infrastructure projects, or for fulfilling campaign promises.

The dollar exchange rate will directly depend on how the large business tax plan will be perceived. If the terms of this plan are accepted, and capital begins to return to the US, the dollar will resume growth from January.

Until the end of the week, it is expected that there were no market drivers capable of changing the alignment of forces in the foreign exchange market. The first week of the year promises to be more interesting. The ISM business activity report for December will be published on Wednesday, January 3. At the same time, the minutes of the FOMC meeting on December 13 will be issued that evening. Since the meeting was held as a whole in accordance with the expectations, the protocol will most likely do not have anything new, but it may contain information about whether there were others who disagreed with the rate increase, except for Evans and Kashkari. If so, the dollar is likely to react to the publication of the protocol by the fall.

* The presented market analysis is informative and does not constitute a guide to the transaction.

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Daily analysis of USD/JPY for December 27, 2017

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Overview

The USDJPY pair leaned on the EMA50 and begins to rebound bullishly from there, noticing that stochastic provides positive signals on the four hours' time frame, waiting to motivate the price to resume the bullish trend. Therefore, we will continue to suggest the bullish trend in the upcoming sessions, and the main target is located at 114.73, noting that holding above 113.00 is important to continue the suggested bullish wave. The expected trading range for today is between 112.80 support and 114.00 resistance.

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Daily analysis of GBP/JPY for December 27, 2017

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Overview

The GBPJPY pair was forced to provide sideways trading recently due to the contradiction of the major indicators, as stochastic fluctuates below 50 level, while the moving average 55 settles below the current price. Consolidation within the bullish channel besides the stability of the initial support at 150.00 allows us to continue suggesting the bullish bias domination that targets 152.85 followed by 154.20. On the other hand, the price attempt to crawl below the initial support will confirm postponing the bullish rally and move to suffer losses that start at 148.25 followed by 146.60 to test historical support as appears on the above chart. The expected trading range for today is between 150.60 and 152.85

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Daily analysis of Gold for December 27, 2017

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Overview

Gold price resumes its positive trading to move away from 1,281.17 level, which supports the continuation of our bullish trend expectations efficiently in the upcoming sessions. The way is open to visit 1,299.20 level that represents our next main target. Continuation of the expected rise depends on holding above 1,272.00 and 1,263.15 levels. The expected trading range for today is between 1,272.00 support and 1,292.00 resistance.

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Daily analysis of silver for December 27, 2017

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Overview

Silver price shows positive trades now to start the attempts to breach 16.56 level, which urges caution from the upcoming trading. Holding above this level will push the price to achieve more gains and head towards 17.43 as a next main station, while trading below it will reactivate the negative scenario that its next target located at 15.49. Therefore, we prefer staying aside in order to monitor the daily candlestick close according to 16.56. The expected trading range for today is between 16.30 support and 16.70 resistance.

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