Intraday technical levels and trading recommendations for EUR/USD for January 3, 2018

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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 a 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 the recent evidence of bearish rejection was expressed (Note the Monthly candlestick of September).

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Daily Outlook

In January 2017, the previous downtrend 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, the recent price action around the price zone of 1.1520-1.1415 indicated an evident bullish recovery.

This hindered further bearish decline which allowed the current bullish pullback towards the price level of 1.2000-1.2100 where price action should be watched for a valid SELL entry.

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BITCOIN Analysis for January 3, 2018

Bitcoin has been quite sustainable with the recent gains and was able to push higher towards the $15,000 price area recently. The recent gains have been speculated amid the latest investment in bitcoin from various organizations like Founders Fund. The big investments do indicate that bitcoin is here to stay and not going to disappear very soon. The regulators are still trying to control the bitcoin transactions, for which the price action has been quite corrective though gaining momentum steadily. As of the current scenario, the price is residing just below the event price area of $15,500; and a daily close above the price area will lead to further bullish pressure in the coming days with a target towards $17,250. Moreover, the dynamic levels of 20 EMA, Tenkan, Kijun and Kumo Cloud are currently working as a support. As the price remains above the dynamic levels and the $11,200 price area, the bullish bias is expected to continue further.

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NZD/USD Intraday technical levels and trading recommendations for January 3, 2018

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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 the next price zones around 0.7150-0.7230 (Key Zone) and 0.7310-0.7380 which was temporarily breached to the upside.

The recent bearish pullback was executed towards the price zone of 0.7310-0.7380 (newly-established demand zone) which failed to offer enough bullish support for the NZD/USD pair.

Re-consolidation below the price level of 0.7300 enhanced the bearish side of the market. This brought the NZD/USD pair again towards 0.7230-0.7150 (Key Zone) which failed to pause the ongoing bearish momentum.

The atypical Head and Shoulders pattern appeared on the depicted chart initiating a 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 a 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 the current bullish momentum is maintained above the key level of 0.7050.

On the other hand, the price zone of 0.7050-0.6980 has turned to be a newly-established demand zone to be watched for BUY entries if any bearish pullback occurs.

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 0.7050 is mandatory to pursue towards next bullish targets.

S/L should be moved to 0.6990 to secure some profits. T/P level remains projected towards 0.7150 and 0.7240.

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Fundamental Analysis of EURJPY for January 3, 2018

EUR/JPY has been quite bearish today after breaking above the 134.50 resistance area recently. EUR has been dominating for a last few weeks but despite positive economic reports today EUR lose some grounds during JPY bank holidays. Today EUR Spanish Unemployment Change report was published with a significant decrease to -61.5k from the previous figure of 7.3k, which was expected to be at -58.7k, and German Unemployment Change was also published with a greater decrease to -29k from the previous figure of -20k which was expected to be at -13k. On the JPY side, due to bank holidays, no economic report or event was held today, but tomorrow JPY Final Manufacturing PMI report is going to be published which is expected to be unchanged at 54.2 and Monetary Base report is going to be published on Friday, which is expected to have a slight decrease to 13.0% from the previous value of 13.2%. To sum up, despite strong economic reports, EUR lost momentum without any economic report or event on the JPY side, which means the market sentiment is currently favoring JPY, it might be for a retracement or for a counter that will be confirmed after the JPY economic reports are published this week. If the economic reports from Japan are positive and EUR fails to stop the bearish gains, then JPY is expected to recover further in the coming days.

Now let us look at the technical view. The price is currently forming a bearish engulfing candle, which is expected to work as a bearish injection in the market for further downward move in this pair. As the price moves towards the 134.50 area, it is anticipated that the price will reject the bears off the level and proceed to move further upward in the coming days with a target towards the 137.50 area. As the price remains above 134.50 with a daily close, the bullish bias is expected to continue further.

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Global macro overview for 03/01/2018

Not only the European and US economies are performing very well these days, but also the Canadian economy is getting stronger as well. The IHS Markit Canada Manufacturing PMI has hit the level of 54.7 points, which was better than last month 54.4 points figure because stronger new order growth helped to underpin the sharpest improvement in business conditions across the manufacturing sector for three months in December. There were also positive signs for near-term growth, with survey respondents recording upbeat sentiment regarding the outlook for production levels in 2018. Moreover, a number of firms cited efforts to boost operating capacity, in response to an accumulation of outstanding business. The latest increase in backlogs of work was the fastest for almost three-and-a-half years in December. The details of the report revealed, that manufacturing business conditions continued to improve sharply in Alberta & British Columbia, Ontario experienced its strongest upturn in manufacturing conditions since May 2016 and Quebec also recorded an improved manufacturing performance during December.

Looking ahead, manufacturing companies are upbeat overall about their growth prospects for 2018. Around 36% of the survey panel forecast a rise in output volumes in the next 12 months, while only 7% expect a decline.

Let's now take a look at USD/CAD technical picture on the H4 time frame. The market has made a local low at the level of 1.2497 in extremely oversold trading conditions. The growing bullish divergence between the price and the momentum oscillator indicates a possible rebound towards the nearest technical resistance at the level of 1.2556 and 1.2598.

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Fundamental Analysis of GBPUSD for January 3, 2018

GBP/USD has been impulsive with the bullish momentum towards the resistance area of 1.3550 to 1.3620. Due to the recent weakness of USD, GBP gained good momentum to dominate earlier, but today's weak economic report made the currency lose some grounds against GBP in the process. Today, GBP Construction PMI report was published with the decreased figure of 52.2 from the previous figure of 53.1, which was expected to be at 52.8. The downbeat economic report helped USD gain some momentum ahead of the NFP and Unemployment Rate reports to be published on Friday this week. On the USD side, today ISM Manufacturing PMI report is going to be published which is expected to have a slight decrease to 58.1 from the previous figure of 58.2, Construction Spending is anticipated to drop by 0.6%, ISM Manufacturing Prices are projected to decline to 64.8 from the previous figure of 65.5, and Total Vehicle Sales are expected to be unchanged at 17.5M. As of the current scenario, USD economic reports are expected to be quite mixed, but any positive economic report on USD today and in the coming days, including the NFP, Average Hourly Earnings and Unemployment Rate, will have a significant impact on the gains of USD against GBP where USD is expected to dominate.

Now let us look at the technical view. The price is currently residing inside the resistance area of 1.3550 to 1.3620. where a break below 1.3550 with a daily close will inject impulsive bearish pressure in the pair that might push the price towards the 1.3300 support area in the coming days. The resistance area, the price is currently residing in, has already pushed the price lower earlier. As of the earlier behavioral analysis, the price is expected to push down in the coming days. As the price remains below 1.3620 with a daily close, the bearish bias is expected to continue further.

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Global macro overview for 03/01/2018

The beginning of the year wasn't too good for all US Dollar bulls as there was not much left for the USD sell-off at the start of the new year, but ultimately it was stopped due to a strong rebound in the US Treasury yield. On such a background, it will be interesting how the market will respond to the US data. The ISM Manufacturing PMI is expected to sustain the November level of 58.2 points. Yesterday, readings from China and Europe showed that the global economy is doing very well, and the regional business climate indicators from the US give hope for a strong reading this afternoon. The problem is that the market has recently limited its reaction to inflation and wage data only. Hence, even an impressive result can bring moderate satisfaction. Later in the day, the minutes from the FOMC meeting may reveal what the Fed is planning to do about the rate of increase. From the statement and conference after the December meeting, we learned that despite the revision of GDP forecasts after tax reform, the Fed still sees room for only three interest rate hikes in 2018. If the notes indicate that the Fed is leaning to pause (or postponing the next step) in anticipation of inflation rebound, it will be a dovish signal. On the other hand, remembering that the market for the FOMC decision reacted quite dovish, it is unrealistic to discount the same for the second time.

Let's now take a look at the US Dollar Index technical picture on the H4 time frame before the FOMC Meeting Minutes release. The market has made a local low at the level of 91.75 and now is trying to rebound higher. The nearest technical resistance is seen at the level of 92.49 and if we take into the account that the market conditions are extremely oversold, then it is quite possible for this level to be tested soon.

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Technical analysis of USD/JPY for January 02, 2017

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All our targets, which we predicted yesterday, have been hit. USD/JPY is still under pressure. Despite the recent rebound, the pair is still trading below its declining 50-period moving average. The relative strength index is mixed with bearish bias.

Therefore, as long as 112.55 is not surpassed, look for a further decline with targets at 112.00 and 111.70 in extension.

Alternatively, if the price moves in the opposite direction, a short position is recommended below 112.55 with a target of 112.80.

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: 112.55, Take Profit: 112.00

Resistance levels: 112.80, 113.00 and 113.35 Support Levels: 112.00, 111.70, 111.50

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Technical analysis of USD/CHF for January 03, 2018

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USD/CHF is expected to trade with a bearish outlook The pair remains under pressure below its horizontal resistance at 0.9800, and is likely to post a new decline. The process of lower highs and lows formation remains intact, which should confirm a negative outlook. In addition, the relative strength index is turning down.

In which case, as long as 0.9800 is not surpassed, the risk of a slide below 0.9700 remains high. Our next down target is set at 0.9670.

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: 0.9800, Take Profit: 0.9700

Resistance levels: 0.9840, 0.9870, and 0.9900

Support levels: 0.9700, 0.9670, and 0.9650

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Technical analysis of NZD/USD for January 03, 2018

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Overview:

  • As expected, the NZD/USD pair is trading upwards above the area of 0.7060/0.7080. Last days, the pair rose from the level of 0.7062 to a top around 0.7100. Today, the first resistance level is seen at 0.7160 followed by 0.7227, while daily support 1 is seen at 0.7062. According to the previous events, the NZD/USD pair is still moving between the levels of 0.7050 and 0.7160. Furthermore, if the trend is able to break out through the first resistance level at 0.7160, we should see the pair climbing towards the double top (0.7227) to test it. Therefore, buy above the level of 0.7100 with the first target at 0.7160 in order to test the daily resistance 1 and further to 0.7227. Also, it might be noted that the level of 0.7227 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 0.7062, a further decline to 0.6978 can occur, which would indicate a bearish market. On the whole, we still look for a strong bullish market as long as the trend is still set above the spot of 0.7060.
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Technical analysis of USD/CHF for January 03, 2018

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Overview:

  • The USD/CHF pair did not make a significant movement yesterday. There are no changes in my technical outlook. The bias remains bearish in nearest term testing 0.9685 or lower. The USD/CHF pair broke support at the level of 0.9773, which acts as a resistance now. According to the previous events, the USD/CHF pair is still moving between the levels of 0.9773 and 0.9724. The trend is still below the 100 EMA for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. Hence, the price spot of 0.9773 remains a significant resistance zone. Consequently, there is a possibility that the USD/CHF pair will move downside. The structure of a fall does not look corrective. In order to indicate a bearish opportunity below 0.9773, sell below 0.9773 with the first target at 0.9685. Besides, the weekly support 2 is seen at the level of 0.9685. However, traders should watch for any sign of a bullish rejection that occurs around 0.9773. The level of 0.9773 coincides with 23.6% of Fibonacci, which is expected to act as a major resistance today. Since the trend is below the 23.6% Fibonacci level, the market is still in a downtrend. Overall, we still prefer the bearish scenario in coming hours.
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Technical analysis of GBP/JPY for January 03, 2018

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GBP/JPY is expected to trade with a bullish outlook. The pair is supported by a rising trend line, which confirmed a positive outlook. The upward momentum is further reinforced by the rising 50-period moving average. The relative strength index calls for a new upleg.

To sum up, above 151.90, look for a new challenge with targets at 153 and 153.70 in extension.

Alternatively, if the price moves in the direction opposite to the forecast, a short position is recommended below 151.90 with the target at 151.45

Strategy: BUY, Stop Loss: 151.90, Take Profit: 153.00

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: 153.00, 153.70, and 154.15

Support levels: 151.45, 151.00, and 150.65

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Technical analysis of NZD/USD for January 03, 2018

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NZD/USD is expected to trade with bullish bias above 0.7080. The pair remains bullish above its key support at 0.7080, which maintains the strong buying pressure. Besides, the relative strength index is mixed to bullish. Therefore, even though continuation of the consolidation cannot be ruled out at the current stage, its extent should be limited.

As long as 0.7080 is not broken, look for a new rise to 0.7130 and 0.7150 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: 0.7130, 0.7150, and 0.7170

Support levels: 0.7050, 0.7025, and 0.700

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Bitcoin analysis for 03/01/2018

The President of Russia, Vladimir Putin, commissioned subordinate officials to create a national cryptocurrency - Cryptoruble. According to the Financial Times, it would be an effective way to bypass Western sanctions. Cryptoruble would be an equivalent to a traditional ruble and its circulation would be limited in such a way that officials could follow its individual movements. It is however not clear whether it would be issued by the Central Bank.

In summer 2017, there was a meeting between the founder of Ethereum, Vitalik Buterin, and President Putin, after which he ordered his officials to develop a framework for the future project. In October 2017, the authorities of the Russian Federation introduced new regulations regarding cryptocurrencies, including registrations of miners, as well as additional provisions to safeguard ICO projects.

Anton Siluanov, Russia's finance minister, said his department would regulate the use of cryptocurrencies, but he has no intention of forbidding them because they are "a reality."

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The triangle pattern scenario for a corrective structure in wave 4 is still possible as no new low was made yet. The market has broken the golden trend line and now is trading just below the technical resistance at the level of $16,636. This level is expected to be tested sooner or later if the triangle pattern is to develop.

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Daily analysis of major pairs for January 3, 2018

EUR/USD: This pair moved flat on Monday having reached the resistance line at 1.2050. The price may be able to move further upwards this week reaching the resistance line at 1.2100. However, the outlook on EUR pairs is bearish for this week and for this month. Thus, a bearish movement can begin anytime.

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USD/CHF: The USD/CHF consolidated on January 2 having moved strongly upwards last week. The support levels at 0.9700 and 0.9650 could be tested this week, and they could possibly be breached this month.

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GBP/USD: The GBP/USD went upwards by 90 pips yesterday testing the distribution territory at 1.3600. Since last Thursday, price has gained 220 pips, leading to a Bullish Confirmation Pattern in the market. Further bullish movement is possible today even if there is a strong bearish correction afterwards.

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USD/JPY: The USD/JPY went further downwards yesterday and then consolidated until the end of the day. There is a Bearish Confirmation Pattern in the market, and further bearish movements are a possibility. The demand levels at 112.00 and 111.50 could be tested this week. They could even be exceeded.

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EUR/JPY: There is a bullish bias on this cross – brought about by the stamina in the euro itself. It is probable that the bulls would continue to pushing the price higher towards the supply zones at 135.50 (which has previously been tested) and 136.00. This condition can be fulfilled before the much expected bearish run that could place trade anywhere between this week or next.

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Trading plan for 03/01/2018

The market catches its breath after Tuesday's dollar sell-off which was later retained with the help of the US government bond yield jump. The lack of investors from Japan is conducive to lowering volatility. There is a green color on the stock market in Asia, Shanghai Composite gains 0.6% and Hang Seng grows by less than 0.1%. Oil prices are in a flat drift; gold goes back from the top.

On Wednesday 3rd of January, the event calendar is quite busy with important news releases. Germany will post its Unemployment Rate data, the UK will present Construction PMI data and the US will post ISM Manufacturing PMI data and FOMC Meeting Minutes.

EUR/USD analysis for 03/01/2018:

The Unemployment Rate data from Germany did not surprise the market participants as it was in line with expectations for 5.5%. On the other hand, the Unemployment Change (the change in the number of unemployed people during the previous month) was bigger than estimates of -13k, because the number released was at the level of -29k (-20k prior). However, the numbers are still very good and the sentiment towards the European job market continues to improve.

Let's now take a look at the EUR/USD technical picture on the H4 time frame. The market has hit the level of 1.2085 before the price made a pull-back towards the level of 1.2034. The market is currently consolidating the recent gains in a horizontal move, but the overbought conditions and clear bearish divergence are making the price susceptible to move lower towards the next technical support at the level of 1.2003.

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Market Snapshot: Gold makes reversal candlestick formation

The price of Gold has hit a new local low at the level of $1,320 and then reversed after making the Dark Cloud Cover candlestick formation. Currently, the price is still trading below the local resistance at the level of $1,315 and there is still a chance for a test of the nearest technical support at the level of $1,305.

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Market Snapshot: USD/JPY close to the range support

The price of USD/JPY has failed to break through the technical resistance at the level of 113.74, so it reversed towards the important technical support at the level of 112.02. The level has not been fully tested yet, but the breakout below the golden trend line and moving average indicates a further weakness in this pair.

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Elliott wave analysis of EUR/JPY for January 3d, 2018

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Wave summary:

EUR/JPY will remain positive above minor support seen at 134.84 for more upside pressure towards 137.37 to complete wave (D). A break below support at 134.84 will be the first warning of possible exhaustion, while a break below support at 134.26 will confirm that wave (D) is completed and wave (E) towards 123.43 is now developing.

R3: 136.55

R2: 136.05

R1: 135.63

Pivot: 134.84

S1: 134.58

S2: 133.89

S3: 133.58

Trading recommendation:

We are long on EUR from 134.10 with stop placed at 134.75. We will also revers our bought position to a sell EUR position at 134.75.

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Ichimoku cloud indicator analysis of USDX for January 3, 2018

The Dollar Index remains in a bearish trend. There are some signs of a short-term reversal but the most possible scenario remains the bearish one since we broke below 92.50. Only a break above 93-93.50 could bring back the bullish scenario for a move towards 97.

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The blue line is the resistance trend line

The price is below both the tenkan- and kijun-sen indicators. Trend is clearly bearish. First short-term resistance is at 92.06 and the next one is at 92.52. Support is at 91. Cloud resistance is at 93.10. Only a break above that level could give the dollar bulls some chances for a larger move higher.

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The red line is the long-term resistance

The weekly chart remains bearish implying that we should expect the price to move below 91 or even 90 before any bigger bounce. Weekly resistance is at 93.65 and we need a weekly close above it in order for the bulls to take control of the trend.

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Ichimoku cloud indicator analysis of Gold for January 3, 2018

Gold made new highs yesterday near $1,318. Trend remains bullish. Gold price has reached an important resistance area. I remain bearish on Gold but would want to see this week to turn bearish for my scenario of a move towards $1,210 to remain valid.

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The price remains above both the tenkan- and kijun-sen (red and yellow line indicators). Support is at $1,310 and the next one is at $1,300. Bears need first to break below these two levels. However bulls will only start to get worried if price breaks below $1,270.

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The magenta line is the long-term resistance trend line

Gold price has bounced off the Ichimoku cloud as expected. The price is approaching the magenta trend line resistance. As long as we are below this resistance trend line, there is still a chance for a pull back at least towards $1,270.

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Elliott wave analysis of EUR/NZD for January 3d, 2018

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Wave summary:

EUR/NZD is working its way higher and it should be a matter of time before resistance at 1.7064 is tested and broken for a continuation higher to 1.7479 and 1.7777.

Support is now seen at 1.6937 and should be able to protect the downside, but only a break below 1.6855 will question the expected rally higher.

R3: 1.7220

R2: 1.7130

R1: 1.7064

Pivot: 1.6952

S1: 1.6937

S2: 1.6855

S3: 1.6831

Trading recommendation:

We are long on EUR from 1.6873 and we will move our stop higher to 1.6850.

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Technical analysis of EUR/USD for Jan 03, 2018

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When the European market opens, some economic data will be released, in particular Germany's Unemployment Change and Spain's Unemployment Change. The US will publish some economic reports as well: Total Vehicle Sales, ISM Manufacturing Prices, Construction Spending m/m, and ISM Manufacturing PMI. Amid these reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.2118.

Strong Resistance:1.2111.

Original Resistance: 1.2099.

Inner Sell Area: 1.2087.

Target Inner Area: 1.2059.

Inner Buy Area: 1.2031.

Original Support: 1.2019.

Strong Support: 1.2007.

Breakout SELL Level: 1.2000.

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 Jan 03, 2018

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In Asia, Japan today will not release any economic data, but the US will reveal some important macroeconomic statistics such as Total Vehicle Sales, ISM Manufacturing Prices, Construction Spending m/m, and ISM Manufacturing PMI. So there is a probability that the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 112.90.

Resistance. 2: 113.68.

Resistance. 1: 112.46.

Support. 1: 112.18.

Support. 2: 111.96.

Support. 3: 111.74.

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.

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

Bitcoin forming a strong reversal, time to short!

The price is seeing a major resistance at 15,016 (Fibonacci retracement, Fibonacci extension, bearish bat formation, horizontal swing high resistance) and we expect to see a strong drop from there to at least the 12,908 support (Fibonacci retracement, horizontal swing low support).

Stochastic (34,5,3) is seeing the major resistance at 90% where we expect a corresponding drop.

Sell below 15016. Stop loss at 15791. Take profit at 12908.

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USD/JPY profit target reached, time to start buying

The price has shot down and reached our profit target perfectly. We look to buy above the major support at 112.13 (Fibonacci retracement, horizontal swing low support, Fibonacci extension) for a push up to at least the 113.76 resistance (Fibonacci retracement, horizontal swing high resistance, Fibonacci extension).

Stochastic (34,5,3,) is seeing major support above 3.7% where we expect a corresponding bounce from it.

Buy above 112.13. Stop loss at 111.34. Take profit at 113.76.

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Daily analysis of USDX for January 03, 2018

The index managed to break lower and weakened during the Asian and European sessions of Tuesday. The nearest support lies at 91.68, at which we could expect some take profits to activate. Such index should help to boost the USDX in order to re-test the new resistance level of 92.18. The MACD indicator remains in favor of the bears.

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H1 chart's resistance levels: 92.57 / 93.16

H1 chart's support levels: 92.18 / 91.68

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 92.18, take profit is at 91.68 and stop loss is at 92.68.

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Daily analysis of GBP/USD for January 03, 2018

The pair has broken the resistance zone of 1.3516 and it's targeting now the 1.3589 level, following a higher high pattern formation. The 200 SMA is pointing to the upside and calling for more bullish moves across the board. However, corrective moves could happen in order to erase the overbought conditions showed by the Cable.

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H1 chart's resistance levels: 1.3516 / 1.3589

H1 chart's support levels: 1.3451 / 1.3388

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 1.3516, take profit is at 1.3589 and stop loss is at 1.3441.

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Brent overflowed with euphoria

For the first time since 2014, both types of oil managed to start the year at a price higher than $60 per barrel due to positive news from the United States and the growth of geopolitical tensions in the Middle East. At the end of the five-day period, by December 22, US oil reserves contracted for the sixth time in a row and reached 431.9 million barrels, the lowest since October 2015. The indicator fell by 20% from its record highs in March 2017. At the same time, the number of rigs have not been increasing for a week in a row, and production marked its first decline (-35 thousand b/s) since October. On the market, rumors have increased that WTI would consolidate above $60 per barrel for a long time. Thus, the report from Baker Hughes started to signal an increase in the activity of drillers.

The conflicts between anti-government demonstrators and the military in Iran continues for the fourth day and are one of the most daring challenges for the country's clerical leadership since 2009. Along with the forward movement of the world economy, upward (according to the IEA forecasts, global demand in 2017 rose by 1.5 million b/s and will continue in the same spirit (+1.3 million b/s) in 2018), the improvement of the US oil market and the weakness of the US dollar, the growth of geopolitical tensions in the Middle East are factors that allowed the "bulls" for Brent and WTI to start the year of the Dog on a positive note. With an outlook of a bright future, oil speculators do not get tired of raising their net long positions. According to data from the US Commodity Futures Trading Commission, the net long position on WTI amounted to 411,972 futures and options contracts, which is very close to a record set in February 2017.

Dynamics of speculative positions for Brent and WTI

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Source: Bloomberg.

Theoretically, large-scale folding of long positions against the background of profit-taking is charged with a deep immersion of oil, as it was at the beginning of last year. However, in order to frighten speculators, strong arguments are needed. We must admit that the resumption of the operation of the pipeline system in the North Sea did not become such an argument.

Investors are optimistic about the extension of the agreement between OPEC and other producer countries in reducing production by the end of 2018, although this history has black spots. In particular, the average production of oil in Russia increases for the ninth consecutive year and reached the level of 10.98 million b/s, the highest since the collapse of the USSR. How could this happen if Moscow adheres to its obligations and reduces production by 300 bps? At the same time, all partners are happy ... The reason should be sought in the rapid growth of the indicator to 11.23 million b/s in October 2016, a few weeks before the conclusion of the Vienna agreement.

Dynamics of oil production in Russia

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Source: Bloomberg.

A weak US dollar is in the hands of the "bulls" for Brent and WTI, which cannot come to any senses due to the disappointment about the reluctance of the market to win back the factor of tax reform.

Technically, reaching a target of 161.8% on the AB = CD pattern increases the risk of a pullback. However, if brent crude will soon be able to gain a foothold above $67 per barrel, the chances of continuing the rally in the direction of the target will increase by 200%.

Brent, daily chart

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