Fundamental Analysis of USDCAD for January 4, 2018

USD/CAD has been impulsive with the bearish gains since its break below the 1.27 support area recently. CAD has been the dominant currency since Canada published positive economic reports and events that helped the currency to strengthen against USD. On Friday, the US will unveil its the NFP, Average Hourly Earnings and Unemployment reports. Today, the ADP Non-Farm Employment Change report is going to be published, which is expected to increase to 191k from the previous figure of 190k; Unemployment Claims are anticipated to decrease to 241k from the preceding reading of 245k; the Final Services PMI is projected to be unchanged at 52.4; Natural Gas Storage is forecasted to show a greater decline of 221B compared with the previous gain of 112B; and Crude Oil Inventories are expected to drop by 5.2M in comparison with the previous fall of 4.6M. On the CAD side, RMPI report is going to be published today, which is expected to increase by 4.0% (3.8% previously) and the IPPI report is expected to show a slowdown to 0.8% from 1.0%. Moreover, tomorrow high-impact economic reports like Employment Change, Trade Balance and Unemployment Rate reports are going to be published in Canada alongside USD high-impact economic reports, where the market is expected to be very volatile and corrective on the mean time. As of the current scenario, USD is expected to gain momentum after a certain spike down tomorrow and a weekly close will provide an upcoming movement hint on this pair to be traded on in the coming days.

Now let us look at the technical view. The rice is currently expected to reach the 1.2450 support area before bouncing up higher towards the 1.2700 resistance area and towards dynamic level of 20 EMA in the coming days. As of the upcoming high-impact economic reports, the pair is expected to be very volatile and a weekly close above or below the support area will lead to further decision on this pair. As the price remains above 1.2450 with a daily close, the bullish bias is expected to continue further.

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Fundamental Analysis of EURAUD for January 4, 2018

EUR/AUD has been quite bearish in a non-volatile trend since it bounced off the 1.5770 resistance area. AUD has been the dominant currency for the last few months due to positive economic reports and events helping the currency gain momentum over EUR. Today EUR has been quite positive with the economic reports which helped the currency to recover some grounds against AUD but it is expected to be temporary in nature. Today, the Spanish Services PMI report was published with a slight increase to 54.6 from the previous figure of 54.4 (54.7 expected); the Italian Services PMI report revealed an increase to 55.4, which was predicted to be unchanged at 54.7; the French Final Services PMI decreased to 59.1, which was anticipated to be unchanged at 59.4; the German Final Services PMI was unchanged as expected at 55.8; and the Final Services PMI for the euro area showed a slight increase to 56.6, which was projected to be unchanged at 56.5. On the other hand, today Australia released the AIG Services Index report with an increase to 52.0 from the previous figure of 51.7, which was not quite sufficient to sustain the bearish pressure against EUR. As of the current scenario, despite having positive economic report from Australia, the Aussie failed to sustain its gains over EUR, but upcoming Australia's Trade Balance report will be published tomorrow and it is forecasted to have a significant increase to 0.55B from the previous figure of 0.11B. If the report comes positive, then AUD is expected to dominate EUR further in the coming days.

Now let us look at the technical view. The price is currently residing below the dynamic level of 20 EMA and a daily Engulfing Bar candle, which is expected to push further down towards the 1.5050-80 support area in the coming days. As the price remains below the 1.5500 price area and the dynamic level of 20 EMA, the bearish bias is expected to continue further.

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Intraday technical levels and trading recommendations for EUR/USD for January 4, 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 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 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 1.2000-1.2100 where price action should be watched for a valid SELL entry.

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Bitcoin analysis for January 04, 2018

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Bitcoin (BTC) has been trading sideways at the price of $14.500. Two major Chinese cryptocurrency exchanges have delayed their launches in South Korea due to uncertainties surrounding the government's regulation. The regulators are currently working on a real-name identification system that will end the anonymous trading of cryptocurrencies in the country. Technical picture looks bearish.

Trading recommendations:

According to the 30M time frame, I found a breakout of horizontal base, which is a sign that buying looks risky and that short-term sellers are in control. Key resistance is set at the price of $14.600. My advice is to watch for potential selling opportunities. The projected downward target is set at the price of $13.610.

Support/Resistance

$14.600 – Intraday resistance (price action)

$14.015– Intraday support

$13.610 – Objective target

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NZD/USD Intraday technical levels and trading recommendations for January 4, 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 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 was expressed on the depicted chart which an 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 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 0.7040 to secure some profits. T/P level remains projected towards 0.7150 and 0.7240.

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Analysis of Gold for January 04, 2018

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Recently, gold has been trading sideways at the price of $1,314.00. According to the 30M time frame, I found a strong bullish pin bar and a bullish breakout of the pivot level at the price $1,314.00, which is a sign that buyers are in control today. I also found a rising MACD oscillator, which is another sign of strength. My advice is to watch for potential buying opportunities. The upward targets are set at the prices of $1,320.00 and 1.327.90.

Resistance levels:

R1: $1,320.58

R2: $1,328.00

R3: $1,334.55

Support levels:

S1: $1,306.00

S2: $1,300.00

S3: $1.292.55

Trading recommendations for today: watch for potential buying opportunities.

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GBP/USD analysis for January 04, 2018

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Recently, the GBP/USD has been trading sideways at the price of 1.3540. According to the 30M time frame, I found that the price has broken the pivot level at 1.3540, which is a sign that buyers are in control today. I also found a rising MACD oscillator, which is another sign of strength. My advice is to watch for potential buying opportunities. The upward targets are set at the prices of 1.3588 and 1.3660.

Resistance levels:

R1: 1.3588

R2: 1.3660

R3: 1.3708

Support levels:

S1: 1.3470

S2: 1.3420

S3: 1.3350

Trading recommendations for today: watch for potential buying opportunities.

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Daily analysis of USD/JPY for January 04, 2018

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Overview

The USD/JPY pair traded upwards yesterday testing the EMA50 that forms a good intraday resistance. Stochastic loses its positive momentum clearly reaching the thresholds of the overbought areas now, which forms a negative factor that we were waiting to motivate the price to decline again. This keeps the correctional bearish scenario active for the upcoming period with the price likely to test 111.90 levels initially. Therefore, the bearish trend will remain suggested for today; and a break of the targeted level will extend the bearish wave towards 111.00, while holding below 113.00 represents the most important condition to continue the expected decline. The expected trading range for today is between the 111.70 support and the 113.20 resistance.

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Daily analysis of GBP/JPY for January 04, 2018

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Overview

The GBP/JPY pair did not show any big moves until this moment by settling below 152.85 levels that continue to block the bullish attempts. Thus, the price will remain affected by the sideways bias domination until the required breach that will confirm rallying towards more targets that reach 154.45 followed by 155.90. We remind you that failing to achieve the required breach will pave the way for correctional negative trading, expecting to target 151.50 followed by 150.00 and approaching the moving average 55. The expected trading range for today is between 151.50 and 154.45.

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Daily analysis of Gold for January 04, 2018

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Overview

The gold price rebounds bearishly clearly after touching the key resistance 1,321.49 on its way to test the key support base 1,299.20. Stochastic approached the oversold areas. The EMA50 meets the mentioned support to add more strength to it. Therefore, these factors support our expectation for the bullish trend in the upcoming sessions. A breach of 1,321.49 will extend the gold price gains to 1,357.53 as the next main station, while a break of 1,299.20 represents a negative factor that will push the price to test the 1,281.17 areas initially before any new attempt to rise. The expected trading range for today is between the 1,295.00 support and the 1,320.00 resistance.

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Daily analysis of Silver for January 04, 2018

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Overview

The silver price shows sideways and tight trades, settling around 17.00 levels. The price is affected by stochastic negativity that blocks the attempts to rise, while the EMA 50 continues to provide the positive support to the price. Therefore, we will continue to suggest the overall bullish trend conditioned by holding above 16.55. A breach of 17.43 will open the way to achieve more positive targets reaching 18.30 on the near-term basis. The expected trading range for today is between the 16.85 support and the 17.30 resistance.

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Global macro overview for 04/01/2018

From January 1, 2018, for the first time in over two decades, the German public debt clock began to move backwards, though not too fast - at a rate of only 78 euros per second. Reversal of the debt run of the clock is the result of changes in the federal and state budget policies.

Since 2014, Germany regularly generates a budget surplus, which is relatively small as it is on the scale of the economy. In 2015, the German fiscal surplus amounted to 19.4 billion euros, and in 2016 it increased to 25.7 billion euros. A surplus of EUR 30 billion is expected for 2018. Nevertheless, German public debt is still significantly higher than before the start of the financial crisis. At present, there are 23,827 euros of public debt per one German. In June 1995, when the German debt clock was activated, the indebtedness per capita was almost half as high and amounted to EUR 12 830. However, the ratio of public debt to gross domestic product fell to 66% (at the end of the second quarter of 2017) from 80% in 2012 and thus returned to the level of 2008.

In 2009-11, Germany had nearly 215 billion euros in fiscal deficits, which together with its contribution to rescuing the eurozone countries in the south (Greece), resulted in an increase in public debt from 1.67 trillion euros in 2008 to over 2.2 trillion euros at the end of 2012. But since then, Germany's debt has been decreasing not only in relation to GDP (from 80% to 66%), but also in nominal terms - to EUR 2.11 billion at the end of the second quarter of 2017.

Will this situation be more permanent and sustain trend in balancing the public debt of Germany? The indicators for the German economy suggest the high level of performance and elevated sentiment among the German business owners, so the current euro rally might not be actually without a macroeconomic reason.

Let's now take a look at the EUR/JPY technical picture on the H4 time frame. The market has just hit the upper line of the parallel channel around the level of 135.90 after a breakout above the technical resistance at the level of 135.64. The clear bearish divergence between the price and momentum in the overbought market conditions indicates a possible pullback towards the level of 134.78.

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Global macro overview for 04/01/2018

The macroeconomic background around the US Dollar remains positive, so it's wrong to look for reasons to keep selling the currency. On Wednesday ISM Manufacturing data was released above forecasts and it only confirmed that the recovery at the end of 2017 sustained a solid pace. The dollar did not react much, after all, the improvement of the economic situation is now a sign for the whole global economy. Wall Street, however, has improved its recent all-time high levels, so investors appreciate the economic data at least at some levels. The minutes of the December FOMC meeting also changed very little. Much discussion about inflation, the impact of the tax law and the yield curve, but the overall message was not surprising - the Fed is constructive with regard to the state of the economy and does not give the market grounds to doubt the forecast of three interest rate hikes this year. But as in the case of the ISM, the market participants did not learn anything that they did not hear yet.

Let's now take a look at the USD/JPY technical picture on the H4 time frame. The market retraced almost 50% of the recent leg down, but the bull camp was top weak to test the golden trend line from below. This bounce higher was expected due to the oversold market conditions at this time frame, so now the next target level is the technical resistance at the level of 113.09. On the other hand, the key technical support is seen at the level of 112.02.

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Technical analysis of NZD/USD for January 04, 2018

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Overview:

  • The NZD/USD pair did not make a significant movement yesterday. There are no changes in my technical outlook. The bias remains bullish in the nearest term testing 0.7227 or higher. Then, 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 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.
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  • 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 04, 2018

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Overview:

  • The USD/CHF pair has been continuing its bearish market for two days. The bias remains bearish in nearest term testing 0.9685 or lower. Overall, we still prefer the bearish scenario in coming hours. 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.
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Daily Video Technical Analysis | 4th January 2018

Today we use trend lines to take a look at how we can find trading opportunities with USD/JPY. Join us everyday for simple yet effective trading strategies!

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Euro and pound are still favorites

On Wednesday, markets practically did not react to the publication of the minutes of the FOMC meeting on December 13, believing that the information contained in it was largely outdated. Indeed, after the meeting, the draft tax reform was adopted in both chambers of Congress and signed by President Trump, which significantly changes economic expectations. It should also be noted that Janet Yellen will soon leave his post, the Cabinet is waiting for a scheduled rotation, which can change the alignment of forces in the ranks of "hawks" and "pigeons."

Nevertheless, the weak market reaction still allowed the dollar to strengthen somewhat after publication.

Eurozone

The growth of the euro in the last weeks of December was largely due to the deterioration of the dollar's position amid some frustration with the results of the FOMC meeting. Prior to the meeting, there was a possibility that the Cabinet would reserve the possibility of 4 rate increases in 2018, but the FOMC forecast remained unchanged, which led to profit-taking by bulls.

Nevertheless, the spread of returns in the coming year will change in favor of the dollar. According to the forecast of the FOMC, the rate will be raised three times, and three more times in 2019, which will give a cumulative increase of 1.5% to the current range. The ECB, by the end of the year, intends only to abandon the repurchase of assets, and if the rate rises, then not earlier than 2019.

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The ECB is likely to openly talk about the normalization of monetary policy after it sees the market reaction to the start of the tax reform in the US. One of the goals of the reform is the repatriation of capital in the amount of at least $ 2 trillion, a large part of which is currently concentrated in Europe. Given the significant trade surplus and imbalance in growth rates between the countries of the north and south of Europe, the ECB is interested in reducing the demand for the euro, and therefore will not prevent the withdrawal of excess capital from the eurozone.

Thus, the external background at the moment is almost completely determined by the reaction of the market to the situation in the United States. The publication on Friday of the report on the labor market will determine whether the euro is able to overcome the maximum of the year (1.2095) and develop an upward movement, or still give way to the dollar initiative.

As for internal factors, on Friday, preliminary data on inflation for December will be published, negative expectations, the forecast to reduce inflation to 1.3% against 1.5% in November.

In general, we assume that the euro will not be able to update its maximum and in the coming days a turn to the south will begin.

The United Kingdom

The pound follows the trend of general market trends, strengthening against the background of the weakness of the dollar, but its own growth drivers are rather weak. The growth of business activity slows down, in the construction sector in December to 52.2p against 53.1p a month earlier, in the manufacturing sector - 56.3p against 58.2p.

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Activity in the services sector is 54.2p, slightly higher than 53.8p in November, but lower than the average level of 2017. The Brexit factor is currently in the background, at least until the resumption of negotiations in Brussels.

The pound will wait for the publication of non-businesses on Friday, depending on the outcome. The week may end either near the current levels or by the beginning of the move to support 1.13050.

Oil and the ruble

Oil has risen to its maximum for more than 2.5 years, growth is supported by a number of factors. First of all, this is a long reaction of the market to the reduction of production by the OPEC + countries. The balancing of demand and supply is expected by the summer of 2018 and the market behaves in accordance with the forecast. Also, the opposition tries to organize a riot in Iran, but the effect of this factor will be short-lived.

More important is the growth of business activity in China and a number of European countries, which will lead to increased demand for oil. Brent managed to reach the level of 68 dollars per barrel. The momentum has not been realized yet. The probability to reach $ 70 per barrel in the long-term week is quite high.

The Russian ruble has come close to support of 57 rubles/dollar. The demand for the ruble is supported by optimistic estimates regarding the outlook for economic growth in 2018. Slowing the inflow of investments in 3 square meters. 2017 is completed and the forecasts for GDP growth this year exceed the level of 2%. The government will take a number of measures aimed at increasing consumption.

The demand for the ruble should increase, and if the Ministry of Finance does not increase the volume of currency purchases, it is possible to strengthen the ruble to 56.50 rubles/dollar already next week.

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Bitcoin analysis for 04/01/2018

Bitcoin developer, Dr. Pieter Wuille, claims that SegWit will optimize the problems that Bitcoin has. Over 65% of the entire block is covered only by electronic signatures. This fact can be changed by updating the Bitcoin software in such a way that the data related to the signatures are separated from the transaction data. The SegWit proposal assumes the omission of the signature from the relay (occupying almost 60% of the block space), shortening old signatures and solving the problem of modification of the signed transaction.

Bitcoin started its year well, several schemes and technological solutions were presented to solve the problems related to its scalability. These initiatives include the SegWit, Lightning Network and Schnorr signatures. Many enthusiasts and investors hope that these efforts will be supported by all interested parties and will cause a successful resolution of the troubles with the world's largest cryptocurrency.

Let's now take a look at the Bitcoin technical picture on the H4 time frame. The golden trend line resistance has been violated and the market tried to rally towards the technical resistance at the level of $16,638 but failed. The price reversed and is currently testing the trend line from above. As long as the market stays above the intraday support at the level of $14, 106, the outlook remains bullish to neutral. Otherwise, the bears might push the market lower towards the technical support at the level of $12,396.

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Trading plan for 04/01/2018

The Wednesday rebound of the US dollar has been stopped today. EUR/USD is up to 1.20 and USD/JPY returns from 112.75. AUD, NZD and NOK perform best, which is partially because of rising commodity prices. Yesterday's records on Wall Street are pulling the Asian indices up.

On Thursday 4th of January 2018, the event calendar has plenty of data to be released. The great part of the data is the Eurozone PMI Composite and PMI Services data releases from France, Italy, Spain, and Germany. Moreover, the UK will post the PMI Services data as well, together with the Net Lending to Individuals and Mortgage Approvals data. Later during the US session, Canada will post Raw Materials Price Index data and the US will post ADP Non-Farm Employment Change data as well as Unemployment Claims and Crude Oil Inventories data.

EUR/USD analysis for 04/10/2018:

After better-than-expected PMI Manufacturing data from across the eurozone that confirmed the high level of performance of the European economy, today the other two PMI indicators will be published: PMI Services and PMI Composite. As it was before, the market participants expect the PMI data to be at least in line with expectations, not worse. In this situation, any disappointment might start to weight on the euro-related pairs and increase volatility in the market.

Let's now take a look at the EUR/USD technical picture on the H4 time frame. The market has tested the level of 1.2003 and is trying to resume the uptrend. Nevertheless, the conditions remain overbought and if the data disappoints market participants, the price might slide more towards the level of 1.1961.

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Market Snapshot: SPY makes another all-time high

The price of SPY (SP500 ETF) has made another higher high in the uptrend as it hit the level of 270.62. The nearest technical support will now be present at the level of 268.51 as the sequence of higher highs and higher lows continue in the overbought market conditions.

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Market Snapshot: DAX bounces from the support

The price of German DAX Index has made a lower low at the level of 12,728 , but the market refused to continue the slide towards the level of 12,676 and bounced back up instead. Currently, the price has hit the technical resistance at the level of 13,108, so the outlook for the Head & Shoulders pattern to complete is getting less probable. Any violation of the level of 13, 336 will invalidate this scenario.

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Ichimoku cloud indicator analysis of USDX for January 4, 2018

NZD/USD is rebounding and is expected to trade with a bullish outlook. The pair has clearly reversed up and is now heading upwards to 0.7150.

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Blue line - long-term resistance

The US dollar index has managed to move above the 4-hour tenkan-sen. The price, however, remains in a bearish trend. Short-term resistance is at the kijun-sen at 92.40. Short-term support is at 92. Trend is bearish. The trend will change to bullish only if price breaks above the Kumo resistance at 93-93.40.

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On a weekly basis, we could be forming a weekly bullish hammer reversal candle. A weekly close above 92.20 will be positive for the next week. A weekly close at the lows of this week will be a bearish sign for the next week. Weekly resistance is very important at 93.65. Break above it and we are off to 97.The material has been provided by InstaForex Company - www.instaforex.com

Ichimoku cloud indicator analysis of gold for January 4, 2018

The gold price has made a shallow pullback so far towards the short-term support of $1,300-$1,310. There is potential for a bigger decline from current levels. Upside is limited. We could see one more new higher high, but I believe the next big move will be to the downside.

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The gold price has broken below the 4 hour tenkan-sen. The price tested the kijun-sen and remains above it. The trend remains bullish. Short-term support is at $1,306. Resistance is at $1,318.

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On a daily basis, the gold price is in a bullish trend. The price is above the daily Kumo, but I expect at least a pullback and a back test of the broken cloud support. Daily cloud support is at $1,280-70. A break below $1.265 could open the way for much lower towards $1,200.The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of USD/JPY for January 04, 2018

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USD/JPY is turning upwards. The pair posted a rebound and broke its 20-period and 50-period moving averages. In addition, the bullish cross between 20-period and 50-period moving averages has been identified. The relative strength index calls for a new upleg.

The latest minutes of the U.S. Federal Reserve's monetary policy meeting in December showed that officials discussed speeding up interest-rate increases. The minutes read: "Participants discussed several risks that, if realized, could necessitate a steeper path of increases in the target range; these risks included the possibility that inflation pressures could build unduly if output expanded well beyond its maximum sustainable level, perhaps owing to fiscal stimulus or accommodative financial market conditions."

To conclude, as long as 112.35 is not broken, look for a further advance with targets at 112.80 and 113.00 in extension.

Alternatively, if the price moves in the opposite direction, a short position is recommended below 112.35 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: BUY, Stop Loss: 112.35, Take Profit: 112.80

Resistance levels: 112.80, 113.00 and 113.35 Support Levels: 112.05, 111.70, 111.50

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Technical analysis of USD/CHF for January 04, 2018

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USD/CHF is expected to trade in a higher range as bias remains bullish. The pair has formed a "rounding bottom" pattern, and is now trading above its rising 50-period moving average, which plays a support role. The nearest horizontal level at 0.9745 should limit any downside room, and call for further advance. In addition, the relative strength index is mixed to bearish.

Hence, as long as 0.9745 is not broken, look for further advance to 0.9800 and 0.9835 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: BUY, Stop Loss: 0.9745, Take Profit: 0.9800

Resistance levels: 0.9800, 0.9835, and 0.9875

Support levels: 0.9705, 0.9670, and 0.9650

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Technical analysis of GBP/JPY for January 04, 2018

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GBP/JPY is expected to trade with a bullish outlook. The pair accelerated on the upside last nigh, and is now challenging its key resistance at 152.50. A bullish breakout of this threshold seems more likely to occur as the rising 20-period and 50-period moving averages call for a new bounce. The relative strength index is still above its neutrality area at 50.

In this case, even though a consolidation cannot be ruled out at the current stage, its extent should be limited. Above 151.85, look for a new rise to 152.50 and 152.80 in extension.

Alternatively, if the price moves in the direction opposite to the forecast, a short position is recommended below 151.85 with the target at 151.45

Strategy: BUY, Stop Loss: 151.85, Take Profit: 152.50

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: 152.50, 152.80, and 153.15

Support levels: 151.45, 151.15, and 150.65

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Technical analysis of NZD/USD for January 04, 2018

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NZD/USD is rebounding and is expected to trade with a bullish outlook. The pair has clearly reversed up and is now heading upwards to 0.7150. The rising 20-period and 50-period moving averages are below the prices and should limit any downward attempts. Besides, the relative strength index is bullish, supported by a rising trend line.

To conclude, as long as 0.7080 is not broken, a likely advance to 0.7150 and 0.7170 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: 0.7150, 0.7170, and 0.7195

Support levels: 0.7050, 0.7025, and 0.700

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Fundamental Analysis of AUDUSD for January 4, 2018

AUD/USD has been quite corrective after an impulsive bullish move towards the resistance area of 0.7750 to 0.7850. AUD has been gaining momentum since the positive Employment Change report published last month that helped the currency sustain the impulse and stable bullish gains. Today the Australian AIG Service Index report was published showing a slight increase to 52.0 from the previous figure of 51.7, which did not quite help the currency break above the 0.7850 resistance area. On the USD side, ahead of the NFP, Average Hourly Earnings and Unemployment reports due to release on Friday, the ADP Non-Farm Employment Change report is going to be published today. The US non-farm employment is expected to increase by 191k in comparison with the previous figure of 190k. The US Unemployment Claims are expected to decrease by 241k compared to the previous figure of 245k, Final Services PMI is expected to be unchanged at 52.4, Natural Gas Storage is expected to show a greater deficit of -221B from the previous figure of 112B, and Crude Oil Inventories are expected to show a greater decline of -5.2M from the previous figure of -4.6M. As of the current scenario, the forecasts of economic reports from the US seem to be quite mixed, but any positive outcome will lead to further bearish pressure in the pair ahead of the high-impact economic reports to be published tomorrow.

Now let us look at the technical view, the price is currently residing just below the 0.7850 resistance level with some indecision daily candles this week. The price is currently correcting itself, but any daily close above 0.7850 will lead to further bullish move towards the 0.8050 resistance level in the coming days. On the other hand, if the price manages to show some impulsive bearish pressure due to upcoming high-impact economic reports from the US, then we will be looking forward to sell with a target towards the 0.7550 support area. As the price remains below 0.7850, the bearish bias is expected to continue further.

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Elliott wave analysis of EUR/NZD for January - 2018

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Wave summary:

We are looking for a break above the minor resistance at 1.7064 to provide upside acceleration towards 1.7479 on the way higher to the long-term target near 1.7777.

Support is seen near 1.6889 and again at 1.6855, which is expected to protect the downside for a break above 1.7064.

R3: 1.7220

R2: 1.7130

R1: 1.7064

Pivot: 1.6952

S1: 1.6937

S2: 1.6889

S3: 1.6855

Trading recommendation:

We are long EUR from 1.6873 with stop placed at 1.6850.

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Elliott wave analysis of EUR/JPY for January 4 - 2018

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Wave summary:

EUR/JPY spiked just below the support at 134.83 for a low at 134.77 before turning higher again. We remain positive for EUR/JPY, expecting it to move closer to 137.37, but the rally from 109.48 is becoming stretched and a soon top should not come as a big surprise.

A break below 134.77 will be a good indication that wave (D) has peaked and wave (E) is expected to go lower to the ideal target of 123.43.

R3: 136.55

R2: 136.05

R1: 135.63

Pivot: 134.77

S1: 134.58

S2: 133.89

S3: 133.58

Trading recommendation:

We are long EUR from 134.10 with stop+revers placed at 134.75.

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Daily analysis of major pairs for January 4, 2018

EUR/USD: This currency trading instrument corrected lower yesterday in the context of the short-term uptrend. The resistance line at 1.2050 could be tested again in an attempt to maintain the current bullishness. On the other hand, a drop of about 150 pips would result in a bearish bias in the market.

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USD/CHF: This pair made a rally attempt on Wednesday in the context of the short-term downtrend. The support level at 0.9700 could be reached eventually in an attempt to maintain the current bearishness. On the other hand, a rise of about 100 pips would result in a bullish bias in the market.

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GBP/USD: After testing the distribution territory at 1.3600, the GBP/USD pair experienced a clear bearish correction. The price could go upwards from here as the correction cannot override the extant bullish bias in the market, only if the accumulation territory at 1.3400 is breached to the downside (which would require strong selling pressure).

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USD/JPY: The bearish bias on the USD/JPY pair has been threatened by the rally effort that was witnessed on Thursday. A movement above the supply level at 113.50 would result in a bullish signal; while a movement below the demand level at 112.00 would help to strengthen the recent bearish bias. Some fundamental figures are expected today and they may have a certain impact on the markets.

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EUR/JPY: The bullish signal on the EUR/JPY pair remains intact. The EMA 11 is above the EMA 56, and the RSI period 14 is above the level 50. Since there is the Bullish Confirmation Pattern in the market, bulls are expected to hold out for the rest of this week before the market begins to plunge later on.

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Technical analysis of EUR/USD for Jan 04, 2018

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When the European market opens, some economic data will be released such as Final Services PMI in Germany, France, Italy, and Spain. The US will publish several macroeconomic reports too such as Crude Oil Inventories, Natural Gas Storage, Final Services PMI, Unemployment Claims, ADP Non-Farm Employment Change, and Challenger Job Cuts y/y. Amid such a background, EUR/USD will move with medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.2067.

Strong Resistance:1.2060.

Original Resistance: 1.2048.

Inner Sell Area: 1.2036.

Target Inner Area: 1.2008.

Inner Buy Area: 1.1980.

Original Support: 1.1968.

Strong Support: 1.1956.

Breakout SELL Level: 1.1949.

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 04, 2018

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Japan will release the Final Manufacturing PMI and the US will reveal several economic reports such as Crude Oil Inventories, Natural Gas Storage, Final Services PMI, Unemployment Claims, ADP Non-Farm Employment Change, and Challenger Job Cuts y/y. So there is a probability the USD/JPY pair will move with medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 113.30.

Resistance. 2: 113.08.

Resistance. 1: 112.86.

Support. 1: 112.58.

Support. 2: 112.36.

Support. 3: 112.14.

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

USD/JPY forming a nice reversal signal, time to start selling

The price is forming a nice reversal with a bearish Bat formation below the major resistance at 112.79 (Fibonacci retracement, horizontal swing high resistance, Fibonacci extension) and we expect a strong drop below this level to push the price down to at least the 112.40 support (Fibonacci retracement, horizontal pullback support).

Stochastic (34,5,3) is seeing the major resistance below 93% where we expect a corresponding drop.

Sell below 112.79. Stop loss at 113.02. Take profit at 112.40.

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AUD/JPY testing major resistance, remain bearish

The price continues to test our major resistance area at 88.09 (Fibonacci retracement, Fibonacci extension, horizontal swing high resistance) and we remain bearish looking for a drop towards the 86.69 support (Fibonacci retracement, horizontal support).

Stochastic (55,3,1) is seeing major resistance at 99% and is starting to drop nicely.

Sell below 88.09. Stop loss at 88.71. Take profit at 86.69.

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Daily analysis of USDX for January 04, 2018

USDX is looking to make a retracement at the current stage towards the resistance level of 92.10 in the first degree as the index has been consolidating losses across the board. The 200 SMA still offers dynamic resistance and the upper band of Bollinger should help to add pressure. If the index manages to break below 91.68, the 91.13 level would be the next target.

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H1 chart's resistance levels: 92.10 / 92.57

H1 chart's support levels: 91.68 / 91.13

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 91.68, take profit is at 91.13 and stop loss is at 92.24.

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Daily analysis of GBP/USD for January 04, 2018

GBP/USD has been moving in a bullish consolidation and made a retracement from the resistance level of 1.3589. The corrective phase should extend at least towards the 1.3526 level, where the pair could gain momentum in order to follow the bullish structure with a first target placed at the 1.3700 level. The MACD indicator remains in the negative territory, favoring the bears.

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H1 chart's resistance levels: 1.3589 / 1.3700

H1 chart's support levels: 1.3526 / 1.3451

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 1.3589, take profit is at 1.3700 and stop loss is at 1.3480.

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Gold stamps victory

Last year was the best year for gold since 2010. The precious metal managed to increase its value for the second time in a row due to the weakness of the US dollar, rates on long-term US debts refusing to increase, periodically flashing geopolitical risks, and also due to uncertainty surrounding the tax reform and the ceiling of the national debt. At the same time, fiscal stimuli was unable to lead to large-scale purchases of the US currency, which provoked the rapid rally of XAU/USD at the turn of 2017 and 2018: gold grew during 8 consecutive trading sessions, reaching a peak mark last seen in September. The winning streak is the longest since February 2014.

Annual dynamics of gold

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Source: Bloomberg.

The Fed persistently talks about three acts of monetary tightening, while the futures market estimate the likelihood of such an outcome to be only at 42%. Investors do not particularly believe in the dollar and prefer to keep long-term bonds. The dynamics of these indicators will determine the fate of the precious metal in 2018. Last year, the USD index showed the worst result since 2003, which laid the foundation for a 13% rally of the XAU/USD.

The "greenback" still needs to prove that the tax reform will lead to an acceleration of the US economy towards a permanent 3%. At the same time, the potential slowdown in GDP in the fourth quarter, as shown by the dynamics of the leading indicator from the Federal Reserve Bank of Atlanta, puts the stick in the wheel of the dollar's fans. On the contrary, its competitors are full of optimism. The speeches of Benoit Coeure and Ewald Nowotny about the completion of the European QE in 2018, coupled with strong data on the business activity of the eurozone and on German inflation, allowed the bulls for the EUR/USD to approach the level of the 3-year peak.

Gold can be supported by a correction of the S&P 500, which has been overestimated from a fundamental point of view, against the backdrop of the "Buy on the rumor, sell on facts" principle. The activity of buyers in the stock market was due to hopes for the dispersal of the US economy through tax reform. If they do not see this within the next 2-3 months, the risks of a rollback of stock indices will increase.

Dynamics of the S&P 500 and its estimates in terms of P/E

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Source: Bloomberg.

Nevertheless, the consensus assessment of Bloomberg analysts suggests that at the end of 2018 precious metal will cost $1,290 per ounce, while the difference between the most bullish and the most bearish forecast is $700. In my opinion, the moderately pessimistic views on the outlook for XAU/USD are due to the hopes for an increase in the yield of 10-year US and German bonds by 45 bpts from 2.45% to 2.9% and from 0.45% to 0.9%. If, under such conditions, inflation in the US and the euro area remains subdued, then the growth of real interest rates on debts will increase the risks of gold sales. The short-term outlook for its dynamics will be affected by the publication of the minutes of the last meeting of the FOMC and the report on the US labor market for December.

Technically, the implementation of the "Deception-ejection" pattern allowed the "bulls" to count on the implementation of the target by 88.6% on the "Shark" pattern. True, a reliable attack on $1320-1321 is needed first.

Gold, daily chart

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Bitcoin analysis for January 03, 2018

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Bitcoin (BTC) has been trading upwards at the price of $15.359. Bitcoin should be regulated and even taxed, according to a European Central Bank (ECB) governing council member. Ewald Nowotny, head of the Oesterreichische Nationalbank, Austria's central bank, said in an interview with German paper Sueddeutsche Zeitung that anyone who participates in a financial transaction should be clearly identified, on top of paying value-added tax (VAT). Technical picture looks bullish.

Trading recommendations: According to the 1H time frame, I found a broken supply trend line, which is a sign that selling looks risky. My advice is to watch for potential buying opportunities. The upward targets are set at the prices of $16.430 and $17.336.

Support/Resistance

$15.359 – Intraday resistance (price action)

$14.733– Intraday support

$16.430 – Objective target

$17.336 – Second objective target

With InstaForex you can earn on cryptocurrency's movements right now. Just open a deal in your MetaTrader 4.

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EUR/USD analysis for January 03, 2018

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Recently, the EUR/USD pair has been trading downwards. The price tested the level of 1.2003. According to the 30M time frame, I found a successful rejection from the lower diagonal of the corrective downward channel, which is a sign that selling looks risky. I also found a successful test of Fibonacci expansion 100% at the price of 1.2011, which is a sign that sellers may exhausted themselves. My advice is to watch for potential buying opportunities. The first upward target is set at the price of 1.2050; and the second, at the price of 1.2075.

Resistance levels:

R1: 1.2095

R2: 1.2130

R3: 1.2175

Support levels:

S1: 1.2015

S2: 1.1965

S3: 1.1935

Trading recommendations for today: watch for potential buying opportunities.

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