Technical analysis of GBP/JPY for January 10, 2018

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All our downside targets which we predicted in yesterday's analysis have been hit. The pair is under pressure below the key resistance at 151.30, which should limit the upside potential. The declining 50-period moving average suggests that the prices have potential for a further downside. The relative strength index lacks upward momentum.

To conclude, as long as 151.30 is not surpassed, expect another decline to 150.35 and even to 149.85 in extension.

Alternatively, if the price moves in the direction opposite to the forecast, a long position is recommended above 152.90 with the target at 152.50

Strategy: Sell, stop loss at 151.30, take profit at 15150.35

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 point, 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: 151.75, 152.10, and 152.45.

Support levels: 150.35, 149.85, and 149.30

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BITCOIN Analysis for January 10, 2018

Bitcoin has been non-volatile with the bearish pressure since the bounce off the $17,000 price area where the price is still heading down towards $13,000. Due to recent diversification of the investment sentiment towards Altcoins like Ethereum and Litecoin, Bitcoin has been struggling to gain momentum. Moreover, recently Chinese Regulators are trying to restrict the mining of Bitcoin because they find mining to be wastage of resources and electricity. Additionally, Bitcoin future allowing traders to go short and make money lead to more bearish pressure in the Cryptocurrency than ever. As for the current scenario, price has been quite away from the dynamic levels of 20 EMA, Tenkan, Kijun and Kumo Cloud which is expected to attract the price towards them, i.e. higher, for a certain period of time before the price continues its bearish pressure to push the price towards $13,000 in the coming days.

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Technical analysis of NZD/USD for January 10, 2018

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Our first upward target which we predicted in yesterday's analysis has been hit. NZD/USD is expected to trade with a bullish outlook. The pair recorded higher tops and higher bottoms, which confirmed a bullish outlook. The upward momentum is further reinforced by both rising 20-period and 50-period moving average. The relative strength index is bullish, calling for a further upside.

To sum up, as long as 0.7160 is not broken, look for a new advance with targets at 0.7245 and 0.7275 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, while the green line is indicating the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 0.7245, 0.7275, and 0.7310.

Support levels: 0.7135, 0.7110, and 0.7070.

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Global macro overview for 10/01/2018

The price of Crude Oil on the US stock market has been steadily climbing up for a month. In mid-December, the barrel, about 159 liters of raw oil, cost $ 56. On Wednesday morning it reached 63.5 dollars, which means an increase of about 13.0%. For the last time, Crude Oil was so expensive in December 2014. The prolongation of the OPEC agreement on limiting oil production and declining inventories are the main elements behind price increases. Especially in the global perspective, the fundamental situation on the Crude Oil market is still not the best. In the first half of this year, the surplus of Crude Oil will remain in the world.

Today the market participants will get familiar with the latest Crude Oil Inventories data. The economists anticipated a draw of -3900k barrels after the last week drop of -7419k. The news is scheduled for release at 03:30 pm GMT. If the data will be released in line with expectations, it will be the 8th consecutive week of Crude Oil draw in inventories.

Let's now take a look at the USD/CAD technical picture at the H4 time frame. This forex pair is highly correlated with the Crude Oil prices (inverted correlation). The price is trying to bounce from the low at the level of 1.2365 and is currently testing the technical resistance at the level of 1.2484. Any violation of this level might lead to further rally towards the level of 1.2556. Strong upward momentum supports the view.

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Fundamental Analysis of AUD/USD for January 10, 2018

AUD/USD has been quite bearish recently after bouncing off the 0.7870 area but the pair is now trading with high volatility. USD has been the weaker currency in the pair since the last bounce off the support area of 0.75. Till then USD did not get any chance to show strong resilience. AUD has been the dominant currency since the final quarter of 2017. The dominancy is expected to continue further but with short-term pullbacks along the way. Today, US Import Price report is going to be published which is expected to decrease to 0.4% from the previous value of 0.7%, Final Wholesale Inventories report is expected to be unchanged at 0.7%, and Crude Oil Inventories is expected to show less deficit to -3.9M from the previous figure of -7.4M. On the other hand, tomorrow Australia is going to present a Retail Sales report which is expected to slow a slight decrease to 0.4% from the previous value of 0.5%. Moreover, USD is quite strong ahead of the upcoming high impact economic reports to be published on Friday including Retails Sales and CPI reports. As for the current scenario, this week USD is expected to gain good momentum over AUD for a certain period of time. However, on the long-term basis AUD is expected to dominate further in the coming days.

Now let us look at the technical chart. The price is currently residing in a volatile corrective structure below 0.7870 area from where the price is expected to proceed lower towards 0.0.7730 support area in the coming days. As the price remains below 0.7870 with a daily close, the bearish bias is expected to continue further.

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Global macro overview for 10/01/2018

The passing night brings two waves of sudden appreciation of the Japanese Yen without a clear justification in the news feed, although the technical levels breaking and the flight of investors who do not know what is happening is doing its job. As yesterday's USD / JPY drop would have been a reaction to reducing the volume of T-bonds from the secondary market bought by the Bank of Japan, today the move has come from nowhere. At the same time, any speculation regarding a faster than anticipated monetary policy tightening in Japan is premature. Inflation is much below the BoJ target (0.6% vs. 2%), and if you look for key elements of the BoJ monetary expansion, then not in the volume of cyclical bond purchase auctions, but in the policy of stabilizing 10Y Treasury yields close to 0%. If BoJ is able to achieve this goal with less expense it will end up positively for all market participants. What's more, in the past, BoJ showed that as soon as yields are to escape over 0.1%, the bank decides to buy unlimited bonds. For now, however, the currency market is following its bizarre path, because inter-market dependencies do not support USD / JPY declines. Yields of 10-year US bonds in the last 24 hours jumped 9 bps to 2.57%; the index of Tokyo Nikkei 225 is at its most since 1991! Such discrepancies in asset relations do not last long, but for the time being, we have to let the market move its own direction.

Let's now take a look at the USD/JPY technical picture at the H4 time frame. The market dropped below the technical support at the level of 112.02 and now is testing another support at the level of 111.45. The key technical support is still at the level of 110.82. Please notice the bullish divergence between the price and the momentum oscillator.

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Intraday technical levels and trading recommendations for EUR/USD for January 10, 2018

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Daily Outlook

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, the 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).

The bearish target for the depicted Head and Shoulders pattern extends towards 1.1350. However, to pursue towards the mentioned target level, a 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 (Note the bearish engulfing daily candlesticks of the previous few days).

On the other hand, daily persistence above 1.2100 confirms the depicted bullish continuation pattern with projected targets towards 1.2500.

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H4 Outlook

On November 7, a short-term uptrend was initiated around 1.1570 Since then, the EUR/USD pair has been moving higher as depicted on the chart.

Recently, a double-top reversal pattern was established around the price levels of 1.2080. This was followed by bearish breakdown below 23.6% Fibonacci level (1.1990).

As long as the EUR/USD pair is trading below 1.1990, more bearish decline should be expected towards the price zone of 1.1890-1.1850 (Demand-Zone) where the uptrend line comes to meet the depicted Fibonacci levels.

Price action should be watched around the depicted demand zone (1.1890-1.1850) for significant bullish rejection and a possible BUY entry.

On the other hand, a bearish breakdown below 1.1850 ( 61.8% Fibonacci ) will be a valid SELL signal if enough bearish pressure is applied against the mentioned zone.

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Gold received news from China

American lawmakers are so carried away by the rapid progress of tax reform through Congress that they completely forgot the question of who will pay for the banquet? Reducing taxes and increasing the budget deficit requires an increase in the issuance of debt obligations. In purchases of the latter, as a rule, non-residents are involved, the largest of which are Japan and China. They usually pay for the bright future of the US economy. In this regard, it becomes clear why information about the decrease in interest in US bonds by the Celestial Empire has produced the effect of an exploded bomb in the financial markets.

One can, of course, long argue what role in the statement of Beijing that "there are assets and more attractive" played Donald Trump's attacks on China, but the fact remains: if the Celestial Empire reduces its presence in the US debt market, the good for the dollar will not end. And the "American" immediately reacted to the news from Asia with a rapid fall, which allowed the gold futures quotes to restore the positions lost during the previous days and go to around $ 1325 per ounce.

Dragmetal generally behaves quite unexpectedly, each time marking growth the next rate increase on federal funds. At the same time, the strengthening of the euro by 14% against the US dollar in 2017 was parallel to the growth of interest in products focused on gold ETF. 75% of the net inflow of capital was attributable to European funds (+148.6 tonnes), while Germany accounted for 35%. Asian ETF, by contrast, accounted for 54% of gross capital outflow. The question is, if the Celestial Empire has cooled to gold and to US bonds, what will it buy? The correct answer will make a good profit.

Dynamics of physical asset flows in ETF

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Source: WGC.

Thus, Donald Trump needs to think three times before continuing to roll barrels to the largest countries of Asia, especially since Japan is also able to respond. The announcement that BoJ reduces purchases of long-term bonds in January, became the catalyst for the collapse of USD / JPY. This pair in recent months quite synchronously moved with gold, so the rumors about the normalization of the monetary policy of the Bank of Japan can be perceived as a "bullish" factor for the precious metal. Indeed, in this scenario, the chances of the USD index to restore the uptrend are zero, and the weakness of the dollar was traditionally perceived as a favorable external background for XAU / USD fans.

It is curious that gold is an asset-refuge, which usually falls into a wave of sales in the event of accelerating global GDP. This time, the precious metal rally coincided with an increase in world economic growth forecasts by the World Bank to 3.1% in 2018. According to the authoritative organization, for the first time since 2008, it will exceed its potential level. The reason for the deviations from the historical connection of the precious metal with global GDP should be sought in a weak dollar.

Technically, if the bulls on the analyzed asset manage to gain a foothold above the important level of $ 1321 per ounce, the risks of implementing the target by 88.6% on the pattern of the "Shark" will increase.

Gold, daily chart

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Bitcoin analysis for January 10, 2018

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Bitcoin (BTC) has been trading downwards. As I expected, the price tested the level of $13.276. The Venezuelan parliament has declared the oil-backed cryptocurrency created by President Nicolas Maduro illegal and in violation of the country's Constitution. Maduro's decree to create the national cryptocurrency, the petro, has been declared null and void. Technical picture looks bearish.

Trading recommendations:

According to the 4H time - frame, I found a broken bearish pennant, which is a sign that sellers are in control. I also found a hidden bearish divergence on the moving average oscillator in the background, which is another sign of weakness. The downward targets are set at the price of $12.728, $10.671 and at the price of $8.225.

Support/Resistance

$14.321 – Intraday resistance (price action)

$13.276– Intraday support

$12.728 – Objective target 1

$10.671 – Objective target 2

$8.225 – Objective target 3

With InstaForex you can earn on cryptocurrency's movements right now. Just open a deal in your MetaTrader4.

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EUR/USD analysis for January 10, 2018

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Recently, the EUR/USD pair has been trading upwards. The price tested the level of 1.2016. According to the daily time – frame, I found a successful rejection from the support (a swing high became resistance), which is a sign that selling looks risky. I also found a bulish engulfing candle pattern, which is another sign of strength. The upward target is set at the price of 1.2080.

Resistance levels:

R1: 1.1970

R2: 1.2002

R3: 1.2030

Support levels:

S1: 1.1910

S2: 1.1880

S3: 1.1850

Trading recommendations for today: watch for potential buying opportunities.

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GBP/USD analysis for January 10, 2018

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Recently, the GBP/USD pair has been trading downwards. The price tested the level of 1.3481. Anyway, according to the 1H time – frame, I found a fake breakout of the support cluster, which is a sign that selling looks risky. I also found a hidden bullish divergence on the moving average oscillator and bullish outside bar, which is a sign of strength. My advice is to watch for potential buying opportunities. The upwad targets are set at the price of 1.3580 and at the price of 1.3610,

Resistance levels:

R1: 1.3579

R2: 1.3620

R3: 1.3655

Support levels:

S1: 1.3503

S2: 1.3465

S3: 1.3425

Trading recommendations for today: watch for potential buying opportunities.

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NZD/USD Intraday technical levels and trading recommendations for January 10, 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.

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

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

An atypical Head and Shoulders pattern was expressed on the depicted chart which initiated bearish reversal.

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

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

Moreover, further bullish advance should be expected towards 0.7250 if the current bullish momentum is maintained above the key-level of 0.7150.

The current price zone of 0.7140-0.7250 is considered a prominent Supply-Zone to be watched for SELL positions if enough bearish rejection is expressed on a daily basis.

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:

Conservative traders should wait for daily closure below the price level of 0.7140 as a valid SELL signal. Initial T/P levels should be located at 0.7050 and 0.6980.

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Technical analysis of USD/CHF for January 10, 2018

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Overview:

  • The USD/CHF pair broke resistance which turned to strong support at the levels of 0.9786 and 9756 yesterday. The level of 0.9786 coincides with a golden ratio (38.2% of Fibonacci), which is expected to act as major support today. The Relative Strength Index (RSI) is considered overbought because it is above 70. The RSI is still signaling that the trend is upward as it is still strong above the moving average (100). This suggests that the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend. In other words, buy orders are recommended above 0.9756 with the first target at the level of 0.9835. From this point, the pair is likely to begin an ascending movement to the point of 0.9869 and further to the level of 0.9889. The level of 0.9889 will act as a strong resistance and the double top is already set at the point of 0.9913. On the other hand, if a breakout happens at the support level of 0.9756, then this scenario may become invalidated.
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Technical analysis of NZD/USD for January 10, 2018

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Overview:

  • Pivot : 0.7165.
  • The NZD/USD pair is expected to continue rising from the levels of 0.7120 or 0.7185 in the long term. It should be noted that the support is established at the level of 0.7120 which represents the 78.6% Fibonacci retracement level on the H1 chart. The price is likely to form a double bottom in the same time frame.
  • Accordingly, the NZD/USD pair is showing signs of strength following a breakout of the highest level of 0.7165. So, buy above the level of 0.7165 with the first target at 0.7195 in order to test the daily resistance 1 and further to 0.7232. Also, it might be noted that the level of 0.7232 is a good place to take profit because it will form a new double top. Moreover, major resistance will be set at the level of 0.7266.
  • On the other hand, in case a reversal takes place and the NZD/USD pair breaks through the support levels of 0.7120 and 0.7185, a further decline to 0.7060 can occur which would indicate a bearish market.
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Bitcoin analysis for 10/01/2018

The Bank of Israel declared that cryptocurrencies are more assets than a currency. During a speech at the meeting of the Knesset Financial Committee, Nadine Baudot-Trajtenberg, the deputy chairman of the Bank of Israel said: "Bitcoin and similar virtual currencies are not a currency and are not considered as a foreign currency. Cryptocurrencies should be seen as financial assets and Bitcoin does not match the legal definition of currency." The vice president asked her fellow citizens to be aware that cryptocurrencies are not supported by official state bodies. She also added that users of virtual currencies should be aware of the risk and high level of price volatility.

In recent months, many central banks and financial supervisors have issued warnings because cryptocurrency prices have risen to record levels. Countries such as the United Kingdom, India, and Russia have expressed concerns about the risks associated with investing in virtual currencies.

Let's now take a look at the Bitcoin technical picture on the H4 time frame. The price keeps making lower lows and just broke below the intraday support at the level of $14,236. The next important support is seen at the level of $12,462 and if this support is violated, then the price will likely test the lows of wave A at the level of $11,152.

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Trading plan for 10/01/2018

The theme of Wednesday's Asian session is a sudden drop in USD/JPY in the absence of justification. The rest of the FX market remains calm. EUR/USD drifting close to 1.1930, GBP/USD last hour spent at 1.3530.The stock market is also dominated by stabilization. However, Crude Oil makes another high.

On Wednesday, 10th of January, the event calendar is busy with important news releases. Important data will be released from France (Industrial Production), UK (Industrial Production, Manufacturing Production, Trade balance, NIESR GDP Estimate), Canada (Building Permits) and the US (Import Price Index, Wholesale Inventories Crude Oil Inventories).

GBP/USD analysis for 10/01/2018:

The most important data for today will be released from the UK. The Visible Trade Balance is expected to remain unchanged at -10bln Pound, Manufacturing Production is expected to increase from 0.1% to 0.3% on monthly basis, Industrial Production is expected to increase as well from 0.0% to 0.4% this month and NIESR GDP Estimate ( an unofficial estimate of UK GDP that comes out one month before the official release) is expected to remain unchanged at 0.5% level. In conclusion, positive data from the UK economy are expected, so if there is no surprise, GBP should appreciate a little across the board after the data are released.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. The price got back under the main channel (dashed blue) around the level of 1.3518. The nearest support is seen at the level of 1.3493 (38% Fibo), but the price might break it and drop towards the level of 1.3446, which is much stronger support zone. The momentum is pointing down and so is the stochastic indicator. In a case of a further rally upwards, the nearest technical resistance is seen at the level of 1.3585.

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Market Snapshot: Crude Oil makes a new high.

The price of Crude Oil has made another higher high as it broke through the resistance at the level of 62.67. The current high is at the level of 63.51 (at the moment of writing) and it hit a dashed channel line resistance.The market conditions are overbought at this time frame and there is a clear bearish divergence between the price and momentum oscillator, so the pull-back towards the level of 62.67 is expected.

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Market Snapshot: DXY fails to break out higher.

The price of US Dollar Index (DXY) has failed to break out above the technical resistance at the level of 92.67 and reversed towards the support line at the level of 92.27 in overbought market conditions. In a case of a further drop, the next technical support is seen at the level of 91.75.

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Technical analysis of USDX for January 10, 2018

The Dollar index has reached its target of 92.60 as expected. Price is showing rejection signs at this resistance area. For the longer-term bullish view towards 96-97 to be achieved, we need to break yesterday's highs soon and move towards the important resistance of 93.60-93.70.

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The Dollar index double a bottom pattern played out as expected. Price target of the Ichimoku cloud and the 38% Fibonacci retracement has been met. A rejection here and a break below 92.20 will be a bearish sign for the index, implying that the main bearish trend is resuming and we should expect price to see new lows below 91.

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Blue lines - bearish channel

The Dollar index has bounced as expected but this could only have been a pause in the main down trend started at 95. It is very important for bulls to break above 92.60 and hold above 92.20. Next important resistance that bulls need to break is at 93.60-93.70. Daily trend remains bearish with high chances of a move below 91 as long as price is below 93.60.

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Technical analysis of gold for January 10, 2018

Gold price has broken the triangle pattern we mentioned yesterday to the downside. As long as price is below $1,322 I expect Gold to move towards $1,290-80 at first. Gold short-term trend is changing to bearish. As said before, Gold is in a similar place when it was trading at $1,237 but from the bearish point of view.

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Blue lines - triangle pattern (broken)

Red line - support

Gold price is near its highs but price has taken a downward turn. Price is making lower lows and lower highs in the 4-hour chart. The bearish divergence signs are finally proving themselves. Critical support is at $1,305. Breaking below that level will confirm our bearish view and accelerate the move lower.

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Blue lines - price expectation

Gold price has broken out of the Daily cloud resistance and now I expect at least a back test of the broken cloud resistance back towards $1,285 at least. I'm bearish about Gold.

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Fundamental Analysis of USD/CAD for January 10, 2018

USD/CAD has breached above 1.2450 price area recently having the recent price action as a false break. CAD has been putting pressure on USD recently amid the positive employment reports last week whereas USD was struggling due to the mixed economic reports. Today, Canada's Building Permits report is going to be published which expected to decrease to -0.7% from the previous value of 3.5%. On the other hand, today US Import Prices report is going to be published which is expected to decrease to 0.4% from the previous value of 0.7%, Final Wholesale Inventories report is expected to be unchanged at 0.7%, and Crude Oil Inventories report is expected to show less deficit at -3.9M from the previous figure of -7.4M. The economic reports from the US are expected to be quite mixed and CAD is likely to remain weak. So if the expectations are met today, then USD will be able to gain momentum over CAD for a certain period in the coming days. To sum up, a good amount of retracement is expected in this pair before CAD pushes the price much lower against USD in the coming days.

Now let us look at the technical chart. The price is currently staying above 1.2450 with a daily close, whereas the current momentum is also signaling bullish momentum with a target towards the dynamic level of 20 EMA and 1.2620 area. The recent price action seems to be a False Break below 1.2450 which empowers the bulls to push higher against the bears in this impulsive bearish trend. As the price remains above 1.2450 with a daily close, the bullish bias is expected to continue further.

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Burning Forecast 01/10/2018

Burning Forecast 01/10/2018

EURUSD: Range

There were strong data on the economy of Germany and the eurozone - production and sales, everything is growing faster than forecast. This stopped the fall of the euro, which began with the first days of the new year 2018.

Thus, two trends crossed: The growth of the euro, which dominated in the spring of 2017, and the decline of the current year. The market chooses a direction.

Range. The current top is 1.2090, the current bottom is 1.1814.

Trade for the breakthrough of boundary: Buy for the breakthrough 1.2090, Sell from 1.1814.

Most likely, we will see the formation of a new lower boundary until the end of this week.

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Fundamental analysis of EUR/JPY for January 10, 2018

EUR/JPY has been quite impulsive with the bearish pressure recently which lead the price to fall back from the 136.70 price area to 134.00 support area. JPY has been quite impulsive with its gains recently due to positive economic reports published this week. Recently Japan's Average Cash Earnings report was published with a significant increase to 0.9% from the previous value of 0.2% which was expected to be at 0.6% and the Consumer Confidence report showed a slight decrease to 44.7 from the previous figure of 44.9 which was expected to increase to 45.1. The worse economic report did not have significant impact on the gains of JPY. Today JPY 10y Bond Auction report was published with an increase to 0.08|3.7 from the previous figure of 0.06|3.7. On the EUR side, today French Industrial Production report is going to be published which is expected to decrease to -0.4% from the previous value of 1.9% and German 10y Bond Auction is going to be held which previous was at 0.30|1.1. As of the current scenario, there will be no key economic reports or events in the Eurozone today to support EUR gains over JPY whereas tomorrow Japan's Leading Indicators report is going to be published which is expected to increase to 108.7 from the previous value of 106.5. If the upcoming economic reports are published better than expected, then JPY is likely to extend gains in the coming days.

Now let us look at the technical view. The price is currently residing below 134.00 support area and dynamic level of 20 EMA which indicates that the bears are the stronger party in the pair. A daily close above or below 134.50 will lead to further definite trend direction in this pair but as of now, the bearish bias is expected to continue as the price remains below 135 price area with a daily close.

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Trading plan 01/10/2018

Trading plan 01/10/2018

General picture: The market is looking for direction.

The beginning of the year showed corrective movements: the Euro is trying to fall, the yen is strengthening, the franc is weakening.

Friday will be an important day- US inflation, the first important data for the current year, will be published.

Meanwhile, the euro has traced a range of 1.1814 - 1.2090.

GBPUSD:

Buy from 1.3470.

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Daily analysis of major pairs for January 10, 2018

EUR/USD: There is a bearish signal on the EUR/USD pair, due to the perpetual bearish movement that has been witnessed on the market. The EMA 11 has crossed the EMA 56 to the downside, and the William's % Range period 20 is in the oversold territory. More and more bearish movement is anticipated.

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USD/CHF: There is a bullish signal on the USD/CHF pair, due to the perpetual bullish movement that has been witnessed on the pair (this week). The EMA 11 has crossed the EMA 56 to the upside, and the William's % Range period 20 is in the overbought territory. This does not mean a "sell" signal. Rather, it means the market would continue going higher irrespective of temporary pullbacks along the way.

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GBP/USD: This currency trading instrument has only gone flat so far this week. Price may be able to go upwards to test the distribution territories at 1.3600 and 1.3650. However, that does not eliminate possibility of a significant pullback, which may happen any time this month.

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USD/JPY: The bearish threat that was witnessed on this currency trading instrument has finally translated into a bearish bias. There is a Bearish Confirmation Pattern in the market, and price could go towards the demand levels at 112.00 and 111.50. It is possible that these bearish targets could even be exceeded.

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EUR/JPY: The EUR/JPY pair has been going downwards since the beginning of this week, and this tallies with the bearish expectation on JPY pairs. Price has gone south by 210 pips and it has tested the demand zone at 134.00. The next targets are the demand zones at 133.50 and 133.00, which would be tested soon.

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Fundamental analysis of GBP/USD for January 10, 2018

GBP/USD has been quite volatile and corrective recently, forming a squeeze towards the resistance level of 1.3610. GBP has been the dominant currency in the pair but recently USD has been quite successful with its pressure to restrict further bullish momentum in this pair. This week GBP has been quite negative with the economic reports which affected the impulsive bullish pressure in the pair. Today, the UK Manufacturing Production report is going to be published which is expected to increase to 0.3% from the previous value of 0.1%. Besides, the Goods Trade Balance report is expected to show a slight increase in deficit to -10.9B from the previous figure of -10.8B. Furthemore, the Construction Output is expected to increase to 0.7% from the previous negative value of -1.7%. The Industrial Production is also expected to increase to 0.4% from the previous value of 0.0%. Additionally, the NIESR GDP Estimate is expected to show an increase from the previous value of 0.5%. On the other hand, despite having worse economic reports recently, USD managed to maintain momentum against GBP which is a signal that further bearish pressure is coming. Today, the US Import Price report is going to be published. It is expected to decrease to 0.4% from the previous value of 0.7%. The Final Wholesale Inventories report is expected to be unchanged at 0.7% and the Crude Oil Inventories is expected to show less deficit at -3.9M from the previous figure of -7.4M. As of the current scenario, the US economic reports are forecasted to have mixed result whereas GBP seems quite optimistic with the economic report results today. A good amount of volatility is expected to hit the market today. USD is likely to gain momentum over GBP, if the US economic reports come better than expected today or GBP fails to meet the expected result.

Now let us look at the technical view. The price is currently residing inside the corrective volatile structure just below the resistance level of 1.3610. As of the current scenario, the price is expected to move down towards the trend line support around 1.3450 area before showing some bullish intervention along the way. As the price remains above 1.33 support area, the bullish bias is expected to continue which might result in a break above 1.3610 with target towards 1.3850.

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Elliott wave analysis of EUR/NZD for January 10, 2018

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Wave summary:

EUR/NZD has tested a low of 1.6587, just above our ideal target seen at 1.6571. This could be enough to fulfill the expected downside target and complete wave (ii). If this is the case, we will likely see minor support at 1.6595 protect the downside for a break above minor resistance at 1.6708 confirming a low is in place for a rally towards important resistance at 1.7026 and above here confirm wave (iii) higher is developing.

R3: 1.6849

R2: 1.6801

R1: 1.6740

Pivot: 1.6708

S1: 1.6637

S2: 1.6595

S3: 1.6587

Trading recommendation:

We are short half a position EUR from 1.6795 we will lower our stop + revers to 1.6715 and we will place a take profit at 1.6610. If done we will place a EUR buy order at 1.6715.

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Elliott wave analysis of EUR/JPY for January 10 - 2018

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Wave summary:

The decline from 136.64 has been strong and the pair is already testing the support at 133.89. A clear break below here will point lower to 132.21 as the next downside target. EUR/JPY will move lower as long as it stays below 134.58, while a break above this minor resistance will indicate that a corrective rally above 135.49 is developing, before declining again.

In the longer term, we are looking for the wave (E) lower to 123.43 to develop and complete the triangle consolidation, that has been developing since July 2008.

R3: 135.49

R2: 135.02

R1: 134.56

Pivot: 133.89

S1: 133.57

S2: 133.06

S3: 132.55

Trading recommendation:

We are short on EUR from 134.75. We will take half profit at 134.09 and a nice little 67 pips profit and lower our stop to 134.60 on the other half.

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Brent: "Bears" threw a towel into the ring

Frosts in the northeastern United States, the continuing decline in US oil reserves, the anti-government strikes in Iran, the high level of compliance with contractual obligations by OPEC members, and the weakness of the dollar pushed the quotations of Brent and WTI to the area of three-year highs. However, some of black gold's advantages, in particular, problems with supplies in the North Sea and in Libya, have already been played. Tehran has not reduced production and the US currency is beginning to win back part of the losses incurred at the turn of 2017-2018 decline. These circumstances require that the "bulls" have evidence that they are able to retain both varieties at current levels.

According to the consensus forecast of Bloomberg experts, by the week ending in January 5, oil reserves in the United States have already decreased by 1.5 million barrels. If this is the case, the figure will drop 8 five consecutive days and will reach a minimum mark since the beginning of 2015. At the same time, the number of drilling rigs, according to the latest report of Baker Hughes, unexpectedly decreased by 5. It seems that the rate that shale oil producers will increase its own activity as WTI moved above $ 60 per barrel, was not justified. However, this threat made Iran's oil minister say that OPEC does not want Brent to go far from $ 60.

Dynamics of WTI and US oil reserves

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Source: Bloomberg.

Tehran is forced to use this rhetoric as part of the "bullish" news for black gold comes from it. The country, which accounts for about 4% of world production (3.8 million bpd), cannot afford to live in the face of the growing risks of an anti-government coup. It indeed has retained its previous production levels but who knows what will happen tomorrow. The situation is aggravated by the conflict between Iran and Saudi Arabia over Yemen as well as rumors that Donald Trump will not confirm the terms of the nuclear deal with Tehran. The renewal of sanctions is fraught with a reduction in world production and rising prices.

The world demand plays an important role in the current Brent and WTI rally. According to IMF forecasts, the global GDP will grow by 3.6% in 2018. At the same time the increase in consumption of black gold increased to 5 million bpd from 2015 to 2017. However, at the time when the North Sea grade was quoted at $ 100 per barrel or higher, it did not reach +1 million bpd. The continuation of the northern oil campaign will have an impact not only on demand, but also on inflation. Accelerated growth in consumer prices in the US will contribute to the aggressive monetary restriction of the Fed, which will strengthen the position of the dollar. Currently, the US currency has an undisclosed potential. First, the market ignored the factor of tax reform and it is quite capable of winning it back. Second, the divergence in the monetary policy of the Fed and its main competitors continues to work in favor of the USD index.

Technically, if the "bulls" for Brent manage to keep the positions won, then the risks of continuing the rally in the direction of the target by 200% on the AB = CD pattern will increase. On the contrary, falling prices below $ 66.95 per barrel will open the door for correction.

Brent, daily chart

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Daily analysis of Gold for January 09, 2018

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Overview

The gold price shows slight bearish bias on its way to testing the EMA50. As long as the price is above 1,299.20, our bullish overview will remain valid for today, reminding you that we need a breach of 1,321.49 for the price to head towards 1,357.53. Meanwhile, stochastic heads towards the oversold areas now in attempt to gain positive momentum that will help the price rise. The expected trading range for today is between the 1,310.00 support and the 1,335.00 resistance.

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Daily analysis of Silver for January 09, 2018

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Overview

The silver price did not show any strong moves on previous days, still fluctuating around 17.20 levels, waiting to get rid of the negative momentum and gain enough ground to resume the bullish bias on the intraday and short-term basis. In general, we still expect the bullish trend in the upcoming period conditioned by holding above 16.55. A breach of 17.43 is required to push the price towards our next target at 18.30. The expected trading range for today is between the 17.00 support and the 17.42 resistance.

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Analysis of bitcoin for January 09, 2018

Bitcoin has been impulsively bearish after bouncing off the $17,000 price area recently. The price has been ranging between $13,000 to $17,000 for a while, but the market trend is yet to be defined. The correction is currently quite obvious for the Bitcoin market as the cryptocurrency is being traded in the futures markets and the behavior of a mature market can be clearly identified here. As of the recent increase in price for the altcoins like Lite Coin, Ethereum and Ripple, Bitcoin is slowly coming out of the lime light while investors are seeking for more diversified investment in the cryptocurrency market. As of the current scenario, the price is showing some bullish retracement towards the dynamic level of 20 EMA which might lead to further correction in this financial instrument. However, as the price remains above $13,000 price area, the bullish bias is going to continue and we can expect the price to move higher towards $17,000 again in the coming days. Despite having challenges and diversification, Bitcoin has managed to remain above $10,000 price area after the long impulsive gains last year which is really brilliant and this bubble will need some more time to burst in the future.

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Technical analysis of USD/JPY for January 09, 2018

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USD/JPY is expected to trade with bullish bias above 112.45. The pair continues its rebound from a low of 112.45 seen yesterday. Currently, it is trading at levels above both the 20-period and 50-period moving averages, while striking against the upper Bollinger band. The relative strength index is well directed above the neutrality level of 50, indicating continued upward momentum for the pair. Therefore, the intraday outlook remains bullish, and the pair should revisit 112.95 on the upside before proceeding to 113.20.

Alternatively, if the price moves in the opposite direction, a short position is recommended below 112.45 with a target of 112.20.

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 at 112.45, take profit at 112.95.

Resistance levels: 112.95, 113.20, and 113.50

Support levels: 112.20, 112.00, and 111.75.

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Fundamental analysis of USD/JPY for January 09, 2018

USD/JPY is currently being squeezed up a little, having a lot of volatility and indecisive movement in the pair. Both USD and JPY are currently having the best time in the market having good economic reports to back up the gains. Today Japan's Average Cash Earning report was published with an increase to 0.9% from the previous value of 0.2% which was expected to be at 0.6%. The economic reports provided help to JPY to gain over USD in the current market situation. At the same time, the US Consumer Confidence report showed a decrease to 44.7 from the previous figure of 44.9 which was expected to be at 45.1. It had some impact on the impulsive gain of the currency. On the other hand, today the US NFIB Small Business Index report was published with a decrease to 104.9 from the previous figure of 107.5 which was expected to rise to 108.4. The JOLTS Job Opening report is yet to be published which is expected to increase to 6.05M from the previous figure of 6.00M. As of the current scenario, JPY seemed to lose some ground against USD having some high impact economic reports on the USD side to be published this week. If the US economic reports turn to be positive, than USD is expected to gain impulsive momentum over JPY, leading to further moves up in this pair in the future.

Now let us look at the technical view. The price is currently quite bearish in nature but residing at the dynamic level of 20 EMA where a break above the trendline resistance with a daily close will lead to further bullish move in this pair with target towards 114.50 in the coming days. As the price remains above 112.00 support area, the bullish bias is expected to continue further.

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