Technical analysis of NZD/USD for January 16, 2018

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Our first target which we predicted in yesterday's analysis has been hit. The pair remains on the upside, backed by its rising 50-period moving average. A strong support base has formed around 0.7275, which should limit any downward attempts. Besides, the relative strength index stands firmly above its neutrality area at 50. Even though a consolidation cannot be ruled out, its extent should be limited.

As long as 0.7250 is not broken, likely advance to 0.7300 and 0.7330 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: 0.73000, 0.7330, and 0.7375.

Support levels: 0.7220, 0.7175, and 0.7150.

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Bitcoin analysis for January 16, 2018

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The Bitcoin (BTC) has been trading downwards. As I expected, the price tested the level of $10.846. New cryptocurrency exchanges are rushing to launch in South Korea despite regulatory uncertainty due to high demand and lucrative business models. Ten crypto platforms are expected to open for business in the first half of this year, including two runs by Kosdaq-listed companies. Technical picture looks bearish.

Trading recommendations:

According to the 4H time - frame, I found broken major pennant formation and symmetrical triangle in the background, which is sign that sellers are in control. Key support level is set at the price of $10.650 and the breakout of this support will confirm further lower price and potential testing of major pattern target at $8.186.

Support/Resistance

$13.149 – Intraday resistance

$10.846– Intraday support

$8.190 – Objective target

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GBP/USD analysis for January 16, 2018

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Recently, the GBP/USD has been trading downwards. As I expected, the price tested the level of 1.3744. According to the 30M time – frame, I found a broken 3-day upward channel, which is a sign that buying looks risky and that sellers are in control. I also found a broken upward trendline and a hidden bearish divergence on the moving average oscillator, which are signs of weakness. My advice is to watch for potential selling opportunities. I placed Fibonacci retracement to find potential downward targets. I got FR 38.2% at the price of 1.380, FR 50% at the price of 1.3640 and FE 61.8% at the price of 1.3600.

Resistance levels:

R1: 1.3835

R2: 1.3875

R3: 1.3930

Support levels:

S1: 1.3740

S2: 1.3685

S3: 1.3640

Trading recommendations for today: watch for potential selling opportunities.

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Trading plan for gold and silver for January 16, 2018

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Technical outlook:

We have presented a weekly chart to represent a multi year consolidation of gold prices. It began in November 2015 with lows at $1,047.00 and has unfolded into 5 waves within a contracting triangle, with each wave sub dividing into 3 waves a-b-c as labelled here. The triangle might be terminating into its last wave E with the recent highs at $1,344/45 levels touched yesterday. For this A-B-C-D-E contracting triangle structure to remain intact, prices should stay below $1,357/58 levels and broadly below $1,375 levels. If the above outlook holds true, we should see prices dropping lower and breaking below $1,236 levels as the first soft target. On the flip side, a break above $1,357 levels would open doors for a test above $1,400/20 levels at least.

Trading plan:

Aggressive traders may want to remain short with stop above $1,357 levels; the target is open.

Silver chart setups:

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Technical outlook:

The weekly chart setups for silver also indicate movement similar to a contracting triangle that has been since November 2015. The underlying trend has completed 5 waves as labelled here as A,B,C,D and E, with each wave sub dividing into 3 waves each. Furthermore, wave E has also tested the consolidation line of resistance at $17.40 levels before pulling back. Please note that for this wave count to hold true, prices should stay below $18.21 levels going forward. If this condition remains, we should see silver prices dropping much lower in the weeks to come. The first soft target remains at $15.60 levels though, before pulling back. From the trading point of view, it is good to prepare short positions.

Trading plan:

Aggressive traders would want to remain short with stop above $18.21 levels.

Fundamental outlook:

There are no major fundamental events for the rest of the day.

Good luck!

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EUR/USD analysis for January 16, 2018

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Recently, the EUR/USD pair has been trading downwards. As I expected, the price tested the level of 1.2201. According to the 30M time – frame, I found a broken 3-day upward channel, which is a sign that buying looks risky and 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. I have placed Fibonacci retracement to find potential downward targets. I got FR 38.2% at the price of 1.2158, FR 50% at the price of 1.2115 and FR 61.8% at the price of 1.2075.

Resistance levels:

R1: 1.2310

R2: 1.2359

R3: 1.2420

Support levels:

S1: 1.2203

S2: 1.2140

S3: 1.2095

Trading recommendations for today: watch for potential selling opportunities.

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Daily analysis of major pairs for January 16, 2018

EUR/USD: The EUR/USD pair traded a bit lower on Monday, but that pales into insignificance when compared to the overall bullish bias. The market could still go upwards, reaching the resistance lines at 1.2250, 1.2300, and 1.2350. The resistance line at 1.2250 was previously tested and it would be tested again.

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USD/CHF: The USD/CHF pair bounced a bit upwards on Monday. However, that cannot override the bearish bias. The market could still go downwards, reaching the support levels at 0.9600, 0.9550, and 0.9500. The support level at 0.9600 was previously tested and it would be tested again.

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GBP/USD: The Cable experienced a shallow bearish correction on January 25, 2018 (in what can be called an uptrend). The bearish correction could turn out to be a wonderful opportunity to buy long at better prices. The Cable would go upwards by another 150 pips before the end of this week.

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USD/JPY: The USD/JPY pair moved lower on Monday, in accordance with the overall bullish bias on the market. Any rallies in the market could be followed by further movements towards the south. The demand levels 110.50, 110.00, and 109.50 could be reached within the next several trading days.

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EUR/JPY: On this cross, there has been a Bullish Confirmation Pattern in the 4-hour chart. Price has moved northwards already and it is supposed to move upwards again, reaching the supply zones at 136.00, 136.50, and 137.00. There are demand zones at 135.00 and 134.50, which would try to impede bearish attacks along the way.

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Fundamental Analysis of GBP/USD for January 16, 2018

Recently, GBP/USD has been trading in the impulsive manner with bullish gains that led the price towards 1.38 area. Today GBP is currently struggling to sustain gains due to mixed economic reports published, which undermines the bullish momentum against USD. Today, the UK CPI report was published with a slight decrease to 3.0% as expected from the previous value of 3.1%, PPI Input decreased to 0.1% from the previous value of 1.6% which was expected to be at 0.5%, RPI report showed an increase to 4.1% which was expected to be unchanged at 3.9%, Core CPI report showed a decrease to 2.5% from the previous value of 2.7% which was expected to be at 2.6%, HPI report showed value of 5.1% decreasing from the previous value of 5.4% but it was better than expectation of 4.2%, PPI Output report was unchanged at 0.4% from a decrease to 0.2% earlier, and CB Index report is yet to be published which previously was at -0.2%. On the USD side, the US is due to release several high impact economic reports including Building Permits report to be published on Thursday. But today, Empire State Manufacturing Index report is scheduled which is expected to increase to 18.5 from the previous figure of 18.0. As for the long-term scenario, GBP is expected to advance further, but at present some retracement and correction are expected in this market before the bulls hit back in the future.

Now let us look at the technical chart. The price is currently quite bearish in nature showing bearish momentum after an impulsive bullish breakout above 1.36 support area. The pair is likely to retrace back towards the support area before showing any bullish intervention to push the price much higher towards 1.40 resistance area in the coming days. If the price remains above 1.36, the bullish bias is expected to continue further.

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Technical analysis of NZD/USD for January 16, 2018

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Overview:

  • Pivot point : 0.7253.
  • The NZD/USD pair continues to climp from the price of 0.7234 in the long term. It should be noted that the support is established at the level of 0.7234 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 0.7234. So, buy above the level of 0.7234 with the first target at 0.7277 in order to test the daily resistance 1 and further to 0.7310.
  • Besides, it might be noted that the level of 0.7310 is a good place to take profit because it will form a new double top.
  • On the other hand, in case a reversal takes place and the NZD/USD pair breaks through the support level of 0.7234, a further decline to 0.7173 can occur which would indicate a bearish market.
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Technical analysis of USD/CHF for January 16, 2018

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Overview:

  • The USD/CHF pair continues to move downwards from the level of 0.9745. Yesterday, the pair dropped from the level of 0.9745 (this level of 0.9745 coincides with the ratio of 38.2% Fibonacci retracment levels) to the bottom around 0.9602. Today, the trend had rebounded from the bottom of 0.9602 to climp toward the level of 0.9650. Moreover, the first resistance level is seen at 0.9691 followed by 0.9745, while daily support 1 is seen at 0.9602. According to the previous events, the USD/CHF pair is still moving br, tetween the levels of 0.9691 and 0.9553; for that we expect a range of 138 pips (0.9691 - 0.9553). If the USD/CHF pair fails to break through the resistance level of 0.9691, the market will decline further to 0.9553. This would suggest a bearish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 0.9553 with a view to test the daily pivot point. On the contrary, if a breakout takes place at the resistance level of 0.9745, then this scenario may become invalidated.
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Bitcoin analysis for 16/01/2018

The rules for cryptocurrency trading in South Korea were announced on Sunday, January 14, after mainstream media misunderstandings about the proposed ban on trading in cryptocurrencies by the Justice Minister last week. Reports at the local news agency Yonhap speak of requirements from Korean traders to use real names for cryptocurrency accounts. Potential regulation notified earlier in January will come into force by the end of this month. Yonhap informs that fines will also be imposed on those who do not comply with the new rules, although the amount of the fine has not yet been determined. Yonhap quotes today's government statement saying: "The proposed closure of exchanges, which was recently mentioned by the Minister of Justice, is one of the measures proposed by the Ministry of Justice to limit speculation. We will make a decision about the national range in the future after sufficient consultations and coordination of opinions."

The turbulent regulatory landscape in South Korea caused fragmentary information to appear on a daily basis on how the cryptocurrency would eventually fall under the jurisdiction of Seoul. In the latest news from Monday, January 15, the official statement of the Office for Coordination of Government Policy was issued, stating that the ban on using cryptocurrencies does not work.

Public moods in the field suggest a real consensus that trade is open and accessible, and last week's petition rejected the ban on cryptocurrencies, which has more than 150,000 signatures. If the petition reaches 200,000 signatures by January 27th, it will force the government to respond.

Let's now take a look at Bitcoin technical picture at the H4 time frame. The local support at the level of $12,439 has been violated and the triangle pattern scenario is getting out of hand. The next best possible corrective scenario is an ABC Irregular Flat pattern, that might even push the priced down to the level of $10,000 and then $8,602. The key technical support is still seen at the level of $11,1150.

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Trading plan for 16/01/2018

Early Tuesday trading brings a calm trade on the forex market, which especially for USD means stopping the sell-off. Some timid corrections are seen for USD/JPY and NZD/USD, and the rest of the crosses are practically standing still. The stock market is climbing higher. Gold and Crude Oil are stable.

On Tuesday 16th of January, the event calendar is moderately busy, with data coming from Germany (Final Consumer Price Index), UK (Consumer Price Index) and the US ( Empire State Manufacturing Index). Later in the day, there is a scheduled speech from SNB Chairman Thomas Jordan.

EUR/USD analysis for 16/01/2018:

On Monday evening the EUR received moderate support in the words of Hansson from the ECB. In an interview with the Boersen-Zeitung newspaper, he said that EUR appreciation is not yet a threat to inflation prospects, and if the economy develops in line with recent forecasts, it will be right to end asset purchases after September. It must be remembered, however, that Hansson is one of the more hawkish members of the ECB.

Let's now take a look at EUR/USD technical picture at the H4 time frame. The price reversed from 100% Fibo Extension at the level of 1.2294 and now is testing the support at the level of 1.2218. The market conditions are slightly overbought, so it is possible that the corrective cycle will test even lower areas of the recent rally, like the level of 1.2155 or even 1.2090. The larger time frame trend remains up.

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Market Snapshot: USD/JPY bounces a little

After the recent sell-off, the price of USD/JPY has broken below the important technical support zone between the levels of 110.61 - 111.06 and made a new low at the level of 110.32. Currently, the price is testing the zone from below and might even extend the corrective pullback towards the upper resistance level at 111.06.

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Market Snapshot: NZD/USD keeps rallying

The price of NZD/USD has been rallying since the end of 2017, broke above the long-term trend line around the level of 0.7200 and now is about to test the technical resistance at the level of 0.7343. The market conditions are extremely overbought, so the market might pull-back a little towards the next technical support at the level of 0.7216 before another leg up.

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Technical analysis of USDX for January 16, 2018

The Dollar index remains in a bearish trend. Price is bouncing but as long as price is below 91.80 trend remains bearish in the short term.

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Blue line - resistance

Short-term resistance is at 90.80 and next is at 91.40. However, only a break above 91.80 would change short-term trend. A bounce today is justified but we should not forget that overall trend is bearish.

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Blue line - long-term resistance

Weekly trend remains bearish. The bearish signs we noted in past analysis were the rejection at 94.20 and at 92.60. Price is making new lows but not the RSI or the MACD. I believe that the downside towards 88 is highly probable but we should also keep in mind that the decline from 103.50 might be at its final stages.

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Technical analysis of gold for January 16, 2018

Gold price is trading near its 4-month highs and below long-term resistance of $1,350-60. A rejection at current levels could push price towards $1,290 or even towards $1,270 if the first support fails to hold. Trend is bullish.

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Gold price is making higher highs and higher lows. Trend is bullish as price is above the Ichimoku cloud. Support is at $1,326. Resistance is at $1,346. Next important support is at $1,315-$1,305. If this support fails, price is likely to move towards $1,270-80.

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Magenta line - long-term resistance

Blue line - long-term support

Gold price bounced off the weekly cloud support and is now testing the long-term resistance trend line. There are warnings for bulls by the divergence signs, but so far all weekly candles remain bullish, implying trend remains up. The steepness of the rise however should make traders cautious as a sharp pullback should follow.

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Elliott wave analysis of EUR/JPY for January 16, 2018

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Wave summary:

We continue to regard the rally from 133.01 as corrective and is looking for a break below minor support at 135.36 and more importantly a break below support at 135.00 as confirmation that this correction has completed and a new decline 131.11 is developing.

At no point should a break above 136.64 be seen under this count.

R3: 137.37

R2: 136.64

R1: 136.32

Pivot: 135.36

S1: 135.00

S2: 134.80

S3: 134.35

Trading recommendation:

We are short EUR from 134.75 with our stop placed at 136.75. Upon a break below 135.00 we will lower our stop to 136.15.

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EUR/JPY testing major resistance, time to sell

The price is now testing major resistance at 135.91 (Fibonacci retracement, Fibonacci extension, horizontal overlap resistance, bearish divergence) and we expect a strong drop from this level towards 134.84 support (Fibonacci retracement) first.

Stochastic (34,5,3) is seeing major resistance below 95% and a bearish divergence vs price also signals that a reversal is impending.

Sell below 135.91. Stop loss is at 136.38. Take profit is at 134.84.

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USD/JPY breaking out nicely and back to pullback resistance, remain bearish

The price has dropped strongly after breaking out of our major support-turned-resistance line at 111.02 (Fibonacci retracement, horizontal overlap support) and has started to make a pullback to our entry area once again. This is a good opportunity to get into the trade once again for those who missed the first breakout. We look to play the drop to at least 109.49 (Fibonacci retracement, horizontal overlap support, Fibonacci extension).

RSI (55) has made a recent bearish exit which is in line with the bearish exit we're seeing in price.

Sell below 111.02. Stop loss is at 111.97. Take profit is at 109.49.

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Daily analysis of USDX for January 16, 2018

USDX remains under heavy selling pressure, consolidating the price action below the 200 SMA on the H1 chart. The support level of 90.59 is suffering a breakout and such move should help to add more strength to the downside in order to reach the next hurdle around 89.36. The MACD indicator is reaching oversold conditions, calling for a short-term rebound.

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H1 chart's resistance levels: 91.75 / 92.57

H1 chart's support levels: 90.59 / 89.36

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 90.59, take profit is at 89.36 and stop loss is at 91.81.

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Daily analysis of GBP/USD for January 16, 2018

The pair continues to consolidate gains across the board and it's forming a higher high pattern above the 1.3700 mark. Currently, GBP/USD is targeting the resistance zone of 1.3846, where a breakout should open the doors to test the 1.3979 level. To the downside, the nearest support lies at the lower band of Bollinger bands. MACD indicator still favors to the bears in the short-term.

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H1 chart's resistance levels: 1.3846 / 1.3979

H1 chart's support levels: 1.3612 / 1.3526

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 1.3846589, take profit is at 1.3979 and stop loss is at 1.3714.

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BITCOIN Analysis for January 15, 2018

Bitcoin has been quite volatile recently but today it showed some bullish momentum taking the price higher above $14,000 price area after bouncing off the $13,000 support area. Though the bearish bias is still quite intact as the price has found a good support at $13,000 price area, this does indicate further bullish momentum is on the way. The market is currently in an indecisive phase, due to the recent South Korean issue where the decision of closing down the exchanges is still pending. Moreover, the introduction of the new investors and speculators in the market due to Bitcoin Futures trading made it more competitive than ever before which had a direct impact on the gains of the Cryptocurrency. As of the current scenario, the price is being held by the Kumo Cloud resistance after bouncing off the $13,000 support area. The price is expected to correct itself for a while until it breaks above $15,500 price level on the upside or $13,000 price area on the downside, to provide definite trend move in the coming days. As the price remains above $13,000 price area, the bullish bias is expected to continue further.

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The pound pushed the dollar to the point of pain

In January, macroeconomics took a back seat in Forex. The ball is ruled by politics and rumors of normalization. The Bank of Japan announced a decrease in purchases of assets in the QE at the next auction, as the yen began to claim the role of the G10's favorite in 2018. It was worth to note that the ECB, in the minutes of its last meeting, designated a discussion about the limit of the quantitative easing program and the possibility of withdrawing from it earlier, as the EUR/USD pair jumped to 3-year highs. However, all this happens against the background of strong data on US retail sales and core inflation for December...

Large banks like to put the weakness of the US dollar on one of the top spots in the list of factors to strengthen its competitors from the G10. In recent years, the underestimation of the Fed's likelihood of tightening monetary policy with "hawkish" comments of FOMC representatives would have built "bulls" on the "greenback" on the platform. In 2018, everything turned upside down. CME futures only implied a 73% chance of a hike in the federal funds rate in March, and Boston's head Erik Rosengren openly talks about four acts of monetary tightening this year. However, the dollar ended as it did back in 2014 with the status of an outsider, and begins in 2018 in the same position.

In this regard, the success of the pound, which has rushed to the peak since the referendum on the membership of Britain in the EU, looks like a matter of course. BofA Merrill Lynch notes that positive political news makes "bulls" for the GBP/USD pair much faster than the negative "bears." Rumors that the finance ministers of Spain and Holland are prepared to do everything possible in order to keep the UK close to the EU have become a catalyst for the sterling's rally. Later on, officials from Madrid and Amsterdam have expressed full confidence in Brexit negotiators from the European Union, the pound did not fall into a wave of selling. Smoke does not happen without fire.

When all eyes are turned to politics, the economy rests. What is the difference that the GDP of the UK looks the weakest compared to its counterparts in the issuing countries of the G10 currencies, while the dynamics of the yield differential of US and British bonds confirm this? If the economy has reached the bottom, then why should it not be repelled from it?

Dynamics of GDP differentials and yields of US and British bonds

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Source: Financial Times.

Releases of data on inflation and retail sales of the United Kingdom make the sterling one of the most interesting currencies of the week. Slowing CPI and doubts of a pick up in consumer spending, it would seem, could put an end to the Bank of England's desire to raise the repo rate. In fact, not everything is so simple. While inflation will be above 2%, the BoE will remain committed to "hawkish" rhetoric.

Technically, it targets 127.2% of the AB = CD pattern, which increases the risk of a rollback. Nevertheless, while the quotes are above 1.3615, the mood in the GBP/USD pair remains bullish.

GBP/USD, daily chart

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