Daily analysis of GBP/JPY for January 26, 2018

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Overview

The GBP/JPY pair failed to surpass 50% Fibonacci correction level at 155.90. Now the conditions for intraday sideways trading have been created. The stability of this barrier will push the price to start trading with a negative bias. It would be a good idea to set target levels at 153.50, followed by 152.85. On the other hand, a new bullish attack needs to breach the current barrier to pave the way for more positive targets by reaching 157.45 followed by 159.80. The expected trading range for today is between 154.80 and 157.45

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Daily analysis of USD/JPY for January 26, 2018

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Overview

The USD/JPY pair bounced clearly after touching the bearish channel's support that appears on the chart. The pair aims to test this channel's resistance. The resistance is met by the EMA50 to add more strength to it. At the same time, stochastic is losing the positive momentum clearly and approaching the overbought areas. Therefore, these factors support the chances of a further bearish trend in the short term. Please note that breaking 109.05 will open the way to head towards our next main target at 107.28, while holding below 110.15 represents the key condition to continue the expected decline. The expected trading range for today is between 108.25 support and 110.15 resistance.

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Daily analysis of Silver for January 26, 2018

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Overview

Silver price is crawling upwards gradually since this morning to move above 17.43 level, which supports our bullish overview for the short term. This outlook is also supported by the EMA50 that carries the price from below, waiting to target 18.30 level as the next main station. Let me remind you that the expected rise conditions the stability of the daily close above 17.43. The expected trading range for today is between 17.20 support and 17.70 resistance.

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Daily analysis of Gold for January 26, 2018

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Overview

Gold has been trading with an upward bias since morning to start testing 1,357.50 level. The price needs to breach this level to ease the mission of a further overall bullish trend. So the price is moving inside the bullish channel in a regular manner. In general, we still suggest the bullish trend for today as long as the price remains stable above 1,339.60, supported by the EMA50 and stochastic positivity. Let me remind you that we are waiting for the target level of 1,375.00, followed by 1,404.00 levels as the next main station. The expected trading range for today is between 1,340.00 support and 1,370.00 resistance.

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Euro hurries to live

Recently, financial markets have reacted more to words than to real facts. It was worthwhile for the US Treasury Secretary Steven Mnuchin to talk about the positive impact of a weak currency on trade, as the pair EUR / USD rewrote a three-year high. It was worthwhile for Donald Trump to show respect for the policy of a strong dollar, as the euro lost some of the conquered positions. And what's the difference that under the influence of the fiscal stimulus, the US GDP can accelerate to 3%, that the yield of treasury bonds is storming perennial peaks, the Fed continues the cycle of tightening monetary and credit policy, and macrostatistics in the States is not tired of pleasing the eye?

Unlike the representatives of the American administration, Mario Draghi could not find the right words to stop the "bulls" in the pair EUR / USD. Yes, he used the autumn bazooka as a reference that the uncertainty caused by the increased volatility of the euro is subject to control by the ECB. Yes, he expressed surprise at the fact that some investors are waiting for rates to increase this year. Yes, he criticized the words of Steven Mnuchin. But in fact, he did not say anything that could surprise the markets. Maybe he did not want to? Unlike the growth of the single European currency against the US dollar, its trade-weighted rate remains stable. This is helped by the strengthening of the British pound.

According to Danske Bank, the pair EUR / USD can be seen at around 1.29 during 2018, as there is no reason to assume that the demand for European assets will fall. The Bank believes that the strong positions of the euro are due to the balance of payments. A stable high surplus of trade is exacerbated by the inflow of real and portfolio investments. I, in turn, want to add that the decrease in the inverse correlation between the main currency pair and the Old World stock indices shows the disinterest of foreign investors to hedge the risks. They seriously expect to earn both on the growth of the stock market, and on strengthening the euro.

Dynamics of EuroStoxx and EUR / USD

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Source: Bloomberg.

In general, the stability of the uptrend in the pair EUR / USD does not cause me any doubts. Confuses only one thing. Events are developing too quickly. The scenario, which was to be realized during the year, was released in January. Rumors of an early normalization of the ECB's monetary policy instead of the second-third quarter arose after the publication of the December meeting of the Governing Council and became a catalyst for the euro's growth to three-year highs.

The rate that the tax reform will disperse GDP and inflation, which, in turn, will force the Fed to aggressively raise the rate on federal funds and lead to a strengthening of the dollar, does not work. More precisely, it works only until the last point. The market stopped paying attention to the Fed, and the yield differential of US and German bonds reached its highest level in the last 18 years. In this situation, the pair EUR / USD was to trade near 0.92.

Technically, the update of the January maximum will allow to count on the implementation of the target by 200% on AB = CD. On the contrary, falling below the support of 1.236 will increase the risks of correction development.

EUR / USD, daily chart

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Global macro overview for 26/01/2018

The fourth quarter UK GDP data has beaten the market expectations as economic growth came in at the level of 0.5% while he market participants expected a 0.4% advance only. However, the estimate put growth for the whole of 2017 at 1.8%, lower than the previous year's figure of 1.9%. The Office for National Statistics said 1.3% growth in manufacturing had pushed the figure higher, although the construction sector contracted for the third quarter in a row, falling 1.0% The services and production sectors rose 0.6%, while agriculture fell 0.4%.

A growth in supply potential and wages seem to be picking up momentum again, so markets should more fully price in the risk of two UK bank rate rises this year. Moreover, certainly fair to say the UK economy has performed much better than many feared in the aftermath of the Brexit vote.

The GDP is an indicator for broad overall growth in the United Kingdom. Robust UK GDP growth signals a heightened level of economic activity, and therefore a high demand for currency. The economic expansion also raises concerns about inflationary pressure, which generally prompts monetary authorities to increase interest rates. This means that positive GDP readings are generally bullish for a given currency, while negative readings are bearish.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. The market has broken through 261% Fibo Expansion at the level of 1.4277 and made a local high at the level of 1.4344 before reversing 270 pips towards the level of 1.4081. This level, together with the upper channel line, is now the key support for the price Please notice, the market is still trading in overbought conditions, so another leg down towards the support is expected.

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Global macro overview for 26/01/2018

Thursday's decision of the European Central Bank is certainly not a breakthrough. The ECB decided to leave the main interest rate unchanged at the level of 0.0%, together with Deposit Facility Rate at -0.40% and Marginal Lending Facility rate at 0.25%.

The last leaks presented by the Reuter agency gave a shadow of a chance to remove the so-called "easing bias", although in the published statement a reference was made to the possibility of adjusting the loosening parameters depending on the economic outlook. A solid dose of surprise was assured by the words of ECB President Mario Draghi, which were definitely less dovish than could be expected. During the press conference of the President of the European Central Bank (ECB) Mario Draghi, accompanying the decision to leave monetary policy parameters unchanged at the first meeting in 2018, there were exceptionally many references to the exchange rate. In a straightforward way, Draghi referred to the Wednesday words of the US secretary of the treasury, S. Mnuchin, about the Dollar, pointing out that although the appreciation of the Euro partly results from the economic situation of the Eurozone, it is also the effect of "other comments". He remarked that this is inconsistent with the arrangements not to affect the behavior of currencies through verbal interventions. Some representatives of the Governing Board expressed their concern about the words of Mnuchin. In M. Draghi's opinion, the increased volatility of the Euro exchange rate is a factor threatening the revival and return of inflation to the target. The ECB is experiencing strong economic growth, as well as signs of a rise in wage pressure, which increases the conviction that the price growth will accelerate in the medium term. In the coming months, the core CPI will remain stable and then rise. Still, according to the ECB, a high degree of stimulation on the part of monetary policy is necessary. The point is to be sure that the return of inflation is permanent. "You still can not declare victory," said M. Draghi. Purchase of assets will last until September, and if necessary, longer. There is a strong determination in the ECB for a full implementation of the QE program consistent with earlier announcements.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. A series evasive answers during the ECB press conference about the threats resulting from the situation on the currency market has been treated as an incentive to buy, which for a moment allowed to place EUR/USD on the higher rate. Nevertheless, after the Munchin comments, the market suddenly dropped towards the level of 1.2363. During the night the situation reversed and EUR/USD has managed to retrace almost 78% of the recent drop. Please notice, that according to the Elliott Wave Principle, we can still expect one more wave to the downside in order to complete the correction.

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Intraday technical levels and trading recommendations for NZD/USD for January 26, 2018

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Daily Outlook

In July 2017, an atypical Head and Shoulders pattern was expressed on the depicted chart which indicated upcoming 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 were expressed around the recent low (0.6780). An inverted Head and Shoulders pattern was expressed around these price levels.

The price zone of 0.7140-0.7250 (prominent Supply-Zone) failed to pause the ongoing bullish momentum. Instead, a bullish breakout above 0.7250 was expressed on January 11.

That's why, the current bullish movement extended towards the price levels of 0.7320 and probably 0.7390.

A quick bullish movement was expected towards the depicted supply zone (0.7320-0.7390) where evident bearish rejection and a valid SELL entry are still expected.

Trade Recommendations:

Conservative traders should be looking for a valid SELL entry anywhere around the depicted supply zone (0.7320-0.7390).

S/L should be located above 0.7450. T/P levels should be located around 0.7230, 0.7150, and 0.7090.

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Intraday technical levels and trading recommendations for EUR/USD for January 26, 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 1.2200 where recent evidence of bearish rejection was expressed (Note the Monthly candlestick of last September).

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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, evident bullish breakout was expressed towards the price level of 1.2100 where the depicted Head and Shoulders reversal pattern was expressed.

Bearish target for the depicted Head and Shoulders pattern extends towards 1.1350. However, the market failed to apply significant bearish pressure against the mentioned zone (1.1415-1.1520).

Instead, In November, evident bullish recovery was manifested around the price zone of 1.1520-1.1415.

This hindered further bearish decline which allowed the current bullish pullback to occur towards the price level of 1.2100 which failed to pause the ongoing bullish momentum as well.

Daily persistence above 1.2150-1.2200 confirms a bullish flag continuation pattern with projected targets towards 1.2500.

Otherwise, bearish pullback may occur towards 1.2070 if a bearish breakout below 1.2160 is achieved on a daily basis (low probability).

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USD/JPY analysis for January 26, 2018

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Recently, the USD/JPY has been trading upwards. The price tested the level of 109.77. Anyway, according to the 30M time – frame, I found a confirmed head and shoulders pattern, which is a sign that buying looks risky. I also found a rejection of pivot resistance, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 108.70 and at the price of 108.00.

Resistance levels:

R1: 109.90

R2: 110.40

R3: 111.11

Support levels:

S1: 108.70

S2: 108.01

S3: 107.50

Trading recommendations for today: watch for potential selling opportunities.

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Bitcoin analysis for January 26, 2018

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The Bitcoin (BTC) has been trading downwards. As I expected, the price tested the level of $10.275. Bitconnect is facing litigation from six individuals accusing the company of operating a Ponzi scheme in addition to numerous violations of securities laws. The six plaintiffs collectively invested approximately $771,000 USD into Bitconnect, and are seeking a recourse following the sudden removal of the company's lending platform that immediately led to a more than 90% loss in the value of Bitconnect tokens. The technical picture looks bearish.

Trading recommendations:

According to the 30M time - frame, I found a broken bearish pennant pattern, which is a sign that sellers are in control. I also found a confirmed hidden bearish divergence on the moving average oscillator, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of $9.855, $9.350 and at the price of $8.160.

Support/Resistance

$11.616 – Intraday resistance

$10.275– Intraday support

$9.855 – Objective target 1

$9.350 – Objective target 2

$8.160 – Objective target 3

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Daily analysis of major pairs for January 26, 2018

EUR/USD: The EUR/USD is in a bullish bias. The EMA 11 is above the EMA 56, and the William's % Range period 20 has always been around the overbought region (even when it temporarily goes out of the overbought region, it would go into that region again). There is a Bullish Confirmation Pattern in the market and price is going to move further northwards.

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USD/CHF: This pair has gone downwards by 280 pips this week, testing the support levels at 0.9300. Price has bounced upwards and become quite choppy, but the bearish movement would continue, and so, the demand level at 0.9300 would be tested again, and it would be breached to the downside.

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GBP/USD: This currency trading instrument trended strongly upwards this week, reaching the distribution territory at 1.4300. There was a pullback yesterday, but in the context of an uptrend. This means the market would go further upwards from here, after proffering good opportunities to go long at better prices.

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USD/JPY: The USD/JPY pair trended strongly downwards this week, having gone down by 210 pips. Since January 8, the market has shed about 420 pips. The demand level at 108.50 has been tested, before the current upwards bounce. Price has been coming downwards again, to test the demand level at 108.50, and to break it to the downside.

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EUR/JPY: This is a sideways market, which oscillates between the supply zone at 136.50 and the demand zone at 135.00. The market is neutral in the short-term, but bullish in the long-term. Further sideways movement could bring out a neutral bias in the long-term. It is OK to stay away from this market right now.

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Analysis of Gold for January 26, 2018

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Recently, the Gold has been trading downwards. As I expected, the price tested the level of $1,342.20 (resistance became strong support). Since the Gold is still in upward trend and there is a successful rejection of strong support in the background, my advice is to watch for potential buying opportunities. The upward target is set at the price of $1,365.55 (yesterday's high).

Resistance levels:

R1: $1,362.07

R2: $1.375.87

R3: $1,385.67

Support levels:

S1: $1,338.47

S2: $1,328.67

S3: $1,314.87

Trading recommendations for today: watch for potential buying opportunities.

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Trading plan 01/26/2018

Trading plan 01/26/2018

The overall picture: The Euro is slowing down, the pound is growing.

The ECB left the policy unchanged, no signals for a change in the direction of tightening.

The representative of Britain in Davos expressed a clear joy from the growth of the pound. The road to the top is open.

The dollar falls to the yen and franc.

The gold has reached an important level of resistance on the way up.

The euro is in the range of 1.2300 - 1.2540.

The pound is on the way up, but the entry points are now very unfavorable, you need a strong pullback.

We are buying from 1.3910.

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BITCOIN Analysis for January 26, 2018

Bitcoin is struggling to sustain the bullish gain in the bearish market trend which has been quite impulsive recently. The volatility still exists in the market but the bears seem to set the tone in the market currently. Amid a lack of news on bitcoin from South Korea, the bitcoin market is going through a quiet phase that resulted to less liquidity and more bearish momentum in the process. As for the current scenario, the price is expected to reach the support area between $9,000 and $10,000, from where the price is expected to bounce higher with a target towards $15,500 price area. On the other hand, the current structure of the market is forming a pre-breakout structure which is indicating the probability of breaking below $9,000 in the future. If that happens, the price is expected to proceed lower towards $7,500 price area in the coming days. As the price remains below $12,000 price area, the bearish bias is expected to continue further.

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Fundamental Analysis of AUDJPY for January 26, 2018

AUD/JPY has been quite impulsive with the bearish gains after bouncing off the 89.00 resistance area recently. AUD has been the dominant currency in the pair for a few months now, but recently, with better economic reports, JPY is showing good gains along the process. Today, for the observance of Australia Day, no economic reports or events are taking place for which JPY had the full potential to dominate AUD, but failed to do so due to mixed economic reports. Today, JPY National Core CPI report was published unchanged at 0.9% as expected, Tokyo Core CPI report was published with a slight decrease to 0.7% which was expected to be unchanged at 0.8%, and SPPI report was also published unchanged at 0.8%. Moreover, Monetary Policy Meeting Minutes were neutral in nature having no short-term impactful policy decisions to effect the current market momentum. As of the current scenario, JPY gains are expected to slow down due to recent mixed economic reports which did not show much of an improvement for the currency. Until AUD comes up with any high impact economic reports in the coming days, JPY is expected to have stable gains but with slower momentum.

Now let us look at the technical view. The price is residing at the edge of dynamic level of 20 EMA between the levels from 87.30 to 89.00. The current residing area of the price has proven to be an area of traffic in the earlier months and for the current scenario, a daily close below 87.30 is expected to open the doorway for further bearish move in the pair with target towards 84.50 area.

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Bitcoin analysis for 26/01/2018

Brisbane Airport (BNE) in Australia will soon become the first cryptocurrency terminal, according to local media reports. The airport cooperates with local and international companies to make the entire airport friendly to customers with cryptocurrencies, along with shops, cafes and restaurants accepting Bitcoin, Ethereum and Dash. The transition to digital currencies makes sense because the number of cryptographic investors is growing. According to Roel Hellemons, Director General for Strategic Planning and Development: "Many people around the world are making investments in cryptocurrencies, and many of them travel around the world, so it is worth offering new currency opportunities at our terminals."

The airport will cooperate with TravelbyBit, a cryptocurrency payment system, to enable travelers also to buy cryptocurrencies. This move emphasizes Australia's growing heat towards cryptocurrencies and digital payment methods, despite the negative prospects from other countries. Thanks to the recent ban in China and the threats from South Korea, the openness of Australian policy will come as a welcome change for cryptographic investors.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market was unable to break out above the weekly pivot at the level of $11,440 and now the price is dropping towards the local support at the level of $9,196. It all depends on how the market will react to this level, will it drop lower or try to bounce. In a case of a drop below, the next target is seen at the level of $8,783.

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Trading plan for 26/01/2018

President Trump's words about the strength of the US Dollar gave fuel to strengthen the currency, but the Asian session brings another retreat. GBP, AUD and NOK are leading the rise; EUR / USD returns at 1.2450. Stock markets are undecided, Japanese Nikkei 225 fell 0.16% (under the pressure of a USD / JPY pull-back), but in China, the indexes are growing - Hang Seng + 1.5%.

On Friday 26th of January, the event calendar is quite busy with important news releases, so the market participants should keep an eye on M3 Money Supply data from the UK, Index of Services and Preliminary GDP from the UK, Consumer Price Index data form Canada and Durable Goods Orders and Preliminary GDP from the US.

EUR/USD analysis for 26/01/2018:

During an interview for CNBC in Davos, US President Trump said he ultimately wanted to see a strong US Dollar, and the earlier comments of the secretary of the treasury Mnuchin were "out of context". After these words, the market underwent mass closing of short positions in USD, pushing USD / JPY to 109.75, and EUR / USD fell to 1.2360.

Let's take a look at the EUR/USD technical picture at the H4 time frame. The market has made a higher high at the level of 1.2538 and felt towards the technical support at the level of 1.2361. Nevertheless, the price has managed to rebound quickly and now is trading higher around the level of 1.2487, threating to test the recent high. The momentum is still above its fifty level and the market is bouncing from the oversold territory. Any breakout above the level of 1.2538 would suggest the uptrend is being continued.

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Market Snapshot: USD/JPY bounces from lows

The price of USD/JPY has bounced from the lows at the level of 108.50 and managed to retrace 38% of the previous swing down. The Doji candle around this level has confirmed a weakness of the market and price has dropped again. Please notice, the market is trading in oversold conditions, so the bounce might continue higher.

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Market Snapshot: Gold is struggling with the resistance

The price of Gold has hit the level of $1,365 and then dropped towards the lower channel line at the level of $1,344. The market conditions are still overbought, but the momentum is trading above its fifty level. Only a violation of the lower channel line around the level of $1,340 would change the uptrend to downtrend, otherwise, the market will try to test the recent high again.

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Ichimoku cloud indicator analysis of USDX for January 26, 2018

The Dollar index has reached our 88.50 target and bounced strongly towards 89.50 yesterday. However, the resistance is very strong there and we have rejection signs. Trend remains bearish as long as price is below yesterday's lows.

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The Dollar index remains below the 4 hour Kumo (cloud). Trend is bearish. Price is testing the 4 hour Kijun-sen (yellow line indicator) which is now support. A higher low and a move above yesgterday's high would be a very bullish sign and a reversal confirmation. But first bulls need to break above 89.30 which is the lower boundary of the Kumo (cloud).

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Black line -long-term support

On a weekly basis, the Dollar index has reached the 61.8% Fibonacci retracement of the rise from 2013. Trend is clearly bearish. Important support is at 87 where the black upward sloping trend line is found. I expect the Dollar index to reverse towards 92-9, as I believe that the decline from 103 is near its end.

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Ichimoku cloud indicator analysis of gold for January 26, 2018

Gold price reversed from $1,266 level towards $1,340 to back test the break out level as expected. So far, the back test was successful as price is bouncing strongly back above $1,355.

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Magenta line - long-term resistance

Gold price remains in a bullish trend. Kijun-sen support at $1,346 was respected in the 4 hour chart. Price remains above the Ichimoku cloud. Support is at $1,342 now, and resistance is at $1,365. Break above $1,365 and we go towards $1,389. Break support and we go to $1,330-20.

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Magenta line -long term resistance

Blue line - long-term support

On a weekly basis, Gold is breaking out. Gold is above the long term resistance and remains bullish in all time frames. A weekly close below $1,332 would only cancel the bullish trend and give a reversal signal.

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Technical analysis of USD/JPY for January 25, 2018

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Our downside targets which we predicted in yesterday's analysis have been hit. USD/JPY is under pressure. Though the pair made a rebound, it is still capped by a declining 50-period moving average. The upside potential should be limited by the key resistance at 109.60. Even though a continuation of technical rebound cannot be ruled, its extent should be limited.

To conclude, as long as 109.60 is not surpassed, look for another drop with targets at 108.00 and 107.45 in extension.

Alternatively, if the price moves in the opposite direction, a long position is recommended above 109.60 with a target of 1110.10.

Chart Explanation: The black line shows the pivot point. The current price above the pivot point indicates a bullish position, while the price below the pivot point is a signal for a short position. The red lines show the support levels and the green line indicates the resistance level. These levels can be used to enter and exit trades.

Strategy: SELL, stop loss at 109.60, take profit at 108.00.

Resistance levels: 110.10, 110.55, and 110.75

Support levels: 108, 107.45, and 107.

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Technical analysis of USD/CHF for January 25, 2018

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USD/CHF is under pressure and expected to prevail the downside movement. The pair is still heading downward, and is likely to post a new decline. The falling 50-period moving average should maintain the strong selling pressure on the prices. Last but not least, the relative strength index is below its neutrality area at 50, and calls for a new pullback.

To sum up, as long as 0.9465 is not surpassed, look for 0.9240 and 0.9195 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 point indicates a short position. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Strategy: SELL, stop loss at 0.9465, take profit at 0.9240.

Resistance levels: 0.9500, 0.9530, and 0.9540

Support levels: 0.9240, 0.9195, and 0.9140.

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Technical analysis of GBP/JPY for January 25, 2018

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All our targets which we predicted in previous analysis have been hit. The pair posted a rebound from the rising 50-period moving average. The key support at 154.75 should limit the downside potential. Even though a continuation of consolidation cannot be ruled out, its extent should be limited.

To sum up, above 154.75, look for a new challenge with targets at 156.10 and 156.45 in extension.

Alternatively, if the price moves in the direction opposite to the forecast, a short position is recommended below 154.75 with the target at 156.10

Strategy: BUY, stop loss at 154.75, take profit at 156.10

Chart Explanation: the black line shows the pivot point. The price above the pivot point indicates long positions; and when it is below the pivot 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: 156.10, 156.45, and 157.00.

Support levels: 154.10, 153.70, and 153.00

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