Daily analysis of GBP/JPY for February 02, 2018

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Overview

The GBP/JPY pair provided a positive signal by surpassing 156.00 level, to settle above 50% Fibonacci correction level. This move indicates its readiness to resume the bullish attack in the short term. We will depend on the stability above the breached barrier to form new support level. Besides, we are waiting until the initial target at 158.75 is achieved, reaching the bullish channel resistance at 160.00. The stability of the moving average 55 below the current trading range as well as stochastic at the overbought level are the factors that assist the bullish scenario by providing the required bullish momentum to achieve the suggested targets. The expected trading range for today is between 156.00 and 158.75

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Daily analysis of Gold for February 02, 2018

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Overview

Gold price is trading sideways in a tight range, settling around 1,345.00. As long as the price is below 1358.40, the bearish scenario will remain valid for today. This scenario is supported by stochastic's current negativity. Please note that breaking 1,335.40 will open the way towards our next main target at 1,316.48. The expected trading range for today is between 1,330.00 support and 1,358.00 resistance.

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Daily analysis of Silver for February 02, 2018

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Overview

Silver price is trading sideways in a tight range, settling below 17.43. Let me remind you that holding below this level will keep our bearish outlook valid. We are waiting until the 17.05 level is broken to reinforce the chances of heading towards our main target at 16.56. Therefore, we still suggest the bearish trend in the short term unless the 17.43 level is breached and holds above it. The expected trading range for today is between 16.95 support and 17.43 resistance.

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Global macro analysis for 02/02/2018:

For the first time since July 2017, the Bank of Japan carried out an unlimited purchase of 10-year bonds, thus reacting to a 0.1% rise in profitability following the global trend of debt sales. In its strategy, the Bank of Japan committed to making sure that the yields of 10-year-olds did not deviate too much from 0.0%. Thus, BoJ reminded everyone that he is still one of the most dovish central banks, so building the position to strengthen the yen, which we witnessed in January, is pointless. However, the pressure of abandoning the dollar was stronger and dominated the falls on USD / JPY. Now, however, trading on the dollar has calmed down a bit, it is more cautious and more limited, but it is not necessarily against it. This in combination with the BoJ action causes that the doubt appears in short positions in USD / JPY and it is quite possible that it will turn into a pressure to push the course up.

Let's now take a look at the USD/JPY technical picture at the H4 time frame. The market has retraced 50% of the previous swing down and is currently trading at the level of 109.84. Nevertheless, the key technical resistance is at the level of 110.32, which is close to the 61% Fibo at the level of 110.29. Only a sustained break out above this level would indicate a down trend reversal.

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NZD/USD Intraday technical levels and trading recommendations for February 2, 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 was 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 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 is 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 February 2, 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 and recently above 1.2075.

Another bullish breakout above 1.2250 is being expressed on the chart. This hinders the bearish momentum allowing bullish advancement to occur towards 1.2750.

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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.

A 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 1.2470-1.2500 confirms a recent bullish flag continuation pattern with projected targets towards 1.2750.

Otherwise, a 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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Global macro analysis for 02/02/2018

USD needs perfect data composition if it wants to reverse the pessimistic market sentiment towards it. Employment increase by 148k in December was disappointing not only with the consensus (190k), but also with regard to 252k in November and 211kin October. Strong readings in previous months were mainly dictated by the reconstruction of jobs after the "hurricane" of September, so difficult to sustain. In addition, individual information from the economy suggests that due to the pre-holiday shopping season stores in November increased employment, as a result, December data were understated. Stabilization of the situation should allow reflection in January. Consensus for 180k it is only slightly above the average for the last 6 months (166k). The ADP report already published indicated an increase in employment in the private sector by 234k, which indicates a positive surprise at the Friday's reading. On the other hand, air temperatures in January were lower than average and some states experienced weather anomalies and large snowfall. This could disrupt the activity in the construction sector, thereby understating the employment reading.

Weaker data can be read as the first signs of labor market deterioration, which will be a prelude to the economic slowdown. This would mean that the Fed is running out of time to continue monetary policy normalization and the market has no reason to raise expectations for the number of interest rate hikes in this cycle.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame before the NFP Payrolls figures are released. The market is still inside of the horizontal zone between the levels of 88.45 - 89.62 and only a valid breakout above or below one of this levels will give a clearer indication of the potential future move. The next technical support in case of a downside breakout is seen at the level of 87.60 and in a case of a rally the next technical resistance is seen at the level of 89.62.

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BITCOIN Analysis for February 2, 2018

The bearish pressure on bitcoin has been quite unstoppable and impulsive, so BTC is expected to decline deeper to $7,500 before showing any bullish intervention along the way. The support area of $9,200 was pretty strong to hold the price but it failed miserably as the price is currently residing below $8,500 price area. Currently, the decrease in bitcoin's value seems to be based on the market sentiment rather than any external fundamental forces. After the South Korean issue, India has also declared illegality of crypto trading which supported the bears to take the price much lower. The crypto industry is still going under some regulation pressure from various countries which resulted to less liquidity and a drastic fall in price. As for the current scenario, the price is expected to reach $7,500 price area. Then, the price is likely to bounce higher towards $10,000 and later towards $12,000. As the price remains above $7,500 price area with a daily close, the bullish bounce off the level is expected for the time being.

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Analysis of Gold for February 02, 2018

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Recently, Gold has been trading sideways at the price of $1,344.00. Anyway, according to the 30M time – frame, I found a successful rejection of strong resistance cluster at the price of $1,347.00, which is a sign that buying looks risky. I also found a bearish momentum, which is another sign that sellers are in control. My advice is to watch for potential selling opportunities. The downward targets are set at the price of $1,337.00 and at the price of $1,335.00.

Resistance levels:

R1: $1,354.15

R2: $1,359.48

R3: $1,367.90

Support levels:

S1: $1,340.35

S2: $1,331.92

S3: $1,326.57

Trading recommendations for today: watch for potential selling opportunities.

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Bitcoin analysis for February 02, 2018

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The Bitcoin (BTC) has been trading downwards. As I expected, the price reached my second target at the level of $8.300. Responding to strong market demand, AMD is planning to increase production of graphics cards which are currently in short supply. The recently launched RX Vega GPUs have virtually disappeared from shelves, with crypto mining gaining popularity among investors and enthusiasts. The revenue from the company's Graphics Division has reached almost a billion dollars in the last quarter of 2017. Recognizing the shortages, AMD is trying to satisfy both gamers and miners. Technical picture looks very bearish.

Trading recommendations:

According to the 1H time - frame, I found a broken pennant pattern in the background, which is a sign of weakness. I also found a strong bearrish momentum and my advice is to watch for potential selling opportunities. The next downward target is set at the price of $6.865.

Support/Resistance

$8.839 – Intraday resistance

$8.070– Intraday support

$6.865 – Objective target

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GBP/USD analysis for February 02, 2018

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Recently, the GBP/USD has been trading sideways at the price of 1.4205. Anyway, according to the 30M time – frame, I found a broken bullish channel in the background, which is a sign that sellers are in control. I also found a hidden bearish divergence on the stochastic 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 1.4188 and at the price of 1.4115.

Resistance levels:

R1: 1.4308

R2: 1.4355

R3: 1.4427

Support levels:

S1: 1.4188

S2: 1.4115

S3: 1.4070

Trading recommendations for today: watch for potential selling opportunities.

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Bitcoin analysis for 02/02/2018

The Government of India, although often not very positive about Bitcoin and other cryptocurrencies, such activities have not helped to curb their popularity. In his annual speech, Finance Minister Arun Jaitley again explained that the government intends to stop the use of digital currencies in India, claiming that the South Asian country does not recognize Bitcoin and other coins as legal tender: "The government does not recognize Bitcoin or other cryptocurrencies as a legal tender and will take all measures to limit their use in financing illegal activities or any part of payment systems."

However, Jaitley did not say anything about the ban on trade. In fact, he claims that the government will instead encourage the use of Blockchain technology in traditional payment systems, showing that the Indian government does indeed see the value of cryptocurrencies, but only as legal tender. Most likely, Indian exchanges will be legal and citizens will have no problem buying and selling cryptocurrencies.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market violated the 161% Fibo extension of the wave A at the level of $8,600 and currently is testing the lower trendline dynamic support around the level of $8,000. If this level will not make Bitcoin to bounce towards the level of $9,100 then the next projected target is seen at the level of $6,742.

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Technical analysis of USD/CHF for February 2, 2018

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Overview:

  • The USD/CHF pair is still trading in downwards from the spot of 0.9377/0.9333. The price of 0.9377 represents the first resistance on the H1 chart. The pair fell from the levels of 0.9377 and 0.9333 to the bottom around 0.9393. Today, the first resistance level is seen at 0.9333 and 0.9377 followed by 0.9432, while daily support is seen at the levels of 0.9289 and 0.9230. According to the previous events, the USD/CHF pair is still trapping between the levels of 0.9333 and 0.9230. Hence, we expect a range of 147 pips in the coming hours. The first resistance stands at 0.6790, for that if the USD/CHF pair fails to break through the resistance level of 0.9377, the market will decline further to 0.9289. This would suggest a bearish market because the RSI indicator is still in a negative area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 0.9230 in order to test the second support (0.9230). On the other hand, if a breakout takes place at the resistance level of 0.9377, then this scenario may become invalidated. Also, it should be noted that the stop loss should be placed above the area of 0.9380.
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Trading plan for 02/02/2018

The US Dollar is strengthening in anticipation of the US labor market report, finding additional support in higher yields on debt. AUD and NZD are losing the most, AUD / USD strongly drops towards Thursday's lows at 0.8000 and NZD / USD bounced from 0.74 and now it is at 0.7360. Futures contracts on the SP500 are 0.1% below the line and below 2820 points Chinese indices are on a modest plus, but for example in Tokyo, weak moods dominate.Oil is climbing last week's peaks.

On Friday 2nd of February, the event of the day is the US Non-Farm Employment Change, Unemployment Rate, Average Hourly Earnings and Participation rate data release in the afternoon, but the market participants should keep an eye on Construction PMI from the UK and Producer Price Index data from the Eurozone.

EUR/USD analysis for 02/02/2018:

The US Dollar gains on all main currencies on Friday, although it only triumphs the most in relation to AUD and JPY on a weekly time frame. The market is cautiously optimistic about the US labor market report that we will receive this afternoon. The highlight NFP Payrolls are expected at the level of 181k (141k prior), Unemployment Rate should remain stable at 4.1% and Average Hourly Earnings should decrease slightly from 0.3% to 0.2% on monthly basis.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market is about to test the last swing high at the level of 1.2539 in overbought market conditions. The technical support is seen at the level of 1.2474 and the next is seen at the level of 1.2384. Any violation of the lower channel line will be the first confirmation that the top is in and lower prices should be expected.

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Market Snapshot: AUD/USD breaks lower

The price of AUD/USD has broken out of the upward channel and now is testing the technical support at the level of 0.8000.The downward pressure remains strong as the momentum indicator is still below the level of fifty, so the lower levels are expected. The next technical support is seen at the level of 0.7934.

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Market Snapshot: DAX sell-off continues

The price of German DAX index is penetrating the lower levels of the zone as it broke below the key support at the level of 12,953. The next target for bears is seen at the level of 12, 782. The untested technical resistance level is seen at 13, 136.

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Technical analysis of NZD/USD for February 02, 2018

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Overview:

  • Pivot point : 0.7305.
  • The NZD/USD pair is rising from the level of 0.7305 in the long term. It should be noted that the support is established at the level of 0.7305 which represents the daily pivot point on the H4 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 0.7305. So, buy above the level of 0.7305 with the first target at 0.7364 in order to test the daily resistance 1.
  • Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). This suggests that the pair will probably go up in the coming hours.
  • If the trend is able to break the level of 0.7364, then the market will call for a strong bullish market towards the objective of 0.7437. The level of 1.4250 is a good place to take profits today.
  • However, in case a reversal takes place and the NZD/USD pair breaks through the level of 0.7305 (pivot point), a further decline to 0.7202 can occur. It would indicate a bearish market.
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Ichimoku cloud indicator analysis of USDX for February 2, 2018

The Dollar index continues to trade in a bearish trend. Price got rejected at the short-term resistance yesterday and is making new lows. I expect the January 25th low to be broken soon. Maybe today, maybe next week after a bounce, but overall the chances favor the index to go towards 87.

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Red lines - bearish channel

Black rectangle - resistance

The Dollar index remains in a bearish trend. Price is below both the tenkan- and kijun-sen indicators. Price got rejected at the cloud resistance yesterday and made new lower lows. Support is at 88.50. Resistance is at 89.20. Short-term trend changes only above 89.60.

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Black line - long-term support

The monthly chart of the Dollar index shows it inside the monthly Kumo (cloud) challenging the long-term black trend line support. This support trend line is at the same level with the lower cloud boundary at 86.80. Price is also at the 61.8% Fibonacci retracement of the rise from 2013. This is long-term support area. Short-term traders should remain bearish as long as price is below 89.60, while longer-term traders should be patient for a bounce soon.

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Ichimoku cloud indicator analysis of gold for February 2, 2018

Gold is holding above support although it tested $1,336 yesterday, now it is trading above $1,347 and is challenging cloud resistance. Trend is about to turn bullish again in the 4-hour chart as price is about to break above the cloud. Today's NFP announcement is expected to provide some volatility in Gold prices.

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Black rectangle - resistance

Green rectangle - support

Gold price is inside the 4-hour Kumo (cloud). Trend is bullish in the small time frames with an upward slope. Resistance is at $1,350. Support is at $1,345 and next at $1,334. With Non-Farm Payrolls announced today, we could expect a pullback towards support to validate it and then bounce strongly.

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Yesterday's daily close was above the tenkan-sen indicator. This is a bullish sign. Price remains below the long-term resistance at $1,350-55. A rejection today at $1,355 and a move below $1,334 will open the way for a push lower towards $1,323 or lower. Respecting support at $1,334 could produce a bounce and a new upward move to new highs.The material has been provided by InstaForex Company - www.instaforex.com

Trading plan 02/02/2018

Trading plan 02.02.2018

General picture: The market is waiting for the Non-Farm Payroll report

The market remains in a state of overall growth against the dollar.

However, there is a strong stop on the Japanese yen. While the pound rises sharply but did not allow to join the growth.

The Euro seems ready to bounce upwards.

Buy the Euro with the target of breaking through the levels 1.2540 and up to 1.2620.

Pound: To sell the pound is too early and clearly very risky.

There is still no good point to impose buying.

For pound - simply observe.

Euro - should purchase from 1.2480

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* The presented market analysis is informative and does not constitute a guide to the transaction.

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