Daily analysis of EUR/JPY for February 27, 2018

EUR/JPY

On this cross, the southward journey may soon be over this week, which could have been harbingered by the slight rally in the context of a downtrend (which happened on February 26), and which would eventually remove the current Bearish Confirmation Pattern in the market. The outlook on JPY pairs is bullish for this week, and for the month of March.

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When the demand zones at 131.50 and 131.00 are tested – especially the demand zone at 131.00, the recent bearish bias would receive more emphasis. A movement above the supply zones at 132.50 and 133.00 would result in a threat to the bearishness in the market.

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Daily analysis of USD/JPY for February 27, 2018

USD/JPY

The market was bearish in the long-term. On Monday, nothing significant happened except a tight, sideways movement. There are demand levels at 106.50 and 106.00, which would impede bearish movements and they would eventually help bring about a bullish reversal, which is expected to take place before the end of this week.

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When a breakout happens, it may be in favor of bulls, as price goes towards the supply levels at 107.00, 107.50 and 108.00. This is what can bring about a Bullish Confirmation Pattern in the 4-hour chart, pointing to a northwards propensity.

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Daily analysis of USD/CHF for February 27 2018

USD/CHF

The market did nothing significant on Monday, and thus the bias on the market is neutral in the short-term (while the medium-term bias is bearish). It is expected that this short-term neutral bias would continue for some time until there is a breakout in the market, which would most probably favor bears.

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There are resistance levels at 0.9400 and 0.9450 and there are support levels at 0.9300 and 0.9250. Once the support level at 0.9250 is breached to the downside, the bias on the market would turn bearish. A movement above the resistance level at 0.9450 would reveal the bullish intent.

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Global macro overview for 27/02/2018

In his speech in the European Parliament, The European Central Bank (ECB) president Mario Draghi demanded a central role in the supervision of clearing central counterparties (CCPs), yet struck a more flexible tone than some European politicians who want the multi-trillion Euro clearing industry to be removed from London City. Draghi made it clear that he sees Brexit as a reason for the EU to speed up the pact of regulations which will give the ECB more power over clearing houses in London financial center and beyond. Draghi said he wants to "stress the crucial importance of finalizing the adoption of key pieces of EU legislation, such as Emir II, well in advance of Brexit, in order to be prepared for all possible contingencies, including a no-deal scenario." The latest update of the European Market Infrastructure Regulation (Emir II) would allow the ECB to directly regulate third-country clearinghouses, with the possibility of stricter rules or even forcing systemically important firms to move their operations to the Eurozone. The rules are currently being discussed in the European Parliament and could pass as soon as the end of the year.

London City is the biggest in the world financial center, where companies use derivatives to hedge against the risk of a whole host of market movements, such as changes in interest rates or foreign exchange, and the vast majority of euro-denominated banking clearing currently taking place in the UK. It would be a huge loss for the London and the whole UK if this center would have been moved in one of the European cities like Frankfurt, Brussel or even Warsaw.

Let's now take a look at the GBP/USD technical picture at the H4 timeframe while the London is still the world financial center. The market is still trading below the golden trend line in a narrow range between the levels of 1.3921 - 1.3986. The momentum is hovering around its fifty level as well, which indicates more sideways price action.

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Global macro overview for 27/02/2018

The currency market shows no major signs of life, and investors focus on the Fed Chair's J. Powell afternoon speech. The text of Jerome Powell's speech will be published at 03:30 pm GMT and the meeting in front of the Financial Services Commission will start at 05:00 pm GMT. The main attention, however, will be the question session, which will start after the presentation of the statement. The market will look for signals whether the Fed is closer to three or four hikes this year and whether it intends to be more aggressive in the next period. So far, Powell has presented neutral views, so turning to one of the camps (hawks/doves) will be an important signal. Nevertheless, in the context of the next meeting in March, he does not have to do much when the market does not fully discount the increase. In addition, it is up to Powell to build consensual forward guidance with the recognition of the dovish camp's arguments, which reduces the chances of a clearly hawkish tone. On the other hand, even moderate Powell openness to more interest rate hikes (if the data from the economy remains very good) will be a sign of a clear change at the Fed rhetoric compared to the dovish Yellen. The market, however, quietly counts on it and positions itself on the hawkish tone of the performance.

Let's now take a look at the EUR/USD technical picture at the H4 time frame before the Powell statement. The market is consolidation inside of a very narrow zone between the levels of 1.2366 and 1.2257. Moreover, there is a golden trend line support located just below the technical support at the level of 1.2257, so any violation of this line will put the bears back in control over the market. In a case of a sell-off, the next technical support is seen at the level of 1.2203.

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Fundamental Analysis of GBP/USD for February 27, 2018

GBP/USD has been quite bearish recently above the support area of 1.3850-1.3950 from where the price is expected to push lower in the coming days. Ahead of the high impact economic reports this week, USD is expected to take the lead in the pair whereas mixed economic reports of GBP published recently is holding the currency back. Today USD Core Durable Goods Orders report is going to be published which is expected to decrease to 0.4% from the previous value of 0.7%, Durable Goods Orders report is expected to be negative at -2.4% from the previous positive value of 2.8%, Goods Trade Balance report is expected to be unchanged at -72.3B and CB Consumer Confidence is expected to have slight increase to 126.2 from the previous figure of 125.4. Moreover, today Fed Chair Powell is going to testify the upcoming monetary policies and interest rate hike in March 2018. On the other hand, today we had no GBP economic report to help the currency to protect its grounds but on Thursday Manufacturing PMI report is going to be published which is expected to have slight decrease to 55.1 from the previous figure of 55.3 and Net Lending to Individuals is expected to increase to 5.4B from the previous figure of 5.2B. Moreover, on Friday Construction PMI is expected to increase to 50.5 from the previous figure of 50.2 along with Prime Minister May and Bank of England Governor Carney to speak about upcoming monetary policies and economic developments of Britain. As of the current scenario, USD is expected to take the lead until GBP comes up with positive economic report and development possible in the Friday events to push back higher in the future.

Now let us look at the technical view. The price is currently residing at the edge of 1.3850-1.3950 support area from where the price is expected to break below 1.3850 and proceed lower towards 1.36 support area in the coming days. There has been a number of bullish rejections along the way from where the Pre-Breakout Squeeze structure is formed. As the price remains below 1.4050 area, the bearish bias is expected to continue further.

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Fundamental Analysis of USD/JPY for February 27, 2018

USD/JPY is currently consolidating below 107.30-50 price area from where the price is expected to push lower. Ahead of USD high impact economic reports to be published today, the market is quite indecisive having positive JPY economic report today. JPY BOJ Core CPI report was published today with an increase to 0.8% from the previous value of 0.7% which was expected to decrease to 0.6%. The positive economic report of JPY lead to certain indecision in the market resulting in more correction below 107.30-50 area. This week there are several economic reports to be published on the JPY side, which is expected to have a good impact on the upcoming growth of the currency against USD. On the other hand, today USD Core Durable Goods Orders report is going to be published which is expected to decrease to 0.4% from the previous value of 0.7%, Durable Goods Orders report is expected to be negative at -2.4% from the previous positive value of 2.8%, Goods Trade Balance report is expected to be unchanged at -72.3B and CB Consumer Confidence is expected to have slight increase to 126.2 from the previous figure of 125.4. Moreover, today Fed Chair Powell is going to testify the upcoming monetary policies and interest rate hike in March 2018. As of the current scenario, the pair is expected to be quite volatile this week having a number of impactful economic reports on the USD side and JPY side as well. To sum up, USD is expected to gain momentum in the coming days ahead of the Rate Hike in the coming days whereas positive economic report results will provide a good push to the USD buyers in the future.

Now let us look at the technical view. The price is expected to proceed towards 107.30-50 price area before showing any bearish or bullish pressure in the coming days. A daily close above 107.50 is expected to lead to further bullish pressure with target towards 108.50. On the other hand, a bullish rejection off the 107.50 with a daily close is expected to push the price lower towards 105.50.

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Technical analysis of USD/CHF for February 27, 2018

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Overview:

  • The USD/CHF pair could not break the major support at the 0.9328 level yet. The level of 0.9328 coincides with 50% of Fibonacci retracement which is expected to act as major support today. Equally important, the RSI is still signaling that the trend is upward, while the moving average (100) is headed to the upside.
  • Accordingly, the bullish outlook remains the same as long as the EMA 100 is pointing to the uptrend. This suggests that the pair will probably go above the price of 0.9328 in the coming hours.
  • The USD/CHF pair will demonstrate strength following a breakout of the high at 0.9328. Consequently, the market is likely to show signs of a bullish trend. In other words, buy orders are recommended above 0.9328 with the first target at 0.9409. Then, the pair is likely to begin an ascending movement to 0.9436 marks and further to 0.9469 levels. The level of 0.9469 will act as strong resistance because it forms the double top on the H1 chart.
  • On the other hand, the daily strong support is seen at 0.9328. If the USD/CHF pair is able to break out the level of 0.9328, the market will decline further to 0.9254 (38.2% Fibonacci retracement).
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Bitcoin analysis for February 27, 2018

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The Bitcoin (BTC) has been trading upwards. The price tested the level of $10.751. The Supreme Court of Israel issued a temporary injunction order on Monday forbidding Bank Leumi from sweepingly halting the account activity of the Bits of Gold bitcoin exchange. This is seen as a major victory in the Israeli cryptocurrency industry that will set a precedent for other bitcoin businesses struggling to get banking services.

Trading recommendations:

According to the 30M time - frame, I found that price is having trouble to go above the strong reference points Fibonacci retracement 61.8% ($10.805) and upper diagonal of the channel, which is sign that buying looks risky. I expext at least the price back into the median line from the channel. My advice is to watch for potential selling opportunities. The first downward target is set at the price of $10.405.

Support/Resistance

$10.805 – Intraday resistance

$10.640 – Intraday support

$10.405 – Objective target

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Technical analysis of NZD/USD for February 27, 2018

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Overview:

  • As expected, the NZD/USD pair continues to move downwards from the areas of 0.7337 and 0.7314. Last week, the pair dropped from the level of 0.7337 to 0.7280, which coincides with a ratio of 23.6% Fibonacci on the H4 chart. Today, resistance is seen at the levels of 0.7337 and 0.7280. So, we expect the price to set below the strong resistance at the levels of 0.7337 and 0.7280; because the price is in a bearish channel now. Amid the previous events, the price is still moving between the levels of 0.7314 and 0.7238. In overall, we still prefer the bearish scenario as long as the price is below the level of 0.7314. Furthermore, if the NZD/USD pair is able to break out the first support at 0.7285, the market will decline further to 0.7238. Hence, the price will fall into a bearish trend in order to go further towards the second support at 0.7261. The level of 0.7238 will form a double bottom to test it again. On the other hand, if the price closes above the strong resistance of 0.7337, the best location for a stop loss order is seen above 0.7350.
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Analysis of Gold for February 27, 2018

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Recently, Gold has been trading downwards. As I expected, the price tested the level of $1,330.70. Anyway, I found a breakout of the upper channel, which is a sign that buying looks risky. I also found an overbought condition 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 $1,326.87 and at the price of $1,321.00.

Resistance levels:

R1: $1,340.65

R2: $1,348.05

R3: $1,355.00

Support levels:

S1: $1,326.30

S2: $1,319.30

S3: $1,311.90

Trading recommendations for today: watch for potential selling opportunities.

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GBP/USD analysis for February 27, 2018

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Recently, the GBP/USD pair has been trading sideways at the price of 1.3958. Anyway, according to the 30M time – frame, I found a broken intraday bearish flag pattern, which is a sign that sellers are in control. I also found an overbought condition on the stochastic oscillator, which is another sign of weakness. My avice is to watch for potential selling opportunities. The downward targets are set at the price of 1.3928, 1.3905 and at the price of 1.3848.

Resistance levels:

R1: 1.4048

R2: 1.4130

R3: 1.4190

Support levels:

S1: 1.3905

S2: 1.3847

S3: 1.3765

Trading recommendations for today: watch for potential selling opportunities.

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Bitcoin analysis for 27/02/2018

Elon Musk, a billionaire, and entrepreneur known for setting up and running Tesla Motors and SpaceX, on Thursday, February 22, revealed on his Twitter how many Bitcoins he has. This is 0.25 BTC, or about $ 2,478, equivalent to 0.000012% of its total net assets. Musk revealed the number of cryptocurrencies owned, after several false Twitter accounts pretending to represent various famous characters, including Musk, published information promises donations in cryptocurrencies to those who send their digital currencies to them.

On February 22, a Twitter user, worried about the scams, asked Musk in the tweet where these rumors come from. Musk replied that he does not know and that he had already reported the problem to the president of Twitter, Jack Dorsey, for now without success. Musk also added that apart from 0.25 BTC, which his friend gave him many years ago, he has literally zero in cryptocurrencies. The amount in Bitcoin, in which Musk is owned, is a very small part of total net wealth, which is $ 21.4 billion.

As a curiosity, it can be added that in November 2017 Musk denied rumors suggested by former SpaceX intern Sahil Gupta that Musk is probably Satoshi Nakamoto, the legendary anonymous creator of Bitcoin.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. After the bounce from the technical support zone located between the levels of $9,174 - $9,434, the price has broken above the local resistance at the level of $10,455 and currently is moving higher towards the next target at the level of $10,802. This level is very important for the bulls and bears because is very close to the golden trend line, and any violation of this trend line will lead to another upward rally towards the level of $11,896.

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Trading plan for 27/02/2018

Financial markets are in a sleeping mode with the hope of awakening with the help of a Fed chairman's speech this afternoon. Asia limited its activity with zero premises from the currency market. Japanese Nikkei225 has found the strength to increase by 1.07%, but in China, the indexes are losing - Shanghai Composite is lower by 1.12%.

On Tuesday 27th of February, the event calendar is busy with important data releases. During the London session, Eurozone will post M3 Money Supply and Private Loans data and Germany will issue Preliminary Consumer Price Index data. During the US session, there will be Durable Goods Orders and CB Consumer Confidence data revealed and Federal Reserve Chairman Jerome Powell speech.

NZD/USD analysis for 27/02/2018:

The biggest drop in price overnight was noted on NZD due to disappointment in the New Zealand trade balance. January brought an unexpected deficit of NZD 566 million, after a surplus of NZD 596 million in December. A positive Trade Balance (surplus) indicates that exports are greater than imports. When imports exceed exports, the country experiences a trade deficit. Because foreign goods are usually purchased using foreign currency, trade deficits usually reflect currency leaking out of the country. Such currency outflows may lead to a natural depreciation unless countered by comparable capital inflows (inflows in the form of investments, FDI - where foreigners investing in local equity, bond or real estates markets). At a bare minimum, deficits fundamentally weigh down the value of the currency.

Let's now take a look at the NZD/USD technical picture at the various intraday time frames. The market still moves inside of the golden descending channel and the market conditions are now oversold. Moreover, there is a visible bullish divergence between the price and the momentum oscillator, which might indicate a possible short-term bounce towards the level of 0.7317 or even 0.7345. Nevertheless, the key intraday support is seen at the level of 0.7268 - 07275 zone, so if this level is clearly violated, the price might fall towards the next support at the level of 0.7239.

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Ichimoku cloud indicator analysis of USDX for February 27, 2018

The Dollar index started weak on Monday but found support at the Ichimoku cloud, at the 38% Fibonacci retracement and at the broken resistance trend line.

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Red line - resistance trend line (broken)

The Dollar index bounced right off support. This support is at 89.50. As long as price is above that level bulls have hopes. Resistance is at 90.05. A break above resistance would be a very bullish sign for the index and if it happens, I would expect price to move towards 91-92.

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Blue line - resistance

On a daily basis the Dollar index remains above both indicators. But also below the daily Kumo. Bulls need to break above the blue resistance at 90.60 for a bigger bounce to be seen. As long as we are below 90.60, there is still a big danger of seeing another sell off in the Dollar index towards 87-86.

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Ichimoku cloud indicator analysis of gold for February 27, 2018

Gold price got rejected at the $1,342 level yesterday and pulled back towards the short-term $1,330 support by the kijun-sen. Price remains below the Ichimoku cloud in the short-term, implying trend remains bearish, as price could not break above the cloud.

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Blue line - support trend line

Black rectangle - resistance area

Gold price reached the 50% Fibonacci retracement and pulled back. However price continues making higher highs and higher lows in the 1 hour chart as shown above, holding also above the blue trend line support. Next important resistance area is at $1,343-50. If bulls manage to break above that area then we could see a run towards $1,400.

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Magenta line - long-term resistance

Yesterday price got rejected at the Daily tenkan-sen indicator and price closed below the kijun-sen. This is not a good sign for bulls. Key short-term support is at $1,320. A break below it could push price lower towards $1,305. Daily clous support is at $1,300-$1,305. As long as this holds bulls have hopes for another run towards the important long-term resistance of $1,350-60.

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