Fundamental Analysis of GBP/USD for May 8, 2018

GBP/USD has been quite impulsive, following the downward trajectory today despite the recent bullish attack with a daily close. After the observance of May Day, today the UK failed to provide strong economic reports to sustain the recent bullish momentum in the pair. Today GBP Halifax HPI report was published with a significant decrease to -3.1% from the previous value of 1.6% which was expected to be at -0.3%. Ahead of the UK Official Bank Rate report to be published this week on Thursday, the weakness of GBP indicates the probability of volatile market momentum in the coming days.

On the other hand, USD has been quite successful to sustain its gains in light of the mixed economic reports on the labor market published on Friday. Today, US JOLTS Job Opening report was published with an increase to 6.55M from the previous figure of 6.08M which was expected to decrease to 6.02M, NFIB Small Business Index report was published with a slight increase to 104.8 from the previous figure of 104.7 which failed to meet the expectation of 105.2 and IBD/TIPP Economic Optimism report was published with an increase to 53.6 from the previous figure of 52.6 which was expected to decrease to 51.3. Moreover, Fed Chair Powell delivered a speech which was quite hawkish in nature that made USD gain further momentum.

As for the current scenario, USD has been the better side of the pair whereas GBP is struggling to meet the economic expectations ahead of the Official Bank Rate report to be published this week. To sum up, USD is expected to have an upper hand over GBP in the long run despite the upcoming market-moving reports and events in the UK which are expected to inject some volatility in the market.

Now let us look at the technical view. The price is currently impulsive with the bearish momentum whereas certain Bullish Divergence is being formed in the chart. As for the current market structure, the price is expected to retrace towards the mean of 20 EMA dynamic level from where it is expected to continue its bearish trend with a target towards the nearest support area of 1.33. As the price remains below 1.3850 with a daily close, further bearish pressure is expected in this pair.

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Technical analysis of USD/JPY for May 08, 2018

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USD/JPY is expected to trade with a bullish outlook. Although the pair posted a pullback from 109.30, it is still trading above its key support at 108.80, which should limit the downside potential. The relative strength index has landed on its neutrality level at 50 and is turning up. To conclude, as long as 108.80 is not broken, look for another rebound with targets at 109.55 and 109.75 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: BUY, stop loss at 108.80, take profit at 109.55.

Resistance levels: 109.55, 109.75, and 110.35

Support levels: 108.60, 108.40, and 108.00.

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Technical analysis of USD/CHF for May 08, 2018

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All our upside targets which we predicted in the previous analysis have been hit. The pair resumed its upside momentum after the bullish penetration of its key psychological level at 1.0000, which is now acting as strong support. The process of higher highs and lows remains intact on the prices, which should confirm the bullish outlook. Therefore, even though a consolidation cannot be ruled out, its extent should be limited before further advance to 1.0060 and 1.0090 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: BUY, stop loss at 1.0000, take profit at 1.0060.

Resistance levels: 1.0060, 1.0090, and 1.0120

Support levels: 0.9975, 0.9950, and 0.9900

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Technical analysis of NZD/USD for May 08, 2018

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All our downside targets which we predicted in yesterday's analysis have been hit. The pair keeps trading on the downside after peaking at 0.7075. Currently, it is capped by a descending 50-period moving average, and the relative strength index remains subdued below the neutrality level of 50, signaling a downside momentum for the pair. So, as long as the key resistance at 0.6990 is not surpassed, the pair stands higher chances of breaking 0.6930 and even 0.6910 on the downside.

Chart Explanation: 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 show the support levels, while the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 0.7005, 0.7030, and 0.7075.

Support levels: 0.6930, 0.6910, and 0.6850.

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Technical analysis of GBP/JPY for May 08, 2018

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All our upside targets which we predicted in the previous analysis have been hit. The pair remains under pressure within its intraday declining channel. The falling 50-period moving average acts as resistance and should continue to push the price lower. Last but not least, the relative strength index is below its neutrality area at 50, and calls for a new pullback. In which case, as long as 147.70 is not surpassed, further downside seems more likely to occur to 146.65 and 146.10 in extension.

Chart Explanation: 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 show the support levels, while the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 148.00, 148.30, and 149.1\0

Support levels: 146.65, 146.10, and 145.50

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Global macro overview for 08/05/2018

In the first three months of 2018 new owners found 973.5 tonnes of gold. This is 7% less than last year and the weakest result of the first quarter since 2008 - the World Gold Council (WGC) informed.

Demand for gold jewelry remained stable and amounted to 487.7 tons, which is only 1% less than a year earlier. Purchases were halted by Indians (-12% YoY), for whom gold jewelry became too expensive due to the weakening of rupees. However, sales in China increased by 7% on a yearly basis. The demand generated by central banks, which acquired 116.5 tons of gold, remained stable, close to the many-year average. Almost 80% of these purchases were made by the monetary authorities of Russia, Turkey and Kazakhstan. Therefore, the global investors were responsible for the reduction of demand. Investment demand dropped by as much as 27% YoY. At the same time, the number of bars and coins purchased by retail investors decreased by 15%. The demand for gold bullion in China dropped by as much as 26% YoY, but the absolute result (78 tons) was still at a quite decent level.

Investors in India, smothered by an increasingly repressive tax office, reduced purchases of investment gold by 13% YoY, to 27.9 tons. US residents purchased only 3.7 tons of gold broth - less than 10 years and as much as 59% less than last year. Purchases in Europe decreased by 39% YoY, where the perception of political risk decreased significantly over the last months. On the other hand, the demand for investment gold in the turbulent inflation of Turkey increased rapidly, where purchases increased by 47% YoY. The same was true in Iran (250% increase), whose residents may be afraid of new American economic sanctions.

The ETF (Exchange Traded Funds) funds reduced purchases by 66% to just 32.4 tons. Despite the smaller inflow of cash from investors, ETFs at the end of the first quarter had more than 2,400 tons of gold - the highest since April 2013. That is, from the sudden collapse in the price of bullion, which initiated the four-year-old bear market.

However, after the end of the first quarter, cash again flowed into the "golden" ETFs again. In April, the funds bought 70 tons of yellow metal, which meant an inflow of around 3 billion dollars of fresh cash. According to the authors of the WGC report, investors took a long position in gold under the influence of fears over the outbreak of a trade war between the US and China and the growing tension between Washington and Moscow.

Global gold mining was stable, growing by 1.4% compared to the same quarter of the previous year. Globally, 770 tons of gold was extracted in the first quarter of 2018 - just like in the previous two years. Extraction has decreased in China, Peru, and South Africa, as well as in the US and Afghanistan. More ore flowed from mine in Indonesia and Canada and Russia.The supply of recycled gold remained at a relatively low level. From this source, just over 287 tons of metal went to the market, which is practically the same as a year ago. They were, therefore, the lowest values since 2007. So even slightly higher prices were not able to induce its owners to part with the royal metal.

Let's now take a look at the Gold technical picture at the daily timeframe. The lack of the demand can be clearly seen at this timeframe chart as from the end of the January the market is in a corrective cycle. The corrective zone is now being stretched between the levels of $1,300 - $1,365 with the 200 days moving average at the level of $1,305. Nevertheless, the overall market conditions are now oversold, so the global investor might see some bounce higher in the prices of Gold. The key technical resistance is seen at the level of $1,320 and only if this level is clearly broken, the bull might push the prices towards the level of $1,335 or even $1,355 again. On the other hand, a deeper downside correction below the level of $1,300 would open the road towards the support at the levels of $1,290 and in a case of the extension - $1,270.

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Global macro overview for 08/05/2018

In July 2015, a nuclear agreement was signed to give the international community control over Iran's actions in exchange for a conditional and temporary loosening of sanctions regarding primarily the possibility of oil exports. Its further fate is very uncertain, which pushed out WTI oil prices over $70 per barrel for the first time since the fourth quarter of 2014 at the beginning of May. The reaction of investors is an anticipation of the increase in geopolitical tensions, but also fears that the tightening of sanctions will reduce the flow of oil flowing to global markets and will accelerate the progressive process of reducing global stocks. Donald Trump has repeatedly criticized the agreement, and the presidential legal advisor Rudy Giuliani announced that the United States would probably withdraw from it. Donald Trump is due to announce his decision before 08:00 pm GMT today.

The question of Iran's reaction is also crucial. The withdrawal of the US from the agreement means that its conditions will cease to apply also to Tehran. An acute reaction and tightening of the position, or for example the announcement of the resumption of the nuclear program is unlikely, one should rather take into account the attempt to play on time and with a conciliatory attitude. President Rouhani finally rules to a large extent thanks to the popularity that has ensured him to ease the sanctions. His radical opponents may count on an increase in support at the time of withdrawal of the US agreement, which may translate into a wave of protests and escalation of internal tensions.

Since the US believes that diplomacy and economic sanctions have not helped sufficiently control Iran's nuclear program, Trump may have to refer to the last resort, namely armed conflict and attempts to destroy alleged installations for uranium enrichment in airstrikes and rocket attacks. The growing risk of such a scenario and a serious destabilization of the geopolitical situation in the Middle East would be a factor with a stronger impact than the mere limitation of the availability of the crude oil and the prices will skyrocket.

Let's now take a look at the USD/CAD technical picture at the H4 timeframe. This main currency pair is very negatively corelated to the Crude Oil prices. The market has made a breakout from the tight range between the levels of 1.2803 - 1.2900 and the price made a new local high at the level of 1.2980, just below the round level of 1.3000. Nevertheless, there is a clear bearish divergence between the price and the momentum indicator, which might indicate the rally is completed. The key level to the downside is the area of 1.2802-1.2813 and the key level to the upside is the area of 1.3126 - 1.3165.

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Intraday technical levels and trading recommendations for EUR/USD for May 8, 2018

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Daily Outlook

The EUR/USD pair had been trapped between the price levels of 1.2200 and 1.2500 until bearish breakout occured recently.

Significant signs of bearish reversal were manifested around the price levels of 1.2400.This was manifested in the bearish engulfing daily candlestick of April 20.

The short-term outlook turns to become bearish as long as the EUR/USD pair keeps trading below the broken uptrend as well as the lower limit of the depicted consolidation range remains broken.

Bearish persistence below the price level of 1.2200 allowed further bearish decline towards the price levels of 1.1990 and 1.1880.

The current price zone (1.1850-1.1750) should be watched for a possible bullish rejection and a short-term bullish pullback.

Conservative traders should wait for a bullish pullback towards 1.2190-1.2200 for a valid low-risk SELL entry.

However, if bearish momentum dominates, bearish persistence below 1.1700-1.1750 (zone of previous daily lows) will be needed to enhance a further decline towards 1.1400 (the previously mentioned monthly key-level).

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NZD/USD Intraday technical levels and trading recommendations for for May 8, 2018

The price zone of 0.7320-0.7390 stood as a significant supply zone during recent bullish pullback. The bulls failed to execute a successful Bullish breakout above 0.7400 during the previous week's consolidations.

The NZD/USD pair had been trapped between the price levels of 0.7170 and 0.7350 until bearish breakdown of 0.7200 occurred Yesterday.

Since April 13, significant bearish pressure has been applied. This probably turns the short-term outlook for the NZD/USD pair into bearish giving considerable significance to the multiple-top reversal pattern.

That's why, bearish breakdown of 0.7220-0.7170 (neckline zone) was needed to confirm the depicted reversal pattern. Bearish target levels around 0.7050 and 0.7000 have been achieved already.

The bearish scenario needs obvious bearish persistence below 0.7050 to maintain significant bearish momentum towards 0.6860 and 0.6820. That's why, the price level of 0.7050 is currently considered a key-level for the NZD/USD bears.

Any bullish breakout above the price level of 0.7050 hinders further bearish decline allowing bullish pullback to occur towards 0.7170-0.7220.

On the other hand, conservative traders can wait for a bullish pullback towards the price zone of 0.7220-0.7170 (neckline zone) (significant supply zone) for a valid SELL entry. S/L should be placed above 0.7260.

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Daily analysis of EUR/JPY for May 8, 2018

EUR/JPY

This EUR/JPY cross has dropped by 380 pips since April 26. Roughly 120 pips have been lost within Monday and Friday, owing to the weakness in EUR and a show of energy in JPY. There is a huge Bearish Confirmation Pattern in the market, and the price is expected to continue going southwards.

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The market has moved below the supply zone at 129.50, going towards the demand zone at 129.00. The targeted demand zone would be breached to the downside today or tomorrow. Bulls are being ridiculed at the moment.

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Daily analysis of USD/JPY for May 8, 2018

USD/JPY

The recent trend is in a precarious position. Price did not go upwards significantly last week, neither has it gone in a directional mode this week (the market is currently consolidating). There would soon be a rise in volatility, which would most probably favor bears. One of the reasons why the price has not come down significantly is the stamina in USD.

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A significant movement upwards from here would result in a Bullish Confirmation Pattern, while a significant downward movement from here would result in a Bearish Confirmation Pattern, which is expected this week.

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Daily analysis of USD/CHF for May 8, 2018

USD/CHF

The USD/CHF pair has managed to go above the psychological level at 1.0000 earlier this week; now targeting the resistance level at 1.0050, which could be reached any moment from now. The price is currently consolidating, and there would soon be a breakout in the market, which would most probably favor bulls.

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USD is supposed to continue being strengthened. There is a Bullish Confirmation Pattern in the market, which makes short trades illogical at the moment. Volatility will return to the market any movement.

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Bitcoin analysis for May 08, 2018

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The Bitcoin (BTC) has been trading sideways at the price of $9.336. A Norwegian district court has ruled in favor of Norway's largest bank against a local cryptocurrency exchange. The court says the bank has full rights to close the account of the exchange, citing money laundering risks and criminal activities associated with bitcoin trading. The technical picture looks neutral to bearish.

Trading recommendations:

According to the H1 time - frame, I found a potential bearish flag in creation, which is a sign that buying looks risky. My advice is to watch for a potential breakout of a bearish flag to confirm a further downward continuation. Downward targets are set at the price of $9.138 and at the price of $8.782.

Support/Resistance

$9.413 – Intraday resistance

$9.138– Intraday support

$9.138 – Objective target 1

$8.782 – Objective target 2

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

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Analysis of Gold for May 08, 2018

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Recently, Gold has been trading sideways at the price of $1,311.00. According to the H1 time – frame, I found a breakout of a smaller bearish flag in the background, which is a sign that there is a room for at least one downward leg. I also found a hidden bearish divergence on the moving average oscillator, which is another sign of weakness. The downward targets are set at the price of $1,307.50 and at the price of $1,301.60.

Resistance levels:

R1: $1,318.65

R2: $1,323.15

R3: $1,327.35

Support levels:

S1: $1,309.95

S2: $1,305.75

S3: $1,301.25

Trading recommendations for today: watch for potential selling opportunities.

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EUR/JPY analysis for May 08, 2018

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Recently, the EUR/JPY pair has been trading downwards. The price tested the level of 129.58. According to the H4 time – frame, I found strong selling pressure on the market, which is a sign that buying looks risky. The rising wedge from the background is still an active pattern and projective target is set at the price of 129.00. I also found a rejection from the resistance at the price of 130.45, which is another sign of weakness. My advice is to watch for potential selling opportunities on the rallies. The downward target is set at the price of 129.00.

Resistance levels:

R1: 130.45

R2: 130.84

R3: 131.09

Support levels:

S1: 129.81

S2: 129.56

S3: 129.18

Trading recommendations for today: watch for potential selling opportunities.

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Bitcoin analysis for 08/05/2018

Warren Buffett: Bitcoin is a rat poison.

Billionaire Warren Buffett once again trashed the cryptocurrencies at Berkshire Hathaway's annual shareholder's meeting on May 5. Buffett repeated his earlier warning that "cryptocurrencies would end badly." Earlier he said that buying cryptocurrencies is not a real investment, but it is only speculative gambling. He also said that in contrast to real estate or companies, virtual currencies have no value and only attract "charlatans": "If you buy something like Bitcoin or other cryptocurrencies, you do not really have anything that has produced something. You just hope that the next guy pays more." said Buffett. He even went a step further by calling Bitcoin "rat poison squared". Buffett's longtime associate billionaire Charlie Munger joined Bitcoin critics, comparing the most capitalized cryptocurrency to turd trade by people with dementia: "I like cryptocurren even less than Warren ... it's just dumbness for me and the Bitcoin trade department is like someone who deals with a turd and you are left out" Munger supposedly said. Buffett repeated his scathing attempts to overthrow digital currencies. In January 2018, he said that cryptocurrencies would "end badly": "In terms of cryptocurrencies, in general, I can say with certainty that they will end badly".

While Warren Buffett and Charlie Munger remain the public critic of cryptocurrencies, the younger generation of technological billionaires such as Twitter CEO, Jack Dorsey, co-owner Paypal, Peter Thiel, and the technological capitalist Tim Draper, are unconvinced in the belief that Bitcoin is here to stay on always and displace all other currencies. In fact, Draper is so confident in the crypto future that he set the price of bitcoin in the amount of USD 250,000 for 2022. Draper, an early investor in companies such as Skype, Tesla and Hotmail, claims that Bitcoin will be larger than all three connected because it is a revolution greater than the Internet:"It's bigger than the Internet," said Draper. "It is larger than the iron age, a renaissance. It is bigger than the industrial revolution. It affects the whole world in a faster and more widespread way than you ever imagined. "

Let's now take a look at the Bitcoin technical picture at the H4 time frame. There is not much movement on the market as the price is hovering around the weekly pivot at the level of $9,409 after the market has completed five wave advance to the upside at the level of $9,913. Currently, the corrective pull-back cycle in developing. The price has broken below the weekly pivot at the level of $9,409 already and now is heading towards another support at the level of $9,050 ($9,000). The corrective cycle might be deep and can extend towards the levels of $8,608 or $8,355 or even $8,132. The overall impulsive scenario invalidation level is at $6,402.

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Trading plan for 08/05/2018

Overnight trading during the Asian session remained in standby mode following the sleepy sessions in Europe and the US on Monday. Investors are also waiting for the decision of President Trump regarding the nuclear contract with Iran. USD and JPY are holding tight. Data on China's foreign trade showed a surplus return in April of USD 28.8 billion, slightly more than expected to USD 27.8 billion. Export increased by 12.9% y/y (exp: 8.0%), and import 21.5% (exp: 16%). The US trade surplus also increased - to USD 22.2 billion from USD 15.4 billion in March. Good data from Chinese foreign trade help stock exchanges: Shanghai Composite grows 0.7%, and Nikkei 225 gains 0.1%.

On Tuesday 8th of May, the event calendar is light in important data releases, but the global investors should keep an eye on Switzerland Unemployment Rate data, German Industrial Production and Trade Balance data, Halifax House Price Index data from the UK, Australian Annual Budget data, Housing Starts data form Canada and JOLTs Job Openings data from the US.

Crude Oil analysis for 08/05/2018:

Crude oil loses on Tuesday and moves away from more than three-year highs. Strong increases from Monday were interrupted by President Trump's tweet that today, at 14:00 Standard Eastern Time, that said he will announce the decision on the nuclear contract with Iran. Investors are likely to make a profit in the event that Trump decides to prolong the deal.

The tense geopolitical situation in the Middle East and the deteriorating economic situation in Venezuela as two hotspots for a sudden oil supply disruption, which could send the oil price higher and affect the currency markets as well. Focus is now on Iran, as the waiver on US sanctions related to the 2015 nuclear deal expires on 12 May.

US President Donald Trump has argued against a continuation of the current nuclear deal and there is a tail risk where sanctions related to Iran's oil exports are reinstated.

Let's now take a look at the Crude Oil technical picture at the H4 time frame. The market has made a new marginal high at the level of 70.82, the higher level since 2014. The immediate technical support is seen at the level of 69.56 and only a clear and sustained breakout below this level would indicate a potential corrective pull-back towards the consolidation zone at the levels of 67.11 - 66.54. The growing bearish divergence supports the short-term pull-back scenario, together with overbought market conditions.

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Technical analysis of USDX for May 8, 2018

The US dollar index made a new higher high yesterday but the price is very close to long-term resistance and the bearish divergence signs by the RSI imply weakness and limited upside. So a pull back towards at least 92 is expected.

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Blue lines - bullish channel

Downward sloping blue line - bearish divergence

The dollar index is expected to make a strong pullback at least towards cloud support around 92. A break below the cloud and below the 91.40 level will open the way for a bigger downward move. I'm bearish on the dollar index. The short-term support for an intraday sell signal is at 92.60. Breaking this level will reinforce the selling pressures.

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Burning forecast 05/08/2018

Burning forecast 05/08/2018

EURUSD: Waiting for the upward movement.

The euro exchange rate reached the highs of the beginning of the year at 1.1915 and updated them by 20 points to 1.1895

At the same time, the downward movement meets ever more stubborn resistance from buyers.

It is logical to see a sharp rebound upward.

In related news, there are no scheduled events with strong impact- only on Thursday, inflation data in the US, but! Today at 6 PM London time Trump will say whether the US will remain in the "nuclear deal" with Iran - or will leave it. This nervous expectation has already caused strong fluctuations in oil prices - and is able to bring traffic to the foreign exchange market.

We expect the euro to rise:

Buy from 1.1980, stop at 1.1935, the profit is at1.2080.

Alternative: Sell from 1.1895, stop at 1.1940, profit 1.1795.

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Technical analysis of gold for May 8, 2018

Gold price is preparing a bounce towards $1,330 at least. The price is making a base around $1,310. I'm bullish on gold. This could be a short-term bounce but there are also chances of this being the start of a big move higher towards $1,400. The key moment for this scenario is the break above $1,365.

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Blue line - horizontal resistance at $1,365

Red line - horizontal support

Black line - short-term resistance

Gold price has touched the 50% Fibonacci retracement for the second time and is moving above the black short-term trend line resistance. Gold has been moving sideways for a few months in a trading range between $1,365 and $1,300. Currently, at the lower end of this range, there are signs of a bounce coming. I'm bullish not only for the swing trade inside the range, but also because there are a lot of chances that gold will start a big leg higher towards $1,400. For this scenario to be confirmed, we need to break above $1,365.

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