GBP/USD: perspectives are unclear

Current trend

Last week pound was growing and reached the maximum since the beginning of October at the level of 1.3360 on Friday.
The investors concern more upon the possible slowing of the monetary policy tightening rate in the USA, than the Brexit negotiations of UK and EU difficulties, where the parties still cannot began to discuss trading agreements due to the fact that the Irish border issue is unclear. Irish government wants to get the guarantees from UK government, that the control on the border between North Ireland and Republic Ireland won’t be implied. Otherwise the Irish party, represented by Commissioner for Agriculture Phil Hogan threatens to block further Brexit negotiations.

Intransigence of the parties and the delaying of Brexit negotiations make business community fears that the deal won’ be done at all, and UK will leave EU without any agreements. This has led to the fact that a number of companies decreased its presence in the country, which can result in the Industrial Production and GDP fall in the UK.
Last week British Office for Budget Responsibility decreased the next year GDP growth forecast from 2.0% to 1.5%. The middle term perspectives of the currency are still unclear.

Support and resistance

Technically the price is tending to the level of 1.3366 (Murray [7/8]) and after the breakout can move upwards to the level of 1.3427 (Murray [8/8]). Otherwise the price can return to the levels of 1.3305 (Murray [6/8], the middle line of Bollinger Bands), 1.3244 (Murray [5/8]). Technical indicators reflect the growth. Bollinger Bands are pointed upwards, Stochastic reversed upwards.

Resistance levels: 1.3366, 1.3427, 1.3488.
Support levels: 1.3305, 1.3244, 1.3183.

Trading tips

Long positions can be opened above the level of 1.3366 with the target at 1.3427 and stop loss at 1.3300.
The consolidation of the price below the level of 1.3305 will make short positions with the targets at 1.3244, 1.3183 and stop loss at 1.3340 relevant.

USD/JPY: the pair has been corrected

Current trend

Today the pair moved away from the resistance level of 111.65 and dropped to 111.38. This dynamics was caused by yet another launch of a ballistic missile by North Korea. International leaders traditionally criticized the launch. Donald Trump said the missile was a threat to the whole world, and South Korean President Moon Jae-in asked North Korea to stop aggression and embark on negotiations. However, the general reaction of the market was not noticeable. The announcement of North Korean officials that the main tasks of the nuclear program had been completed also gives certain optimism.

Political tension pushed economic data backwards, and they are generally negative for yen. October statistics on retail sales was weak. The indicator made up 0.0% MoM and -0.2% YoY. Retail sales in major stores also dropped by 0.77%. According to a monthly report of the Japanese government, the national economy is moderately restoring, but internal consumption does not grow fast enough due to slower salary increase rates thus putting pressure on GDP.

Support and resistance

Right now the price is restoring positions after a morning fall. A key level for the “bulls” is 111.65. Its breakout will open the way for further growth to 112.50 (Murrey [8/8], middle line of Bollinger Bands). Breaking down the level of110.93 (Murrey [7/8]) will open the way for further fall to 110.20 and 109.37 (Murrey [6/8]). Technical indicators show possible upward correction. Stochastic is leaving the oversold area, and MACD histogram begins to reduce in the negative zone.

Support levels: 110.93, 110.20, 109.37.
Resistance levels: 111.65, 112.50, 113.20.

Trading tips

Buy positions may be opened above the level of 111.65 with target at 112.50 and stop-loss at 111.10.
The consolidation of the price below 110.93 and the reversal around 111.65 will make short positions relevant with targets at 110.20, 109.37 and stop-loss at 111.30 and 112.00.

GBP/USD: the pound stopped strengthening

Current trend

Last week the pair continued to grow and today reached the level of 1.3548 (Murrey [6/8]). By now it has been corrected to the level of 1.3488 (Murrey [5/8]) but may resume growth as the general background is negative for USD. Investors were disappointed that the Senate stopped the discussion of the tax reform and moved the vote from Thursday to Friday. The market is also unstable due to the news about possible dismissal of the US Secretary of State Rex Tillerson due to his recent conflict with President Trump.
On the other hand, the pound is supported by strong data on the UK industrial PMI. In November the indicator grew from 56.6 to 58.2 points which is the best value since 2013. Correction may continue if strong data on ISM industrial PMI are released from the USA. However, the indicator is expected to fall (from 58.7 to 58.4 points).

Support and resistance

Right now the pair is trading around 1.3488 (Murrey [5/8]) and is trying to move upwards. The key level for the “bulls” seems to be 1.3549 (Murrey [6/8]). Breaking through it will open the way for further growth of the pair to 1.3610 (Murrey [7/8]) and 1.3670 (Murrey [8/8]). The consolidation of the price below 1.3488 will lead to further reduction to 1.3427 (Murrey [4/8], middle line of Bollinger Bands) and 1.3366 (Murrey [3/8]). Technical indicators provide for correction. Stochastic is directed downwards, and MACD histogram started to fall in the positive zone and broke down the signal line.

Support levels: 1.3488, 1.3427, 1.3366.
Resistance levels: 1.3550, 1.3610, 1.3671.

Trading tips

In the current situation buy positions may be opened above the level of 1.3550 with targets at 1.3610, 1.3671 and stop-loss at 1.3510.
Sell positions should be opened below the level of 1.43888 with targets at 1.3427, 1.3367 and stop-loss at 1.3520.

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EUR/USD: the pair is waiting

Current trend

During the current week the pair is trading near the level of 1.1840 (Murrey [1/8]) but is unable to move below it because it is supported by the middle line of Bollinger Bands. In the near future the price may remain within the range of 1.1800-1.1850 although potential of reduction to 1.1718 (Murrey [0/8]) remains. Still, investors are unlikely to take risks before Friday releases from the US labor market (the indicator is about to reduce from 260K to 200K).

Moreover, market is unstable due to the uncertain situation with the US state debt limit. The Congress has to agree on its increase before Friday, otherwise the financing of governmental structures will be reduced, and some of them may stop working.
Today attention should be paid to November employment data by ADP that are considered an early indicator for federal statistics. The indicator is expected to drop from 235K to 185K causing the growth of the price and the weakening of the US currency.

Support and resistance

Technical indicators show possible continuation of the fall. Stochastic is directed downwards, and MACD histogram has crossed the signal line from above. Still, one may speak about the opening of short positions only after the price consolidates below the middle line of Bollinger Bands. In this case it may go down to 1.1718 (Murrey [0/8]) and 1.1657 (Murrey [-2/8] for H4). In case the price consolidates above 1.1840, growth may continue to 1.1962 (Murrey [2/8]).

Support levels: 1.1800, 1.1718, 1.1657.
Resistance levels: 1.1840, 1.1900, 1.1930, 1.1962.

Trading tips

Sell positions may be opened from the level of 1.1800 with targets at 1.1718, 1.1657 and stop-loss at 1.1850. Buy positions should be opened from 1.1870 with target at 1.1962 and stop-loss at 1.1840.

GBP/USD: general review

Current trend

Today the pair rose to the level of 1.3515 after the UK and the EU entered into intermediary agreements. According to them, the UK has to grant special rights to 4 mln EU citizens living in its territory, pay 40 to 60 mln euro for withdrawal, and eliminate excessive control at the border of North Ireland. Now the parties may start discussing the trading agreement, but it promises to be even more complicated. Before that Theresa May pointed out that she would try to enter into a free trade contract with the EU under privileged conditions, but it is still unclear what the UK government is ready to trade for it. The absence of clearance may put pressure on the UK businesses and therefore the pound. During the day GBP was also supported by positive statistics: the volume of industrial output in October grew by 3.5%, and the volume of processing industry – by 3.9%.

Right now the pair is being corrected, but the price may reverse if the data from the US labor market released today is weak. The number of workplaces is expected to drop from 261K to 200K. Similar data by ADP released earlier confirmed the negative trend (the indicator reduced from 235K to 190K).

Support and resistance

Right now the price is testing the level of 1.3427 (Murrey [4/8], middle line of Bollinger Bands), and in case it is broken down, may continue to decrease to 1.3366 (Murrey [3/8]) and 1.3305 (Murrey [2/8]). In case the level of 1.3488 (Murrey [5/8]) is broken out, the price may continue to grow to 1.3550 (Murrey [6/8]) and 1.3610 (Murrey [7/8]). Technical indicators show the continuation of the fall. Stochastic is leaving the overbought ares, and MACD histogram is reducing in the positive zone.

Support levels: 1.3427, 1.3366, 1.3305.
Resistance levels: 1.3488, 1.3550, 1.3610.

Trading tips

In the current situation sell positions may be opened below 1.3427 and the middle line of Bollinger Bands with targets at 1.3366, 1.3305 and stop-loss at 1.3465.
Buy positions may be opened above 1.3488 with targets at 1.3550, 1.3610 and stop-loss at 1.3455.

USD/CAD: Murray analysis

Current trend

Since October on the daily chart the pair is trading above the Ultimate Resistance of Murray ([8/8]) around 1.2695, but cannot break the level of 1.2940 (Murray [+2/8]) and is trading within the horizontal channel. Now the price is trying to reverse into fall to the lover border of the range 1.2695. However, it needs to consolidate below the level of 1.2817 (Murray [+1/8]), as the price is set near it. Stochastic confirms the possibility of the decrease, entering the overbought zone, which reflects the perspective of a reversal. In addition, the price is near the temporal border, where the direction of the movement usually changes. If the price cannot break the level of 1.2817, it can grow to the levels of 1.2940 and 1.3000 (Murray [5/8] for H4).

Support and resistance

Resistance levels: 1.2940 ([+2/8]), 1.3000 ([5/8] for H4).
Support levels: 1.2817 ([+1/8]), 1.2695 ([8/8]), 1.2573 ([7/8]).

Trading tips

Short positions can be opened at the level 1.2817 with the target at 1.2695 and stop loss at around 1.2860.
Long positions can be opened at the level of 1.2880 with the targets at 1.2940 and 1.3000 and stop loss at 1.2840.

LiteForex: XAU/USD: Fibonacci analysis

Current trend

On the 4-hour chart the price is growing after the reversal around 1240.00. Now the “bullish” targets are the level of 1260.05 (correction 38.2%) and 1267.50 (correction 50.0%), approximately coinciding with the lower border of the sideways channel for D1 chart and being a key level for the further growth. If the price is set below the level of 1250.90 (correction 23.6%, the price can return to 6 months lows at the area of 1240.00.

On the daily chart the price оrebounded from the correction cluster 1242.00 (50.0% for W1, 76.4% for D1) and is now trying to grow through the upward upcoming fan. Key “bullish” level is the correction cluster around 1265.00 (38.2% for W1 and 61.8% for D1) and the middle line of Bollinger Bands behind it. After the breakout of the levels the price can return to the long term horizontal channel and can grow to the levels of 1279.50 (correction 50.0%) and 1297.00 (correction cluster 23.6% for W1 and 38.2% for D1). However, the possibility of the reversal of the price 1265.00, which is the strong “mirror” resistance and return of the price to the area of 1242.00 is high.

Main scenario

Short positions can be opened below the level of 1250.00 or after the rebound at the level of 1265.00 with the target at 1242.00 and stop loss 1256.00 and 1268.00.

Alternative scenario

Long positions can be opened above the level of 1267.50 with the targets at 1279.50, 1297.00 and stop loss around 1264.00.

LiteForex: Brent Crude Oil: Murrey analysis

Current trend

In the H4 chart the price has been trading within the range of 63.28 ([5/8])-62.50 ([4/8]) for the third session in a row. The key level for the “bulls” seems to be 63.28. In case of its breakthrough growth may continue to 64.06 ([6/8]) and 64.84 ([7/8]). However, the drivers on the week before Christmas may be insufficient, and it will remain within the said trading range.

Generally, technical indicators show the possibility of growth: Bollinger Bands start to rise, and Stochastic is also directed upwards. One may speak about considerable reduction to 61.72 ([3/8]) and 60.93 ([2/8]) only after the price consolidates below 62.50 ([4/8]) which seems unlikely in the short term.

Support and resistance

Support levels: 62.50 ([4/8], central line of Murrey range), 61.72 ([3/8], bottom of the channel), 60.93 ([2/8])
Resistance levels: 63.28 ([5/8], top of the channel), 64.06 ([6/8]), 64.84 ([7/8]).

Trading tips

In this situation buy positions should be opened if the price consolidates above 63.28 with targets at 64.06, 64.84 and stop-loss at 63.00.
Short positions should be opened if the price moves away from 63.28 with targets at 62.50, 61.72 and stop-loss at 63.45.

LiteForex:EUR/USD: the tax reform failed to strengthen USD

Current trend

On Wednesday US Congress finally approves the draft of the tax reform that provides for the reduction of the corporate tax rate from 35% to 21%. However, the US currency reacted to this fact only by slowing down its fall, as the decision was expected and included into the price.

However, the reduction of the tax burden on business may have long-term consequences for the US economy. First of all, the authors of the reform expect corporate income to increase, new workplaces to be creates, and salaries to rise. Another purpose of the reform is the repatriation of capitals into the USA. Trying to avoid taxes, major companies keep about $2 trln on foreign accounts. The law offers them a special deal: capitals may be repatriated one time at the rate of only 15.5%. However, the US economy will be able to feel the positive effect of the reform only in several years, while the budget deficiency will be evident at once. According to Bloomberg, it will take about $1-1.5 trln to implement the project.

The US currency may start strengthening in case of release of strong final data on the US GDP. According to forecasts, in Q3 2017 the growth of the indicator may make up 3.3% which is the biggest increase since Q3 2016.

Support and resistance

Currently the price is around 1.1900 (Murrey [7/8]). In case this level is broken out growth may continue to 1.1962 (Murrey [8/8]) and 1.2024 (Murrey [+1/8]). Stochastic is approaching the overbought area which creates the possibility of correction, but one may speak about it only when the price consolidates below 1.1840 (Murrey [6/8]). In this case the price may drop to 1.1780 (Murrey [5/8]) and 1.1718 (Murrey [4/8]).
Support levels: 1.1780, 1.1718, 1.1657.
Resistance levels: 1.1840, 1.1900, 1.1962.

Trading tips

In the current situation buy positions may be opened above 1.1900 with targets at 1.1962, 1.2024 and stop-loss at 1.1870.
Sell positions should be opened below 1.1840 with targets at 1.1780, 1.1718 and srop-loss at 1.1890.

LiteForex: AUD/USD: Fibonacci analysis

On the 4-hour chart the price has been growing for the third week and it has reached the level of 0.7770.
In case of reversal of the price, the downward correction to the level of 0.7705 (correction 23.6%, the middle line of Bollinger Bands) is possible. If the price is set above the level of 0.7770, the further growth is possible, but its potential seems restricted, as Stochastic is in the overbought area and can form a sell signal in the nearest future.
On the daily chart the price is tending to the corrections cluster at the area of 0.7780 (50.0% and 38.2%); in addition, in this area the downward correctional fan line 38.2% goes. All the facts, supported by Stochastic, which has entered the overbought area, shows the possibility of the fall to the levels of 0.7700 (correction 50.0%) and 0.7615 (correction 61.8%, the middle line of Bollinger Bands). If the price is set above the level of 0.7780 the further growth to the levels of 0.7845 (correction 61.8%) and 0.7885 (correction 23.6%) is possible, but the price should break through the downward fan.

Trading tips

Short positions can be opened at the level of 0.7780 with the targets at 0.7700, 0.7615 and stop loss at 0.7820.

Alternative scenario

Long positions can be opened at the level of 0.7800 with the targets at 0.7845, 0.7885 and stop loss around 0.7870.

LiteForex: USD/JPY: general review

Current trend

US dollar continues to reduce against the majors due to low trading volumes. Market players are cautious waiting for the release of the minuted of the Fed’s December meeting. No important macroeconomic releases are expected from Japan until the end of the week. At the same time, US currency is under pressure from central banks of other countries, as the growth of the global economy in 2017 catalyzes the tightening of the monetary policy in a number of key states leading to the reduction of differences between the rates.

The main event of today is the release of the minutes of December Fed’s meeting. Investors hope to receive new data on further rates of the US fiscal policy. Moreover, market volatility may be caused by simultaneous release of gradual inflation build-up index and industrial PMI, as well as the data on construction expenses in the USA. The pair is extremely sensitive to inflation indicators, as its low level in the USA prevents the Fed from implementing its monetary policy plans.

Support and resistance

On the H4 chart the instrument has been corrected to 112.25. A strong support level is 112.00. Breaking through it will be a strong signal for the opening of short positions. Bollinger Bands are directed downwards, and the price range has slightly reduced. A key resistance level is 112.40. MACD histogram has reached its minimal level in the negative zone, and the strong sell signal is still valid. Stochastic fails to give a clear signal for entering the market.
Support levels: 111.60, 111.80, 112.00, 112.25.
Resistance levels: 112.40, 112.60, 112.80, 113.15, 113.35.

Trading tips

Short positions may be opened below the level of 112.25 with targets at 111.80, 111.60 and stop-loss at 112.50. The period of implementation is 1-2 days.
Long positions may be opened from the level of 112.45 with targets at 112.85 and stop-loss at 112.25. The period of implementation is 1 day.

LiteForex: GBP/USD: the pound is pressured by permutations in the British government

Current trend

Last week, the pair tested 1.3600 mark, but today it adjusted to the level of 1.3550 (Murrey [7/8]). The uncertainty of the market is caused by the expectation of the reshuffle in the government of Theresa May, which is to be held on Monday and Tuesday.

However, it is expected that the reshuffle will not affect key cabinet ministers, such as David Davis, Philip Hammond, and Boris Johnson. Perhaps the First Secretary of State, the actual deputy prime minister, will be the current health minister Jeremy Hunt, a consistent supporter of Brexit. Earlier this position was occupied by Damian Green, but in December he was forced to resign because of a sexual scandal that shook the domestic political position of Theresa May. The current reshuffle should restore stability to the British government before the next round of Brexit talks.

Support and resistance

Technically, the price dropped below the 1.3550 mark (Murrey [7/8]) and may continue to decline to the level of 1.3427 (Murrey [6/8], the middle line of the Bollinger Bands) and 1.3305 (Murrey [5/8]). Technical indicators generally allow the possibility of a downward correction. Stochastic is pointing downwards. MACD histogram and price chart demonstrate slight diversion. One may speak about resuming growth after the price consolidates below the level of 1.3600. In this case, the growth can be continued to the levels of 1.3670 (Murrey [8/8]) and 1.3795 (Murrey [+1/8]).
Support levels: 1.3427, 1.3305, 1.3215.
Resistance levels: 1.3550, 1.3600, 1.3670, 1.3795.

Trading tips

Short positions may be opened from the level of 1.3510 with targets at 1.3427, 1.3305 and stop-loss at 1.3560. If the price consolidates above 1.3600, long positions could be opened with targets at 1.3670, 1.3795 and stop-loss at 1.3570.

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