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EUR/USD: wave analysis
The pair may fall.
On the daily chart, the first wave of the higher level 1 of (3) developed, within which the fifth wave v of 1 formed. Now, a downward correction is developing as the second wave 2 of (3), within which the wave a of 2 is forming. If the assumption is correct, the pair will fall to the levels of 1.1976–1.1890. In this scenario, critical stop loss level is 1.2219.
XAU/USD: gold is in demand again
Current trend
Gold prices are rising significantly during today's Asian session, updating local highs of January 15. The instrument is testing the level of 1850.00 for a breakout. Noticeable pressure on USD was exerted by the speech of the candidate for the post of the US Treasury Secretary Janet Yellen, who spoke in favor of a gradual return of the "strong dollar policy". In any case, it seems that the Joe Biden administration will not engage in artificial weakening of the national currency, as well as prosecute other countries for such actions. In addition, investors are looking forward to Biden's inauguration today, and also expect quick decisions on the announced USD 2 trillion support package for the US economy.
Support and resistance
Bollinger Bands in D1 chart demonstrate a stable decrease. The price range expands from below, weakly reacting to the appearance of ambiguous trading dynamics in the nearest future. MACD is reversing to growth forming a new buy signal (located above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought instrument in the ultra-short term. Technical indicators do not contradict the further development of the uptrend in the short and/or ultra-short term.
Resistance levels: 1850.00, 1863.34, 1875.09, 1900.00.
Support levels: 1830.00, 1811.96, 1800.00.
XAG/USD: silver returns to global growth
Current trend
Silver contracts are correcting upwards, trading at $26 an ounce.
Of all the assets of the metal group, silver has the highest chances of further growth. The asset is not as dependent on fluctuations in global capital as gold, and due to its much smaller money capacity, responds more quickly to fluctuations in the US dollar. The recent decline in the USD has led to the current strengthening of silver.
In the future, the instrument can be supported by stability in the Chinese economy, the main importer of the metal. Yesterday, several key data were published, such as the rate of the People's Bank of China, which remained at 3.85%, and the volume of industrial production which increased by 7.3%. Thus, despite a new outbreak of coronavirus in some provinces, economic activity and demand in the PRC are strengthening, supporting silver.
Support and resistance
On the global chart of the asset, the price, after a rather significant downward impulse, is correcting upwards again, reversed from the resistance line of the global triangle pattern. Technical indicators are uncertain. The fluctuation range of the EMA on the Alligator indicator is narrowed, and the histogram of the AO oscillator is in the sell zone.
Resistance levels: 27.54, 30.00.
Support levels: 24.60, 21.76.
GBP/USD: consolidating at record highs
Current trend
GBP is trading down against USD during today's morning session, correcting slightly after yesterday's renewing record highs since May 2018. The decline in the instrument is largely due to technical factors, while fundamentally the picture changes only slightly.
Moderate support for USD is provided by rather positive macroeconomic statistics from the US, which entered the market on Thursday. The number of initial jobless claims for the week ending January 15 fell from 926K to 900K, while investors expected a decrease in the figure to 910K. Continuing Jobless Claims were revised down from 5.181M to 5.054M with the forecast for growth to 5.4M.
In turn, GBP is under slight pressure on Friday after the publication of GfK Consumer Confidence. In January, the index fell from –26 to –28 points, while the market expected a decline to –29 points.
Support and resistance
The Bollinger Bands in D1 chart show moderate growth. The price range is expanding but it fails to conform to the development of "bullish" sentiments at the moment. MACD indicator is growing preserving a buy signal (located above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought instrument in the ultra-short term.
Resistance levels: 1.3760, 1.3834, 1.3900.
Support levels: 1.3700, 1.3650, 1.3600, 1.3552.
NZD/USD: a movement to the local high
Current trend
The NZD/USD pair shows a steady upward trend, trading near the level of 0.7211.
The positive momentum continues after the publication of the New Zealand CPI on Friday. The Q4 figure quarter was 0.5%, significantly surpassing the skeptical forecasts of analysts at the level of 0.1%. Manufacturing PMI for December fell but remained above the stability level, amounting to 48.7 points.
The USD Index is declining, despite the positive Friday statistics, and moves around 90.100. Investors are waiting for the start of active actions by Joe Biden as president and are in no hurry to make a choice. Sales in the secondary housing market for December rose again and reached 6.76 million against the background of the forecast of 6.55 million. Manufacturing PMI for January reached 59.1 points, which is better than 57.1 in the previous period.
Support and resistance
After the breakout of the local resistance line, the formation and subsequent development of the Inverted Head and Shoulders pattern is possible. Technical indicators are in a local buying state and are ready to strengthen their readings. The fluctuation range of the EMA on the Alligator indicator began to expand, and the histogram of the AO oscillator, trading in the positive zone, forms upward bars.
Resistance levels: 0.7236, 0.7340.
Support levels: 0.7165, 0.7032.
EUR/USD: ambiguous dynamics
Current trend
EUR shows flat dynamics of trading against USD during today's Asian session, consolidating near the level of 1.2150. Investors do not open new trading positions yet, waiting for the Fed's monetary policy comments to be released tonight. The markets were a little wary after Joe Biden's statements that he is ready to adjust the previously announced USD 1.9 trillion stimulus plan for the US economy.
Today, European investors expect the publication of macroeconomic statistics from Germany and France on the level of consumer confidence in February and January, respectively. In addition, attention will be drawn to the speech of the ECB Chief Economist Philip Lane, who can comment on the recent statements by Christine Lagarde about a possible double recession in the eurozone.
Support and resistance
In the D1 chart, Bollinger Bands are reversing horizontally. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD indicator is growing preserving a weak buy signal (located above the signal line). The indicator line is also trying to consolidate above the zero level. Stochastic, having reached the level of "80" reversed downwards and does not react to yesterday's resumption of growth of the instrument.
To open new positions, it is necessary to wait for the trade signals to become clear.
Resistance levels: 1.2200, 1.2234, 1.2271, 1.2309.
Support levels: 1.2150, 1.2120, 1.2087, 1.2052.
WTI Crude Oil: oil is preparing to renew the local high
Current trend
The oil price is moving sideways, trading at the level of 52.50.
Quotes reacted to the data on energy reserves very sharply. According to the API Institute, the amount of oil in American vaults fell by 5.272 million barrels against the expected increase of 0.603 million barrels. According to the report of the US EIA, the reduction was more significant. The indicator fell by 9.910 million barrels against the expected increase of 0.430 million barrels.
However, such a tangible decrease in stocks gave the instrument only a temporary upward impetus, and the growth was offset by the subsequent news of the suspension of arms supplies from the United States to the UAE and Saudi Arabia. Although the ban is temporary, experts fear that relations between the countries will deteriorate, which will add additional uncertainty to the energy market.
Support and resistance
On the local chart of the asset, the price moves within the downwards channel, which can transform into a Flag pattern of the trend continuation. Technical indicators are uncertain. Fast EMAs of the Alligator indicator intertwined with the signal one and the histogram of the AO oscillator is approaching the positive zone.
Resistance levels: 53.10, 55.00.
Support levels: 52.00, 50.30.
XAU/USD: wave analysis
The pair may grow.
On the daily chart, the third wave of the higher level (3) formed, a downward correction developed as the wave (4), and the wave (5) forms. Now, the first entry wave of the lower level 1 of (5) has formed, a local correction has developed as the wave 2 of (5), and the formation of the wave 3 of (5) is starting. If the assumption is correct, the pair will grow to the levels of 2000.00–2075.45. In this scenario, critical stop loss level is 1811.49.
WTI Crude Oil: wave analysis
The price may grow.
On the daily chart, a downward correction of the higher level developed as the wave B, and the formation of the upward wave C started, within which the first wave 1 of (1) of C develops. Now, the third wave of the lower level (iii) of iii of 1 is forming, within which a local correction has developed as the wave iv of (iii). If the assumption is correct, the price will grow to the levels of 60.00–65.50. In this scenario, critical stop loss level is 49.06.
GBP/USD: wave analysis
The pair may fall.
On the daily chart, the first wave of the higher level (1) developed, within which the wave 5 of (1) formed. Now, the fifth wave of the lower level v of 5 of (1) has developed as a wedge, and a downward correction is starting to develop as the wave (2). If the assumption is correct, the pair will fall to the levels of 1.3207–1.2861. In this scenario, critical stop loss level is 1.3756.
Brent Crude Oil: pending OPEC+ decision
Current trend
Brent crude oil prices continue to be in an uptrend, trading at 57.80.
Oil quotes are slightly adjusted after active growth the day before, the main reason for which was the OPEC+ report on the results of compliance with the agreement in January 2021.
Before today's meeting, at which the duration of the plan to curb world oil production will be discussed, the monitoring committee reported on the results of the implementation of the agreement in January. According to the report, the participating countries fulfilled the terms of the deal by 99%, and the total volume of the reduction fell from 7.7 million barrels per day to 7.2 million barrels. The current agreements are expected to remain in place in February, with a total cut of 7.125 million barrels per day, and given that Saudi Arabia and several other members of the deal agreed to a larger cut, this figure could be just over 7 million barrels.
Support and resistance
On the local chart, the asset left the correction channel and consolidated above the resistance line with high prospects for continued growth. Technical indicators are in a global buy signal state. The range of EMA fluctuations on the Alligator indicator continues to expand, and the histogram of the AO oscillator is trading in the positive zone.
Resistance levels: 58.20, 59.30.
Support levels: 57.40, 56.30.
AUD/USD: wave analysis
The pair is in a correction and may grow.
On the daily chart, the first wave of the higher level (1) of C develops, within which the third wave 3 of (1) formed. Now, a local correction is developing as the fourth wave 4 of (1), within which the wave c of 4 forms. If the assumption is correct, after the end of the correction, the pair will grow to the levels of 0.7900–0.8100. In this scenario, critical stop loss level is 0.7503.
XAU/USD: wave analysis
The correction ends, the pair may grow.
On the daily chart, the third wave of the higher level (3) formed, a downward correction developed as the wave (4), and the wave (5) forms. Now, the first entry wave of the lower level 1 of (5) has formed, and a local correction is ending to develop as the wave 2 of (5), within which the wave c of 2 has formed. If the assumption is correct, the pair will grow to the levels of 1959.38–2075.45. In this scenario, critical stop loss level is 1763.20.
EUR/USD: wave analysis
The pair may fall.
On the daily chart, the first wave of the higher level 1 of (3) developed, and a downward correction forms as the second wave 2 of (3). Now, the wave a of 2 is developing, within which the third wave of the lower level (iii) of a has formed, and a local correction is developing as the wave (iv) of a. If the assumption is correct, after the end of the correction, the pair will fall to the levels of 1.1880–1.1684. In this scenario, critical stop loss level is 1.2191.
XAG/USD: wave analysis
The pair may grow.
On the daily chart, the first wave of the higher level 1 of (3) formed, and a downward correction developed as the wave 2 of (3). Now, the third wave 3 of (3) is forming, within which a local correction has developed as the wave ii of 3, and the wave iii of 3 is forming. If the assumption is correct, the price will grow to the levels of 33.00–35.00. In this scenario, critical stop loss level is 25.82.
EUR/USD: local trend reversal
Current trend
The EUR/USD pair is correcting upward, trading around the level of 1.2125. EUR is trading neutral against other major competitors but is significantly strengthening against USD.
The main topic of discussion in Europe remains the consequences of the COVID-19 pandemic. Yesterday, the Austrian authorities said that a large outbreak of the South African strain of the virus was recorded in the Tyrol region. 400 cases of the suspected virus have been reported, of which 293 have been confirmed. Due to a sharp increase in the number of new cases, the Greek authorities have decided to close schools and non-grocery stores for at least 2 weeks. The number of new cases in the country in the past day alone amounted to 1526.
USD Index continues to decline, trading at 90.300. Yesterday, the US Senate decided that the impeachment procedure of former President Donald Trump is not contrary to the constitution. 56 senators voted for this, and 44 against. However, to recognize the impeachment itself, at least 67 votes of members of the Senate are required.
Support and resistance
Locally, the price has broken the resistance line of the local downtrend and consolidated above it. Technical indicators gave a buy signal. Fast EMAs on the Alligator indicator crossed the signal one upwards, and the AO oscillator histogram moved into the positive zone.
Resistance levels: 1.2173, 1.2340.
Support levels: 1.2062, 1.1958.
EUR/USD: consolidation at local highs
Current trend
EUR shows the flat dynamics of trading against USD during today's morning session, consolidating after another renewal of local highs the day before. The reason for the emergence of multidirectional dynamics was the correctional sentiment for USD, which received support after the disclosure of some details of the previously announced plan to stimulate the US economy in the amount of USD 1.9 trillion. At the same time, published macroeconomic statistics from the USA often exert moderate pressure on USD positions, as, for example, in the case of data on consumer inflation, which appeared on Wednesday.
In turn, the macroeconomic statistics from Europe, published on Wednesday, turned out to be neutral. The Consumer Price Index in Germany in January rose by 0.8% MoM and 1% YoY, which coincided with market expectations and data for the previous period.
Support and resistance
In the D1 chart, Bollinger Bands are reversing horizontally. The price range is slightly changing, being spacious enough for the current activity level in the market. MACD indicator is growing preserving a stable buy signal (located above the signal line). The indicator is about to test the zero line for a breakout. Stochastic retains upward direction but is located near its highs, which indicates the risks of overbought EUR in the ultra-short term.
Existing long positions should be kept in the short and/or ultra-short term until the signals from technical indicators clear up.
Resistance levels: 1.2150, 1.2200, 1.2234, 1.2271.
Support levels: 1.2087, 1.2052, 1.2000, 1.1951.
Brent Crude Oil: wave analysis
The price may rise.
On the daily chart, the development of a downward correction of the higher level as wave B was completed and the formation of the ascending wave C began, as part of which the first wave 1 of (1) of C is developing. At the moment, the third wave of the lower level iii of 1 is forming, within which wave (iii) of iii is developing. If the assumption is correct, one may expect the growth of the price of the asset to 65.00–70.00. The level of 57.20 is critical and stop-loss for this scenario.
XAG/USD: wave analysis
The pair may grow.
On the daily chart, the first wave of the higher level 1 of (3) formed, and a downward correction developed as the wave 2 of (3). Now, the third wave 3 of (3) is forming, within which a local correction has developed as the wave ii of 3, and the wave of the lower level (i) of iii of 3 is forming. If the assumption is correct, the price will grow to the levels of 33.00–35.00. In this scenario, critical stop loss level is 25.82.
Brent Crude Oil: trading near record highs
Current trend
Today, during the Asian session, oil prices change slightly, holding near record highs at $64 per barrel.
The instrument is supported by an improvement in the global epidemiological situation amid the rapid spread of vaccines. Markets are hoping that there will be no new restrictions this year, although it is clear that it will not be possible to complete vaccination campaigns completely. Additional support for the quotes is provided by the restrictive OPEC+ policy. Despite the gradual recovery of the energy market, many countries are in no hurry to return to the previous production volumes, which positively affects the supply.
Friday’s US Baker Hughes' report on active oil platforms reflected another rise in the number of rigs from 299 to 306 units, indicating a gradual recovery in the US oil sector.
Support and resistance
Bollinger bands are growing steadily on the daily chart. The price range is narrowing from the bottom, reflecting the ambiguous nature of recent trading. The MACD indicator is growing, maintaining a relatively strong buy signal (the histogram is above the signal line). Stochastic reversed upwards; however, it is near its highs. The indicator readings indicate that the instrument is strongly overbought in the nearest time intervals.
Development of a corrective decline is possible in the short and/or super-short term.
Resistance levels: 64.00, 65.00, 66.00.
Support levels: 63.00, 62.00, 61.00, 60.00.
EUR/USD: US yield rising supports the dollar
Current trend
Yesterday, with the opening of trading on the New York Stock Exchange, the EUR/USD pair sharply changed its direction of moving. US Treasury yields renewed annual highs, reaching the level of 1.292% on 10-year notes and 2.095% on 30-year notes. Meanwhile, the stock market corrected downward from local highs, closing below the opening level.
The EU Q4 2020 GDP decreased by 0.6% and by 5.0% YoY. Employment is recovering but slowly, rising only by 0.3% QoQ. The February index of economic sentiment from the ZEW rose to 69.6 points from the previous reading of 58.3.
In general, the greenback is expected to strengthen further before the adoption of the US $1.9 trillion financial stimulus bill. The correction of the euro towards a long-term uptrend is likely to continue but investors should pay attention to the ECB monetary policy statement at 10:00 (GMT+2) today.
Support and resistance
Initially, the instrument was in a strong resistance area of 1.2175–1.2160 but after the release of news on the EU and the US, the rate dropped to 1.2110.
The RSI indicator is in the neutral zone. The instrument is moving within a medium-term downtrend, the key resistance of which is the margin zone 1.2128–1.2112. While this area is held, it is worth opening short positions with a target in the area of the February low.
Resistance levels: 1.2175, 1.2320.
Support levels: 1.1975, 1.1925.
Morning Market Review
EUR/USD
EUR shows flat dynamics of trading against USD during today's Asian session, consolidating after an active decline the day before, as a result of which the instrument has updated local lows since February 8. USD was supported yesterday by strong macroeconomic data from the US on the dynamics of retail sales. In January, sales volumes increased by 5.3% MoM after a decline of 1% MoM in the previous month. Analysts had expected "bullish" trend to appear, but counted only on +1.1% MoM. Excluding car sales, the indicator in January increased by 5.9% MoM, which is also significantly better than the market forecasts of +1% MoM. Industrial production data for the same period was not so optimistic. In January, production slowed down from +1.3% MoM (revised from +1.6% MoM) to +0.9% MoM. However, the real dynamics again turned out to be noticeably better than market expectations at +0.5% MoM.
GBP/USD
GBP is trading ambiguously against USD during today's morning session. The day before, the instrument retreated from its record highs, responding to the strengthening of USD in response to the publication of strong macroeconomic statistics on retail sales in the US. In turn, the British statistics were not so optimistic. The Consumer Price Index in the UK in January fell by 0.2% MoM after growing by 0.3% MoM in December. Analysts, however, had expected a twice as strong fall. On an annualized basis, the index accelerated from +0.6% YoY to +0.7% YoY, beating the forecasts of +0.5% YoY. The Retail Price Index for the same period fell by 0.3% MoM after rising 0.6% MoM at the end of last year. Analysts had expected decline by 0.4% MoM.
AUD/USD
AUD is relatively stable against USD in Asia today. The instrument is consolidating near 0.7750, recovering slightly after the decline at the beginning of the week. The focus is on macroeconomic statistics on the labor market from Australia. The Unemployment Rate in Australia in January fell from 6.6% to 6.4% against the forecast of 6.5%. At the same time, the Employment Change increased by only 29.1K after an increase of 50K in December. Analysts expected growth of 40K. Curiously, the growth in employment as a whole is due to an increase in the level of Fulltime Employment, while Part-Time Employment in January fell by 29.8K jobs. The Participation Rate in January fell slightly from 66.2% to 66.1%.
USD/JPY
USD is showing a slight increase against JPY in trading this morning session, trying to win back some of the losses suffered the day before. USD is still supported by the positive macroeconomic data from the US on the dynamics of retail sales, released on Wednesday, and many analysts associate the appearance of negative dynamics only with technical factors. Today, investors are focused on the statistics on the dynamics of jobless claims in the US. The indicator is expected to continue its moderate decline, reflecting the gradual recovery in the US labor market after the pandemic. It is also worth paying attention to the publication of data on the dynamics of building permits in January and the Philadelphia Fed Manufacturing Survey for February. Interesting statistics from Japan will appear only on Friday with the release of the inflation cut in January-February and Jibun Bank Manufacturing PMI for February.
XAU/USD
Gold prices are showing quite active growth during today's morning trading session, offsetting the no less active decline the day before, which led to the renewal of local lows since November 30. The uptrend was triggered by technical factors, while USD gained additional support in the form of strong US retail sales data for January. In turn, investors are still expecting the development of the situation with the stimulus package for the US economy at USD 1.9 trillion. It is predicted that the approval of such an expensive program, taking into account the current situation in the US domestic market, will lead to a noticeable increase in inflationary pressures. In the meantime, traders are more interested in the yield of US Treasury securities, which are breaking new local records.
EUR/USD: ambiguous trading
Current trend
EUR is showing ambiguous trading during today's Asian session, consolidating near 1.2100 after the instrument retraced the day before. The reason for yesterday's resumption of "bullish" trend was the disappointing data from the US. Initial Jobless Claims for the week ending February 12 again showed an increase from 848K to 861K, while analysts expected their reduction to 765K. Continuing Jobless Claims for the week ending February 5 fell from 4.558M to 4.494M, which fell short of the most optimistic forecasts of 4.413M. Thus, investors are again convinced that it is still somewhat premature to talk about the beginning of a confident recovery of the American economy. As Jerome Powell said, it will take years for the labor market to return to its previous levels.
The focus of European investors today is statistics on business activity in the manufacturing and services sectors in Germany and the eurozone for February.
Support and resistance
Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is changing slightly, but remains rather spacious for the current level of activity in the market. MACD has reversed towards growth without forming a buy signal (located below the signal line). Stochastic shows similar dynamics, reversing upwards near the level of "20". Current readings of the indicator signal in favor of a corrective growth in the ultra-short term.
Resistance levels: 1.2100, 1.2150, 1.2200.
Support levels: 1.2052, 1.2022, 1.2000, 1.1951.
BTC/USD: growth prospects remain
Current trend
Last week, the pair has continued growing. The price reached new all-time highs, rising above 58000.00 and adding about 17.4%.
The growth in quotes was due to the growing popularity of BTC among large institutional players. Tesla Inc. investment into Bitcoin encouraged other large global companies to enter the digital assets market. German SynBiotic SE has officially announced the transfer of part of its liquidity to BTC, as it fears a serious devaluation of world fiat currencies.
The price increase is supported by the launch in Canada of the first Bitcoin ETF in North America. Its shares began trading on the Toronto Stock Exchange on February 18. According to Bloomberg, in the first two days, the fund managed to attract investments in the amount of USD 421M, which is several times higher than the capitalization of the average Canadian ETF. Bitcoin ETF trading may be allowed in the US in the near term, providing new support for the entire cryptocurrency sector.
Support and resistance
The price maintains an uptrend, which is confirmed by upward reversal of the Bollinger Bands and an increase in the MACD histogram in the positive zone. Now the price is trying to consolidate above 56250.00 (Murrey [+1/8]). If successful, the growth of quotations will continue to 62500.00 (Murrey [+2/8]) and 65600.00 (Murrey [+5/8], H4). A downward reversal of Stochastic in the overbought zone does not exclude a price rollback to 50000.00 (Murrey [8/8]), but is unlikely to lead to the uptrend reversal.
Resistance levels: 56250.00, 62500.00, 65600.00.
Support levels: 53900.00, 50000.00, 43750.00.
WTI Crude Oil: oil prices are consolidating
Current trend
Yesterday oil prices hit record highs since January 2020. Today during the Asian session, the price moves flat, trading near $61 per barrel. It is supported by the optimistic market’s mood, expecting a further easing of quarantine restrictions and the restoration of oil demand to previous levels. However, the speech of the head of the US Fed Jerome Powell in Congress alarmed investors, as he noted that it would take "some time" for the economy to recover.
Yesterday’s API report on oil reserves also contributed to the development of corrective dynamics. For the week of February 19, stocks in the country rose by 1.026 million barrels after falling by 5.8 million barrels in the previous period. On Wednesday, traders are focused on the second Powell’s speech and the publication of a report on oil reserves from the US Department of Energy.
Support and resistance
Bollinger bands grow steadily on the daily chart. The price range narrows from above, reflecting the ambiguous nature of trading at the beginning of the week. MACD falls, maintaining a poor sell signal (the histogram is below the signal line). Stochastic reversed upwards after the flat dynamics and indicates the remaining “bullish” potential after the active growth at the beginning of the week.
To open new trading positions, it is better to wait until the signals from technical indicators are clarified.
Resistance levels: 62.18, 63.00, 64.00, 64.71.
Support levels: 60.50, 58.51, 57.25, 55.00.
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