Forex News Analysis by LiteForex

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.