Forex News Analysis by LiteForex

EUR/USD: general analysis

Current trend

Yesterday the US Dollar strengthened against the European currency. The Euro was pressured by the publication of data on economic sentiment in the eurozone. The ZEW survey showed an increase in economic sentiment to 5.4 points that was, however, substantially below market consensus of 6.7 points.
Today attention needs to be paid to data on the Import and Export Prices Indexes, due in the US at 2:30 pm (GMT+2), which are followed as indicators of inflation in the country.

Support and resistance

Bollinger Bands on the 4-hour chart is directed down while the price range is narrowing. MACD histogram remains in the region of the zero line and is keeping a sell signal. Stochastic is hovering not far from the border of the oversold zone.

The indicators recommend short positions.

Support levels: 1.1221, 1.1215, 1.1208, 1.1200, 1.1190, 1.1180.
Resistance levels: 1.1231, 1.1242, 1.1250, 1.1255, 1.1262, 1.1271, 1.1278.

Trading tips

Short positions can be opened from the current level with targets at 1.1205, 1.1195 and stop-loss at 1.1245. Validity – 1-2 days.
Long positions can be opened from the level of 1.1240 with the target at 1.1280 and stop-loss at 1.1225. Validity – 1-3 days.

XAU/USD: general analysis

Current trend

The Federal Reserve will hold its September meeting next week, and now market volatility is likely to be increasing amid publications of data on the US economy. Today attention needs to be paid to statistics on jobless claims and retail sales. Economists expect the number of initial jobless claims to increase from 259,000 to 265,000 and the volume of retail sales to fall by 0.1%. If the indicators come out better than market consensus, the US Dollar is likely to get support that would lead to a fall in the pair.

Support and resistance

The nearest support level is at 1319.25.
The nearest resistance level is at 1325.66.

Trading tips

Short positions can be opened from the level of 1318.00 with the target at 1315.00 and stop-loss at 1320.00.

Brent: technical analysis

UKBrent, D1

On the daily chart, the instrument is trading in the lower Bollinger band. The indicator is directed down while the price range remains unchanged. MACD histogram is near the zero line. Stochastic entered the oversold zone.

UKBrent, H4

On the 4-hour chart, the instrument is testing the level of 44.25. Bollinger Bands is directed down while the price range is narrowing. MACD histogram is in the negative zone and its volumes are falling. Stochastic is trying to turn down.

Key levels

Support levels: 46.01, 45.83, 45.61 (local low), 45.44 (lower line of Bollinger Bands), 45.26.
Resistance levels: 46.70 (middle MA of Bollinger Bands), 46.91, 47.16, 47.42, 47.69, 47.91, 48.11.

Trading tips

Short positions can be opened from current prices with the target at 45.45 and stop-loss at 46.70. Validity – 1 day.
Long positions can be opened from the level of 46.80 with the target at 47.40 and stop-loss at 46.40. Validity – 1-2 days.

USD/CHF: Dollar strengthened

Current trend

The US Dollar strengthened against the majority of other currencies on the market last Friday amid the publication of positive data on consumer inflation in the US. On a year-to-year basis, the Consumer Price Index in August grew by 1.1% that was a 0.1% better than forecasts of economists. In July, inflation showed a 0.8% growth. The Consumer Price Index ex Food and Energy accelerated its growth from 2.2% to 2.3% while economists predicted no change in the index.

The data increased expectations of monetary policy tightening by the Fed in the nearest future. However, the probability of an interest rate hike this week remains very low and stands at only 9%. Markets are focused on the December meeting of the regulator.

Support and resistance

Bollinger Bands on the daily chart is moving down while the price range is narrowing. MACD is growing and giving a weak buy signal. Stochastic is growing as well and approaching the border of the overbought zone.
The indicators recommend waiting for clearer trading signals.

Support levels: 0.9783 (local low), 0.9762, 0.9737, 0.9709, 0.9689 (12 September low), 0.9668, 0.9648 (8 September low), 0.9630, 0.9600, 0.9570, 0.9535 (18 August low), 0.9520.
Resistance levels: 0.9800 (local high), 0.9816 (local high), 0.9842, 0.9864, 0.9883 (1 September high).

Trading tips

Long positions can be opened after the breakout of the level of 0.9800 (with the appropriate indicators signals) with targets at 0.9864, 0.9883 and stop-loss at 0.9762. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 0.9762 with targets at 0.9689, 0.9668, 0.9648 and stop-loss at 0.9825. Validity – 2-3 days.

GBP/USD: review and forecast

Current trend

The pair continues falling amid strengthening in the US Dollar that remains supported by expectations of monetary policy tightening by the Fed before the end of the year. At the same time, the probability of an interest rate increase at the meeting, which is due this week, stands at only 10%. In addition, the Pound remains under pressure after the publication of week data on Retail Sales in the UK that showed a decline in August. The data returned worries that the British economy may slow down as the result of the decision to leave the EU.

Support and resistance

The price is heading towards a strong support level at 1.2900 that it has tested twice already.
On the 4-hour chart, the pair is falling towards the lower line of Bollinger Bands while bands are directed down.
Support levels: 1.2900, 1.2860.
Resistance levels: 1.3070, 1.3100, 1.3150, 1.3200.

Trading tips

Short positions can be opened from current prices with the target at 1.2900 and stop-loss at 1.3100.
Pending buy orders can be placed at the level of 1.2900 with the target at 1.3100 and stop-loss at 1.2850.

EUR/USD: review and forecast

Current trend

Yesterday the EUR/USD pair showed choppy trade and slightly fell on the day.
Today investors are focused on the US Fed Interest Rate Decision. Markets do not expect any changes in interest rates. In addition, the regulator will release its forecasts on economic growth, unemployment, inflation and its further plans regarding monetary policy.

At the same time, few of experts forecast an increase in interest rates during this meeting as some of the Fed officials earlier supported such step. However, the probability of this remains low.

Support and resistance

On the daily chart, the pair continues falling along the descending channel.
MACD histogram is about to enter the negative zone. Stochastic lines are in the oversold zone and directed down.
Support levels: 1.1120, 1.1050, 1.0980.
Resistance levels: 1.1180, 1.1230, 1.1300.

Trading tips

Long positions can be opened from the level of 1.1180 with targets at 1.1230, 1.1300 and stop-loss at 1.1150.
Short positions can be opened from the level of 1.1120 with the target at 1.1050 and stop-loss at 1.1150.

EUR/USD: general review

Current trend

On Wednesday, the EUR/USD pair significantly strengthened amid the decision by the American regulator to keep its interest rate unchanged. At the same time, in the Monetary Policy Statement it was noted that the possibility of policy tightening in the nearest future is very high.

Today, pair’s dynamics can be affected by the publication of data on the Chicago Fed National Activity Index and on Jobless Claims in the US. In addition, high volatility on the market can be caused by ECB President Draghi speech regarding economic conditions in the eurozone.

Support and resistance

On the daily chart, the instrument broke out a strong resistance level at 1.1120. Bollinger Bands is directed down while the price range is narrowing. MACD histogram is near the zero line. Stochastic has left the oversold zone.
The indicators recommend waiting for clearer trading signals.
Support levels: 1.1217, 1.1199, 1.1182, 1.1148, 1.1100, 1.1070.
Resistance levels: 1.1250, 1.1271, 1.1280, 1.1306, 1.1327.

Trading tips

Long positions can be opened from current prices with the target at 1.1280 and stop-loss at 1.1195. Validity – 1-2 days.
Short positions can be opened from the level of 1.1195 with the target at 1.1150 and stop-loss at 1.1220. Validity – 1-2 days.

USD/JPY: review and forecast

Current trend

The pair significantly fell last week amid weakening in the US Dollar after the Fed decided to keep its interest rate unchanged. In addition, commentaries regarding monetary policy showed regulator’s cautiousness when it comes to further rate increases.

This week attention needs to be paid to Bank of Japan Governor Kuroda speech. At its last meeting, the Japanese regulator left the key interest rate at the current -0.1% and the size of the bond purchases at 80 trillion Yen. However, after cautious statements from the Fed, Kuroda could hint about further easing in monetary policy in order to weaken the Yen.

Support and resistance

The pair continues testing a strong support level of 100.00 having failed to leave the descending channel.
On the daily chart, a pattern “inside bar” has formed. MACD histogram is in the negative zone and its volumes are growing. Stochastic is trying to leave the oversold zone.
Support levels: 100.00, 98.90.
Resistance levels: 101.25, 102.20, 103.30.

Trading tips

Pending buy orders can be placed at the level of 100.00 with the target at 103.30 and stop-loss at 99.00.
Short positions can be opened from the level of 98.80 with the target at 98.00 and stop-loss at 99.40.

AUD/USD: pair is strengthening

Current trend

The pair continues growing amid weakening in the US Dollar, which remains under pressure after quite cautious commentaries from the Fed officials regarding further monetary policy tightening.

In addition, the American currency is pressured by a large number of macroeconomic statistics that is coming out in the US this week, and its forecasts are not very optimistic. Tomorrow, data on Durable Goods Orders is due to be published, while yearly data on the GDP for the second quarter of the year and on Personal Consumption, Personal Income and Spending will be released on Thursday and Friday in the US. Furthermore, Fed’s Yellen will testify tomorrow and Fed’s James Bullard, Charles Evans and Loretta Mester will give their speeches.

Support and resistance

Bollinger Bands on the daily chart is moving horizontally while the price range is narrowing. MACD is growing and giving a quite strong buy signal. Stochastic is trying to leave the overbought zone.
The indicator recommend waiting for clearer trading signals.

Support levels: 0.7655 (local low), 0.7638, 0.7615, 0.7600 (local low), 0.7583, 0.7567, 0.7539, 0.7516, 0.7500 (19 September low), 0.7474, 0.7441 (13 September low).
Resistance levels: 0.7674 (22 September high), 0.7691, 0.7731 (8 September high), 0.7755 (10 August high), 0.7800 (21 April high).

Trading tips

Long positions can be opened after the breakout of the level of 0.7700 (with the appropriate indicators signals) with targets at 0.7731, 0.7755, 0.7800 and stop-loss at 0.7655. Validity – 2-3 days.
Short positions can be opened after the price rebound from the level of 0.7674 with targets at 0.7600, 0.7583, 0.7567 and stop-loss at 0.7720. Validity – 2-4 days.

USD/JPY: technical analysis

USD/JPY, D1

On the daily chart, the pair is trading in the lower Bollinger band. The price remains below its moving averages that are directed down. The RSI is about to retest its longer MA. The Composite is growing towards its longer MA as well.

USD/JPY, H4

On the 4-hour chart, the pair is trading on the middle MA of Bollinger Bands. The price remains below its moving averages that are turning down. The RSI is turning down towards its longer MA. The Composite is testing its resistance level.

Key levels

Support levels: 100.09 (local lows), 99.61 (50% Fibonacci retracement), 96.86 (October 2013 lows).
Resistance levels: 102.96 (local highs), 104.14 (September highs), 105.25 (61.8% retracement).

Trading tips

The price is consolidating between its descending trendline and 61.8% fan line and 50% retracement.
Long positions can be opened from the level of 102.96 with targets at 104.14, 105.25 and stop-loss at 102.23. Validity – 3-4 days.
Short positions can be opened from the level of 99.61 with the target at 96.86 and stop-loss at 100.19. Validity – 3-4 days.