Forex News Analysis by LiteForex

Brent: the market remains optimistic

Current trend

The trading week started with a strong oil prices growth, the Brent listings reached the maximum from the July, 2015, rising above the level of 57.00. The OPEC and 11 non-OPEC countries have come to the agreement of the oil producing limitation by 558K barrels per day, and this supported the price greatly. The oil Minister of Saudi Arabia declared the possibility of further limitations unilaterally. This brought some optimism on the market, and the middle term targets increased. Today the level of 65 dollar per barrel is the strong support level.

The market is favorable for the “bulls” now. If all the participants follow the agreement fully, the world extracted oil resources will reduce by 46%, which will make the price to grow. On the other hand, the countries have violated such rules many times. In addition, the USA can prevent the oil prices from growing, as they can increase the production of the shale oil, reopening the wells, declared as unprofitable. So the traders are waiting for the realization of the agreement, remains optimistic.

Support and resistance

The price was corrected to the level of 55.24 and now is trying to grow. In case of the breakup at 56.46 the nearest targets will be at 57.10 (December maximum), 58.00 and 58.80. The indicators show the possibility of the growth, too. The price is moving within the upper border of the Bollinger Bands, which is pointed upwards and shows the upward trend, too. The Stochastic is reversing upward, the MACD histogram is growing in the positive area. The continuing of the downward correction to the level of 53.50 (Fibonacci correction 23.6%) and 51.50 (Fibonacci correction 38.2%) is less possible, as the price should consolidate below the 54.80 to develop it.

Support levels: 54.80, 53.50, 51.50.
Resistance levels: 56.45, 57.10, 58.00, 58.80, 60.00.

Trading scenario

Open long positions when the price is set above 56.45 with the target at 57.10, 58.00 and 58.80. Stop loss is at 55.90. Open short positions below 54.80 with the target at 53.50, 51.50 and stop loss at 55.40.

NZD/USD: technical analysis

NZD/USD, D1
On the daily chart the tool is steadily growing along the upper border of the indicator "Bollinger Bands". Indicator is pointing up, while the price range continues to grow, which is the basis for the continuation of the current trend. The MACD histogram is getting closer to zero line from below, its volumes are growing, maintaining a buy signal. Stochastic is going to enter the overbought zone.

NZD/USD, H4
On the 4-hour chart the pair is trading in the upper Bollinger band. Indicator is pointing up, while the price range has increased, pointing to the preservation of the current trend. Histogram MACD is in the positive zone, its volumes continue to grow, while maintaining a strong buy signal. Volume line of Stochastic is pointing up, while the signal line is oriented downwards.

Key levels
Support levels: 0.7203, 0.7194, 0.7182, 0.7165, 0.7153.
Resistance levels: 0.7222, 0.7230, 0.7238, 0.7246.

Trading tips
Long positions may be opened at the current price with the targets at 0.7238, 0.7250 and stop loss at 0.7200. Implementation period 1 day.
Short positions can be placed at the level of 0.7205 with the targets at 0.7180, 0.7170 and stop loss at 0.7195. Implementation period 1 day.

EUR/USD: general analysis

Current trend

The pair is lowering. It renewed the historical minimum due to the FRS decision of the key interest rate rise to 0.5-0.75%. The rise was expected, and furthermore, the commitment to the tightening of the US monetary policy was announced.
“A modest increase in the federal funds rate is appropriate in light of the solid progress we have seen toward our goals of maximum employment and 2% inflation”, — is written on the official site of the FRS. Janet Yellen said that the FRS will pursue its policy according to Trump’s economical plan for lowering the taxes and increasing of spending on infrastructure. The new interest rate rise in the next year was also announced.

As today there are no significant releases in Eurozone, the USA Retail Sales and Initial Jobless claims indicators are worth traders’ attention.

Support and resistance

On the 4-hour chart the pair broke the lower border of the Bollinger Bands indicator, showing a strong sell signal. The MACD is on negative zone, its volumes are rising. The signal line crosses the histogram body downwards, giving sell signal. The Stochastic crosses the border between neutral area and oversold area downwards, giving a signal to open shorts positions.

Support levels: 1.0400.
Resistance levels: 1.0500, 1.0550, 1.0600, 1.0650, 1.0710, 1.0735, 1.0800, 1.0830, 1.0870.

Trading scenario

Open short positions from the current price with the target at 1.0300. Stop loss is at 1.0450.
Open long positions from the level of 1.0550 with the target at 1.0600. Stop loss is at 1.0520.
Implementation period: 1-3 days.

XAG/USD: silver is falling

Current trend

Yesterday the price of silver significantly declined amid a continuous strengthening in the US Dollar that was supported by strong data from the US.

The Consumer Price Index excluding Food and Energy in November rose by 2.1% that matched the figure from the previous month but came out a 0.1% worse than forecasts of economists. On a month-to-month basis, the index added 0.2% that matched the expectations. Additionally, the number of Initial Jobless Claims for the week ending 9 December fell from 258 thousands to 254 thousands that exceeded the expectations by 1 thousand claims. The NY Empire State Manufacturing Index in December grew from 1.5 to 9.0 points, more than twice beating the forecasts. The Philadelphia Fed Manufacturing Index rose from 7.6 to 21.5 points, against the expectations of a growth to only 9.0 points.

Support and resistance

Bollinger Bands on the daily chart turned down while the price range is widening. The price, however, is trading underneath its lower border. MACD is falling having formed a sell signal. Stochastic continues falling having reached the oversold zone.
The indicators recommend waiting for clearer trading signals.

Support levels: 15.87 (local low), 15.65, 15.51 (11 April low).
Resistance levels: 16.00 (local high), 16.15 (25 November low), 16.30, 16.42 (18 November low), 16.62, 16.73 (local high), 16.87, 17.00, 17.22 (16 November high).

Trading tips

Long positions can be opened after the price consolidation above the level of 16.15 with targets at 16.62, 16.73, 17.00 and stop-loss at 15.80. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 15.87 with targets at 15.51, 15.25, 15.00 and stop-loss at 16.15. Validity – 2-3 days.

GBP/USD: general analysis

Current trend

During the last week trading sessions the pair has lost about 110 points due to the strengthening of the USD. As expected, the regulator has increased the key interest rate from 0.50% to 0.75%, adding than the next rate rise can happen in the first half of the next year. On Thursday, December, 15, the Bank of England has decided to keep the interest rate on the same level of 0.25%. The Head of the regulator, Mark Carney has commented the decision carefully and avoided any specificity. However, he said that the inflation stays within expected range, and there are no conditions to its growth.

Concerning the “hawk” rhetoric of the USA FRS and tough negotiations between UK and the EU upon the Brexit, the pair will decrease in the long term.

Support and resistance

On the 4-hour chart the pair is trading in the bottom area of the Bollinger Bands. The indicator is pointed downwards, as the price range is wide, so the current trend will continue. The MACD is in negative zone and doesn’t give a clear signal. The Stochastic is ready to leave the overbought area, forming a strong sell signal.
According to the readings, it’s better to open short positions.

Support levels: 1.2450, 1.2401, 1.2361, 1.2184.
Resistance levels: 1.2516, 1.2567, 1.2605, 1.2648, 1.2698, 1.2723.

Trading scenario

Open short positions on the current level with the target at 1.2400. Stop loss is at 1.2520. Implementation period: 1-2 days.
Open long positions from the level of 1.2520 with the target at 1.2570. Stop loss is at 1.2500. Implementation period: 1-3 days.

USD/CAD: general analysis

Current trend
The Canadian dollar continues to move in the upward channel since March 2016. Since last week, the pair once again start the upward movement within the channel, caused by the strengthening US dollar. Now the pair is in the middle of the range.
Further movement of the pair may be affected by data on wholesale sales from Canada at 15:30 (GMT+2) today, retail sales data from the US, and particularly the report of the American Petroleum Institute at 23:30 (GMT+2). As you know, the Canadian dollar has a strong correlation with the oil price. For the same reason it is important to pay attention to the Wednesday release, 17:30 (GMT+2) of oil stats from the US.

Support and resistance levels
Support levels: 1.3262, 1.3315, 1.3376, 1.2988, and, of course, the lower boundary of the channel at 1.3130.
Resistance levels: 1.3521, 13579, 1.3800 (the upper border of the channel), 1.3844.

Trading tips
Long positions may be opened at the market price, targets – 1.3521 and 1.3579, stop loss –1.3340.
The scenario with a return to the bottom border of the channel is still relevant. In this case, we sell from the level 1.3376 with target at 1.3130 and stop loss at 1.3450.

AUD/USD: general analysis

Current trend

Yesterday, the Australian currency continued its decline against the US dollar after the release of Bank of Australia Meeting Minutes on interest rates and monetary policy. However, during the American session, the pair gained back about forty points from the 90 it had lost. The releases of the leading economic indicators index in Australia and the index of activity in all sectors of Japan did not affected the situation significantly.

Today, at 14:00 and 16:00 (GMT+2) we expect the stats on real estate market and mortgage lending in the US. Also important data will be stats on stocks of petroleum products in the US (17:30 GMT+2).

Support and resistance

Resistance levels: 0.7837 (one-year maximum), 0.7776 (month and week high), 0.7660, 0.7600, 0.7545, 0.7489, 0.7420, 0.7309.
Support levels: 0.7143, 0.7021, 0.6828.

Trading tips

Short positions can be opened at the market price with the targets of 0.7143, 0.7021 and stop loss at around 0.7310.
If the price consolidates above 0.7309 level, then the long positions will become relevant. Targets for the “bulls” will be 0.7420, 0.7489 and stop loss at around 0.7250.

GBP/USD: the pound stays under pressure

Current trend

During the trading sessions in the previous week the pound was lowering against the US dollar, renewing the local minimum from November, 2. Despite of the decreasing traders’ activity due to the upcoming New Year and Christmas holydays, the pound couldn’t became corrected, being under the pressure of new concerns due to the upcoming Brexit.

In addition rather controversial macroeconomical statistics from the UK were published on Friday, 23. The third quarter GDP index has grown by 0.6% QoQ, which is better than the predicted value by 0.1%. The YoY GDP has grown by 2.2%, which is worse than predicted value by 0.1%. The Business Investments indicator has grown only by 0.4% QoQ, while the experts predicted the growth by 0.9% QoQ. The YoY volume of the investments has decreased by 2.2% YoY against -1.6% in the previous quarter. The Index of Services has grown by 1.0% in October against +0.8% in September, while analysts were expecting the growth by 0.9% QoQ. The Current Account data are better than expected also. The third quarter deficit is 25.490 billion pounds, increased from the level of 22,080 billion, while the analysts expected the deficit to grow to the level of 27,450 billion pounds.

Support and resistance

Resistance levels: 1.2312 (minimum on December, 20), 1.2354, 1.2385 (minimum on November, 28), 1.2419, 1.2468, 1.2512 (maximum on November, 22), 1.2548, 1.2584 (the level of December, 14) and 1.2619.
Support levels: 1.2272 (testing during the morning session on December, 26), 1.2228 (current minimum from December, 23), 1.2171 and 1.2132 (the October, 28 level).
On the daily chart the Bollinger Bands indicator is lowering. The price range is slightly widening, giving to the “bears” the way to new local minima. However the indicator shows the possibility of the appearance of the correctional growth and the return of the price to the middle line area.

The MACD is lowering, keeping a sell signal (the histogram is below the signal line). It’s better to keep current shorts positions, but not to open new “bearish” ones.
The Stochastic is in the oversold area, is trying to reverse upwards, which can show the potential formation of the correctional growth in short or very short terms.

Trading scenario

Open long positions after the breakout of the level of 1.2312, if the technical indicators don’t contradict the “bullish” trend. Take profit is at 1.2419 or 1.2468. Stop loss is at 1.2210 and 1.2200. Implementation period: 2-3 days.
In case of the breakout of the level of 1.2228 downwards, it’s better to open short positions with the targets at 1.2132 and 1.2100. Stop loss is at 1.2280. Implementation period: 2-3 days.

USD/CHF: the US dollar keeps growing

Current trend

In the beginning of the week the US dollar is growing against the Swiss franc, renewing a local maximum on December, 21. The market activity is still low due to the Ney Year and Christmas holydays. The traders prefer not to buy a risky currency, but consolidate the profit while trading stable ones.

On Monday, 26, there were no significant macroeconomical statistics published, but on Tuesday there will be a lot of data from USA. The investors are interested in Business Activity and Consumer Confidence indices. Also the traders wait for the Redbook index and October S&P/Case-Shiller Home Price Indices. The nearest publications in Switzerland are due at Wednesday, December, 28, as the November UBS Consumption Indicator will be published. The data is based on 5 economic indicators of consumption: car sales, consumer confidence, retail sales, the number of domestic overnight hotel stays, credit card transactions volumes.

Support and resistance

Resistance levels: 1.0290 (maximum on December, 21), 1.0318 (maximum on December, 20) и 1.0342 — maximum on December, 15.
Support levels: 1.0271 (the nearest level), 1.0239 (minimum on December, 16), 1.0212 (maximum on December, 9), 1.0190, 1.0166, 1.0149 (the level of December, 4), 1.0123 and 1.0100.

On the daily chart Bollinger Bands indicator is growing. The price range is narrowing, reflecting recent controversial trade dynamics. Stick to the channel trade strategy.
The MACD is lowering, keeping the weak sell signal (the histogram is below the signal line). It’s better to close some of the short positions and wait for more trading signals.

The Stochastic reversed again in the middle of its working area. The indicator doesn’t contradict with the further “bullish” development in short or very short term.

Trading scenario

Open long positions after the breakout of 1.0290, if the technical indicators don’t contradict with the «bullish» trend. Take profit is at 1.0342, 1.0350 or 1.0375. Stop loss is at 1.0250. Implementation period: 2-3 days.
In case of reversal near the level 1.0290 it’s better to open correction short positions with the nearest target at 1.0200 or 1.0190. Stop loss is at 1.0320 or 1.0330. Implementation period: 2-3 days.

XAG/USD: general analysis

Current trend

Yesterday the pair was growing against the “thin” market and no key macroeconomical news. It couldn’t consolidate above the strong resistance level of 16.00, and the silver began to decrease again.
Today the publication of the Pending Home Sales index can affect the market. The growth of the index above 0.5% will pressure the pair.

Support and resistance

On the daily chart the pair is trading in the narrow range of 15.85-16.05. The Bollinger Bands indicator has corrected downwards, as the price range has widened significantly, reflecting the high volatility of the continuing of the current trend. The MACD is in the negative zone, the volumes of the histogram are decreasing, keeping a sell signal. The Stochastic has reversed upwards near the border of the oversold area.
According to the indicators, short positions are more preferable.
Support levels: 15.82, 15.65, 15.47.
Resistance levels: 16.16, 16.41, 16.66, 16.94, 17.20.

Trading scenario

Open short positions at the current price with the target at 15.45. Stop loss is at 16.05. Implementation period: 1-2 days.
Open long positions at 16.15 with the target at 16.55. Stop loss is at 15.95. Implementation period: 1-2 days.