Forex News Analysis by LiteForex

USD/CHF: Fibonacci analysis

The downward trend will continue.

On the 4-hour chart the price has tested the level of 1.0070. The breakout here is possible, as the Bollinger Bands are pointed downwards. Also, the Stochastic has reversed in the same direction, and in this case the significant lowering of the price is possible. In case of the rebound from the level of 1.0070 the correction is possible to the level of 1.0125 (correction cluster 23.6% in the short and middle term) and further to 1.0160 (correction 38.2%) and 1.0190 (correction 50.0%, the middle line of the Bollinger Bands for D1).

On the daily chart there is a downward breakout of the level 1.0120 (correction 23.6%) and the upward fan line 38.2%, and now is reaching the level of 1.0010 (correction 38.2%) and further across the 50.0% fan line to the level of 0.9920 (correction 50.0%) into the area of the crossing with the 61.8% fan line or the curve 38.2%. If the price will reverse at the level of 1.0010 or in case of the upward breakout of the level of 1.0120 the growth is possible to reappear. In this case the correction can continue to the level of 1.0200 (the middle line of the Bollinger Bands) and 1.0300 (correction 0.0%).

Trading scenario

Sell the pair below the level of 1.0070 with the target at 1.0010, 0.9920 and stop loss at 1.0110.

Alternative scenario

Buy the pair above the level of 1.0120 or in case of the reversal at 1.0000 with the target at 1.0200 and 1.0300. Stop loss is at 1.0080 and 0.9970 correspondingly.

FDAX: technical analysis

FDAX, D1

On the daily chart, the instrument is trading in the upper Bollinger band. The price remains above its moving averages that are directed up. The RSI is showing Bearish dynamics having broken down its longer MA. The Composite is representing similar pattern.

FDAX, H4

On the 4-hour chart, the instrument is trading just above the lower line of Bollinger Bands. The price remains above the EMA65, EMA130 and SMA200 that are turning horizontally. The RSI is testing its last week support. The Composite is approaching its support level as well.

Key levels

Support levels: 11484.2 (December 2016 highs), 11336.1 (local lows), 11220.7 (local lows).
Resistance levels: 11638.5 (local highs), 11663.1 (local highs), 11792.3 (July 2015 highs).

Trading tips

The price is consolidating above a strong support level at 11484.2. Its breakdown could lead to a downward correction continuation, however, the main trend remains ascending.
Short positions can be opened from the level of 11484.2 with the target at 11336.1 and stop-loss at 11524.0. Validity – 3-5 days.
Long positions can be opened from the level of 11663.1 with the target at 11792.3 and stop-loss at 11638.5. Validity – 3-5 days.

EUR/GBP: Fibonacci analysis

Possibility of fall continuation.

On the 4-hour chart, the price fell below the level of 0.8718 (23.6% correction) and after a breakdown of the 38.2% fan line (which seems likely as Stochastic is directed down), the fall could continue towards 0.8650 (38.2% corrections for the medium-term and short-term trends) and 0.8590 (50% correction). However, the ascending fan could be an additional obstacle to the price, so in the region of 0.8650 the price might reverse and start growing towards its January highs.
On the daily chart, the price is heading towards the level of 0.8650 (38.2% correction), a breakdown of which would lead to a fall continuation towards 0.8580 (lower line of Bollinger Bands), 0.8545 (23.6% correction). However, there is also a chance of a price reverse and growth towards the levels of 0.8742 (50% correction) and 0.8830 (61.8% correction), but this scenario seems unlikely (Stochastic turned down).

Main scenario

Sell the pair below the level of 0.8650 with targets at 0.8580, 0.8545 and stop-loss at 0.8690.

Alternative scenario

Buy the pair after the price rebound from the level of 0.8650 with targets at 0.8742, 0.8830 and stop-loss at 0.8620.

USD/JPY: general analysis

Current trend

During the yesterday trading session the USD continued to fall against all the main currencies, including Yen. Investors are fixing the profit on the dollar assets. After the great growth due to the positive expectation of the new President policy the traders want to see the confirmation of the Trump’s intentions to reform the economy. Yesterday the USA FRS members’ commentaries supported the USD and helped it not to fall further. The FRS members said that the USA economy has almost reached the target level of the inflation and now is almost involved. Yesterday Trump’s commentaries of the “too strong” dollar and its bad affection on the USA economy pressed the USD. The USD/JPY pair has decreased to the level of 112.56, but today on the opening session the price was corrected upwards. Today the USA Consumer Price Index (15:30 GMT+2), the Industrial Production data (16:15 GMT+2), Fed's Beige Book review (21:00 GMT+2) and Janet Yellen Speech (22:00 GMT+2) are worth traders attention.

Support and resistance

Support levels: 113.00, 112.56, 112.00.
Resistance levels: 113.50, 114.00, 114.47.

Trading scenario

On the 4-hour chart Bollinger Bands are pointed downwards, reflecting the development of the downward trend. Still the correction into the area of the middle line of the Bollinger Bands (113.86) is possible. The reversal from the level of 113.86 and the downward movement is possible.

The MACD histogram is in the negative zone, its volumes are decreasing, reflecting the development of the correction. In case of the consolidation of the price above the level of 114.00 the formation of the upward trend is possible.
Sell the pair after the price is set below the level of 113.00 with the target at 112.56, 112.00 and stop loss at 113.35.
Open the pair after the price is set above the level of 114.00 with the target at 114.47, 115.00 and stop loss at 113.65.

GBP/USD: the pair has a limited growth potential

Current trend
On Wednesday, the pair was corrected from the level of 1.2400 to the 1.2250 level. Today, the pair once again resumed its growth, which can reach the levels of 1.2380 (Fibonacci correction 50.0%) and 1.2470 (Fibonacci correction 61.8%). However, in the long term position of the pound is evaluated negatively. The head of the IMF, Christine Lagarde, in an interview with BBC said that the British economy will be under further pressure, because the new free trade agreement with the EU, which the UK intends to achieve, in any case, would give the country fewer trade opportunities than if it remained a member of the European Union. Goldman Sachs experts believe that the process of negotiations on a new agreement can take a long time and may take more time than the "Brexit" itself.

Support and resistance levels
The pair has a potential to grow up to the levels of 1.2380 and 1.2470, as confirmed by the Stochastics, turning upwards. However, long-term negative factors could lead to a reversal of the price at the level of 1.2380, then to the breakdown of the level of 1.2290 (Fibonacci correction 38.2%) and to a further decrease to the levels of 1.2180 (23.6% correction) and 1.2120.
Support levels: 1.2290, 1.2180, 1.2120.
Resistance levels: 1.2380, 1.2470.

Trading tips
In this situation, the short-term long positions can be opened at the level of 1.2340 with the targets at 1.2380 and 1.2470. Stop loss orders can be set in the area of 1.2310. Short positions can be opened at the level of 1.2380 or in case of breakdown of the level of 1.2290 with the targets at 1.2180, 1.2120 and stop losses at 1.2420, 1.2330, respectively.

EUR/USD: the market is waiting for Trump’s inauguration

Current trend

Yesterday the Head of the ECB Mario Draghi’s speech affected the market, and the price has tested the level of 1.0600, today it’s the turn of America to do the same. The Head of the FRS Janet Yellen had a conference in the Stanford University She said that the correction of the monetary policy should be gradual, and that some of her questions connected to the election of Donald Trump are still unclear. Such commentaries didn’t satisfy the traders, and the price grew to 1.6290. Now the investors are waiting for the Donald Trump’s inauguration and his speech, which can cause a significant volatility in the market.

Support and resistance

The price is near the upper border of the downward trend and can lower to the level of 1.0600 (Fibonacci correction 23.6%), which is confirmed by the downward reversal of the Stochastic The key level is 1.0600, the breakout and the consolidation of the price below the middle line of the Bollinger Bands indicator (the area of 1.0550 in the current moment) will let the price to lower to the levels of 1.0450 and 1.0370. But the scenario of a reversal from the level of 1.0600-1.0550 is still possible. In this case the price will grow to 1.0750 (Fibonacci correction 38.2%) and 1.0865 (Fibonacci correction 50.0%).
Support levels: 1.0600, 1.0550, 1.0450, 1.0370.
Resistance levels: 1.0750, 1.0865.

Trading scenario

Open short positions if the price is set below 1.0600 and the middle line of the Bollinger Bands indicator with the target at 1.0450, 1.0370 and stop loss at 1.0610. Open long positions in case of a rebound from the levels of 1.0650 or 1.0550 with the target at 1.0750, 1.0865 and stop loss at 1.0570 and 1.0510 correspondingly.

NZD/USD: technical analysis

NZD/USD, D1

On the daily chart, the pair is growing along the upper line of Bollinger Bands. The price remains above its moving averages that are horizontal. The RSI is trying to turn down near the border of the overbought zone. The Composite is about to retest its longer MA showing Bearish dynamics.

NZD/USD, H4

On the 4-hour chart, the pair is trading in the upper Bollinger band. The price remains above its moving averages that are directed up. The RSI turned down having failed its longer MA. The Composite is about to test its longer MA from above.

Key levels

Support levels: 0.7135 (local lows), 0.7110 (August 2016 lows), 0.7056 (April 2016 highs).
Resistance levels: 0.7232 (December 2016 highs), 0.7311 (July 2016 highs), 0.7336 (August 2016 highs).

Trading tips

The pair is testing its 61.8% Fibonacci retracement near the lower border of the previous ascending channel. There is a chance of a downward rebound.
Short positions can be opened from current prices with targets at 0.7135, 0.7110, 0.7056 and stop-loss at 0.7232. Validity – 3-5 days.
Long positions can be opened from the level of 0.7242 with targets at 0.7311, 0.7336 and stop-loss at 0.7212. Validity – 3-5 days.

Brent Crude Oil: General analysis

Current trend

From the opening of the morning trading session the oil prices are growing against yesterday lowering to the level of 54.96. The weakening dollar supports the oil price. The lowering of the dollar is due to the recent speech of the President of the USA, when he accented on the protectionist measures towards the USA economy, while investors were waiting for more specific plans of USA fiscal reformation. The price are also supported by the oil production limitation by OPEC and non-OPEC countries. On the OPEC members meeting on January, 22, in Vienna, it was reported that the world oil production level has lowered by 1.7 million barrels per day. As a result the UKBrent price is reaching the level of 56.14. Today the API Weekly Crude Oil Stock index due at 23:30 (GMT+2) in the USA is worth traders attention.

Support and resistance levels

Support levels: 55.73, 54.96, 54.06.
Resistance levels: 56.14, 57.15, 58.20.

Trading tips

On the 4-hour chart the technical indicators reflects the possibility of growth. The Bollinger Bands are pointed upwards. The MACD histogram is in the positive zone, its volumes are rising, giving a buy signal.
In the current situation open long positions after the breakdown and consolidation of the price above the level of 56.14 with the target at 57.15 and stop loss at 55.80.
If the price is set below the middle line of the Bollinger Bands at the level of 55.25, the downward trend can develop. *In that scenario open short positions with the targets at 54.96, 54.08 and stop loss at 55.60.

USD/CAD: general analysis

Current trend

The Canada Wholesale Sales index, published on January, 23, was lower than expected and lower than the previous value, which is negative, “bearish” factor for the CAD. Still the decision to keep the interest rate on the level of 0.5%, published on January, 18, outweighed the negative data. From the beginning of the week the pair continue to lower, crossed its strong support range of the lower border of the daily channel and 1.3200 downwards, pointing at the next support levels of 1.3080, 1.2990 and 1.2880.

There are some key issues for the pair to be published on the week. Today it is the USA Housing Price Index and USA Initial Jobless Claims data tomorrow: according to the last reports, the index is lowering, which can support the USD. The Chicago Fed National Activity Index is growing against the December report. The New Home Sales statistics is expected to lower a bit, making a negative impact on the USD. The USA CB Leading Indicator is expected to grow by 0.2%, which support the USD. As a result, today and tomorrow the pair is under the pressure of many controversial factors.

Support and resistance

Support levels: 1.3080, 1.2990, 1.2880, 1.2750.
Resistance levels: 1.3200, 13280, 1.3330, 1.3400.

Trading scenario

Open short positions at the current price with the target at 1.3080, 1.2990, 1.2880. Stop loss is at 1.3200.
Open long positions if the price is back in the daily channel over the level of 1.3200 with the target at 1.3280, 1.3330. Stop loss is at 1.3140.

USD/CHF: Fibonacci analysis

A price reversal and a correction to the middle line of the Bollinger Bands are most likely.

On the four-hour chart the price is testing its lowest level since November 2016 in the area of 0.9960. Breakdown of this level could lead to a further decline to the level of 0.9860 (61.8% correction for the medium-term trend). Otherwise, the correction is possible to the levels of 1.0030 (38.2% correction for the medium-term trend) and 1.0095 (38.2% correction for the short-term trend, the middle line of the Bollinger Bands on the D1). Growth scenario seems more likely, since the Stochastic lines have crossed, trying to turn up.

On the daily chart, the price moves along the arc of 38.2% in an effort to break up the level of 1.0010 (38.2% correction), then to rush to the area of 1.0095 (middle line of the Bollinger bands) and 1.0120 (23.6% correction). Since Stochastics turns up in the oversold zone, the price growth seems more likely.

The main scenario

Buy positions can be opened above the level of 1.0010 with the targets at 1.0095 and 1.0120. The stop loss order should be placed at around 0.9970.

Alternative scenario

Sell positions should be placed below the level of 0.9960 with the targets at 0.9920, 0.9860, 0.9830, and stop-loss at 0.9990.