Forex News Analysis by LiteForex

USD/CHF: general analysis

Current trend

Since last week the pair has been trading around last May minimum due to the poor macroeconomical statistics and the decreasing possibility of the tightening of the USA Fed’s monetary policy. The price has broken the strong support level of 0.9510 and is still trading below this level. The US is falling and is under pressure of the macroeconomical data and political situation. The president of the Swiss National Bank Thomas Jordan commented that the franc was “highly overpriced” and the central bank would support negative interest rates.

On Monday the US Markit Manufacturing (53.2) and Services (54.2) PMI was published, which have grown against the previous period, and the pair was slightly corrected. It grew to the level of 0.9476 (+0.14%). However, generally, the market is waiting for the FRS Meeting on Wednesday, when the interest rate decision will be taken, and for the USA GDP report on Friday.

Support and resistance

The pair is trading around lower border of Bollinger Bands, which are widened and are pointing downwards, which reflects a “bearish” trend. However, CCI is in the oversold area, the signal line is pointed upwards; the breakout of the level of –100 will give a buy signal. RSI has left the oversold area and is at the level of 32.4, also pointed upwards, giving a buy signal.

Support levels: 0.94425, 0.93750, 0.92926.
Resistance levels: 0.94897, 0.95391, 0.96007, 0.96998, 0.98586, 1.00071.

Trading tips

Long positions can be opened if the price is set above the level of 0.94897 with the targets at 0.95159 and 0.96007.
Short positions will become relevant after the breakdown of the level of 0.94425 with the targets at 0.93750 and 0.92969.

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NZD/USD: the pair is in the horizontal channel

Current trend

Since the beginning of the week the pair has been in the narrow trading range 0.7443-0.7415 that currently coincides with Bollinger Bands. The calmness in the market is caused by waiting for today's Fed's meeting. The majority of experts do not believe in changes in the interest rate. Taking into account the fall of inflation in June (from 1.9% to 1.7%), the members of the Fed may abstain from making important decisions and will wait for autumn meetings. The rate is likely to remain at the level of 1.25%. The market will be interested in the follow-up statement that may give hints at further development of the monetary policy, for example, indicate the time for the beginning of balance reduction. NZD also lacks serious movement drivers. Important data on employment and dairy products index will be released only next week.

Support and resistance

Technically, the price is in the narrow side range of 0.7443-0.7415 that meets Bollinger Bands that narrowed down (as usual before considerable movements of the price). The consolidation of the price above the upper border of the range and the continuation of growth is possible to 0.7500 and 0.7550. In case the lower border is broken own, the fall may continue to 0.7360 and 0.7300 (Fibo correction 23.6%). Generally the market is uncertain (Bollinger Bands have narrowed and are located horizontally, as well as Stochastic) waiting for the results of the meeting of the US regulator.

Support levels: 0.7415, 0.7360, 0.7300.
Resistance levels: 0.7440, 0.7500, 0.7550.

Trading tips

If the price consolidates above 0.7443 long positions may be opened with targets at *0.7500, 0.756 and stop-loss at 0.7410. Consolidating below the level of 0.7415 will allow opening short positions with targets at 0.7360, 0.7300 and stop-loss at 0.7450.

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USD/JPY: general review

Current trend

Yesterday the Fed announced its decision on the interest rate. As expected, the value of 1.25% remained unchanged, but the cautious tone of the follow-up statement disappointed the investors that started to aggressively sell USD. As a result, the pair USD/JPY lost 100 points. At the same time, the US regulator still considers it possible that interest rates may be increased until the end of the year. Moreover, the Fed stated it intended to start reducing the volume of aggregated assets in September.

The key event of today will be the release of data on jobless claims by the US Department of Labor. The expected growth of initial jobless claims from 233K to 241K will lead to further fall of the pair.

Support and resistance

On the D1 chart the instrument is trading around the lower border of Bollinger Bands. The indicator is turning sideways, while the price range has widened indicating the continuation of the current trend. MACD histogram is in the negative zone with its volumes reducing, and the signal line is directed downwards which is a signal for opening sell positions. Stochastic does not give clear signal for entering the market.

Support levels: 110.70, 110.35, 109.90, 109.40.
Resistance levels: 111.70, 112.15, 112.55, 112.95, 113.50.

Trading tips

Short positions may be opened from the current level with targets at 110.50, 110.35 and stop-loss at 111.40. The period of implementation is 1-3 days.
Long positions may be opened from the level of 111.75 with targets at 112.35 and stop-loss at 111.50. The period of implementation is 1-3 days.

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Brent: technical analysis

Brent, D1

On the daily chart, the instrument is growing along the upper line of Bollinger Bands. The price remains above the EMA14, EMA65, EMA130 and just below the SMA200, which is horizontal. The RSI is approaching its strong resistance region. The Composite is growing having failed its longer MA.

Brent, H4

On the 4-hour chart, the instrument is trading in the upper Bollinger band. The price remains above its moving averages that start turning up. The RSI is trying to leave the overbought zone. The Composite is breaking down its longer MA. Both indicators have formed a Bearish divergence with the price.

Key levels

Support levels: 49.95 (March lows), 48.75 (local lows), 47.70 (local lows).
Resistance levels: 52.60 (June 2016 highs), 54.20 (February lows), 54.55 (May highs).

Trading tips

The price is approaching its medium-term descending trendline and the SMA200. There is a chance of a downward rebound.
Short positions can be opened from current prices with targets at 49.95, 48.75, 47.70 and stop-loss at 52.15. Validity – 3-5 days.
Long positions can be opened from the level of 52.60 with targets at 54.20, 54.55 and stop-loss at 51.85. Validity – 3-5 days.

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XAU/USD: general review

Current dynamics

Precious metal receives support from a demand from Chinese consumers, who are actively investing to hedge risks, in particular against falling property prices. So, according to the latest data, Chinese consumption increased by 10% to 545.2 tons.
Another factor of support for the XAU/USD pair is geopolitical risks. Donald Trump's advisers are trying to develop new sanctions against China. According to the American leader, China is engaged in unscrupulous trade practices and receives billions of profits, undervaluing the rate of the yuan. The aggravation of relations occurred when China did not do enough to restrain the development of the DPRK nuclear program and the launch of a new intercontinental missile.

Support and resistance

Gold on the H4 chart is trading near the support level of 5/8 Murray (1265.65). If the pair XAU/USD breaks this level, then the next target for the fall will be the level of 1250.02. If the price consolidates above the previous high of 1270.71, the target of growth will be the level of 1281.28.

Resistance levels: 1270.71.
Support levels: 1265.65.

Trading tips

Long positions can be opened at the level of 1270.71 with the target at 1281.28 and a stop-loss at the level of 1262.00.

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GBP/USD: the upward trend is still strong

Current trend

The British currency continues to go up against US dollar in view of the falling USD rate. Within two trading weeks the pair has been moving within the upward tendency without long corrections which indicates considerable decrease of demand for USD. US fundamental data cannot support the rate of the American currency. This and last week negative statistics was released on a number of macroeconomic indicators, namely construction sector, demand for durable goods, and labor market. The pound, in turn, is supported by strong demand and positive releases by key indexes.

Despite negative data on UK PMI, GBP continues to grow. In the end of the current week special attention should be paid to labor market data and the main US indexes, as well as the decision of the Bank of England on the volumes of economic stimulation program and interest rate. Moreover, the follow-up speech by the head of the Bank of England Mark Carney scheduled for Thursday, may provide additional support for the pound.

Support and resistance

Technically the pair has a reserve of upward movement to the upper border of the upward channel at the level of 1.3450 followed by a long downward tendency. Currently there are no grounds for USD support from the fundamental background and the actions of the US regulator. Technical indicators confirm this tendency: MACD shows the preservation of the high volume of long positions, and Bollinger Bands point upwards.

Support levels: 1.3200, 1.3125, 1.2930, 1.2805, 1.2700, 1.2590.
Resistance levels: 1.3310, 1.3380, 1.3450, 1.3480, 1.3670, 1.3750.

Trading tips
Long positions may be opened from the current level with target at 1.3450 and stop-loss at 1.3100.

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NI225: technical analysis

NI225, D1

On the 4-hour chart, the instrument is trading just below the lower line of Bollinger Bands. The price remains below its moving averages that are horizontal. The RSI is falling having broken down its longer MA. The Composite is approaching its strong support region.

NI225, H4

On the hourly chart, the instrument is falling along the lower line of Bollinger Bands. The price remains just below its moving averages that start turning down. The RSI is approaching the border of the oversold zone. The Composite is falling as well.
Key levels
Support levels: 19889.00 (local lows), 19865.00 (July lows), 19670.00 (March highs).
Resistance levels: 20198.00 (July highs), 20288.00 (June highs), 20550.00 (May 2015 highs).

Trading tips

The price is forming a “contraction triangle” pattern. Positions can be opened after a breakout of either of its borders.
Long positions can be opened from the level of 20198.00 with targets at 20288.00, 20550.00 and stop-loss at 20090.00. Validity – 3-5 days.
Short positions can be opened from the level of 19865.00 with the target at 19670.00 and stop-loss at 19963.00. Validity – 3-5 days.

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XAU/USD: general review
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Current trend

After yesterday's fall gold price has restored lost positions and is currently trading at the level of 1268.00. The price of the metal as a safe haven asset is growing, while US dollar is weak after the Fed's refusal to increase the rates this year due to low inflation.

On Friday the market is waiting for a report on the number of non-farm payrolls. NFPR will gain 183K in July against 222K in June. The level of unemployment will drop to 4.3% from 4.4%, and average hourly salary will slightly grow from 0.2% to 0.3% in June, as expected.

Support and resistance

On the H4 chart XAU/USD is consolidating near the 1268.00 mark. The price has returned to the upward channel after a false break-through. *MACD indicator is below the signal line with its volumes reducing, Stochastic lines are in the overbought area and directed to the side.

Resistance levels: 1273.70, 1280.00, 1288.00.
Support levels: 1256.00, 1250.00, 1242.00.

Trading tips

The pair may be bought if the price breaks through 1274.00 with target at 1280.00 and stop-loss at 1272.00.
Short positions should become relevant below the level of 1263.00 with targets at 1250.00 and stop-loss at 1266.00.
Implementation time: 1-2 days.

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WTI Crude Oil: general review

Current trend

Today the price for WTI continues to move within the narrow side range 48.50-49.70.

During the Friday trading the price of oil was supported by the data on the reduction of the number of oil rigs in the USA. Within the week that ended on August 4 it was reduced by 1 to 765.

On the other hand, despite that the production of oil in the USA reached 9.43mln barrels a day which is the highest indicator since August 2015. Moreover, according to last week's release by Thompson Reuters Oil Research, the export of oil in OPEC states in July reached the record-setting level of 26.11 barrels a day.
In the beginning of the current week the members of OPEC+ technical committee will meet in Abu Dhabi to discuss the fulfillment of obligation to reduce oil production by certain parties to the agreement.

Support and resistance

The price of WTI is trading around MA(200) at the level of 49.50 and is still unable to break through it. MACD indicator is located above zero and signal lines, and Stochastic is in the neutral zone with its lines pointing downwards. Indicators give uncertain signals.

Resistance levels: 46. 60, 47.40, 48.20.
Support levels: 45.80, 45.20, 44.40

Trading tips

Short positions may be opened from the level of 48.40 with target at 47.30 and stop-loss at 49.00.
Buy positions may be opened if the price consolidates above 50.40 with targets at 51.90 and stop-loss at 50.00.
The period of implementation is 1-2 days.

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SX5E: technical analysis

SX5E, D1

On the daily chart, the instrument is trading in the upper Bollinger band. The price remains above its moving averages that start turning up. The RSI is about to test its strong resistance. The Composite is growing as well.

SX5E, H4

On the 4-hour chart, the instrument is trading in the upper Bollinger band. The price remains just below the SMA200 and above the EMA14, EMA65 and EMA130 that start turning up. The RSI is growing towards the border of the overbought zone. The Composite turned up as well.

Key levels

Support levels: 3462.0 (local lows), 3430.0 (July lows), 3399.0 (April lows).
Resistance levels: 3515.0 (local highs), 3533.0 (July highs), 3552.0 (May lows).

Trading tips

The price is consolidating above its previous descending trendline. The growth is likely to continue.
Long positions can be opened from the level of 3515.0 with targets at 3533.0, 3552.0 and stop-loss at 3502.0. Validity – 3-5 days.
Short positions can be opened from the level of 3462.0 with targets at 3430.0, 3399.0 and stop-loss at 3480.0. Validity – 3-5 days.

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