Forex News Analysis by LiteForex

liteForex NZD/USD: Murray analysis

Current trend

On the daily chart the price rebounded from the level of 0.6958 ([2/8]) and is tending to the level of 0.6835 ([0/8]), which it has tested in the end of October already. The level was unsuccessfully tested this May, too, so it is quite strong. After the breakdown of it the price can fall to the levels of 0.6775 ([–1/8]) and 0.6714 ([–2/8]), which is confirmed by Stochastic, which is pointed downwards. However, the reversal and breakout of the middle line of Bollinger Bands and the level of 0.6958 ([2/8]) is not excluded, as the price is reaching the lower border of Bollinger Bands. In this case the price can grow to the levels of 0.7020 ([3/8]), 0.7080 ([4/8]) and 0.7141 ([5/8]).

Support and resistance

Support levels: 0.6835 ([0/8]), 0.6775 ([–1/8]), 0.6714 ([–2/8]).
Resistance levels: 0.6958 ([2/8]), 0.7020 ([3/8]), 0.7080 ([4/8]), 0.7141 ([5/8]).

Trading tips

Long positions can be opened after the reversal of the price around 0.6835 or above the level of 0.6958 with the targets at 0.7020 and 0.7080 and stop loss at 0.6800 and 0.6900.
Short positions can be opened below the level of 0.6775 with the targets at 0.6714, 0.6670 and stop loss at 0.6810.

EUR/USD: inflation is pushing the pair downwards

Current trend

On Wednesday the pair started correction from the level of 1.1840 (Murrey [1/8] for D1). USD was supported by positive data on inflation in the USA. Basic CPI that the Fed uses to make decisions on changes in the interest rate, grew by 1.8% (after remaining on the level of 1.7% for five months). This gave the investors confidence that the regulator would increase the interest rate during its December meeting.
Today’s inflation statistics from Eurozone was negative for euro. CPI remained on the level of 1.4% and its basic variant dropped from 1.1% to 0.9%. Moreover, the European currency is under pressure from the data that German Chancellor Angela Merkel has problems forming the new German government.

Support and resistance

Currently the price is moving towards the level of 1.1718 (Murrey [0/8] for D1) and may well reach it if today’s data on US industrial output prove to be strong (the indicator is expected to grow from 0.3% to 0.5%). Breaking down the level of 1.1718 will open the way for further decrease to 1.1657 (Murrey level [3/8] for Н4) and 1.1596 ([-1/8] for D1). One may speak about considerable growth after the price breaks out the level of 1.1840. In this case the targets of the “bulls” will be 1.1900 (Murrey level [7/8] for H4) and 1.1962 ([2/8] for D1). Technical indicators show opposite signals. Stochastic is leaving the overbought area forming a sell signal. MACD histogram is about to move to the positive zone and form a buy signal.

Support levels: 1.1718, 1.1657, 1.1596.
Resistance levels: 1.1840, 1.1900, 1.1962.

Trading tips

Short positions should be opened at the current price with targets at 1.1718, 1.1657 and stop-loss at 1.1790.
Long positions may be opened above 1.1840 with targets at 1.1900, 1.1962 and stop-loss 1.1800.

NZD/USD: downward impulse maintains

Current trend

New Zealand Currency is significantly falling against the US dollar after the interest rate decision and RBNZ Statement upon the maintenance of the mild monetary policy in the long term.
In the middle of the last week in RBNZ statement was claimed that the key interest rate will stay on the same level, so the monetary policy perspectives are unclear. It was also noted, that low rate of the national currency is necessary to increase the inflation rate.
Today the pair rapidly went down, breaking few of the key support levels. Poor Business NZ PMI, Producer Price Index – Input and Output data affected the pair negatively. The pair has lost 100 points in a few hours, and downward momentum maintains.
As there is lack of US key releases in the economical calendar, the pair will move according to the trading moods.

Support and resistance

The pair will fall to the key levels of 0.6770, 0.6680, 0.6575. Insignificant upward correction at the level of 0.6770 with the target at 0.6820 is possible, but after it the pair will decrease further. Technical indicators confirms the forecast, MACD reflects the growth of short positions volumes, Bollinger Bands are pointed downwards.

Resistance levels: 0.6820, 0.6875, 0.6920, 0.6975, 0.7010, 0.7050.
Support levels: 0.6770, 0.6730, 0.6680, 0.6575, 0.6500.

Trading tips

It’s better to increase the volume of short positions at the current level with the targets at 0.6770, 0.6680, 0.6575 and stop loss at 0.6860

EUR/USD: instability in Germany puts pressure on euro

Current trend

The pair started the week with a fall to 1.1723. The market acted on the data on the termination of negotiations on the formation of a new German government. Free Democratic Party headed by Christian Lindener refused to become a part of the coalition government with CDU/CSU. Now Chancellor Angela Merkel may either create a government of parliamentary minority and reach separate agreements with the opposition on key bills, or hold an extraordinary parliamentary election. Anyway, instability in the German government will put pressure on EUR in the medium term.

After the opening of the European session the pair regained positions and is now trading around 1.1790. During the day the market is waiting for the speech by Mario Draghi in the European Parliament. However, the head of ECB is unlikely to say something new about the monetary policy. He stated several times that despite the success of the European economy stimulation had to be continued.

Support and resistance

Currently the price is located near 1.1780 (Murrey level [5/8]). Its breakdown may return the quotes to 1.1730 (lower line of Bollinger Bands)-1.1718 (Murrey [4/8]). One may speak about considerable growth in case the price consolidates above 1.1840 (Murrey [6/8]). In this case growth may continue to 1.1900 (Murrey [7/8]) and 1.1962 (Murrey [8/8]). Technical indicators don’t give a clear signal. Bollinger Bands are switching to the horizontal movement. MACD histogram is stable in the negative zone. Stochastic is directed upwards.

Support levels: 1.1780, 1.1718, 1.1657.
Resistance levels: 1.1840, 1.1900, 1.1962.

Trading tips

Short positions should be opened below 1.1780 with targets at 1.1718, 1.1657 and stop-loss at 1.1820.
Long positions may be opened above 1.1840 with targets at 1.1900 and 1.1962 and stop-loss at 1.1800.

NZD/USD: Murrey analysis

Current trend

On the D1 chart the pair continues to trade within the downward channel having decreased below the main support level of 0.6835 (Murrey [0/8]). The instrument failed to break through this level several times, and it still remains important. In case it is broken out, the price may continue to grow to 0.6897 ([1/8]) and 0.6958 ([2/8]). Otherwise the price may go down to 0.6713 ([-2/8]).

Further fall of the quotes may be caused by today’s release of the dairy prices index by Global Dairy Trade. They have been falling a stable decreasing pattern since the beginning of October, and its continuation may put considerable pressure on the currency of New Zealand.

Support and resistance

Technical indicators don’t exclude reversal and upward correction. Stochastic is near the oversold area and moves horizontally. MACD histogram is in the negative zone and shows signs of divergence with the price chart which indicates reversal.

Support levels: 0.6775 ([-1/8]), 0.6713 ([-2/8]).
Resistance levels: 0.6835 ([0/8]), 0.6897 ([1/8]), 0.6958 ([2/8]).

Trading tips

In the current situation buy positions should be opened when the level of 0.6835 is broken through with targets at 0.6897, 0.6958 and stop-loss at 0.6800.
Short positions may be opened below 0.6775 with targets at 0.6713, 0.6670 and stop-loss at 0.6810.

AUD/USD: Philip Lowe stopped the fall of the pair

Current trend

On Tuesday the pair made an attempt of upward correction and rose to 0.7590. Investors acted upon the statement of the head of RBA Philip Lowe who said that at that time there was no need to increase the interest rates, but it could appear soon. The state of the economy indicates that the regulator is likely to increase the interest rate with its next decision. However, the optimism of the market did not last long, as Lowe gave no hints regarding the time of the increase. Currently the price is aiming at November minimums at 0.7535.
The minutes of the Fed’s November meeting will be released in the evening. Investors will look for confirmations of their expectations regarding one more increase of the interest rate in the USA in December.

Support and resistance

Technically the pair is consolidating around 0.7568 (Murrey level [2/8]) and may remain there until the end of the week. The consolidation of the price below 0.7568 will open the way for reduction to 0.7446 (Murrey level [1/8], lower border of the upward channel). Still, reversal and beginning of growth to 0.7690 (Murrey [3/8]) and 0.7812 (Murrey [4/8]) seem more likely. This is confirmed by the fact that Stochastic starts to reverse in the oversold areas and Bollinger Bands have turned to horizontal movement.
Support levels: 0.7568, 0.7446, 0.7324.
Resistance levels: 0.7690, 0.7812.

Trading tips

Long positions should be opened from 0.7600 with targets at 0.7690, 0.7812 and stop-loss at 0.7560.
Short positions may be opened from the level of 0.7520 with targets at 0.7446, 0.7324 and stop-loss at 0.7560.

EUR/USD: American currency is under pressure

Current trend

The Thanksgiving Day is celebrated today in the USA, but dollar is under the pressure after FOMC Minutes publication. Some of FOMC members expressed their doubts in the rapid increase of the interest rate in unstable inflation growth conditions. Earlier the outgoing Fed’s head Janet Yellen stated the same doubts. On the other hand, EUR is supported by the news than the head of Social-Democratic Party Martin Schulz is ready to negotiate with Chancellor Angela Merkel upon her restricted support in case of minority party creation by her.
In addition, the “bulls” were inspired by strong statistics from EU. Markit Services PMI reached the maximum level of 56.2 points since this May, as Markit Manufacturing PMI reached the record 60.0 points.

Support and resistance

Technically the price is testing the level of 1.1840 (Murray [6/8]) and after consolidation above it can grow to the levels of 1.1900 (Murray [7/8]) and 1.1962 (Murray [8/8]). Stochastic is in the overbought area, so the correction to the level of 1.1780 (Murray [5/8], the middle line of Bollinger Bands) is possible. The growth seems more likely.

Resistance levels: 1.1840, 1.1900, 1.1962.
Support levels: 1.1780, 1.1718, 1.1657.

Trading tips

Long positions can be opened above the level of 1.1840 with the targets at 1.1900, 1.1962 and stop loss at 1.1800.
Short positions can be opened from the level of 1.1820 with the targets at 1.1780 and 1.1718 and stop loss at 1.1850.

EUR/USD: Powell strengthened dollar

Current trend

In the beginning of the week the pair was growing to the area of 1.1962 (Murray [4/8]), but was corrected and is now trading around 1.1880.
USD strengthened after Powell’s statements before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate meeting. Today the Committee should make a decision upon the conformation of Fed’s head. Powell noted, that the regulator will maintain the increasing rates and reducing balance-sheets policy and support the employment market and stimulate the inflation. He also supported the banks activity on the stocks markets restriction laws, which will let US financial system be strengthened.

Powell’s statement stimulated the growth of dollar, but it’s unclear, how significant will it be. Today the investors are focused on Trumps meeting with the US Senate Republican Party members, where he will try to persuade them to vote for the tax reform package, but earlier senators Ron Johnson and Bob Corker threatened to vote against the new laws. The result of the negotiations can bring the pair significant volatility.

Support and resistance

The price weakened below the level of 1.1900 (Murray [3/8]) and the middle line of Bollinger Bands and can be corrected to the levels of 1.1840 (Murray [2/8]) and 1.1780 (Murray [1/8]). The growth to the levels of 1.2023 (Murray [5/8]) and 1.2085 (Murray [6/8]) is possible after the breakout of the level of 1.1962 (Murray [4/8]).

Resistance levels: 1.1900, 1.1962, 1.2023, 1.2085.
Support levels: 1.1840, 1.1780, 1.1718.

Trading tips

Short positions can be opened at the current level with the targets at 1.1840, 1.1780 and stop loss at 1.1930.
The consolidation of the price above the level of 1.1962 will make long positions with the targets at 1.2023, 1.2085 and stop loss at 1.1930 relevant.

USD/JPY: the pair has been corrected

Current trend

Today the pair moved away from the resistance level of 111.65 and dropped to 111.38. This dynamics was caused by yet another launch of a ballistic missile by North Korea. International leaders traditionally criticized the launch. Donald Trump said the missile was a threat to the whole world, and South Korean President Moon Jae-in asked North Korea to stop aggression and embark on negotiations. However, the general reaction of the market was not noticeable. The announcement of North Korean officials that the main tasks of the nuclear program had been completed also gives certain optimism.

Political tension pushed economic data backwards, and they are generally negative for yen. October statistics on retail sales was weak. The indicator made up 0.0% MoM and -0.2% YoY. Retail sales in major stores also dropped by 0.77%. According to a monthly report of the Japanese government, the national economy is moderately restoring, but internal consumption does not grow fast enough due to slower salary increase rates thus putting pressure on GDP.

Support and resistance

Right now the price is restoring positions after a morning fall. A key level for the “bulls” is 111.65. Its breakout will open the way for further growth to 112.50 (Murrey [8/8], middle line of Bollinger Bands). Breaking down the level of110.93 (Murrey [7/8]) will open the way for further fall to 110.20 and 109.37 (Murrey [6/8]). Technical indicators show possible upward correction. Stochastic is leaving the oversold area, and MACD histogram begins to reduce in the negative zone.

Support levels: 110.93, 110.20, 109.37.
Resistance levels: 111.65, 112.50, 113.20.

Trading tips

Buy positions may be opened above the level of 111.65 with target at 112.50 and stop-loss at 111.10.
The consolidation of the price below 110.93 and the reversal around 111.65 will make short positions relevant with targets at 110.20, 109.37 and stop-loss at 111.30 and 112.00.

EUR/USD: inflation in Eurozone disappointed investors

Current trend

Today the pair continues to reduce under the influence of weak European statistics. Retail sales in Germany dropped by 1.2% MoM and 1.4% YoY in October. Investors were mostly negative about initial November data on Eurozone inflation. The values failed to reach outlook levels: CPI made up 1.5% (instead of the expected 1.6%), and the basic value of the index remained unchanged and made up 0.9%. Therefore, despite the growth of Eurozone economy, inflation continues to lag back reducing the possibility of material monetary policy tightening by ECB.
During the day the market also waited for the release of October statistics on personal spending in the USA. The indicator is expected to grow which may support further strengthening of the US currency.

Support and resistance

Right now the pair is trading around the level of 1.1840 (Murrey [1/8]) and in case it is broken through may continue to be corrected to 1.1750 (middle line of Bollinger Bands) and 1.1718 (Murrey [0/8]). Otherwise the price may resume growth to 1.1962 (Murrey [2/8]) and further to August maximums at 1.2085 (Murrey [3/8]). Right now the continuation of the fall seems more likely as Stochastic is directed downwards.

Support levels: 1.1750, 1.1596.
Resistance levels: 1.1962, 1.2085.

Trading tips

In the current situation sell positions should be opened below the level of 1.1840 with targets at 1.1750, 1.1718 and stop-loss at 1.1860.
Buy positions should be opened from the level of 1.1880 with targets at 1.1962, 1.2085 and stop-loss at 1.1840.