Forex News Analysis by LiteForex

LiteForex: Brent Crude Oil: Murrey analysis

Current trend

In the H4 chart the price has been trading within the range of 63.28 ([5/8])-62.50 ([4/8]) for the third session in a row. The key level for the “bulls” seems to be 63.28. In case of its breakthrough growth may continue to 64.06 ([6/8]) and 64.84 ([7/8]). However, the drivers on the week before Christmas may be insufficient, and it will remain within the said trading range.

Generally, technical indicators show the possibility of growth: Bollinger Bands start to rise, and Stochastic is also directed upwards. One may speak about considerable reduction to 61.72 ([3/8]) and 60.93 ([2/8]) only after the price consolidates below 62.50 ([4/8]) which seems unlikely in the short term.

Support and resistance

Support levels: 62.50 ([4/8], central line of Murrey range), 61.72 ([3/8], bottom of the channel), 60.93 ([2/8])
Resistance levels: 63.28 ([5/8], top of the channel), 64.06 ([6/8]), 64.84 ([7/8]).

Trading tips

In this situation buy positions should be opened if the price consolidates above 63.28 with targets at 64.06, 64.84 and stop-loss at 63.00.
Short positions should be opened if the price moves away from 63.28 with targets at 62.50, 61.72 and stop-loss at 63.45.

LiteForex: NZD/USD: correction may continue

Current trend

This week the pair is showing stable reduction and by now it has reached the level of 0.6958 (Murrey [2/8]). US dollar received support from the news on the tax reform that is about to be approved by the Congress. Today is the day of the last vote, after which the bill will be sent to President Trump for signing.

On the other hand, NZD is under considerable pressure of fundamental data. The index of prices for dairy products by Global Dairy Trade yesterday reduced to 3.9% which is the biggest fall since 2016. The trading balance of New Zealand was also weak. In November its deficiency exceeded forecasts and made up 1,193 mln. In the evening statistics on New Zealand GDP for Q3 2017 will be released. The indicator is expected to drop from 0.8% to 0.5% due to a long period of dry weather that caused the reduction in the volumes of production of agricultural products including the main export product – milk.

Support and resistance

Currently the pair is trading around the level of 0.6958 (Murrey [2/8]) and in case of its breakdown may drop to 0.6897 (Murrey [1/8]) and 0.6835 (Murrey [0/8]). One may speak about the growth of the price to 0.7080 (Murrey [4/8]) and 0.7140 (Murrey [5/8]) only after it consolidates above 0.7020 (Murrey [3/8]). Bollinger Bands are reversing upwards, confirming the formation of the upward trend. However, Stochastic points downwards indicating the possibility of downward correction.

Support levels: 0.6958, 0.6897, 0.6835.
Resistance levels: 0.7020, 0.7080, 0.7140.

Trading tips

In this situation sell positions may be opened if the price consolidates below 0.6958 with targets at 0.6897, 0.6835 and stop-loss at 0.6990.
Buy positions should be opened above 0.7020 with target at 0.7080, 0.7140 and stop-loss at 0.6990.

LiteForex:EUR/USD: the tax reform failed to strengthen USD

Current trend

On Wednesday US Congress finally approves the draft of the tax reform that provides for the reduction of the corporate tax rate from 35% to 21%. However, the US currency reacted to this fact only by slowing down its fall, as the decision was expected and included into the price.

However, the reduction of the tax burden on business may have long-term consequences for the US economy. First of all, the authors of the reform expect corporate income to increase, new workplaces to be creates, and salaries to rise. Another purpose of the reform is the repatriation of capitals into the USA. Trying to avoid taxes, major companies keep about $2 trln on foreign accounts. The law offers them a special deal: capitals may be repatriated one time at the rate of only 15.5%. However, the US economy will be able to feel the positive effect of the reform only in several years, while the budget deficiency will be evident at once. According to Bloomberg, it will take about $1-1.5 trln to implement the project.

The US currency may start strengthening in case of release of strong final data on the US GDP. According to forecasts, in Q3 2017 the growth of the indicator may make up 3.3% which is the biggest increase since Q3 2016.

Support and resistance

Currently the price is around 1.1900 (Murrey [7/8]). In case this level is broken out growth may continue to 1.1962 (Murrey [8/8]) and 1.2024 (Murrey [+1/8]). Stochastic is approaching the overbought area which creates the possibility of correction, but one may speak about it only when the price consolidates below 1.1840 (Murrey [6/8]). In this case the price may drop to 1.1780 (Murrey [5/8]) and 1.1718 (Murrey [4/8]).
Support levels: 1.1780, 1.1718, 1.1657.
Resistance levels: 1.1840, 1.1900, 1.1962.

Trading tips

In the current situation buy positions may be opened above 1.1900 with targets at 1.1962, 1.2024 and stop-loss at 1.1870.
Sell positions should be opened below 1.1840 with targets at 1.1780, 1.1718 and srop-loss at 1.1890.

LiteForex: Brent Crude Oil: general review

Current trend

Oil prices opened the week with a slight correction, but as a whole remain within the uptrend. Prices are supported by the optimism of Iraqi energy minister Jabbar Al-Luaibi, who said on Monday that the balance in the oil market can be reached in the first quarter of next year, and prices will grow due to the increase in demand from India and China. Market participants are also encouraged by the data of Baker Hughes, according to which the number of drilling rigs in the US does not increase for the second week in a row and now stands at 747 units. It should be noted that the number of drilling rigs peaked in August (768 units) and since then has fluctuated around 730-750. This may mean that investors no longer commit in the development of production capacities and are preparing to make profit from existing ones. We should also note that in the short term, the easing of oil prices could be affected by the commissioning of the Fortis pipeline stopped in mid-December due to a fracture. Currently, it is tested it with high pressure.

Support and resistance

Currently, the price is trying to begin correction, but its development to the level of 63.28 (Murrey [1/8]), 62.50 (Murrey [0/8]) will become possible when fixing the price below 64.06 (Murrey [2/8], middle line Bollinger Bands). Otherwise, the price may enter the Murrey channel and reach 65.62 (Murrey [4/8]) and 66.40 (Murrey [5/8]). Technical indicators do not provide a clear signal. Bollinger Bands pointing up, confirming the uptrend, Stochastic tries to turn around at the overbought zone.
Support levels: 64.06, 63.28, 62.50.
Resistance levels: 64.84, 65.62, 66.40.

Trading tips

Under current conditions, it is possible to sell below 64.06 with targets 63.28, 62.50 and stop-loss at 64.40. Buying is worth above 64.84 with targets 65.62, 66.40 and protective order 64.50.

LiteForex: AUD/USD: Fibonacci analysis

On the 4-hour chart the price has been growing for the third week and it has reached the level of 0.7770.
In case of reversal of the price, the downward correction to the level of 0.7705 (correction 23.6%, the middle line of Bollinger Bands) is possible. If the price is set above the level of 0.7770, the further growth is possible, but its potential seems restricted, as Stochastic is in the overbought area and can form a sell signal in the nearest future.
On the daily chart the price is tending to the corrections cluster at the area of 0.7780 (50.0% and 38.2%); in addition, in this area the downward correctional fan line 38.2% goes. All the facts, supported by Stochastic, which has entered the overbought area, shows the possibility of the fall to the levels of 0.7700 (correction 50.0%) and 0.7615 (correction 61.8%, the middle line of Bollinger Bands). If the price is set above the level of 0.7780 the further growth to the levels of 0.7845 (correction 61.8%) and 0.7885 (correction 23.6%) is possible, but the price should break through the downward fan.

Trading tips

Short positions can be opened at the level of 0.7780 with the targets at 0.7700, 0.7615 and stop loss at 0.7820.

Alternative scenario

Long positions can be opened at the level of 0.7800 with the targets at 0.7845, 0.7885 and stop loss around 0.7870.

LiteForex: AUD/USD: Fibonacci analysis

On the 4-hour chart the price has been growing for the third week and it has reached the level of 0.7770.
In case of reversal of the price, the downward correction to the level of 0.7705 (correction 23.6%, the middle line of Bollinger Bands) is possible. If the price is set above the level of 0.7770, the further growth is possible, but its potential seems restricted, as Stochastic is in the overbought area and can form a sell signal in the nearest future.
On the daily chart the price is tending to the corrections cluster at the area of 0.7780 (50.0% and 38.2%); in addition, in this area the downward correctional fan line 38.2% goes. All the facts, supported by Stochastic, which has entered the overbought area, shows the possibility of the fall to the levels of 0.7700 (correction 50.0%) and 0.7615 (correction 61.8%, the middle line of Bollinger Bands). If the price is set above the level of 0.7780 the further growth to the levels of 0.7845 (correction 61.8%) and 0.7885 (correction 23.6%) is possible, but the price should break through the downward fan.

Trading tips

Short positions can be opened at the level of 0.7780 with the targets at 0.7700, 0.7615 and stop loss at 0.7820.

Alternative scenario

Long positions can be opened at the level of 0.7800 with the targets at 0.7845, 0.7885 and stop loss around 0.7870.

LiteForex: USD/JPY: general review

Current trend

US dollar continues to reduce against the majors due to low trading volumes. Market players are cautious waiting for the release of the minuted of the Fed’s December meeting. No important macroeconomic releases are expected from Japan until the end of the week. At the same time, US currency is under pressure from central banks of other countries, as the growth of the global economy in 2017 catalyzes the tightening of the monetary policy in a number of key states leading to the reduction of differences between the rates.

The main event of today is the release of the minutes of December Fed’s meeting. Investors hope to receive new data on further rates of the US fiscal policy. Moreover, market volatility may be caused by simultaneous release of gradual inflation build-up index and industrial PMI, as well as the data on construction expenses in the USA. The pair is extremely sensitive to inflation indicators, as its low level in the USA prevents the Fed from implementing its monetary policy plans.

Support and resistance

On the H4 chart the instrument has been corrected to 112.25. A strong support level is 112.00. Breaking through it will be a strong signal for the opening of short positions. Bollinger Bands are directed downwards, and the price range has slightly reduced. A key resistance level is 112.40. MACD histogram has reached its minimal level in the negative zone, and the strong sell signal is still valid. Stochastic fails to give a clear signal for entering the market.
Support levels: 111.60, 111.80, 112.00, 112.25.
Resistance levels: 112.40, 112.60, 112.80, 113.15, 113.35.

Trading tips

Short positions may be opened below the level of 112.25 with targets at 111.80, 111.60 and stop-loss at 112.50. The period of implementation is 1-2 days.
Long positions may be opened from the level of 112.45 with targets at 112.85 and stop-loss at 112.25. The period of implementation is 1 day.

LiteForex: Brent Crude Oil: general analysis

Current trend

Oil prices are growing.
Yesterday Brent went up by 2.40% and reached the level of 67.96, which is last 3-years maximum. The instrument is supported by preliminary API Crude Oil Stocks change data, which reflect the decrease of the resources by 4.992 million barrel in a week. EIA Crude Oil Stocks change release is due at 17:30 (GMT+2) today. If the data confirms the decrease, Brent will be significantly supported.
The growth of the prices is supported by tense situation in Iran, where anti-Government protests are expressed all over the country.

Support and resistance

Technical indicators reflect the maintenance of the upward trend, but the technical correction possibility is not excluded.
Bollinger Bands are pointed upwards. MACD volumes are growing in the positive zone, forming a buy signal. Stochastic is in the overbought zone, which can reflect the reversal of the price.

The instrument is now testing the level of 67.96 (Murray [7/8]). If it cannot consolidate above this level, the correction to the levels of 67.18 (Murray [6/8]), 66.76 (the middle line of Bollinger Bands) is possible.
The breakout of the level 67.96 will let the price grow to the level of 68.75 (Murray [8/8]).
Resistance levels: 67.96, 68.75.
Support levels: 67.18, 66.40, 65.62.

Trading tips

Long positions can be opened above the level of 67.96 with the target at around 68.75 and stop loss 67.75.
Short positions can be opened below the level of 67.18 with the targets at around 66.40–65.62 and stop loss 67.40.

LiteForex: GBP/USD: the pound is pressured by permutations in the British government

Current trend

Last week, the pair tested 1.3600 mark, but today it adjusted to the level of 1.3550 (Murrey [7/8]). The uncertainty of the market is caused by the expectation of the reshuffle in the government of Theresa May, which is to be held on Monday and Tuesday.

However, it is expected that the reshuffle will not affect key cabinet ministers, such as David Davis, Philip Hammond, and Boris Johnson. Perhaps the First Secretary of State, the actual deputy prime minister, will be the current health minister Jeremy Hunt, a consistent supporter of Brexit. Earlier this position was occupied by Damian Green, but in December he was forced to resign because of a sexual scandal that shook the domestic political position of Theresa May. The current reshuffle should restore stability to the British government before the next round of Brexit talks.

Support and resistance

Technically, the price dropped below the 1.3550 mark (Murrey [7/8]) and may continue to decline to the level of 1.3427 (Murrey [6/8], the middle line of the Bollinger Bands) and 1.3305 (Murrey [5/8]). Technical indicators generally allow the possibility of a downward correction. Stochastic is pointing downwards. MACD histogram and price chart demonstrate slight diversion. One may speak about resuming growth after the price consolidates below the level of 1.3600. In this case, the growth can be continued to the levels of 1.3670 (Murrey [8/8]) and 1.3795 (Murrey [+1/8]).
Support levels: 1.3427, 1.3305, 1.3215.
Resistance levels: 1.3550, 1.3600, 1.3670, 1.3795.

Trading tips

Short positions may be opened from the level of 1.3510 with targets at 1.3427, 1.3305 and stop-loss at 1.3560. If the price consolidates above 1.3600, long positions could be opened with targets at 1.3670, 1.3795 and stop-loss at 1.3570.



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LiteForex: WTI Crude Oil: Murray analysis

On the 4-hour chart, the price has grown to the area of the upper border of the Murray trading range 62.50 ([8/8]), but has not tested it and was corrected to 61.72 ([7/8]). The consolidation of the price below this the level and the middle line of Bollinger Bands can lead to the development of the downward correction to the levels of 60.94 ([6/8]) and 60.15 ([5/8]). Stochastic confirms it, reversing downwards near the overbought area. On the other hand, as MACD in the positive zone and Bollinger Bands and MA are growing, the upward trend, within the correction can develop, maintains. The price can grow to the levels of 63.28 ([+1/8]) and 64.00 ([+2/8]) after the consolidation above the level of 62.50.

Support and resistance

Resistance levels: 62.50 ([8/8]), 63.28 ([+1/8]), 64.00 ([+2/8]).
Support levels: 61.72 ([7/8]), 60.94 (6/8]), 60.15 ([5/8]), 59.37 ([4/8]).

Trading tips

Short positions can be opened after the price is set below the level of 61.72 and the middle line of Bollinger Bands with the targets at 60.94, 60.15 and stop loss at around 61.85.
Long positions can be opened after the price is set above the level of 62.50 with the targets at 63.28, 64.00 and stop loss at around 62.10.