Forex News Analysis by LiteForex

LiteForex analitics. USD/JPY: general analysis


Current trend

This week the pair was growing, and by now it has reached the level of 112.40. The investors are focused on the US-China trade war. The government of Japan, represented by Cabinet Secretary Yoshihide Suga, has already expressed concern about its escalation. China and the United States are the largest trading partners of the country, and last year the export of Japanese goods in these directions amounted to $300 billion. The decline in the economic growth of the US and China could affect Japanese exporters negatively. According to experts, the consequences of the trade war are likely to come in the next year, and the country's economy may lose 0.6%.
On Thursday, investors are waiting for the publication of June inflation data in the US. It is expected that the Consumer Price Index (YoY) may reach 2.9%, and Consumer Price Index Ex Food & Energy (YoY) will reach 2.3%. Thus, the basic indicator of inflation may remain above the target level (2.0%) for the fourth consecutive month. However, despite good economic results, FOMC members can reduce the number of rate increases this year, primarily due to the deepening trade US-China crisis.

Support and resistance

The price is now reaching the level of 112.50 (the upper border of the Murrey range [8/8]), where a reversal and correction to the levels 111.72 (Murrey [7/8]) and 110.93 (Murrey [6/8]) are possible. The price breaking the upper line of Bollinger bands and Stochastic entering the overbought zone confirm the forecast. The further growth is possible only if the price consolidates above the level of 112.50, in this case, the “bullish” targets will be 114.06 (Murrey [+2/8]).
Resistance levels: 112.50, 114.06.
Support levels: 111.72, 110.93, 110.15.

Trading tips

Short positions can be opened at the level of 112.50 with the targets at 111.72, 110.93 and stop loss at the level of 112.80.
Long positions can be opened from the level of 113.00 with the target at 114.06 and stop loss around 112.70.
Implementation period: 3–5 days.

LiteForex analitics. EUR/USD: general review

Current trend

Last week, the pair was trading near the level of 1.1718 (Murrey [0/8]), but could not get away from it significantly.
This week, investors are waiting for a number of key events, mainly, for the Fed's head Jerome Powell Congress speeches, which will be held on Tuesday and Wednesday. Probably, they will be about monetary policy in the face of the complications of trade relations between China, the EU, and the USA. On the one hand, the inflation reaching the target level and a stable labor market push the regulator to raise rates. On the other hand, trade wars make the future of the American economy vague. Recently, representatives of the FRB of St. Louis noted that the reciprocal trade duties could lead to job losses and the shutdown of production in several US states. In these circumstances, the Fed may well begin to be cautious in monetary policy.

Support and resistance

Now, the instrument is testing the level of 1.1718 and, after consolidating above it, can continue rising to 1.1840 (Murrey [1/8]). This is confirmed by Stochastic, which is reversing upwards, as well as negative forecasts of the retail sales indicator, which will be published today (it is expected to decrease from 0.8% to 0.5%). The level of 1.1650 (the center line of Bollinger Bands) is seen as key for the "bears". Its breakdown will give a prospect of a return to 1.1530 (the bottom line of Bollinger Bands).
Support levels: 1.1650, 1.1530.
Resistance levels: 1.1718, 1.1840, 1.1962.

Trading tips

Buy positions may be opened from the level of 1.1718 with the target at 1.1840 and stop loss at 1.1680.
Sell positions may be opened below 1.1650 with the target at 1.1530 and stop loss at 1.1690.
Implementation time: 3-5 days.

LiteForex analitics. Brent Crude Oil: general analysis

Current trend

After Monday’s drop, oil prices stabilized. Brent is trading around 72.00–71.50. The decline can resume soon, as the external background remains negative. Investors are concerned about the US-China trade conflict escalation, which can lead to a decrease in the growth of the two leading world economies and undermine the demand for energy. At the same time, the supply deficit due to US anti-Iran sanctions, which could support prices, is balanced by increased production in a number of OPEC countries and their allies. In the first half of July, Russia increased it to 11.22 million barrels per day. By the end of this month, Iraq volumes can grow to 4.7 million barrels per day against the current 4.5 million barrels per day.
Tuesday’s API Weekly Crude Oil Stock release increased unexpectedly: oil by 0.629 million barrels, and gasoline by 0.425 million barrels. In the evening, EIA Weekly Crude Oil Stock will be published, which is expected to reach 3.495 million barrels, but it is unlikely to support the prices significantly.

Support and resistance

The price fell below the level of 71.87 (Murrey [2/8]) and will continue to decline to the levels of 70.31 (Murrey [1/8]) and 68.75 (Murrey [0/8]), which is confirmed by the indicators. Bollinger bands diverge, MACD entered the negative zone. Stochastic entered the oversold zone: correction to 73.43 (Murrey [3/8]) is possible only after the price is set above 71.87.
Resistance levels: 71.87, 73.43, 75.00.
Support levels: 70.31, 68.75.

Trading tips

Short positions can be opened from the current level with the targets at 70.31, 68.75 and stop loss 71.90.
Long positions can be opened from the level of 72.30 with the target at 73.43 and stop loss around 71.90.
Implementation period: 3–5 days.

LiteForex analitics. EUR/USD: general analysis

Current trend

Today, the EUR/USD pair falls again, and the instrument is now trading around 1.1620. USD was supported by Fed Chairman Jerome Powell, who spoke on Wednesday before the Financial Services Committee of the US House of Representatives. According to him, Fed’s balance reaches 4.5 trillion dollars, however, the program of bonds redemption confirmed its effectiveness, and there are no reasons to cut back the purchase so far. The normalizing of the balance can take up to four years. As for the key problems of the American economy, Powell noted the growth rates of the national debt, exceeding GDP growth, which had to be stopped. In general, investors remain confident that the US regulator will raise interest rates this year two more times.
June US construction market data prevents USD strengthening. Building Permits decreased by 2.2%, and Housing Starts – by 12.3%.

Support and resistance

Now the price consolidated below the middle line of Bollinger bands and may continue to fall to the levels of 1.1530 (June lows) and 1.1475 (Murrey [–2/8]). The key "bullish" level is 1.1718 (Murrey [0/8]). Its breakout may lead to an increase to the levels of 1.1840 (Murrey [1/8]) and 1.1962 (Murrey [2/8]). Technical indicators do not give a clear signal. Bollinger bands are moving horizontally. MACD histogram is near the zero line, its volumes are insignificant. Approach Stochastic to the oversold zone suggests the possibility of a price reverse upwards.
Support levels: 1.1530, 1.1475.
Resistance levels: 1.1718, 1.1840, 1.1962.

Trading tips

Short positions can be opened at the level 1.1580 with the targets at 1.1530, 1.1475 and stop loss around 1.1620.
Long positions can be opened above the level 1.1718 with the target at 1.1840 and stop loss 1.1680.
Implementation period: 3–5 days.

LiteForex analitics. FTSE: Fibonacci analysis

On the H4 chart, the price is testing the level of 7695.0 (50.0%), which could not be overcome within a month. If the price is able to consolidate above it, the growth to the level of 7742.5 (61.8%) is possible. Indicators confirm the strength of buyers, indicating the possibility of further growth. Stochastic and Bollinger Bands are reversing upwards. MACD histogram is in the positive zone.
On the D1 chart, the price reversed in the area of 7477.0 (38.2%), broke out the level of 7625.0 (23.6%) and now is directed to the May highs to the level of 7860.0 (0.0%). The price is moving along the line of the ascending correctional Fibo fan (38.2%). The continuation of the growth of quotations is confirmed by Stochastic, which reversed upwards. The key level for the "bears" seems to be 7625.0 (23.6%, center line of Bollinger Bands). Its breakdown could lead the price to the level of 7550.0 (probable intersection with the line of the ascending correctional Fibo fan 50.0%) and 7477.0 (38.2%). However, the decline scenario is still less likely.

Trading tips

Buy positions may be opened if the price consolidates above 7695.0 with targets at 7742.5, 7800.0. Stop loss should be placed at 7670.0.
Sell positions may be opened below 7625.0 with targets at 7550.0, 7477.0 and stop loss at 7660.00.

LiteForex analitics. XAG/USD: silver prices are growing

Current trend

Prices for silver increased significantly on Wednesday, noting a new local high since July 17. USD fell against a background of falling yields on Treasury bonds and weak macroeconomic statistics on the new home sales dynamics in the US.

Yesterday's preliminary meeting between US President Donald Trump and European Commission President Jean-Claude Juncker did not bring anything new to the market. Following the meeting, Trump said that he hoped for a positive outcome of the negotiations on the trade deal, and praised Juncker for a rather tough position.

It should be noted that the consequences of trade wars begin to affect their participants. On Tuesday, the PRC government announced a program to stimulate domestic demand and its own economy to prevent its recession due to new US import duties. At the same time, it became known that Washington would allocate USD 12B to help farmers affected by Chinese retaliatory duties.

Support and resistance

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is narrowing, reflecting the "bullish" nature of trading in recent days. MACD indicator is growing keeping a buy signal (located above the signal line). Stochastic keeps on growing, but is rapidly approaching its highs, which indicates the risks associated with the overbought instrument.

Current indicators do not contradict the further development of the "bullish" trend in the short term.

Resistance levels: 15.60, 15.83, 16.00, 16.12.
Support levels: 15.46, 15.30, 15.09.

Trading tips

To open long positions, one can rely on the breakout of 15.60. Take profit — 15.83, 15.90 or 16.00. Stop loss — 15.46.

A rebound from 15.60 as from resistance, followed by a breakdown of 15.46 may become a signal for new sales with the target at 15.09. Stop loss — 15.60 or 15.65.

Implementation period: 2-3 days.

LiteForex analitics. USD/CAD: general analysis


Current trend

On Friday, USD moved in different directions against CAD due to Q2 US GDP preliminary data release, which grew from 2.2% to 4.1%. Gross Domestic Product Price Index also exceeded forecasts, increasing from 2.0% to 3.2%. Core Personal Consumption Expenditures were worse than expected, rising by 2.0%.

Today, traders should pay attention to US June Pending Home Sales release at 16.00 (GMT+2), the market expects moderate volatility.

Support and resistance

On the 4-hour chart, the instrument was corrected to the midline of Bollinger bands, the price range narrowed. MACD histogram is in the negative area, keeping the signal to the opening of short positions.

Resistance levels: 1.3080, 1.3100, 1.3130, 1.3160, 1.3200.
Support levels: 1.3050, 1.3025, 1.3000.

Trading tips

Short positions can be opened from the level of 1.3025 with the target at 1.2970. Stop loss is 1.3060.
Long positions can be opened from the level of 1.3100 with the target at 1.3160 ​​and stop loss 1.3060.

Implementation period: 1–3 days.

LiteForex analitics. XAU/USD: technical analysis


XAU/USD, D1

On the daily chart, the instrument is trading in the lower Bollinger band. The price remains below its moving averages that are directed down. The RSI is testing from below its longer MA, having formed a Bullish divergence with the price. The Composite is about to test from above its longer MA.

XAU/USD, H4

On the 4-hour chart, the instrument is trading in the lower Bollinger band. The price remains below its moving averages that are directed down. The RSI is falling, having bounced off its longer MA. The Composite is showing similar dynamics.

Key levels

Support levels: 1215.0 (local lows), 1205.0 (July 2017 lows), 1185.0 (December 2013 lows).
Resistance levels: 1237.0 (local highs), 1256.0 (local highs), 1260.0 (October 2017 lows).

Trading tips

The chances of an upward correction are increasing.
Long positions can be opened from the level of 1237.0 with targets at 1256.0, 1260.0 and stop-loss at 1228.0. Validity – 3-5 days.
Short positions can be opened from the level of 1205.0 with the target at 1185.0 and stop-loss at 1215.0. Validity – 3-5 days.

LiteForex analitics. GBP/USD: to new local lows

Current trend

GBP against USD is moving within a broad downwards channel, despite the July decline in volatility. The downward momentum significantly decreased due to a drop in investment interest in the overbought dollar. An additional catalyst for the pair's growth was weak data on key sectors of the US economy in the middle of last month. At the end of last trading week, the pair reached the upper border of the current downward trend at 1.3210 due to the British positive fundamental background, and dollar is now strengthening due to favorable data and the growth of demand before US key releases publications.

At the end of this week US data on the labor market will be published, as well as Fed’s and BoE interest rates decisions, so high volatility of the instrument is expected.

Support and resistance

The pair remains in a downward trend. Technical indicators confirm the fall forecast. On the daily chart and higher, MACD keeps high volumes of short positions, and Bollinger bands are directed downward.

Resistance levels: 1.3150, 1.3180, 1.3210, 1.3230, 1.3270, 1.3295.
Support levels: 1.3110, 1.3000, 1.2970, 1.2955, 1.2930, 1.2850, 1.2800.

Trading tips

It is relevant to increase the volumes of short positions from the current level with the targets at 1.2975, 1.2800 and stop loss 1.3250.

LiteForex analitics. USD/CAD: general review

Current trend

This week, CAD strengthened against USD due to the publication of strong data on GDP.

In May, Canada's GDP grew by 0.5%, which was the most significant figure for the last year. GDP growth is explained by good weather, which led to an increase in retail sales (by 2.0% in May) and an increase in oil prices in the first half of 2018.

At present, the Canadian economy is seriously dependent on the oil market, since the share of oil and gas production in the national GDP is more than 7% (the most significant figure since 1998). On Wednesday, after the publication of the EIA report, which recorded the growth of oil reserves in the US by 3.803M barrels to 408.74M barrels, CAD was under pressure, the pair began to grow and is currently trading at around 1.3025.

Support and resistance

Currently, the price is corrected upwards within the downtrend, and the possibility of further growth is confirmed by Stochastic, which is located at the oversold zone. However, one may speak about a serious increase in the price when it is fixed above 1.3061 (Murrey [3/8]). In this case, the next target of "bulls" will be 1.3183 (Murrey [4/8]). If the downtrend continues, the targets of the "bears" will be 1.2939 (Murrey [2/8]), 1.2817 (Murrey [1/8]) and 1.2695 (Murrey [0/8]).

Resistance levels: 1.3061, 1.3183.
Support levels: 1.2939, 1.2817, 1.2695.

Trading tips

Sell positions may be opened from the current level with targets at 1.2939, 1.2817, 1.2695 and stop loss at 1.1360.
Buy positions can be opened above 1.3061 with target at 1.3183 and stop loss at 1.3020.
Implementation period: 3-5 days.