Forex News Analysis by LiteForex

LiteForex analitics. EUR/USD: the euro is strengthening

Current trend

EUR showed moderate growth against USD on Wednesday, departing from local lows, updated the day before.

However, the instrument traded mainly with a decrease in the morning. Euro was under pressure by poor economic statistics. In July, EU Retail Sales declined by 0.2% MoM, and grew only by 1.1% YoY (1.3% growth was expected). August EU Services PMI remained at the same level of 54.4 points, and in Germany it fell from 55.2 to 55.0 points over the same period. Investors are focused on the US-Canada negotiations on NAFTA and are waiting for the introduction of new US duties on Chinese goods worth USD 200B.

Today, the pair is trading in both directions, waiting for the appearance of new drivers at the market. The focus will be on the ADP Employment Change report, as well as a block of statistics on Markit Services PMI.

Support and resistance

Bollinger Bands in D1 chart show moderate growth. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD is reversing upwards preserving a sell signal (located below the signal line). Stochastic is growing, having showed a rebound from the level "20", which can be called a formal margin of oversoldness of EUR.

One should keep existing long positions in the short and ultra-short term.

Resistance levels: 1.1657, 1.1718, 1.1749.
Support levels: 1.1621, 1.1573, 1.1526, 1.1500.

Trading tips

To open long positions one can rely on the breakout of 1.1657 while maintaining "bullish" signals from technical indicators. Take profit — 1.1749 or 1.1780. Stop loss — 1.1610 or 1.1600.

The rebound from 1.1657 as from resistance with the subsequent breakdown of 1.1621 can become a signal to further sales with target at 1.1526 or 1.1500. Stop loss — 1.1670 or 1.1680.

Implementation period: 2-3 days.

LiteForex analitics. GBP/USD: the pound is corrected

Current trend

Yesterday, GBP showed a slight increase against USD, continuing the development of the corrective impulse generated on Wednesday.

GBP is supported by data on possible progress in the Brexit negotiations. Currently, in addition to talks with EU representative Michel Barnier, British officials are discussing separate agreements with several EU countries. On Wednesday, Bloomberg reported that the UK and Germany agreed on a less detailed agreement on future trade relations between the EU and the UK. Later, both parties denied reports, saying that the positions remained the same and there is no progress in the negotiations. The German representative also noted that he fully trusts the EU chief negotiator Michel Barnier. Nevertheless, British investors remained positive.

Today, the focus of investor attention will be shifted to data from the US, where besides the publication of the August labor market report, there will also be speeches by Fed representatives Loretta Mester and Robert Kaplan, while statistics from the UK will be practically absent.

Support and resistance

On the D1 chart Bollinger Bands are reversing horizontally. The price range is trying to consolidate, reflecting the flat nature of trading in the short term. MACD is growing keeping a weak buy signal (located above the signal line). Stochastic is growing more actively, quickly approaching its maximum levels.

The current showings of the indicators do not contradict the further development of the "bullish" trend.
Resistance levels: 1.2960, 1.3000, 1.3048, 1.3100.
Support levels: 1.2879, 1.2850, 1.2800, 1.2732.

Trading tips

To open long positions, one can rely on the breakout of 1.2960. Take profit — 1.3048 or 1.3100. Stop loss — 1.2910 or 1.2900.

A breakdown of 1.2879 may become a signal for returning to sales with target at 1.2800 or 1.2750, 1.2732. Stop loss — 1.2930 or 1.2940.

Implementation period: 2-3 days.

LiteForex analitics. USD/CAD: general analysis

Current trend

On Friday, USD strengthened against CAD due to the growth of Nonfarm Payrolls data by 201 thousand, which was higher than the forecast of 191 thousand. The published report dispelled almost all doubts about the rate increase this month. August US average hourly earnings increased by 0.4% MoM and by 2.9% YoY, supporting USD.

Cad is under pressure of August’s growth of unemployment to 6.0% against the forecast of 5.9% and the decrease of employment by 51.6K against the forecast of an increase by 5.0K.

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 positive area, preserving the signal to open long positions.

Resistance levels: 1.3207, 1.3225, 1.3286, 1.3382.
Support levels: 1.3158, 1.3127, 1.3102, 1.3043, 1.3006, 1.2935, 1.2886.

Trading tips

Long positions can be opened from the current level with the target at 1.3225 and stop loss 1.3130.
Short positions can be opened from the level of 1.3120 with the target at 1.3050 and stop loss 1.3158.

Implementation period: 1–3 days.

LiteForex analitics. EUR/USD: Euro is corrected

Current trend

EUR showed moderate growth against USD on Monday, departing from the updated local lows of August 21.

The investors are focused on trade negotiations between the US and EU representatives in Brussels. This is the first meeting of the parties since the chairman of the European Commission Jean-Claude Juncker and the US president Donald Trump agreed to delay the introduction of higher tariffs for cars produced in the EU in July. At the current negotiations, it is planned to discuss the export of American beef and the possible increase in European taxes towards large American Internet companies.

In general, the market is waiting for ECB meeting. The interest rates are unlikely to be changed, but new comments on the monetary policy of the regulator can appear.

Support and resistance

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is slightly narrowing from below, reflecting the flat nature of trading in the short term. MACD is trying to reverse upwards keeping a sell signal (located below the signal line). Stochastic keeps a downward direction and reacts to the resumption of growth of the instrument at the beginning of the current trading week weakly yet.

It is worth looking into the possibility of corrective growth of EUR in the short and/or ultra-short term.

Resistance levels: 1.1621, 1.1657, 1.1718, 1.1749.
Support levels: 1.1573, 1.1522, 1.1500, 1.1473.

Trading tips

To open long positions one can rely on the breakout of 1.1621, while maintaining "bullish" signals from technical indicators. Take profit – 1.1718 or 1.1749. Stop loss — 1.1570 or 1.1560.

The return of "bearish" trend to the market with a breakdown of 1.1540 or 1.1530 may become a signal for the resumption of sales. Take profit — 1.1473 or 1.1446. Stop loss — 1.1580 or 1.1590.

Implementation period: 2-3 days.

LiteForex analitics. AUD/USD: general review

Current trend

Having reached two-year lows at the end of last week, the instrument moved to growth and is currently trading near the psychological level of 0.7200.

Despite the low level of consumer confidence in Australia, AUD strengthened after the US offered to begin a new round of negotiations on trade tariffs with the PRC.

In addition, USD was under pressure from yesterday’s negative data on US inflation. In August, the Consumer Price Index fell from 2.9% YoY to 2.7% YoY (minimum since April), and the Base Consumer Price Index rose from 2.4% to 2.2% (the worst indicator since May). Market participants feared that poor inflation data, along with pressure from President Trump's administration and trade tensions, could force FOMC members to hold only one interest rate increase instead of the two planned ones.

Today, the publication of data on retail sales in the US is expected at 14:30 (GMT+2), as well as the data on industrial production (15:15 (GMT+2)).

Support and resistance

On the H4 chart, the instrument is traded in the upper part of Bollinger Bands, trying to consolidate above the psychological level of 0.7200. The indicator is directed upwards and the price range has widened, which indicates the continuation of the uptrend. MACD histogram is in the positive zone, keeping a strong buy signal. Stochastic does not give clear signal for entering the market.

Resistance levels: 0.7234, 0.7266, 0.7308, 0.7345, 0.7987.
Support levels: 0.7195, 0.7146, 0.7110, 0.7076.

Trading tips

Long positions may be opened from the current level with target at 0.7250 and stop loss at 0.7180. Implementation period: 1 day.

Short positions could be opened below 0.7175 with targets at 0.7105, 0.7075 and stop loss at 0.7205. Implementation period: 1-2 days.

LiteForex analitics. XAG/USD: technical analysis

XAG/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 keeps testing the border of the oversold zone, having formed a Bullish divergence with the price. The Composite is testing from below its longer MA.

XAG/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 breaking down its longer MA. The Composite is turning up, having failed its quite strong support region.

Key levels

Support levels: 13.90 (local lows), 13.72 (January 2016 lows), 13.63 (December 2015 lows).
Resistance levels: 14.28 (July 2017 lows), 14.45 (local highs), 14.85 (local highs).

Trading tips

There is a chance of an upward correction.
Long positions can be opened from the level of 14.45 with the target at 14.85 and stop-loss at 14.28. Validity – 3-5 days.
Short positions can be opened from the level of 13.90 with targets at 13.72, 13.63 and stop-loss at 14.02. Validity – 3-5 days.

LiteForex analitics. Brent Crude Oil: general review

Current trend

This week, Brent Crude oil shows ambiguous dynamics.

The pressure was exerted by the decision of US President Donald Trump on the introduction of 10% of duties on Chinese goods totaling USD 200 billion from September 24 (from January 1, tariffs may increase to 25%). The expansion of production in the US also influence quotes negatively: according to the Baker Hughes, the number of active oil rigs increased from 860 to 867 units. According to the EIA report, in October, production at seven largest shale deposits in the United States will reach 7.6 million barrels per day. Today, the instrument rose sharply to 78.80 after the Bloomberg publication, which states that Saudi Arabia considers prices above USD 80 per barrel to be "quite acceptable". This means that in the short term the country will not try to compensate the supply shortage.

Today, investors are waiting for the weekly API report on the US crude oil reserves. If the trend to reduction continues (the last time the volume of oil reserves fell by 8.636 million barrels), then quotes can get additional support.

Support and resistance

Now the price has risen above 78.12 (Murrey [6/8]) and can go up to the area of 79.68 (Murrey [7/8]) and 80.00. Reverse consolidation of the instrument below 78.12 may lead to a correction to 76.56 (Murrey [5/8]) and 75.00 (Murrey [4/8]).

Technical indicators show decline: Stochastic has reversed downwards, and MACD histogram is reducing in the positive zone.

Support levels: 78.12, 76.56, 75.00.
Resistance levels: 79.68, 80.00, 81.25.

Trading tips

Sell positions may be opened below 78.12 with the target at 76.56 and stop loss at 78.60.
Buy positions may be opened from 78.90 with targets at 79.68, 80.00 and stop loss at 78.40.

Implementation time: 3-5 days.

LiteForex analitics. XAU/USD: technical analysis

XAU/USD, D1

On the daily chart, the instrument is trading in the upper Bollinger band. The price remains below the EMA65, EMA130 and SMA200 that are directed down. The RSI keeps testing its most recent resistance. The Composite is testing from above its longer MA.

XAU/USD, H4

On the 4-hour chart, the instrument is trading in the upper Bollinger band. The price remains just above its moving averages that are horizontal. The RSI is about to test from above its longer MA. The Composite is showing similar dynamics.

Key levels

Support levels: 1175.0 (local lows), 1160.0 (local lows), 1130.0 (December 2016 lows).

Resistance levels: 1213.0 (local highs), 1235.0 (local highs), 1241.0 (local highs).

Trading tips

The price has reached a strong support near 1180.0. There is a chance of an upward correction.

Long positions can be opened from the level of 1213.0 with targets at 1235.0, 1241.0 and stop-loss at 1201.0. Validity – 3-5 days.
Short positions can be opened from the level of 1160.0 with the target at 1130.0 and stop-loss at 1175.0. Validity – 3-5 days.

LiteForex analitics. YM: general analysis

Current trend

The Dow Jones index has been growing for the third trading session in a row. The price has updated the historical maximum at the level of 26703.1 after the news on the introduction of 10% of trade taxes on Chinese goods, although before that the US president had spoken about the value of 25%. The second positive factor was macroeconomic statistics. Initial Jobless Claims continue to be low, which indicates a strong economic growth in the country.

Today, Markit PMI statistic will be published. Next week, the Fed will hold a meeting. Many market participants expect that the interest rate will be increased by 25 basis points. Thus, USD will most likely begin to strengthen, and a correction in the stock market is possible.

Support and resistance

Stochastic is around 98 points and reflects a possibility of a correction.
Resistance levels: 26953.1, 27343.8.
Support levels: 26646.8, 26562.5.

Trading tips

Short positions can be opened after the breakdown of the level of 26646.8 with the target at 26562.5 and stop loss 26724.0.

LiteForex analitics. FTSE: technical analysis

FTSE, D1

On the daily chart, the instrument is trading in the upper Bollinger band. The price remains just below its moving averages that are horizontal. The RSI is growing, having broken out its longer MA. The Composite has reached its critical overbought levels.

FTSE, H4

On the 4-hour chart, the instrument is trading just below the upper line of the Bollinger Bands. The price remains on the level with the SMA200 and above the EMA14, EMA65 and EMA130 that start turning up. The RSI is testing from above the border of the overbought zone. The Composite is breaking down its longer MA.

Key levels

Support levels: 7395.0 (local lows), 7325.0 (local lows), 7230.0 (local lows).
Resistance levels: 7515.0 (local highs), 7580.0 (November 2017 highs), 7615.0 (local highs).

Trading tips

The price is testing its strong resistance near 7515.0. There is a chance of a downward reverse, while its breakout would lead to a growth continuation.
Short positions can be opened from the level of 7395.0 with targets at 7325.0, 7230.0 and stop-loss at 7440.0. Validity – 3-5 days.
Long positions can be opened from the level of 7515.0 with targets at 7580.0, 7615.0 and stop-loss at 7475.0. Validity – 3-5 days.