Forex News Analysis by LiteForex

LiteForex analitics. WTI Crude Oil: the prices rise

Current trend

Yesterday, oil prices increased significantly, renewing the highs since July 11.

The instrument is supported by the results of the meeting of OPEC and partner countries in Algeria. Contrary to market expectations, the cartel did not decide to increase oil production to compensate for the supply deficit that could follow after the introduction of US sanctions against Iran. Moreover, next year OPEC predicts a serious decline in oil prices, and in this case, production may fall again. Now the market is waiting for a new meeting of the cartel and partner countries, which will take place in Abu Dhabi in December. By this time, the scale of the supply deficit after leaving the Iranian market will become clear, and decisions can be made on its compensation.

On Tuesday, investors will focus on API Weekly Crude Oil Stock release. EIA Crude Oil Stocks change will be published on Wednesday.

Support and resistance

On the daily chart, Bollinger bands are growing steadily. The price range is actively expanding, but not as fast as the "bullish" dynamic develops. MACD indicator is growing, keeping a strong buy signal (the histogram is above the signal line). Stochastic is directed upwards but is approaching its highs, which indicates that the instrument is overbought in the short term.

It is better to keep current long positions until the situation becomes clear.

Resistance levels: 72.49, 73.00, 73.74.
Support levels: 71.80, 71.00, 70.00, 69.07, 68.60.

Trading tips

Long positions can be opened after the breakout of the level of 72.49 or 73.00 with the target at 73.74 or 74.30 and stop loss 72.30–72.00. Implementation period: 1–2 days.

Short positions can be opened after the downwards reversal of the price reverses near the current levels with the target at 70.00 and stop loss 72.50. Implementation period: 2–3 days.

LiteForex analitics. NZD/USD: general review

Current trend

Today, the pair showed a moderate decline against the backdrop of the RBNZ decision on monetary policy.

The New Zealand regulator left the interest rate at the level of 1.75% as expected. At the same time, comments on monetary policy were extremely cautious, which disappointed investors. The RBNZ is interested in a low exchange rate of NZD in order to maintain demand for exports. This measure is aimed at mitigating the consequences of the US-China trade conflict.

Yesterday, the Fed announced the increase in the interest rate by 25 basis points, which was expected by the market. USD strengthening was limited as a number of financiers saw signs of overheating of the American economy. In this regard, investors are expecting today's speech of the Fed head Powell.

Today, a number of significant macroeconomic releases are expected, the publication of which will create volatility in the market. At 14:30 (GMT+2), data on GDP, as well as statistics on personal spending will be published in the US. The speech by the Fed Head Jerome Powell is due at 22:30 (GMT+2).

Support and resistance

On the H4 chart the instrument is trading in the lower part of Bollinger Bands. The indicator corrected horizontally and the price range reduced, which indicates further downward correction. MACD histogram is consolidating at the zero mark; the signal for entering the market is not formed. Stochastic is approaching the oversold area boundary; a buy signal can be formed during the day.

Resistance levels: 0.6653, 0.6671, 0.6701, 0.6727, 0.6753.
Support levels: 0.6633, 0.6600, 0.6562, 0.6534, 0.6505.

Trading tips

Short positions may be opened below 0.6630 with target at 0.6570 and stop loss at 0.6660.
Long positions may be opened above 0.6660 with target at 0.6700 and stop loss at 0.6640.
Implementation period: 1-2 days.

LiteForex analitics. USD/CAD: general review

Current trend

Despite the strength of the US currency in late summer and early autumn, the Canadian dollar is dominating the pair for three months.

One should note a wide range of movement of the instrument, which indicates an ambiguous situation between two currencies. The “Canadian” received the main impulse for growth after the increase in the key rate in July, after which it only grew against all the main competitors. The policy of the Bank of Canada is aimed at further raising of the rates, which will help to keep inflation at the target level. The next meeting of the regulator is scheduled for the end of October. At the end of September, the pair moved upwards, but after reaching the key resistance level of 1.3060, which was the upper border of the descending range, sharply headed down due to the release of strong data on the economic growth of Canada in July. This impulse still controls the movement of the instrument: in less than two days, the pair has gone through almost 300 points.

At the end of the week, major releases will be published, namely, data on the US and Canadian labor markets, including Nonfarm Payrolls in the United States.

Support and resistance

In the short term, the current momentum may extend to 1.2745, the first strong support level. In the future, a correctional movement up to the levels of 1.2825, 1.2860, 1.1285 is expected. In the medium term, the downward trend will continue, as confirmed by all technical indicators: MACD shows a sharp decrease in the volume of long positions, Bollinger Bands reversed down; on W1 chart, the pair broke the lower border of the long-term uptrend and the Kijun Sen, Tenkan Sen lines of the Ichimoku indicator from the top down.

Support levels: 1.2780, 1.2745, 1.2700, 1.2640, 1.2585, 1.2555, 1.2530.
Resistance levels: 1.2825, 1.2860, 1.2885, 1.2910, 1.2975, 1.3000, 1.3060.

Trading tips

Deferred short positions may be opened from the levels of 1.2960, 1.2910, 1.2880 with the target at 1.2550 and stop loss at 1.3110.

LiteForex analitics. EUR/USD: the Euro remains under pressure

Current trend

EUR showed a decline against USD on Monday noting a new local low since September 11. Development of the "bearish" trend on the instrument was promoted by heterogeneous macroeconomic statistics from the EU.

Markit Manufacturing PMI declined to 53.2 points in September from 53.3 a month earlier. The unemployment rate was better than expected and dropped to 8.1% in August from 8.2% in the previous month.

The risks of a political crisis in Italy continue to exert additional pressure on EUR. Previously, Italian politicians set the ratio of deficit to GDP for the next year at a much higher level than was proposed by the EU Ministry of Finance. The European Commission has already opposed these budget plans.

Support and resistance

Bollinger Bands in D1 chart demonstrate a gradual decrease. The price range expands, making way for new local lows for the "bears". MACD is declining keeping a stable sell signal (located below the signal line). In addition, the indicator is trying to consolidate below the zero mark. Stochastic, having reached its minimum levels, reversed into the horizontal plane, indicating oversold EUR in the ultra-short and/or short term.

Existing short positions should be kept until the situation clears up.

Resistance levels: 1.1615, 1.1657, 1.1700, 1.1732, 1.1801.
Support levels: 1.1561, 1.1522, 1.1500, 1.1473, 1.1446.

Trading tips

To open long positions, one can rely on the rebound from 1.1561 as from support with the subsequent breakout of 1.1615. Take profit — 1.1700 or 1.1732. Stop loss — 1.1570 or 1.1560.
A confident breakdown of 1.1561 may be a signal to further sales with target at 1.1500 or 1.1473, 1.1446. Stop loss — 1.1600 or 1.1615.

Implementation period: 2-3 days.

LiteForex analitics. XAG/USD: silver prices grow

Current trend

Yesterday, silver rose, updating the highs since August 28. The instrument was supported by rather harsh statements by the representative of the ruling party of Italy, Claudio Borghi, that most of the problems in the country could be solved by having their own currency. However, at the end of the trading session, the instrument lost most of its gains after the speech of Fed Chairman Jerome Powell, who confirmed the previous policy to a gradual tightening of monetary policy.

A large block of statistics on business activity in Europe and the United States will be published today, as well as a number of speeches by Fed representatives, such as Lael Brainard and Loretta Mester. In addition, traders are waiting for ADP Employment Change release, since on Friday there will be a September report on the US labor market.

Support and resistance

On the daily chart, Bollinger bands are growing moderately. The price range is expanding, but not as fast as the "bullish" trend develops. MACD is growing, maintaining a strong buy signal (the histogram is above the signal line), and is trying to consolidate above the zero line. Stochastic reversed horizontally, reacting to the active instrument correction.

The current readings of the indicators do not contradict the further development of the “bullish” trend in the short and/or ultra-short term.

Resistance Levels: 14.79, 14.86, 15.00.
Support levels: 14.67, 14.60, 14.51, 14.41, 14.25.

Trading tips

Long positions can be opened after the breakout of the level of 14.79 with the target at 15.00. Stop loss is 14.67. Implementation period: 1–2 days.
Short positions can be opened after the breakdown of the levels of 14.67 or 14.60 with the targets at 14.41–14.35. Stop loss is 14.70–14.80. Implementation period: 2–3 days.

LiteForex analitics. Brent Crude Oil: general analysis

Current trend

Oil quotes are rising and trading near the level of 86.20. Yesterday’s official EIA Crude Oil Stocks change release, which reflected a significant increase in US oil reserves, could not stop the growth of the prices. According to the report, the indicator rose by 7.975 million barrels for the week, while a more modest growth of 1.985 million barrels was expected. The oil market is supported by the potential risks of oil shortage in the global market due to US sanctions against the Iranian oil sector. Currently, there is a slight downward correction, but in general, the upward trend continues.

On Friday, investors will pay attention to Baker Hughes US Oil Rig Count release, which decreased by 3 units to 863 last week.

Support and resistance

Technical indicators reflect the preservation of growth potential but do not exclude a correction in the short term. Bollinger bands are directed upwards. MACD volumes declined slightly in the positive zone, indicating the formation of a downward correction. Stochastic is pointed downwards. If sellers manage to lower the rate below 85.93 (Murrey [7/8]), then it may develop a correction to the area of ​​84.80, corresponding to the middle line of Bollinger bands. If buyers increase their activity and fix the rate above 86.55, then Brent may grow to 87.50 (Murrey [8/8]).

Resistance Levels: 86.60, 87.50, 88.00.
Support levels: 85.93, 84.37, 82.81.

Trading tips

Short positions can be opened below the level of 85.93 with the target around ​​84.80 and stop loss 86.10
Long positions can be opened above the level of 86.56 with the target at 87.50 and stop loss 86.30.

LiteForex analitics. EUR/USD: transition to the lateral trend

Current trend

The euro continues to decline against the dollar within the broad long-term trend.

Over the past two weeks, the instrument has lost more than 350 points, breaking strong support levels of 1.1515, 1.1500 on its way. Now the pair has fixed within the lateral consolidation after a serious decline and in anticipation of the release of key releases on the US labor market.

Today, data on unemployment and Nonfarm Payrolls will be published. The unemployment will possibly decline, while at the same time, consensus forecasts indicate a reduction in the number of people employed in non-agricultural sectors of the economy.

Support and resistance

Most likely, one will see an increase in volatility after releases but there will be no significant change in the rate. In the medium term, the pair will descend to the levels of 1.1430, 1.1400, after which the rising wave will be formed with targets at 1.1600, 1.1665.

Technical indicators show the possibility of moving to broad lateral consolidation. MACD indicates a decrease in volumes on D1 chart, and the signal line is approaching zero one; Bollinger Bands on D1 and W1 charts are directed horizontally.

Support levels: 1.1500, 1.1430, 1.1400, 1.1370, 1.1300, 1.1250, 1.1210, 1.1170.
Resistance levels: 1.1515, 1.1550, 1.1575, 1.1600, 1.1665, 1.1690, 1.1715, 1.1730.

Trading tips

In this situation, short positions may be opened from the current level with the target at 1.1370; pending short positions may be opened from 1.1550, 1.1600, 1.1665 with the target at 1.1370 and stop loss at 1.1700, 1.1760.

LiteForex analitics. XAU/USD: technical analysis

XAU/USD, D1

On the daily chart, the instrument is trading on the middle MA of the Bollinger Bands. The price remains below its moving averages that are directed down. The RSI is turning down, having failed its strong resistance. The Composite is testing 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 just below its moving averages that are horizontal. The RSI is falling, having broken down its longer MA. The Composite is approaching its strong support.

Key levels

Support levels: 1182.0 (local lows), 1171.0 (local lows), 1160.0 (August lows).

Resistance levels: 1213.0 (local highs), 1236.0 (December 2017 lows), 1241.0 (local highs).

Trading tips

The price keeps consolidating in a narrow sideways channel. A breakout of its upper border would allow the growth to continue.
Long positions can be opened from the level of 1213.0 with targets at 1236.0, 1241.0 and stop-loss at 1196.0. Validity – 3-5 days.
Short positions can be opened from the level of 1182.0 with targets at 1171.0, 1160.0 and stop-loss at 1188.0. Validity – 3-5 days.

LiteForex analitics. XAG/USD: technical analysis

XAG/USD, D1

On the daily chart, the instrument is trading on the middle MA of the Bollinger Bands. The price remains below its moving averages that are directed down. The RSI is falling, having formed a “double top” reverse pattern. The Composite is testing its longer MA, having formed a Bearish divergence with the price.

XAG/USD, H4

On the 4-hour chart, the instrument is trading in the lower Bollinger band. The price remains on the level with its moving averages that are horizontal. The RSI is growing towards its longer MA. The Composite is breaking out its longer MA.

Key levels

Support levels: 14.25 (local lows), 13.95 (local lows), 13.72 (January 2016 lows).
Resistance levels: 14.77 (local highs), 14.95 (local highs), 15.24 (local highs).

Trading tips

After a short-term correction the fall can continue.
Short positions can be opened from the level of 14.25 with targets at 13.95, 13.72 and stop-loss at 14.38. Validity – 3-5 days.
Long positions can be opened from the level of 14.95 with the target at 15.24 and stop-loss at 14.77. Validity – 3-5 days.

LiteForex analitics. XAU/USD: gold prices are consolidating

Current trend

After a sharp decline at the beginning of the current week, gold prices are in the slight correction. The instrument is under pressure from a rising USD due to the restoration of treasury bonds yields’ growth. In addition, the market still expects a further increase in the Fed’s interest rates, which makes the purchase of gold, as an asset that does not generate interest income, unprofitable.

Tomorrow, investors expect the publication of statistics from the US consumer price dynamics. If the report meets the expectations of analysts, this will confirm market confidence in further tightening of monetary policy and will affect the instrument negatively.

Support and resistance

On the daily chart, Bollinger bands are moving horizontally. The price range remains quite narrow and does not attempt to widen, which corresponds to the real trading dynamics in the market. MACD indicator is falling, keeping a weak sell signal (the histogram is below the signal line). Stochastic is directed downwards, however, it is approaching its lows, which indicates the risks associated with oversold gold in the short and/or super short term.

It is better to keep current short positions until the situation is clear.
Resistance levels: 1191.71, 1195.28, 1200.00, 1208.14.
Support Levels: 1187.53, 1183.10, 1180.35, 1170.00.

Trading tips

Long positions can be opened after the breakout of the level of 1191.71 with the target at 1200.00. Stop loss is 1187.53. Implementation period: 1–2 days.
Short positions can be opened after the breakdown of the level of 1183.10 with the target at 1175.00 or 1170.00. Stop loss is 1187.53. Implementation period: 2–3 days.