Forex News Analysis by LiteForex

LiteForex analitics. XAU/USD: gold prices are going down

Current trend

Gold prices declined slightly on Thursday, updating the record lows of December 7.

Macroeconomic statistics from the US published on Thursday failed to provide significant support to USD, but investors were focused on the further development of US-China trade relations. Anyway, the published figure for the number of initial jobless claims for the week on December 7 dropped sharply from 233K to 206K, which was better than expected 226K.

Today, traders are focused on the US retail sales data. Analysts expect a sharp slowdown in November from +0.8% MoM to +0.1% MoM, which could have a negative impact on USD. There will also be published the November statistics on industrial production and preliminary December data on business activity.

Support and resistance

Bollinger Bands in D1 chart show moderate growth. The price range is narrowing, reflecting the emergence of ambiguous trading dynamics. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic is declining more actively, but is rapidly approaching its minimum levels, which indicates the risks associated with the oversold instrument.

Technical indicators do not contradict further development of the "bearish" trend in the short term.

Resistance levels: 1247.00, 1250.66, 1255.00.
Support levels: 1240.00, 1237.16, 1233.08, 1229.84.

Trading tips

To open long positions, one can rely on the breakout of 1247.00. Take profit — 1255.00. Stop loss — 1244.00. Implementation period: 1-2 days.
A breakdown of 1240.00 or 1237.16 may be a signal to further sales with target at 1229.84 or 1226.11. Stop loss — 1243.00 or 1245.00. Implementation period: 2-3 days.

LiteForex analitics. EUR/USD: general review

Current trend

Today, the pair is correcting upwards, aiming at the level of 1.1352 (Murrey [2/8], the midline of Bollinger Bands).

The euro is strengthening, despite the weak data on inflation in the Eurozone. In November, the basic consumer price index remained at 1.0%, and the general CPI dropped from 2.0% to 1.9%, having fallen below the target level for the first time since May. Investors are more concerned about the upcoming Fed meeting. The rate is expected to be raised once again, this time from 2.25% to 2.50%; but in the future, the rate of monetary tightening may be slowed down. During the month, hints of this were made by several members of the regulator, including its chairman Jerome Powell. Currently, the market expects another three rate hikes next year, and any data on the reduction of their number could put pressure on USD.

Support and resistance

The level of 1.1352 (in the midline of Bollinger Bands) is seen as the key one for the "bulls". Its breakout will give the prospect of further growth to 1.1413 (Murrey [3/8], the upper line of Bollinger Bands) and 1.1474 (Murrey [4/8]). Otherwise, the decline will resume to the levels of 1.1291 (Murrey [1/8]) and 1.1230 (Murrey [0/8]).

Technical indicators do not provide a clear signal: MACD histogram is stable in the negative zone and Stochastic is directed horizontally.

Support levels: 1.1291, 1.1230, 1.1200.
Resistance levels: 1.1352, 1.1413, 1.1474.

Trading tips

Short positions may be opened after the reversal near 1.1352 with targets at 1.1291, 1.1230 and stop loss at 1.1380.
Long positions may be opened from the level of 1.1370 with targets at 1.1413, 1.1474 and stop loss at 1.1330.
Implementation period: 4-5 days.

LiteForex analitics. USD/CAD: the pair is growing

Current trend

For two and a half months, the USD/CAD pair has been trading within an upward channel due to the ambiguous Canadian statistics and the growing demand for the American currency. In early December, the price fell to the key support level of 1.3170, failed to overcome it and sharply rose to a local maximum of 1.3450. It was followed by a correction, which was replaced by the current upward impulse with testing of new local highs.

This week, strong data on the US construction sector were published, but traders are waiting for new statistics that can affect the instrument. Today, special attention should be paid to inflation level data in Canada and the Fed's decision on monetary policy. In the second half of the week, GDP and Retail Sales will be released in Canada, and employment market data will be published in the USA.

Support and resistance

In the medium term, the trend will continue, as the growth rate of the economy and key US macroeconomic indicators are increasing. The price can rise to levels of 1.3595 and 1.3785, which were tested at the end of 2016 and the middle of 2017.

Technically, the pair stays within the upward channel, which is supported by the technical indicators’ readings: MACD volumes of long positions are growing, Bollinger bands are directed upwards.

Resistance levels: 1.3495, 1.3530, 1.3570, 1.3595, 1.3650, 1.3785.
Support levels: 1.3450, 1.3390, 1.3375, 1.3355, 1.3290, 1.3225, 1.3170.

Trading tips

It is relevant to increase the volumes of long positions from the current level and open pending long positions from the levels of 1.3450, 1.3390 with the targets at 1.3595, 1.3785 and stop loss 1.3310.

LiteForex analitics. Brent Crude Oil: general review

Current trend

Oil quotes show negative dynamics having reached the level of 56.03, the minimum value for the last 14 months.

Published yesterday, official data from the US Department of Energy, indicating a reduction in oil reserves by 0.497M barrels for the week, could not support the Brent rate. Experts predicted a more significant decrease in the amount of 2.437M barrels for the week. The pressure on prices is exerted by concerns regarding oversupply in the oil market. The new OPEC agreement to reduce oil production will come into force only next month and currently the level of oil production in such countries as the USA, Saudi Arabia and the Russian Federation is at a high level. Also, additional pressure on prices is exerted by the general strengthening of USD in connection with the decision of the US Fed to raise the interest rate and to continue tightening monetary policy in 2019.

Support and resistance

Technical indicators show that downward movement potential is preserved. Bollinger Bands and Stochastic are directed downwards. MACD histogram is stable in the negative zone. One may speak about downward movement continuation after the price consolidates below the support level of 56.25. In this case, the decline may continue to the level of 55.46. If the price fails to consolidate below the level of 56.25, then an upward correction is likely to develop with the main target at 57.81, corresponding to the center line of Bollinger Bands.

Resistance levels: 57.03, 57.81, 58.59.
Support levels: 56.25, 55.46, 54.68.

Trading tips

Short positions may be opened from the current level with target at 54.68 and stop loss at 56.00.
Long positions may be opened above the level of 57.03 with target at 57.80–58.00 and stop loss at 56.80.

LiteForex analitics. USD/CHF: general analysis

Current trend

USD strengthened slightly against CHF: the pair is now trading near the resistance level of 6/8 Murrey or 0.9948. If the currency can consolidate higher, then the next target will be the level of 7/8 Murrey or 0.9979.

USD may be affected negatively by a significant drop in the stock market. If there is no reversal in the near future, the current decline will be greatest since 2008: only last week, indices lost more than 6%. The leaders of the largest investment banks said that they had enough funds on their balance sheets for lending business and other market operations. On this issue, the Presidential Group on Financial Markets and the Fed will hold a working meeting under the leadership of Stephen Mnuchin.

The second negative point for USD is the shutdown of a part of US government since Donald Trump could not agree with the Senate about government spending. The US president planned to add to the expenditure side a project to build a wall on the Mexico border for a total of $5 billion but the Senate did not agree to sign the bill.

Today, there is no strong movement expected in the market, since many institutions do not conduct financial operations on Christmas Eve.

Support and resistance

Stochastic is at 68 points and does not give signals for opening positions.
Resistance levels: 0.9948, 0.9979.
Support levels: 0.9918, 0.9887.

Trading tips

Short positions can be opened from the level of 0.9979 with the target at 0.9887 and stop loss 1.0003.

LiteForex analitics. SPX: general review

Current trend

S&P 500 has recovered slightly after reports from US President Donald Trump about excellent opportunities for buying shares of American companies, which have recently lost in price.

The president also noted that the US economy continues to grow, and Fed Chairman Jerome Powell does an excellent job, although information about Trump’s intention to dismiss an official appeared before. A number of experts believe that the rapid market decline is caused by computer algorithms, since about 85% of operations are automated. On the other hand, the negative dynamics was triggered by fundamental factors, such as the tightening of monetary policy, the geopolitical situation, in particular the trade war between the US and China, as well as weak data on corporate profits of American companies. Also a negative factor for the market is the government shutdown due to the fact that the President was unable to agree with the Congress on government spending. Today, the US Senate will hold another meeting on this issue, but it is likely that it will not be resolved by the end of the year.

Support and resistance

Stochastic is at the level of 86 points indicating the possible correction.
Resistance levels: 2500.0, 2524.0.
Support levels: 2421.9, 2393.8.

Trading tips

Short positions may be opened from the resistance level of 2500.0 with take profit at 2393.8 and stop loss at 2524.0.

LiteForex analitics. Morning Market Review

On Wednesday, the US dollar strengthened significantly against most majors, with the exception of the yen. Despite the correction that began during Asian trading, the US currency did not lose its accumulated advantage. The overall decline in the US stock market contributes to strengthening of the dollar. Investor interest in the USD returns amid fears of a slowdown in economic growth in the world in general and in China in particular. Macroeconomic events that can affect the dollar rate today include statistics from the United States on ADP Nonfarm Employment Change (15:15 GMT+2), Initial Jobless Claims (15:30 GMT+2), as well as statistics on ISM Manufacturing PMI (17:00 GMT+2). It is expected that ADP Nonfarm Employment Change will remain unchanged at the level of 179K in December, and the number of initial jobless claims will rise to 220K per week from 216K a week earlier. SM Manufacturing PMI is expected to decline to 57.7 points in December from 59.3 points a month earlier. If the forecasts prove right, the rate will fall under pressure.

EUR/USD

Quotes of the pair EUR/USD decreased to 1.1361 due to the strengthened USD. In the absence of news from euro area, the movement of the instrument will be influenced by the statistics from the United States.

GBP/USD

Quotes of GBP/USD went down to 1.2547 under pressure of the strengthening USD. Today, investors will focus on Construction PMI in the UK. The indicator is expected to fall to 52.9 points in December from 53.4 points a month earlier. If the forecast proves right, the pound may fall under pressure.

USD/JPY

After active decline and testing the support level of 104.68, during the Asian session, the USD/JPY quotes managed to recover some of the lost positions, correcting to the area of 106.70. Today, the stock exchanges in Japan are closed, so the dynamics of the instrument will be influenced by news from the United States.

AUD/USD

Quotes of the AUD/USD pair during the Asian session fell to the level of 0.6762, after which they corrected to the level of 0.6958 rather quickly. Due to the absence of significant macroeconomic releases in Australia, the movement of the instrument is mostly technical.

Gold

Quotes of gold demonstrate a positive trend during the Asian trading having reached 1290.00.

LiteForex analitics. XAU/USD: general analysis

Current trend

Gold is trading at semi-annual highs. The market situation made investors pay attention to traditional shelter assets, such as gold, JPY, and treasury bonds.

Yesterday, the fall of the American stock market, provoked by Apple, strengthened the instrument. Company CEO Tim Cook announced a decrease in profit forecast in the first quarter of this year. Similar statements were made earlier by representatives of other US companies. This news reinforced concerns about a slowdown in global economic growth amid a decline in industrial production in China and the EU. In addition, negative macroeconomic indicators and the suspension of the work of the government in the United States catalyze the interest of market participants in gold.

On Friday, traders are cautious due to an extremely rich news background. Investors are closely watching the stock market. Growth stocks of large American companies may provide treasury income and increase the attractiveness of the dollar, weakening the demand for gold.

Support and resistance

On the 4-hour chart, the instrument tests the upper border of Bollinger bands. The indicator is pointing up, and the price range is widening, indicating continued growth of the instrument. MACD histogram is in the positive zone, keeping a strong buy signal. Stochastic is preparing to leave the overbought area.

Resistance levels: 1296.83, 1308.67, 1322.51.
Support levels: 1886.00, 1274.66, 1263.65, 1247.45, 1232.55.

Trading tips

Long positions can be opened from the current level with the target at 1322.50 and stop loss 1283.50.
Short positions can be opened below the level of 1282.90 with the targets at 1270.00, 1255.90 and stop loss 1290.30.

Implementation period: 1–3 days.

LiteForex analitics. Morning Market Review

USD strengthened moderately against most majors during today's Asian session, after an active decline on Monday, caused by the publication of weak data on ISM Non-Manufacturing PMI, which was worse than expected and fell to 57.6 points in December from 60.7 points a month earlier. Investors reacted to this statistics by selling the US currency. The growth of the instrument observed during the Asian session is of a technical nature. Macroeconomic statistics able to influence USD include JOLTs Job Openings (17:00 GMT+2).

EUR/USD

Quotes of the EUR/USD pair, supported by positive statistics on retail sales in the euro area, and amid a general weakening of the US currency, rose to 1.1483, however, during Asian trading, they corrected to the level of 1.1441. Today, investors will pay attention to statistics on the Business Climate in the euro area. The indicator is expected to fall to 0.99 points in December from 1.09 points a month earlier. If the forecast proves right, the euro may fall under pressure.

GBP/USD

Quotes of the pair GBP/USD increased to 1.2770 due to the decline of USD. Today, investors are waiting for the publication of data on Halifax House Price Index. It is predicted that the value of the indicator in annual terms will rise to 0.4% in December from 0.3% a month earlier, and in monthly terms it will rise to 0.5% in December from –1.4% a month earlier.

USD/JPY

Quotes of the pair USD/JPY show moderate positive dynamics reaching the level of 108.75. Due to the absence of macroeconomic releases from Japan, the movement of the pair's exchange rate will be affected by US statistics.

AUD/USD

Quotes of the AUD/USD pair are moving within the narrow range of 0.7113–0.7148 having changed only slightly. Published at night, data from Australia indicated a decrease in the trade balance surplus to 1.930 billion dollars in November from 2.316 billion dollars a month earlier, but did not affect the rate of the instrument significantly.

Gold

During the Asian session, quotes of gold fell to 1282.00 due to correction of USD.

LiteForex analitics. Morning Market Review

US dollar declines moderately against the majors during the Asian session. Macroeconomic releases that can affect the rate of the instrument today include the publication of the FOMC minutes, which can shed light on the Fed's future monetary policy. It was decided to extend the trade negotiations between the United States and China, which lasted two days, by one more day.

EUR/USD

The quotes of the EUR/USD pair after yesterday's decline, caused by weak data on the level of business confidence in the eurozone and the slowdown in industrial production in Germany, corrected in the Asian session to the level of 1.1457. Today, investors will pay attention to the EU Unemployment Rate (12:00 GMT+2). The indicator is expected to remain unchanged at the level of 8.1% in November.

GBP/USD

Quotes of GBP/USD demonstrate moderate positive dynamics having risen to 1.2740 during the Asian session. Today, market participants will pay attention to the speech of the Bank of England’s Governor Mark Carney (17:30 GMT+2). His comments may lead to an increase in the volatility of the pound in the short term.

USD/JPY

Quotes of USD/JPY rose to the level of 109.00. The pair is supported by positive investors’ expectations regarding the outcome of trade negotiations between the United States and China.

AUD/USD

Quotes of the pair AUD/USD demonstrate moderate positive dynamics and are traded near the level of 0.7155.

Gold

The rate of gold declines during Asian trading and is testing 1281.14.