Forex News Analysis by LiteForex

LiteForex analitics. WTI Crude Oil: the instrument is consolidating

Current trend

Yesterday, oil prices stayed unchanged against the ambiguous USD dynamics.

The prices were supported by the Baker Hughes US Oil Rig Count index, which stayed at the level of 869 units due to the transportation problems from the Perm oil basin. Also, the prices are positively influenced by the comments of Saudi Energy Minister Khalid Al-Falih, who noted that the state oil company Saudi Aramco is doing its best to meet the growing global demand for oil. The potential for the current growth in oil prices is restricted.

Support and resistance

On the daily chart, Bollinger bands are moderately falling. The price does not change, practically not reacting to the attempt of growth of the instrument in the short/ultra-short term. MACD indicator reversed upwards, forming a new buy signal (the histogram is above the signal line). Stochastic is directed upwards and is approximately in the center of its working area.

The current indicators’ readings do not contradict the further development of corrective growth in the short and/or ultra-short term.

Resistance levels: 65.60, 66.48, 67.00, 67.50.
Support levels: 65.00, 64.50, 63.78.

Trading tips

Long positions can be opened after the breakout of the level of 65.60 with the target at 67.00 and stop loss 65.00.
Short positions can be opened after the breakdown of the level of 65.00 with the at targets 63.78–63.50 and stop loss 65.60.

Implementation period: 2–3 days.

LiteForex analitics. XAU/USD: technical analysis

XAU/USD, D1

On the daily chart, the instrument is correcting up from the lower line of the Bollinger Bands. The price remains below its moving averages that are directed down. The RSI is growing, having left the oversold zone. The Composite is approaching its recent resistance region.

XAU/USD, H4

On the 4-hour 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 is turning down, having formed a Bearish divergence with the price. The Composite is showing similar dynamics.

Key levels

Support levels: 1189.0 (local lows), 1174.0 (local lows), 1160.0 (local lows).
Resistance levels: 1217.0 (local highs), 1235.0 (December 2017 lows), 1259.0 (February 2017 highs).

Trading tips

The price has broken down its long-term ascending trendline. The fall could continue.
Short positions can be opened from the level of 1189.0 with targets at 1174.0, 1160.0 and stop-loss at 1198.0. Validity – 3-5 days.
Long positions can be opened from the level of 1217.0 with targets at 1235.0, 1259.0 and stop-loss at 1204.0. Validity – 3-5 days.

LiteForex analitics. AUD/USD: the Australian dollar is declining

Current trend

Yesterday, AUD slightly decreased against USD, stepping off the local highs, updated earlier.

The traders are focused on Wednesday’s speech of the Deputy Head of the RBA Guy Debelle and on Q2 Construction Work Dore release. The head of the bank noted that the fall of inflation is due to the increase in competition in the retail sector and the slow growth of salaries. Currently, the regulator believes that in the next few years, the consumer price index will reach 2.25% against the backdrop of GDP growth and the average wage in the country. As for Construction Work Dore indicator, it exceeded forecasts and grew by 1.6% after growing by 2.4% in the previous period.

Today, AUD is falling sharply due to a possibility of the resignation of Australian Prime Minister Malcolm Turnbull, as several ministers announced their withdrawal.

Support and resistance

On the daily chart, Bollinger bands are moving flat. The price range narrows from above, reflecting the emergence of mixed trading dynamics. MACD indicator has reversed downwards, keeping the buy signal (the histogram is above the signal line). Stochastic reversed downwards from its highs, signaling that AUD is overbought.

It is possible to further develop the downtrend in the short and/or ultra-short term.

Resistance levels: 0.7322, 0.7346, 0.7362, 0.7380.
Support levels: 0.7290, 0.7260, 0.7222, 0.7200.

Trading tips

Long positions can be opened after a rebound from the level of 0.7290 with the targets at 0.7346–0.7362 or 0.7380 and stop loss 0.7260–0.7250.
Short positions can be opened after the breakdown of the level of 0.7290 with the targets at 0.7222–0.7200. Stop loss is 0.7322.

Implementation period: 2–3 days.

LiteForex analitics. EUR/USD: general review

Current trend

On Friday, the pair grew in view of an inconclusive end to China-US trade negotiations and Jerome Powell's ambiguous statements.

The White House only said that the parties exchanged views on how to achieve a balance in economic relations. Chinese representatives called the talks constructive. According to Bloomberg, the next meeting can take place no earlier than November. Speech of Fed Chairman Jerome Powell in Jackson Hole has caused mixed reactions from investors. The head of the regulator confirmed that the pace of the US economic growth will remain the same, so the policy of raising interest rates will continue. However, according to Powell, there are no clear signs of inflation growth accelerating above 2.0%. In this regard, investors have doubts that the regulator will go to four rate increases this year. In addition, the tightening of monetary policy is criticized by President Donald Trump and some FOMC members agree with his position. The head of the Federal Reserve Bank of Saint Louis, James Bullard, in an interview with CNBC, stated the expediency of stopping the rate hike since inflationary pressures do not increase.

Support and resistance

Now, the price has risen above the level of 1.1596 (Murrey [7/8]) and can continue rising to 1.1718 (Murrey [8/8], the upper line of Bollinger Bands). However, Stochastic's reverse in the overbought zone indicates the probability of a downward correction to the levels of 1.1474 (Murrey [6/8]) and 1.1352 (Murrey [5/8]).

Support levels: 1.1596, 1.1474, 1.1352.
Resistance levels: 1.1718, 1.1840.

Trading tips

Sell positions may be opened if the price consolidates below 1.1596 with targets at 1.1474, 1.1352 and stop loss at 1.1630.
Buy positions may be opened from 1.1640 with targets at 1.1718, 1.1840 and stop loss at 1.1600.

Implementation time: 3-5 days.

LiteForex analitics. Brent Crude Oil: general review

Current trend

Quotes are growing and the price of Brent Crude oil rose above 76.56.

Oil is supported by the reduction in the US rigs from 869 to 860 units (according to Baker Hughes), the expectation of a further reduction in oil reserves by API and EIA, and a new US-Mexico trade agreement. On Monday, it became known that the NAFTA would be replaced by a new agreement. US and Mexico were the first to formalize it but Canada is expected to join it soon and, thus, NAFTA will be restored on new terms. It is known that Mexico will expand purchases of food in the US, and will also increase the share of cars produced by workers with wages of at least USD 16 an hour to 45% (to equalize the value of production with US enterprises).

In the evening, the market is waiting for the weekly API report on the US crude oil reserves. If the trend to decline continues (the last time it was 5.17 million barrels), prices may start to grow.

Support and resistance

The quotes are above 76.56 (Murrey [5/8]) and can go up, to 78.12. If the price consolidates below 76.56, correction to 75.00 (Murrey [4/8]) and 73.43 (Murrey [3/8], the midline of Bollinger Bands) is possible.

Technical indicators show continued growth: Bollinger Bands diverge, confirming the uptrend, MACD histogram has moved to the positive zone and formed a buy signal, Stochastic is in the overbought zone moving horizontally.

Support levels: 76.56, 75.00, 73.43.
Resistance levels: 78.12, 79.68.

Trading tips

Buy positions may be opened from 77.00 with the target at 78.12 and stop loss at 76.60.
Sell positions may be opened below 76.56 with targets at 75.00, 73.43 and stop loss at 76.90.

Implementation time: 3-5 days.

LiteForex analitics. Brent Crude Oil: general review

Current trend

Oil prices are rising and reached a maximum since July at 77.82, supported by yesterday's US statistics. EIA Crude Oil Stocks change reflected the decrease of “black gold” resources by 2.566 million barrels, and gasoline reserves by 1.55 million barrels. The production level stayed at the level of 10.9 million barrels per day. In response, investors are actively purchasing oil futures.

On Friday, market participants will pay attention to Baker Hughes US Oil Rig Count release. Last week, the number fell to 860 from 869 units. If tomorrow's report reflects the further decrease in the indicator, the instrument will receive substantial support.

Support and resistance

On the 4-hour chart, technical indicators reflect the maintenance of growth potential. There is no sign of correction. Bollinger bands are directed upwards. MACD is stable in the positive zone, keeping the buy signal. Stochastic is in the overbought zone and is pointing down, but it does not give a clear reversal signal.

At the level of 78.12 (Murrey [+2/8]), there is a strong support level, from which a reversal and formation of a downward correction are possible. The breakout of the level will let the price grow to the area of ​​79.00–80.00.

Resistance levels: 78.12, 79.00, 80.00.
Support levels: 76.56, 75.00, 73.43.

Trading Tips

Long positions can be opened above the level of 78.12 with the targets around ​​79.00 and stop loss at the level of 77.80.
Short positions can be opened below the level of 77.40 with the targets around ​​76.56 and stop loss at the level of 77.70.

LiteForex analitics. USD/CAD: general review

Current trend

Quotes of the instrument grow amid yesterday's weak data on Canada's GDP.

GDP growth MoM stopped and amounted to 0.0% in July against 0.5% a month earlier. YoY the indicator in Q2 was higher than the previous values and amounted to 2.9%, but an increase of 3.0% was expected. Investors reacted to this by active sales of the Canadian currency, so the rate jumped to the level of 1.3022. CAD is also pressured by the uncertainty of the country's position regarding the trilateral trade deal with the US and Mexico. Canada's accession to the deal looks most likely, but there's no official position of the government on this issue so far. The final decision is expected on Friday.

If Canada agrees to a deal, CAD will receive support, and we will see a decline in the instrument. The refusal will push the quotes even higher.

Support and resistance

Technical indicators on H4 chart generally indicate the preservation of growth potential. Bollinger Bands diverge, indicating an active continuation of the current trend. MACD histogram is actively declining in the negative zone, forming a buy signal. Stochastic's lines are directed upwards.

Support levels: 1.3000, 1.2970, 1.2939, 1.2908.
Resistance levels: 1.3031, 1.3061, 1.3092, 1.3122.

Trading tips

Buy positions may be opened above the level of 1.3031 with targets at the area of 1.3061-1.3092 and stop loss at 1.3010.
Sell positions may be opened below 1.3000 with targets at 1.2970-1.2939 area and the stop loss at 1.3020.

Implementation time: 1 day.

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

Current trend

EUR showed a significant decline against USD noting a new local low since August 24.

EUR is under pressure of US President Trump’s commentaries and poor inflation statistics. In an interview with Bloomberg Trump said that the EU's proposals on duties on cars are not good enough for the US. Probably, the EU will need new concessions; otherwise, it is possible that the 25% duties on EU-imported cars will be introduced in the US.

Friday’s preliminary August inflation data were poor. The consumer price index fell from 2.1% to 2.0% and the core consumer price index fell from 1.1% to 1.0%.

Today, EU Markit Manufacturing PMI will be released. The indicator is expected to remain unchanged at the level of 54.6 points in August.

Support and resistance

Bollinger Bands in D1 chart show moderate growth. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is going down having formed new sell signal (located below the signal line). Stochastic is steadily declining, approaching its minimum levels, which indicates the risks associated with oversold euro.

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

Resistance levels: 1.1621, 1.1653, 1.1718, 1.1749.
Support levels: 1.1573, 1.1526, 1.1500, 1.1473.

Trading tips

To open long positions, one can rely on the rebound from the support level of 1.1573 with the subsequent breakout of 1.1621. Take profit — 1.1718, 1.1749 or 1.1789. Stop loss — 1.1560 or 1.1750. Implementation period: 2-3 days.

A breakdown of 1.1573 may be a signal to further sales with target at 1.1500 or 1.1473. Stop loss — 1.1620. Implementation period: 1-2 days.

LiteForex analitics. XAG/USD: the price is under pressure

Current trend

Yesterday, silver prices declined slightly, renewing a local minimum since August 16. On Monday, the US markets were closed due to the national holiday, so investors fully concentrated on the European and Asian releases.

Monday’s August EU Manufacturing PMI release remained at the same level of 54.6 points. The corresponding German index fell from 56.1 to 55.9 points. The Japanese indicator remained at the same level of 52.5 points, but the Chinese PMI Caixin in August fell from 50.8 to 50.6 points.

Support and resistance

On the daily chart, Bollinger bands unfold horizontally. The price range is expanding but still remains uncomfortable for the development of downward trend dynamics. MACD indicator decreases, keeping a weak sell signal (the histogram is below the signal line). Stochastic, approaching its lows, reversed horizontally, reflecting the risks of the corrective silver growth in the short and/or ultra-short term.

It is better to wait until the signals are clear and keep current short positions in the short term for some time.

Resistance levels: 14.48, 14.60, 14.79, 14.89, 15.00.
Support levels: 14.40, 14.24, 14.17.

Trading tips

Long positions can be opened after the rebound from the level of 14.40 and breakout of the levels of 14.48–14.50 with the targets at 14.70–14.79 and stop loss 14.35.
Short positions can be opened after the breakdown of the level of 14.40 with the targets at 14.24 or 14.17–14.10 and stop loss 14.45–14.55.

Implementation period: 2–3 days.

LiteForex analitics. NZD/USD: New Zealand dollar is under pressure

Current trend

Yesterday, NZD fell significantly against USD, renewing the minimum since February 2016.

Investors are focused on American foreign trade. Negotiations are going between the United States and Canada on the accession of the latter to the new terms of the NAFTA (agreed earlier by the US and Mexico). However, there's no compromise yet. The market also expects that in the near future, President Trump can introduce increased duties on Chinese goods with a total value of another USD 200 billion. This, surely, will not remain without the answer of the PRC, and in the end, both leading world economies will suffer.

On Tuesday, USD was also supported by US releases. August Manufacturing PMI increased from 54.5 to 54.7 points. The corresponding ISM index accelerated even more: from 58.1 to 61.3 points.

Support and resistance

On the daily chart, Bollinger bands move horizontally. The price range is expanding, but not as fast as the "bearish" trend develops. MACD indicator decreases, keeping a strong sell signal (the histogram is below the signal line). Stochastic reached its lows ​​and reversed horizontally. The indicator reflects than NZD is oversold in the short term.

The development of corrective growth is possible.

Resistance levels: 0.6560, 0.6592, 0.6618, 0.6650.
Support levels: 0.6543, 0.6529, 0.6500.

Trading tips

Long positions can be opened after the breakout of the levels 0.6560–0.6570 with the targets at 0.6630–0.6650 and stop loss 0.6530–0.6520.
Short positions can be opened after the breakdown of the level 0.6529 with the targets at 0.6500 or 0.6480–0.6470 and stop loss 0.6560.

Implementation period: 2–3 days.