daily market outlook

[jebat66]

Since our last analysis, gold has been trading downwards. As I expected, the price tested and reached our first take profit level at $1,242.00 (Fibonacci expansion 161.8%). Downward pressure started because of strong head and shoulders formation from the top and successful breakout of the neckline. Volume confirmed the HSS pattern and that is a reason for selling pressure on the market. The second take profit level is set at the price of $1,230.00.

Daily Fibonacci pivot points:

Resistance levels:

R1: 1,255.95

R2: 1,256.70

R3: 1,257.80

Support levels:

S1: 1,253.40

S2: 1,252.60

S3: 1,251.40

Trading recommendations for today: be careful when buying gold, watch for selling opportunities on rallies.

 

[jebat66]

NZD/CAD has been moving sideways for almost two weeks; and this does not seem to be over as the price remains within slightly descending main channel boundaries. The Fibonacci retracement levels of the secondary channel formed at the bottom shows that the price has tested neither 261.8% nor 361.8%, while it broke above the 161.8% level.

The Fibonacci applied to the first corrective wave after the breakout of the secondary channel shows that the nearest potential target at 0.8925, being 161.8% retracement level. It also corresponds with the higher uptrend of the main channel and 361.8% retracement level of the secondary Fib channel.

Consider buying NZD/CAD while the price remains near the 0.8835 support level (S1), targeting the 0.8925 area (R1). The stop loss should be well below S2 (0.8820).

Support: 0.8820, 0.8835

Resistance: 0.8890, 0.8925

 

[jebat66]

Since my original idea on CHF/JPY was published, price remained near the sell entry point - R2 (115.40). Today, price started to move lower which is likely to continue to test one of two support levels, either S2 (114.10) or S3 (113.60) being the final target for ongoing wave down.

Consider holding short positions with the stop loss just above R2, targeting S3 support level which corresponds to the 361.8% extention level of the Fibonacci channel.

Support: 114.60, 114.10, 113.60

Resistance: 114.90, 115.40

 

[jebat66]

Global macro overview for 21/03/2016:

In the USA, the Thomson Reuters/University of Michigan preliminary Consumer Confidence Index dropped to 90.0 points in March, down 1.7 points from a month before. According to the report, this unexpected worsening in sentiment was caused by concerns of increasing petrol prices and mounting expenses. Moreover, another important fact is the employment situation and wages: the number of employed people is increasing steadily, but there is no chance for any increase in salaries and wages. In conclusion, the current situation is deteriorating compared to 2000 when the confidence index reached its all-time high at 112.

Let's now take a look at the US Dollar index technical picture at the daily time frame. The bears seem to be in complete control over this market as the price is trading below the 21.50 and the 100 daily moving average. Moreover, the price has recently broken below the important technical support at the level of 95.25 and currently the bears are testing this level from below. Any failure here would mean further price decrease towards the next support at the level of 94.05.

 

[jebat66]

A bullish breakout above the previous consolidation zone between 1.2400 and 1.2800 was performed on July 15 (shown on the weekly chart).

A significant bearish rejection was observed around 1.3450. Hence, another consolidation range was established from 1.3450 down to 1.2800.

On December 7, a bullish breakout above 1.3450 (the upper limit of the recent consolidation range) enhanced the bullish side of the market. Hence, a bullish visit to the resistance level of 1.4120 (Fibonacci Expansion 100%) was executed.

Bullish persistence above 1.4150 enhanced the bullish side of the market towards 1.4650 (141.4% Fibonacci expansion) where an evident bearish rejection was expected (bearish engulfing weekly candlestick).

The level of 1.4120 (Fibonacci Expansion 100%) stood as a significant key level to be watched for further price reactions.

Although the price zone of 1.3170-1.3250 was expected to offer bullish support for the USD/CAD pair, temporary bearish breakdown of the same price zone is currently being manifested on the daily chart.

This price zone corresponds to the depicted weekly uptrend line and the upper limit of the previous consolidation range (prominent breakout level).

On the other hand, the price level of 1.2975 (61.8% Fibonacci level) stands as a prominent support level to be watched for significant bullish rejection.

Otherwise, bearish breakdown below 1.2975 (61.8% Fibonacci level) will allow a quick bearish decline to occur towards the price levels of 1.2770 and 1.2550.

 

[jebat66]

Recently, EUR/NZD has been moving sideways around the price of 1.6600. At the H4 time frame, I found a defined trading range between the price of 1.6475 (support) and the price of 1.6865 (resistance). Support level at the price of 1.6475 is successfully held. According to the daily time frame, I found weak demand, which is a sign of a potential downward movement. Anyway, wait for a successful breakout of trading range to confirm further direction.

Fibonacci Pivot Points:

Resistance levels:

R1: 1.6680

R2: 1.6715

R3: 1.6765

Support levels:

S1: 1.6575

S2: 1.6545

S3: 1.6495

Trading recommendation for today: Sideways market, watch for a potential breakout of trading to confirm further direction.

 

[jebat66]

Global macro overview for 22/03/2016:

The UK inflation rate was unexpectedly unchanged in February, remaining far below the Bank of England's 2 percent goal.The Office for National Statistics revealed this morning that the consumer price index was at the level of 0.3% (vs. 0.4% expected and 0.3% prior). Core inflation, which excludes volatile food and energy prices, remained at the level of 1.2 percent. In conclusion, the inflation level has been stubbornly low for the last two years, largely due to lower oil prices. The BoE Governor Mark Carney reiterated last week that there are low chances that the interest rate will be cut or that it will enter the negative territory. Thus,the next move should result in a long-time rate increase.

Let's now take a look at the technical picture of the GBP/USD pair at 4h time frame. After making a new local high at the level of 1.4515 the market has fallen toward the 50%Fibo at the level of 1.4290, breaking the support at the level of 1.4427 with ease. Currently, it looks like bears want to push the prices even further down, towards the 61%Fibo at the level of 1.4229. Any breakout below this level will result in an immediate test of the golden trend line

 

[jebat66]

Overview:

The NZD/USD pair broke resistance at 0.6645, which turned into strong support last week. This level coincides with the 23.6% of Fibonacci retracement, which is expected to act as major support this week too. It is also important that the RSI is still signaling that the trend is upward, while the moving average (100) is heading to the upside. Accordingly, the bullish outlook remains the same as long as the EMA 100 is pointing to the uptrend. This suggests that the pair will probably go above the daily pivot point (0.6749) in the coming hours. The NZD/USD pair will demonstrate strength following a breakout of the high at 0.6749. Consequently, the market is likely to show signs of a bullish trend. In other words, buy orders are recommended above 0.6749 with the first target at 0.6809. Then, the pair is likely to begin an ascending movement to 0.6873 and further to the 0.6923 levels. The level of 0.6923 will act as strong resistance, and the double top is already set at 1.0128. On the other hand, the daily strong support is seen at 0.6645. If the NZD/USD pair is able to break out the level of 0.6645, the market will decline further to 0.6575.

Weekly technical levels:

R3: 0.7221
R2: 0.7047
R1: 0.6923
PP: 0.6749
S1: 0.6625
S2: 0.6451
S3: 0.6327

 

[jebat66]

Global macro overview for 22/03/2016:

The German Ifo Business Climate data was released this morning. A slight improvement can be noticed as the indicator was at the level of 106.7 points, beating expectations of 106.1 and prior reading of 105.7. Nevertheless, the next sentiment data in the form of ZEW Survey was worse than expected. The ZEW Current Situation indicator decreased to the level of 50.7 from 52.3 in the last month and was below the forecast of 53.0. The ZEW Economic Sentiment indicator declined to the level of 4.3 (5.9 expected), but was better than the last month's figures of 1.0. In conclusion, the overall business and economic sentiment did not improve significantly despite the recent ECB actions, including expansion of the QE program. This is not a good sign and it should put more pressure on the euro.

Let's now take a look at the EUR/USD technical picture at the 4h time frame. A bull run towards the recent swing high at the level of 1.1376 did not result in another higher high in this pair. Bears took control over the market as they had pushed the price below the important support at the level of 1.1218. The next support is seen at the level of 1.1066.

 

[jebat66]

Since our last analysis, gold has been trading upwards. The price tested the level of $1,259.94 . Our head and shoulders formation is still active. I found successful rejection from the neckline, which is a good sign for further downward movement. According to the 4H time frame, I found that weakness appeared. According to the 5M time frame, I found a volume spike (buying climax) and a strong sign of weakness. Later on, we saw up-thrust bars and no demand bars, which confirmed professional selling. First, take profit level is set at the price of $1,240.00.

Daily Fibonacci pivot points:

Resistance levels:

R1: 1,252.70

R2: 1,255.80

R3: 1,260.95

Support levels:

S1: 1,242.55

S2: 1,239.40

S3: 1,234.40

Trading recommendations for today: be careful when buying gold, watch for selling opportunities on rallies

 

[jebat66]

The USD/CHF pair movement was controversial as it took place in a narrow sideways channel for a while. The market showed signs of instability. Amid the previous events, the price is still moving between the levels of 0.9751 and 0.9650. The daily resistance and support are seen at the levels of 0.9751 and 0.9650, respectively. In consequence, it is recommended to be cautious while placing orders in this area. Thus, we should wait until the sideways channel completes. On the H4 chart, the price spot of 0.9751 remains a significant resistance zone. Therefore, there is a possibility that the USD/CHF pair will move to the downside from the 0.9751 level, which represents the pivot point today.
Resistance is seen at the level of 0.9751 today. So, sell below 0.9751 with the first target at 0.9650 to test last week's bottom. In overall, we still prefer the bearish scenario as long as the price is below the level of 0.9751. Furthermore, if the USD/CHF pair is able to break out the bottom at 0.9650, the market will decline further to 0.9590.
However, a stop loss should be set above the second resistance of 0.9552.

 

[jebat66]

After testing the 164.00 resistance area, GBP/JPY dropped heavily breaking previously established the support level of 161. The Fibonacci applied to the first corrective wave after the breakout shows that the price has not tested the 161.8% retracement, which eventually should be tested.

The Fibonacci channel clearly shows that the price is not able to pass over the 161.8% retracement trendline and today, after the second bounce, the price started to fall sharply.

Consider selling GBP/JPY on small pullbacks towards R1 (161.40) targeting S3 (159.00) support area. The stop loss should be slightly above R1.

Support:160.45, 159.35, 159.00

Resistance: 161.40

 

[jebat66]

Global macro overview for 23/03/2016:

The concerns regarding the U.S. manufacturing sector, hit by a stronger dollar and signs of global slowdown, has weakened amid the recent economic data. The Markit's flash manufacturing PMI increased to 51.4 points, up from the final February print of 51.3, but still the reading came lower than expected number of 51.9. It looks like the U.S. domestic producers has been hurt by the Fed's recent rate hike decision, and they are struggling with weakening global demand. The new business volumes are slightly better than expected, but the relatively stronger US dollar makes these volumes still weaker than the post-crisis trend. In conclusion, the first rate hike hasn't not really helped the domestic producers so far and two more rate hikes are anticipated later this year.

Let's now take a look at the technical picture of the US Dollar index on 4H chart. The price is trading now at a very interesting point, which consists of various resistance levels: 61% retracement of the last swing, 38% of the overall retracement, the supply zone, technical resistance and market geometry 1-to-1 resistance of previous corrective cycle. This might be a good place for the bears to took control over the market in the coming days, so please keep an eye on it

 

[jebat66]

Since our last analysis, gold has been trading downwards. As I expected, the price tested the level of $1,231.08. Our head and shoulders formation is still active and so far it is progressing. According to the 4H time frame, we can observe strong selling pressure in a high volume. Supply entered the market after strong rejection from the neckline and after we saw a strong sign of weakness on the 4H time frame bar. The intraday take profit level is set at the price of $1,225.60 (swing low) and the short term take profit level is set at the price of $1,214.00.

Daily Fibonacci pivot points:

Resistance levels:

R1: 1,251.50

R2: 1,253.60

R3: 1,256.95

Support levels:

S1: 1,245.00

S2: 1,243.40

S3: 1,239.70

Trading recommendations for today: be careful when buying gold, watch for selling opportunities on rallies

 

[jebat66]

AUD/CAD has been ranging for the past few weeks between 0.9900 and 1.0020. But on the 18th of March, price managed to produce new low breaking the support area and at the same time the 161.8% retracement level of the Fibonacci channel.

It seems that price is producing lower lows and lower highs which could be a sign of a potential correction down. The Fibonacci retracement applied to the first corrective wave after the support breakout shows potential downside targets, S2 (0.9800) or S3 (0.9700). Both of these targets correspond with the Fib channel trend lines.

Consider selling AUD/CAD while the price is near R1 (0.9980), targeting one of the support levels, either S2 or S3. The stop loss should be just above the 1.0000 psychological resistance level.

Support: 0.9865, 0.9800, 0.9700

Resistance: 0.9980, 1.0000

 

[jebat66]

Technical outlook and chart setups:

Silver hit $15.95/16.00 levels yesterday and reversed lower as expected. The metal is trading at $15.75 levels at the moment, looking to drop lower towards $15.40 and further as depicted here. The metal seems to have carved out an intermediary top at $16.13 levels and should remain in control of bears at least in the short term. Please also note that the metal could drop towards $14.50 levels before turning bullish again. It is hence recommended to remain short for now, with risk at $16.13 levels. Immediate support is seen at $15.00 levels, while resistance is seen at $16.00/13 levels respectively. Only a break above $16.00 levels would change the bearish outlook from here on.

Trading recommendations:

Remain short for now, stop at $16.13, target is open.

Good luck!

 

[jebat66]

Technical outlook and chart setups:

Gold has dropped lower after hitting resistance at $1,260.00 levels yesterday, a tad bit higher than expected but the direction has been lower since then. The metal is seen to be trading at $1,235.00/36.00 levels for now, looking to drop below $1,220.00 levels going forward. Please note that the metal is on track towards $1,190.00 levels at least before producing a meaningful retracement. Furthermore, potential still remains towards $1,140.00 levels (which is the fibonacci 0.618 support of the entire rally from $1,056.00 through $1,283.00 levels) as well. It is recommended to remain short for now, with risk at $1,265.00 levels. Immediate resistance is at $1,260.00 levels, while support is at $1,220.00 levels.

Trading recommendations:

Remain short for now, stop at $1,265.00, target $1,190.00.

Good luck

 

[jebat66]

Technical outlook and chart setups:

The EUR/JPY pair dropped lower towards 124.60 levels before pulling back sharply yesterday. The pair is trading at 125.90 levels and should be looking to form lower lows till prices remain below 127.00 levels. Please note that the interim support trend line has provided a bullish bounce at 124.60 levels, but bears are expected to regain control soon. Also note that the pair has unfolded into 3 waves from 122.00 levels, which is corrective. Hence the probability for a drop lower remains high until prices hold 127.00 levels. It is recommended to remain short against 127.00 levels for now. The immediate interim resistance is seen at 127.00 levels, while support is at 124.60 levels respectively.

Trading recommendations:

Remain short for now, stop at 127.50, target is open.

Good luck!

 

[jebat66]

Technical outlook and chart setups:

The GBP/CHF pair dropped lower below 1.3880 levels yesterday, taking stops out on long positions. The pair is still holding above the 1.3700/25 interim support, but we will need more evidence here to confirm that the bullish setup remains intact and trades can be committed on the long side again. The drop from 1.4250/75 levels still looks to be corrective in nature and the pair might be producing an up gartley here. The gartley normally terminates at the fibonacci 0.786 support and then resumes the rally sharply. It is recommended to stay flat for now but an aggressive trade setup would still warrant long positions against 1.3700 levels. Immediate support is seen at 1.3725 levels, while resistance is seen at 1.3950 levels respectively.

Trading recommendations:

Aggressive traders might want to remain long with stop at 1.3700 levels. A conservative setup would be to wait for further confirmation.

Good luck!

 

[jebat66]

The abc green corrective cycle in wave (ii) had been completed at the level of 124.67. Moreover, the immediate upward reaction looks impulsive in nature and might be the beginning of a new upward impulsive wave progression. Nevertheless, the alternative count suggests that the correction might be complex and time-consuming, but it cannot violate the 123.07 level. If it does, the alternative count will be in play, which suggests more downward wave progression towards the 122.06 level.

Support/Resistance:

127.98 - WR2

127.26 - Intraday Resistance

126.76 - WR1

125.39 - Weekly Pivot

125.58 - Intraday Resistance

124.90 - Intraday Support

124.82 - WS1

124.67 - Intraday Support

123.07 - Green Impulsive Cycle Invalidation Level

121.87 - WS2

Trading recommendations:

Day traders should buy on dips with SL below 123.07 and TP open for now.