Tifia Daily Market Analytics

[TifiaFX]

NZD/USD: New Zealand business confidence index remains in negative territory
19/12/2017
Current dynamics
As it was reported today during the Asian session by the Reserve Bank of New Zealand, the confidence index in the business circles of New Zealand in December is still deep in the negative territory and amounts to -37.8% (in November the value of the index was -39.3%). The index of business confidence assesses the business climate in New Zealand and allows you to analyze the economic situation in the short term. The decrease in the value of the indicator indicates a decrease in business confidence and a decrease in business investment, which negatively affects the production and other areas of the economy of New Zealand.
The mood of producers in the agricultural sector, the leading industry in New Zealand's economy, is still deteriorating, reflecting a negative reaction to the new government. The achievements of recent years in the growth of the country's economy belong to the former leadership of the country. The general elections that took place at the end of September in New Zealand led to the defeat of the ruling at the time conservative party.
The consumer mood in New Zealand is also deteriorating. This is evidenced by the decline in the consumer sentiment indicator in New Zealand, published today at the beginning of the Asian trading session (107.4 in the fourth quarter against 112.4 in the previous quarter).
According to many economists, the RBNZ can return to consideration of the possibility of raising the rate in New Zealand not earlier than the second half of 2018.
On the other hand, the US dollar currently looks more promising for investment than the New Zealand dollar against the backdrop of expectations of a phased increase in the Fed's rate and accelerating the growth of the US economy. The Fed plans to raise the rate 3 times in 2018. Thus, the fundamental factors testify to the reduction of the NZD / USD.
From the news for today, we are waiting for the publication of the results of the dairy auction (in the period after 14:00 GMT). Two weeks ago, the dairy price index, prepared by Global Dairy Trade, came out at + 0.4% (against previous values of -3.4%, -3.5%, -1.0%, -2.4%) . Dairy products - one of the main exports goods of New Zealand, so the reduction in world prices for dairy products harms the quotes of the New Zealand dollar.

Support levels: 0.7000, 0.6980, 0.6935, 0.6863, 0.6800
Resistance levels: 0.7030, 0.7070, 0.7110, 0.7200, 0.7240, 0.7270


Trading scenarios
Sell Stop 0.6990. Stop-Loss 0.7040. Take-Profit 0.6980, 0.6935, 0.6863, 0.6800
Buy Stop 0.7040. Stop-Loss 0.6990. Take-Profit 0.7070, 0.7110, 0.7200, 0.7240, 0.7270

 

[TifiaFX]

S&P500: US Senate approves tax reduction bill
20/12/2017
Current dynamics
As it became known at the beginning of today's European session, the US Senate approved a reduction of taxes for 1.5 trillion dollars within the tax reform by 51 votes "in favor" and 48 "against".
On Tuesday, a package of laws providing for the most significant reform of the tax system since 1986 was passed by the House of Representatives with 227 votes "in favor" and 203 "against". All the Democrats present at the meeting, which was predictable, and 12 Republicans voted "against".
The reform implies a reduction in corporate taxes from 35% to 21% (previously 20% was assumed). This will increase the profits of companies, as well as increase the wages of hired workers at an accelerated rate. This, in turn, should stimulate the growth of inflation, which will contribute to more active actions of the Fed with regard to further tightening of monetary policy in the US. Most taxes will be reduced from January, and by February many workers will teach higher salaries.
The new tax law will accelerate the growth of the US economy. The dollar has not reacted to this information in any way. However, the main US stock indices, in general, positively took the news about the adoption of the law in the Senate and continue to grow during the European trading session.
Today is weak for the publication of important macro statistics. All movement around the dollar and the US stock markets will occur against the backdrop of information on the results of the promotion of tax reform in the US Senate. Conservatives said they are still deciding whether to support the bill on short-term expenses. As expected, the House of Representatives will vote on the bill on expenditures on Thursday.
Despite the doubts of some economists regarding the positive impact of this law on the growth of the US economy, nevertheless, its adoption can be considered a major victory for US President Donald Trump.
Most likely, in full measure the market reaction to this fact can be seen as early as next year. On the eve of the Catholic Christmas and the New Year celebration, the activity of traders and trading volumes are declining.

Support and resistance levels
The S & P500 index remains positive dynamics, trading in the upward channels on the daily and weekly charts since February 2016. On Monday, the S & P500 index updated its absolute high near the 2693.0 mark and today, after yesterday's declining, it again traded with a rise.
The upper limit of the ascending channel on the weekly chart runs near the 2710.0 mark, which will become the nearest goal in case of continued growth.
Since May 2016, technical indicators (OsMA and Stochastic) are on the buyers’ side, and signals for the reversal of the long-term upward trend are not yet visible.
A downward correction is possible only in the short term with targets at support levels of 2648.0 (local lows), 2627.0 (EMA200 on the 4-hour chart), 2610.0 (bottom line of the upward channel on the daily chart).
The signal to the beginning of the downward correction may be a breakdown of the short-term support level of 2669.0 (EMA200 on the 1-hour chart).
While the S & P500 is trading above the key support level of 2490.0 (EMA200 on the daily chart, the bottom line of the upward channel on the weekly chart, the Fibonacci level 23.6% of correction to the growth since February 2016), long-term upward dynamics persist.
In case of breakdown of the local resistance level of 2693.0 (December and year highs), the index's growth will continue.
Support levels: 2669.0, 2648.0, 2627.0, 2610.0, 2580.0, 2500.0, 2490.0
Resistance levels: 2693.0, 2700.0, 2710.0

Trading Scenarios
Sell Stop 2677.0. Stop-Loss 2694.0. Objectives 2669.0, 2648.0, 2627.0, 2610.0, 2580.0, 2500.0, 2490.0
Buy Stop 2694.0 Stop-Loss 2677.0. Objectives 2700.0, 2710.0

 

[TifiaFX]

GBP/USD: pound remains vulnerable against the background of Brexit
21/12/2017
Current dynamics
The resignation of Deputy Prime Minister Teresa Mei Damian Green, as it became known on Wednesday, caused a decline in the pound. Damian Greene was Teresa May's companion, and his departure changes the balance of power in the Cabinet. Now this is just as bad for the conservatives, as the UK conducts the most important negotiations about Brexit. The British government still has no common opinion on further actions and future relations with the EU. The Prime Minister of Great Britain is trying to smooth the differences in the government over Brexit, but, at the same time, is looking for ways to maintain close trade ties with the EU.
According to official data released on Thursday, in November of this year, compared with November last year, the net borrowing of the UK public sector decreased and reached a minimum in ten years (8.7 billion pounds, 0.2 billion pounds less than in November last year) . The National Bureau of Statistics of Great Britain noted that in the last months of the financial year, which ends in March 2018, tax revenues are expected to slow down.
Philip Hammond, the UK finance minister, announced more gloomy forecasts for the economy in November, and on Wednesday the IMF published a forecast that UK GDP growth in 2018 will slow down to about 1.5% amid the declining consumer and company costs due to Brexit.
Meanwhile, in the financial markets, there has been a slowdown in trading activity and a decline in trading volumes ahead of the Catholic Christmas and the celebration of the New Year.
From the news for today, we are waiting for the publication of important macro data from the United States. At 13:30 (GMT), the US Department of Labor will publish a report on the number of new applications for unemployment benefits. This indicator determines the state of the labor market. The growth is expected to reach 231,000 (against 225,000 last week). The result above the expected indicates a weak labor market, which will negatively affect the US dollar.
Also at this time annual data on US GDP for the 3 quarter (updated values) and the price index (for 3 quarter), which is an indicator of inflation, will be published. Data on GDP are among the key, along with data on the labor market and inflation, for the Fed in determining its further monetary policy. A high result strengthens the USD. Forecast: GDP for the 3rd quarter increased by 3.3%. If the data prove to be better, the dollar will be strengthened.

Support levels: 1.3330, 1.3300, 1.3280, 1.3210, 1.3100
Resistance levels: 1.3395, 1.3470, 1.3500, 1.3550, 1.3630, 1.3720, 1.3970, 1.4050

Trading Scenarios
Sell Stop 1.3340. Stop-Loss 1.3410. Take-Profit 1.3300, 1.3280, 1.3210, 1.3100
Buy Stop 1.3410. Stop-Loss 1.3340. Take-Profit 1.3470, 1.3500, 1.3550, 1.3630, 1.3720, 1.3970, 1.4050

 

[TifiaFX]

USD/CAD: probability of rate increase in Canada increased in January
22/12/2017
Current dynamics
After yesterday, at the beginning of the US trading session were simultaneously published macro statistics on the US and Canada, the USD/CAD literally collapsed. The fall in the hour was about 100 points. Then the pair fell further, but managed to recover slightly to the end of yesterday's trading day, closing near the 1.2740 mark.
Negative factor for the US dollar was the publication of revised previously published data on US GDP for the 3rd quarter (+ 3.2% instead of + 3.3%). Despite the fact that the US GDP growth rates are record since the beginning of 2015, this did not stop the dollar from falling.
The basic index of real spending on personal consumption for November was also revised downward (1.3% in Q3, instead of 1.4%, according to the preliminary release).
The US dollar was put under pressure, despite the publication of the index of leading indicators Conference Board, which rose in November by 0.4%, to 130.9 after rising in October and September. The index of leading indicators consists of 10 components, including initial applications for unemployment benefits, production orders and changes in the S&P500 index. Economists note that the November growth of the index signals the continuation of strong economic growth in the first half of 2018.
Simultaneously with the publication of updated data on US GDP, inflation indicators were published for Canada. The total consumer price index (Total CPI) of Canada in November rose by 2.1% in annual terms (the forecast was + 2.0%). Compared to the previous month, the price increase was 0.3%.
Basic inflation in Canada also accelerated. Indicators of annual core inflation showed growth to the range of 1.5% -1.9%, while the average value of 1.7% became the maximum for more than a year.
In addition, the October report on retail sales in Canada also exceeded expectations.
At the beginning of the month, the Bank of Canada kept the interest rate at the current level of 1.0%. Prior to this, the bank twice this year raised rates - in July and September. Inflation remains below the target level of 2%. The head of the Bank of Canada, Poloz noted earlier that the target range for inflation is 1% -3%, and said that the decline in the Canadian dollar will support exports. Now, after yesterday's publication on inflation indicators and retail sales, traders estimate the likelihood of a rate hike in Canada in January at 50%.
The focus of traders today will be the publication at 13:30 (GMT) of Canada's GDP data for October. GDP is expected to grow by 0.2% compared with September. This will mean that the data generally correspond to growth in the 4th quarter at the level of 2%.
Also at the same time (13:30 GMT) we are waiting for data from the US, when important macro statistics (final values) for November will be published, including inflation indices (personal income / expenditure of Americans, personal consumption expenditure), orders for goods durable. The growth is expected in comparison with the previous month, which should positively affect the US dollar.
In this connection, once again it is worth remembering yesterday, when the dollar collapsed after the published updated data on GDP for the 3rd quarter turned out to be worse than the preliminary figures. Although in the US came out, in general, positive macro data, the fact that they were worse than the forecast, was the reason for selling the dollar.
A little later (at 15:00) will be reported on the sales of new homes in the US for November.
If today's publication of data on the US and Canada will resemble yesterday, the story of the fall of the pair USD / CAD may repeat.
In the opposite scenario, if the US data is better than forecasted values, the US dollar will partially compensate for yesterday's losses.
Support levels: 1.2700, 1.2620, 1.2500, 1.2430, 1.2300, 1.2170, 1.2100, 1.2050
Resistance levels: 1.2740, 1.2780, 1.2835, 1.2900

Trading Scenarios
Sell Stop 1.2690. Stop-Loss 1.2750. Take-Profit 1.2620, 1.2500, 1.2430, 1.2300, 1.2170, 1.2100, 1.2050
Buy Stop 1.2750. Stop-Loss 1.2690. Take-Profit 1.2780, 1.2835, 1.2900

 

[TifiaFX]

Nikkey225: The Bank of Japan intends to continue a large-scale program of mitigation
26/12/2017
Current dynamics
As Haruhiko Kuroda said during today's press conference, the Japanese central bank will continue the large-scale mitigation program, as inflation is still far from the target level of 2%.
This is, almost traditional in recent months, the statement of the head of the Bank of Japan was addressed primarily to those investors who expect that next year the Bank of Japan may begin to wind down its extra soft monetary policy.
If earlier Kuroda spoke about "readiness for the most decisive measures to support the Japanese economy", which implies continuation or expansion of extra soft monetary policy in Japan, today he said that "we (the leadership of the Bank of Japan) will further support the cycle of revenue growth , supporting a moderate increase in wages and prices."
According to official data released today, in November, the unemployment rate in Japan fell to 2.7%. This means that the conditions on the labor market are most favorable for the growth of wages for last 24 years.
The CPI National Consumer Price Index for November, published by the Bureau of Statistics of Japan, came out today with an increase of 0.6% (in annual terms), which is better than the forecast of + 0.3% and + 0.2% in October. CPI is the most significant inflationary barometer of changes in Japan's consumer trends. The growth of the index positively affects the yen's quotations and the stock index.
The Bank of Japan and the authorities of the country are trying to overcome a long period of deflation and stagnation.
Nevertheless, the positive Japanese macro statistics and Kuroda's statement were rather restrainedly perceived on the Japanese stock market.
The yield of 10-year Japanese government bonds rose to 0.045% from 0.035%.
After the Japanese main stock index Nikkey225 jumped by about 20% in the period from September to November, the last few weeks it is just below 23000.00, and today, at the end of the Asian trading session, it was trading near 22900.00.
Today, trading volumes are low because the European stock exchanges, as well as the markets of Australia, New Zealand and Hong Kong are closed today due to the celebration of Boxing Day. However, the US exchanges are working today. Therefore, volatility with the opening of US stock exchanges will increase.
Nevertheless, the full activity of trade will be restored in the next year. On the eve of the New Year celebration, the activity of traders and trading volumes will remain low.

Support and resistance levels
After in November the Nikkey225 index reached the annual maximum near the mark of 23430.00, the last weeks the index is traded in the range, the upper limit of which passes near the resistance level of 23000.00. At the same time, the Nikkey225 index keeps positive dynamics, trading in the upward channel on the weekly chart since September 2017.
The last days trading activity is low due to the upcoming New Year holidays.
In case of fastening above the resistance level of 23000.00, growth will resume.
The scenario for the decline will be related to the breakdown of the short-term support level of 22550.00 (EMA200 on the 4-hour chart). The goal of the decline is the support level of 22000.00 (November, December low and the low limit of the range formed between the levels of 23000.00 and 22000.00).
The long-term positive dynamics of the index remains in force, as long as the index trades above the support level of 20900.00 (zone of ЕМА144, ЕМА200 on the daily chart and highs of 2015).
Support levels: 22840.00, 22550.00, 22000.00, 20900.00
Resistance levels: 23000.00, 23450.00

Trading Scenarios
Sell Stop 22700.00. Stop-Loss 23100.00. Objectives 22550.00, 22000.00, 21000.00
Buy Stop 23100.00. Stop-Loss 22700.00. Objectives 23450.00, 24000.00

 

[TifiaFX]

Brent: the upward trend prevails
27/12/2017
Current dynamics
The explosion of the oil pipeline in Libya caused an increase in concerns over possible interruptions in oil supplies, which led to a sharp increase in oil prices. As indicated on the site of the Libyan National Oil Co., the reduction in oil production in the country due to the accident is likely to be up to 100,000 barrels per day.
Earlier it was reported about the continued suspension of the operation of the Forties pipeline system in the North Sea, as a result of which the market will not receive 450,000 barrels of oil daily.
As a result, prices yesterday reached a maximum for two and a half years. On Tuesday, WTI futures rose above $ 60 per barrel, gaining 2.6% to a maximum since June 2015. The spot price for Brent crude at the end of yesterday's trading day was close to $ 66.20 per barrel, which is $ 1.7 higher than the opening price of the trading day. Today there is a decline in oil quotations.
On Thursday, the publication of data on oil reserves in the US is expected. It is expected that the report submitted by the US Energy Ministry will demonstrate the fifth week decrease in reserves in a row (-3.925 million barrels against -6.495 million barrels in the week before last).
As is known, at the end of November, OPEC, Russia and a number of other large oil-producing countries agreed to further reduce oil production by about 1.8 million barrels a day, or about 2% of the world's oil production. The deal was extended until the end of 2018.
Thus, several factors will support oil prices in the short term. This is the extension of the OPEC deal, the reduction of US oil reserves, the weakening of the dollar, and, again, the recently manifested factor, like the risks of oil supply disruptions in different regions of the world.
Despite the fact that the supply of oil from the United States and other countries not participating in the deal is likely to continue to grow, the positive dynamics of oil prices remains.

Support levels: 65.30, 64.50, 63.00, 62.00, 61.50, 61.00, 60.00, 59.00, 58.80, 57.50, 56.00
Resistance levels: 66.20, 67.00, 68.00

Trading scenarios
Sell Stop 65.20. Stop-Loss 66.30. Take-Profit 65.00, 64.50, 63.00, 62.00, 61.50, 61.00, 60.00, 59.00, 58.80, 57.50, 56.00
Buy Stop 66.30. Stop-Loss 65.20. Take-Profit 67.00, 68.00

 

[TifiaFX]

S&P500: indexes "lay down into the drift"
28/12/2017
Current dynamics
The dollar continues to scale down. The index of the dollar WSJ, which estimates its rate to the basket of 16 other currencies, fell 0.4% on Thursday. He declined during seven of the last eight sessions. Many of the trading ideas associated with the expectation of dollar growth are beginning to unfold.
The dollar is under pressure, despite the adoption of laws on tax reform, which, according to many economists, should support the growth of the US economy. Tax cuts from 35% to 21% (previously assumed to be 20%), according to supporters of reforms, will also support inflation, which will allow the Fed to accelerate the pace of tightening policies in 2018. Most taxes will be reduced from January, and by February many workers will take higher salaries.
At the same time, on the eve of New Year holidays, trading volumes remain low. American stock indexes remain in narrow ranges for the second week in a row. Investors in the stock market also continue to assess the impact of the recently adopted tax bill on the US economy. Economic indicators of the US economy are still favorable for the stock market on the eve of 2018.
The S & P500 grew in December by 1.3%, and from the beginning of the year by 20%. Overall, the S & P500 remains positive. Nevertheless, traders prefer to take a wait-and-see position in the stock market.
In the case of breakdown of the local resistance level at 2693.0 (December and year highs), the index will continue to grow.

Support levels: 2675.0, 2648.0, 2640.0, 2625.0, 2580.0, 2490.0
Resistance levels: 2693.0, 2700.0, 2710.0

Trading Scenarios
Sell Stop 2670.0. Stop-Loss 2694.0. Objectives 2660.0, 2648.0, 2625.0, 2610.0, 2580.0, 2500.0, 2490.0
Buy Stop 2694.0 Stop-Loss 2670.0. Objectives 2700.0, 2710.0

 

[TifiaFX]

EUR/USD: the dollar lost to the euro more than 13%
29/12/2017
Current dynamics

Today is the last trading day of the outgoing year, and the dollar remains the focus of investors' attention, demonstrating a large-scale decline. This year became worst in a decade for the index of the dollar WSJ, dropping from the beginning of the year by 7.3%.
Euro since the beginning of the year has strengthened to the dollar by 13.6%, which was the maximum growth since 2003. The British pound in 2017 rose to the dollar by 9.1%, and this happens despite the still unclear prospects for negotiations of the UK with the EU over Brexit.
In December, finally, the US Senate fully approved tax reform, which envisages an unprecedented tax cut from US corporations from 35% to 21% (previously 20% was assumed). Reform, according to its supporters, should support the growth of the US economy. It will also accelerate inflation, which will allow the Fed to accelerate the pace of tightening policies in 2018.
And, nevertheless, investors are actively selling the dollar, the fall of which does stop neither positive US macro statistics, nor adoption of new tax legislation in the US, nor the Fed's actions to tighten monetary policy. As you know, the Fed raised interest rates three times in 2017, and three more increases are scheduled for 2018.
Probably, the focus of investors' attention in 2018 will be the dynamics of wages in the US. Most taxes will be reduced from January, and by February many workers will take higher salaries. If wages are growing steadily, then, while maintaining the stability of the economy and the US labor market, interest rates can rise faster than market participants suggest.
It is possible that the actions of the Fed will still be able to reverse the situation in the new year with a deteriorating attitude toward the dollar. The reason for the reversal of the market and the bearish trend of the dollar may be the repatriation of profits earned abroad by US companies. As is known, within the framework of the tax reform, a one-time privilege for the repatriation of profits and capital to the United States is envisaged. If in the next few months US companies begin to return money to the United States, earned in other countries, it will cause an increase in demand for the dollar.
In recent months, unexpected movements and fluctuations in exchange rates have occurred on the market. Also, we should not discount the earlier statements of Donald Trump about the need for a weak dollar, including in order to increase the competitiveness of American goods abroad.
Thus, the intrigue around the dollar and its dynamics in the new year persists.

Support and resistance levels
The pair EUR / USD remains positive dynamics, trading in the ascending channels on the daily and weekly charts.
Indicators OsMA and Stochastics on the 4-hour, daily, weekly charts recommend long positions.
At the beginning of the European session, the pair EUR / USD broke through the resistance level at 1.1960 (November highs) and continues to rise towards the upper border of the rising channel on the daily chart and 1.2100 mark.
You can return to consideration of short positions only after the breakthrough of the short-term support level 1.1875 (EMA200 on the 1-hour chart). And only after the price returns to the zone below the support levels 1.1800 (EMA50 and the bottom line of the upward channel on the daily chart), 1.1780 (Fibonacci level 38.2% of corrective growth from the lows reached in March 2015 in the last wave of global decline from 1.3900) you can return to consideration of short (already mid-term) positions with targets at support level 1.1550 (EMA200 on the daily chart).
So far, long positions are preferable.
Support levels: 1.1960, 1.1900, 1.1875, 1.1850, 1.1800, 1.1780, 1.1710, 1.1650, 1.1540
Resistance levels: 1.2000, 1.2100, 1.2180, 1.2320, 1.2430

Trading Scenarios
Sell Stop 1.1930. Stop-Loss. Take-Profit 1.1900, 1.1875, 1.1850, 1.1800, 1.1780, 1.1710, 1.1650, 1.1550
Buy in the market. Stop-Loss 1.1930. Take-Profit 1.2000, 1.2050, 1.2100, 1.2180, 1.2320, 1.2430

 

[TifiaFX]

Brent: the rising dynamics of prices
09/01/2018
Current dynamics
With the coming of the new year, the decline in the dollar, especially noticeably observed at the end of the past year, continued. Nevertheless, the dollar is gradually beginning to win back the lost positions.
Despite the fact that the negative dynamics of the dollar is observed in relation to commodity currencies, such as Canadian, New Zealand, Australian dollars, against the euro and the assets-shelters (yen, franc, gold), the dollar is strengthening.
Meanwhile, with the coming of the new year, oil prices are also rising. During today's Asian trading session, the price of Brent crude oil was again in the zone of multi-month highs near the level of 68.00 dollars per barrel. The last time the price was at current levels in May 2015.
Cold frosty weather in the US and riots in Iran, held several days ago, provoked a sharp rise in oil prices at the beginning of the year. According to various estimates, Iran possesses about 10% of the world's proven oil reserves, being the 4th largest oil producer after Venezuela (20% of the world's reserves), Saudi Arabia and Canada. Russia, by the way, is on the 8th place with reserves of 80,000 million barrels as of 2016. Iran is the third largest in terms of oil production in OPEC. Therefore, the information received from Iran on anti-government actions, made investors fear of possible interruptions in oil supplies, which, in turn, affected the next increase in oil prices.
As the American oil service company Baker Hughes reported last Friday, the number of active oil drilling rigs in the United States fell by 5 units to 742 over the past week. This also has a positive effect on oil prices, as it indicates some decrease in oil production in the US.
Meanwhile, US oil companies have a significant prospect and an incentive to increase production while oil prices remain high. The growth of oil production in the US is one of the deterrents to the growth in oil prices.
In November 2017, OPEC and another 10 oil-producing countries that are not part of the cartel have extended the deal to reduce global oil production by the end of 2018. The surplus of oil on the world market, which exerted pressure on prices for several years, is gradually being absorbed. The positive dynamics of oil prices, in general, remains. A further price increase is likely to reach $ 70 per barrel.
Today, the American Petroleum Institute (API) at 21:00 (GMT) will report on oil and petroleum products in the US. And on Wednesday (15:30 GMT) the official weekly report of the US Energy Ministry will be presented. As expected, this agency will report a drop in oil and petroleum products by 4.1 million barrels last week (after a decline of 7.4 million barrels in the week before last). If the data are confirmed, they will further increase oil prices.

Support levels: 67.00, 66.20, 64.50, 63.00, 61.50, 61.00, 60.00, 59.00, 57.00, 56.00
Resistance levels: 68.00, 68.20, 69.00, 70.00

Trading Scenarios
Sell Stop 66.90. Stop-Loss. 68.20. Take-Profit 66.20, 65.00, 64.50, 63.00
Buy Stop 68.20. Stop-Loss 66.90. Take-Profit 69.00, 70.00

 

[TifiaFX]

GBP/USD: pound reacted positively to industrial production data
10/01/2018
Current dynamics
According to official data published on Wednesday, UK manufacturing production in November increased by 0.4% (forecast was + 0.3%) and by 3.5% in annual terms. Data for October were revised upwards (+ 0.3%, and not 0.1%, as previously thought). Despite the fact that industrial production accounts for about a fifth of the country's economy, with the largest contribution to the economy by the service sector and retail trade, the pound reacted positively to the data presented.
At the same time, data showed a slight increase in the UK trade deficit in November (to 12.2 billion pounds from 11.7 billion pounds in October, with a forecast of -10.7 billion pounds). Nevertheless, the pound continued to rise against the dollar after the release of the data.
The dollar is again falling today after growth in the beginning of the year.
On Tuesday, the Bank of Japan cut of 5% to 190 billion yen in buying some long-term government bonds. Market participants considered this a foreshadowing of the beginning of the curtailment of a large-scale program to stimulate the Japanese economy. Sales of the dollar against the yen against the backdrop of an increase in the yield of 10-year and 25-year Japanese government bonds provoked its decline against other currencies. By the beginning of today's European session, the dollar index DXY fell to 92.07 from the level of 92.2 on Tuesday.
In general, the positive dynamics of the GBP / USD pair remains. Nevertheless, traders who trade in the pound and GBP / USD pair are cautious ahead of the start of trade talks between the EU and the UK. Uncertainty in the prospects for economic relations between the UK and the European Union and the disagreements in the British government over Brexit put pressure on the pound. The British government still has no common opinion on further actions and future relations with the EU.
Back in November, UK Finance Minister Philip Hammond published negative forecasts for the growth of the British economy, and in December the IMF published a forecast that the GDP growth of the UK in 2018 will slow down to about 1.5% against the backdrop of declining consumer and company costs due to Brexit .
At 13:00 (GMT) the report NIESR (National Institute for Economic and Social Research of Great Britain) will be published with an estimate of GDP growth rates of the country. This indicator estimates the growth rate of the British economy during the last three months and is able to influence the monetary policy of the Bank of England. The high value of the indicator is a positive factor for GBP. Forecast: UK economic growth for the last three months was 0.5% (against + 0.5% in the previous 3-month period). If the data are confirmed, then you can expect a 2% increase in the UK economy in 2017. This is a very positive indicator, given the gloomy forecasts of economists regarding the British economy after the referendum on Brexit, held in June 2016.
*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support and resistance levels
Short-term support level 1.3520 (EMA200 on 1-hour and EMA50 on 4-hour charts) kept GBP / USD from a deeper decline.
The pair GBP / USD remains positive dynamics, trading in the upward channels on the daily and weekly charts.
In case of consolidation above the local resistance level 1.3550, the GBP / USD growth will continue towards the resistance levels 1.3700 (EMA144), 1.3970 (Fibonacci level 38.2%), 1.4050 (EMA200 on the weekly chart).
The decline scenario will be related to the breakdown of the support level 1.3420 (EMA200 on the 4-hour chart) and the further decline of the GBP / USD to support levels of 1.3300 (the lows of December), 1.3210 (the Fibonacci level 23.6% of correction to the decline of the GBP / USD pair in the wave, which began in July 2014 near the level of 1.7200). The breakdown of the key support level 1.3150 (EMA200 on the daily chart, EMA50 on the weekly chart) will return GBP / USD in to the global downtrend began in July 2014.
Support levels: 1.3520, 1.3420, 1.3300, 1.3210, 1.3150
Resistance levels: 1.3550, 1.3630, 1.3700, 1.3970, 1.4050

Trading Scenarios
Sell Stop 1.3470. Stop-Loss 1.3590. Take-Profit 1.3420, 1.3300, 1.3210, 1.3150
Buy Stop 1.3590. Stop-Loss 1.3470. Take-Profit 1.3630, 1.3700, 1.3970, 1.4050

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

EUR/USD: euro decline is suspended
11/01/2018
Current dynamics
As the statistical agency Eurostat reported on Thursday, industrial production in the Eurozone rose by 1.0% in November (+ 3.2% in annual terms). The forecast of economists assumed an increase of 0.6% (+ 2.9% compared to the same period of the previous year).
Eurostat also raised the estimate of industrial production growth in the Eurozone for October.
In December, the purchasing managers' index (PMI) for the Eurozone's manufacturing sector reached its highest level in the history of such observations (since mid-1997).
The increase in investment costs of companies has contributed to the strongest growth in the Eurozone economy since 2007. The growth of industrial production at the moment is the strongest since August 2011.
It is worth noting at the same time that such a strong growth in industrial production of the Eurozone is provided, mainly at the expense of Germany, where in November industrial production grew by 3.6% compared to the previous month.
The data also show that the bullish economic trend persists in Germany. The surplus of the country's budget in 2017 amounted to 1.2% of GDP. The Bureau of Statistics Eurostat reported that Germany's GDP increased by 2.2% last year.
The euro reacted rather sluggishly to the data presented, and the pair EUR / USD is trading today in the range near the 1.1950 mark.
At the beginning of the year, the EUR / USD rose above 1.2070, however, subsequently fell to current levels. Investors are still cautious about buying euro against the dollar with EUR / USD rising above the level of 1.2000. ECB executives may fear that the strengthening of the euro could have a negative impact on the recovery of the Eurozone economy.
Market participants expect that the minutes of the December meeting of the ECB (will be published at 12:30 GMT) will demonstrate "fairly neutral" rhetoric of the ECB leaders.
If, however, the number of supporters of policy tightening in the Governing Council of the ECB grows, then it will exert increasing pressure on the ECB towards faster completion of monetary stimulus.
And this is a positive factor for euro buyers and its further growth. In general, we can say that the positive dynamics of EUR / USD remains. As far as leaders are tolerant with respect to the growth of the EUR / USD pair towards 1.2400, 1.2500, it is likely to become clearer from the published protocols.
Meanwhile, the US dollar rose on Thursday after the drop on Wednesday, when China denied media reports that Beijing could cut or stop purchases of US government bonds. This, in particular, was reported in the agency Bloomberg News.
The dollar index DXY rose by 0.2%, to 92.46. However, the cautious-negative attitude to the dollar on the part of investors remains; any upward correction in the DXY index is likely to be limited to 93.00 and used to build short positions in the dollar.

Support and resistance levels
The pair EUR / USD remains positive dynamics, trading in the ascending channels on the daily and weekly charts.
At the beginning of the European session, the pair EUR / USD is trading in the range near 1.1950, below the short-term resistance level 1.1970 (EMA200 on the 1-hour chart). The reduction to support levels 1.1855 (EMA50 and the bottom line of the upward channel on the daily chart), 1.1800 is corrective.
So far, long positions are preferable. In case of breakdown of the local resistance level 1.1970, the EUR / USD pair growth will resume with the nearest target near the resistance level 1.2100 (the upper line of the rising channel on the daily chart).
Only in case of breakdown of the key support levels 1.1660 (EMA200 on the weekly chart), 1.1585 (EMA200 on the daily chart) can we speak about the reversal of the bullish trend of the EUR / USD pair.
Support levels: 1.1890, 1.1855, 1.1800, 1.1780, 1.1710, 1.1660, 1.1585
Resistance levels: 1.1970, 1.2000, 1.2100, 1.2180, 1.2320, 1.2430

Trading Scenarios
Sell Stop 1.1910. Stop-Loss 1.1975. Take-Profit 1.1890, 1.1855, 1.1800, 1.1780, 1.1710, 1.1660, 1.1585
Buy Stop 1.1975. Stop-Loss 1.1910. Take-Profit 1.2000, 1.2050, 1.2100, 1.2180, 1.2320, 1.2430

 

[TifiaFX]

S&P500: indexes continue to update highs
12/01/2018
Current dynamics
While the dollar continues to scale down, the rally in the US stock market continues. On Friday, the main US indices reached new record highs, having successfully started in 2018.
Against the backdrop of the continued confidence of investors that companies will report again on the strong profit growth for the last quarter of 2017, the American stock market continues its rapid growth, which began in January 2016.
According to FactSet, the profits of companies from the S & P500 in the fourth quarter increased by about 11%. JPMorgan Chase & amp; Co. and Wells Fargo & amp; Co., part of the financial sector S & P500, today the first of the leading US banks will report on quarterly results. Economists expect profit growth.
Investors also continue to assess the impact of the recently adopted tax bill on the US economy.
Today, investors will follow the publication (at 13:30 GMT) of US consumer inflation data. According to the forecast, retail sales in the US are expected to grow by 0.5% in December (+ 0.8%, according to the previous release, and + 0.2% in November), CPI grew by 2.1% (in annual terms).
Nevertheless, signs of a sharp increase in inflation are still few. So, the US producer price index (PPI) for December, published on Thursday, decreased by 0.1%.
The threat that the current state of inflation may become a catalyst for the reversal of the bullish trend in the stock market is not yet relevant.
The Fed said about 3 rate increases in 2018. Nevertheless, the Fed may slow the rate of rate hikes if inflation continues to be weak and macroeconomic indicators will deteriorate. Soft monetary policy will contribute to the further growth of the US stock market. Thus, soft monetary policy, expectations of economic growth amid the new tax policy, and strong reporting by US companies continue to stimulate purchases of US stock assets.
Support levels: 2735.0, 2680.0, 2640.0, 2600.0, 2550.0, 2520.0
Resistance levels: 2775.0

Trading Scenarios
Sell Stop 2730.0. Stop-Loss 2780.0. Objectives 2700.0, 2680.0, 2640.0, 2600.0, 2550.0, 2520.0
Buy Stop 2780.0 Stop-Loss 2730.0. Objectives 2800.0, 2900.0

 

[TifiaFX]

AUD/USD: a day off in the US
15/01/2018
Current dynamics
Published on Friday, the macro data, pointed to the growth of inflation in the US. According to the US Ministry of Labor, CPI in December rose by 0.1% compared to the previous month, the base CPI index excluding food and energy prices increased by 0.3% (+1.8% in annual expression). Economists expect that by April, annual inflation will be above 2%. This is the most important fundamental factor, as the FRS relies on this basic CPI index when assessing the need for tightening monetary policy.
Janet Yellen, leaving the post of the head of the Federal Reserve on February, said earlier that the weakness of inflation observed last year is a temporary phenomenon. The growth of inflationary pressures against the backdrop of a stable labor market and positive macro statistics gives the Fed the opportunity to raise rates this year at least three times, as expected.
At the moment, the dollar is falling large.
The US dollar index DXY fell to its lowest level since December 2014. This was promoted, first of all, by the growth of the euro. Published on Thursday, the ECB's protocols showed that leaders at the beginning of this year can change the targets of leading indicators if economic growth remains strong. Expectations of tightening monetary policy outside the United States, especially in the Eurozone, contributed to the weakening of the dollar and the growth of the euro.
The euro in the basket of 6 currencies in the dollar index DXY takes about 57%, and its growth contributes to an active decline in the dollar.
However, investors probably can underestimate the Fed's determination to raise interest rates.
In addition, the tax reform and the consistently low unemployment rate in the US (about 4.1%) create the preconditions for accelerating the growth of wages, and this is also a factor that accelerates consumer inflation. There is a high probability that in the current year rates can be raised not three, but four times.
There may be a situation where investors, skeptical about inflation and raising rates in the US, will be taken by surprise when the Fed starts raising rates quarterly, and the bearish trend of the dollar against this background will suddenly be broken.
In conditions of an increase in the interest rate, the investment attractiveness of the dollar will grow.
Meanwhile, this week investors will focus on the publication of inflation indicators in Germany and the UK (Tuesday), the Eurozone (Wednesday), China's GDP (Thursday), the Bank of Canada decision on the interest rate (Wednesday), the publication of the Beige Book Fed (Wednesday) and data from the Australian labor market (Thursday 00:30 GMT).
Economists expect that data on employment in Australia for December will be weak. Unemployment will remain at the same level of 5.4% and an excess of labor resources will remain.
It is likely that the RBA is unlikely to decide to change the current monetary policy in conditions of weak growth in the labor market and the purchasing power of the population. While the growth rate of wages in the country will not grow, the RBA will not go on raising the interest rate, despite the emerging trend towards an early tightening of monetary policies in other major world central banks.
The current growth in the AUD / USD pair is explained, first of all, by the weakening of the US dollar. If the ratio of investors to the US dollar starts to change for the better, then the bullish trend of the AUD / USD pair will not stand.
At the moment, the number of short speculative positions on the AUD / USD pair in the foreign exchange market is 90%.
Today in the US, a day off, US stock exchanges do not work, and against a background of a reduced volume of trades, large players can push the quotes of the AUD / USD pair even higher.
Well, tomorrow, with the opening of the Asian session, the situation may change in the opposite direction. It is necessary to be vigilant when building long positions in the AUD / USD pair.

Support levels: 0.7950, 0.7900, 0.7850, 0.7795, 0.7710, 0.7600, 0.7545, 0.7500, 0.7460
Resistance levels: 0.8000, 0.8100, 0.8160

Trading Scenarios
Sell Stop 0.7925. Stop-Loss 0.7975. Take-Profit 0.7900, 0.7850, 0.7795, 0.7710
Buy Stop 0.7975. Stop-Loss 0.7925. Take-Profit 0.8000, 0.8100, 0.8160

 

[TifiaFX]

NZD/USD: amid rising commodity prices
16/01/2018
Current dynamics
On the eve, the DXY dollar index has reached its minimum for more than three years near the 90.13 mark, and for the year of 2017 the index has decreased by almost 10%, which was the strongest annual decline since 2003. At the beginning of the European session, the DXY index is near the 90.50 mark.
After a many-day decline today for the first time there is a recovery in the US dollar.
In general, the negative attitude of investors to the US dollar remains. Expectations that soon the world's largest central banks will begin to wind down their stimulus programs for national economies and begin to raise interest rates, increase the attractiveness of major world currencies and reduce the attractiveness of the dollar.
After strong growth over a period of ten years, American stock markets are receding into the background, and the largest regional stock markets, such as the European and Japanese stock markets, are coming to the fore. And this increases the demand for the euro and yen, for which the national stock assets are acquired. In this sense, commodity currencies, such as Canadian, Australian and New Zealand dollars, which are especially sensitive to the cost of primary commodities on the world market, also keep pace. The observed large-scale weakening of the US dollar contributes to higher commodity prices. This fully applies to oil and gas, metallic ores, as well as to agricultural products.
The main part of the New Zealand economy is the timber and agricultural complex, and a significant part of the New Zealand export is dairy products, primarily milk powder.
In the last 203-th auction GDT (Global Dairy Trade), held on January 2, 2018, the price index for dairy products increased by 2.2%. Prices for powdered milk increased by 4.2%. The weighted average world price for dairy products was 3,124 USD / kg. And, although the prices are on average lower than the prices for the level of a year ago, there has recently been a slight increase in the price of dairy products. This, in particular, is contributed by the weakening of the US dollar, as commodity prices are mainly in US dollars.
The general elections in New Zealand that took place at the end of September, as a result of which the conservative government, which achieved significant growth in the New Zealand economy, resigned, led to the fall of the New Zealand dollar. The business-sentiment of producers in the agricultural sector, the leading industry in New Zealand's economy, is still at a low level, reflecting a negative reaction to the new government.
Nevertheless, the NZD / USD pair recovered completely after the fall against the background of the September elections in New Zealand. This was facilitated also by the weakening of the US dollar/
So far, the negative attitude of investors to the US dollar remains, and the positive dynamics of the pair NZD / USD still prevails.
From the news for today, we are waiting for the publication of the results of the next dairy auction (in the period after 14:00 GMT). Two weeks ago, the price index for dairy products, prepared by Global Dairy Trade, came out with a value of 2.2% (against the previous value of + 0.4%). If the prices for dairy products rise again, the New Zealand dollar will strengthen, including in the pair NZD / USD. The decline in world prices for dairy products will hurt the quotations of the New Zealand dollar.
Support levels: 0.7240, 0.7210, 0.7090, 0.7000, 0.6865, 0.6800
Resistance levels: 0.7310, 0.7430, 0.7550

Trading Scenarios
Sell Stop 0.7255. Stop-Loss 0.7315. Take-Profit 0.7240, 0.7210, 0.7090
Buy Stop 0.7315. Stop-Loss 0.7225. Take-Profit 0.7430, 0.7550

 

[TifiaFX]

USD/CAD: probability of rate hike is high
17/01/2018
Current dynamics
Despite the fact that the probability of today's interest rate increase in Canada is high, the Canadian dollar declined during the Asian session, and the pair USD / CAD rose today to 1.2460. In December, the Bank of Canada kept its interest rate at 1.0% after doubling it during 2017. The head of the Bank of Canada Poloz said that when making decisions, the central bank will be guided by incoming economic data.
The current level of inflation in Canada is below the target level of 2.0%. Nevertheless, ignoring a strong labor market and rising oil prices, Canada's main export commodity, is unlikely to work either.
Most economists agree that today the Bank of Canada will raise the rate by 0.25% to 1.25%. It is likely that the Canadian dollar will strengthen on this event. However, further dynamics will depend on what the leaders of the Bank of Canada will say in the accompanying statement. If the Bank of Canada indicates that further increases will depend on the data, the upward momentum of the Canadian currency may soon weaken, while the USD / CAD pair will stop falling.
If the accompanying statement points out improvements in the economy and signals about plans for further tightening, the Canadian dollar will continue to rise. In general, today's rate increase is already taken into account in prices. Only signals about further tightening of monetary policy in Canada will cause a significant strengthening of the Canadian dollar.
The press conference of the Bank of Canada will begin at 16:15 (GMT), and the publication of the decision on the rate is scheduled for 15:00 (GMT).
Later (at 19:00) will be published economic review "Beige Book". The publication of this report by the Fed usually does not have a strong impact on markets. Nevertheless, this document will contain a look at the current state of the economy, from the point of view of leading economists, analysts, representatives of US business.

Support levels: 1.2400, 1.2360, 1.2300, 1.2170, 1.2100, 1.2050
Resistance levels: 1.2500, 1.2620, 1.2740, 1.2780, 1.2835, 1.2900

Trading Scenarios
Sell Stop 1.2390. Stop-Loss 1.2470. Take-Profit 1.2360, 1.2300, 1.2170, 1.2100, 1.2050
Buy Stop 1.2470. Stop-Loss 1.2390. Take-Profit 1.2500, 1.2620, 1.2740, 1.2780, 1.2835, 1.2900

 

[TifiaFX]

NZD/USD: US dollar received support
18/01/2018
Current dynamics
Today, the dollar gained support and grew at the beginning of the Asian trading session. On Wednesday, Fed representatives, Robert Kaplan and Loretta Mester, spoke in favor of raising interest rates. They expect acceleration in the growth of the US economy and inflation. According to Robert Kaplan, inflationary pressures are "growing", and it will be better if the Fed starts raising rates "sooner rather than later".
Apple announced on Wednesday that it would repatriate most of the profits it received abroad. Under the new tax laws, US companies that make profits outside the US will be able to pay a one-time tax of 15.5% of the repatriated assets. Apple said that the company will pay a one-time tax of $ 38 billion as a result of the repatriation of its foreign cash. If other large American companies follow Apple's example, this will increase demand for the dollar.
Nevertheless, the negative mood of investors regarding the dollar is still preserved. The growth of the world economy outside the US will support the currencies of other countries where econic growth is expected, and will cause their strengthening against the dollar.
At 13:30 (GMT) macro data from the United States will be published. The publication of the report of the US Department of Labor about the change in the number of initial applications for unemployment benefits for the last week is expected, according to which the number of initial applications for unemployment fell to 250,000 (against 261,000 in the week before last). The result higher than expected will indicate the weakness of the labor market, which will negatively affect the US dollar. If the data is confirmed, it should positively affect the dollar. The consistently low level of applications for unemployment benefits is one of the signs of a strong labor market.
Also at this time will be published indicators of activity in the real estate market in the US in December, as well as the index of business activity in the manufacturing sector of the Federal Reserve Bank of Philadelphia in January.
At 21:30 (GMT) index of business activity in the manufacturing sector (PMI) of New Zealand, assessing conditions in the business environment of the country, will be published. The production PMI is considered an important indicator of general economic conditions. In November, the PMI was 57.2. If the updated data for December will be better than November's value, the New Zealand dollar will strengthen, including in the pair NZD / USD.

Support and resistance levels
Yesterday, the NZD / USD upgraded the 2-month high near the 0.7330 mark and today again develops an upward move. So far, the negative attitude of investors to the US dollar remains, and the positive dynamics of the NZD / USD still prevails. The breakdown of the local resistance level of 0.7330 (January highs) will cause growth towards resistance levels of 0.7430 (September highs), 0.7550 Fibonacci level of 50%).
The signal to the resumption of sales of the NZD / USD will be a breakdown of the support level of 0.7240 (EMA200 on the weekly chart, EMA200 on the 1-hour chart and the bottom line of the upward channel on the 4-hour chart, and the Fibonacci level of 38.2%).
The purpose of the downward correction is the most important support level 0.7090 (EMA200 on the daily and monthly charts, EMA50 on the weekly chart).
The breakdown of support levels 0.6865 (the Fibonacci level 23.6% of the upward correction to the global wave of decline of the pair from the level of 0.8800, which began in July 2014, here are the minimums of December 2016), 0.6800 will mean the end of the upward correction, which began in September 2015, and return to the global downtrend.
Support levels: 0.7240, 0.7200, 0.7090, 0.7000, 0.6865, 0.6800
Resistance levels: 0.7330, 0.7430, 0.7550

Trading Scenarios
Sell Stop 0.7230. Stop-Loss 0.7340. Take-Profit 0.7200, 0.7100
Buy Stop 0.7340. Stop-Loss 0.7230. Take-Profit 0.7400, 0.7430, 0.7550

 

[TifiaFX]

GBP/USD: correction on the dollar
19/01/2018
Current dynamics
The House of Representatives of the US Congress extended government funding until February 16. This is the fourth resolution on the provisional financing of the federal government. The issue of the suspension of the US government for the time being removed from the agenda.
If the Senate and the House of Representatives can not agree on the procedure for financing the government, then state institutions will be closed, and their employees will go on temporary unpaid leave. So it was already in 2013 because of the budget crisis.
The dollar received a temporary respite. Nevertheless, investors are following developments. On the second half of the trading day, the economic calendar is empty, there is no important news.
Therefore, the dynamics of the dollar will, in the main, be determined by technical analysis.
And on most charts of dollar currency pairs, the dollar is oversold. In the middle of the European session, there is already a technical correction, and the dollar is growing against most of the competing currencies, including against the pound.
After today (09:30 GMT), the UK National Statistics Office presented updated data on retail sales for December, which were worse than the previous release and forecast, the pound fell in the foreign exchange market.
In December, according to the report, retail sales in the UK fell by 1.5% with a forecast of a decrease of 0.8%. Reduction of retail sales in December was the strongest since June 2016, when the referendum on withdrawal from the EU was held. It also became the sharpest for December in seven years. This is a bad sign for the pound and the British economy, focused mainly on the domestic market. In the fourth quarter of 2017, retail sales, according to the National Bureau of Statistics, failed to make almost no positive contribution to GDP growth.
Until now, the large-scale weakening of the US currency contributed to the active growth of the GBP / USD pair after the referendum on Brexit.
The negative attitude of investors to the dollar remains, despite the adoption of new tax laws in the US and the Fed's determination to further tighten monetary policy. Most likely, after the "working off" of the upward correction, the dollar will resume its decline. And for the pound, more important than today's publication on retail sales, will be the publication of data on the wages of the British, expected next week.

Support levels: 1.3800, 1.3735, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210
Resistance levels: 1.3900, 1.3970, 1.4050, 1.4250

Trading Scenarios
Sell Stop 1.3820. Stop-Loss 1.3910. Take-Profit 1.3800, 1.3735, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210
Buy Stop 1.3910. Stop-Loss 1.3820. Take-Profit 1.3970, 1.4050, 1.4250

 

[TifiaFX]

EUR/USD: the pair gets double support today
22/01/2018
Current dynamics
Analyzing the consequences of the temporary cessation of the work of the US government, investors reacted with restraint to the news that on Sunday the senators did not agree on voting for the bill on financing the government for one month. Pause in the work of the US government is unlikely to become a threat to the global economy, however, the major US stock indices and the dollar are moderately declining on Monday.
Last week, the dollar index DXY reached a multi-month low near the mark of 90.15, and today DXY again decreases, being at the beginning of the European session near the 90.20 mark. Meanwhile, the yield on 10-year US Treasury bonds grew on Monday to 2.651% from Friday's level of 2.639%, which was the maximum for the end of the session since July 2014. The dollar receives support from the growth of yield on US bonds, restrainedly declining in the foreign exchange market, even on an unfavorable domestic political background in the United States.
Meanwhile, as it became known from media reports, on Sunday the Social Democratic Party of Germany, which adheres to the center-left views, agreed to negotiations with the conservative bloc of Angela Merkel on the creation of a coalition. Thus, the domestic political situation in Germany, whose economy is leading in Europe and the Eurozone, has improved, and Merkel overcame a key obstacle in an attempt to form the government for the fourth time.
Thus, the EUR / USD is receiving double support today and is growing again at the beginning of the European session after the pair opened today's trading day with a gap up, reaching 1.2268.
The focus of investors who trade the euro will be the ECB meeting on monetary policy, which will be held on Thursday. Also this week is expected a large amount of macro data on the economy of the Eurozone. On Tuesday (10:00 GMT), the ZEW Research Institute will release a January report on business sentiment and expectations in Germany. On Wednesday, PMI (preliminary release) indices for the manufacturing and service sectors of France, Germany and the Eurozone will be published. On Thursday, the indices GfK and Ifo of the sentiment in the economy of Germany will be published. On the same day, at 12:45 (GMT), the ECB's interest rate decision will be published. It is expected that the current monetary policy of the ECB will remain unchanged, and ECB President Mario Draghi will favor the preservation of a soft monetary policy. The press conference of the ECB will begin on Thursday at 13:30 (GMT). On Friday, investors will be waiting for data on consumer confidence and business sentiment in France, as well as data on the euro money supply M3 and consumer lending (08:00 GMT). Thus, a very volatile trading week is expected.
Meanwhile, the EUR/USD keeps positive dynamics, trading in the zone of multi-month highs, above the important support level of 1.2200, which corresponds to the Fibonacci level 50% of correction to the fall from the level of 1.3900, which began in May 2014.

Support levels: 1.2200, 1.2100, 1.2060, 1.2000, 1.1900, 1.1855, 1.1790, 1.1735, 1.1680, 1.1630
Resistance levels: 1.2300, 1.2320, 1.2430, 1.2600

Trading Scenarios
Sell Stop 1.2190. Stop-Loss 1.2290. Take-Profit 1.2100, 1.2060, 1.2000, 1.1900, 1.1855, 1.1790, 1.1735, 1.1680, 1.1630
Buy Stop 1.2290. Stop-Loss 1.2190. Take-Profit 1.2320, 1.2430, 1.2600

 

[TifiaFX]

USD/JPY: The Bank of Japan left monetary policy unchanged
23/01/2018
Current dynamics
As expected, the Bank of Japan left all three monetary policy goals unchanged during today's meeting. The report of the Bank of Japan said that expectations about the pace of economic growth and inflation remained the same, while in December the bank said that they are "in the phase of weakening". In the course of his speech, the Governor of the Bank of Japan Haruhiko Kuroda stated that "we have not yet reached the point at which we should discuss the exit from monetary stimulus". The Japanese stock index Nikkei added 1.3% and for the first time since November 1991 closed above 24000 points, even despite the strengthening of the yen.
During the European session, the pair USD / JPY continued to decline. The dollar has only briefly received a breather by resolving a potential crisis with funding from the US government. As it became known, yesterday the Senators approved the bill on provisional financing of the government until February 8. Nevertheless, the restrained-negative attitude to the dollar on the part of investors remains, which is facilitated both by the internal political tensions in the US and by the expectations of a faster growth of the economy outside the United States, especially in countries with the world's largest economies.
At the beginning of today's European session, the DXY dollar index is near the 90.25 mark, while last week DXY reached a multi-month low near the 90.15 mark.
For today, important news on the US is not planned for publication. At 23:50 (GMT), the Ministry of Finance of Japan will publish a report with data on imports and exports, as well as the overall trade balance for December. The trade balance surplus and exports (+ 10%) of Japan are expected to increase, which will positively affect both the yen and the Japanese stock market.

Support levels: 110.15, 109.50, 108.80, 108.10, 107.30, 107.00, 106.50, 105.00
Resistance levels: 111.10, 111.85, 112.70, 113.10, 113.70, 114.00, 114.40, 115.00, 116.00

Trading Scenarios
Buy Stop 111.30. Stop Loss 110.40. Take-Profit 111.85, 112.70, 113.10, 113.70, 114.00, 114.40
Sell Stop 110.40. Stop Loss 111.30. Take-Profit 110.15, 110.00, 109.20, 108.80, 108.10, 107.30, 107.00, 106.50, 105.00

 

[TifiaFX]

GBP/USD: Dollar expects further weakening
24/01/2018
Current dynamics
On Wednesday, the US dollar continued to decline. Concerns about US protectionist trade policies have come to the fore once after US President Trump threatened trade barriers to Chinese goods. After that, the media reported that China intends to start getting rid of US government bonds, which led to a sharp short-term drop in the dollar. So far, the US has not imposed additional duties on imports from China. Nevertheless, on Monday, the administration of the US president announced the introduction of duties on the import of cheap solar batteries and washing machines that are produced in other countries in Asia. And this, according to the American leadership, is only the first such step in the sphere of trade.
The yield of 10-year US Treasury bonds is growing, rising to a 3-year high of 2.63%. However, this does not support the dollar, which is actively falling against the basket of other major currencies. So, during today's European session, the dollar index DXY reached a new multi-month low near the 89.50 mark, falling below the key level of 90.00.
It is likely that in the next few months we should wait for the continuation in the US of the policy of trade restrictions on imported goods, including from China. This should lead, theoretically, to reciprocal measures on the part of the PRC. The escalation of tensions between the US and Asian countries, primarily with China, against the backdrop of the protectionist trade policy of the White House will lead to an even weaker dollar. Moreover, a cheaper dollar is beneficial to the US economy. A strong national currency has a negative impact on the US economy, making US exports less affordable for overseas buyers. Trump has repeatedly stated that the US foreign trade deficit has reached an impressive $ 500 billion precisely for this reason.
On Monday, economists at the Institute of International Finance (IIF) reported that, according to their calculations, the US dollar is still overvalued by about 10%, despite the fact that last year the dollar has already decreased by 7% against a basket of 16 currencies tracked by Wall Street Journal. Thus, we should expect further weakening of the dollar.
Of the news for today, it is worth paying attention to the publication at 14:45 (GMT) of business activity indexes (PMI) in the services sector and manufacturing sector in the US for January. The publication of indicators with strong values is expected. If they exceed their expectations, the dollar may strengthen for a moment.
From the fundamental point of view, we should expect further weakening of the dollar.
Meanwhile, at 09:30 (GMT), data from the British labor market was published, indicating that the unemployment rate in November was 4.3%, which is the minimum for the past 40 years. The number of new jobs also reached a record high, while the number of unemployed fell to a minimum in more than 15 years. Such data was cited by the National Statistics Office of Great Britain.
However, higher demand for labor did not lead to an acceleration in the growth of wages of the British. The worsening of the financial situation of consumers after the referendum on Brexit, apparently, continues.
Nevertheless, the pound reacted with growth on the data presented. The GBP / USD pair updated the annual and multi-month high near the 1.4115 mark. For the last time at this point, the pair GBP / USD was at the end of June 2016, on the eve of the referendum on Brexit.

Support levels: 1.4050, 1.4000, 1.3970, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210
Levels of resistance: 1.4100, 1.4180, 1.4250

Trading Scenarios
Sell Stop 1.4070. Stop-Loss 1.4135. Take-Profit 1.4050, 1.4000, 1.3970, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210
Buy Stop 1.4135. Stop-Loss 1.4070. Take-Profit 1.4180, 1.4250