LiteForex's analytics

[LF.Anastasia]

16.08.2012

FOREX: Analysis and forecast of XAUUSD

1. Current trend of XAUUSD

Yesterday, value of contracts for gold fell by more than 2% against local highs of $1626.50 per ounce. After reaching the lows of the week of 1590.00, the price of “yellow metal” started intraday correction. The decline was caused by a new surge of rumors about development of European crisis. The most problematic countries are still Greece and Spain. The US positive macro-economic statistics also puts additional pressure on the price of the precious metal, as due to the positive news, chances of launching the third round of quantitative easing policy by the US Federal Reserve have reduced significantly. Later, the price rolled back to the level of 1606.00.

2. Important levels (Support and Resistance)

Important resistance levels today will be: 1614.10, 1618.50 and 1614.10. Support levels are as follows: отметки 1614.10, 1618.50 and 1614.10.

3. Best entry/exit points

Best entry points for contracts on purchase will be the level of 1614.50. Contracts on sale are recommended after breaking down of the level of 1601.00.

4. Supporting facts

Analysts believe that gold will preserve attractiveness for investors due to uncertainty in the world economy. Gold will remain an instrument of hedging against inflation, as monetary authorities of different countries will use this precious metal as a tool to relieve effects of the monetary policy.

GBPUSD: British currency is under pressure; traders anticipate sharp decline in the pair

1. Current trend of GBPUSD

Since the beginning of August the pair GBPUSD has been moving upward and gained about 200 points for two weeks. The price is growing, amid optimistic estimates of the prospects of the British economy, made by the Bank of England, and favourable data on unemployment rate in July, which suddenly was above expectations. All these facts helped the price to consolidate near the key resistance level of 1.5685. However, these positive prospects are illusive since British economy is still in deep recession. Unemployment rate in the country has reached the highest level over the last few years; situation in Eurozone is also a negative impact on the British economy. These facts show that prospects of the pair GBPUSD are not very positive. All preconditions indicate that the rise in the pair will shift into the sharp fall.

2. Important levels (Support and Resistance)

Correction near the key resistance level of 1.5685 after ascending movement in the pair GBPUSD may end up with the sharp decline. If the price breaks down of this level, with the help of support from positive news, and will go upward, it can reach the key resistance level of 1.5765 and after that we will witness sharp fall. If the price will be corrected near the key resistance level, after correction it can sharply go up. The target is the key support level of 1.5470; movement will be interrupted by corrections at the weaker levels.

3. Best entry/exit points

The most feasible scenario is slight correction and decline in the pair GBP/USD. The trend will depend on the fundamental news from the leaders of Eurozone and ECB and the Bank of England.
In this case it is advisable to set short positions with profit taking around the key support level of 1.5500. Pending orders for sale are recommended below the key level 1.5750 with the same level of profit taking.

4. Supporting facts

Currently Eurozone remains in deep recession and has the lowest indexes in history. Many respected economists predict collapse of the European Union in 2013 and exit of Greece before the end of this year.
Meanwhile, Greece was able to avoid default. On 20 August Athens has to pay more than 3 billion euro to ECB; however Greece did not have this amount of money in the budget. With the approval from ECB, country’s authorities decided to place 13-week treasury bills. As the result, securities for more than 4 billion have been sold, enabling to cover government’s current expenses. The main buyers of securities were Greek banks and therefore, final yield of bills of 4.43% does not reflect current realities.
MACD indicator is in the positive area, below the signal line and is directed downward, which is a clear signal for opening short positions.

Dmitry Likhachev

 

[LF.Anastasia]

17.08.2012

Analysis and forecast of the currency pair EURUSD

1. Current trend

During the American session on Thursday the Unified European currency has steadily strengthened against the American dollar, reaching the local highs around 1.2372. The main driver of growth was weak US macro-economic statistics; according to experts it was expected that the data would be much better than estimates.

2. Fundamental data

Many financial analysts agree that the Federal Reserve may soon use the printing press to print money in order to support economy. This rumour negatively affects the American dollar and forces many large foundations to review their trading positions. Thus, according to CFTC report, which was made public last Friday, net long position of the USD against 7 major currencies fell by 18%, short positions in the EUR decreased by 4.5%.
Additional factor that triggered growth in the Euro was the verbal intervention by Merkel who said that all countries of the European Union will operate closely together and coordinate their efforts in order to preserve the Unified European currency. We should not forget about Greece. If the “group of three” will not allocate financial aid in September, the Euro may collapse versus all other currencies and after that verbal interventions will not be able to help the Unified currency, no matter whether they conducted by Draghi or by Merkel.

3. Important levels (Support and Resistance)

The key resistance level: 1.2441.
The key support level: 1.2235.

4. Best entry/exit points

Best entry point for buying transactions is above resistance level of 1.2441 with protective order around 1.2412.
Best entry point for opening short positions is the level below support level around 1.2235 with protective order around 1.2265.

Forex: Ichimoku Clouds. Review of USDCHF

USDCHF, H4

On the four-hour chart, the price has broken through the lower bound of the cloud, reaching the level of 0.9705 and rolled slightly upward. The line Tenkan-Sen is above Kijun-Sen, both lines are horizontal. The line Chinkou Span is below the price chart, current cloud is ascending. Kijun-Sen (0.9747) will become the resistance level.

USDCHF, D1

Now, have a look at the daily chart. The line Tenkan-Sen has crossed Kijun-Sen from bottom to top below the cloud forming the pattern “Dead cross” We received the second signal from the line Chinkou Span: the intersection of the price chart from top to bottom. Current cloud is still ascending. The price has exceeded the level of Tenkan-Sen and now this line will become the resistance level (0.9732). Support level is the line Senkou Span A (0.9670).

Key levels

Support level: 0.9670.
Resistance levels: 0.9732 and 0.9747.

Trading tips

On the daily chart intersection of the lines Tenkan-Sen and Kijun-Sen, as well as the signal from Chinkou Span will be the confirmation of the downtrend. It will be the best moment for opening sell positions.

Anastasiya Glushkove
Analyst of LiteForex Group of Companies

 

[LF.Anastasia]

20.08.2012

Analytical analysis of the currency pair AUDUSD

1. Current trend of AUDUSD

According to the review published by the Treasury of Australia, Central Bank of Australia may well decide to reduce interest rate in the country if the rise in the AUD will pose a risk to the economy. This statement, along with the excerpts from the study that the Australian dollar is overvalued, according to basic models of IMF, suggests that representatives of the Central Bank can carry out verbal interventions (aimed at reducing the rate of the national currency) in the future. The minutes of the meeting of the RBA of 7 August that will be made public on the night from 20 to 21 August, will show the tendency.

2. Important levels (Support and Resistance)

The pair AUDUSD will continue to decline. At the moment, the pair traded around the level of 1.0445. The nearest support levels are 1.0447 and 1.0474. They are the main target for the “bulls” with the prospect of further growth up to the level of 1.0507. The main target of “bears” is the support level of 1.0424. This level of support is rather strong.

3. Best entry/exit points

The most feasible scenario is further decline in the rate. In this case it is advisable to enter the market around the level of 1.0435 with stop loss at 1.0460. If the price will go down, short positions should be opened at the level of 1.0405. If support levels will be strong, and the rate starts to grow, long positions should be opened at the levels of 1.0460 and 1.0480 with protective orders at the levels of 1.0440 and 1.0465.

Forex: Ichimoku Clouds. Review of NZDUSD

NZDUSD, H4
Have a look at the four-hour chart. The line Tenkan-Sen has crossed the Kijun-Sen from bottom to top under the cloud, forming the pattern “Golden cross”. The price chart has already gone above the lines Tenkan-Sen and Kijun-Sen; however is still under the cloud. The line Chinkou Span has almost crossed the price chart from below to above; current cloud is descending. Resistance level is lower border of the cloud ― Senkou Span A(0.8110), support level is ― Kijun-Sen (0.8080).

NZDUSD, D1
On the chart with the frame time D1, the line Kijun-Sen is below the Tekan-Sen; current value of the price is in the gap between Tenkan-Sen and Kijun-Sen. The line Chinkou Span is above the price chart; current cloud is ascending. Support level is ― Kijun-Sen (0.8015), resistance level is ― Tenkan-Sen (0.8100).

Key levels

Support levels: 0.8080 and 0.8015.
Resistance levels: 0.8100 and 0.8110.

Trading tips

On the four-hour chart the price is approaching to the cloud. The daily chart will show if the price will be able to go through the cloud or not. If the last candlestick on D1 closes above the level of Tenkan-Sen (0.8100), it will be a signal for opening long positions.

Anastasiya Glushkova
Analyst of LiteForex Group of Companies

USDCAD: Canadian dollar keeps tendency to strengthen

1. Current trend of the currency pair USDCAD

The pair USDCAD rate is still in the downtrend. Nevertheless, the rise in the Canadian dollar has slowed down due to negative effect of the Canadian economic statistics released last Friday. Consumer prices index in the country fell by 0.1% against the rise of 0.2% predicted by the experts. Core inflation amounted to 1.7% on annual basis against expectations of 2.0%. This information triggered correction in the market; the USD had increased by 40 points, but encountered resistance at the level of 0.9900. Currently, the pair traded in the narrow channel of 0.9900-0.9875.

2. Important levels (Support and Resistance)

At the moment, initial resistance level is at 0.9900, and support level is at 0.9875. Investors are waiting for the release of new Canadian statistics on the volume of wholesale and retail sales on Tuesday and Wednesday, therefore, in the near future the flat in the range of 0.9900-0.9875 is possible. If statistics is positive, it will be likely that the price will continue to move to the target levels of 0.9842 и 0.9797. In case of deterioration of the Canadian economy, correction will be possible with further upward movement to the level of 0.9934.

3. Best entry/exit points

Breakdown of the support level of 0.9875 is the signal for opening short positions. In this case it is recommended to enter the market at the level of 0.9868 with protective order around the level of 0.9900. If the “bulls” manage to consolidate above the resistance level of 0.9900, it will make it possible to place an order for purchase at the level of 0.9909 with protective order at the level of 0.9863.

4. Supporting facts

Support to the Canadian dollar is provided by high prices for commodity. Last week, the price of crude oil Brent has reached the level of $116 per a barrel, due to the news on reduction of stocks of fuel and distillates in the US; however, after correction, oil traded at the price of $114 per a barrel. Investors are concerned about the decline of inflation in Canada that may lead to the delay in the rise of the key interest rate by the Bank of Canada and the decline in the pace of growth of the Canadian currency.

5. Technical indicators

On the daily chart the indicator “Bollinger bands” shows weak convergence of lines; moving average line is directed downward that may be regarded as a signal for continuation of the downward trend. However, the price chart is near the bottom line that gives a chance to open short-term buying positions. Histogram of MACD indicator is below the zero line, confirming downtrend; signal line of histogram has not been crossed yet, and the signal to buy has not been formed either.

 

[LF.Anastasia]

21.08.2012

EURUSD: The pair is awaiting solutions to the debt crisis

1. Current trend of EURUSD

The currency pair EURUSD continues to move sideways. Quotes at the end of last week and earlier this week were not able to exceed resistance level of 1.2385 and failed to go up. On Monday, the Euro rose slightly against the USD when European authorities refuted the said allegations that the European Central Bank plans to limit the rise in bond yields of the peripheral countries of Eurozone. Currently, the pair is testing the average bound of the channel; the price is still being corrected. The price has been in the narrow channel for a few sessions in a row; volatility in the market is still very low.

2. Important levels (Support and Resistance)

This week the Euro should traded in the narrow range; at the moment the pair EURUSD has consolidated near the key resistance level of 1.2385. Breakdown of this level will make the rise up to the key level of 1.2440 possible. If the pair EURUSD will be affected by the negative news and the price goes down and breaks through the initial support level of 1.2325, we will see downward movement to the basic support level and local lows in the last few weeks of 1.2255. It should be noted that a lot will depend on the decisions of the European leaders on debt crisis and in particular on Greek issue that is still the most acute problem.

3. Best entry/exit points

It is difficult to predict further prospects of the pair EURUSD, as its future will depend on the fundamental factors. European leaders will have a meeting this week to discuss the ways to fight against debt crisis in a number of countries. Further trend of the pair will depend on their decisions and actions.
If specific measures will be adopted and particular actions will be proposed in order to exit from the debt crisis, it will have a positive effect on the pair EURUSD, and will trigger uptrend in the pair. If European leaders will not come to common opinion and will not outline specific plans and activities, we will see downtrend in the pair, caused by pressure from negative news.
Up to date, the pair is moving upward and long positions are preferable. It is recommended to set limits for purchase around the lower boundary of the channel with profit taking at the key resistance level of 1.2420 (30).

4. Supporting facts

Eurozone has divided into two camps: one camp supports aid to Greece, the other is against this aid. Germany opposes additional help to Greece. The head of European Group Jean Claude Juncker stated that Greece would not leave Eurozone. Jean Claude Juncker said that we will be forced to discuss the issue of Greece withdrawal from Eurozone only if it completely abandons fiscal consolidation and structural reforms.
MACD indicator is in the positive area, below the signal line and is directed upward, giving a signal for corrective upward movement.

BRENT: Analysis and Forecast

1. Current trend of crude oil BRENT

During Monday’s trading session September futures price of the North Sea crude oil Brent slightly went down up to the level of $113.70 per barrel.
Investors’ attention was drawn to the monthly report of the Central Bank of Germany in which the chief regulator of German economy speaks against purchase of debt securities of European countries by the European Central Bank. Bundesbank managers believe that this issue should be controlled by governments and parliaments of European Union, but not only by ECB. Investors’ sentiment was also affected by the news that the US authorities intend to use part of the US Strategic Petroleum Reserve in order to reduce fuel prices. Additional driver for decline was the information that the Saudi Arabia increased production of “black gold” to the highest level in 30 years.

2. Important levels (Support and Resistance)

The nearest important resistance level will be the highs of August of 116.70; if this level is exceeded, next level for the “bulls” will be the price of $120.00 per barrel. Support level will be 200МА (111,40); when this level is broken down, next support level will be 104.00.

3. Best entry/exit points

The best entry point for the contracts to buy is the level of 117.10 with protective order at the level of 115.60. For the sale contracts the best entry point will be at the level of 111.00 with protective order at the level of 112.60.

4. Supporting facts

At the moment, investors are focused on expectations of the US news. On Wednesday, statistics on the housing market and amount of crude oil and petroleum products will become known. However, the main event for investors will be the minutes of the Fed Reserve as it may give indication on the future plans of the US monetary authorities in regards to chances of the quantitative easing policy.

Technical analysis of the currency pair GPBUSD

1. Current trend of GPBUSD

The four-hour chart shows that the pair has been moving upward since the beginning of the month. The Pound continues to grow despite difficulties in the UK economy. After sharp rise on Tuesday morning, short-term correction will be possible. Histogram MACD is in the positive area and is above the signal line; volume is increasing, which suggests further growth rate.

2. Important levels (Support and Resistance)

On Tuesday morning the “bulls” managed to break down resistance level of 1.5740 and approach the level of 1.5770. This resistance level is rather strong and the “bulls” will have to make efforts in order to break through it. At the moment, the pair traded near the level of 1.5760. The nearest targets for “bears” are the levels of 1.5740 and 1.5725.

3. Best entry/exit points

It is most likely that the rate will go down. In this case short positions are recommended at the levels of 1.5735 and 1.5715 with stop loss at 1.5750 and 1.5735. In case of growth in the pair GPB/USD, it is recommended to enter the market around the level of 1.5785 with protective order at 1.5760.

 

[LF.Anastasia]

22.08.2012

Analysis and forecast of the currency pair EURUSD

1. General trend

The Unified European currency has grown considerably against major currency pairs on Tuesday. The Euro has reached the local highs of 1.2487; the next important level is still 1.2500, only in case of consolidation at this level the players can expect continuation of ascending trend.

2. Fundamental data

The news that Germany may extend the duration of the aid program to Greece for two years in order to support its economy has became the main driver for the growth in the Euro. This issue will be discussed at the meeting of the EU leaders in Berlin. It is obvious that positive decision will encourage large institutional investors to buy the Euro. The other event that was also favourable for the Euro is successful Spanish auction for selling debt securities- average yield of loans for Spanish region declined compared with previous value and amounted 3.07% against 3.92%. We would remind that the leaders of ECB believe that the cost of borrowing is still very high for the peripheral countries. This factor facilitates the ECB to purchase the bonds of the troubled countries by in order to bring down the price. Program of redemption of bonds of the troubled counties of the ECB can support economy and improve access to finance, which will also support the Euro in the short-term. Despite a number of positive news, Bundesbank has not expressed approval of the new policy of ECB.

3. Important levels (Support and Resistance)

Key resistance levels: 1.2500 and 1.2554.
Key support levels: 1.2432 and 1.2378.

4. Best entry/exit points

The best entry point for placing buying orders will be above resistance level of 1.2500 with protective orders of 1.2450. The best entry point for opening short positions will be the level below support level of 1.2432 with protective order of 1.2460.

NZDUSD Investors are in confusion

1. Current trend of the currency pair NZDUSD

The NZDUSD rate started this week with ascending movement. On Tuesday the pair has reached three-week highs of 0.8144. However, the “bulls” failed to maintain the achieved level and after correction, the NZD has lost 50 points. Announcement, made by the director of International Rating Agency Fitch David Reilly, has also caused decline in the NZD. He spoke about probability of further downgrade of the creditworthiness of European countries if political and economic situation in Eurozone does not improve until the end of this year. Currently, the exchange rate of the pair NZDUSD continues to decline; the price goes down to the important support level of 0.8062.

2. Important levels (Support and Resistance)

Initial resistance level is 0.8114, support level is 0.8062. Note that the meeting of the European leaders will have an effect on market sentiment. On Wednesday the head of European Group Jean-Claude Juncker will have a meeting with Greek Prime minister Antonis Samaros to discuss extension of the austerity program for two years. a meeting of Greek prime Minister with the leaders of Germany and France is scheduled for the same day in the afternoon. Positive investors’ reaction to the outcome of these discussions can lead to reversal and upward movement to the three-week highs of 0.8144, and in case of breakdown of this level to the next resistance level of 0.8191. If discussion does not lead to the desired results, downward movement in the pair NZDUSD may continue up to the target levels of 0.8037 and 0.7987.

3. Best entry/exit points

In the current situation breakdown of the resistance level of 0.8114 will be the signal for opening long positions. In this case it will be advisable to enter the market at the level of 0.8121, with protective orders around support levels of 0.8062 or 0.8037. If the price consolidates below support level of 0.8062, it will give a chance to open positions for sale with protective order around 0.8114.

4. Supporting facts

Support to the New Zealand currency is traditionally provided by the high prices of oil and commodities. New Zealand stock index NZX 50 has been demonstrating price growth for a month. It should be noted that corporate reporting season is in full swing in New Zealand. The largest telecommunication company Telecom and construction company “Fletcher Building” will provide their reports on income in the next two days, which will also affect positions of the New Zealand currency.

5. Technical indicators

Indicator “Bollinger bands” on the daily chart does not give clear signals. The upper and lower lines are converging, which may indicate that the market is ready either to launch a new trend or continue the previous one. Histogram of the MACD indicator is below the zero line, confirming ascending trend; however it crosses the signal line from top to bottom, which may indicate a signal for opening short positions.

GBPUSD: Price will continue upward movement

1. Current trend of GBPUSD

The pair GBPUSD has been steadily moving upward for a few weeks. In the last two weeks the pair GBPUSD has gained about 300 points and reached local highs of the last three months. The price continues to move in an upward trend, amid positive estimates of the British economy by the Bank of England and favourable news from Eurozone, where the EU leaders and management of the European central Bank are preparing to take the necessary steps to fight against debt crisis. The last piece of positive news from Eurozone has encouraged investors to close part of the short positions, which has a positive impact on the growth of the pair GBPUSD.

2. Important levels (Support and Resistance)

The rise in price, which was triggered by the positive news from the Bank of England and trading floors in Eurozone may shift into downward correction. Up to date the price has reached the local highs of the few months and consolidated near the resistance level of 1.5840. If there will not be any significant turmoil, the price may reverse to the first support level of 1.5670, which will be followed by another upward surge. In case of positive news from European Union and the Bank of England and if investors continue to close short positions, it is not ruled out that growth will continue and if the first resistance level of 1.5840 is broken down the movement will go up to 1.5925, and further up to the key resistance level of 1.6000.

3. Best entry/exit points

The most feasible scenario shows that downward correction will take place after slight upward movement in price. In this case it is advisable to open short positions with profit taking at the level of 1.5700; pending orders of the type “BUY LIMIT”, near the first support level of 1.5670 with profit taking at the level of 1.5820 will be of interest as well.

4. Supporting facts

All indicators show further upward movement.
MACD indicator is in the positive area, above the signal line and is directed upward, indicating clear signal to buy.
Indicator Ichimoku Kinko Hyo also gives a signal for upward movement; the price went through the cloud and soared up.
On Tuesday, the Office for National Statistics released the data showing that British government has borrowed more money than it was expected in July and net borrowing of the public sector increased by 560 million pounds.
Investors can have great influence on the future movement in the pair GBPUSD: if they start to close short positions it will cause further upward movement in the pair GBPUSD.

 

[LF.Anastasia]

23.08.2012

EURUSD: US Federal Reserve can support the “bulls”

1. Current trend of EURUSD

Yesterday, the pair EURUSD soared up after the publication of the minutes of the US Fed meeting. It seems that the US Fed is ready to adopt new measure to stimulate economy and minutes of the CB meeting proves this fact. Members of the Committee believe that the third round of monetary easing policy will be justified. Ben Bernanke said commenting the first two rounds of quantitative easing that both programs of quantitative easing has no negative impact or adverse consequences, so we can drive to conclusion that the next round is not going to be harmful for the USD. The first two rounds did not cause significant rise in money supply and at the earliest opportunity the Fed will launch the third round of quantitative easing, or so-called sterilized quantitative easing (QE sterilized).
Now, let’s stop over the term “sterilized quantitative easing”. I will try to explain the meaning of it briefly and clearly. When the US Fed buys bonds or other assets as part of the quantitative easing policy, it actually injects cash into economy, which causes the increase in the amount of currency in the market and the USD rate goes down; while sterilization implies a procedure that decreases the amount of cash in the system.
The US Fed will issue money to buy bonds, causing weakening of the USD by way of increasing demand for the American currency and also with the help of reducing the yield of the US bonds.
If the US Fed launches easing in the near future, it can boost the rise in the pair EURUSD. Presently, the European currency has reaches the three-month highs against the USD and traded at the level of 1.2550.

2. Important levels (Support and Resistance)

After the sharp rise of the pair EURUSD, amid the news from the US Fed, the pair is likely to calm down and go down to the main support level of 1.2430. After that the pair is expected to go upward, this time not with the help of the rise in European currency, but due to weakening in the USD, as it is assumed that the US Central Bank will print new banknotes soon. Based on this forecast we can say that after insignificant decline the price will soar up, breaking down initial resistance level of 1.2580, and after reaching the main resistance level of 1.2690, it will consolidate near the key resistance level of 1.2735.

3. Best entry/exit points

It is difficult to foresee further prospects of the pair EURUSD, as they will directly depend on fundamental statistics. If the US Fed and CB launch easing, upward surge will be inevitable.
In this situation it is advisable to open long positions. Limits on buying will be of interest around support level of .2450 with profit taking at the level of 1.2700.

4. Supporting facts

MACD indicator also confirms the described scenario. We can clearly see trading divergence that was formed during trading session yesterday. It indicates that not all investors have closed their short positions and downward correction may take place in the near future.
When will the US Fed begin to act and launch the third round of quantitative easing? In the normal circumstances it will not take long to wait, however in advance of the presidential elections the regulator may play for time.
The next event, that market participants are expecting, is scheduled for 31 August: speech of the US Fed chairman Ben Bernanke at a symposium in Jackson Hall, Wyoming.
Meeting which will be held this week may clarify uncertain outlook for Greece and reveal ECB plans regarding the purchase of sovereign bonds and measures to fight against inflation.

Brent is in the overbought zone

1.Current trend of the crude oil BRENT

World prices of October futures for the North Sea crude oil Brent shows the rise of 0.82% - 115.85 USD per barrel. This rise in the oil quotes has been supported by several factors. The US Department of Energy had reported decrease in crude oil reserves by 5.4 million barrels; this value dropped up to the lowest level for five months (360.7 million barrels, which was above experts’ expectations. Reduction in the oil reserves had been predicted around 1.9-2.0 million barrels, which increased demand for oil.

The minutes of the US Fed, which were released earlier, also contributed to the rise in price of “black gold”. Many members of the Committee for open markets of the US Fed believe that new measures of monetary stimulus will be necessary for the economy and is likely to be introduced.

2.Important levels (Support and Resistance)

Currently, support and resistance levels are as follows: key target for the “bulls” will be the level of 106.70, in case of new development in the market and if this level is broken down, the priority will be the level of 120.00. Support level is 200МА (111.40), if it is exceeded, next level will be 104.00.

3.Best entry/exit points

At the moment, the rise in the oil quotes has been suspended because oil is overbought; the rise has reached the highest of three months. Some experts believe that profit taking by the shareholders will take place when the price will be close to $106.70 per barrel. Considering current market situation it is recommended to carry out short-term transactions placing short positions around resistance level of 106.70. Long positions should be opened around support level of 111.40.

4.Supporting facts

In order to improve existing situation with the overbought of the crude oil Brent, investors should develop new market ideas. It is also possible that situation in Iran may be an impetus for the growth; or more vigorous actions of the monetary authorities of Europe and US in order to revive economy.

GOLD: Analysis and forecast

1. Current trend of XAUUSD

Gold has reached the highs, which was last recorded in early May. Recently, Federal Reserve has made it clear that Central Bank is ready to undertake actions in case of weakening of the US economy.
Minutes of the last US Fed meeting showed that most of the members of the Committee, who vote for operations in the open market of Fed, will approve further monetary policy easing in the near future if the latest data will not indicate significant and stable growth of economic recovery. This information has triggered the rise in gold.
According to investors, injection of liquidity will lead to the fall in the value of the USD and the rise in inflation in the future. Therefore, they buy gold to protect against such risks.

2. Important levels (Support and Resistance)

Currently, the pair traded around the level of 1664.00. The four-hour chart shows that the nearest resistance level is 1670.00. Gold needs to consolidate above the level of 1664.00 before it starts to break down the level of 1670.00. If these levels will be exceeded, the price will move to 1680.00. The nearest support levels are 1654.00 and 1644.00.

3. Best entry/exit points

Positive sentiment dominates in the market, and it is most likely that gold will continue to grow.
In this case, the best entry points will be 1667.80 and 1675.30 with stop losses at the levels of 1660.00 and 1665.50.
If the price reverses and goes down, it will be better to enter the market at the levels of 1661.50 and 1651.00 with protective order at the levels of 1666.50 and 1656.50.

 

[LF.Anastasia]

24.08.2012

USDCAD: Review of dynamics and forecast for the near future

1. Current trend of the currency pair USDCAD

Currency pair USDCAD has been in the sideways trend testing strong resistance level of 0.9900 at the end of last week and at the beginning of this trading week. On Wednesday the “bulls” were able to break down this level and consolidated at the new resistance level of 0.9942. Strengthening in the American dollar is largely due to the publication of the minutes of the US Fed meeting on Wednesday, according to the minutes it is very likely that a new round of quantitative easing (EQ3) will be launched in the near future. Currently, the pair is been corrected, testing a new resistance level of 0.9942.

2. Important levels (Support and Resistance)

Currently initial resistance level is 0.9942 that is already rather strong; support level is 0.9891. The pair USDCAD is forming a basis around the levels of 0.9850-0.9880. Therefore, the most feasible scenario for today is upward price movement to the target level of 0.9996 and if it is broken down, to the level of 1.0047. However in case of unfavourable news from Europe and the US; reversal and movement to the annual lows of 0.9800 is not ruled out.

3. Best entry/exit points

In case of the first scenario, it is advisable to enter the market above resistance level of 0.9942 with protective order around 0.9890. Break down of the support level of 0.9891 will be the signal for opening sale positions and in this case positions can be opened at the level of 0.9882 with protective order around 0.9942.

4. Supporting facts

Support to the Canadian currency is provided by sustained high prices for oil. This week oil prices received support from the US statistics, which showed that crude oil inventories in the US decreased by 5.412 million for a week against projected decline of 250 thousand barrels. Growth in the Canadian dollar is also supported by macro-economic statistics: Canadian economy looks more “healthy” than economies of Europe and the USA. On the other hand, strong correlation is taking place between the Stock market and the CAD rate and majority of stock indices (S&P 500, Dow Jones), as well as the Canadian stock index S&P/TSX 60, traded in the red this week, which puts pressure on the Canadian currency.

5. Technical indicators

Indicator “Bollinger bands” on the daily chart is not giving clear signals; however reversal of the price chart towards average moving line can be regarded as a weak signal to the shift from descending trend into ascending one. Histogram of MACD indicator is below the zero line, confirming downtrend; nevertheless, it crosses the signal line from bottom to top, which gives a signal to open buying positions.

NZDUSD ANALYSIS AND FORECAST

1. Current trend of the currency pair NZDUSD

The New Zealand dollar is trading downward on Friday. The reason is investors’ fading optimism regarding the forthcoming use of Quantitative easing by the USA.
The currency pair will trade in a narrow range until the FED’s intentions become clearer.

2. Important levels (Support and Resistance)

Support level: 0.8093 down to 0.8075
Resistance level: 0.8141 up to 0.8186

Analysis and forecast of the currency pair USDJPY

1. Current trend of the currency pair USDJPY

This week, the yen has risen in price against the majority of main currencies due to the decline of Asian stock indexes and deterioration in macroeconomic statistics worldwide, which has stimulated the interest towards “safe-haven” currencies. The weekly lowering of USDJPY can be the highest over the last 12 periods.
The pair can continue moving downward. The downfall that took place the day before yesterday was a response to the reports of the US Federal Reserve System, notably, the references to new measures of Quantitative easing which contributed to further lowering. The key profitability of US ten-year securities has really dropped below its 200-day SMA as a result of the FED’s reports.

2. Important levels (Support and Resistance)

The pair is currently trading at the level of about 78.60. The pair has almost reached the support level of 78.45 and the “bulls” will soon try to break it down. If they succeed, their next target will be the strong support level of 78.00. The nearest resistance level is at 78.70.
This level broken down, the price will go up to 78.90 and then up to 79.60

3. Best entry/exit points

The most feasible scenario is the rate further decline. That’s why it’s advisable to open short positions at the level of 78.35. But the possibility if reverse movement shouldn’t been excluded either. In this case, it’s recommended to enter the market at 78.95 with protective orders at the level of 78.80. It also makes sense to set sell limits at about 78.70.

 

[LF.Anastasia]

27.08.2012

USDJPY. General Analysis

1. General Dynamics

Speculators continue to grow long positions in USDJPY. As analysts of a number of major banks believe, the main factor for buying USD against JPY is a strong support level around - 78.22. Further strengthening of JPY can provoke an intervention by the Bank of Japan, as the representatives of the Ministry of Finance repeatedly stated, commenting on the situation on the currency market. Last week USD was rapidly losing its positions against the main currencies - the main reason was the statement of the Fed's chairmen about possible additional quantitative softening if the U.S. economy recovers slowly. Against the background of this statement USDJPY decreased by more than 90 points which increases the possibility of the intervention.

From a technical point of view the histogram MACD is in a negative area, but it crosses the signal line at the bottom, which can be interpreted as a signal for buying.

2. Important levels (support and resistance)

The main resistance level: 78.86, 79.05, 79.25
The main support level: 78.56, 78.36, 78.17

3. Best entry/exit point

Good entry point for buying will be the level above resistance around 78.86, with protective orders in 78.56.

AUDUSD. Australian dollar continues to decline

1. Current dynamics of AUDUSD

Last week the pair AUDUSD was traded differently directed. The greatest success "bulls" made on Wednesday, when the transcripts of the last meeting of the U.S. Fed were published.Тhat day the Australian dollar consolidatedby more than 100 points. Investors were encouraged by the possibility of early launching of a round of monetary easing policy(QE3) in the United States, as it was stated in the minutes. However, the optimism on the market was short-lived. On Thursday the statement of the chairman of the Federal Reserve Bank, St. Louis James Bullard, followed. He said that the U.S. economy had improved in August and at that moment there wasn’t a good enough reason to start new stimulus measures. Against the background of the message the exchange rate of AUDUSD once again resumed the downward movement that is continuingtoday.

2. Important levels (support and resistance)

The initial resistance level of AUDUSD is 1.0418 and the support level is 1.0375. At the moment it is most likely that the downward price movement continues and goes to the target levels of 1.0331 and 1.0303. Also it is necessary to note that the annual symposium of the world's largest central banks will be held on Friday in the U.S. If on this forum the Fed still decides to launch QE3, the turn can happen and the upward price movement can start and go to the resistance levels of 1.0514 and 1.0602.

3. Best entry/exit points

The breakdown and consolidating of the price below the support level of 1.0375 will be the signal to open short positions. In this case, it is wise to enter the market at the level of 1.0366 with setting a protection order around the resistance level of 1.0418. In case if the market implements the second scenario, it is possible to open orders for buying, if the price is fixed above the resistance level of 1.0418, protective orders can be set around 1.0360.

4. Supporting facts

Currently the support is provided by the high prices of raw materials, the crude oil BRENT has been trading around 114-115 U.S. dollars per barrel for almost three weeks. Prices of silver and gold, which Australia is the leading supplier of, have also been growing the third week in a row. It should be noted that Australia is one of the few countries that still retains the highest long-term credit rating of "AAA". Government bonds of the country are in high demand among investors, which also affects the strengthening of AUD. On the other hand the Australian currency is being pressed by the ongoing crisis of the European economy. Thus, the level of unemployment in the European Union in June crossed 11%, the total number of unemployed exceeded 18 million people. Experts also expect the new decrease of the rate of private loans in the euro area and reduction of GDP in Spain for the second quarter of this year.

5. Indications of technical indicators

In the daily chart the indicator "Bollinger Bands" does not give us clear signals, however the moving average line is directed downward, which can mean a weak signal of the continuation of the downtrend. In addition the price chart is at the lower line of the indicator, which creates the possibility of opening short positions for buying. Histogram MACD is in the positive area and crosses the signal line top-down, which indicates a change of the upward trend by the downward trend and gives a signal to sell. In addition, the price chart continues forming a double M-shaped peak, which may indicate a decrease of AUDUSD to the level of 0.9695 in the long term.

 

[LF.Anastasia]

28.08.2012

Analysis and forecast of the currency pair GBPUSD

1. The current dynamics of GBPUSD

The Bank of England's Chief Economist Spencer Dale said that UK investors had benefited from the lowering of interest rates to the lowest levelon recordand the bond purchasing program of the central bank, as those measures prevented a deepereconomic collapse. The stimulus also halted asset prices from falling, which otherwise they might have had during the economicrecession, protecting the value of savings and investments in financial assets, Dale said in The Sunday Telegraph in London. Britain "is still under the influence of the financial crisis," he said. The objectives of monetary policy aretostimulate the economy, to return it to a state of steady growth, low inflation and a "more normal level ofinterest rates."

2. Important levels (support and resistance)

GPBUSD fell by 100 points for Thursday and Friday. At the moment the pair is being traded around 1.5790.The nearest resistance levels are 1.5790 and 1.5820, if they are broken then the price will rush to the nextkey level of 1.5865. The main purpose of "Bulls" is the level of 1.5674 but before they will need to overcome the support levels of 1.5754 and 1.5729.

3. Best entry/exit points

The most likely scenario is further depreciation. In this case, it is better to enter the market in the area of ​​1.5745 with a stop loss 1.5765. If the price goes even lower then short positions should be opened at the level of 1.5715. If the support levels are strong enough and the course begins to grow it is better to open long positions at the levels of 1.5805 and 1.5830 with placing protective orders at the levels of 1.5780 and 1.5710.

USDCAD. Analysis of the current situation and the near-term outlook

1. Current dynamics of USDCAD

The pair USDCAD opened the trading week with reduction of the rates. The price tested the local level of support 0.9891, however “bears” haven’t been fixed below it yet, and after a technical correction the price continues to test the same level of support again. Strengthening of the Canadian dollar against the U.S. counterpart occurs amid unconvincing economic statistics from the U.S. and the worsening of the economy in European countries. The situation in Spain looks particularlylamentable; GDP in Spain fell by 0.4% in the second quarter of this year compared to the first quarter and by 1.3% year on year. It is not surprising that investors prefer to invest in currency more stable than EUR or USD, which today is the Canadian dollar.

2. Important levels (support and resistance)

Currently, the initial resistance level is the level of 0.9212 and the support level is the level of 0.9891. Apparently the latter will be taken in the near future and "bears" will have a new goal – the support level of 0.9850. Gradual price decrease to this level is the most likely. However, we can’t completely rule out a market correction. So on Wednesday, the new values ​​of the commodity price indexand the producer price index will be published in Canada. If they don’t satisfy the investors, upward price movement to the resistance level of 0.9912 is possible. And in case this level is broken down, the movement to the level of 0.9941 is possible.

3. Best entry/exit points

In case if the market implements the first scenario, it would be reasonable to open a position at the level of 0.9886 with setting protective orders around 0.9915. A breakdown of the resistance level 0.9912 will be the signal to open long positions; in this case it’s possible to open a position at the level of 0.9917, with setting protective orders around 0.9884.

4. Supporting facts

Canadian currency is under pressure of the oil market; today the prices of BRENT fell to two-week minimum and they are being traded around 112 U.S. dollars per barrel. Canadian economic statistics looks also unsatisfactory; in June the volume of retail sales in the country fell by 0.4% to 38.7 billion Canadian dollars.

5. Indications of technical indicators

On the daily chart the indicator "Bollinger Bands" does not give us clear signals, however, the reversal of the price chart to the moving average can be interpreted as a weak signal of continuation of the downtrend. Histogram MACD is below the zero line, confirming the downward trend, however, it crosses the signal line bottom-up, which gives a signal to open positions for buying. Also it should be noted that the price chart of USDCAD has features of double-bottom formations, so one can assume that the price can make a reversal at the levels of 0.9855-0.9850 and have a long-term upward trend.

 

[LF.Anastasia]

29.08.2012

Analysis of dynamics BRENT

1. Current trend of crude oil BRENT

The chart of the M30 shows that the oil resumed growth after its recentdecrease to 2-week minimum of 111.54 on Monday. The main growth catalyst of the Brent oil price was the reduction of the oil production due to the hurricane, "Isaac." The oil production was cut by 93% on Tuesday because of the approaching hurricane. However, "Bulls" failed to gain a foothold above 113.05 and the oil price began to fall again due to the technical correction and profit fixation continuation. On Wednesday, the oil price is influenced by the data on the American Petroleum Institute (API) about the increase of raw materials stocks in warehouses of the USA. According to the API, for the last week the oil stocks rose by 5.5 million barrels, while the fuel stocks decreased by 2.4 million barrels. The official data on the crude oil stocks will be published at 17:30 (GMT +2). Many analysts agree that the data will point to the reduction of the oil reserves by 1.45 million barrels. It should be noted that the ministers of Finance of the Great Seven in their joint statement, estimated the situation in the oil market as negative. They call to increase the production volumes and they do not exclude the possibility of intervention on the part of the International Energy Agency (IEA), which can reduce the rate of oil.

2. Important levels (support and resistance)

In case of further decrease the first support level will be 111.40, from which the further decrease to 110.25 and then to 109.20 is possible.
In case the upward movement is resumed the important resistance levels will be: 113.08, from which it will continue to grow to 114.05 and then to 115.45.

GOLD: ANALYSIS AND FORECAST

1. Current dynamics of the pair XAUUSD

Gold is being traded below the yesterday’s marks, continuing the correction which started on Monday, but the general mood for the precious metal remains positive as investors intend to buy.
It is likely that at year-end the growth in world gold prices will be the rapidest in the past 24 months; this expectation is based on the possibility that the U.S. and China still will start further stimulation of the economy in the nearest future. Players continue to increase their investments in gold; in August investments have increased by more than 1.6 million ounces which is the highest growth rate in one month (and the month is not over yet) since October last year. The third round of quantitative easing will be a great event for the gold. QE3 tends to weaken the U.S. dollar, to decrease real interest rates and to increase commodity prices –a triple incentive to increase the precious metals prices.

2.Important levels (support and resistance)

At the moment the pair is being traded around 1665.00; the nearest support levels are 1663.00 and 1657.00.
But the main goal of "Bears" is the level of 1657.00 with further perspective to 1647.00.
The target level for "Bulls" is the level of 1675.00, which has been the maximum for the last four months.

3. Best entry/exit points

The most likely scenario is the further growth of the gold rate. In this case, a good entry point is the level of 1679.00 with placing the stops at 1670.00.
If the price rolls back in the opposite direction, it is better to open short positions at the levels of 1654.00 and 1645.00 with protective orders at the levels of 1660.00 and 1651.00.

Forex: Ichimoku Clouds. Overview AUDUSD

AUDUSD, H4

Let’s consider the four-hour chart. The Tenkan-Sen line is below the Kijun-Sen, the price is between them. The Chinkou Span line is below the price chart, the current cloud is downward. There is a strong resistance level at around 1.0444 (Kijun-Sen), the support level–Tenkan-Sen (1. 0368).

AUDUSD, D1

On the chart with timeframe D1 the price chart fell below the Tenkan-Sen and the Kijun-Sen and it approaches the top of the cloud. The Chinkou Span line crossed the price chart in the top-down direction; the current cloud is still upward. The support level – Senkou Span A (1.0239), the resistance level – Kijun-Sen (1.0395).

Key Levels

The support levels: 1. 0368, 1.0239.
The resistance levels: 1.0444, 1.0395.

Trading Recommendations

Downward movement will be confirmed after crossing the lines Tenkan-Sen and Kijun-Sen on the daily chart. It will be a signal to open short positions.

Anastasiya Glushkova
Analyst of LiteForex Group of Companies