LiteForex's analytics

[LF.Anastasia]

30.08.2012

EURUSD. OVERVIEW

1. General dynamics

On Wednesday, EUR couldn’t gain a foothold above the key resistance level of 1.2584. At the moment, EUR is losing its ground against the U.S. dollar. The single European currency is mainly pressed by the rumor that the Fed will not make a unanimous decision on the launch of the new stimulus package, which substantially makes the large institutional players reconsider its positions in favor of the dollar or another financial asset. Thus, the US GDP statistics turned out to be better than analysts' forecasts and amounted to1.7% in the second quarter against 1.5%, which reflects a gradual recovery of the American economy without additional stimulating measures. Meanwhile, the U.S. consumers don’t feel confident and don’t rush to increase purchasing power, which influences negatively all sectors of the economy. Obviously, in this background, the European economy is slightly losing to the U.S. economy, so today it’s been announced that two Spanish regions were forced to ask for financial support in the amount of 4 billion euros to stabilize the economic situation, which has a negative impact on the euro.

2. Important levels (support and resistance)

The main resistance levels: 1.2553, 1.2584,1.2616.
The main support levels: 1.2496, 1.2465, 1, .2434.

3. Best entry/exit points

Good entry point to buy will be the level above resistance around 1.2553, with protective orders around 1.2525.
To sell – onlylower than thelevel of -1.2496 withprotectiveorders-1.2530.

NZDUSD. Strengthening of the U.S. economy threatens "New Zealander" with a drop

1. Current dynamics of NZDUSD

The course of the currency pair NZDUSD has been maintaining downtrend the whole week. On Wednesday, it dropped to the lowest level since the end of July and now it’s being traded near the important support level of 0.8000. Strengthening of the U.S. dollar to NZD can be explained with good economic statistics published in the United States. In the second quarter GDP growth rate amounted to 1.7% year on year, which is 0.2% more than a preliminary estimate. Also on Wednesday, the Federal Reserve published a report on the state of the U.S. economy, the so-called "Beige Book"; according to it the U.S. economy continues to recover, thanks to the growing sales of automobiles and real estate.

2. Important levels (support and resistance)

The initial resistance level at the moment is the level of 0.8018, and the level of support is a strong level of 8.0000. Flat is possible in this range during the day, however, the most likely scenario in the market, in our opinion, is the continuation of a smooth downward price movement of NZDUSD to target level of 0.7983, and in case of its breakdown, to the level of 0.7923. However, still there is a possibility of the price reversal and its upward movement to the resistance levels of 0.8042 and 0.8075.The reversal may occur if on Friday at the annual symposium of heads of the world's largest central banks, Fed Chairman Ben Bernanke announces about the launch of the program QE3. However, the probability of such a decision on the part of the Fed is very small.

3.Best entry/exit points

In case of the price fixation below the resistance level of 0.8000, it will be reasonable to open short positions at the level of 0.7995, placing protective orders around 0.8042. The signal to open positions for buying will be a breakdown of the resistance level of 0.8018. In this case, you can enter the market at the level of 0.8024, placing protective orders around 0.7980.

4. Supporting facts

NZD is being supported by the high commodity prices; although the CRB index suffered a slight drop last week, now it is growing again. The oil prices have fallen this week from 115 to 112 U.S. dollars per barrel which seems to worsen the picture a bit. It is also necessary to note that this week the New Zealand dollar has given up its positions against other world currencies EUR, JPY and AUD.

5. Indications of technical indicators

On the daily chart the indicator "Bollinger Bands" does not give us clear signals, however weak divergence of the lines can be interpreted as a signal of the current downtrend strengthening. Histogram MACD is above the zero line and may soon cross it having formed a signal to sell. At the same time the histogram crosses the signal line top-down, which gives a signal confirming a price drop.

Forex: Ichimoku Clouds. Overview GBPUSD

GBPUSD, H4

On the four-hour chart the line Tenkan-Sen crosses Kijun-Sen bottom-up, both lines are horizontal. The price chart failed to break down the cloud top and it continues to move along the line Senkou Span A. The Chinkou Span line is approaching the price chart from below, the current cloud is upward. A strong level of support is Senkou Span A (1.5820-1.5830). The resistance level will be the last extremum of the line Chinkou Span (1.5836).

GBPUSD, D1

Let’s consider the daily chart. The Tenkan-Sen line is above the Kijun-Sen line. The Chinkou Span line is above the price chart, the current cloud is upward. The support levels: Tenkan-Sen (1.5793) and Kijun-Sen (1.5684).

Key Levels

The resistance levels: 1.5836.
The support levels: 1.5820-1.5830, 1.5793, 1.5684.

Trading Recommendations

On the chart with a smaller timeframe, a possible downward movement needs to be confirmed with overcoming of the support level Senkou Span A. On the daily chart the price will have to drop below the Tenkan-Sen (1.5793) and Kijun-Sen (1.5684) in order to reverse the trend.

Anastasiya Glushkova
Analyst group of companies LiteForex

 

[LF.Anastasia]

31.08.2012

GOLD: ANALYSIS AND FORECAST

1. Current dynamics of the pair XAUUSD

On Thursday, gold prices showed a downward trend amid quiet trading. At this point, investors are not taking any action, anticipating the speech of the head of the U.S. Federal Reserve Ben Bernanke. At the end of trading on COMEX, Gold futures prices fell by 5.90 dollars, or by 0.4%, to 1657.10 dollars per troy ounce. Another supporting factor of this dynamics is the strengthening of the U.S. dollar.

2. Important levels (support and resistance)

Today, the most important resistance level is the maximum of 4 months –1675.00; in case of its capture, the next target for "Bulls" will be the level of 1690.00. The support level will be the level of 1655.00; the next support line is at 1635.00.

3. Best entry/exit points

The level of 1760.50 with setting protective orders at the level of 17,654.50 can be considered as a good entry point with the contracts for purchasing. To perform sale transactions you can use the level of 1649.50 with placing protective orders at around 1656.00.

4. Supporting facts

Taking into consideration the importance of the upcoming speech of the Chairman of the Federal Reserve System, no matter which statement is voiced by Bernanke, the market reaction is expected to be quite stormy. If the head of the Federal Reserve informs about the third stage of the quantitative easing policy, it will be a clear signal for "Bulls." However, some analysts fear that these hopes are exaggerated and gold prices can drop sharply if Bernanke disappoints.

USDJPY. Technical Analysis

1. Current dynamics of USDJPY

The hourly chart shows that the pair USDJPY has been trading sideways for the second week. MACD histogram indicator is in the negative zone and below the signal line, pointing to the possible decline. In turn, the Stochastic Oscillator shows the growth of the rate –% K line crosses % D line bottom-up. Thus, both indicators give conflicting signals, confirming the current uncertainty.

2. Important levels (support and resistance)

At the moment, the pair is being traded near the level of 78.45 which is the level of support. The next support levels are 78.35 and 78.27 –the latter is the main target for "Bears." The nearest resistance level is 78.70. 78.80 –target level for "Bulls."

3. Best entry/exit points

In this situation, to enter the market is not recommended until one of the key levels is broken. It’s better to open short positions at the level of 78.15 with stop-losses around 78.55. Long positions are worth opening at 78.90 with setting protective orders at 78.70.

AUDUSD. The Australian dollar is strengthening temporarily

1. Current dynamics of the pair AUDUSD

During the trading week AUDUSD has been maintaining a downward trend and by the middle of the week the pair lost more than 100 points. But on Thursday, after the publication of some positive economic statistics, the Australian dollar began to strengthen. "Bulls" managed to break the resistance level of 1.0300, and now the price is steadily moving to the next target at around 1.0335.

2. Important levels (support and resistance)

At the moment, the major resistance level is the level of 1.0335 and the support level is the level of 1.0275. If "Bulls" overcome the level of 1.0335, the price can rise to the level of 1.0384, but this option is unlikely. Apparently, the strengthening of the Australian dollar is only temporary, as investors' appetite for riskremains not high. At the beginning of the next week, it’s most likely that the rate will resume to fall to the support levels of 1.0275 and then to the level of 1.0197. Also it should be noted that the correction of AUDUSD is possible after the symposium of heads of major world’s central banks, which will be held on Friday in the U.S.

3. Best entry/exit points

The breakdown of the resistance level of 1.0335 will be the signal to open buy orders, in this case it would be reasonable to enter the market at the level of 1.0344 placing protective orders at around 1.0260. In case if the market implements the second scenario and the price breaks down the support level of 1.0275, you can open sell orders at 1.0268 setting protective orders around 1.0345.

4. Supporting facts

The Australian dollar is being supported by commodity prices. Oil prices are growing slowly after falling on Monday, at the moment BRENT crude oil is being traded around 113 U.S. dollars per barrel. The gold market is experiencing a small correction; the metal is now being traded at around 1660 U.S. dollars per troy ounce. Investors are pleased with Australian economic statistics; investment in equipment and construction increased by 1.2% and 4.8% respectively in the second quarter of this year. But the Australian stock market is disappointing, the index S&P/ASX 200 has been downward the second week in a row.

5. Indications of technical indicators

On the daily chart the indicator "Bollinger Bands" shows divergence of thelines, which can be interpreted as confirmation of the existing downtrend. Histogram MACD is in the positive area, but soon it has to cross the zero line top-down and form a signal to sell. At the same time histogram crosses the signal line top-down, indicating continuation of the price drop.

 

[LF.Anastasia]

03.09.2012

Forex: Ichimoku Clouds. Overview USDCHF

USDCHF, H4

On the four-hour chart the price is below the cloud and below the lines Tenkan-Sen and Kijun-Sen. The Chinkou Span line is below the price chart, the current cloud is downward. The resistance levels are Tenkan-Sen (0.9557) and Kijun-Sen (0.9568).

USDCHF, D1

Let’s consider the daily chart. The Tenkan-Sen line is below the Kijun-Sen line and it’s going down sharply. The Chinkou Span line is under the price chart. The Senkou Span A line crosses Senkou Span B top-down, which means that the current cloud changed its direction to downward. The price chart broke the bottom of the cloud. The support level is one of the previous extremes of Chinkou Span (0.9483).

Key Levels

The support level: 0.9483.
The resistance levels: 0.9557, 0.9568.

Trading Recommendations

The four-hour chart shows further downward movement. On the chart with large timeframe we can see confirmation signal from the lines Senkou Span A and Senkou Span B: overturn of the cloud.

Anastasia Glushkova
Analyst of the group of companies LiteForex

BRENT: ANALYSIS AND FORECAST

1. The current dynamics of BRENT crude oil

World prices of October futures for North Sea Brent crude oil mix at the end of Friday's trading showed an increase of $ 1.92 to 114.57 dollars per barrel. This increase in oil prices occurred after the statement of the U.S. Federal Reserve Chairman Ben Bernanke. The Fed chairman did not rule out the possibility of launching a new round of quantitative easing (QE) to support the economy. "Taking into account the uncertainty and limitations inherent in the instruments of monetary policy, the Federal Reserve will apply additional stimulus measures, if it’s necessary and to the necessary extent, to support the economic recovery and sustainable improvement in the labor market in the context of price stability," - said Bernanke, concluding his speech.

2. Important levels (support and resistance)

At this point the support and resistance levels are the following. The main purpose of “Bulls” is still the level of 106.70, in case of new ideas on the market and the subsequent overcome of this level, the priority will be the level of 120.00. The level of support will be 200MA (111.40), and if it’s broken the next level will be 104.00.

3.Best entry/exit points

Currently, oil is being traded in a channel from the support level of 111.40 to the resistance level of 116.70. On the assumption of the current market conditions it’s better to enter with contracts to purchase at the level of 114.60 and with contracts to sell at 116.30.

4. Supporting facts

A possible catalyst to overcome the current level of resistance for “Bulls” can be the meeting of the ECB, which will be held on September 6. Currently, the management of the monetary authorities in Europe is developing a new program of buying government bonds of indebted countries to reduce their yield. It is expected that M.Dragi will present details of the program at the meeting. The situation in Iran remains open; toughening sanctions for Iran can lead to higher prices for "black gold."

AUDUSD: Review

1. The current dynamics of AUDUSD

AUDUSD opened today with a gap down. There are several reasons for the decrease in rate; the key reasons are the lack of claims about holding a third round of quantitative easing, QE3, and weak data on manufacturing PMI in China. Macroeconomic statistics on the U.S., which, in the opinion of the Fed chairman, is not "crisis", reduced the need to launch a new round of QE. However, Bernanke mentioned weak economic growth and a high level of unemployment in the U.S.; according to Bernanke the Fed is ready to take steps as the need arises.The Australian dollar is pressed by the negative news from China. China's PMI index has become a minimum of 9 months and amounted to 49.2, indicating a decline in growth of the Chinese economy. Since China is one of the largest raw materials markets, the problems in the Chinese economy will put pressure on the Australian dollar.

2. Important levels (support and resistance)

In case of further downward movement of the first support level will be 1.0239, from this level the decline will continue to 1.0214 and then to 1.0177.
In case of upward movement the first resistance level will be 1.0299 from this level the decline will continue to 1.0354 and then to 1.0398.

Analysis and forecast of USDJPY

1. Current trend of USD / JPY

The U.S. dollar fell as the Federal Reserve Chairman Ben Bernanke spoke in favor of unprecedented measures and made the case for further monetary stimulus to fight unemployment.
The currency weakened as at the annual conference in Jackson Hole, Wyoming, Bernanke said that unemployment is a "major concern" and that further bond purchases for quantitative easing should not be excluded. The dollar also fell as the reports showed that business activity in the U.S. has been increasing more slowly this month and the demand for U.S. goods fell in July.
The fact that he said that quantitative easing had worked in the past, and that it helped the economy, means that he tends to increase the easing. Many people were expecting something more specific in terms of signalling, but all he said lets us assume that he is more inclined to QE3. USD fell by 0.3% to 78.39 yen. As it can be seen on the daily chart, USD / JPY has been steadily falling since March.

2. Important levels (support and resistance)

Now USD / JPY is being traded near the level of 78.36. The support level of 78.00 is the main target for "Bears."
They have repeatedly tried to overcome this level, but their attempts were unsuccessful. For "Bulls" the nearest resistance level is - 78.90 with further perspective to 80.00.

3. Best entry/exit points

"Bears" are unlikely to overcome the level of 78.00 and the most likely scenario is correction and growth of USD / JPY. Therefore it is better to enter the market around the levels of 79.15 and 80.15 with protective orders 78.70 and 79.65. It makes sense to place pending Sell-stop orders below 78.00.