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Brent: general review Current trend The price of Brent has been growing since the beginning of this week. Yesterday, Brent had reached 2-month highs at the level of 110.66; however the “bulls” were not able to consolidate above this level so far. In addition to the geopolitical factor, crude oil Brent is supported by the Chinese news that preliminary index of industrial activity has grown up to 49.7 points in May, which is the highest level for the last 5 months. The price of oil was also supported by the minutes of the US Fed meeting, which were released on Wednesday. The minutes have confirmed that interest rates will remain at the previous levels. The data on housing sales in the USA, which is scheduled for the release today (17:00 GMT+3), will be of investors’ interest. Support and resistance Brent is trading at the high levels and the “bulls” need strong fundamental support in order to raise the rate to the higher level. On the four-hour chart Bollinger bands are diverging, indicating upward movement. The price has broken down the upper line, which suggests possibility of corrective movement to the level of 109.70. MACD histogram is in the positive zone; however its volumes are decreasing. It is likely that the instrument will continue to trade in the range of 109.70-110.66. Support levels: 110.25, 109.60, 108.95 and 108.00. Resistance levels: 110.66, 111.00 and 112.00. Trading tips It is advisable to open short positions at the current price with the nearest target of 109.70. Buy positions can be opened in the upward correction from the support level of 109.70.
Vadim Smarzh Analyst of LiteForex Investments Limited
Forex: Ichimoku Clouds. Review of USD/CHF USD/CHF, H4 On the four-hour chart Tenkan-sen line is above Kijun-sen, they are both horizontal. Chinkou Span line is above the price chart, current cloud is ascending. Despite all the corrections the pair is slowly rising. Tenkan-sen line is the closest support level (0.8947). One of the previous maximums of the Chinkou Span line is expected to be a resistance level at 0.9015.
USD/CHF, D1 Let’s look at the daily chart. Tenkan-sen line is above Kijun-sen, both lines are directed upwards. Chinkou Span line has crossed the price chart from below, current cloud is descending. The pair has broken through the cloud and is still growing. Tenkan-sen line becomes a support level (0.8919). One of the previous maximums of the Chinkou Span line is expected to be a resistance level at 0.9005.
Key levels Support levels: 0.8947, 0.8919. Resistance levels: 0.9015, 0.9005. Trading tips Both charts confirm Bullish trend. Targets for the long positions are 0.9015 and 0.9005. Anastasiya Glushkova Analyst of LiteForex Investments Limited
GBP/USD: uptrend will shift to the sideways movement Current trend Yesterday’s British data has chilled out investors’ enthusiasm. British GDP has remained at the previous level and the Pound started to decline slowly against the USD. On the other hand, the American currency is supported by the plan of the US Fed to completely abandon soft monetary policy. Important U.S. and UK news is not scheduled for the release today. Movement in the pair will be guided by the investors’ sentiments. Support and resistance In order to break down the local highs and key resistance level of 1.7000, the pair needs strong momentum. Changes in the monetary policy of the Bank of England or the rise in the interest rate can act as such momentum. However, Mark Carney gave to understand that British economy needs time for full recovery and the interest rate is not going to be changed until 2015. In the medium-term the pair may shift to the sideways movement with the range of 1.6800-1.7000. Support levels: 1.6800, 1.6730, 1.6650 and 1.6000. Resistance levels: 1.6850, 1.6920, 1.7000, 1.7050 and 1.7100. Trading tips In the current situation it is advisable to place long positions and pending long positions from the level of 1.6800 with take profit at 1.7000.
Dmitry Likhachev Analyst of LiteForex Investments Limited
GBP/USD: The pair will stay in the upward channel Current trend At the end of last week the price of the pair GBP/USD has declined. In advance of the release of the British GDP, investors started to buy British currency. However, as soon as it became clear that the predictions were correct, the demand for the Pound has sharply dropped and the pair started to decline. Economic growth rate in the UK is slowing down, and in the situation when the Pound is significantly overbought, even minor decline in the economic indices can trigger strong pressure on the British currency. However, it is worth noting that the USD is also weak; that is why the pair is still near the local highs. The data on the US labour market was again below the forecast. It is the bank holiday in the UK and the USA, which means that the high volatility is not expected. Support and resistance It is expected that soon upward movement will shift to the sideways trend in the range of 1.7000 – 1.6810. Strong fundamental catalyst is required in order to break down important psychological level of 1.7000 and the USD is not strong enough to break down the bottom limit of the ascending channel. In the medium-term the pair will move in the sideways channel and may break down the local highs, in case the Bank of England reduces the volume of quantitative easing program or raises the key interest rate, Support levels: 1.6810, 1.6760, 1.6660 and 1.6600. Resistance levels: 1.6850, 1.6920, 1.6950, 1.7000 and 1.7100. Trading tips In the current situation it makes sense to place pending short orders from the level of 1.6810 with take profit at the level of 1.7000 and stop-loss at the level of 1.6790.
Dmitry Likhachev Analyst of LiteForex Investments Limited
AUD/USD: general analysis Current trend The Australian dollar has reached the two-week highs at the end of last week and stopped near support level of 0.9215, which is not surprising, considering the recent statement of the Australian authorities. Two weeks ago it was announced about the raise of the pension age, reduction of the welfare benefits, increase of taxes, and dismissal of some of civil servants. These measures was the reaction of the government to the government budget deficit, which amounted to 3.1% of GDP Important news from Australia is not scheduled for release this week. However, attention should be paid to the data on sales of new houses in Australia in April, which will be known on Wednesday. Support and resistance Indicator “Williams’ Percent Range” with the period 30 is in the oversold zone with the figure of -86. Moving average line with the period 70, which can act as an additional support level for the price, is located at the level of 0.9215. It the near future the Australian currency may experience upward correction to the level of 0.9280. From this level the price may reverse and decline to the levels of 0.9215 and 0.9110. The nearest resistance level is 0.9280. The nearest support level is 0.9215. Trading tips With consideration of possible correction to the level of 0.9280, it is recommended to open short positions from the level of 0.9240 with stop-loss at the level of 0.9280 and the target of 0.9110.
Aleksey Dzhaman Analyst of LiteForex Investments Limited
EUR/USD: review and forecast Current trend At the previous trading session Euro has slightly grown. It seems that the pair found support at the level of 1.3614 and the “bears” have not been able to go below this level so far. Yesterday European currency was supported by positive German macro-economic data on consumer confidence index in June, as per Gfk. The index remained at the previous high level of 8.5 points, as had been expected by the experts. Today investors are waiting for the speech of Mario Draghi, the head of the European Central Bank that may affect the rate of EUR/USD. Market participants will also pay attention to business activity index in the manufacturing sector in Richmond, US for May and business activity index in the US service sector for May. Support and resistance On the four-hour chart Bollinger bands are diverging, which confirms that upward movement will continue. MACD histogram is in the negative zone; however its volumes are rapidly decreasing, indicating the rise in rate. Both indicators demonstrate weak signals of the rise in price; however it is too early to expect the formation of the upward trend. Resistance levels: 1.3668, 1.3690 and 1.3722. Support levels: 1.3640, 1.3614, 1.3560 and 1.3530. Trading tips Orders to buy can be placed after breakdown of the level of 1.3668 with the targets of 1.3690 and 1.3722. Given general downtrend it is likely that the price will slowly go down to the level of 1.3614 and may even reach the level of 1.3560.
Vadim Smarzh Analyst of LiteForex Investments Limited
USD/JPY: technical analysis Current trend Last week the pair had reached the local highs at the level of 100.80. Last time the price has been at this level this February. After the failure to break down this level last week, downtrend in the pair has shifted into the uptrend. Last Friday trading session completed at the level of 101.95. Yesterday, trading was sluggish in the narrow sideways channel. It is likely that the pair will be able to reach the level of 102.20; however, further growth is hardly possible without additional drivers. Technical indicators give mixed signals. Average moving lines with the periods of 20 and 50 act as support levels and are being tested by the price. If the price does not break down these levels, it will give us a buy signal. MACD histogram is near the zero line. Stochastic is directed downwards, indicating the decline. Support and resistance Support levels: 101.80, 101.65, 101.50 and 101.30. Resistance levels: 101.95,102,2 and 102.35. Trading tips It makes sense to open short positions below the level of 101.65 with the target of 101.00. It is also advisable to place limited sell orders at the level of 102.20. Long positions can be opened above the level of 102.35.
Ilya Lashenko Analyst of LiteForex Investments Limited
EUR/USD: Weak US statistics can trigger the decline in quotes Current trend Last week European currency continued to decline, breaking out several key support levels. Weakening in the European currency is associated with low inflation and poor macro-economic statistics. In addition, election to the European parliament also increased pressure on the pair. At the beginning of this week the pair traded near three-month lows. The fact that upward correction has not occurred, suggests that investors’ interest to Euro is low. Today mixed statistics of the largest EU economics have been released. It became known that unemployment rate in Germany has remained at the previous level while the number of unemployed has increased. Consumer spending in France has declined. Tomorrow is a Banking Day in EU, so news from there is not expected, at the same time preliminary US GDP for Q1 will be published. According to the forecast, American GDP can be revised to the negative value. Support and resistance High volatility is not expected today due to lack of important macro-economic news. Breakout of the key support level of 1.3600 is unlikely; however significant ascending correction is not expected either. If the US GDP forecast proves to be correct, the USD can significantly drop, demand for the USD may decrease, and in this situation European currency can regain some of the losses and go up to the level of 1.3720. Support levels: 1.3600, 1.3520, 1.3470 and 1.3400. Resistance levels: 1.3660, 1.3720, 1.3770 and 1.3800. Trading tips In the current situation it makes sense to place pending sell orders from the level of 1.3720 with take profit at the level of 1.3470 (1.3400) and stop-loss at the level of 1.3790.
Dmitry Likhachev Analyst of LiteForex Investments Limited
USD/СHF: The pair may undergo correction Current trend The currency pair USD/СHF continues to trade in the upward channel. Today the pair has reached three-month highs at the level of 0.8982. Even strong data on Swiss GDP for Q1 was not able to halt the rise in quotes. On the annual basis this index has reached the level of 2.0%, which was above experts’ expectations. Due to lack of the important news today, trading will not be volatile; quotes may slowly go up to the levels of 0.9000 and 0.9030. However, on Thursday, the pair can undergo significant correction to the levels of 0.8960 and 0.8936, as on this day preliminary US GDP for Q1 will become known. It is expected that the index will drop by 0.2%, which will add pressure on the American currency. Support and resistance Technical indicators demonstrate that the pair will continue to rise. Bollinger bands are directed upwards. MACD histogram is in the positive zone; its volumes are increasing. Stochastic lines have crossed and are rising now. Important resistance levels: 0.8982, 0.9000 and 0.9030. Important support resistance levels: 0.8960 and 0.8936. Trading tips In the present context, it makes sense to open long positions from the current level of price with take profit at 0.9000. Pending orders to sell can be placed at the same level with take profit at the level of 0.8936.
Dmitriy Zolotov Analyst of LiteForex Investments Limited
GBP/USD: following the decline the Pound has begun to win back losses Current trend This week the British currency has been under pressure, demand for the Pound continues to drop; while moderately positive US statistics has added support to the USD. Yesterday, the pair broke out key resistance level of 1.6785 and bottom limit of the ascending channel. In order to go back to the upward channel, the Pound needs investor support and favourable macro-economic statistics that will confirm stability of the British economy and enable the rise in the pair. Today, US GDP will become known; according to forecast GDP will be revised to the negative value. Support and resistance British macro-economic calendar is uneventful today; therefore movement in the pair will depend on the American news. It is likely that following significant decline in the overbought Pound, the pair will regain and go up to the local highs of 1.6950 and 1.7000. However, this scenario can be feasible only with the help of positive momentum. In the medium-term the pair may go to the key support level of 1.6660 and after that rise up to 1.6810. Support levels: 1.6660, 1.6600 and 1.6500. Resistance levels: 1.6760, 1.6810, 1.6920, 1.6950 and 1.7000. Trading tips In the current situation it makes sense to place pending orders to buy from the level of 1.6510 with take profit at the level of 1.6650.
Dmitry Likhachev Analyst of LiteForex Investments Limited