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USD/СAD: the pair is likely to undergo downward correction Current trend This week the currency pair USD/CAD has been trading in the range of 50 points. Investors are waiting for the key statistic data on GDP in the US and Canada for Q1. It is expected that both indices will be negative. As per preliminary forecast, American GDP can decline by 0.2%, while Canadian GDP will grow only by 1.8%, which is below the previous value. Support and resistance It is expected that in the near future the price of the pair will go down to 1.0860 (middle moving average line of “Bollinger bands” indicator.) From the level of 1.0838, the pair may reverse and resume upward movement to the levels of 1.0880 и 1.0910. Technical indicators demonstrate mixed signals. MACD histogram is ready to move to the positive zone and form a buy signal. Stochastic lines are directed downwards, confirming downtrend. Trading tips In the current situation it is advisable to open short positions with the target of 1.0838, if the price breaks down the level of 1.0860. Pending buy orders can be placed at the level of 1.0838 with the target of 1.0880.
Dmitriy Zolotov Analyst of LiteForex Investments Limited
EUR/USD: European currency is still under pressure Current trend European currency is still under pressure; investor interest to Euro has dropped due to rumours about probability of expansion of monetary incentive measures. The pair did not respond to yesterday’s negative data on the US GDP, which was below negative expectations. Today the pair continues to trade near the key support level of 1.3600. Weak data of retail sales with seasonal fluctuations in Germany has prevented the rise in the pair. Attention today shall be paid to important US news, including the data o=n personal expenses and Chicago consumer confidence index (PMI). Support and resistance In the medium-term European currency will remain under pressure. The decline in Euro will be halted by the weakening gin the USD, which will not receive positive momentum for the rise. Today, high volatility is unlikely; the pair will continue to trade in the narrow sideways channel. In case of negative American data the pair may undergo upward correction. In the future the pair may go down to the target level of 1.3520 (1.3470). Support levels: 1.3600, 1.3520, 1.3470 and 1.3400. Resistance levels: 1.3660, 1.3720, 1.3770, 1.3810, 1.3900, 1.3960 and 1.4000. Trading tips In the current situation it is advisable to place pending sell orders from the levels of 1.3660 and 1.3720 with take profit at the level of 1.3470 and stop-loss at 1.3750.
Dmitry Likhachev Analyst of LiteForex Investments Limited
Forex: Ichimoku Clouds. Review of USD/CHF USD/CHF, H4 On the four-hour chart Tenkan-sen line is below 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. Kijun-sen line is the closest support level (0.8961). 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 horizontal. Chinkou Span line is above the price chart, current cloud is ascending. The pair has broken through the cloud and is still growing. Tenkan-sen line becomes a support level (0.8943). One of the previous maximums of the Chinkou Span line is expected to be a resistance level at 0.9005.
Key levels Support levels: 0.8961, 0.8943. 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: decline or return to the upward channel? Current trend As expected, following significant decline at the end of last week, the Pound started to win back losses last Friday. Investor interest to the British currency started to grow again and the pair rose to the level of 1.6785. However, due to today’s weak data on manufacturing activity index, the pair fell again to the local lows. PMI fell below the negative value, amounting to 57 points. The oversold USD gets investor support, despite negative statistics. Investors try to get rid of the risky assets in favor of the American currency. Attention today shall be paid to the American news: business activity index in the manufacturing sector and the data on construction sector will become known. Support and resistance Despite the fact that the chart demonstrates downward channel and the Pound is still overbought, there is a high chance of ascending movement with the targets of 1.6920 and 1.7000. In the current situation it is difficult to determine if such considerable decline indicates a change in trend or the pair will be able to return to the upward channel. Support levels: 1.6700, 1.6660, 1.6600 and 1.6530. Resistance levels: 1.6760, 1.6810, 1.6850, 1.6920, 1.6950 and 1.7000. Trading tips It is recommended to open long positions and pending long positions from the level of 1.6700 (1.6660) with take profit at the level of 1.6920 (1.7000) and stop-loss at the level of 1.6000.
Dmitry Likhachev Analyst of LiteForex Investments Limited
EUR/USD: the demand for Euro is decreasing Current trend The pair EUR/USD continues to trade near the key support level. Yesterday the pair had tried to regain positions; however, negative data on business activity index in the manufacturing sector forced the pair EUR/USD to drop to the local lows. In addition, the demand for European currency continues to decrease, and even favourable data on the labour market was not able to support the pair. At the moment European currency is traded at the level of 1.3605 against the USD. Further decline is suspended only due to the weakening in the USD. Today, the US data on manufacturing orders will become known, which may give a chance for the rise in Euro. The main battle will take place tomorrow, when the key European and US data is released. The fact that Euro is oversold, as well as the probability of introduction of the monetary policy easing at the next meeting of European Central Bank discourages investors. Support and resistance It is unlikely that the pair can go back to the local highs; probably the pair will continue to trade in the downtrend with the target level of 1.3480 (1.3420). Support levels: 1.3590, 1.3520, 1.3480, 1.3420 and 1.3300. Resistance levels: 1.3660, 1.3720, 1.3810, 1.3900, 1.3950 and 1.4000. Trading tips It is advisable to open pending short positions from the level of 1.3720 (13660) with take profit at the level of 1.3480 (1.3420) иand stop-loss at 1.3770.
Dmitry Likhachev Analyst of LiteForex Investments Limited
USD/JPY: general analysis Current trend Yesterday, the price of the pair USD/JPY has significantly increased, reaching the level of 102.48. Quotes of the USD have grown amid the rise in the treasury bonds, and anticipation of the labour market report. Tomorrow preliminary data on the number of jobs in the USA, as per ADP will become known. On 6 June, Non-Farm Payrolls will be released. Today, the number of manufacturing orders in the USA will become known. The rise in this index will support the USD and weaken the JPY. Support and resistance At the moment the pair consolidates near the moving average with the period of 200 days at the level of 102.40. Support levels are the local highs of 102.48, 103.02 and 104.12. Resistance levels are 102.20 (moving average with the period 50) and 101.75 (yesterday’s lows), 101.42 (lows of 29 May, moving average with the period 200) and 100.82 (lows of 22 May). Trading tips It is recommended to open long positions at the level of 102.50 and higher up with stop-loss at 102.35 and the target of 103.00.
Andrey Cherkas Analyst of LiteForex Investments Limited
GBP/USD: it is expected that US labour market statistics will be weak Current trend At the beginning of the week the pair moved in the sideways channel in the narrow range of 1.6780-1.6700. Yesterday there were no British news and the pair was under the influence of investor sentiment, which helped the pair to strengthen and rise up to resistance level of 1.6780. However, following the release of the US manufacturing orders for April, which amounted to 0.7% against the forecast of 0.1%, the pair started to decline. The declined continued today in advance of the release of PMI in the service sector for May. It was expected that the index would fall to the level of 58.3 points, however, contrary to predictions, the index amounted to 58.6 points, which helped the British currency to win back some of the losses. Attention today shall be paid to important US news, including labour market statistics and business activity index in the service sector. Support and resistance Favourable PMI in the UK service sector prevented the decline in the pair below the key support level of 1.6700. The US labour market statistics, scheduled for release today, is expected to be negative, which may trigger weakening in the USD, pushing the price up to the level of 1.6780. In future, upward movement may reach resistance level of 1.6810 (1.6850). A lot will depend on tomorrow’s speech of Mark Carney, the head of the Bank of England. In case his speech appears optimistic, the pair will continue to rise. In the medium-term the Pound is likely to rise against the USD with the target level of 1.6920. Support levels: 1.6700, 1.6660, 1.6600 and 1.6530. Resistance levels: 1.6780, 1.6810, 1.6850, 1.6920, 1.6950 and 1.7000 Trading tips In the current situation it makes sense to open long positions with taking profit at the level of 1.6810 (1.6920) and a short stop-loss.
Dmitry Likhachev Analyst of LiteForex Investments Limited
USD/JPY: general analysis Current trend This week the currency pair USD/JPY is traded in the narrow ascending channel. According to the Bank of Japan, Japanese economy, which holds the third place in the world, continues to recover moderately. The regulator believes in good prospects of the Japanese economy after the rise in sales tax in April. The increase in private investments to economy in Q1 and the rise in GDP to 5.9% also encouraged growth in the Yen. In the near future the Bank of Japan will estimate the effect of the increase in the sales tax to the economy. Probably in July further measures to stimulate economy will be introduced. Support and resistance The nearest resistance level is 10280 – Fibonacci retracement level of 61.8%. Support level is 102.45 – Fibonacci retracement level of 50%. It is expected that in the near future the pair will slightly roll back, amid strengthening in the USD, and may reach Fibonacci retracement level of 50%, which coincides with the level of 102.45. This scenario is also confirmed by the indicator "Williams’ Percent Range”, which is in the overbought zone at the level of -14%. Trading tips It is recommended to open short positions from the current level of price with the target of 102.45 and protective order at the level of 102.70.
Igor Shukin Analyst of LiteForex Investments Limited
EUR/USD: decrease of interest rates will cause the decline in Euro Current trend The pair EUR/USD continues to trade near the local lows and the key support level of 1.3600. Demand for Euro continues to drop in advance of the meeting of European Central Bank, where interest rate can be lowered up to 0.10%. The regulator may also introduce negative interest rate on deposits for commercial banks, which will cause further weakening in Euro Tomorrow, the data on the US labour market will become known. Statistical agencies predict the rise of unemployment rate and decrease of the jobs outside agricultural sector. Such results may deter investors from buying the USD, which means that the end of the week may be exciting. Support and resistance In the current situation it is expected that the pair will fall to support level of 1.3520 (1.3500). In the medium-term the pair may reach the levels of 1.3470 and 1.3300. Even negative US labour market statistics will not be able to support the pair EUR/USD. Support levels: 1.3600, 1.3520, 1.3500, 1.3470 and 1.3300. Resistance levels: 1.3666, 1.3720, 1.3770, 1.3810, 1.3900, 1.3960 and 1.4000. Trading tips It is recommended to place pending orders below the level of 1.3550 with taking profit at the level of 1.3300.
Dmitry Likhachev Analyst of LiteForex Investments Limited
AUD/USD: analysis and forecast Current trend Yesterday, Australian GDP for Q1 was released, which was above the forecast. GDP rose due to the increase in exports of iron ore and minerals. However, despite positive indices it is unlikely that RBA will change monetary policy, as the bank has confirmed this week that interest rates will remain unchanged. Due to positive fundamental news the pair managed to reach the level of 0.9300, but failed to maintain at this level, dropping back to the level of 0.9250 in the afternoon. Tomorrow, US data on the number of jobs outside agricultural sector will become known. This indicator will obviously have impact on the currency pair AUD/USD. In case of poor data the pair may go above the level of 0.9300, which coincides with Fibonacci level of 38.2%. Today, outcome of the ECB meeting will become known and the decisions made on interest rate and monetary policy, which will affect movement in the most currency pairs. Support and resistance The nearest support levels: 0.9275, 0.9265, 0.9250 and 0.9240. The main target of the “bears” is the level of 0.9200. Resistance levels: 0.9290, 0.9300 and 0.9330. Key level of the “bulls” is 0.9360. Trading tips It is likely that volatility will be high in the next two days. Long positions are advisable above the level of 0.9300; short positions can be opened below the level of 0.9265 with the target of 0.9200. Limited sell positions can be placed at the level of 0.9200.
Ilya Lashenko Analyst of LiteForex Investments Limited