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GBP/USD: investors expect decisive actions from the Bank of England Current trend As expected, the pair continues to strengthen amid favourable data on the British labour market. The reduction in unemployment rate had exceeded expectations and the pair went up to the level of 1.6810. Today, investor interest in the British currency continues to increase, the pair broke down the key resistance level of 1.6810 and reached the level of 1.6830. However, the Bank of England is not ready to tighten monetary policy and raise interest rate, which may lead to the downward correction. Today, the data on the US retail sales will become known. It is expected that this index will go up, which will support the American currency, and cause the decline in the pair GBP/USD to the level of 1.6740. Support and resistance The pair has reached the upper limit of the descending channel; therefore, the downward wave can follow. The fact that the Pound is overbought gives ground for the buying American currency. In the medium-term the pair will fall to the lower limit of the range at 1.6600. However do not disregard the alternative scenario. If the Bank of England drops a hint on the possible raise in interest rate, the demand for the Pound will significantly increase and the pair will soar up to the local highs of 1.6950 and 1.7000. Support levels: 1.6810, 1.6780, 1.6740, 1.6700, 1.6660 and 1.6600. Resistance levels: 1.6830, 1.6850, 1.6920, 1.6950, 1.7000, 1.7050 and 1.7100. Trading tips It is recommended to open short positions and pending short positions from the level of 1.6850 (1.6920) with taking profit at the level of 1.6660 (1.6600) and stop-loss at 1.7020.
Dmitry Likhachev Analyst of LiteForex Investments Limited
Forex: Ichimoku Clouds. Review of EUR/USD EUR/USD, H4 On the four-hour chart Tenkan-sen line is below Kijun-sen, red line is directed upwards, while the blue one remains horizontal. Chinkou Span line is approaching the price chart from below; current Kumo-cloud is descending. After small fall the pair has been corrected above Tenkan-sen line, which is a support level now (1.3545). The next obstacle for the price on its way up will be the lower border of the cloud at 1.3590.
EUR/USD, D1 On the daily chart Tenkan-sen line is also below Kijun-sen, however, the correction has never reached the red line, which is still a resistance level (1.3590). Chinkou Span line is below the price chart, current cloud is descending. One of the previous minimums of Chinkou Span line is expected to be a support level at 1.3485.
Key levels Support levels: 1.35445, 1.3485. Resistance levels: 1.3590. Trading tips Both charts confirm strong resistance level of 1.3590. Probably the price won’t be able to overcome it and the pair will return to the fall. Target for the short positions is 1.3485. Anastasiya Glushkova Analyst of LiteForex Investments Limited
AUD/USD: the pair is soaring up again Current trend Last morning Australian economic data was released. It became known that employment rate for May was at the level of 4800, which was below expectations, while unemployment rate fell by 0.1% against the previous value, as expected. In addition, the Australian currency was supported by the fact that ARB did not change the interest rate, which was expected by the investors. The pair AUD/USD came close to the level of 0.9400, but failed to break it down. In the afternoon weak US statistics pushed the pair up to the resistance level of 0.9435. Today the pair is undergoing an inevitable correction, testing support level of 0.9400. ЕIf the “bears” manage to break down this level, the pair will fall to the level of 0.9360. In case of the opposite situation, the “bulls” will again try to overcome the level of 0.9435. Support and resistance Support levels: 0.9410, 09390, 09380 and 0.9360. Resistance levels: 0.9420, 0.9435 and 0.9460. Trading tips It is recommended to open short positions with taking profit at the level of 0.9360. Limited buy orders can be placed at the same level with the target of 0.9460.
Ilya Lashenko Analyst of LiteForex Investments Limited
GBP/USD: the attempt to break down the level of 1.7000 can become successful Current trend At the end of last week the price of the pair GBP/USD sharply went up. It happened after the speech of the head of the Bank of England Mark Carney, who said that interest rates could be increased in the near future. This announcement caused the increase in the demand for the Pound; in one hour the Pound has gained about 100 points against the USD and practically has reached the local highs and the key resistance level of 1.7000. Additional support to the pair was provided by the weak American statistics. Following the significant rise, the price has corrected and today it went up. At the moment the pair is trading at the level of 1.6960. Demand for the pair continues to grow; however in order to break down the key resistance level of 1.7000, an additional fundamental catalyst will be required. Today economic calendar does not contain any UK news. Attention shall be paid to the US statistics, including the data on the volume of industrial output for May. Support and resistance Positive statistics on the volume of industrial output of the USA and lock in of the long positions may trigger the decline in the pair to the level of 1.6920. However, tomorrow key UK indices will become known. This data may force the pair to return to the key resistance level and break it down with the target of 1.7050 (1.7100). The pair GBP/USD has returned to the upward channel and in the near future it pair may go up to the level of 1.7170 (1.7360). Support levels: 1.6920, 1.6850, 1.6810, 1.6780, 1.6740, 1.6700, 1.6660 and 1.6600. Resistance levels: 1.7000, 1.7050 and 1.7100. Trading tips In the current situation it makes sense to place long positions and pending long positions above the level of 1.7020 with taking profit at the level of 1.7170 (1.7360).
Dmitry Likhachev Analyst of LiteForex Investments Limited
Brent: review and forecast Current trend During last trading week the price of crude oil Brent significantly increased. Today, the quotes are maintaieds above the level of 112 USD per barrel. Disturbances in Iraq, one of the leading centers of oil production, are the main reasons for continuously high prices of oil. The attacks of the armed insurgents are still ongoing and government troops seem not to be able to take control over the situation. Continuous military actions bear significant threat to exports of the Iraqi oil. Support and resistance Resistance levels: 113.20, 114.00 and 115.00 Support levels: 112.00, 111.00 and 110.50. On the four-hour chart Bollinger bands demonstrate minor divergence, confirming sideways movement in the market. MACD histogram is in the positive zone and its volumes are gradually decreasing. Trading tips Although the price of Brent is still quite high, it is early to expect correction or downward movement. It is likely that in the near future the price will move in the sideways channel of 113.20-112.00.
Andrey Cherkas Analyst of LiteForex Investments Limited
EUR/USD: review and forecast Current trend On Monday the currency pair EUR/USD rate has slightly grown. Despite positive macro-economic statistics on the volume of the US industrial output, investors do not rush to buy the USD in advance of the Fed meeting. The volume of industrial output in the US has increased by 0.6% in May against expectations of 0.5%. Utilization of production capacity in the USA also increased up to 79.1%, which was also above experts’ forecast. Investors are cautious, waiting for the interest rate decisions by the US Fed, which will be announced on Wednesday. On the same day the head of the US Fed will give a press-conference which will outline further policy of the American regulator. These events can have a significant impact on the dynamics of the pair. Support and resistance Resistance levels: 1.3587, 1.3615 and 1.3648. Support levels: 1.3550, 1.3525 and 1.3500. On the four-hour chart Bollinger bands are significantly diverging, indicating sideways movement. MACD histogram has crossed the zero line and moved to the positive zone. However it is too early to expect the formation of the uptrend. The pair is strengthening in advance of the Fed meeting. Trading tips Sell positions can be opened after consolidation of the pair below the level of 1.3550, from which the price will go down to the level of 1.3525. Following breakout of the level of 1.3525, the way to 1.3478 will be opened. The formation of the uptrend may begin if the price consolidates above resistance level of 1.3587, from which the pair may go to the next resistance levels of 1.3615 and 1.3648.
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 below the price chart, current cloud is ascending. The pair wasn’t able to break down the cloud and is still trading above its upper border (0.8977). The closest resistance level is Kijun-sen line (0.8986).
USD/CHF, D1 Let’s look at the daily chart. Tenkan-sen and Kijun-sen lines are getting closer above the cloud and can soon form trend reversal pattern. Chinkou Span line is above the price chart, current cloud is ascending. The pair is still trading around red line, which becomes a support level (0.8972). One of the previous maximums of Chinkou Span line is expected to be a resistance level at 0.9060.
Key levels Support levels: 0.8972, 0.8977. Resistance levels: 0.8986, 0.9060. Trading tips On the four-hour chart all Ichimoku lines are horizontal, indicating flat market. Pending sell orders can be placed below 0.8972 (the lower border of the cloud). On the daily chart we can see a correction of the upward movement, however, Tenkan-sen and Kijun-sen lines can soon form The Dead Cross pattern. Anastasiya Glushkova Analyst of LiteForex Investments Limited
AUD/USD: the pair will continue to decline Current trend On Tuesday the currency pair AUD/USD had declined significantly reaching the lows of 0.9329. Weakening in the Australian currency was caused by the minutes of the last meeting of the Reserve Bank of Australia, which says that investments in the mining industry is expected to decrease, which may have an impact on the Australian economy. Anticipation of the outcome of the US Fed meeting is putting additional pressure on the Australian currency. It is likely that the volume of bond purchase will be reduced again. However, considering that inflation rate in the USA has exceeded the target level, reaching the level of 2.1%, we can assume that the size of the reduction of QE3 program will be more than normal. Support and resistance During the day the pair may undergo minor correction to the level of 0.9365 (middle line of the Bollinger band indicator). However, it is also probable that downward movement will continue up to the levels of 1.9330 and 1.9300. Technical indicators demonstrate mixed signals. Bollinger bands are directed downwards. MACD histogram is in the negative zone, its volumes are increasing. Stochastic lines have left overbought zone, forming a buy signal. Trading tips In the current situation it makes sense to open short positions from the levels of 0.9365 and 0.9330 with the target of 0.9300. Short-term long positions can be opened from the level of 0.9350 with the target of 0.9365.
Dmitriy Zolotov Analyst of LiteForex Investments Limited
USD/CAD: The pair is expected to undergo upward correction Current trend On Wednesday the currency pair USD/CAD went up, reaching the lows since January this year at the level of 1.0809. The sharp decline was triggered by the decision of the US Fed to reduce the volume of asset purchase from $45 billion to $35 billion. At the meeting the US Fed experts have also lowered the forecast of GDP growth in the USA. It was expected earlier that the US GDP will amount to 2.8-3.0% this year; while according to the new prediction the growth of the American economy will not exceed 2.1-2.3%. These data have put significant pressure on the American currency. On the other hand, the Canadian dollar was supported by continuously high price of oil. Key statistics, which may affect movement in the pair, will be released on Friday; it will be Canadian consumer price index for May and volume of retail sales for April. Support and resistance In the near future the market can experience the correction to the levels of 1.0828 и 1.0809. The price is unlikely to go further up as investors will wait for the release of the fundamental data. Technical indicators demonstrate mixed signals. Bollinger bands demonstrate divergence, confirming downtrend. The price chart has repeatedly broken down the bottom moving average line, indicating a chance of correction. MACD histogram is in the negative zone, its volumes are increasing. Stochastic lines are in the oversold zone, they are intersecting and turning down. Trading tips In the current situation it makes sense to open long positions from the current price level with taking profit at the level of 1.0844. Pending sell orders can be placed at the same level.
Dmitriy Zolotov Analyst of LiteForex Investments Limited
EUR/USD: The pair is expected to weaken in the downward channel Current trend The European currency has been under strong pressure for a few months. Demand of the Euro continues to decrease and the pair goes down even despite the fact that the American currency is very weak. On Wednesday the US Fed adopted decision to reduce QE3 program by 10 billion USD. At the same time at the press-conference, which followed after the meeting it was stressed that the rates would be kept at the low levels for a long time. This announcement has weakened the American currency; however strengthening in the Euro is not expected to last long, as there are no positive drivers that can significantly support European currency. Note that the quotes of the pair EUR/GBP are declining amid expectations that the Bank of England will raise the key interest rate at the next meeting. Now the pair EURUSD is traded at the level of 1.3600, however many investors expect the decline in the pair after the ascending correction. Support and resistance Volatility is not expected to be high today because of the lack of important economic news. It is likely that in the near future demand for European currency will fall and the pair will move in the downward channel with the target level of 1.3300. Support levels: 1.3600, 1.3520, 1.3470, 1.3300, 1.3250 and 1.3170. Resistance levels: 1.3660, 1.3720, 1.3770, 1.3810, 1.3900, 1.3960 and 1.4000. Trading tips In the current situation it makes sense to open short positions and pending short positions from the level of 1.3660 with taking profit at the level of 1.3300.
Dmitry Likhachev Analyst of LiteForex Investments Limited