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Don't ask why - just push the button
when you see the trading setup...
Christian KÄMMERERHead of German Speaking Markets
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Research is to see what everybody else has seen,
and to think what nobody else has thought.
- Albert Szent-Gyorgyi
Barbara NICODEMOUMarket Analyst
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Research is creating new knowledge.
- Neil Armstrong
Melina DELTASJunior Market Analyst
Thursday, 19 January 2017 08:42

WTI is Falling Towards the $51.47 Level

Published in Commodites & Metals

WTI crude oil dropped on Wednesday more than 2.5% following the rebound on the $54.30 resistance level. The aggressive sell-off will move the oil towards the $51.47 support barrier but it needs to go through the 50-daily SMA which behaves as a good support. Momentum has turned negative as the MACD indicator is headed lower and is holding slightly above the zero line at the moment. In the next few sessions, we are waiting for the indicator to slip below its mid-level. The Relative Strength Index (RSI) entered the bearish territory while the Stochastic oscillator is falling and is approaching the oversold area.

WTICrudeDaily190117.png

Monday, 16 January 2017 10:15

Brent is Approaching the JFD Pivot Point

Published in Commodites & Metals

The Brent Crude Oil is establishing within an ascending move since April as it surged almost 40%. The oil price tried to test the rising trend line several times while now is trading well above it. The price hit a fresh high at $58.50 while it rebounded on it and now is trading lower near $55.70.

The crude oil is moving towards the $53.80 support barrier which overlaps with the first support level of the weekly pivot points, as it failed to test again the aforementioned new high. Additionally, a break below the latter level will drive the price at the 50-daily SMA which is near the second support of the pivot points. On the daily chart, technical indicators are biased lower after entering the negative territory. The MACD oscillator is falling while it is moving below the zero line with some weak momentum. The RSI indicator is sloping downwards whilst it is still holding above the negative zone.

BrentCrudeDaily160117.png

Monday, 16 January 2017 08:59

Strategic Report, 2017 Newsletter 3

Published in Strategic Report

 

Technical Analysis

1. EUR/USD WEEKLY OUTLOOK

REVIEW

The single currency opened with a gap to the downside over yesterday’s quiet session, three days ahead of the ECB’s interest rate decision on Thursday. The EUR/USD pair traded higher over the last week as it surged more than 1% and managed to challenge the 1.0670 resistance level.

OUTLOOK (SCENARIO A / B)

The common currency failed to end a day above the latter level while it rebounded on it and now is developing near the 1.0620 price level. Over the last week, the price rose above the 50-daily SMA endorsing the bullish attitude on price while the RSI indicator is following a positive path, however, is pointing downwards. The MACD oscillator is rising and is moving above both, its trigger and zero lines. Also, the Bollinger bands show that the market is ready for an upward potential move as the upper band is inclining to the upside. The next level to watch would be the 1.0800 strong psychological handle which overlaps with the 100-daily SMA. On the other hand, if the pair fails to move higher a sideways channel is possible to be created within the 1.0500 – 1.0670 significant zone.

EURUSDDaily160117

2. GBP/USD WEEKLY OUTLOOK

REVIEW

Sterling dropped more than 20% against the U.S dollar since EU Referendum in June. The GBP/USD pair opened with 155 pips gap to the downside over yesterday’s session and almost challenged the 31-year low at 1.1987 ahead of Prime Minister Theresa May’s speech on Tuesday who plans to speak about Britain’s exit from the European Union.

OUTLOOK (SCENARIO A / B)

The pair recorded a fresh three-month low and now may try to cover the losses as it is developing slightly below the 1.2040 price level. If the price surpasses above the latter level, it would open the way for a retest of the 1.2120 resistance barrier. Otherwise, the pair may slip at the aforementioned 31-year low. On the short-term timeframe, the RSI indicator plunged near the 30 level, however, it failed to fall within the oversold area. Furthermore, the MACD oscillator holds below its trigger and zero lines with strong momentum.

GBPUSDH4160117

3. USD/JPY WEEKLY OUTLOOK

REVIEW

U.S. dollar recorded the fourth negative week in a row against the Japanese yen after breaking to the downside the consolidation area that was holding over the last month. The USD/JPY pair plummeted more than 2.6% this month and reached our first target at 113.70 (see technical analysis here: http://bit.ly/2jOIT2m)

OUTLOOK (SCENARIO A / B)

The pair fell below the 50-daily SMA that was acting as a strong support level during the previous sessions. Now, it behaves as a resistance level and if there is a successful penetration above it the price will expose until the 118.65 resistance level. An alternative scenario is a continuation of the downside correction until the 113.00 psychological level or moreover until the 111.30 support barrier. Technical indicators, seem to be in agreement with the bearish thought, as both are following a negative path. The MACD oscillator is falling and has just entered the territory below zero while the RSI indicator is rebounded on the overbought area and is approaching the 30 level.

USDJPYDaily160117

4. DAX 30 Index WEEKLY OUTLOOK

REVIEW

German DAX 30 is losing some ground since yesterday’s trading session as it fell more than 0.7%. Over the last week, the index recorded a fresh 21-month high at 11695, however, after that, the price plunged to 11480 support barrier.

OUTLOOK (SCENARIO A / B)

From the technical point of view, the indicators are confirming the recent bearish movement as maybe is the time for a retracement to the downside. It seems that the bulls have run out of strength while the DAX will continue its attempts to break the 11480 level. A successful penetration of the support zone at 11390 - 11480, it would open the way for the index to hit the 11130 handle which overlaps with the 50-daily SMA. On the other side, a break above the new high will expose the index until the 11800 resistance barrier. On the daily chart, the Relative Strength Index (RSI) dropped below the overbought territory and the MACD oscillator fell below its trigger line.

DE30CashDaily160117

5. Brent Crude Oil WEEKLY OUTLOOK

REVIEW

The Brent Crude Oil is establishing within an ascending move since April as it surged almost 40%. The oil price tried to test the rising trend line several times while now is trading well above it. The price hit a fresh high at $58.50 while it rebounded on it and now is trading lower near $55.70.

OUTLOOK (SCENARIO A / B)

The crude oil is moving towards the $53.80 support barrier which overlaps with the first support level of the weekly pivot points, as it failed to test again the aforementioned new high. Additionally, a break below the latter level will drive the price at the 50-daily SMA which is near the second support of the pivot points. On the daily chart, technical indicators are biased lower after entering the negative territory. The MACD oscillator is falling while it is moving below the zero line with some weak momentum. The RSI indicator is sloping downwards whilst it is still holding above the negative zone.

BrentCrudeDaily160117

6. XAU/USD Weekly Outlook

REVIEW

The yellow metal surged more than 6% over the last three weeks while over yesterday’s session it printed the seventh green day in a row. The strong rebound on the $1,122 support barrier drove the gold to incline above the $1,200 significant psychological level.

OUTLOOK (SCENARIO A / B)

Technically, on the daily chart, the XAU/USD pair surpassed the 50-SMA and now is developing towards the $1,220 resistance level which is slightly below the 100-SMA. At this level, the price may begin a small correction to the downside as the zone acts as a good resistance barrier. Despite that, if the price rises above the aforementioned obstacles will meet the $1,240 price level. The MACD oscillator is moving higher while is holding above its trigger and zero lines. The RSI indicator has just entered the overbought area as it lies above the 70 level.

XAUUSDDaily160117

7. Schneider Electric STOCK WEEKLY OUTLOOK

REVIEW

Schneider Electric (SU.P) is publicly traded on the Euronext Exchange and is a component of the Euro Stoxx 50 stock market index. The stock is trading near to its highest level since the mid of 2015. We expect that the uptrend in this market will sustain and the price will continue rising with the target zone around the 69.00 resistance level.

OUTLOOK (SCENARIO A / B)

Technically, a break over the latter level, it will open the way towards our expected price target around the key level at 71.30. The price is over the 50, 100 and 200 period SMAs on the daily chart and the trend looks stable with approximate 45 degrees’ angle, which is adding to the odds for a new possible rise in the short-term period. MACD is above the zero line supporting the expectations for a new uptrend movement. RSI is testing the zone of 70 level and is moving over it and is indicating for a new upward movement. In the case the price declines and moves below 63.80, then we are forecasting that the upside move will not be valid. With this scenario, the target would be the key support at 59.70.

SU.PDaily

FX Weekly Market Preview

Weekly Outlook: Jan 16 - 20; Economic Calendar Signals High Volatility

The U.S. dollar ended last week very low against all the major currencies, as U.S. President Donald Trump didn’t give enough information for his administration in his speech, as it was broadly expected. The only exception was the British pound which surprised the marked this morning with a gap to the downside on speculations that U.K. PM Theresa May will signal a so-called “Hard Brexit” on Tuesday.

This week we have a number of significant events scheduled that will trigger volatility in the market. Today, the BoE Governor Mark Carney will give a speech. On Tuesday, U.K. Prime Minister will give a speech for the Brexit, while in the next days the U.K. Supreme Court is expected to publish its decision for Article 50. On Wednesday, Fed Chair Janet Yellen has a speech while on Friday the inauguration of Donald Trump as the 45th U.S. President is on the calendar. Moreover, European Central Bank and Bank of Canada will announce their interest rate decision while during the week, U.S., U.K. and Euro area’s inflation rates will be released.

On Monday, the U.S. market will be closed due to a Bank Holiday and perhaps this will influence a quiet market and low volatility. Data from the Eurozone will come out, presenting trade balance for November with a forecast €22.0B from a previous €19.7B, but the market reaction is not expected to be significantly affected by the news. The event that could drive volatility in the market and especially in the GBP pairs is the BoE Governor Mark Carney’s speech at the London School of Economics at 18:30 which will be published.

On Tuesday in the European morning, the U.K. inflation and report will be released. CPI for December is forecasted to show a rise to 1.4% yoy amid previous 1.2% yoy while the core CPI is expected to rise to 1.5% yoy from 1.2% before. The retail price indicator in the U.K. for December on yoy base also is expected to increase to 2.3% from previous 2.2%. Overall, we expect the U.K. data to support the sterling. The most significant market driver event of the day is U.K. Prime Minister Theresa May speech for Brexit which will probably drive the market, and she is expected to signal the so-called “hard Brexit”.

Later on, German ZEW Survey for January will present the economic sentiment in Eurozone and Germany, as well as the current situation in Germany. All of the mentioned sectors are expected to show improvement for the first month of the new year. The German ZEW Economic Sentiment is expected to rise to 14.8 from 13.8 before, while the EU ZEW Economic Sentiment for January is forecasted for 19.4 against previous 18.1. ZEW data will raise the volatility of the euro against the other majors and the better than expected values will help the shared currency to keep rising. In the U.S., the NY Empire State manufacturing index and the IBD/TIPP economic optimism for January are coming out while traders will keep an eye on Fed William Dudley’s speech.

Wednesday shows some signs to be a volatile day. The day begins with the German CPI report, though the headline inflation rate is not expected to change from the last figure of 1.7%, thus will leave the market indifferent. In the U.K., the employment report will be published. The ILO unemployment rate for the three months to November may show slight rising to 4.9% comparing to the last data of 4.8%.

The average earnings, including bonus, for the three months to November, are forecasted to show a rise of 2.6% versus an increase of 2.5% before. Claimant count rate is expected to increase by 7.4K from a previous rise of 2.4K. In Eurozone, the headline inflation report for December will be released. The headline CPI figure is forecasted to meet the initial estimate of 1.1%, thus, the market may not react to the news.

Contrary, the U.S. CPI report perhaps will influence the U.S. dollar pairs. The forecasts suggest the consumer prices in December to have risen 2.1% versus 1.7% in November. An important increase of the rising pace. U.S. industrial production is also coming out, and the market predicted it to rise 0.3% from the previous decline of 0.4%. Better than expected values may support the U.S. national currency.

Furthermore, on Wednesday, the Bank of Canada will appear on stage and will announce the overnight rate. We expect the rate to stay unchanged at 0.5%, but during the statement and monetary policy report the Canadian dollar may show strong volatility and any hawkish signs may lead the Loonie to rise sharply. Overnight, Australian consumer inflation expectation for January will be released followed by country’s employment report. The unemployment rate is forecasted to stay unchanged from previous 5.7%, while employment change may fall by 5K against from a previous increase of 39.1K.

Economic events on Thursday will keep supporting volatility on the currency market. The highlight of the day is the European Central Bank interest rate decision which will be accompanied by a press conference. The ECB is widely anticipated to keep its interest rate unchanged at 0% and its deposit rate at -0.4%. The impact on the market is likely to come over during ECB president Mario Draghi's speech.

From the U.S., weekly jobless claims are expected to show similar values of 247K as previous. Philly Fed manufacturing index for January perhaps will show lower figures to 17.4 – less than previous 21.5 while buildings permits for December will slightly rise to 1217K amid previous 1212K. Overnight, China will publish the latest data for GDP and industrial production. GDP is expected to stay unchanged at 6.7% for the fourth quarter of the year and industrial production may increase to 6.1% compared with previous 6.2%. Meanwhile, the CNY may have got some selling pressure from the other currencies.

On Friday, the spotlight event is Donald Trump’s inauguration. In U.K., the retail sales for December from the United Kingdom are forecasted to rise by 1.0% compared to previous 0.2%. From Canada, the CPI inflation data for December will concentrate trader focus. The consumer prices are awaited to rise by 0.2%, while in November they declined by 0.4%. Also, retail sales are expected to rise 0.3% against a previous 1.1%. If the Canada data come out mixed in line with the forecast, most likely we will see sharp movements in all CAD crosses after the release.

Stay tuned for further updates from our daily reports.

USCPI180117

ECB19012017 2

 

Friday, 13 January 2017 08:23

WTI Crude Oil Target Locked at $52.65

Published in Commodites & Metals

The West Texas Intermediate (WTI) crude oil created the second positive day in a row following the rebound on the $51.35 barrier which overlaps with the 50-daily SMA, a level that hit it after it slipped below our suggested target at $52.65 (see technical analysis here: http://bit.ly/2jKRtTX). Currently, the oil is trading higher and is moving towards the $55.25 - $55.70 resistance zone while the technical indicators seem to be in contrary with the price. The RSI indicator is sloping downwards, however, it still lies above 50 level. Furthermore, the MACD oscillator is falling within the positive territory. If there is no change on the indicators in the next few session, then a correction to the downside is possible as a negative divergence has been observed on MACD.

WTICrudeDaily130117.png

Thursday, 12 January 2017 08:10

Gold Surged and Target Locked Below $1,200

Published in Commodites & Metals

Gold added more than 4.3% over the last seven trading days following the strong rebound on the $1,122 price level. The XAU/USD pair booked a profit that we suggested in the previous days at $1,197 with entry level at $1,175 (see technical analysis here: http://bit.ly/2jGE6UM). The price currently is developing above the strong obstacle at $1,200 and is moving towards the next resistance barrier at $1,220.

Technically, the MACD oscillator is moving upwards with strong momentum, confirming the enthusiasm of the bulls, after it entered into the positive area while the RSI indicator is approaching the overbought territory with very clear directional strength.

XAUUSDDaily120117.png

Monday, 09 January 2017 09:26

WTI Crude Oil Hit a Fresh 17-Month High

Published in Commodites & Metals

Oil prices plunged early this morning as increased exports from Iran undermined efforts by other oil producers. The West Texas Intermediate (WTI) crude oil edged sharply higher over the last year while over the last week the oil printed a fresh 17-month high at $55.70.

After it hit the latter level, a pullback started while the price is moving sideways over the last three weeks. The WTI consolidates within the $52.65 support barrier and the $55.25 resistance level while now is trading near the $54.30 price level. Despite that, the oil is still developing in an ascending move since August 2016 and is moving well above of the rising line. However, if there is a break below the $52.65 support barrier will slip the price towards the $51.00 strong level. Otherwise, if the price surpasses the resistance area $55.25 - $55.70 to the upside, it will expose the oil towards the $56.50 obstacle. Currently, the price may retest the lower boundary of the trading range. The RSI indicator is moving within the 50 and 70 level with some weak momentum while the MACD oscillator is falling with solid move and it is holding below its trigger line.

WTICrudeDaily090117.png

Monday, 09 January 2017 09:04

Strategic Report, 2017 Newsletter 2

Published in Strategic Report

 

Technical Analysis

1. EUR/USD WEEKLY OUTLOOK

REVIEW

In the previous week, Eurozone economic reports helped to drive EUR/USD pair above 1.0600 price level, however, on Friday the pair dropped 0.7% and ended the day slightly above the 1.0500 strong psychological level.

OUTLOOK (SCENARIO A / B)

The From a technical point of view, the single currency rebounded on the 50-daily SMA and hit the 1.0630 resistance barrier while the moving average seems to be a strong resistance obstacle for the bulls. If the price surpasses the 1.0630 – 1.0670 zone to the upside, it would open the way for a further bullish movement until the 1.0800 significant handle. On the other side, a break below the aforementioned psychological level will slip the currency pair towards the 1.0340 support level. Technical indicators are confirming the bearish thought as both are indicating downward momentum. The RSI indicator was flattening near its mid-level while now is pointing downwards and the Stochastic oscillator created a bearish crossover between its moving averages. 

EURUSDDaily090117

2. GBP/USD WEEKLY OUTLOOK

REVIEW

Sterling struggled throughout the first week of January against the U.S. dollar, despite that it failed to create a second positive week. The GBP/USD pair plunged more than 1.8% since Friday’s session and early this morning recorded a fresh two-month low at 1.2180 price level.

OUTLOOK (SCENARIO A / B)

As you can see on the chart, the pair failed to break, or close, above the key resistance level at 1.2430 during the previous week while the currency pair rebounded on the latter level and started a significant bearish movement. The next level to watch would be the 1.2115 support barrier. On the short-term timeframe, the Relative Strength Index (RSI) is falling with strong momentum as it is approaching the oversold area. The MACD oscillator has just entered the negative territory while it lies below its trigger line.

GBPUSDH4090117

3. USD/JPY WEEKLY OUTLOOK

REVIEW

Friday’s U.S. jobs report was not strong enough to prevent the dollar from sinking near 115.00 support level versus the Japanese yen but also not enough for driving the USD/JPY pair retesting the 11-month high at 118.65.

OUTLOOK (SCENARIO A / B)

The pair jumped more than 1.7% since Friday’s session after the bounce off the 115.00 strong critical level and now is approaching the 118.65 resistance barrier as the momentum remains to the upside. As you can observe on the chart, the 50-SMA is moving higher near 115.00 while the other two SMAs are also sloping upwards. On the daily chart, the MACD oscillator lost its strong momentum as it is flattening above its mid-level. The RSI indicator is rising after the rebound in the 50 area. Going to the 4-hour chart, the price surpassed above the three SMAs while the technical indicators are following a positive path. 

USDJPYDaily090117

4. DAX 30 Index WEEKLY OUTLOOK

REVIEW

DE30Cash is losing positions during the first trading day of the week, but the price is still sustaining over 11,500.00 which is signaling that this is temporary weaken, perhaps due to some long positions closing and taking profits from traders after the last few weeks’ rally.

OUTLOOK (SCENARIO A / B)

We expect that this market will keep its uptrend tendency during the next days and the zone around 11,500.00 - 11,510.00 looks very attractive for taking new long positions with very first targets around resistance at 11,655.50. We also expect that uptrend momentum will continue towards 12,000.00 in the short term period. The price is strongly over the 50, 100 and 200 periods SMA on the daily chart which are indicating for very strong upward movement. MACD is above the zero line and giving a divergence signal, but still is not a strong sign for possible DAX sell-offs. RSI is leaving the overbought zone and the line is slipping below level of 70, which is a sign for possible decline. Nevertheless, as MACD and RSI signaling for possible decline, the tendency is strongly up and only a sharp sell-off and a move below 10780.00 will be a solid signal for further decreasing towards 10,354.00 - 10,300.00 zone.

DE30CashDaily090117

5. WTI Crude Oil WEEKLY OUTLOOK

REVIEW

The Oil price plunged early this morning as increased exports from Iran undermined efforts by other oil producers. The West Texas Intermediate (WTI) crude oil edged sharply higher over the last year while over the last week the oil printed a fresh 17-month high at $55.70.

OUTLOOK (SCENARIO A / B)

After it hit the latter level, a pullback started while the price is moving sideways over the last three weeks. The WTI consolidates within the $52.65 support barrier and the $55.25 resistance level while now is trading near the $54.30 price level. Despite that, the oil is still developing in an ascending move since August 2016 and is moving well above of the rising line. However, if there is a break below the $52.65 support barrier will slip the price towards the $51.00 strong level. Otherwise, if the price surpasses the resistance area $55.25 - $55.70 to the upside, it will expose the oil towards the $56.50 obstacle. Currently, the price may retest the lower boundary of the trading range. The RSI indicator is moving within the 50 and 70 level with some weak momentum while the MACD oscillator is falling with solid move and it is holding below its trigger line.

WTICrudeDaily090117

6. XAU/USD Weekly Outlook

REVIEW

The precious metal printed the second green consecutive week following three negative months in a row. The XAU/USD pair surged more than 3.6% over the last two weeks and surpassed above the $1,165 strong barrier after several failed attempts.

OUTLOOK (SCENARIO A / B)

On the daily timeframe, despite that the price rose above the latter level, it found an obstacle as the 50-SMA lies near the current market price. If the yellow metal penetrates to the upside the aforementioned obstacle, it would open the door for a retest of the $1,197 resistance barrier. Technical indicators on the daily chart are biased higher as the MACD oscillator is rising and is approaching its mid-level. The RSI indicator is weakening as it is flattening above the 50 level. On the short-term basis, the 50-SMA is ready for creating a bullish crossover with the 200-SMA indicating a buy signal.

XAUUSDDaily090117

7. Facebook Inc. STOCK WEEKLY OUTLOOK

REVIEW

The stock strongly rose after the price rebound from the key support zone 113.60 - 114.00 and continues inclining for four days in a row reaching and testing the 100 period SMA at 123.890 - 124.00. During the next days, we expect that the price will continue to rising with first target at 126.30. Clear break over will open the way towards price region at 133.40.

OUTLOOK (SCENARIO A / B)

On the daily chart, we have also confirmed technical formation “double bottom”, which is in line supporting our expectations for possible rising with technical target levels at 127.00 – 127.50. MACD is still below the zero line, but the indicator is rising from a side and divergence signal is adding to the odds that the price will keep increasing. RSI is sloping up approaching the 70 level and this is a signal for a possible uptrend movement. Nevertheless, always, there is an alternative scenario – in case some investors and traders decided to take some profits from the market and this may lead to price decline. Sharp sell-off and moving below 119.60 will erase the expectation for rising and signal for possible decline with initial target support zone at 113.60.

FBDaily090117

FX Weekly Market Preview

Weekly Outlook: Jan 09 - 13; Fed Yellen's Speech and U.S. Retail Sales the Focus of the Week

The U.S. non-farm payroll data released on Friday showed that the economy added 156K non-farm jobs in December, a bit below expectations of 175K and previous month’s figure of 178K. On the same time, the unemployment rate rose to 4.7% in line with forecast. On the other hand, the average hourly earnings rose 2.9% versus 2.5% before, surprising positively the market.

The greenback managed to push higher against all the major currencies, with the exception the Loonie. Traders were expecting better values, though the thought that U.S. economy is near to full employment and the increase in wages considered the numbers sufficient for bullish dollar positions.

The economic calendar for the week ahead seems to be very busy with a plethora of data, but not such significant news. The only market driver events are Fed Yellen’s speech on Thursday overnight and the publication of the U.S. retail sales for December.

On Monday, Eurozone’s sentix investor confidence for January and unemployment rate of November will cause low effect over the market. The sentix index is expected to rise up to 12.6 from previous 10.0, while the unemployment rate most likely will stay unchanged at 9.8%. The data from U.S. is expected to show a slight increase for consumer credits change up to $48.43B in November compared with previous $16.02B, but here also we do not expect any strong movement. Monday is a Bank Holiday for Japan.

Overnight, the retails sales of Australia may bring some volatility over the Aussie crosses. Retail sales on monthly base are forecasted to decline to 0.4% in November from previous 0.5% and this may set under the pressure the Aussie. From China, interest will provoke the data for consumer price and producer price index. In overall, the forecast is for slight improving for producer price index up to 4.8% with previous 3.3%, which may bring some interest over the CNY.

On Tuesday, Canada will release building permits which perhaps may rise just by 2.4% from 8.4% for November and new housing starts with a forecast for rising to 195K from 184K. From U.S., the wholesale inventories are expected to show 0.9% increase in November in line with the previous month’s figure. On Wednesday, early in the morning, Japanese flash leading and coincident index will be released, but market most likely will just pass over the news without any reaction.

In the middle of the week, November’s manufacturing and industrial production from the U.K. will be in the focus. Better figures would help to the sterling to improve its positions against the majors. The manufacturing production is forecasted to improve to 0.6% yoy from previous negative 0.9% and industrial production may raise to 0.8% yoy from previous also negative 1.3%. Additional volatility over the sterling will add the release of the NIESR GDP estimate for the three months to December. Later in the night, Japan will publish its current account and trade balance for November.

On Thursday morning, Euro area’s industrial production for November and ECB monetary policy meeting accounts are coming out. Industrial production is forecasted to rise 1.6% yoy in November, versus an increase of 0.6% the month before. Weekly jobless claims from U.S. will also come out on Thursday where we expect increasing to 266K against the week before of 235K, however, we wouldn’t expect any reaction of the market. Import prices from the U.S. are also expected to show increasing to 0.8% yoy in December following negative 0.3% the previous period. Moreover, FOMC members Charles L. Evans and Patrick T. Harker will speak after the release of the U.S. data. In the European midnight, Fed Chair Janet Yellen will discuss the mission and responsibilities of Fed, expressing her remarks and taking questions from educators of economics. The event will have a severe impact on U.S. the dollar. Meanwhile, the trade balance from China is expected to reach 345B from the previous 298B and this may create a good base for further rising for offshore yuan.

On Friday, the data from the Euro area are limited and to Spanish which is not expected touch the single currency. The focus on that day will be again in U.S. data where inflation indicator PPI and retails sales will be announced. Retail sales on a monthly base are expected to improve to 0.5% from 0.1% previously, while PPI data may decline to 0.1% from previous 0.4%.

UKManufIndusProd11012017

USretailSales13012017

 

Wednesday, 04 January 2017 07:35

Gold is Ready to Surpass $1,165

Published in Commodites & Metals

The precious metal added more than 9% to its value over the last year, however, it recorded the third red month in a row and met a fresh 11-month low at $1,122 support level. The XAU/USD pair is trading in a downward move following the bounce off the $1,375 resistance level.

On the short-term basis, the metal started a correction to the upside and if the price surpasses the $1,165 resistance barrier, it will open the door for the $1,197 handle which overlaps with the 100-weekly SMA but the 50-daily SMA seems to be an obstacle for the bulls. Technical indicators on the daily chart are biased higher as the MACD oscillator is rising and is approaching its mid-level. The RSI indicator is pointing upwards suggesting a stronger metal in the next few sessions.

XAUUSDDaily040117.png

Tuesday, 03 January 2017 08:07

Strategic Report, 2017 Newsletter 1

Published in Strategic Report

 

Technical Analysis

1. EUR/USD WEEKLY OUTLOOK

REVIEW

The EUR/USD pair plunged more than 3% over the last year and hit a fresh 13-year low at 1.0352 against the U.S. dollar whilst it recorded three consecutive negative months in December. The main focus this week will be the December’s non-farm payrolls report, the first one after Federal Reserve raised rates.

OUTLOOK (SCENARIO A / B)

The world’s most traded currency penetrated to the downside the multi-month consolidation area in December, with upper boundary the 1.0620 resistance level and lower boundary the 1.0500 support barrier. The pair surged above 1.0600 in thin liquidity conditions last week while the new year starts with the investors still wondering if the currency pair will hit parity. If the U.S. dollar continues to strengthen then the euro will continue to weaken. Early this morning, the price opened with a gap to the downside and now is developing below the 1.0500 price level. The single currency may create an upward move for recovering the gap, however, a failed attempt of surpassing the latter level will move the price towards the 1.0352 support level. On the daily timeframe, technical indicators are still moving within the negative territory while the RSI indicator is sloping upwards. The MACD oscillator crossed its trigger line to the upside and is approaching its mid-level. 

EURUSDDaily030117

2. GBP/USD WEEKLY OUTLOOK

REVIEW

Sterling dropped more than 16.2% over the last year against the greenback due to Brexit concerns that will be the main focus at the beginning of the new year. The GBP/USD pair ended the year with a negative month while during last October hit a fresh low at 1.1978.

OUTLOOK (SCENARIO A / B)

On the short-term basis, the technical structure remained under pressure as the pair opened with a gap during yesterday’s session and dropped below the 1.2310 barrier. Although, currently the price is developing above the 50-SMA on the 4-hour chart as well as, above the mid-level of the Bollinger band and is trying to recover the gap that created. If the price jumped above the 1.2310 resistance level, it will expose the price at 1.2390 key level but it needs to go through the upper band of the Bollinger band. The MACD oscillator entered the positive territory while it is rising above its trigger line.

 

GBPUSDH4030117

3. USD/JPY WEEKLY OUTLOOK

REVIEW

The USD/JPY pair surged more than 15% over the last three months as it recorded the third positive session in a row after Donald Trump’s victory on November 9th. The pair surged to 118.65 strong resistance level which is the new 11-month high following the strong rebound on the 99.00 support barrier.

OUTLOOK (SCENARIO A / B)

During the previous year, the currency pair started an aggressive rally to the upside with no significant retracement. The pair awaits the first non-farm payrolls report after the rise of the interest rates the previous month. Currently, the pair is trading lower and it is in the progress to return to its pre-gap level and may retest the 116.00 strong psychological level. A break below the latter level, it will open the way for the 114.80 support handle. Otherwise, the pair may challenge again the previous record high. On the daily chart, the technical indicators ticked lower, however, are still moving in a bullish territory. The MACD oscillator is holding below its trigger line but lies above the zero line while the RSI indicator is pointing downwards. 

USDJPYDaily030217

4. DAX 30 Index WEEKLY OUTLOOK

REVIEW

The German DAX 30 surged more than 7.7% over the last year and during yesterday’s session the index climbed to a fresh five-month high at 11621. The price was moving within a trading range until December 7th where the index broke the area to the upside with an aggressive rally.

OUTLOOK (SCENARIO A / B)

Over the last month, the index surpassed the three SMAs (50-SMA, 100-SMA and 200-SMA) to the upside and now is approaching the August 8th high at 11810. On the other side, if there is a penetration of the 11390 support barrier will slip the price towards the 11130 obstacle. Technical indicators seem to be in agreement with the bullish thought as both are moving in a positive territory. The RSI indicator holds within the overbought area while the MACD oscillator is moving slightly higher.

 

DE30CashDaily020117

5. WTI Crude Oil WEEKLY OUTLOOK

REVIEW

The West Texas Intermediate (WTI) crude oil edged sharply higher over the last year and surged 46%the best gains since 2009. Oil prices rose in the first trading hours of 2017, however now is developing slightly lower.

OUTLOOK (SCENARIO A / B)

The WTI is moving in an ascending move since August and is trading well above of the rising trend line. The price printed a new 17-month high while now is trying to retest it. A break above the aforementioned level will expose the crude oil towards the $57.60 resistance barrier. From a technical point of view, the three SMAs (50-SMA, 100-SMA and 200-SMA) are pointing upwards and moving far away from the price. MACD is flattening with its trigger line above the mid-level while RSI is rising with some weak momentum and is approaching the 70 level. 

WTICrudeDaily030117

6. XAU/USD Weekly Outlook

REVIEW

The precious metal added more than 9% to its value, however, it recorded the third red month in a row and met a fresh 11-month low at $1,122 support level. The XAU/USD pair is trading in a downward move following the bounce off the $1,375 resistance level.

OUTLOOK (SCENARIO A / B)

On the short-term basis, the metal started a correction to the upside and if the price surpasses the $1,165 resistance barrier, it will open the door for the $1,197 handle which overlaps with the 100-weekly SMA but the 50-daily SMA seems to be an obstacle for the bulls. Technical indicators on the daily chart are biased higher as the MACD oscillator is rising and is approaching its mid-level. The RSI indicator is pointing upwards suggesting a stronger metal in the next few sessions.

 

XAUUSDDaily030117

7. Google STOCK WEEKLY OUTLOOK

REVIEW

The Alphabet Inc. (NASDAQ: GOOG) stock rose 1.8% over the last year as the price is moving sideways with some solid upward move. During October, the stock hit a fresh high at $838.65, however, it rebounded on it and created a correction to the downside.

OUTLOOK (SCENARIO A / B)

Technically, the price is moving lower and for now, we would expect the pressure to remain to the downside and the next level to watch, over intraday basis, will be the $754.00 and then the $742.00 region, a strong technical barrier. Although, the 200-daily SMA seem to be a strong obstacle for the bears and the price may have a pose before continues its downward move. The stock slipped below the 50 and 100 SMAs on the daily chart, endorsing the bearish attitude on price. The Relative Strength index (RSI) indicator is sloping downwards with strong momentum while it entered the negative territory. The MACD oscillator fell below its trigger line but is still lies above its neutral area.

GOOGDaily030117m

FX Weekly Market Preview

After Holidays Traders Expect FOMC Minutes and NFP Report

The market is still in the holiday mood while traders return. The trading session on Monday was completely quiet, as both NYSE and Nasdaq stock exchanges were closed as well as London’s and Tokyo’s. The forex market has some modest move, mainly during the Asian session but we will see very soon more volatile days. The FOMC minutes from the meeting the committee voted for a rate hike will be published on Wednesday and the NFP report for December on Friday. Moreover, Eurozone's flash CPI for December will be released on Wednesday.

U.S. Dollar Mixed Against the Majors
The U.S. dollar was traded mixed against the G10 currencies, while both the euro and the British pound faltered against the majors. There were no economic news or speeches from the U.S. on Monday and the greenback was traded mixed. Today, we have some data coming out, thus we would expect some moderate volatility on the scene. The U.S. Markit services PMI and the ISM non-manufacturing, December’s final figures will be released. The two spotlights for the buck this week are the FOMC minutes on Wednesday and the U.S. jobs report on Friday.

Euro and Pound on a Weaker Footing Versus G10
The euro and the British pound were traded on a weaker footing against all its G10 counterparts on Monday and early Tuesday on the back of holidays. Though, both currencies hold against the Japanese yen. Eurozone’s Markit PMI showed that manufacturing sector in December kept the same pace of growth as the first estimation at 54.9 – figure above 50.0 indicates expansion. In Germany, the factory activity rose more at 55.6 marginally above market forecasts of 55.5. No news came out from U.K.

What to Watch Today
We will start the day with the announcement of the unemployment rate in Germany, which is expected to be unchanged for the second month in a row. The U.K. Markit manufacturing PMI for December will be closely watched while is predicted to slow down to 53.0 from 53.4 the month prior. Going to the U.S., the Markit manufacturing PMI is going to be published as well as, the ISM manufacturing PMI. The last one is expected to tick higher at 53.5 from 53.2 the previous month while the ISM prices paid will rose with a faster pace to 56.0 from 54.5 before. Moreover, the construction spending will come out in the afternoon.

USD03012017 Strategic

EUR03012017 Strategic

 

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