LiteForex Market Analytics

LiteForex analitics. XAU/USD: gold prices are going down

Current trend

Gold prices declined slightly on Thursday, updating the record lows of December 7.

Macroeconomic statistics from the US published on Thursday failed to provide significant support to USD, but investors were focused on the further development of US-China trade relations. Anyway, the published figure for the number of initial jobless claims for the week on December 7 dropped sharply from 233K to 206K, which was better than expected 226K.

Today, traders are focused on the US retail sales data. Analysts expect a sharp slowdown in November from +0.8% MoM to +0.1% MoM, which could have a negative impact on USD. There will also be published the November statistics on industrial production and preliminary December data on business activity.

Support and resistance

Bollinger Bands in D1 chart show moderate growth. The price range is narrowing, reflecting the emergence of ambiguous trading dynamics. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic is declining more actively, but is rapidly approaching its minimum levels, which indicates the risks associated with the oversold instrument.

Technical indicators do not contradict further development of the "bearish" trend in the short term.

Resistance levels: 1247.00, 1250.66, 1255.00.
Support levels: 1240.00, 1237.16, 1233.08, 1229.84.

Trading tips

To open long positions, one can rely on the breakout of 1247.00. Take profit — 1255.00. Stop loss — 1244.00. Implementation period: 1-2 days.
A breakdown of 1240.00 or 1237.16 may be a signal to further sales with target at 1229.84 or 1226.11. Stop loss — 1243.00 or 1245.00. Implementation period: 2-3 days.

 
LiteForex analitics. EUR/USD: general review

Current trend

Today, the pair is correcting upwards, aiming at the level of 1.1352 (Murrey [2/8], the midline of Bollinger Bands).

The euro is strengthening, despite the weak data on inflation in the Eurozone. In November, the basic consumer price index remained at 1.0%, and the general CPI dropped from 2.0% to 1.9%, having fallen below the target level for the first time since May. Investors are more concerned about the upcoming Fed meeting. The rate is expected to be raised once again, this time from 2.25% to 2.50%; but in the future, the rate of monetary tightening may be slowed down. During the month, hints of this were made by several members of the regulator, including its chairman Jerome Powell. Currently, the market expects another three rate hikes next year, and any data on the reduction of their number could put pressure on USD.

Support and resistance

The level of 1.1352 (in the midline of Bollinger Bands) is seen as the key one for the "bulls". Its breakout will give the prospect of further growth to 1.1413 (Murrey [3/8], the upper line of Bollinger Bands) and 1.1474 (Murrey [4/8]). Otherwise, the decline will resume to the levels of 1.1291 (Murrey [1/8]) and 1.1230 (Murrey [0/8]).

Technical indicators do not provide a clear signal: MACD histogram is stable in the negative zone and Stochastic is directed horizontally.

Support levels: 1.1291, 1.1230, 1.1200.
Resistance levels: 1.1352, 1.1413, 1.1474.

Trading tips

Short positions may be opened after the reversal near 1.1352 with targets at 1.1291, 1.1230 and stop loss at 1.1380.
Long positions may be opened from the level of 1.1370 with targets at 1.1413, 1.1474 and stop loss at 1.1330.
Implementation period: 4-5 days.

 
LiteForex analitics. USD/CAD: the pair is growing

Current trend

For two and a half months, the USD/CAD pair has been trading within an upward channel due to the ambiguous Canadian statistics and the growing demand for the American currency. In early December, the price fell to the key support level of 1.3170, failed to overcome it and sharply rose to a local maximum of 1.3450. It was followed by a correction, which was replaced by the current upward impulse with testing of new local highs.

This week, strong data on the US construction sector were published, but traders are waiting for new statistics that can affect the instrument. Today, special attention should be paid to inflation level data in Canada and the Fed's decision on monetary policy. In the second half of the week, GDP and Retail Sales will be released in Canada, and employment market data will be published in the USA.

Support and resistance

In the medium term, the trend will continue, as the growth rate of the economy and key US macroeconomic indicators are increasing. The price can rise to levels of 1.3595 and 1.3785, which were tested at the end of 2016 and the middle of 2017.

Technically, the pair stays within the upward channel, which is supported by the technical indicators’ readings: MACD volumes of long positions are growing, Bollinger bands are directed upwards.

Resistance levels: 1.3495, 1.3530, 1.3570, 1.3595, 1.3650, 1.3785.
Support levels: 1.3450, 1.3390, 1.3375, 1.3355, 1.3290, 1.3225, 1.3170.

Trading tips

It is relevant to increase the volumes of long positions from the current level and open pending long positions from the levels of 1.3450, 1.3390 with the targets at 1.3595, 1.3785 and stop loss 1.3310.

 
LiteForex analitics. Brent Crude Oil: general review

Current trend

Oil quotes show negative dynamics having reached the level of 56.03, the minimum value for the last 14 months.

Published yesterday, official data from the US Department of Energy, indicating a reduction in oil reserves by 0.497M barrels for the week, could not support the Brent rate. Experts predicted a more significant decrease in the amount of 2.437M barrels for the week. The pressure on prices is exerted by concerns regarding oversupply in the oil market. The new OPEC agreement to reduce oil production will come into force only next month and currently the level of oil production in such countries as the USA, Saudi Arabia and the Russian Federation is at a high level. Also, additional pressure on prices is exerted by the general strengthening of USD in connection with the decision of the US Fed to raise the interest rate and to continue tightening monetary policy in 2019.

Support and resistance

Technical indicators show that downward movement potential is preserved. Bollinger Bands and Stochastic are directed downwards. MACD histogram is stable in the negative zone. One may speak about downward movement continuation after the price consolidates below the support level of 56.25. In this case, the decline may continue to the level of 55.46. If the price fails to consolidate below the level of 56.25, then an upward correction is likely to develop with the main target at 57.81, corresponding to the center line of Bollinger Bands.

Resistance levels: 57.03, 57.81, 58.59.
Support levels: 56.25, 55.46, 54.68.

Trading tips

Short positions may be opened from the current level with target at 54.68 and stop loss at 56.00.
Long positions may be opened above the level of 57.03 with target at 57.80–58.00 and stop loss at 56.80.

 
LiteForex analitics. USD/CHF: general analysis

Current trend

USD strengthened slightly against CHF: the pair is now trading near the resistance level of 6/8 Murrey or 0.9948. If the currency can consolidate higher, then the next target will be the level of 7/8 Murrey or 0.9979.

USD may be affected negatively by a significant drop in the stock market. If there is no reversal in the near future, the current decline will be greatest since 2008: only last week, indices lost more than 6%. The leaders of the largest investment banks said that they had enough funds on their balance sheets for lending business and other market operations. On this issue, the Presidential Group on Financial Markets and the Fed will hold a working meeting under the leadership of Stephen Mnuchin.

The second negative point for USD is the shutdown of a part of US government since Donald Trump could not agree with the Senate about government spending. The US president planned to add to the expenditure side a project to build a wall on the Mexico border for a total of $5 billion but the Senate did not agree to sign the bill.

Today, there is no strong movement expected in the market, since many institutions do not conduct financial operations on Christmas Eve.

Support and resistance

Stochastic is at 68 points and does not give signals for opening positions.
Resistance levels: 0.9948, 0.9979.
Support levels: 0.9918, 0.9887.

Trading tips

Short positions can be opened from the level of 0.9979 with the target at 0.9887 and stop loss 1.0003.
 
LiteForex analitics. SPX: general review

Current trend

S&P 500 has recovered slightly after reports from US President Donald Trump about excellent opportunities for buying shares of American companies, which have recently lost in price.

The president also noted that the US economy continues to grow, and Fed Chairman Jerome Powell does an excellent job, although information about Trump’s intention to dismiss an official appeared before. A number of experts believe that the rapid market decline is caused by computer algorithms, since about 85% of operations are automated. On the other hand, the negative dynamics was triggered by fundamental factors, such as the tightening of monetary policy, the geopolitical situation, in particular the trade war between the US and China, as well as weak data on corporate profits of American companies. Also a negative factor for the market is the government shutdown due to the fact that the President was unable to agree with the Congress on government spending. Today, the US Senate will hold another meeting on this issue, but it is likely that it will not be resolved by the end of the year.

Support and resistance

Stochastic is at the level of 86 points indicating the possible correction.
Resistance levels: 2500.0, 2524.0.
Support levels: 2421.9, 2393.8.

Trading tips

Short positions may be opened from the resistance level of 2500.0 with take profit at 2393.8 and stop loss at 2524.0.
 
LiteForex analitics. Morning Market Review

On Wednesday, the US dollar strengthened significantly against most majors, with the exception of the yen. Despite the correction that began during Asian trading, the US currency did not lose its accumulated advantage. The overall decline in the US stock market contributes to strengthening of the dollar. Investor interest in the USD returns amid fears of a slowdown in economic growth in the world in general and in China in particular. Macroeconomic events that can affect the dollar rate today include statistics from the United States on ADP Nonfarm Employment Change (15:15 GMT+2), Initial Jobless Claims (15:30 GMT+2), as well as statistics on ISM Manufacturing PMI (17:00 GMT+2). It is expected that ADP Nonfarm Employment Change will remain unchanged at the level of 179K in December, and the number of initial jobless claims will rise to 220K per week from 216K a week earlier. SM Manufacturing PMI is expected to decline to 57.7 points in December from 59.3 points a month earlier. If the forecasts prove right, the rate will fall under pressure.

EUR/USD

Quotes of the pair EUR/USD decreased to 1.1361 due to the strengthened USD. In the absence of news from euro area, the movement of the instrument will be influenced by the statistics from the United States.

GBP/USD

Quotes of GBP/USD went down to 1.2547 under pressure of the strengthening USD. Today, investors will focus on Construction PMI in the UK. The indicator is expected to fall to 52.9 points in December from 53.4 points a month earlier. If the forecast proves right, the pound may fall under pressure.

USD/JPY

After active decline and testing the support level of 104.68, during the Asian session, the USD/JPY quotes managed to recover some of the lost positions, correcting to the area of 106.70. Today, the stock exchanges in Japan are closed, so the dynamics of the instrument will be influenced by news from the United States.

AUD/USD

Quotes of the AUD/USD pair during the Asian session fell to the level of 0.6762, after which they corrected to the level of 0.6958 rather quickly. Due to the absence of significant macroeconomic releases in Australia, the movement of the instrument is mostly technical.

Gold

Quotes of gold demonstrate a positive trend during the Asian trading having reached 1290.00.
 
LiteForex analitics. XAU/USD: general analysis

Current trend

Gold is trading at semi-annual highs. The market situation made investors pay attention to traditional shelter assets, such as gold, JPY, and treasury bonds.

Yesterday, the fall of the American stock market, provoked by Apple, strengthened the instrument. Company CEO Tim Cook announced a decrease in profit forecast in the first quarter of this year. Similar statements were made earlier by representatives of other US companies. This news reinforced concerns about a slowdown in global economic growth amid a decline in industrial production in China and the EU. In addition, negative macroeconomic indicators and the suspension of the work of the government in the United States catalyze the interest of market participants in gold.

On Friday, traders are cautious due to an extremely rich news background. Investors are closely watching the stock market. Growth stocks of large American companies may provide treasury income and increase the attractiveness of the dollar, weakening the demand for gold.

Support and resistance

On the 4-hour chart, the instrument tests the upper border of Bollinger bands. The indicator is pointing up, and the price range is widening, indicating continued growth of the instrument. MACD histogram is in the positive zone, keeping a strong buy signal. Stochastic is preparing to leave the overbought area.

Resistance levels: 1296.83, 1308.67, 1322.51.
Support levels: 1886.00, 1274.66, 1263.65, 1247.45, 1232.55.

Trading tips

Long positions can be opened from the current level with the target at 1322.50 and stop loss 1283.50.
Short positions can be opened below the level of 1282.90 with the targets at 1270.00, 1255.90 and stop loss 1290.30.

Implementation period: 1–3 days.
 
LiteForex analitics. Morning Market Review

US dollar declines moderately against the majors during the Asian session. Macroeconomic releases that can affect the rate of the instrument today include the publication of the FOMC minutes, which can shed light on the Fed's future monetary policy. It was decided to extend the trade negotiations between the United States and China, which lasted two days, by one more day.

EUR/USD

The quotes of the EUR/USD pair after yesterday's decline, caused by weak data on the level of business confidence in the eurozone and the slowdown in industrial production in Germany, corrected in the Asian session to the level of 1.1457. Today, investors will pay attention to the EU Unemployment Rate (12:00 GMT+2). The indicator is expected to remain unchanged at the level of 8.1% in November.

GBP/USD

Quotes of GBP/USD demonstrate moderate positive dynamics having risen to 1.2740 during the Asian session. Today, market participants will pay attention to the speech of the Bank of England’s Governor Mark Carney (17:30 GMT+2). His comments may lead to an increase in the volatility of the pound in the short term.

USD/JPY

Quotes of USD/JPY rose to the level of 109.00. The pair is supported by positive investors’ expectations regarding the outcome of trade negotiations between the United States and China.

AUD/USD

Quotes of the pair AUD/USD demonstrate moderate positive dynamics and are traded near the level of 0.7155.

Gold

The rate of gold declines during Asian trading and is testing 1281.14.
 
LiteForex analitics. Morning Market Review

US dollar is showing weak negative dynamics against the majors during the Asian session. After active growth the day before, the observed decline in the dollar is correctional. In general, the pressure on the dollar continues to be exerted by the mitigated rhetoric of some representatives of the US Fed, including Jerome Powell, who said that the regulator could postpone the next increase in the interest rate in 2019. Today the statistics on the Consumer Price Index in the US (15:30 GMT+2) will be able to influence the rate. The indicator in monthly terms is expected to decrease to –0.1% in December from 0.0% a month earlier, and in annual terms it can decrease to 1.9% in December from 2.2% in the previous month. If this forecast is right, it will put pressure on the US dollar in the short run.

EUR/USD

The pair EUR/USD rose to 1.1526 due to the weakening USD. In the absence of news from the euro area, the movement of the instrument will be influenced by the news from the United States.

GBP/USD

The GBP/USD pair is growing insignificantly and is trading at 1.2756 during the Asian session. Investors are waiting for the publication of macroeconomic data from the UK on GDP, industrial production and manufacturing production (11:30 GMT+2). GDP is expected to remain unchanged at the level of 0.1% in November. Industrial production is expected to rise to 0.3% in November from –0.6% a month earlier. Manufacturing production is expected to rise to 0.4% MoM in November from –0.9% a month earlier, and YoY it can rise to –0.7% in November from –1.0% a month earlier. In general, confirmation of forecasts may support the GBP.

USD/JPY

The USD/JPY pair is moderately declining having fallen to 108.26 during the Asian session. Statistics from Japan published tonight turned out to be ambiguous and was ignored by the market. Household Spending YoY decreased to –0.6% in November from –0.3% a month earlier, and in monthly terms, the value of the indicator decreased less than expected and amounted to 1.1% in November against 1.8% a month earlier.

AUD/USD

Quotes of the pair AUD/USD show moderate positive dynamics reaching the level of 0.7210. The instrument is supported by positive data from Australia, published at night. Retail sales rose to 0.4% in November from 0.3% a month earlier.

Gold

The gold rate is growing against the backdrop of a weakening dollar, reaching 1293.00.
 
LiteForex analitics. WTI Crude Oil: price is consolidating

Current trend

After an active growth at the beginning of the year, oil prices are consolidating near the level of $50 per barrel.

"Black gold" is supported by investors' hopes for a positive outcome of China-US trade negotiations and the end of the trade conflict in the near future. In addition, quotes are rising against the background of the Norwegian Petroleum Directorate, which reported a likely reduction in production by 4.8% to 1.42 million barrels per day in 2019, which is the minimum figure for the last 30 years.

Last Friday, Baker Hughes US Oil Rig Count report affected the instrument positively. During the week, the number of rigs decreased by 4 to 873 units. Over the past period, the figure also declined from 885 to 877.

Support and resistance

On the daily chart, Bollinger bands are growing steadily. The price range narrows, reflecting the emergence of ambiguous trading dynamics in the short term. The MACD indicator is growing, keeping a buy signal (the histogram is above the signal line), and is testing the zero line but is not likely to consolidate above it. Stochastic declines, reacting to the active “bearish” dynamics of the beginning of the week.

The current readings of the indicators do not contradict the further development of the corrective decline in the short and/or super short term.

Resistance levels: 52.00, 53.19, 54.43, 55.64.
Support levels: 50.00, 49.00, 48.05, 47.00, 45.80.

Trading tips

Long positions can be opened after the rebound from the level of 50.00 with the target at 52.00 or 53.19. Stop loss is 49.00.

Short positions can be opened after the breakdown of the level of 50.00 with the target at 48.05 or 47.00. Stop loss is 51.00.

Implementation period: 2–3 days.
 
LiteForex analitics. Morning Market Review

The US dollar is declining against the pound and the Australian currency, however, it shows a sideways trend paired with the euro and is growing against the yen. Today, investors will pay attention to the publication of PPI in the US (15:30 GMT+2). The indicator in monthly terms is expected to decrease to –0.1% in December from 0.1% a month earlier, and in annual terms it can remain unchanged at 2.5% in December. In the afternoon, speeches by members of the US Federal Reserve are expected. Speech by Neel Kashkari is planned for 18:30 (GMT+2), and speeches by Esther George and Robert Kaplan are expected at 20:00 (GMT+2). From their speeches, investors are hoping to understand the intentions of the regulator regarding the rate hike in 2019. Speeches of officials of this rank can have a significant impact on the dynamics of the dollar.

EUR/USD

The EUR/USD pair is moving within the range of 1.1449–1.1488. Investors are awaiting publication of data from the euro area on the trade balance (12:00 GMT+2), as well as the speech by the ECB President Mario Draghi (17:00 GMT+2).

GBP/USD

The pair GBP/USD continues showing positive dynamics having risen to 1.2908 during the Asian session. Today, investors are waiting for the outcome of the vote in the British Parliament on Brexit. Theresa May calls on MPs to approve the treaty, arguing that the consequences could otherwise be catastrophic. In case of failure of the vote, the Prime Minister will have three working days to prepare an alternative version of the contract.

USD/JPY

The USD/JPY pair is rising actively and has reached the level of 108.74 during the Asian session. Due to the absence of significant macroeconomic releases in Japan, the movement of the instrument is mostly technical.

AUD/USD

The pair AUD/USD is rising having reached 0.7217 during the Asian session. Against the background of the absence of macroeconomic releases from Australia, the movement of the instrument's rate is of a technical nature.

Gold

Quotes of gold demonstrate lateral dynamics and are traded near the level of 1290.00.
 
LiteForex analitics. Morning Market Review

The US dollar moderately strengthens against the euro and the yen, but shows a lateral trend paired with the Australian currency. Statistics from the USA, published yesterday, indicated a decline in the Producer Price Index to –0.2% in December from 0.1% a month earlier, but did not have a significant impact on the instrument. Investors continue to follow the news regarding the US government shutdown, which has been going on for the fourth week and, according to representatives of the administration, may last until the end of February. This situation threatens the market with possible negative consequences. Macroeconomic statistics, which can influence USD today, include the data on retail sales in the USA (15:30 GMT+2).

EUR/USD

The EUR/USD pair dropped to the level of 1.1410. EUR is under pressure from yesterday’s speech by the ECB President Mario Draghi at the European Parliament. The official believes that the slowdown in the economy can last longer than expected. Uncertainty about Brexit puts additional pressure on the euro. Yesterday, the British Parliament rejected an agreement on the UK leaving the EU, prepared by Prime Minister Theresa May.

GBP/USD

The GBP/USD pair showed ambiguous dynamics on Tuesday amid heightened volatility caused by the outcome of a vote in the UK Parliament on withdrawal from the EU. Quotes fell to the level of 1.2667, after which they quickly returned to the level of 1.2869, where they are trading during today's Asian session. Yesterday, the British MPs rejected an agreement prepared by the government of Theresa May and the EU. MPs voted 432 to 202 to defeat the proposal. Now the Prime Minister has three days to present an alternative to the Brexit agreement. During this time, Theresa May will probably try to get new concessions from the EU, as well as convince the Parliament to support the deal. The instrument today may be affected by the speech of the Bank of England head Mark Carney (11:15 GMT+2), as well as statistics on the CPI in the UK in December (11:30 GMT+2).

USD/JPY

After active growth on Tuesday, the USD/JPY pair corrected down to 108.47 during today's Asian session. Yesterday's statistics from Japan was ignored by investors. The movement of the instrument rate is primarily technical. Tertiary Industry Activity Index was better than expected, but worse than in the previous month and amounted to –0.3% in December against 2.2% a month earlier.

AUD/USD

The AUD/USD pair shows lateral dynamics within the range of 0.7224–0.7178 and has changed slightly on the whole.

Gold

Quotes of gold have ambiguous dynamics. After an active decline yesterday and a test of the level of 1286.56, the instrument rate returned to 1292.15 during the Asian session.