2018-01-18
Wave summary:
EUR/NZD continues to follow the expected path. After wave i peaked at 1.6937 a corrective decline in wave ii has begun unfolding. This wave ii corrections will likely test the 61.8% corrective target of wave i at 1.6678 before turning higher in wave iii towards 1.7360 on the way higher to 1.7777.
Short-term, we expect minor resistance at 1.6839 to cap the upside for the final dip to 1.6678 and then strongly higher.
R3: 1.6937
R2: 1.6860
R1: 1.6845
Pivot: 1.6737
S1: 1.6711
S2: 1.6678
S3: 1.6613
Trading recommendation. We closed the final 50% long EUR position at 1.6845 for a nice profit of 175 pips. A we will re-buy EUR at 1.6695 or upon a break above 1.6845.
Technical analysis of NZD/USD for January 18, 2018
2018-01-18
NZD/USD is consolidating. The pair posted an intraday "V-reversal" pattern yesterday and is likely to post some consolidations in sight. The relative strength index has broken below its neutrality area at 50 and is now mixed to bearish.
Therefore, as long as 0.7330 is resistance, expect a new pullback to 0.7260 and 0.7230 in extension.
The black line shows the pivot point. Currently, the price is above the pivot point, which is a signal for long positions. If it remains below the pivot point, it will indicate short positions. The red lines are showing the support levels, while the green line is indicating the resistance levels. These levels can be used to enter and exit trades.
Resistance levels: 0.7350, 0.7370, and 0.7385.
Support levels: 0.7260, 0.7230, and 0.7200.
Trading Plan for EUR/USD and US Dollar Index for January 18, 2018
2018-01-18
Technical outlook:
The EURUSD daily chart setup has been presented here to have a bigger picture. The pair seems to have either completed an impulse after its rally began from Jan 2017, or it is in the last leg within the 5th wave as labeled here. In either case, a drop is expected towards at least 1.1900 levels, which could be wave 4 termination point within the last wave (5). Furthermore, if EURUSD breaks below the immediate support trend line, it would indicate that a meaningful top is in place at 1.2323 levels and that the pair should be heading lower towards 1.1500 levels. Also, note that the 1.1500 levels are right at the Fibonacci 0.382 support of the entire rally between 1.0350 through 1.2323 levels in the past one year. Bias, for now, remains on the short side.
Trading plan:
Remain short with the stop above 1.2323, target 1.1950/00 at least.
US Dollar Index chart setups:
Technical outlook:
The US Dollar Index daily chart view has been presented today with probable wave counts, to have a bigger picture. The index looks to have produced an impulse (5 waves) lower since January 2017 from 103.80 through 90.20 levels respectively. As an alternative though, it could be possible that the last wave (5) is yet not complete and may push lower one last time after producing wave 4 of one lesser degree. In either case, the highest probable wave count is a rally through 92.70/93.00 levels at least. Furthermore, a push higher would test 95.14 resistance before producing a meaningful pullback. Please note that over the next several weeks or months, the potential remains for an extended rally towards 98.50 levels. The bias remains on the long side for now.
Trading plan:
Remain on the long side, stop at 90.00, target 92.70 at least.
Fundamental outlook:
Watch out for CNY GDP figures around 0200 AM EST.
Good luck!
Technical analysis of GBP/JPY for January 18, 2018
2018-01-18
All our upside targets which we predicted in the previous analysis have been hit. The pair is moving upward and is expected to challenge the next resistance at 154.25. The 20-period moving average is turning up now and calls for a new rise. Additionally, the relative strength index managed to break above its neutrality area at 50, confirming a positive outlook.
Therefore, as long as 153.10 is not broken, likely advance to 154.25 and 165.95 in extension.
Alternatively, if the price moves in the direction opposite to the forecast, a short position is recommended below 153.10 with the target at 152.50
Strategy: BUY, stop loss at 153.10, take profit at 154.25
Chart Explanation: the black line shows the pivot point. The price above the pivot point indicates long positions; and when it is below the pivot point, it indicates short positions. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.
Resistance levels: 154.25, 154.95, and 155.50.
Support levels: 152.50, 152.00, and 151.45
Technical analysis of USD/CHF for January 18, 2018
2018-01-18
USD/CHF is expected to trade with bullish bias above 0.9615. The pair has clearly reversed up and now stands firmly above its 20-period and 50-period moving averages, which now act as strong support roles. The relative strength index is bullish above its neutrality area at 50.
Hence, above 0.9615, a new bounce seems to be on the cards with the targets at 0.9675 & 0.9700.
Chart Explanation: The black line shows the pivot point. The present price above the pivot point indicates a bullish position, and the price below the pivot point indicates a short position. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.
Strategy: Sell, stop loss at 0.9660, take profit at 0.950.
Resistance levels: 0.9700, 0.9725, and 0.9770
Support levels: 0.9570, 0.9550, and 0.9520.
Technical analysis of USD/JPY for January 18, 2018
2018-01-18
USD/JPY is expected to trade with a bullish outlook. The pair shows an upward momentum after breaking above the declining trend line since January 15. Both rising 20-period and 50-period moving averages maintain the bullish bias. The relative strength index advocates for a further upside.
Hence, above 110.90, look for a new advance with targets at 111.45 and 111.70 in extension.
Alternatively, if the price moves in the opposite direction, a short position is recommended below 110.90 with a target of 110.50.
Chart Explanation: The black line shows the pivot point. The current price above the pivot point indicates a bullish position, while the price below the pivot point is a signal for a short position. The red lines show the support levels and the green line indicates the resistance level. These levels can be used to enter and exit trades.
Strategy: BUY, stop loss at 110.90, take profit at 111.45.
Resistance levels: 111.45, 111.70, and 112.05
Support levels: 110.50, 110.20, and 109.65.
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