Thread: InstaForex Wave Analysis

The USD/CHF technical analysis and trading recommendations for December 23, 2010








Overview:
It seems that franc started downside movement. New sell signal with 0.9423 target leve has been formed. The signal is strong and confirmed, as the Chinkou Span managed to fixate below the price chart and the price fixed below the Ichimoku Cloud. Therefore, now the first target of the downside movement is the second support level 0.9408. In case this level is passed the next target will be the third support level of 0.9255. The downside movement remains until the price is below the Kijun-Sen (0.9610), if the price fixates above this line it is advisable to cut short positions. The Chinkou Span is below the price curve, thus indicating the bearish sentiment and confirming the sell signal. The Bollinger Bands seem to show the beginning of downside trend, the lines are diverging and directed down. The MACD is descending indicating the downward movement.
Trading recommendations:
Currently it is recommended to trade down with the target to 0.9408, in case this level is passed the next target will be 0.9255. Stop Loss should be placed above the Kijun-Sen (0.9610). In case the MACD reverses up short positions should be cut manually.


In addition to technical image, one should take into account the fundamental data and the time of their release.



The chart annotation:
Ichimoku indicator:
Tenkan-sen — red line
Kijun-Sen — blue line
Senkou Span A — light brown stipple line
Senkou Span B — light purple stipple line
Chinkou Span — green line
Bollinger Bands indicator:
3 yellow lines
MACD indicator:
The red line and the histogram with the white bars in the indicators window.



Performed by Stanislav Polyanskiy, Analytical expert
InstaForex Companies Group © 2007-2010


More analysis - at instaforex.com



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Fundamental Analysis, December 23, 2010



The national office of statistics in Britain has announced yesterday that the country's GDP rose in the third quarter by 0.7% as compared to the second quarter. Growth had been more moderate than preliminary estimates of a 0.8% growth, as well as economists' predictions of a 0.8% increase. Europe's stock exchanges, having recovered all the declines they incurred due to the collapse of the American Lehman Brothers investment bank in 2008, had closed yesterday on a mixed trend, with the London exchange locking at a 0.6% rise, the Frankfurt exchange retreating by 0.1%, and Paris declining by 0.2%

A mixed trend with a tendency for index rises has been recorded this morning in the Asian stock markets, led by the stock of the commodities sector, after the price of oil approached 90 United States dollars per barrel of oil. The growth has also been influenced by the index rises recorded on Wall Street yesterday. Therefore, the Seoul stock exchange declines by 0.4%. The Hong Kong stock exchange climbs by 0.2%, and the Taiwan stock exchange strengthens by 0.2% as well. Due to a Japanese holiday, trade will not be conducted today at the Tokyo stock exchange.

In the macroeconomic sphere, the United States Department of Commerce reported yesterday that the American GDP grew in the third quarter at an annualized rate of 2.6%, higher growth than expected according to preliminary data published in the previous month, pointing to a 2.5% growth. That said, growth was more moderate than predicted by economists, who predicted a 2.9% growth in the third quarter.

More from the macroeconomic sphere: the real estate agents' association announce yesterday that existing home prices rose 5.6% in November as compare to the previous month, to an annualized rate of 4.68 million homes. Growth was slightly higher than analysts' predictions of an annualized rate of 4.66 million homes in November, as compared to an annualized rate of 4.43 million homes in October. Still, the sales rate is lower by 27.9% from the rate for November 2009.

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Performed by Gerardo Porras Palomino, Analytical expert
InstaForex Companies Group © 2007-2010


More analysis - at instaforex.com


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CHF/JPY, Signs of Reversing the Downward Trend, December 23, 2010 (Daily Strategy)






CHF/JPY

The Swiss Frank – Japanese Yen is beginning to show signs of tiredness over everything related to its bullish trend that had brought it yesterday to a new high around the strong resistance level of 88.00. The pair's failure to breach the resistance level, in combination with the negative deviation developing between the price movement and the MACD indicator, lead us to estimate that the pair is headed south.

A final confirmation for a trend reversal and a new wave of downwards movement will be received only after the pair breaches the bottom of the shuffle pattern it entered during last week, around 86.15. The first support level, expected to stall the negative momentum, should such a thing appear, will be poised around 84.15, while the meaningful support level around 82.15 will serve us as a final goal for a complete exit from the sell position.


Performed by Gerardo Porras Palomino, Analytical expert
InstaForex Companies Group © 2007-2010



More analysis - at instaforex.com

The EUR/USD technical analysis and trading recommendations for December 24, 2010 4-hour timeframe Overview: Another correction started without even touching the first support level, which is indicated by MACD. The formed sell signal has target level of 1.2966. This signal is strong and confirmed since the Chinkou Span fixed below the price graph and the price managed to fixate below the Ishimoku cloud. But as mentioned before, correction movement is continuing, therefore it is not recommended to trade down until it ends. The first target for downside movement is 1.3047 – the first support level. If the first support level is passed the next target will be the second support level of 1.2907. The downside movement remains while the price is below the Kijun-Sen (1.3220), short positions should be closed if the price strengthens above this line. The Chinkou Span is below the price graph, thus confirming the current sell signal and indicates the bearish sentiment. The Bollinger bands show possible completion of the downwards movement or a prolonged correction, the lines are not diverging and directed sideways. It is recommended to resume trading after the lines start to diverge again. The MACD is ascending, thus pointing to the current correction movement. Trading recommendations: Currently it is recommended to trade down with the target to 1.3047, in case this level is passed the target will be 1.2907. Stop Loss should be placed above 1.3127. Short positions should be opened only if the MACD reverses down and Bollinger bands start to diverge. In addition to technical image, one should take into account the fundamental data and the time of their release. The chart annotation: Ichimoku indicator: Tenkan-sen — red line Kijun-Sen — blue line Senkou Span A — light brown stipple line Senkou Span B — light purple stipple line Chinkou Span — green line Bollinger Bands indicator: 3 yellow lines MACD indicator: The red line and the histogram with white bars in the indicators window. Performed by Stanislav Polyanskiy, Analytical expert InstaForex Companies Group © 2007-2010 More analysis - at instaforex.com ================================================== =================================== ================================================== =================================== The GBP/USD wave analysis for December 24, 2010. Yesterday the GBP/USD pair was not active and was trading within a narrow sideways corridor near the 54 figure level. At the same time, all changes take place within the incomplete 3rd wave of the future C, that has been gaining quite complex inner wave structure. Apparently, we will see the further development of this situation after the holidays. Performed by Alexander Dneprovskiy, Analytical expert InstaForex Companies Group © 2007-2010 More analysis - at instaforex.com ================================================== =================================== ================================================== =================================== The USD/JPY wave analysis for December 24, 2010. The USD/JPY pair trading was quite volatile which resulted in testing the 93.00 level. At the same time, wave e of the estimated triangular correction structure has become longer, which can allow the 4th wave to have more complex form. Simultaneously, strong MACD divergence supports the prediction that the price should go up. Performed by Alexander Dneprovskiy, Analytical expert InstaForex Companies Group © 2007-2010 More analysis - at instaforex.com ================================================== =================================== ================================================== =================================== The USD/CHF technical analysis and trading recommendations for December 24, 2010. Week review Ishimoku: New sell signal with 0.9324 target level has been formed. The signal is very strong, as the price is below the Ichimoku Cloud and the Chinkou Span managed to fixate below the price chart. Therefore, downside movement is most likely to extend as there are no signs of reversal or at least correction. It is recommended to trade down with the second support level 0.9373 as the first target. If the level 0.9373 is passed, the third support level 0.9198 will be the next target. If the price manages to fixate above the Kijun-Sen (0.9775) the signal will grow weaker and short positions should be closed in this case. The price is located below the Tenkan-sen and the Kijun-Sen lines and below the Ichimoku cloud, which indicates downtrend. The Tenkan-sen is directed downwards which predicts further downside movement in the short term. The Kijun-Sen is also directed downwards which predicts further downside movement in the long term. Senkou Span A and Senkou Span B crossed, as expected, and formed a sell signal; the cloud itself change its movement to downside. Chinkou Span is located below the price graph, which also indicates downtrend. Bollinger Bands: This indicator shows downside movement. The lines are expanding and directed downwards. This fact supposes further downside movement. MACD: This indicator shows downside movement at the moment. This predicts further downside movement. In case MACD reverses up, this will denote the beginning of correction. Trading recommendations: At present the USD/CHF pair is now characterized by downside movement. Current target is 0.9373. Stop loss should be placed above Kijun-Sen (0.9775). In case MACD reverses, short positions should be cut manually. The chart annotation: Ichimoku indicator: Tenkan-sen — red line Kijun-Sen — blue line Senkou Span A — light brown stipple line Senkou Span B — light purple stipple line Chinkou Span — green line Bollinger Bands indicator: 3 yellow lines MACD indicator: The red line and the histogram with the white bars in the indicators window. Performed by Stanislav Polyanskiy, Analytical expert InstaForex Companies Group © 2007-2010 More analysis - at instaforex.com ================================================== =================================== ================================================== =================================== The EUR/USD wave analysis for December 24, 2010 The EUR/USD currency pair could not escape from quite a narrow sideway corridor being stuck between the levels of the 31 and 32 figures. At the same time, slow price fluctuations form its complex wave structure that can be both correction within the future downside section and the beginning of a more complex horizontal correction structure. Simultaneously, forthcoming Christmas holidays have strong influence on the market activity, which is clearly demonstrated by the euro. Performed by Alexander Dneprovskiy, Analytical expert InstaForex Companies Group © 2007-2010 More analysis - at instaforex.com

Candlestick analysis of the AUD/USD for December 27, 2010
The AUD/USD has slightly rebounded after it successfully broke the resistance level near 1.0024. Now upside movement targeted for this year’s high 1.0182 should be expected.
Earlier on a daily chart the AUD/USD has formed the combination of candlesticks Bullish Engulfing which indicates the uprising movement, confirmed further.
This combination of candlesticks developed near the support level of 0.9537, where the bulls started to increase their influence and a rebound took place after a downside movement. This combination of candlesticks provided a good opportunity to open long positions.
A breakthrough of the resistance level of 0.9710 means that this point of view is correct.
However, in case the reversal takes place and the AUD/USD breaks through the support level of 0.9710, then long positions should be closed, as it will lead to the further decline to 0.9537. 

Performed by Vladimir Donin, Analytical expert
InstaForex Companies Group © 2007-2010

More analysis - at instaforex.com

Technical analysis of the USD/CAD for December 27, 2010

Support levels: 1.0000, 0.9980, 0.9930
Resistance levels: 1.0212, 1.0290, 1.0380
On a 4-hour graph the USD/CAD is descending after it failed to break through the resistance level of 1.0212. If the downside movement extends, the pair is expected to bounce up near strong support level of 1.0000.
The uprising movement is confirmed by the fact that on a 4-hour chart the MACD divergence appeared. As it was mentioned before, if the USD/CAD breaks out 1.0290, this will lead to upside motion with the target to 1.0380. Further breakout of 1.0380 will denote the end of a rollback and that further advance should be expected. Moreover, the breakthrough of 1.0380 will point to the formation of “Triple Bottom”.
Nevertheless, the breakout of the support level near 0.9980-1.0000 will allow the pair to reach 0.9930.
In a midterm the currency pair will probably remain within the limits of its wide range between 1.0000 and 1.0750-1.0850. Nonetheless, in case the reversal takes place, then the breakout of 1.0680 will confirm that the consolidation ended and that the downtrend with 1.3063 is broken through. In this case it is expected that the USD/CAD will move upside to the Fibonacci correction level 38.2 from 1.3063 to 0.9929 at 1.1126 with the next target to the Fibonacci correction level 61.8 at 1.1866.

Performed by Vladimir Donin, Analytical expert
InstaForex Companies Group © 2007-2010

More analysis - at instaforex.com

Candlestick analysis of the USD/CHF for December 27, 2010

On a 4-hour graph the USD/CHF has made a sharp rebound from 0.9500. Nevertheless, the viewpoint on the currency pair is still bearish. As mentioned before, the breakout of the support level 0.9559 targeted the USD/CHF pair to 0.9462.
Earlier on a 4-hour graph the USD/CHF has formed the combination of candlesticks Falling Three Methods which indicates the downside movement.
This combination of candlesticks shows that the USD/CHF was increasing during a couple of weeks, but the rebound took place after the USD/CHF failed to break out the level of 1.0066. This means that the bulls did not manage to solidify here and the bears started increasing their influence. The downside movement is supported by the fact that the currency pair broke through the line of the uptrend.
A breakthrough of support level of 0.9850 confirms this point of view.
It is recommended to place the stop-orders slightly above 0.9669 as the breakout of this level will target the currency pair to 0.9850.

Performed by Vladimir Donin, Analytical expert
InstaForex Companies Group © 2007-2010
More analysis - at instaforex.com

On a 4-hour graph the GBP/USD is consolidating after a drop to 1.5355. Nevertheless, the viewpoint on this pair is still bearish as the downtrend still remains. Earlier the pair dropped sharply after it failed to break out the resistance level of 1.5900.
Earlier on a 4-hour graph the GBP/USD formed the combination of candlesticks Bearish Engulfing which indicates the decline, confirmed further.
This combination of candlesticks developed after the currency pair could not break through the resistance level near 1.6085-1.6096, which means that the bulls did not solidify here. Further the bears started increasing their influence.
A breakthrough of 1.5841 means that this point of view is correct.


Performed by Vladimir Donin, Analytical expert
InstaForex Companies Group © 2007-2010

More analysis at instaforex.com

GBP/JPY is developing wave C of medium term downtrend (the wave and expansions off A-B waves are colored magenta in the chart). Within this wave C there are four subwaves (colored red) and potential subwave 5 that is developing now. Within subwave 5 there are still smaller A-B-C waves - colored orange red. The targets of the downmove are Fibonacci expansions off 135.03-126.43-134.19, 134.19-129.33-133.03, 133.03-130.75-131.61 (waves 1-2), 131.61-127.43-128.54 (waves 3-4), 128.54-127.69-128.41 (subwaves A-B within wave 5), 128.41-127.79-128.06 (still smaller waves).

Supports:

- 127.44 = objective point (OP)
- 127.06-03 = confluence area of two expanded objective points (XOP)
- 126.44 = super expanded objective point (SXOP)
- 126.18 = SXOP
- 125.96 = contracted objective point (COP)

If the price reverses up the nearest resistances will be Fibonacci retracements of 131.61-127.43.

Resistances:

- 129.03 = .382 retracement
- 129.52 = .50 ret


Overbought/Oversold

Assuming that the prevailing trend is down it's preferable to use overbought readings of the Detrended Oscillator. The overbought area is 30-40 pips away from the current price.

Performed by Roman Molodiashin, Analytical expert
InstaForex Companies Group © 2007-2010
More analysis at instaforex.com

AUD/USD Elliott wave count and Fibonacci levels, December 28, 2010

This currency pair is now moving within wave C of daily degree (the wave and expansions off A-B waves are colored royal blue in the chart). Within this wave C there are five subwaves - colored magenta. And subwave 5 is still developing. Within subwave 5 there are still smaller waves A-B-C (colored yellow in the chart) with subwave C still developing.

The targets of the upmove are Fibonacci expansions off 0.9539-1.0031-0.9833 (waves A-B of larger degree, daily), 0.9833-0.9930-0.9843 (waves 1-2), 0.9843-1.0069-0.9990 (waves 3-4), and 0.9990-1.0060-1.0013 (subwaves A-B within wave 5).

Resistances:

- 1.0094 = super expanded objective point (SXOP)
- 1.0126-30-37 = confluence area of expanded objective point (XOP) and two contracted objective points (COP)

If the price reverses down the nearest supports will be Fibonacci retracements of the wave up from 1.0013 - this wave is not developed yet.

Overbought/Oversold

Assuming that the prevailing trend is up it's preferable to use oversold readings of the Detrended Oscillator or its cross below the zero level to consider long positions. The zero level is 15 pips away from the current price, the oversold area is 30-35 pips away from the current price which may correspond to a Fib support only on smaller timeframes, so stand aside in the meantime.
Performed by Roman Molodiashin, Analytical expert
InstaForex Companies Group © 2007-2010
More analysis - at instaforex.com

GBP/JPY Elliott wave count and Fibonacci levels, December 28, 2010

GBP/JPY has developed five waves of medium term downtrend (colored red in the chart) from 131.61 to 127.34. These 5 waves are the subwaves of wave C of larger degree (colored magenta in the chart). Current wave up is potential wave A in A-B-C cycle that is the retracement to 131.61-127.34. Now the targets above the current price level are Fibonacci retracements of 131.61-127.34 and 128.54-127.34.

Resistances:

- 128.08 = .618 retracement
- 128.97 = .382 ret
- 129.48 = .50 ret
- 129.98 = .618 ret

If the price resumes the downtrend and breaks below 127.34 the nearest supports will be Fibonacci expansions off 135.03-126.43-134.19, 134.19-129.33-133.03, 133.03-130.75-131.61 (waves 1-2), 131.61-127.43-128.54 (waves 3-4).

Supports:

- 125.96 = contracted objective point (COP)
- 125.64-59 = confluence area of super expanded objective point (SXOP) and objective point (OP)


Overbought/Oversold

Assuming that the pair is now trading in a flat but the prevailing trend is down it's preferable to use overbought readings of the Detrended Oscillator. The overbought area is 20-30 pips away from the current price which corresponds to 128.08 resistance.

Performed by Roman Molodiashin, Analytical expert
InstaForex Companies Group © 2007-2010
More analysis - at instaforex.com

EUR/GBP candlestick analysis (long term view)

The EUR/GBP currency pair started this week on the upside.
Nevertheless, as mentioned before, successful breakout of the support level near 0.8430-0.8450 targeted the pair to 0.8143.
The view on the currency pair remains bearish as earlier the EUR/GBP has formed a combination of Bearish Engulfing candlesticks in a downward trend.
In addition, the support level breakthrough at 0.8535 proves that this point of view is correct. Now the pair is likely to decline to 0.7750-0.7700.
The downside movement is supported by the fact that this combination of candlesticks was formed near the upper line of the downward trend where the bulls could not solidify, the bears started increasing their influence and the rollback took place.
It is worth pointing out that short positions should be closed in case of breakthrough of Fibonacci correction level 50.0, as it will mean that the downtrend is overcome and the currency pair will target to 0.98.

Performed by Vladimir Donin, Analytical expert
InstaForex Companies Group © 2007-2010
More analysis - at instaforex.com