Thread: InstaForex Wave Analysis

Fundamental Analysis, February 17, 2011

According to protocol of the Fedral Bank’s (FOMC) last meeting held last month and published yesterday, the Federal Reserve has revised its growth forecast for the US economy's performance this year, its leaders expressing confidence that the great economic recovery in the world is accelerating. The bank raised the forecast for economic growth in 2011 to a level of 3.4% – 3.9% of the US Gross Domestic Product (GDP).

On the American macroeconomic front, the United States Department of Commerce reported last night that the amount of new construction projects rose in January 14.6% to an annual rate of 596 thousand houses, the highest rate in 20 months, whereas economists predicted a more moderate growth to an annual rate of 539 thousand new construction projects.

The United States Department of Commerce further reported that the US Producer Price Index (PPI) rose in January 0.8%, a seventh monthly rise in a row, following the rise in energy prices. Economists had forecasted a 0.9% rise. The core index, which excludes energy prices, had risen 0.5% – the sharpest rise since October 2008, higher than the economist’s forecasts of a 0.3% rise.

Also in the macroeconomic sphere, US industrial production declined in January by 0.1% following a 1.2% rise in December. The analysts forecasted a 0.5% rise in production following a rise of 0.8% which was originally reported in December. Production capacity use declined last month to 76.1% compared with December's 76.2%, and is still lower than the average level of 80% over the past 20 years.

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CAD/JPY Technical Correction , February 17, 2011 (Daily Strategy)





CAD/JPY

The rate rises in the world stock exchanges support the price of the Canadian dollar - Japanese Yen pair, which has been in an upwards trend for a month and a half. A downwards breach lower border will signal the beginning of the movemet southwards and serve as a trigger for a short entry with a drop potential down to the previous low support level of 82.50. On the way down one must be careful of the nearer 83.70 support level, which may serve as a key point for a partial realization of the position.



Performed by Gerardo Porras Palomino, Analytical expert
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Fundamental Analysis, February 18, 2011




The Asian stock markets have recorded an index rise after Taiwan has reported faster

economic growth than expected, at a level of 6.9% for the fourth quarter of 2010. As such,

the Tokyo stock exchange reports a 0.03% rise, the Seoul stock exchange rises by 1.6%, the

Hong Kong stock exchange climbs by 1.0% and the Taiwan stock exchange soars by 1.9%.

The macroeconomic front in the United States provided mixed data yesterday, with the

Philadelphia Federal Reserve reporting an increase in manufacturing activity in the

Philadelphia area to 35.9 points, its highest level since January 2004, where economists

had expected merely a light increase of the index to a level of 21 points.

The United States Department of Labor also published the weekly unemployment data

yesterday. The amount of new unemployment claims increased last week by 25 thousands to a

total of 410 thousand, above analysts' prediction of 400 thousands. Furthermore, the

Department also adjusted last week's data to 385 thousand as compared to the original

report of 383 thousand it had reported originally, which was the lowest number of weekly

new unemployment claims reported in over two years.

Furthermore in the macroeconomic field, it has been reported yesterday that the CPI in

America has risen in January by 0.4% - a second monthly rise in a row, while economists had

predicted a more moderate 0.3% climb. As compared to January 2010, the Index has completed

a 1.6% climb. The core index, which excludes the prices of fuel and food, considered too

volatile rises by 0.2% - the sharpest increase since October 2009.

Commodity prices had also risen yesterday on the background of pro-democracy protests in

the Middle East. Gold futures in April had locked at 1,385 United States dollars for one

ounce of gold - the highest close in five weeks - at the New York Commodities Exchange.

Crude oil futures for March at the New York Commodities Exchange had locked at a rate of

86.36 United States dollars for one barrel of oil, after having risen 1.6%.


Performed by Gerardo Porras Palomino, Analytical expert
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CHF/JPY Bearish Outlook , February 18, 2011 (Daily Strategy)








Swiss Franc - Japanese Yen

The CHF/JPY pair has been trading in a shuffle for over two weeks in a relatively narrow

range between the levels of 88.00 from above and 85.00 from below. Right now, after the

pair has reached the shuffle pattern's upper range once more and has formed another double

top pattern, an attractive opportunity has been formed for entry into a sell deal in the

attempt to catch a new wave of downwards movements that is expected to lead the Swiss Franc

- Japanese Yen pair back to the lower range of the shuffle pattern. with one goal in 85.20







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EUR/USD wave analysis for February 18, 2011








Yesterday the EUR/USD currency pair was trading near the 36 figure, continuing to form an

inner wave structure of the estimated upside correction. At the same time, given the

correlation between its waves a and c we can suppose that targets for such growth might be

located in the range between 1.3610 and 1.650, and further to 1.3700.

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GBP/USD wave analysis for February 18, 2011







In spite of the recent dynamic decline of the price, yesterday the GBP/USD currency pair

did not manage to develop a downside movement and by the end of the day reached Wednesday’s

highs near the 1.3180 level. At the same time, the pound has another opportunity to

overcome the February 3 high 1.6275 and form a quite complicated wave structure of the 4th

wave of the whole uptrend initiated December 28.

Performed by Alexander Dneprovskiy, Analytical expert
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The EUR/USD technical analysis and trading recommendations for February 18, 2011


4-hour timeframe




Overview:
The euro price could not overcome the first support level 1.3449 and started a correction

that transformed into forming of a new buy signal with target level 1.3764. The formed sell

signal is weak and confirmed, since the Chinkou Span fixated above the price graph and the

price is below the Ichimoku cloud. Thus, at the moment the first target for the upside

movement is 1.3843 – the second resistance level, but it is recommended to trade up only

after the buy signal strengthens and proves, which implies the price fixating above the

Ichimoku cloud. If this level is passed the second target will be the third resistance

level at 1.3943. Upside movement remains while the price is above the Kijun-sen (1.3530),

if the price fixates below this line it is recommended to cut long positions. The Chinkou

Span is above the price graph, which confirms the current buy signal and indicates bullish

sentiment. The Bollinger bands show the beginning of the upside movement, the lines are

diverging and directed up. The MACD is ascending, which indicates current upside movement,

if the indicator reverses down it will denote the beginning of a correction.



Trading recommendations:
Currently it is recommended to wait until the buy signal strengthens and proves and trade

up with target at 1.3843 and further to 1.3530. Stop Loss should be placed above 1.3620. If

the MACD reverses down it is recommended to cut long positions.

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 © 2007-2011


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GBP/JPY Elliott wave count and Fibonacci levels - February 21, 2011

The GBP/JPY is now correcting the whole movement up from 133.24, however this wave down (colored red in the chart) may become wave A of A-B-C cycle down. The targets of the downmove are Fibonacci retracements of 134.24-133.56, 133.24-135.56, 131.62-135.56, and expansions off 135.56-134.88-135.28.
Supports:
- 134.86 = contracted objective point (COP)
- 134.74 = .618 retracement
- 134.67-60 = confluence area of .382 ret and objective point (OP)
- 134.40 = .50 ret
- 134.18-18-05 = confluence area of expanded objective point (XOP), .618 and .382 retracements
If the price breaks above 135.56 the immediate resistances will be Fibonacci expansions off 125.47-132.48-129.49, 129.49-132.64-129.75, 129.75-133.31-131.62, 131.62-134.31-133.24, 133.24-135.52-134.24.
Resistances:
- 135.65 = contracted objective point (COP)
- 135.93 = objective point (OP)
- 136.50-52 = confluence area of two OP's

Overbought/Oversold
Assuming that the medium term 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 oscillator is now going up from below the zero level and just hit 134.90 support (.50 ret), therefore now is a good time to consider longs.

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GBP/USD candlestick analysis for February 21, 2011

On a 4-hour graph the GBP/USD is testing the resistance level near 1.6260-1.6280. As mentioned before, stop loss should be placed slightly above 1.6280 as breakthrough of this level will target the pair to 1.6457.
Earlier on a 4-hour graph the GBP/USD pair formed a candlestick combination Bearish Engulfing, which indicates downside movement, confirmed further.
This candlestick combination has formed after the pair failed to break the resistance level near 1.6280, which means that the bulls could not solidify here. Further the bears started to increase their influence.
Break of the Fibonacci correction level 23.6 will prove this viewpoint. In this case downside movement to 1.5800-1.5750, where Fibonacci correction level 50.0 is also located, should be expected.
Bearish divergence on the Stochastic Oscillator supports downside movement as well.


Performed by Vladimir Donin, Analytical expert
InstaForex Companies Group © 2007-2010
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USD/JPY candlestick analysis for February 21, 2011

At the moment the USD/JPY currency pair is rolling back after it failed to break the resistance level 83.67. Nevertheless, the pair is likely to find support near 83.00.
Earlier on a 4-hour graph the USD/JPY pair has formed Hammer candlestick, indicating upside movement. This candlestick shows that the currency pair was decreasing for several days, but rebounded near 80.93.
This viewpoint is supported by the fact the pair has successfully broken the 23.6 Fibonacci correction level. Breakout of the resistance level 82.85 has targeted the pair to 84.50. 
As mentioned before, if the support level 80.93 is broken, long positions should be closed as a break of this level will cause the pair to decrease to 80.20.


Performed by Vladimir Donin, Analytical expert
InstaForex Companies Group © 2007-2010
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AUD/USD Elliott wave count and Fibonacci levels - February 21, 2011

The AUD/USD is developing subwave 5 (colored orange red in the chart) within impulse wave C of medium term uptrend (colored red in the chart).
The targets of the upmove are Fibonacci expansions off 0.9943-1.0016-0.9969, 0.9969-1.0055-1.0017, 1.0017-1.0137-1.0088.
Resistances:
- 1.0160-62 = confluence area of super expanded objective point (SXOP) and contracted objective point (COP)
- 1.0208 = objective point (OP)
- 1.0242 = SXOP
If the price keeps declining the immediate supports will be Fibonacci retracements of 0.9943-1.0157, 0.9969-1.0157.
Supports:
- 1.0085 = .382 retracement
- 1.0075 = .382 ret
- 1.0063 = .50 ret
- 1.0050 = .50 ret
- 1.0041 = .618 ret
- 1.0025 = .618 ret

Overbought/Oversold
Assuming that the medium term trend is up, it's preferable to use oversold readings (5-15 pips away from the current price) of the Detrended Price Oscillator, or even further support at 1.0085 (.382 ret), to open long positions.

Performed by Roman Molodiashin, Analytical expert
InstaForex Companies Group © 2007-2010
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EUR/USD candlestick analysis for February 21, 2011

The EUR/USD currency pair has successfully broken the upper limit of the downtrend. If the resistance level 1.3853 is broken, short positions should be closed as it will lead to an advance to 1.4000.
Earlier on a 4-hour graph the EUR/USD has formed candlestick combination Falling Three Methods, indicating downside movement.
This candlestick combination shows that the currency pair had been demonstrating upside movement for several weeks. However, near the resistance level 1.3852 (3-month high) the bears started to increase their influence and a rebound took place.
Downside movement is supported by the MACD divergence and Evening Star and Bearish Engulfing candlestick combinations on the day graph.
Break of the support level 1.3538 proves this viewpoint. Now we should expect a downside movement to the support level 1.3227, where Fibonacci correction level 61.8 is also located.


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

The EUR/USD technical analysis and trading recommendations for February 21, 2011


4-hour timeframe




Overview:

The euro is observing a buy signal with target level 1.3764, the Ichimoku cloud was successfully passed, which strengthened the current signal. The formed buy signal is strong and confirmed, since the Chinkou Span fixated above the price graph and the price is above the Ichimoku cloud. Thus, at the moment the first target for the upside movement is 1.3786 – the second resistance level. If this level is passed the second target will be the third resistance level at 1.3926. Upside movement remains while the price is above the Kijun-sen (1.3590), if the price fixates below this line it is recommended to cut long positions. The Chinkou Span is above the price graph, which confirms the current buy signal and indicates bullish sentiment. The Bollinger bands show the continuation of the upside movement, the lines are diverging and directed up. The MACD is ascending, which indicates current upside movement, if the indicator reverses down it will denote the beginning of a correction.





Trading recommendations:
Currently it is recommended to trade up with target at 1.3786 and further to 1.3926. Stop Loss should be placed below 1.3590. If the MACD reverses down it is recommended to cut long positions 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 white bars in the indicators window.




Performed by Stanislav Polyanskiy, Analytical expert
InstaForex Companies Group © 2007-2011

More analysis - at instaforex.com



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GBP/JPY Expect a Break Trend Line, February 21, 2011 (Daily Strategy) 2011-02-21







GBP/JPY

The pair British Pound - Japanese Yen recorded an upward trend since early 2011, when he was still at low levels 125.50 minimum. On the eve of the weekend, the pair British Pound - Japanese yen reached an important crossroads to encounter strong resistance level of 135.20, which succeeded for the time to stop the positive momentum of the pair when the other side can identify the level of support from the trend line than about the pair below. A clean break of the trendline at 134.70, representing an indication of negative moment, which may eventually lead the pair to support the significant level of 129.92 yen per British Pound.





Performed by Gerardo Porras Palomino, Analytical expert
InstaForex Companies Group © 2007-2011


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GBP/USD. Weekly and Monthly Pivot Points, For February 21 to February 25, 2011



_____WEEKLY____
Weekly - R3 = 1.6634
Weekly - R2 = 1.6448
Weekly - R1 = 1.6350
Weekly Pivot = 1.6164
Weekly - S1 = 1.6066
Weekly - S2 = 1.5880
Weekly - S3 = 1.5782






_____MONTHLY______
Monthly - R3 = 1.6899
Monthly - R2 = 1.6477
Monthly - R1 = 1.6247
Monthly Pivot = 1.5825
Monthly - S1 = 1.5595
Monthly - S2 = 1.5173
Monthly - S3 = 1.4943




Performed by Gerardo Porras Palomino, Analytical expert
InstaForex Companies Group © 2007-2011


More analysis - at instaforex.com



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The USD/JPY wave analysis for February 21, 2011







The USD/JPY has continued to decline, has stopped near the correction level 38.2% and has almost formed a 5-wave structure of the estimated a-wave. If so, the 4th wave of the whole uptrend, initiated February 4, is supposed to become more complicated and continuous. At the same time, given the general volatility on currency markets, the pair might form b and c waves and resume a growth in favour of the dollar at an accelerated pace.

Performed by Alexander Dneprovskiy, Analytical expert
InstaForex Companies Group © 2007-2011

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EUR/USD. Weekly and Monthly Pivot Points, For February 21 to February 25, 2011




_____WEEKLY_____
Weekly - R3 = 1.4082
Weekly - R2 = 1.3898
Weekly - R1 = 1.3795
Weekly Pivot = 1.3611
Weekly - S1 = 1.3508
Weekly - S2 = 1.3324
Weekly - S3 = 1.3221






_____MONTHLY______
Monthly - R3 = 1.4898
Monthly - R2 = 1.4327
Monthly - R1 = 1.4010
Monthly Pivot = 1.3439
Monthly - S1 = 1.3122
Monthly - S2 = 1.2551
Monthly - S3 = 1.2234






Performed by Gerardo Porras Palomino, Analytical expert
InstaForex Companies Group © 2007-2011


More analysis - at instaforex.com

GBP/JPY Elliott wave count and Fibonacci levels - February 22, 2011

The GBP/JPY is now developing corrective wave 4 of medium term uptrend (colored royal blue in the chart). The targets of wave 4 are Fibonacci retracements of 131.62-135.56 (wave 3), 133.24-135.56 (subwave C within wave 3), and expansions off 135.56-134.75-135.54.
Supports:
- 134.13 = .618 retracement, hit precisely (!)
- 134.05 = .382 ret
- 133.59 = .50 ret
- 133.42 = super expanded objective point (SXOP)
- 133.13 = .618 ret
If the price reverses up the immediate resistances will be Fibonacci retracements of 135.54-134.13, and if the price goes above 135.56, we'll use Fibonacci expansions off 129.49-132.64-129.75, 129.75-133.31-131.62, 131.62-135.56-134.13.
Resistances:
- 136.50-56 = confluence area of objective point (OP) and contracted objective point (COP)
- 137.38 = expanded objective point (XOP)

Overbought/Oversold
Assuming that the medium term trend is up, but now a corrective wave is developing, it's preferable to stand aside, until wave 5 manifests itself.

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

GBP/USD candlestick analysis for February 22, 2011

On a 4-hour graph the GBP/USD is rolling back after an unsuccessful attempt to test the resistance level near 1.6260-1.6280. Nevertheless, stop loss should be placed slightly above 1.6280 as breakthrough of this level will target the pair to 1.6457.
Earlier on a 4-hour graph the GBP/USD pair formed a candlestick combination Bearish Engulfing, which indicates downside movement, confirmed further.
This candlestick combination has formed after the pair failed to break the resistance level near 1.6280, which means that the bulls could not solidify here. Further the bears started to increase their influence.
Break of the Fibonacci correction level 23.6 will prove this viewpoint. In this case downside movement to 1.5800-1.5750, where Fibonacci correction level 50.0 is also located, should be expected.
Bearish divergence on the Stochastic Oscillator supports downside movement as well.


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