Wave Analysis by InstaForex

AUD/JPY reversing nicely below major resistance

The price has started to form a really nice reversal pattern with bearish divergence being formed. We look to sell below major resistance at 86.67 (Multiple Fibonacci retracements, horizontal overlap resistance, bearish divergence) for a push down to at least 84.69 support (Fibonacci extension, horizontal swing low support).

Stochastic (55,3,1) is seeing major resistance below 98% where we expect a corresponding drop from. We're also seeing bearish divergence vs price signaling that a reversal is impending.

Sell below 86.67. Stop loss is at 87.34 Take profit is at 84.69.



*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

Elliott wave analysis of EUR/JPY for December 21, 2017



Wave summary:
The break above resistance at 134.50 told us that wave (D) still is developing and more upside towards the "old" 137.37 target should be expected to complete wave (D) and set the stage for the final decline within the huge triangle consolidation, that has been developing since July 2008. Support is now seen at 134.40 and again at 133.84. The later should be able to protect the downside for more upside closer to 137.37.

R3: 136.05
R2: 135.75
R1: 134.90
Pivot: 134.40
S1: 133.84
S2: 133.57
S3: 133.24

Trading recommendation:
We will buy EUR at 134.10 and place our stop at 133.40.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

The US dollar returns to the game

Data in the first half of the Thursday exerted pressure on the European currency, not allowing it to get beyond its weekly highs against the US dollar. According to the report of a statistics agency, the level of confidence in the manufacturing sector in France in December of this year declined. Thus, the index of sentiment of companies in the manufacturing sector was at 112 points against the November value of 113 points. Despite this, a high level of confidence supports the economic growth of France. Restrained demand for the euro is also associated with early parliamentary elections, which took place in Catalonia. It is expected that the majority of seats in parliament can go to parties that advocate integrity, and which are against the independence of Catalonia. Coupled with another result, the pressure on the European currency may rise again. Weak data on the annual growth of US GDP in the 3rd quarter of this year did not allow the US dollar to further strengthen its positions against the European currency in the afternoon at the beginning of the US session. According to the report of the US Department of Commerce, the US economy in the third quarter of this year expanded by 3.2% compared with the same period in 2016, which is lower than the previous estimate. According to the previous estimate, the annual growth of US GDP in the third quarter was 3.3%. Economists forecast that GDP will remain unchanged at the level of 3.3%.



The main reason for the decline in the indicator was consumer spending, which dropped further during the reporting period than previously thought. Growth was noted in company investments and exports.

As for the technical picture of the EURUSD pair, an unsuccessful attempt to get beyond the resistance level of 1.1885 led to the expected downward correction in the trading instrument, which will likely be limited to support levels around 1.1830 and 1.1805.

The British pound rose after data on reduced borrowing of the UK public sector. According to the report, in November of this year, the net borrowing of the UK public sector decreased and amounted to 8.7 billion pounds compared to the same period of last year. As noted in the report, borrowing declined due to increased tax revenue.

As for the technical picture of the GBPUSD pair, it is likely that the pressure on the pound will continue and that will lead to a decline in the trading instrument towards the lower border of the channel to the area of 1.3330 and 1.3300, from which it was possible twice to see the return to the market of large buyers of the British pound.

Analysis are provided byInstaForex.

Inflation continues to grow in Japan

Weekends and holidays are always accompanied by a low volume of trades against the background of lack of important fundamental statistics.

Most likely, serious and purposeful movements will not be formed in the pairs EUR/USD and GBP/USD before the end of this year.

Some leading experts expect that the growth of the US economy next year will significantly accelerate due to the approved program of tax cuts, and also due to an increase in government spending. Do not forget that at the end of last week, US President Donald Trump signed a new tax bill with a total cost of $ 1.5 trillion, which the budget will not be counted on.

According to economists of Goldman Sachs, the measures taken by the White House administration will lead to a larger GDP growth in 2018. According to the data, the US GDP in 2018 will grow by 2.6%, and 1.7% in 2019. These data were revised upwards by 0.3% and 0.2%.

Economists of J.P. Morgan also expects more significant growth in consumer spending, which will stimulate the economy of the country, adding to the previous forecast of 0.2%. In J.P. Morgan forecasts, the US GDP growth of 2.1% next year.

As for the technical picture of the EUR/USD pair, it did not change significantly compared to the forecast at the end of last week. Only a confident exit to the resistance level 1.1880 will lead to the formation of a new upward wave, with an update of the monthly highs of 1.1900 and 1.1935.

The data on consumer price growth in Japan did not lead to significant changes in the USD/JPY pair, even despite the increase in the index which is a positive sign for the Bank of Japan.

According to the report of the Ministry of Internal Affairs and Communications of Japan, the base consumer price index in November rose by 0.9% compared to the same period of the previous year after an increase of 0.8% in October. While economists expected the index to grow by 0.8%.

The general consumer price index rose by 0.6% in November after rising to 0.2% in October this year. Economists predicted an increase of 0.5%.



Despite the lack of strong impetus, prices continue to grow for 11 consecutive months, which makes the Bank of Japan feel more relaxed.

The index, excluding the prices of fresh food and energy, rose by 0.3% compared with the same period in 2016 after an increase of 0.2% in October.

Today, the unemployment rate in Japan in November 2017 fell to 2.7% from 2.8% in October, as the number of jobs increased. As indicated in the report, there were 100 applicants in November who had 156 jobs compared to 155 in October.

* The presented market analysis is informative and does not constitute a guide to the transaction.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

Prepare to sell below major resistance

The price is approaching major resistance at 113.76 (76.4% Fibonacci retracement, Fibonacci extension, horizontal overlap resistance) and we expect a strong reaction off this level to push the price down to at least 112.13 support (Fibonacci retracement, multiple horizontal swing low support).

Stochastic (55,3,1) is dropping nicely from our 97% resistance with good downside potential.

Sell below 113.76. Stop loss is at 114.54. Take profit is at 112.13.



*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

Wave analysis of the EUR / USD currency pair for December 29, 2017



Analysis of wave counting:
In a thin inter-holiday market, the EUR/USD pair was able to add about 60 pp in price and re-tested to the level of the 19th figure in the second half of yesterday. It can be assumed that the currency pair has reached the final stage of the formation of the wave c, in b, in c, in a, in (C). If this is the case, the pair can resume reduction quotes and mark the beginning of a future wave in a, and in (C) after virtually reaching the highest level achieved yesterday or after the growth to the level 1.1920-1.1930.

Objectives for building a downward wave:
1.1736 - 38.2% by Fibonacci
1.1666 - 23.6% Fibonacci retracement
Goals for building an upward wave:
1.1900
1.1918 - 11.4% Fibonacci retracement

General conclusions and trading recommendations:
The construction of the downward trend section continues, as well as the construction of the assumed wave b, in c, in a, in (C). If this assumption is correct, the quote will resume its increase with targets around 19 figures and the mark of 1.1918. Hereinafter, a decline in quotations may resume with the targets located near the calculated marks of 1.1736 and 1.1666, corresponding to 38.2% and 23.6% Fibonacci, and lower.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

Wave analysis of the USD / JPY currency pair. Weekly review



Analysis of wave counting:
At the end of last week, the pair USD / JPY still began to decline, losing about 90 pp and was able to work out the mark of 112.50 in the middle of the Friday session. Thus, it seems that the currency pair has attempted to confirm the transition to the stage of formation taking a rather complex form of the waves c, b, a, (C). If this is the case, then in the process of the development of the wave structure of this wave c, b, a, (C), the currency pair can continue the already identified downward movement in the direction of the levels of the 111th or even 110th figure.

Targets for the downward wave option:
111.01 - 50.0% of Fibonacci
110.14 - 61.8% of Fibonacci

Targets for the upward wave option:
115.43 - 61.8% of Fibonacci
116.32 - 76.4% of Fibonacci

General conclusions and trading recommendations:
The pair USD / JPY continues to build the upward wave (C). Thus, the increase in quotations may continue within the wave c, a, (C) with targets located near the estimated levels of 115.43 and 116.32, which corresponds to 61.8% and 76.4% of Fibonacci (these goals will be reviewed). The assumed wave b, a, (C) can resume its construction, complicating its internal wave structure.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

Traders are waiting for the Fed's Minutes

Data on the good condition of the German labor market slightly supported the European currency, which began to gradually lose its positions paired with the US dollar after the pre-New Year rally that was observed in the entirety of the previous week.

According to the report of the Federal Ministry of Labor of Germany, the number of applications for unemployment benefits in Germany in December 2017 decreased by 29,000, while economists had expected a decrease in the number of applications by only 10,000.

Data for November were revised. The final report indicates a decrease in the number of applications for 20,000, not 18,000, which was previously announced. The unemployment rate in December was 5.5%.



While the market is just beginning to "swing" after the New Year holidays, all investors' attention today will be directed to the publication of the Fed's minutes from the meeting that took place last year on December 12 and 13. It should be noted that it decided to raise federal funds rates by a quarter of a percentage point to the range of 1.25% -1.50%.

In the minutes, it will be more significant to expect further interest rate increases early in 2018. Analysts predict at least three of such increases. The timing of the next rate increase will also be important. If it is the 1st quarter of this year, it is possible that the demand for the US dollar may return, as there are no plans to change the policy of the European Central Bank until spring.

Retail sales, according to The Retail Economist and Goldman Sachs, fell after the Christmas week. According to the report, for the week from December 24 to December 30, the sales index in US retailers fell by 2.3% compared to last week. In comparison with the same period in 2016, the sales index in US retail chains grew by 3.9%.

As for the technical picture, the attempt of the bulls in the morning to reach on an important level of resistance in the area of 1.2070 was unsuccessful. As a result, the scenario began to develop in line with a bearish forecast. Now you can expect the support in the area of 1.2000 and 1.1955. Talk about the resumption of the upward trend in the euro will be possible after consolidation above 1.2055.

The British pound, though not immediately, but began to decline gradually against the US dollar after a weak report in the construction sector of the UK.

According to the statistics agency,, the index of supply managers for the construction sector of the UK in December 2018 fell to the level of 52.2 points from 53.1 points in November. It should be noted that the value above 50 points indicates the retention of activity, despite the decline in the index.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

Euro and pound win back their positions against the US dollar

Good data for the euro area and the UK in the first half of the day led to a slight strengthening of the European currency and the British pound after yesterday's decline, which was noticed after the publication of the Fed's protocols.

According to the IHS Markit report, the composite PMI of the euro zone's supply managers rose to 58.1 points in December from 58.0 points. This once again confirms the fact that economic activity in the eurozone at the end of 2017 remained at a fairly strong level. This allows you to count on excellent indicators for GDP growth. Also, it is most likely that in early 2018, the current growth rate of activity will continue due to the flow of new orders.

As for the technical picture of the EURUSD pair in the short term, the exit beyond the level of 1.2035, which I recommended to pay attention to in the morning review, led to the resumption of purchases of the European currency. The next target is a break above the monthly highs, which will lead to the renewal of new resistance levels of 1.2125 and 1.2170.

The British pound strengthened its position against the US dollar against the backdrop of good data on the service sector, which accounts for a significant portion of the UK GDP.

According to IHS Markit's report, PMI's supply managers index for the UK services sector increased to 54.2 points in December 2017 against 53.8 points in November. Economists had expected the index in December to be at 54.0 points. The IHS Markit report noted that business growth accelerated at once in all regions of the UK.



Today, the number of approved mortgage loans in the UK was published for November which increased compared to October. Despite this, growth is gradually slowing down, indicating a decrease in activity in the housing market.

So, according to the Bank of England, the number of approved mortgage loans in the UK in November 2017 was at 65 140 against 64 890 in October. Meanwhile, the average for the last 6 months was at 66 562, indicating a likely decrease in activity. According to the Nationwide Building Society, housing prices in the UK in December last year rose by 2.6% compared with the same period in 2016.

Unsecured consumer lending in the UK also began to gradually slow down.

According to the same Bank of England, unsecured consumer lending in November 2017 grew by only 1.4 billion pounds, while economists expected a 1.6 billion pounds increase in lending. Compared to November 2016, lending grew by 9.1%.

Analysis are provided byInstaForex.

NZD/USD approaching major resistance, prepare to sell



The price is testing major resistance at 0.7188 (Fibonacci retracement, horizontal overlap resistance, bearish divergence) and a strong reaction could occur at this level to push the price down to at least 0.7041 support (Fibonacci retracement, horizontal pullback support). However, we are also in a bullish ascending channel and only a break of this channel would confirm further downside move.

Stochastic (34,5,3) is seeing major resistance at 94% and also displays bearish divergence vs price signaling that a reversal is impending.

Sell below 0.7188. Stop loss is at 0.7280. Take profit is at 0.7041.

Analysis are provided byInstaForex.