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Fundamental Analysis of EUR/USD for April 17, 2018



EUR/USD has been quite impulsive with the bullish gains recently which engulfed the recent bearish pressure with a daily candle yesterday. The volatility in the EURUSD is still quite high and expected to have no definite trend momentum until 1.25 is broken above or 1.21 is broken below. Despite having worse economic reports EUR gained good momentum over USD recently which is expected to push higher in the coming days. Today EUR German ZEW Economic Sentiment report is going to be published which is expected to decrease to -0.8 from the previous positive figure of 5.1, Italian Trade Balance report is expected to show an increase to 2.23B which previously was at -0.09B and ZEW Economic Sentiment report is expected to decrease to 7.3 from the previous figure of 13.4. On the other hand, today USD Building Permits report is going to be published which is expected to increase to 1.33M from the previous figure of 1.30M, Housing Starts is also expected to increase to 1.27M from the previous figure of 1.24M, Capacity Utilization Rate is expected to have slight decrease to 77.9% from the previous value of 78.1% and Industrial Production report is expected to decrease to 0.3% from the previous value of 1.1%. Moreover, today FOMC Member Williams and Quarles is going to speak about the nation's interest rate and monetary policy which is expected to be neutral in nature. As of the current scenario, both currencies in the pair is expected to have mixed economic results today and this week there is no further high impact economic reports or events to push the price into a definite trend but as the EUR is quite stronger in comparison to USD with the market sentiment, further bullish momentum is expected after certain retracement along the way in the coming days.

Now let us look at the technical view. The price is currently residing above 1.2350 which was recently broken below with a daily close showing good evidence of price proceeding lower. As of yesterday, after having a daily close above 1.2350 does signify previous bearish move as a false break which is currently expected to push the price much higher in the coming days with the target towards 1.2450-1.25 price area. As the price remains above 1.2350 area, the further bullish pressure is expected in this pair.

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

Analysis are provided byInstaForex.

Brent: East is a delicate matter

Donald Trump's statement that "the mission is carried out" after the military strikes against Syria by the United States and its allies allowed the "bears" of Brent and WTI to go on a counterattack. The conflict around Damascus did not turn into a mass brawl and the risks of interruptions in supplies from the Middle East declined, which led to the removal of oil futures from the region of 3.5-year highs. However, fears about the resumption of economic sanctions against Iran, political instability in Venezuela, OPEC's readiness to expand its commitments beyond 2018, and a strong global demand set the fans of black gold in a major way. In addition, who will give his head to be cut-off to guarantee that the US president will not throw out another fortune?

Theoretically reducing the degree of geopolitical risks opens the way for correction. "Bears" are waiting for their hour, guided by the growth of American production by about a quarter from mid-2016 to 10.53 million bpd and the increase in drilling rigs by 73 units from the beginning of the year. The dynamics of indicators indicates that US companies are actively developing production and simultaneously hedging price risks through the sale of futures contracts. The problem is that the decline in stocks indicates the outpacing dynamics of domestic demand. According to the forecasts of experts in Bloomberg, by the end of the week of April 13, oil reserves in the USA will have decreased by 600 thousand barrels and for the first time in the last few years, will have fallen below their five-year average.

Dynamics of US stocks



Thus, the large-scale fiscal stimulus favorably affects domestic demand and allows to cover the negative from the increase in production. The increased interest in black gold in other countries, coupled with the implementation of the Vienna agreements of OPEC, lays a solid foundation under the upward trend for Brent and WTI. Thus, the volume of oil refining in China in March set a new record of 12.13 million bpd. The previous one was recorded in November (12.03 million). The acceleration of the indicator compared with the average for the first two months of the year (11.56 million) and March 2017 (11.19 million) speaks of the growing appetite of the Celestial Empire. The volume of its domestic extraction of black gold is 3.76 million bpd. The indicator is wandering near the lowest mark since June 2011, and its dynamics convince that Beijing is actively buying oil abroad.

The situation can be changed only by the large-scale trade war between the US and China. This is the opinion of the International Energy Agency. Nevertheless, it does not change its forecast for the increase in global demand for 2018 at 1.5 million bpd. This shows that the IEA does not believe in military action. In our opinion, if the world economy headed by the US is beginning to restore the growth rates taken in 2017. The increased interest in oil will allow the "bulls" of Brent to continue the northern trend.

Technically, the April update of the maximum will increase the risks of implementation of the Targets by 161.8% and 200% in the AB = CD patterns. They are located near the marks of $ 75-76.5 per barrel.

Brent, daily chart



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

Analysis are provided byInstaForex.

Technical analysis: Intraday Level For EUR/USD, April 19, 2018



When the European market opens, some Economic Data will be released such as Spanish 10-y Bond Auction and Current Account. The US will release the Economic Data too, such as Natural Gas Storage, CB Leading Index m/m, Unemployment Claims, and Philly Fed Manufacturing Index, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Breakout BUY Level: 1.2438.
Strong Resistance:1.2431.
Original Resistance: 1.2419.
Inner Sell Area: 1.2407.
Target Inner Area: 1.2378.
Inner Buy Area: 1.2349.
Original Support: 1.2337.
Strong Support: 1.2325.
Breakout SELL Level: 1.2318.

Disclaimer:
Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all Traders or Investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

*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 do not have enough reference points

The lack of benchmarks and positive fundamental statistics leads traders to a standstill. On the one hand, trading in the EURUSD pair is below a significant resistance level of 1.2395, which has repeatedly limited the upside potential in risky assets. On the other hand, there are also few who want to to sell the euro and go against the trend.

In the first half of the day, data showed that the positive balance of the current account of the euro area's balance of payments in February 2018 decreased compared to January. According to the report of the European Central Bank, the current account surplus of the balance of payments in February fell to 35.1 billion euros against 39 billion euros in January.

However, compared with February 2017, it should be noted that there was growth. As in 2017, the current account surplus of the euro area's balance of payments was at the level of 29.8 billion euros. For the period from March 2017 to February 2018, the surplus of the current account of the euro area's balance of payments totaled 408.1 billion euros.

Let me remind you that Donald Trump has been advocating a criticism of Germany, and a month ago he spoke in favor of introducing a number of trade duties on the European Union. However, up to now the case never came. The White House administration repeatedly appealed to German Chancellor Angela Merkel on insufficient efforts related to the reduction of the trade surplus with the US, but failed to receive any support.

On Thursday afternoon, a report was released from the US Department of Labor, which was ignored by the market.

According to the data, the number of Americans, who applied for unemployment benefits for the first time, fell last week. Thus, the number of initial applications for unemployment benefits for the week from April 8 to 14 fell by 1,000 and was at the level of 232,000, which went against the forecasts of economists who expected the number of applications to be 225,000.



The British pound was lower against the US dollar in the morning amid weak data on retail sales, but then managed to regain its position, as traders began to digest Wednesday's report on inflation in more detail. In fact, if you understand, then there was nothing "terrible" in that report, which could cause such a speculative market reaction to the selling of the pound.

According to a report by the National Bureau of Statistics, retail sales in the UK in March 2018 fell 1.2% compared to the previous month. It happened against the background of bad weather. In general, the economic categories of goods and food suffered. For the 1st quarter of 2018, retail sales in the UK decreased by 0.5% compared to the previous quarter.

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

Analysis are provided byInstaForex.

Technical analysis: Intraday Level For EUR/USD, April 23, 2018



When the European market opens, some Economic Data will be released such as German Buba Monthly Report, Flash Services PMI, Flash Manufacturing PMI, German Flash Services PMI, German Flash Manufacturing PMI, French Flash Services PMI, and French Flash Manufacturing PMI. The US will release the Economic Data too, such as Existing Home Sales, Flash Services PMI, and Flash Manufacturing PMI, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Breakout BUY Level: 1.2333.
Strong Resistance:1.2326.
Original Resistance: 1.2314.
Inner Sell Area: 1.2302.
Target Inner Area: 1.2273.
Inner Buy Area: 1.2244.
Original Support: 1.2232.
Strong Support: 1.2220.
Breakout SELL Level: 1.2213.

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

Analysis are provided byInstaForex.

Daily analysis of USDX for April 24, 2018

USDX is posting fresh multi-day highs above the 200 SMA at H1 chart and the resistance zone of 91.75 could be challenged in coming days, as we're watching a possible breakout of the 90.63 level, which has been proven to be a tough resistance to crack. However, a retracement at the current stage should be limited by the moving average mentioned above.


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H1 chart's resistance levels: 90.63 / 91.75
H1 chart's support levels: 89.36 / 87.88

Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the USD Index breaks with a bearish candlestick; the support level is at 90.63, take profit is at 91.75 and stop loss is at 89.49.

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

Analysis are provided byInstaForex.

Locking in short positions in euros before the ECB meeting

The data released in the first half of the day had a temporary pressure on the European currency, which, after the daily lows, began to recover gradually against the background of profit taking.

Most likely, big investors will hurry to lock in some of the short positions in euros before an important meeting of the European Central Bank, which will be held this Thursday.

On Tuesday, pressure on the euro might come from weak data on sentiment in the business circles of France, which in April of this year has deteriorated. This happened because manufacturers changed their outlook on their future prospects.

According to the report of the statistics agency, the business climate index in April 2018 dropped to 109 points from 110 points in March. Economists had expected the index to remain at 110 points.

The index of sentiment in business circles in Germany also showed a decline due to a fall in expectations of companies in the manufacturing sector. According to the Ifo Institute, the business climate index fell in April to 102.1 points from 103.3 points in March. Economists predicted a value of 102.6 points.



On Tuesday, the European Central Bank's report on lending volumes for the first quarter of this year was published, in which banks noted an increase in demand for loans.

This happened because the euro zone banks significantly softened the lending standards in the 1st quarter. Particularly since it concerns the standards of lending for the purchase of housing, as well as the standards of unsecured consumer lending. The report indicates that banks expect further easing of lending standards and in the second quarter of this year.

As for the technical picture of the EURUSD pair, attempts by the bears to squeeze the euro below the day's low were futile. Most likely, the movement for the day will fall under the bullish scenario, which I discussed in more detail in the previous review. A breakthrough and going beyond the level of 1.2215 will lead to further upward correction in the trading instrument with the update of areas 1.2245 and 1.2270.

The Australian dollar managed to recover its position against the US dollar after a major fall in the first half of the day, which happened right after the publication of data on the slower rate of inflation in Australia.

According to the report, Australia's consumer price index in the 1st quarter of 2018 increased by 0.4% compared to the previous quarter and by 1.9% compared to the same period of the previous year. Economists had expected growth of 0.5% and 2.0%, respectively.

Weaker inflation growth rates may not allow the Reserve Bank of Australia to increase its interest rates in the future.

Analysis are provided byInstaForex.

Gold fell under the crossfire

After the unsuccessful attempt to breakthrough the upper border of the medium-term trading range of $ 1300-1360 per ounce, the gold collapsed downwards on an unfavorable external background. The topic of the trade war in the context of rapid negotiations between Washington and Beijing no longer provides support for safe havens, while the shift in investors' interest in tightening monetary policy of the Federal Reserve extended a helping hand to the rates of the debt market and the US dollar. Precious metals reacts sensitively to the behavior of these assets: the strengthening of the US currency makes imports in the largest consumer countries of the physical asset more expensive. At the same time, non-yielding gold is not able to adequately compete with treasury bonds in the event of an increase in yield.

Dynamics of the yield of US and gold bonds



The growth of rates in the 10-year American debts above the psychologically important level of 3% to the maximum level since the beginning of 2014 has become a real catastrophe for the "bulls" of XAU/USD. Moreover, increasing the attractiveness of bonds leads to the diversification of investment portfolios in their favor, so the cost of servicing ETF products is even more expensive. But in April, according to Commerzbank, the reserves of specialized funds increased by 53 tons, which is equivalent to all inflows for the first quarter. Uncertainty about the US-China trade conflict, geopolitical problems in the Middle East and the reluctance of the US dollar to strengthen in response to the Fed's "hawkish" rhetoric have inflated the demand for these assets, but at the end of April the external background has radically changed. This can lead to loss of the ETF.

In general, it seems that 2015-2016 has returned, when rumors about the normalization of the monetary policy of the Fed pushed up the USD index. In April, the chances of four federal funds rate increases in 2018 increased from less than 30% to almost 50%, which is one of the main drivers of growth in Treasury yields. The second is the increase in inflation expectations under the influence of the Brent rally to $75 per barrel.

Not the least role in the correction of the USD index is the weakness of the euro on the eve of the meeting of the Governing Council. The ECB is concerned about the impact of the revaluation of the single European currency and trade conflicts on the eurozone economy. The latter lost steam in the first quarter, however, its gradual recovery during the rest of the year will return to the market rumors about the normalization of the ECB monetary policy and will help restore the EUR/USD position. Gold will be able to benefit from this fact due to its high correlation with the US dollar.

Technically there is a retest of the lower border of the upward trading channel. If the "bulls" manage to return gold quotes into it and consolidate above the resistance at $1336 per ounce, the risks of recovery of the upward trend will increase. On the contrary, if the buyers do not succeed, the peak of the precious metal in the direction of targeting by 88.6% in the pattern of the "Shark" is likely to continue. Gold, daily chart

Analysis are provided byInstaForex.

The ECB leaves the rate unchanged, and Draghi leaves the answers

The euro fell in the morning against the US dollar, but did not go beyond the lows. Pressure on the pair had data from the company GfK, according to which the mood of consumers in Germany in May will deteriorate. This will happen because of fears about the geopolitical risks and the growth of protectionism, which the US is promoting with respect to trade.

As indicated in the leading report, the index of consumer confidence in Germany in May was 10.8 points against 10.9 points in April. The data fully coincided with the forecasts of economists.

After the publication of the ECB's decision on the interest rate, the euro again returned to the lows of the day.

Thus, the European Central Bank left the refinancing rate unchanged, at 0.0%, while the deposit rate was also maintained at a negative level of -0.4%.



The ECB said that rates will remain at current levels for an extended period, especially highlighting the point that changes in monetary policy will not be introduced long after the completion of asset purchases. Let me remind you that a number of experts suggest that as soon as the European regulator completely turns off the asset buy-back program, there will immediately appear the prerequisites for raising interest rates.

As for the program of quantitative easing, then, according to the ECB, it will be implemented in the amount of 30 billion euros a month before the end of September this year, and if necessary, then longer.

The ECB President's speech at the press conference led to a surge in market volatility.

Many market participants expected specifics in the statements of the ECB President regarding the asset buy-back program. Despite this, Mario Draghi again blurrily commented on the current situation. According to him, the incoming information speaks in favor of a somewhat moderate position.

With regard to the rate of price growth, Draghi expressed concern about the restrained growth of core inflation, confident that inflation will continue to rise to the target level in the medium term, and that it will still require significant stimulus to maintain it.

Draghi also drew attention to the fact that economic growth will remain confident, large-scale, even though the growth rate has become more moderate compared to the beginning of 2018. In this connection, according to the president of the ECB, there remains a need for sufficient monetary and credit incentives.

Analysis are provided byInstaForex.

Technical analysis: Intraday Level For EUR/USD, May 02, 2018




When the European market opens, some Economic Data will be released such as Unemployment Rate, Italian Prelim GDP q/q, Prelim Flash GDP q/q, Italian Monthly Unemployment Rate, Final Manufacturing PMI, Final Manufacturing PMI, French Final Manufacturing PMI, Italian Manufacturing PMI, and Spanish Manufacturing PMI. The US will release the Economic Data too, such as Federal Funds Rate, Crude Oil Inventories, and ADP Non-Farm Employment Change, so, amid the reports, EUR/USD will move in a medium to high volatility during this day.

TODAY'S TECHNICAL LEVEL:
Breakout BUY Level: 1.2050.
Strong Resistance:1.2043.
Original Resistance: 1.2031.
Inner Sell Area: 1.2019.
Target Inner Area: 1.1991.
Inner Buy Area: 1.1963.
Original Support: 1.1951.
Strong Support: 1.1939.
Breakout SELL Level: 1.1932.

Analysis are provided byInstaForex.