Wave Analysis by InstaForex

Forecast for USD / JPY on November 29, 2018

https://forex-images.ifxdb.com/userf...f6e9429095.png

https://forex-images.ifxdb.com/userf...f6ea4ed7c3.png

Yesterday, the Japanese yen was able to withstand the onslaught of counterdollar currencies at the speech of Fed Chairman Jerome Powell, but this resistance weakened today in the Asian session - the yen's decline is 32 points. Of course, the yen has a traditional patron - the stock market. Yesterday, the S & P500 added 2.3%. Today, the Nikkei225 is growing by 0.61%. It seems that the stock market rally has already begun. According to the data released today, retail sales in Japan added 3.5% y / y in October against the forecast of 2.7% y / y. Tomorrow, a whole block of positive changes are expected: industrial production growth in October is 1.3%, the base CPI of the capital Tokyo in November from 1.0% y / y to 1.1% y / y. Consumer confidence index is expected to be 43.3 against 43.0 earlier, the number of new housing bookmarks is from -1.5% y / y to 0.4% g / g.

At the moment, the price is close to the Krusenstern indicator lines and the balance on H4, but as part of the fluctuation, it is possible to reduce to support for the daily scale in the area of 113.00. From the level, we are waiting for the price reversal up to the resistance of the trend line of the price channel (115.15).

Analysis are provided byInstaForex.

Bitcoin analysis for December 03, 2018

Company does not offer investment advice and the analysis performed does not guarantee results

https://forex-images.ifxdb.com/userf...9a_source!.png

Trading recommendations:

According to the H1 time - frame, I found the upward breakout of the 6-hour balance, which is sign that buyers are in control today. I also found the rejection from the demand zone (blue shape), which is another sign that selling looks risky. My advice is to watch for buying opportunities. The upward targets are set at the price of $4.117 (Fibonacci expansion 61.8%) and at the price of $4.225 (swing high).

Support/Resistance
$4.000 – Intraday resistance
$3.870– Intraday support
$4.117– Objective target 1
$4.225 – Objective target 2

With InstaForex you can earn on cryptocurrency's movements right now. Just open a deal in your MetaTrader4.

Analysis are provided byInstaForex.

Experts Goldman predicts oil prices above $ 65 if OPEC cuts production

Company does not offer investment advice and the analysis performed does not guarantee results

https://lh6.googleusercontent.com/ZI...LEcizQXAMtGfuM

Financial analysts at Goldman Sachs believe that the price of Brent crude oil may exceed $ 65 per barrel if the OPEC member countries agree to reduce production this week.

Experts agree that the wording of the new OPEC agreement will be restrained, for example, the goal could be to stabilize the volume of commercial stocks.

According to their estimates, at the beginning of next year, the price of Brent crude oil may exceed $ 70 per barrel amid a reduction in exports and the cessation of growth in reserves that exceed seasonal rates. This price level will allow for normalization of reserves, while not sufficient for an excessive increase in drilling activity in the United States.

If oil quotes reach $ 62-63 per barrel, this may stimulate further growth to $ 70 per barrel. However, if OPEC does not reach an agreement on reducing production at the next meeting on December 6-7, this will lead to the continuation of a downward rally.

Analysis are provided byInstaForex.

Forecast for GBP/USD for December 5, 2018

The correction on the British pound yesterday took place even higher than the area we expected, the limiter was the balance line of the daily timeframe. On the four-hour chart, the signal line of the Marlin oscillator formed a long corridor, pushing off from its upper limit. The reason for the increased dynamics was the decision of the British Parliament to take over the authority of further Brexit process in case of failure of the May draft vote on the 11th. This turn of events has threatened the prime minister's resignation. Given that the EU may not want to process the finished project, which has been repeatedly stated, the country can leave the EU without a deal at all.

So, the short-term technical growth took place, the price strengthened on the daily and H4 in the downtrend, we are waiting for the price to support the price channel line in the area of 1.2550.

https://lh5.googleusercontent.com/Cf...f-CJxs8wXrrAvS

https://lh3.googleusercontent.com/MN..._boCAMSksvIs0k

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

GBP/USD. Supporters of "soft" Brexit have an unexpected ally

Company does not offer investment advice and the analysis performed does not guarantee results

The British currency was under strong pressure yesterday, following the controversial fundamental background. The unexpected cohesion of the British deputies against Theresa May has caused alarm to traders, after all, after only 6 days, parliamentarians must decide the fate of the Brexit deal. On the horizon, the prospects for Britain's chaotic exit from the EU again loomed, after which the pound fell to 18-month lows.

But the fundamental picture of the GBP/USD pair is very changeable: today the sterling is showing a very aggressive growth, restoring lost positions. A rich news flow keeps traders in good shape, and the closer December 11, the more acute the market reaction to any rumors related to the prospect of Brexit.

However, today the growth of the pound is not due to rumors. The fact is that the leader of the Conservatives in the House of Commons, Andrea Leadsom, said in an interview that the only alternative to the deal is "hard" Brexit, that is, the chaotic exit of the country from the EU. According to her, this scenario is basic and there are no other scenarios. On the one hand, this statement should again alert traders – because just yesterday 311 members of Parliament voted to investigate the issue of disrespect of the Cabinet of Ministers to the legislature. That is, the deputies have unambiguously showed that Theresa May has no unequivocal support of the parliamentary majority and all decisions are made situationally.

https://lh3.googleusercontent.com/eJ...rppwy3gEeQtWMc

On the other hand, Leadsom's statement supported the British currency: the fact that the position of the parliamentary leader puts the deputies before a simple but difficult choice: either they vote for a "bad deal", or they support a "hard" Brexit. No "plan Bs", re-referendum or other half-hearted scenarios. Only forward or backward, only "black or white", without any shades. It should be noted that Theresa May is now playing this card: in almost every speech she paints a catastrophic chaotic Brexit, warning deputies that they take responsibility for the implementation of such a scenario. That is why Labour has been actively promoting the idea of a second referendum or an alternative agreement with Brussels – to convince Parliament that their choice is not limited to "hard" or "soft" Brexit.

In other words, Theresa May's opponents are trying to minimize the deputies' concerns about the consequences of a failed vote for the Brexit project. The task of Theresa May's supporters is the opposite - to convince them that if they do not support the proposed agreement, they will plunge the country into a state of economic and political chaos.

That is why today's statement by Andrea Leadsom is so important – in fact, she sided with Theresa May – at least voiced the message, which is politically beneficial to the prime minister. And here it is worth noting that Leadsom has a strong enough influence among conservatives. She was one of the contenders for the premiere position after David Cameron left the post. Moreover, in 2016, she even went to the last round of elections of the leader of the Conservative Party, but lost to the current prime minister – 199 deputies of the Conservative Party voted for May's candidacy, 84 for Leadsom. Later, she withdrew her candidacy, thereby opening the way for Theresa May to the prime minister's office.

In other words, the supporters of the "soft" Brexit received a rather important ally, although the support is very indirect. But the bulls of the GBP/USD, apparently, use any reason of a positive nature to return the price in the direction of corrective growth. Despite the strong volatility and the likely temptation of traders to "catch the price wave", trading the pound is still extremely risky. The market reacts too violently even to minor signals regarding the prospects of Brexit, so such price movements are unreliable. In a few hours, the fundamental picture may change dramatically - if rumors return to the market that the prime minister does not have sufficient support among the deputies.

Unfortunately, now we can only analyze the causes of this or that surge in volatility after the fact, while it is almost impossible to predict price fluctuations for the GBP/USD pair (as well as for other cross-pairs involving the pound).

https://lh6.googleusercontent.com/zr...Q9bKS6bO26my4y

From a technical point of view, only support levels are relevant. In this case, the strongest support level is 1.2640 - the bottom line of the Bollinger Bands on the daily chart. Slightly higher is the price low of the year - 1.2660, which also acts as support - for example, yesterday, with a pulsed southern movement, the pair did not refresh this low, stopping at 1.2670. But here it is worth warning that with strong volatility, the above levels of support will not be able to resist the onslaught of bears, especially in anticipation of a key vote in the British parliament.

Analysis are provided byInstaForex.

EUR/USD: in search of a neutral rate and in anticipation of the Nonfarm report

Company does not offer investment advice and the analysis performed does not guarantee results

The dollar index today made an unsuccessful attempt to return to the area of 97 points: at the beginning of the US session, the greenback had once again began to lose positions throughout the market.

Dollar bulls found themselves in a difficult and rather contradictory situation: on the one hand, the Federal Reserve declares a gradual tightening of monetary policy, on the other hand, representatives of the regulator increasingly say that the rate is approaching its neutral level, when its size does not hold back the development of the economy, but does not "overheat" it. That is why traders are now so sensitive to the slowdown in the key macroeconomic indicators of the United States – since this fact can reduce the determination of the members of the regulator about the prospects of monetary policy next year.

Here it is necessary to make a reservation at once: market participants still lay in the current prices a high probability of a rate hike in December. Although in recent years, traders have somewhat doubted this step: if a month ago, this probability was about 80%, today it is 67%. In my opinion, these are understated figures – the Federal Reserve will not resort to "shock therapy", refusing to raise the rate for the fourth time this year. Fed members are too transparent and persistent in making it clear that they are ready to show appropriate determination at the December meeting. Therefore, the main intrigue concerns the prospects for next year and not this year.

The dollar bulls have a reason for concern – several members of the Fed have recently changed their rhetoric, significantly softening their positions. For example, Jerome Powell in early October clearly stated that the rate is still "too far from neutral". However, last week his position changed - he said that the rate is "slightly below" the level that can be considered neutral. Vice-Chairman of the Fed Richard Clarid also raised this issue: in his opinion, the rate is at the lower limit of the range where the notorious neutral level is located.

https://lh4.googleusercontent.com/dE...TT_-W-FVy5abie

The minutes of the Fed's November meeting also show that the members of the regulator are gradually reducing their hawkish attitude. Thus, if at previous meetings they allowed the probability of exceeding the neutral level, this time the emphasis was placed differently. The Fed was again concerned about the slowdown in the world economy, tighter credit conditions, the decline in the housing market and other negative factors.

In other words, the general tone of rhetoric has become more cautious, and this fact has alerted traders, especially against the background of subsequent comments by Powell and Clarida. According to some experts, the Fed smoothly prepares the markets for the fact that the regulator will not raise the interest rate on a "regular basis": when a certain level is reached, the Fed will take a wait-and-see position, and all subsequent decisions will be taken situationally. And here the main intrigue is when exactly the regulator will pause the process of regular rate hikes, because the above mentioned range is quite wide – from 2.5% to 3.5%.

Although the issue is debatable, the fact that it is discussed puts indirect pressure on the markets. In particular, the yield of 10-year treasuries returned to three percent and continues to decline (at the moment – 2,838%). The growth of the dollar index also slowed - over the past month, the indicator tried to gain a foothold three times in the area of 97 points.

Thus, the dollar does not have sufficient grounds to make a price breakthrough, but it is also in no hurry to give up its positions. As I said above, in the light of such uncertainty, traders are more sensitive to the slowdown in macroeconomic indicators: in particular, the level of labor cost, which is an indirect indicator of inflation growth, is out in the red zone. Also disappointed by the ADP report, which came out in anticipation of tomorrow's Nonfarm. Although these indicators are of a secondary nature (compared to tomorrow's release), they were able to provoke additional pressure on the yield of treasuries and, accordingly, on the dollar.

This fact determines the current dynamics of the corrective growth of the EUR/USD pair. The single currency does not have its own arguments for growth – indirect support provides a likely compromise between Rome and Brussels. But Italy will present the updated budget next week, so the intrigue of this event is still there,

Thus, the further correctional growth of the pair depends on tomorrow's Nonfarm. If they come out in the "red zone" (especially in terms of wage growth), the pressure on the US currency will increase and, accordingly, the growth of EUR/USD will continue.

https://lh4.googleusercontent.com/gO...JsuseatGQKC8YL

From a technical point of view, the situation has not changed since yesterday. The price on the daily chart is still on the middle line of the Bollinger Bands indicator, which indicates the absence of a bright trend movement. If the pair is fixed below 1.1340, then, firstly, the price will be between the middle and lower lines of the above indicator, and secondly – the Ichimoku Kinko Hyo indicator will form a bearish "Parade of lines" signal . The combination of these signals will open the way for the pair to a strong support level of 1.1250 (the lower Bollinger Bands line on the daily chart). If tomorrow's Nonfarm will disappoint, then the pair may again test the 14th figure.

Analysis are provided byInstaForex.

Technical analysis: Intraday level for USD/JPY for December 11, 2018

Company does not offer investment advice and the analysis performed does not guarantee results

https://forex-images.ifxdb.com/userf...11_source!.jpg

In Asia, Japan will release the Prelim Machine Tool Orders y/y, 30-y Bond Auction, M2 Money Stock y/y, and BSI Manufacturing Index. The US will also publish some economic data such as Core PPI m/m, PPI m/m, and NFIB Small Business Index. So there is a probability that the USD/JPY pair will move with a low to a medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Resistance. 3: 113.66.
Resistance. 2: 113.44.
Resistance. 1: 113.22.
Support. 1: 112.94.
Support. 2: 112.72.
Support. 3: 112.50.

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.

Analysis are provided byInstaForex.

Theresa May's European voyage: a difficult evening for the pound

Company does not offer investment advice and the analysis performed does not guarantee results

So, the epic with Brexit continues: today Theresa May arrived in Brussels, where two important meetings will be held in the evening - first, she will discuss the prospects of the "divorce process" with the President of the European Council Donald Tusk, and then – with the head of the European Commission Jean-Claude Juncker. According to some information, May will also meet with German Chancellor Angela Merkel.

The British Prime Minister is trying to find a way out of the current impasse: the "maximum" task at the moment is to agree with Europeans on the final date of the back-stop, while receiving the corresponding guarantees of a legal nature. Let me remind you that the main stumbling block in the British Parliament was precisely the Irish border discussion. According to the draft agreement, the special customs status of Northern Ireland does not have a time limit, which means it can become permanent. Moreover, according to the provisions of the transaction, London will not be able to waive this status unilaterally. Such vague prospects were perceived in hostility by the laborists, unionists, and the "hawkish wing" of conservatives.

https://lh5.googleusercontent.com/FE...rLUjub52A1h2Nt

According to Theresa May, the majority of deputies support the key points of the deal, but the uncertainty with backstop forces them to vote against the proposed agreement. In turn, Labour states that the problem lies not only in backstop but also in many other aspects. However, conservatives and unionists voice more restrained comments. Thus, the chances of a "soft" Brexit are still there – and this explains the current dynamics of the pound, which paired with the dollar, consolidated at the bottom of the 26th figure.

By and large, now the "ball" is on the side of Europe. If Brussels makes concessions and fixes the final date of the backstop, many British MPs may reconsider their decision in favor of the proposed deal. However, the other scale – the disastrous consequences of "hard" Brexit, which have already been said about.

However, Europe is not in a hurry to meet. At least, the head of the European Council Donald Tusk today said that Brussels will not re-discuss the agreement reached, and even more so will not revise the issue of the Irish border. Nevertheless, the head of the EC said that the European side is ready to think about how to "facilitate the process of ratification by the British side." What exactly Donald Tusk had in mind is unknown, so his words can be interpreted in a fairly broad sense. The head of the European Commission Juncker, in turn, also rejected the hypothetical revision of the transaction. However, he admitted the possibility of a certain compromise: speaking at the session of the European Parliament, Juncker said that in the current situation, certain clarifications are permissible – but without revision of the text of the Treaty.

In other words, on the one hand, Brussels categorically refuses to revise the agreement, but on the other hand, it makes it clear that it is ready to make certain concessions in the context of clarifying and interpreting the agreements reached.

Thus, traders of the pound/dollar pair once again find themselves in agonizing wait: if today the parties do not sound positive signals, the price will collapse once again to an annual low, to the level of 1,2505. If the evening meetings lead to any result (even if of a preliminary nature), the bulls of the pair will seize the initiative and the price will rapidly go up.

https://lh5.googleusercontent.com/WM...gseSfIdhZvDkOD

The fact is that the GBP/USD pair has a strong unrealized potential for large-scale corrective growth, especially after today's release of data on the UK labor market. The unemployment rate remained unchanged, a record low of 4.1%, but the average earnings jumped by 3.3%, while experts expected a more modest growth – up to three percent. But the increase in salaries in nominal terms for three months was the strongest in the last ten years. The growth of applications for unemployment benefits was a bit disappointing, but the indicator of earnings plays a more important role in this context. Weak wage growth rates for a long time worried the members of the British regulator – in their opinion, this indicator largely determines the stability of inflation growth in the country. But the figures published today show that Average Earnings Index has been growing for the fourth month in a row, exceeding the forecast values.

All this allows the Bank of England to toughen its rhetoric and take a more "hawkish" stance at the next meeting, taking into account the growth of the consumer price index. If not for one "but" - Brexit. If London and Brussels are unable to agree on legal guarantees for the completion of the backstop, the probability of a chaotic Brexit will increase again, and the British Central Bank, in turn, will take a wait-and-see position for a long time - and under certain conditions, will reduce the rate. Therefore, the results of the next negotiations can not be overestimated: not only the fate of the deal depends on them, but also the prospects of monetary policy in Britain.

Analysis are provided byInstaForex.

Technical analysis: Intraday level for USD/JPY for December 13, 2018

Company does not offer investment advice and the analysis performed does not guarantee results

https://forex-images.ifxdb.com/userf...1c51fd5456.jpg

In Asia, Japan will not release any economic data today, but the US will publish some economic data such as 30-y Bond Auction, Natural Gas Storage, Unemployment Claims, and Import Prices m/m. So there is a probability that the USD/JPY pair will move with a low to a medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Resistance. 3: 114.03.
Resistance. 2: 113.81.
Resistance. 1: 113.63.
Support. 1: 113.30.
Support. 2: 113.08.
Support. 3: 112.86.

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.

Analysis are provided byInstaForex.

The ECB leaves rates unchanged. Mario Draghi's press conference hit the euro

Company does not offer investment advice and the analysis performed does not guarantee results

The euro was trading fairly volatile in tandem with the US dollar, but then dropped sharply following the beginning of the press conference at which the president of the European Central Bank expressed concerns about a slowdown in the eurozone's economic growth rate at the end of this year.

All attention today in the afternoon was riveted to the decision of the European Central Bank, which left the refinancing rate unchanged at the level of 0.0%. The European Central Bank also kept the deposit rate at a negative level, -0.40%.

https://lh4.googleusercontent.com/4a...JtgaA2QcLSFHCb

The regulator confirmed that it plans to complete net acquisitions of assets at the end of December 2018, but in the future it is also planned to completely reinvest funds received as a result of QA over a long period even after the first interest rate increase.

With regard to the conditions of monetary policy, the ECB expects rates to remain at current levels at least until the summer of 2019 inclusive.

ECB economists have negatively revised their forecasts for the growth of the eurozone economy over the next three years.

GDP growth is expected to be at 1.9% in 2018, while the September forecast was 2.0%. GDP growth in 2019 is projected at 1.7%, while the September forecast was 1.8%. But GDP growth for 2020 remained unchanged, at the level of 1.7%.

As for inflation, experts predict its growth at the end of the year. It is expected that the EU Harmonised Index of Consumer Prices in 2018 will be 1.8%, while in September it was projected to grow by 1.7%.

However, it should be noted that a sharp drop in oil and other energy prices may adversely affect inflation growth at the end of the year, as was the case with the US consumer price index, which has slowed to zero.

ECB experts predict that inflation in 2019 will be 1.6% against the September forecast of 1.7% and 1.7% in 2020.

The speech of the president of the European Central Bank sharply pulled down the euro.

The ECB president said that the latest economic data were weaker than expected, and the uncertainty associated with protectionism, emerging markets, is still strongly expressed, which may affect the pace of economic growth.

Immediately after saying that a substantial monetary stimulus is still needed, the euro went down against a number of world currencies, as many experts were counting on a different kind of statement.

Draghi also noted that the risks to economic growth prospects are generally balanced, but the balance of risks is shifting downwards.

All this once again confirms the fact that the European Central Bank will continue to closely monitor the incoming economic data, and only a real revival of economic growth, along with the solution of a number of problems related to protectionism and political risks, will make it possible to seriously start discussing the first increase in interest rates in the eurozone after the 2008 crisis.

Analysis are provided byInstaForex.

Technical analysis: Intraday Level For EUR/USD for December 17, 2018

Company does not offer investment advice and the analysis performed does not guarantee results

https://forex-images.ifxdb.com/userf...71211491d5.jpg

When the European market opens, some economic data will be released such as Empire State Manufacturing Index, Trade Balance, Final Core CPI y/y, Final CPI y/y, and Italian Trade Balance. The US will also release the economic data such as TIC Long-Term Purchases, NAHB Housing Market Index, and Empire State Manufacturing Index, so amid the reports, the EUR/USD pair will move in a low to a medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Breakout
BUY Level: 1.1362.
Strong Resistance: 1.1355.
Original Resistance: 1.1344.
Inner Sell Area: 1.1333.
Target Inner Area: 1.1306.
Inner Buy Area: 1.1279.
Original Support: 1.1268.
Strong Support: 1.1257.
Breakout SELL Level: 1.1250.

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.

Analysis are provided byInstaForex.

EUR/USD: Weak PMI, the "Yellow Jackets" and the expectation of the Fed

Company does not offer investment advice and the analysis performed does not guarantee results

After Friday's rise to one and a half year highs, the dollar index today slowed down and returned to 96 points. The strengthening of the US currency was due to weak data from China and strong data from the US. However, the dollar rally did not continue due to the upcoming Federal Reserve meeting, the results of which will be known the day after tomorrow.

But on Friday, the dollar bulls were inspired by US data on the growth of retail sales. First, the October data were revised upwards - from 0.8% to 1.1%. Second, in November, the indicator came out better than expected, although it de facto fell to 0.3%. However, following the release of data on inflation growth, Friday's figures provided strong support to the dollar against the backdrop of growth in consumer activity and lending. After all, in addition to the indicator of retail sales, last week data on the growth of industrial production in the United States were published. This indicator jumped by 0.6% in November, being stronger than the forecast (0.3%).

https://lh5.googleusercontent.com/dJ...bwPJN3yClLxSvj

In other words, the US data renewed confidence that the Federal Reserve on Wednesday will not only raise the rate, but will also take a "hawkish" position on the future prospects of monetary policy. Although this issue is quite controversial (due to recent talk about the search for a neutral rate), the fundamental picture for the dollar looks undoubtedly better than the euro.

The single currency came under pressure of not only macroeconomic but also political factors. French PMI indices in the services and manufacturing sector fell under the key 50 mark - for the first time this year. German indicators also came out in the "red zone", showing a slowdown. Composite PMI index in the eurozone sharply fell in December to 51.3 - although last month was at 52.7 points. Weak PMI figures are fully consistent with the slowdown in economic growth in the eurozone, which was recorded in the third quarter of this year – let me remind you that GDP growth in the eurozone slowed to four-year lows.

On top of that, European inflation also brought it down - the consumer price index fell to two percent (with a forecast of 2.1% from the previous value of 2.2%), and core inflation excluding volatile energy and food prices returned to 1%, although experts were confident that the indicator will remain at the October level, that is, at around 1.1%. Against the background of these results, Mario Draghi's position at the last meeting of the ECB looked even optimistic – at least the head of the central bank did not rule out the tightening of monetary policy within the next year.

https://lh5.googleusercontent.com/kr...XmVSCCr79jkRnq

However, it is too early to talk about it. The bulls of EUR/USD are still satisfied with the fact that the European Central Bank completed QE on time, while the next steps of the ECB look too vague. Uncertainty puts pressure on the single currency, as well as the political situation in many European countries – primarily in France. The ongoing protests of the so-called "Yellow Jackets" unnerve the markets, especially against the backdrop of the Italian budget crisis. On Saturday, Paris hosted another (fifth) round of protests: about 70,000 people took to the streets of the city. And although it is almost two times less than in the past, it is too early to talk about the intensity of protest sentiments: most likely, bad weather conditions (almost zero air temperature + heavy rain) are to blame for everything.

Local demands for lower fuel prices have grown into political manifestos - now protesters demand to move to direct democracy through referendums on key issues of the country's life. In other words, the protest movement in France is taking a protracted form with rather unpredictable consequences. On the one hand, many experts say that the protest in its current form is not supported by all the French (much less than during the first wave of rallies). On the other hand, if Macron is forced to resign, then early elections will be held in the country, and the risk of a political crisis will increase in many ways.

Thus, today's corrective growth of the euro-dollar pair is primarily due to the hypothetical problems of the US currency. First, on the eve of the Fed meeting, traders were still anxious over the central bank's further actions. Secondly, there was a risk of a shutdown again in the United States. The US government may stop work on December 22 due to disagreements over the construction of the wall on the border with Mexico. According to the American press, the White House has already begun to conduct advance preparations for the implementation of this scenario.

https://lh4.googleusercontent.com/8Y...VJ8tn4jizs50l-

All this suggests that the EUR/USD pair is unlikely to demonstrate strong volatility until Wednesday – only if Italy or Brexit does not present any surprises in the news plan. From a technical point of view, the pair remains within the downward movement until the price fixes above 1.1360 (the average line of the Bollinger Bands indicator on the daily chart, which coincides with the Tenkan-sen and Kijun-sen lines). In this case, the Ichimoku Kinko Hyo indicator will form a "Golden cross" signal, which will determine further growth to the level of 1.1390 (the lower limit of the Kumo cloud). The nearest target of the downward movement is 1.1280 - the lower line of the Bollinger Bands indicator on the same timeframe.

Analysis are provided byInstaForex.

EUR/USD. Trump again made the dollar nervous

Company does not offer investment advice and the analysis performed does not guarantee results

"Fear has big eyes": something like this can be said about the situation on the foreign exchange market on the eve of the last Federal Reserve meeting this year. The dollar index dives down, showing the weak position of greenback against a basket of major currencies, and the yield of 10-year treasuries fell to 2.83%, finally leaving the area of three percent. It is likely that panic in the near future will only increase, especially after the recent comments of US President Donald Trump.

It is worth noting here that members of the American regulator are forced to observe a "silence regime" for 10 days prior to the meeting itself – this rule is strictly observed by them. But the president of the country is not burdened with such restrictions. And although Trump's predecessors tried not to comment on the Fed's actions at all, the current owner of the Oval Office has been putting verbal pressure on the Fed for several months. In the summer of this year, he rather rigidly commented on the next rate hike, saying that the actions of the central bank harm the economic growth of the country. After that, Trump returned to this issue several times, calling the Fed's policy "insane."

https://lh5.googleusercontent.com/J2...qXxPIw0YT-5wSA

Jerome Powell diplomatically ignored the criticism of the head of state and did not change the tone of his rhetoric. This fact calmed the markets for a while — until the end of autumn, the Fed members started talking about the level of the neutral rate. Initially, Richard Clarid said that the interest rate has almost reached its neutral level, so further tightening of monetary policy may have a negative impact on the key indicators of the US economy. Then Powell touched on this topic: in his opinion, the rate is "just below" the neutral range. And although this range is quite wide (2.5%-3.5%), this position of the Fed chief has disappointed market participants. After all, not so long ago he said that the regulator may exceed the neutral level if the main indicators of the economy grow at an advancing pace.

In other words, traders have well-founded fears that the regulator will take a more cautious position regarding future prospects. That is why the dollar feels rather uncertain at the beginning of this week. Donald Trump also added fuel to the fire, which a few hours before the beginning of the two-day meeting again criticized the possible tightening of monetary policy. In his Twitter account, he said that raising the rate in the current conditions is "unbelievable." In his opinion, in the conditions of a strong dollar, low inflation and a slowing economy of China, it is absolutely impossible to raise the rate.

Today he supplemented his opinion with another tweet, the text of which is worth quoting: "Do not let the market become even less liquid than it is now. Feel the market, don't just chase the meaningless numbers." I think any comments are unnecessary here. And although de jure Trump has no direct influence on the Fed, the position he voiced complemented the gloomy picture on the eve of the key meeting for the dollar.

The weakening of the US currency allowed the euro-dollar pair to demonstrate a more or less clear correction: the price again approached the boundaries of the 14th figure. The single currency has also found a reason for its growth: an epic with the problem of the Italian budget could end tomorrow. According to the European press, the European Commission will announce its verdict on Wednesday. If the parties still come to a compromise, the euro will receive a strong enough support, since this issue has kept traders in suspense since the beginning of autumn.

In addition, against the background of an empty economic calendar, a report from the IFO was published today: on the one hand, the indicators came out worse than the forecast values, but, on the other hand, the comments to the report offset the negative effect. According to experts of the research institute, although the German economy is slowing, it does not show signs of recession. This is a very weak reason for optimism, but against the backdrop of a weakening dollar, it was the impetus for a small increase in EUR/USD.

https://lh3.googleusercontent.com/mS...BeFCS5BhXM9k7S

From a technical point of view, the situation is as follows. On the four-hour chart, the pair reached the upper line of the Bollinger Bands indicator (1,1401), but failed to break it, so it retreated by several dozen points. Despite an unsuccessful assault attempt, the price still remains within the short-term upward movement, as the Ichimoku Kinko Hyo indicator formed a bullish "Parade of lines" signal. The nearest target of the impulse is the 1,1401 mark, when overcoming which it will be possible to talk about the development of the upward movement (up to the 15th figure, that is, to the upper limit of the Kumo cloud on the daily chart). But this growth can only be due to the "dovish" results of tomorrow's Fed meeting.

Analysis are provided byInstaForex.

Technical analysis: Intraday Level For EUR/USD for December 20, 2018

Company does not offer investment advice and the analysis performed does not guarantee results

https://forex-images.ifxdb.com/userf...ca_source!.jpg

When the European market opens, some economic data will be released such as Current Account. The US will also publish the economic data such as Natural Gas Storage, CB Leading Index m/m, Unemployment Claims, and Philly Fed Manufacturing Index, so amid the reports, the EUR/USD pair will move in a low to a medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1440.
Strong Resistance: 1.1433.
Original Resistance: 1.1422.
Inner Sell Area: 1.1411.
Target Inner Area: 1.1384.
Inner Buy Area: 1.1357.
Original Support: 1.1346.
Strong Support: 1.1335.
Breakout SELL Level: 1.1328.

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.

Analysis are provided byInstaForex.

Technical analysis: Intraday level for USD/JPY for December 21, 2018

Company does not offer investment advice and the analysis performed does not guarantee results

https://forex-images.ifxdb.com/userf...45_source!.jpg

In Asia, Japan will release the National Core CPI y/y and the US will also publish some economic data such as Revised UoM Inflation Expectations, Personal Income m/m, Revised UoM Consumer Sentiment, Personal Spending m/m, Core PCE Price Index m/m, Final GDP Price Index q/q, Durable Goods Orders m/m, Final GDP q/q, and Core Durable Goods Orders m/m. So there is a probability that the USD/JPY pair will move with a low to a medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Resistance. 3: 111.78.
Resistance. 2: 111.56.
Resistance. 1: 111.85.
Support. 1: 111.07.
Support. 2: 110.86.
Support. 3: 110.64.

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.

Analysis are provided byInstaForex.

Technical analysis: Intraday Level For EUR/USD for December 27, 2018

https://forex-images.ifxdb.com/userf...4b_source!.jpg

When the European market opens, some economic data will be released such as ECB Economic Bulletin. The US will also publish the economic data such as New Home Sales, CB Consumer Confidence, HPI m/m, and Unemployment Claims, so amid the reports, the EUR/USD pair will move in a low to a medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Breakout BUY Level: 1.1425.
Strong Resistance: 1.1418.
Original Resistance: 1.1407.
Inner Sell Area: 1.1396.
Target Inner Area: 1.1369.
Inner Buy Area: 1.1342.
Original Support: 1.1331.
Strong Support: 1.1320.
Breakout SELL Level: 1.1313.

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.

EUR/USD: US consumer confidence weakened the dollar

The dollar index froze in flat today: on the one hand, the indicator was able to return to the area of 96 points, but on the other hand, further growth was questionable. The fundamental background for the US currency is quite controversial, so traders are in no hurry to open large positions - neither in favor of the greenback nor against it.

https://lh5.googleusercontent.com/n7...qG_D5AW8ijvuFI

Bulls of EUR/USD situationally took advantage of the situation, making up for yesterday's losses, however, the northern dynamics is also under a certain question. Throughout the trading day, traders stormed the 14th figure, but it is not yet possible to finally gain a foothold in this area. The European currency was not able to attract investors even against the background of the shaken demand for the dollar. As a result, the EUR/USD pair was also stuck in a flat, despite the predominantly bullish sentiment of investors.

In general, the foreign exchange market today is balanced between two border states. In the morning, there was clearly a thirst for risk in the background of recent events. Traders "changed their anger to mercy" when the main indices of the US stock market showed rapid growth. News from China also encouraged the market, as the date of talks between Beijing and Washington became known: the American delegation will visit the Chinese capital in the second half of January. This fundamental picture has weakened the interest of traders in the dollar, which has recently enjoyed the status of a "defensive asset".

In turn, this situation allowed the EUR/USD bulls to return the pair to the area of the 14th figure, although the northern dynamics of the price were under serious threat. The reason for this is the economic bulletin, which was published today by the ECB. The European equivalent of the "minutes" of the Federal Reserve rarely causes strong volatility in the market, but against the background of an almost empty economic calendar and low liquidity, today's release played a role for the euro.

By and large, the published Bulletin in many respects duplicates the already voiced information from the last meeting on monetary policy. Today, traders did not see anything new in the report: according to members of the central bank, the eurozone economy still needs significant amounts of stimulation against the backdrop of increasing downward risks. The central bank expects to see further expansion of the economy, although the momentum of growth by the end of the year slowed noticeably. In addition, the regulator is quite pessimistic about the dynamics of the EU economic growth in 2019 against the background of the expected slowdown in the global economy.

All these theses were almost literally voiced by Mario Draghi at the ECB's last meeting this year. However, he was more optimistic in his assessments, while the Bulletin compiled only negative factors. Therefore, among the experts today there is a fairly reasonable assumption that at the beginning of the year the European Central Bank will soften its rhetoric.

In their opinion, the regulator will first of all change the wording regarding the approximate term of the rate increase. If at the moment the ECB plans to tighten the monetary policy "not earlier than autumn 2019", then in the text of the January or March accompanying statement of the wording may be subject to adjustment. The essence of the possible changes is obvious: the regulator will move the date of rate increase for an indefinite period, so that, on the one hand, not to entertain the market with unrealistic illusions, and on the other hand, not to drive itself into the framework of its own forecasts.

In my opinion, these concerns are justified, but only if the key inflation indicators show a further decline in the first quarter of next year. That is, the ECB can adjust its position only at the March meeting, while the January meeting is likely to be "passing". Apparently, the market also came to the conclusion that it is too early to worry about this, so after a small southern pullback, the EUR/USD pair shot up, after all having overcome the price outpost of 1.1400.

This price movement contributed to the US statistics. The consumer confidence indicator published today turned out to be much worse than forecast: with the forecast of 133.7, it came out at 128.1 - this is the weakest result since July of this year. The indicator has weakened quite sharply and unexpectedly, since over the past five months it has not decreased below the 130th mark.

As you know, this index is a leading indicator of consumer spending, so traders returned to the problem of inflation growth in the United States. The market was again concerned about the pace of the rate hike next year – after all, according to some experts, the Fed may even pause the process of tightening monetary policy - or just raise the rate once at the December 2019 meeting. And although these arguments are also too generalized, the dollar was under quite strong pressure.

https://lh4.googleusercontent.com/Es...5wESy1z6ZhQ90i

Technically, the bulls of the EUR/USD pair still need to consolidate above the upper line of the Bollinger Bands indicator on the daily chart (1.1430) and the upper limit of the Kumo cloud (1.1515). Having overcome these price barriers, traders will indicate the priority of the northern movement. Until then, there is a risk of a downward rollback to the middle line of the Bollinger Bands, that is, to the level of 1.1360.

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

Analysis are provided byInstaForex.

Trading plan for 02/01/2019

https://forex-images.ifxdb.com/userf...d4_source!.jpg

The start of the new year brings a revival of trade, which for the currency market mainly means USD sales. EUR / USD and USD / JPY are gaining new levels closer to 1.15 and 109 respectively. More pressure concerns only AUD and NZD in the company of the stock market in Asia, where the pressure was created after disappointing data from China.

On Wednesday, the 2nd of January, the event calendar is light in important data releases, but the global investors should keep an eye on PMI Manufacturing data from Germany, France, Spain, Italy, UK and the whole Eurozone being released early in the morning. During the US session, Canada and the US itself will publish their PMI Manufacturing data as well.

EUR/USD analysis for 02/01/2018:

China's December Caixin manufacturing PMI fell from 50.2 in November to 49.7, in line with the official manufacturing PMI, which fell from 50.0 to 49.4. Together with a fall in industrial profits of 1.8%YoY in November from +3.6%YoY in October, and softer retail sales growth (8.1% in November from 8.6% in October), the global investors have a clear indication that the economy is weakening.

The Chinese HSBC Manufacturing PMI is a composite indicator designed to provide an overall view of activity in the manufacturing sector and acts as a leading indicator for the whole economy. When the PMI is below 50.0 this indicates that the manufacturing economy is declining and a value above 50.0 indicates an expansion of the manufacturing economy. Flash figures are released approximately 6 business days prior to the end of the month. Final figures overwrite the flash figures upon release and are in turn overwritten as the next Flash is available. The Chinese HSBC Manufacturing PMI is concluded from a monthly survey of about 430 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market has broken through the local technical resistance zone located between the levels of 1.1442 - 1.1471 and made a new local high at 1.1495 on its way up. The zone between 1.1493 - 1.1499 is a resistance zone as well so the bulls might have some problems there, but the momentum is still strong and positive, which supports the short-term bullish outlook. In a case of a further rally, the next target for bulls is seen at the level of 1.1533 and 1.1550.

Analysis are provided byInstaForex.

GBP/USD. And again Brexit: the pound fell into the zone of turbulence

The situation in the foreign exchange market is changing rapidly: in the morning the pound-dollar pair showed a positive attitude, taking advantage of the weakness of the US currency – but in the second half of the day the British sharply fell throughout the market, testing the 25th figure paired with the greenback. It was followed by the euro, which was unable to hold local highs and hastily returned to December positions. After the New Year holidays, traders again remembered Brexit, the prospects of which are still very vague.

The immediate reason for the price collapse of the GBP/USD was the message that Theresa May is holding an emergency meeting of the cabinet ministers today, on the agenda of which there will be only one issue – preparation for a "hard" Brexit. Traders reacted anxiously to this news, although, in my opinion, today's situation should be considered from a slightly different angle.

https://lh6.googleusercontent.com/gL...cvHsMas9DtTjBT

The fact is that since the beginning of December, when Theresa May canceled the Brexit vote, the general mood among British parliamentarians has not changed. It would be possible to talk about any changes if Brussels went to a meeting and outlined the validity period of the backstop. But Europe refused, so the prime minister returned to London with nothing, refusing to even hold a press conference. May's behavior is quite understandable: after all, the Europeans not only refused her request, but even criticized her for the lack of structural elements. Brussels expressed bewilderment: what kind of "legal guarantees" can we talk about if the draft agreement already approved by the European Union and British ministers provides for consideration of this issue during the transition period?

In other words, over the past three weeks, the situation has not changed, whereas after two weeks the British deputies must render their verdict to the proposed deal. Theresa May still needs to consolidate the votes of not only her fellow party members (117 of whom voted for her resignation), but also find 10 more votes outside the Conservative Party. The task, to put it mildly, is not easy, so the prime minister needs to act "decisively and convincingly."

And apparently, May decided to play the "no alternative" card of the proposed agreement again. The previous attempt ended in failure: according to preliminary estimates, on the eve of December 11, the prime minister lacked a few dozen votes, which was the reason for the cancellation of the vote. Now the situation is somewhat different, so the prime minister will certainly try her luck again - especially since there are simply no other options.

Let me remind you that since around the end of September, May has been actively focusing on the catastrophic consequences of chaotic Brexit, recalling that the proposed deal is a single alternative to this scenario. This position was repeated by the European Union: according to the European side, the members of the Alliance will under no circumstances reconsider any points of the agreement reached. Speaking with a "united front", Brussels and London tried to convince members of Parliament that they have little choice: either they vote for the deal (with all its shortcomings), or let the country "derail", allowing a chaotic scenario.

But shortly before the key vote, the deputies began to discuss possible alternatives. Among them is the rejection of Brexit as such (the European court at the end of 2018 allowed such an option) or a new referendum. As a result, Theresa May's script has lost its trump card, which lay in the proverbial no alternative.

https://lh4.googleusercontent.com/FI...wJY13GFJ-MULNB

Why does May again begin to escalate the situation, "scaring" politicians with hard Brexit? The fact is that in late December, the leader of the British opposition, Jeremy Corbyn, disappointed supporters of the second referendum with his unexpected statement. He said that his party supports Brexit, but at the same time the Labour Party will try to change the terms of the deal if they win the early elections in 2019 (if they are held, of course). Thus, the probability of holding a second referendum has largely decreased, since now only small parties defend this idea, which are unable to change the situation as a whole.

Other proposed scenarios look too ephemeral to "compete" with the draft deal proposed by May. That is why in the coming days the situation will only escalate: supporters of the prime minister will, under any pretext, "scare" the public and politicians with catastrophic consequences of a hard Brexit. This strategy can persuade doubting MPs that a bad deal is better than a chaotic option – especially in the absence of clear alternatives.

Traders of GBP/USD, in turn, will have to be patient: the pound reacts sharply to any comments or events related to the prospects of the "divorce process". Therefore, the period of "panic" will be perceived by the British quite painfully. At the moment, the pair is heading to the nearest, strongest support level of 1,2505 (the lower line of the Bollinger Bands on the daily chart), where a corrective pullback may follow.

Analysis are provided byInstaForex.

EUR/USD. Friday's Jackpot: Nonfarm and European inflation

The foreign exchange market is experiencing a period of increased volatility, showing strong price impulses. The dollar/yen pair has passed more than 400 points in the last day, the pound/dollar – almost 150, the "kiwi" and "loonie" – about 100. In all cases, the dollar for some time significantly strengthened its position, but then just as rapidly fell throughout the market. This difference in mood is due to the changeable fundamental background, which is clearly confusing traders.

https://lh6.googleusercontent.com/Qn...srlsjuHk9blMaZ

The fact is that the dollar last year (especially in the second half of it) actively enjoyed the status of a defensive instrument – even the negative events in the United States increased the demand for the greenback. The US currency had a powerful trump card in the form of the hawkish policy of the Fed, especially against the background of the uncertainty of the rest of the central banks of the leading countries of the world. Now the situation has changed somewhat: the problems in the US are still growing like a snowball, but the position of the Federal Reserve has softened significantly. The results of the December Fed meeting will "chase" the dollar for a long time, especially if the key US economic indicators show a decline in the first half of the year. Some representatives of the American regulator, who had recently voiced the "hawkish" position, added fuel to the fire. Now their rhetoric has changed significantly.

For example, the head of the Federal Reserve Bank of Dallas, Robert Kaplan, said today that the regulator should take a wait-and-see position for at least two quarters of 2019. The essence of his position boils down to the fact that the US-Chinese trade conflict has harmed not only the world economy and not only China – but also the United States. In view of this fact, he expects a slowdown in US GDP growth and inflation this year. The Fed, in his opinion, should react accordingly, so as not to aggravate the already precarious situation. Here it is worth recalling that in the autumn of last year Kaplan stated that 4 rounds of increase would follow to the neutral level of the rate (that is, the neutral level would be at the level of 3.25%). As we see, now his opinion has changed dramatically: now he stands for a six-month pause.

If the rest of the Fed members move to the "dovish" camp in the same way, the dollar finally loses its foothold. In this context, it is important to listen to Jerome Powell, who will speak at the economic conference tomorrow with his predecessors, Janet Yellen and Ben Bernanke. If the incumbent Fed chief also softens his rhetoric (or at least repeats the main points of the December meeting), the dollar index will continue its downward trend.

However, tomorrow is full of other events. First of all, we are talking about the Nonfarm, which can give an additional impetus to dollar pairs. According to preliminary estimates of experts, the number of people employed in the non-agricultural sector in December should increase by 180 thousand, while the unemployment rate will remain at the previous level of 3.7%. This is a good forecast, so if real numbers meet expectations, then the dollar will avoid another wave of sales.

https://lh4.googleusercontent.com/ia...kC_hz69mcL13TH

But as shown today, experts can make a big mistake in their estimates: the American manufacturing index ISM, contrary to all forecasts, fell to the mark of 54.1 - this is the weakest result since September 2016. This unexpected result discouraged dollar bulls, after which the EUR/USD pair was able to return to the 14th figure for a short time. If tomorrow's Nonfarm will present a similar "surprise", then the market reaction will be more extensive.

Another important release on Friday is the dynamics of wages. The indicator of the average hourly wage in the USA has been fluctuating in the range of 0.1% to 0.3% (m/m) for a long time, although in annual terms the indicator has grown slightly (up to 3.1%). For EUR/USD bears, it is important that the indicator does not cross the zero line on a monthly basis and does not "dive" under the three percent mark in annual terms. This indicator is closely monitored by the Fed, so its negative dynamics will affect the position of the US currency.

Also, we should not forget that tomorrow the release of data on the growth of European inflation is expected. The consensus forecast suggests that the consumer price index will drop again - to 1.8%. Core inflation should remain at the same level - 1%. Any deviations from the forecast scenario will cause strong volatility - depending on the direction in which the pendulum will swing. The recovery of inflation indicators will inspire the bulls of the EUR/USD pair, as the chances of a rise in the ECB rate this year will increase. If the price pressure continues to weaken, the euro will be too vulnerable - even against the background of an uncertain greenback.

Analysis are provided byInstaForex.

Technical analysis for EUR/USD for January 10, 2019

EUR/USD has finally broken above and out of the trading range it has been in for the last two months. This is a bullish sign. We could see a pullback as a back test towards 1.1450-1.1480 but I remain bullish on EUR/USD looking for at least a move towards 1.17.

https://forex-images.ifxdb.com/userf...6f16324bd5.png

Light blue dots - medium strength support

Blue dots - maximum strength support

Green line - trend line support

Blue lines - extension targets

EUR/USD after three attempts at 1.15, buyers have finally broken above it and closed above it as well. We were favoring the bullish scenario despite being in a neutral sideways trend, because of the warning we had seen by the Daily RSI bullish divergence. Our target is now at 1.17 and any move higher will increase the chances of a major low to be in place at 1.1215 and a new up trend to start. A daily close below 1.1435 is something bulls do not want to see.

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

GBP/USD: do not succumb to the illusions of growth

The pound/dollar pair is now extremely unreliable in the context of any forecasts – and in the short term, and even more so in the long term. The general weakness of the US currency can create the illusion of the northern trend of GBP/USD, but in this case it is absolutely impossible to focus on the dynamics of the dollar. "Cable "for two and a half years is completely subject to Brexit, so the vector of price movement here depends only on the fate of the "divorce process".

However, sometimes emotional news related to the prospects of the Federal Reserve's monetary policy still drowns out Brexit. One of those rare occasions happened yesterday. The resonant statement of the head of the Federal Reserve of Atlanta that the regulator can hypothetically reduce the interest rate coincided with the failure of the British parliament to vote for Theresa May's government. The GBP/USD pair remained in its positions (showing even the northern dynamics) only at the expense of the dollar that had sharply fallen throughout the market.

Although in reality there are no reasons for optimism among bulls of the pair, and there was no. Although in reality there are no reasons for optimism among bulls of the pair, and there is no.

https://lh3.googleusercontent.com/yy...tPydKIk_C3bp-E

On the one hand, the amendments adopted yesterday by British MPs do not entail any serious consequences - at least for today. Members of the House of Commons have adopted amendments to the tax law, thereby limiting the powers of the Cabinet of Ministers in this area in the event of the development of a "hard" Brexit scenario. Now the Ministry of Finance will not be able to change the amount of taxes (thus offsetting the negative effect of "hard" Brexit), if this step is not approved by the deputies. According to legislators, this rule will prevent the country's chaotic exit from the EU: "Now Theresa May must by all means reach a compromise solution with the European Union and the British Parliament," said Labour leader Jeremy Corbyn.

The logic of this law is to "force negotiations": as many politicians believe, Theresa May has largely conceded to Brussels, and now "frightens" the Parliament by the lack of any alternative to the agreement reached. The above norm, in the opinion of the deputies, will incline the prime minister to additional negotiations with the EU.

British MPs adopted another rule and is very significant of character. Parliament ordered the government to prepare a new Brexit plan if the members of the House of Commons do not vote on January 15 for the proposed draft deal. Moreover, ministers are obliged to present a "plan B" within three days after the failed vote. 308 of the 618 deputies of the lower house of Parliament voted in favour of the proposal, while 297 opposed the idea.

It is not even the essence of the adopted bills that is important here (although their content also speaks volumes) - yesterday's voting showed a preliminary political alignment in the Parliament. And apparently, it is clearly not in favor of "soft" Brexit. The results of the vote suggest that the majority of deputies in the House of Commons are opposed to leaving the EU without an agreement – May's opponents are not only among Labour and other opposition parties, but also among "their" conservatives.

Thus, the British prime minister's "saving strategy" seems to be a fiasco. Let me remind you that the local press this week discussed a possible scenario in which the Parliament approves the deal, but only if Brussels provides additional guarantees regarding the duration of the special regime on the Northern Ireland border. As you can see, the Parliament decided to go its own way, playing ahead. In addition, representatives of the European side also hurried to assure their British colleagues that they will no longer discuss the terms of the deal – under any conditions.

https://lh3.googleusercontent.com/DV...xV4qyxRLtEtOX7

What are the options then? According to the majority of experts, there are not so many of them, or to be more precise, only two: either the prime minister will postpone the vote again, as it was in December, or she will postpone the country's exit from the EU for an indefinite period, using the decision of the European Court of Justice, which at the end of last year clarified the provisions of the 50th article of the Treaty of Lisbon. Both options are negative for the British currency, despite the fact that they save from the "hard" Brexit. The market is quite exhausted by the two-year period of uncertainty, so the prolongation of this regime will be bad news for GBP/USD bulls.

That is why the northern dynamics of the pair now looks unreliable and unconvincing. Long positions on the pair are too risky, especially on the eve of January 15, when a key vote in the British Parliament is to be held. If Theresa May takes one of the two decisions listed above at the weekend, the pound may collapse on Monday for several figures, as it was in mid-December. It will be possible to speak about the confident growth of the "cable" only when the "soft" Brexit becomes a reality – that is, when it receives the approval of the British parliamentarians.

Analysis are provided byInstaForex.

Brexit: Scenarios of the movement of the British pound. May, Tusk and Juncker exchanged courtesies

The euro fell in the first half of the day to the area of a minimum amid weak industrial production data, indicating the likelihood of a slowdown in economic growth in 2018. A further bearish trend in the EUR/USD pair gets more real.

Eurozone

According to the report, industrial production in the eurozone in November last year declined more significantly than expected. As noted in Eurostat, industrial production in the euro area fell by 1.7% in November compared with October. This is the biggest drop since February 2016. Economists had expected a decline in production of 1.3%. Germany, where production fell by 1.9%, and Spain, where the decline was marked by 1.6%, were among the leaders in countries where production was falling the fastest.

https://lh3.googleusercontent.com/uz...1qX9_mtRn5cqa4

Thus, the decline in industrial production in many European countries only confirms the weakening of the global economy.

This was noted in today's report of the Organization for Economic Cooperation and Development, which states that the growth rates of the United States and many other developed countries will continue to slow down this year. The only exception may be the Chinese economy, which shows signs of stabilization. But even here, a lot will depend on the trade agreement with the United States.

According to the data, the leading indicator for the US fell for the third month in a row, being at the level of 99.6 points. China's indicator rose to 98.9 points, indicating a less active slowdown in economic growth. The leading indicator of the eurozone is below the level of 100 points, indicating a continued slowdown in the pace of activity.

As for the technical picture of the EUR/USD pair, it remained unchanged compared with the morning forecast. Buyers of risky assets need to go back to the resistance level of 1.1490 since the future direction will depend on it. If this fails to be done, then it is likely that the bears will continue to push the euro down to the support of 1.1425 and 1.1370.

UK and Brexit

The British pound continues its growth, which, apparently, is still more speculative. Traders positively perceived the information that the Prime Minister of Great Britain today sent a letter to Tusk and Juncker, in which she confirmed her intentions to carry out the decision made during the referendum. However, despite this, May is concerned about the fate of the Brexit deal, which is under threat due to concerns over Northern Ireland. The Prime Minister of Great Britain assured that the EU's concerns about the threat of a rigid border are groundless and negotiations will continue immediately after the vote in the UK. The focus of these negotiations will be on technology that will give up the guarantee of the absence of a rigid border.

In turn, Juncker and Tusk responded to May in the same style, sending her a letter with assurances regarding the Brexit deal, but adding that they would not agree to anything that changes the agreement or does not correspond to it. Juncker also noted that the EU will quickly work on a trade agreement in order to avoid applying the guarantee of the absence of a rigid border in Ireland.

All of these suggest that if the deal with the EU in the framework of a vote does not receive the support of parliamentarians tomorrow, the British pound may remain in the side channel until a final decision is reached since there are a lot of future development scenarios. Starting from the postponement of the exit of the UK from the EU, ending with indiscriminate exit without the adoption and approval of the basic laws.

The prospect of complete abolition of Brexit also has a place to be that will support the British pound when information appears about the next referendum on this matter.

Analysis are provided byInstaForex.

EUR/USD. Spotlight on China and Brexit

The economic calendar of the foreign exchange market is nearly empty today. Nevertheless, the most important release of the day caused quite a strong resonance among traders. We are talking about the publication of data on the state of China's foreign trade.

The importance of this indicator is due to the general concern of investors about the slowdown in the world economy. Any facts that somehow confirm this concern have a strong impact on the dynamics of trading – both in the currency and stock market. Today's figures once again reminded the market of the consequences of the trade war, which is still ongoing, despite the intention of the parties to conclude a broad deal.

On the one hand, the surplus of Chinese foreign trade was at an impressive level – the December figure came out at 57.1 billion dollars, reaching a three-year high. Immediately after the publication, the market was optimistic about these figures. But the structure of this release is frankly disappointed, as the performance of imports and exports showed weak dynamics, continuing the trend of slowdown. Thus, according to China's General Administration of Customs, exports from the country (in dollar terms) fell by 4.4% year-on-year. Imports fell more significantly-immediately by 7.6% year-on-year. In other words, Chinese exports and imports in the last month of last year showed the sharpest decline in two years.

https://lh3.googleusercontent.com/ps...txjqx_5cJ4-qYd

According to experts, the lion's share of Chinese imports is imported into the country not for final consumption, but for further production of goods. That is, a significant decrease in imports is a wake-up call, which indicates the upcoming slowdown in the Chinese economy as a whole. According to preliminary data, last year the Chinese economy grew by only 6.6% - this is the lowest rate in the last 19 years. Naturally, such weak results of the second world economy in nominal GDP will provoke a "domino effect". In particular, at the end of last year, the head of Apple sharply reduced the forecast for revenue for the first quarter of 2019 – by 8 percent, that is, from 91 to 84 billion dollars. It is noteworthy that Apple has revised downward quite a fresh forecast: the target of 91 billion was set just two months ago. According to Tim Cook, the negative dynamics associated with the slowdown of the Chinese economy and the "tough" policy of the Federal Reserve.

The situation with Apple is just one example, which is the most recent and revealing. If the economic momentum of the PRC continues to lose its strength, such situations will be repeated more often, not to mention the slowdown of the commodity market with all the ensuing consequences.

A broad trade deal between the US and China could change this state of affairs – at least in the long run. But the parties are in no hurry to disclose the details of the latest negotiations, although the officials promised to publish them "in the near future". More than a week has passed since then, but the cart is still there. The very fact of such silence suggests certain thoughts, the essence of which is reduced to the presence of unresolved problems between Washington and Beijing. And although all this is still speculation, the overall situation in the market remains uncertain.

The EUR/USD pair also cannot determine the vector of its movement. The dollar index drifted at the base of 95 points, and the European currency is under pressure from the uncertain prospects of Brexit and negative data on the growth of industrial production in the eurozone. The indicator came out much worse than expected: year-on-year at – 3.3% (with a forecast of -2.2%), and month-on-month at –1.7% (with a growth forecast of 0.3%). In France, this figure subsided due to long-term protests of "yellow vests" in Germany – because of problems in the automotive industry, and a general decline in the entire industry was recorded in Italy.

https://lh4.googleusercontent.com/CP...aLpp9B3oClXFnf

Conflicting fundamental picture does not allow EURUSD to demonstrate a strong momentum, so traders have to bargain in a flat in anticipation of a strong infopovod. It is obvious that Brexit, or rather today's discussion of this issue in the British Parliament, will become such an occasion.

At the moment, it is known that the European Union has sent a written appeal to London, which assures the British that the subsequent negotiations in the transition period will avoid the use of the backstop mechanism. In the evening, during Theresa May's speech to the Parliament, we will learn the details of this letter, and so far the market is in limbo – and regarding the prospects of the "divorce process", and regarding the prospects of the US-Chinese trade conflict.

https://lh6.googleusercontent.com/k7...t6zHnDoDqbv1d9

On the technical side, the EUR/USD bulls need to gain a foothold above 1.1530 to demonstrate their advantage. In this case, the Ichimoku Kinko Hyo indicator on the daily chart will form a bullish "Parade of lines" signal , increasing the probability of price growth to the borders of the 16th figure. If the general interest in the risk fades, the pair may already return to the average line of the Bollinger Bands indicator on D1, that is, to the level of 1.1410. A break of this level will send the pair to the lower boundary of the Kumo cloud, that is, to the level of 1.1350.

Analysis are provided byInstaForex.

EUR/USD: Italy, Draghi, Brexit

The foreign exchange market in anticipation of key events of today, month, and possibly - the year. The British Parliament will deliver its verdict on Brexit late tonight (and possibly late at night), so today's trading is cautious and quite volatile. In particular, at the beginning of the US session, the euro/dollar pair surprised traders with a downward impulse toward the founding of the 14th figure. Considering the fact that the pound was relatively calm at the same time, it was possible to conclude that Brexit had nothing to do with it.

Later it became known that the single currency reacted so keenly to the statements of the Italian prime minister, who criticized the European Central Bank. Italy again reminded of itself, although traders turned over this Chapter at the end of last year, when Rome and Brussels agreed on a budget, thus preventing a disciplinary procedure. However, now conflict situations have arisen in a somewhat different plane. The fact is that the ECB is seriously concerned about the state of the Italian banking sector, especially after a number of recent events. I recall that in early January, the European regulator took control of the tenth largest bank in Italy, Banca Carige. The European Central Bank has appointed three temporary administrators and a supervisory committee, thereby replacing the bank's board of directors.

https://lh4.googleusercontent.com/V6...1tT4R97yUqTApY

And here it is worth noting that Banca Carige is one of the most troubled Italian banks, which was provided with assistance in the amount of 320 million euros from the Italian Interbank Fund last fall. But because of the frankly inept management and the conflict of shareholders, the bank failed to restructure and get rid of "bad" debts. The Fitch rating agency, in turn, lowered the bank's credit rating to CCC + with a negative outlook, while warning that Carige could go bankrupt. As a result, the Italian National Commission on Companies and Stock Exchanges ceased trading in bank shares, as the board of directors wereunable to reach an agreement on raising capital. This was the last straw for the majority of the members of the Board of Carige, after which the leadership was transferred to the temporary administrators appointed by the European Central Bank. By the way, after that, both Italian and German government bonds collapsed, putting significant pressure on the euro.

The above situation did not remain without consequences. Two weeks later, that is, today, the ECB demanded that Italian banks prepare reserves to cover the so-called "bad loans" for seven years. Italy's Vice Prime Minister Silvio Matteo "with hostility" took this demand, calling it "irresponsible." In his opinion, the European regulator demonstrates double standards and abuses its powers, using them for political purposes. He also noted that the central bank's intervention on banks which are "undesirable", can be an expensive cost for Italy- Matteo announced the amount of 15 billion euros. In addition, the Italian Deputy prime minister warned that the European regulator by its actions could provoke political and financial instability in the country.

Such harsh statements came as a complete surprise, so the single currency reacted accordingly. Mario Draghi, who spoke today in the European Parliament, added fuel to the fire. He said that the latest macroeconomic indicators turned out to be "much weaker" than forecasts, and this fact suggests that stimulating the economy through soft monetary policy is "still necessary."

https://lh5.googleusercontent.com/D3...P5TDOjR9i1EmQG

He also said that the regulator will pursue an accommodation policy in the foreseeable future until inflation rises to the target level. Given the fact that inflation has recently shown only negative dynamics, it is not difficult to build an appropriate logical chain. In other words, the chances of an ECB rate hike within the current year are melting before our eyes, especially in the face of uncertain prospects for Brexit.

By the way, it was Brexit's question that put pressure on the pound and the dollar in the second half of today: and the closer the time to "X hour", the more volatility is expected in the market, and for no apparent reason. For example, the dollar index fluctuated without any enthusiasm throughout the day, but by the end of the day it soared up, although the producer price index in the United States and the Empire Manufacturing index were worse than expected (the last figure dropped to 1.5-year lows). The general nervousness of the market affects the dynamics of the US currency, although there are still no significant reasons for strengthening the greenback.

All this suggests that before a vote in the British Parliament, traders are best to take a wait-and-see attitude: events in London will have an impact not only on the pound or the euro, but also determine the mood of the entire foreign exchange market.

Analysis are provided byInstaForex.

GBP/USD. Results of the day. Cancel Brexit, Brexit transfer, new Brexit negotiations?

https://lh3.googleusercontent.com/xq...i_Y63vTQIyotww

The amplitude of the last 5 days (high-low): 94p - 73p - 156p - 112p - 246p.

Average amplitude for the last 5 days: 136p (106p).

The British pound sterling on Wednesday, January 16th, is not moving. Traders, with such a feeling, do not know what to do next. On the one hand, yesterday, a fateful decision was made for Britain. On the other hand, the situation with Brexit did not become clearer. It only became clear that the UK is not exactly leaving the EU according to the Chequers plan. However, whether it will leave the European Union at all and under what conditions it is now is unknown. Today on the agenda in the British Parliament is the question of distrust of Theresa May, initiated by the leader of the main opposition party (Labour), Jeremy Corbyn. If the majority of deputies vote in favor, Theresa May will be dismissed. We believe that this is exactly what will happen. But again, it is not known how traders will react to this event. From our point of view, the resignation of Theresa May will give a chance for new negotiations with the EU, perhaps more productive and beneficial for the United Kingdom, as well as a chance for the country not to leave the EU at all. Thus, Theresa May's resignation could provoke ... the growth of the British currency. In any case, it is best to wait for the evening and find out how the debate in Parliament will end. Inflation, published today in the UK, did not cause any reaction from the market, as it corresponded to the predicted value - 2.1% y/y in December. In his speech today, the head of the Bank of England, Mark Carney, noted that the loss of Theresa May and the strengthening of the British pound means that markets believe in reducing the chances of a disorderly exit of the country from the EU.

Trading recommendations:

The GBP/USD currency pair remains in an upward trend on the eve of a new vote in the British Parliament. Once again, we do not recommend opening any positions in the current situation, as it is associated with increased risks. The pair can again be extremely volatile in the next few hours.

The same applies to sell orders. Any positions you can open, aware of the increased risks and always placing protective Stop Loss orders.

In addition to the technical picture, fundamental data and the timing of their release should also be taken into account.

Explanation of illustration:
Ichimoku Indicator: Tenkan-sen-red line. Kijun-sen – blue line.
Senkou span a – light brown dotted line.
Senkou span B – light purple dotted line.
Chikou span – green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD:
Red line and histogram with white bars in the indicator window.

Analysis are provided byInstaForex.

EC and the United States: a new trade war between the EU and the USA is very close

https://lh3.googleusercontent.com/65...8nUChEzS08bple

The European currency again failed to gain a foothold above key resistance levels and began to gradually lose ground against the US dollar in the afternoon after the release of a good report on the US labor market, as well as before the publication of the report of the US Department of Commerce, in which the import of cars from the European Union will be important.

The trade war is gaining momentum.

It is expected that in the above report it will be clear whether US President Donald Trump will return to a protectionist policy towards the EU, since from an economic point of view, the import of cars is strategically important and can pose a threat to US national security. For example, last year tariffs on Chinese goods were introduced in this way.

Even today, EU authorities have imposed restrictions on the import of steel in order to combat the consequences of US trade policy, which makes it possible for the US president to verify the need for import duties on metals, which were introduced last year by the United States.

The European Commission said that the new measures involve the introduction of quotas on imports of 26 categories of goods, as well as 25% duty on imports in excess of this quota. This decision will take effect from February 4 and will replace the temporary solution, which was introduced in July 2018.

Today's data on inflation in the eurozone, as yesterday in Germany, fully coincided with the forecasts of economists, which is likely to force the European Central Bank to adhere to a wait-and-see approach at a meeting to be held next week. However, the main focus, of course, will be shifted towards the deterioration of the growth prospects of the European economy in 2019.

According to the statistics agency, the consumer price index CPI of the eurozone in December this year remained unchanged and year-on-year grew by 1.6%, fully coinciding with the forecasts of economists. The Core CPI core consumer price index, which does not take into account volatile categories, rose 0.5% in December compared to November and 1.0% year-on-year. The consumer price index of the eurozone excluding tobacco products in December was 1.5%.

The US labor market data provided some support to the US dollar. According to a report from the US Department of Labor, the number of initial jobless claims for the week from 6 to 12 January fell by 3,000 to 213,000. Economists had expected the number of applications to be 220,000.

Activity increased in the mid-Atlantic region of the United States in January. According to the Federal Reserve Bank of Philadelphia, the index of business activity rose to 17.0 points in January 2019 against 9.1 points in December, while economists had expected the index to reach 8.0 points in January. The report notes that companies remain optimistic for the next six months, with more than 46% of the companies surveyed expecting increased activity.

As for the technical picture of the EURUSD pair, the bears are trying to resume the downward movement in the market after an unsuccessful attempt of bulls to return to the game. The breakout of 1.1375 may lead to a larger decline in risky assets with the update of the lows of 1.1340 and 1.1310. In the case of another false breakout at 1.1375, the bulls may be willing to return, which will lead to a powerful upward momentum with a test and a breakthrough of the intermediate resistance of 1.1415 and the main goal of updating a high of 1.1450.

Analysis are provided byInstaForex.

Technical analysis: Intraday level for USD/JPY, Jan 21, 2019

https://forex-images.ifxdb.com/userf...54a9615712.jpg

Today, Japan and the US will not release any economic data. So there is a probability the USD/JPY pair will move with a low to a medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Resistance. 3: 110.20.
Resistance. 2: 109.98.
Resistance. 1: 109.77.
Support. 1: 109.50.
Support. 2: 109.29.
Support. 3: 109.07. (Disclaimer)

Analysis are provided byInstaForex.

British Triangle: Tory, Whigs and Theresa May

Tonight (at about 15:30 London time) Theresa May will again try to convince the British Parliament to support her deal with Brussels. In anticipation of this event, the pound is behaving extremely cautious after a significant decline on Friday. At the end of last week, the pound slumped in a matter of hours by more than a hundred points, as the initial optimism was replaced by habitual pessimism. Today, the mood of traders has not improved: judging by the rhetoric of May's entourage, she does not intend to postpone Brexit's term, not excluding the "hard" scenario.

https://lh3.googleusercontent.com/nR...fC5TwNF1Ksd8jK

A new vote on the updated version of the agreement with the European Union will be held in the House of Commons on January 29. But here it is worth noting that the British can demonstrate increased volatility today, that is, until the key moment of the vote. The fact is that many market participants are worried that the government will only make superficial changes to the original version of the agreement, keeping the key points unchanged. Such fears are logically justified - for several days it is simply impossible to prepare an alternative deal, eliminating the positions agreed with the EU. This means that the transaction will retain its design, and all changes will be only of a formal nature.

According to most experts, Theresa May will present a new version of the resolution of the Irish border problem today. This issue is the main stumbling block that impedes the approval of the transaction. Having enlisted the support of the deputies, she will actually go to Brussels with an ultimatum: either the European Union will make concessions, or Brexit will follow the "hard" scenario, without concluding a deal. That is why May categorically rejects the option of postponing Brexit date - in this case, the whole point of the ultimatum of negotiations is lost.

According to available information, the British prime minister will propose to conclude a separate agreement between Britain and Ireland. In this document, the parties will fix the details and terms of the special border regime with Northern Ireland. By and large, we are talking about those legal guarantees from the EU, which have been talked about for so long in the British parliament. It is quite probable that the deputies of the House of Commons will support this scenario - however, it is absolutely impossible to count on the same support from Brussels. First, the Europeans initially stated that they would not revise the agreement reached. Secondly, the idea of London to conclude a bilateral agreement on the border has already been rejected by Ireland.

Therefore, even if the British deputies today support the above proposal of May, the pound can ignore this fact or even react with a decline - after all, this scenario is not viable, given the position of Brussels and Dublin.

But if the House of Commons supports the idea of extending the 50th article of the Lisbon Treaty, then the British currency can demonstrate a strong enough northern impulse. And although the Theresa May government is categorically against this option, this does not mean that it cannot be realized. The previous polls suggest that the prime minister's opponents can, in a fit of unity, take the necessary decisions, regardless of party affiliation.

https://lh3.googleusercontent.com/3j...bdHEH7y4Rhr2lg

For example, not only Labour, but some Conservatives also voted for amendments to tax legislation. More than 100 Conservatives voted against the original deal, in unison with the Labour Party. And this is not a complete list of situations when representatives of the Tories find agreement with representatives of Whigs And in this case, they can also vote in harmony, trying, on the one hand, to avoid the chaotic Brexit, and on the other hand, to force May to return to the negotiating table with Brussels.

There is one more scenario, in which the Parliament will gain control over the negotiation process. However, in the context of today, this scenario is unlikely - they can return to it in case of a failed vote on January 29.

Thus, today's statement by the prime minister in the British Parliament will not be formal. Moreover, the presented "Plan B" will make it possible to understand in what direction the subsequent events will develop - either the prime minister will rely on Brussels, or will nevertheless try to convince her party members.

In any case, Brexit continues to be the number one topic for the GBP/USD pair, so you should not focus on the release of tomorrow's data on the growth of the labor market in Britain. Published figures may provide temporary support for the pound (forecasts are mostly optimistic), but the initial reaction may be a trap. Representatives of the Bank of England have repeatedly stated that the prospects of monetary policy directly depend on the prospects of the "divorce process", so macroeconomic data in this context play a secondary role.

Analysis are provided byInstaForex.

A preview of the January meeting of the Bank of Japan

Tomorrow, the Bank of Japan will hold its first meeting this year. Traditionally, investors do not expect the Japanese regulator to take any action on the parameters of monetary policy: the central bank will continue to purchase bonds for 80 trillion yen a year, the interest rate on deposits will remain at the level of -0.1%, and the target yield of 10-year government bonds-at about 0%. There are no prerequisites for any radical actions on the part of the central bank now, so the main attention of traders will be focused on the press conference of Haruhiko Kuroda.

Here it is worth recalling that since the summer of last year, a form of "sword of Damocles" hangs over the yen. The fact is that then the Japanese central bank expanded the range of the estimated rate, thus admitting the likelihood of monetary policy easing. And although since then Kuroda has not voiced such intentions on a practical plane ("scaring" only traders with a hypothetical probability), this fact has a background pressure on the yen. It is obvious that the regulator has reserved this scenario for the future, if inflation trends become negative. And given the weak growth rates of wages and inflation, now there is every reason for concern: at the January meeting, traders may well hear hints of a possible reduction in the interest rate to -0.2%.

The fact is that consumer prices excluding the cost of fresh food (this is the main indicator of inflation monitored by the Japanese regulator) in December fell to 7-month lows, continuing a consistent decline. Thus, the Core Inflation Rate in September-October was kept at the level of 1%, while in November it decreased to 0.9%, and in December - to 0.7%. At each meeting, Haruhiko Kuroda recalls that inflation remains below the two-percent target, and achieving it "requires a larger time range than previously thought". However, in this case, it can respond to the current negative trend with sharper wording of the "dovish" character.

https://lh4.googleusercontent.com/AF...ygFWxcvfOISY0w

Weak growth rates of consumer spending against the background of the decline in the oil market have created fertile ground for reducing inflation. Although oil prices showed positive dynamics during the last month, this is clearly not enough to reverse the situation as a whole. Therefore, tomorrow Kuroda can voice soft rhetoric, thereby exerting pressure on the national currency.

Another intrigue of the January meeting of the Bank of Japan is the possible expansion of the range of fluctuations in yield on 10-year government bonds. According to some experts, the regulator will allow a decrease in profitability in the negative area. Let me remind you that last summer the Japanese central bank decided to limit the fluctuations in yield in the range of -0.2% to + 0.2%. The minutes of the last meeting showed that one of the members of the regulator proposed to expand this range, arguing that the stagnation in this issue will neutralize the positive effect of soft monetary policy in the context of inflation expectations. However, there is no unambiguous position on this issue among the members of the regulator: the members of the Board of Governors of the Bank of Japan disagreed, de facto keeping the parameters of monetary policy at the same values.

What to expect from Haruhiko Kuroda following the results of tomorrow's meeting? First, a "dovish" rhetoric. And although the market has long been accustomed to the soft position of the head of the Japanese central bank, tomorrow it may still surprise the market if it allows an interest rate reduction in the foreseeable future. Second, the regulator may lower its forecast for inflation and GDP growth this year. The probability of such a step is quite high, given the recent inflation trends. Thirdly, Kuroda can comment on the issue of a possible expansion of the yield fluctuation range on 10-year government bonds.

The rhetoric of the head of the Bank of Japan can put significant pressure on the yen, especially if it goes beyond the usual theses (and there are prerequisites for this). In this case, the USD/JPY pair can demonstrate a pulse growth to the first resistance level of 111.05 – this is the upper line of the Bollinger Bands indicator on the daily chart.

https://lh6.googleusercontent.com/MT...CdIlisQB8FxDIl

In general, from a technical point of view, the Ichimoku Kinko Hyo indicator currently demonstrates one of its strongest signals, the Golden Cross, in which the price fixed above the crossed lines of Tenkan-sen and Kijun-sen, while the Kumo cloud is still above the price chart . This signal indicates the upward direction of the pair. Also, the upward movement is confirmed by the location of the price between the middle and upper lines of the Bollinger Bands indicator, which began to narrow its channel. The support level is the Tenkan-sen line, which corresponds to 108.80. And the resistance level is the upper line of the Bollinger Bands indicator - the price is 111.05.

Analysis are provided byInstaForex.

The January meeting of the ECB: too dovish expectations may bring down the bears of EUR/USD

The euro/dollar pair this week shows almost no signs of life: any attempts to grow or decline are stopped at the root. The 14 figure is not available to the EUR/USD bulls, and the bears cannot hold the pair below the 1.1350 mark. Everyone is waiting for the main event of this week – the January meeting of the ECB, which will take place tomorrow. Mario Draghi will either knock out the single currency or give it a chance for a corrective recovery. Despite the general negative attitude, both options have a chance to live - to one degree or another.

The vast majority of experts are confident that the ECB head will take a very soft position tomorrow, given his previous rhetoric and the decline in key macroeconomic indicators. Indeed, last week, Draghi said that the incoming data is weaker than the ECB forecasts, and this fact confirms the feasibility of the accommodation policy. These words came amid the release of German data, which showed a slowdown in Germany's largest economy.

https://lh5.googleusercontent.com/Rf...Fe2ofuUNC9KfaK

Thus, the German GDP index last year grew by only 1.5% - this is the weakest result in the last five years. For comparison - in 2017, this indicator was released at the level of 2.2%. Here again, we can talk about the echoes of the US-China trade war, since China is one of the main trading partners of Germany. Therefore, following the economy of China, the German economy is also declining. According to experts, the slowdown in Europe's largest economy will inevitably affect the growth dynamics in the rest of the EU countries and the eurozone as a whole.

Mario Draghi during his press conference may focus on this fact, especially against the background of slowing inflation and GDP in the eurozone. But in my opinion, the situation is not as critical as many try to present it. Indeed, despite the difficult conditions and the ongoing trade conflict between China and the United States, the German economy was able to avoid a technical recession and showed weak, but still growth. Of course, Draghi, in the course of his communication with journalists, may recall Germany in a negative context, but the text of the accompanying statement will surely contain a statement about balanced risks (and this is much more important for traders).

In general, too "dovish" expectations may bring down the bears of EUR/USD/. At the moment, the market does not expect any "hawkish" hints from Draghi - the general opinion is that the interest rate will not be increased until 2020, and this year the program of long-term financing will be resumed. The previous TLTRO program ends in the middle of next year, however, the banking sector will already need liquidity this year. As the minutes of the last meeting of the ECB showed, regulators raised this topic in December, so tomorrow Draghi can make clearer comments on this issue.

As for the prospects of interest rates, here Mario Draghi is unlikely to take a clear position. At the moment, there are too many uncertain factors that do not make it possible to talk about long-term prospects - neither in the context of "for", nor in the context of "against". Brexit, trade negotiations between Beijing and Washington, prospects for the Chinese/world economy, elections to the European Parliament, the dynamics of the oil market and ultimately the level of domestic consumer demand — these circumstances will not allow Draghi to think too far, assessing the possibility of tightening monetary policy. Most likely, he will disguise his answer with vague phrases that monetary policy will depend on incoming data, and it is not advisable to talk about this earlier this fall, given the trend of incoming data. By the way, such a position can play into the hands of EUR/USD bulls, as it does not exclude an increase in the interest rate in the framework of the current year, while the market has already "put up with" the reference point for 2020.

Thus, the totality of macroeconomic factors suggests that the regulator tomorrow will take a soft, but very "obscure" position. The ECB probably will not talk about shifting risk balances, keeping a waiting position until the next meeting, which will be held in March. In my opinion, the market is now too "twisted" by the fact that Draghi will voice too pessimistic estimates - if these expectations are not met, the European currency can get quite strong support.

https://lh3.googleusercontent.com/ue...xh-Qk0_jTjpyJ-

In technical standpoint, the situation is as follows. The EUR/USD bulls need to break the mark of 1.1440 to confirm their dominance. In this case, the Ichimoku Kinko Hyo indicator will generate a bullish Parade of Lines signal, which will open the way to the top line of the Bollinger Bands indicator - the mark of 1.1525. The support level is at 1.1310 - this is the bottom line of the Bollinger Bands on the daily chart.

Analysis are provided byInstaForex.

ECB meeting: the bearish triumph did not work, but buying EURUSD is risky

Trading "on the news" is extremely risky - today traders could once again see this. The January meeting of the ECB turned out to be very intense, but the expected "bear triumph" turned out to be an illusion or, more simply, a trap.

The initial decline in EUR/USD to the bottom of the 13th figure was very reasonable. Mario Draghi began his press conference with a series of negative comments that did not bode well for the pair's bulls. First, he reiterated that the latest macroeconomic data turned out to be much weaker than the ECB's preliminary forecasts and in the short term this trend will continue. In his opinion, the root cause of such a dynamic is a decrease in external demand in the EU countries. First of all, of course, we are talking about Germany, which showed in last year's lowest growth of the economy over the last 5 years.

https://lh3.googleusercontent.com/fA...j70yL8gUcMqFep

Secondly, Draghi recalled that the European Central Bank "has all the necessary tools" for regulating monetary policy and, if necessary, the central bank uses them. What kind of levers of influence are we talking about, the head of the ECB did not elaborate, however, even without this nuance, it became clear that if the downward dynamic of inflation continues, the regulator will apply retaliatory measures to soften its policies.

Third, Mario Draghi was rather pessimistic about Brexit's prospects. In his opinion, the uncertainty in this issue is growing, and the negative factors associated with the "divorce process" only exacerbate the difficult situation in the eurozone economy. "If the factors continue their impact, the economy will show a weakening over a longer period of time," said the ECB head. This is a fairly transparent allusion to the upcoming events to be held in the British Parliament next week. If the parties do not find mutual understanding and do not approve the deal, the uncertainty will have a negative impact on both the European economy and the British one.

Such a portion of the "dovish" comments pulled the EUR/USD to the mark of 1.1307, thereby attracting bears. However, literally in a few minutes the situation changed radically. During the question and answer period, Draghi not only offset the "dovish" mood, but also provoked a demand for a single currency throughout the market. First of all, the head of the ECB said that at the moment there are no grounds for implementing the next TLTRO program. According to him, this issue was discussed at the meeting, but no decision was made on it, and in general this topic requires a "good justification".

It should be noted that TLTRO is perceived by the market as one of the tools to mitigate monetary policy, so this position of Draghi played into the hands of the European currency. Although many experts warned that members of the regulator were still discussing the possibility of a new round of long-term lending programs in December. The previous TLTRO program ends in mid-2020, however, according to some economists, the banking sector may already need liquidity this year. Nevertheless, the central bank is not in a hurry with this issue, and this fact has supported the bulls of EUR/USD.

Afterwards, Mario Draghi made quite optimistic assessments in contrast to his initial statements. In his opinion, the growth rate of core inflation will accelerate in the medium term, given the positive dynamics of wages in the eurozone and the ECB accommodative policy. By the way, Draghi emphasized that in some EU countries full employment has been achieved, and the labor market continues to strengthen steadily. In addition, members of the regulator at the January meeting came to the unanimous opinion that the probability of a recession in the eurozone countries is close to zero. This thesis is consistent with the assessment of the prospects for the Chinese economy - according to "some members of the ECB" (Draghi did not specify exactly who we are talking about), the decline in the PRC economy will not last long, as "Beijing responds to all risks in a timely manner."

https://lh3.googleusercontent.com/mq...V0ZVc6hjxMN1sN

The final chord of the January meeting was the question of the prospects of the interest rate. Here Mario Draghi said that traders are laying in the current price of the first increase in early 2020: "...and this suggests that the markets understood us correctly," he added. However, the ECB at the end of the meeting said that it is not going to raise the rate "until the end of summer". And although the market did not receive a clear answer to the question – whether the rates will be changed within the current year – EUR/USD bears could not take advantage of this fact. Too "dovish" expectations of traders did not materialize, so they began to buy back the pair when approaching the bottom of the 13th figure.

In summary, it should be noted that now we should be especially careful with long positions on the EUR/USD pair. First, the dollar received support from the manufacturing PMI. Secondly, the demand for the US currency may increase due to ambiguous news about the US-China trade negotiations. Representatives of Beijing and Washington voice opposite theses – but if the risk of another failure increases, the dollar will rise in price throughout the market, and the EUR/USD pair will not be an exception.

Analysis are provided byInstaForex.

USD/JPY Approaching Support, Prepare For Bounce

https://forex-images.ifxdb.com/userf...e92f1a51ec.png

The USD/JPY pair is approaching its support at 109.16 (61.8% Fibonacci extension, 38.2% Fibonacci retracement, horizontal overlap support) where it could potentially bounce to its resistance at 109.66 (61.8% Fibonacci retracement).
Stochastic (55, 5, 3) is nearing its support at 7.6% where a corresponding bounce could occur.
USD/JPY is approaching its support where we expect to see a bounce.
Buy above 109.16. Stop loss at 108.84. Take profit at 109.66.

Analysis are provided byInstaForex.

EUR/USD. The shutdown completed – but the dollar is no better

Late Friday night, the House of Representatives of the U.S. Congress unanimously supported the adoption of the provisional budget, and within hours, the US president signed a bill to stop the shutdown. However, they didn't put an end to this issue - this is a temporary "truce" that will last until February 15. During this time, congressmen and the White House must find a compromise on the allocation of additional funds for the construction of the wall on the border with Mexico. To date, this issue has remained in limbo.

https://lh3.googleusercontent.com/zJ...d77nXI_eK32Unw

The US currency actually ignored these events: the dollar index shows minimal growth, remaining within 95 points. Similarly, the euro/dollar pair behaves, which, although it has not conquered the 14th figure, but with enviable persistence, has been besieging this level for more than a week. Dollar bulls are still unable to reverse the situation on the pair due to the remaining problems.

According to American political analysts, it will be extremely difficult for the parties to find a common denominator in the migration issue, as Trump offers an unequal exchange: he promises to soften his position in the legislative field, while in return he requires $5 billion for the construction of the notorious wall. Therefore, with a certain probability we can say that the shutdown may have a relapse, especially in February, Republicans and Democrats will start another political battle – this time about the limit of public debt of the country.

The single currency is also under the burden of its problems – the data published last week from ZEW and IFO eloquently demonstrated the slowdown of key economic indicators in Europe, including Germany. ECB head Mario Draghi also did not present any surprises, keeping the "dovish" position on the prospects of monetary policy. After the January meeting of the regulator, the pair did not collapse just because traders expected softer rhetoric from the Draghi. However, he kept a certain balance, optimistic about the prospects for inflation in the eurozone. Therefore, instead of the expected fall, the EUR/USD pair showed an unexpected growth, however, the 14th figure was again too tough for bulls.

All this suggests that the tone of trading on the pair is set by the dollar, which, in turn, focuses on the political climate in the US, the position of the Federal Reserve and the US-China trade negotiations. All these factors, unfortunately, are now opposed to the US currency. The shutdown is only suspended for three weeks, while Republicans and Democrats are not ready to make concessions to each other. Do not forget that next November presidential elections will be held in the United States, so all the events taking place in Washington should be considered in this aspect as well.

The record for the duration of the shutdown strongly hit on the electoral positions of Trump - and the Democrats simply could not fail to draw the appropriate conclusions. Therefore, with a high degree of probability we can say that political conflicts will continue to shake the United States. By the way, at the end of last week, the former political adviser to the American president Roger Stone was arrested: he is accused, in particular, of putting pressure on witnesses, obstructing justice and giving false testimony (total of 7 counts). Since this is the sixth arrested adviser to Trump (though with the prefix "ex"), the American press started talking about the fact that the results of the investigation of US Special Prosecutor Robert Mueller can "hurt" the positions of the head of state.

https://lh6.googleusercontent.com/Ci...xSrteOR3qnwMIc

As for the prospects of monetary policy, there is also no reason for optimism. First, many representatives of the Fed recently almost in unison stated that the regulator can "be patient" this year. It is expected that at the January Fed meeting Jerome Powell will confirm these "dovish" intentions. In addition, according to the American press, the US central bank plans to accelerate the process of reducing its balance sheet. This factor also has a background pressure of the greenback, considering all other circumstances.

The US-China conflict has also stopped fueling dollar growth, despite conflicting rumors about the failure of the negotiation process. So, representatives of Washington last week said that the parties are" too far " from progress. Earlier in the media, information emerged that the negotiations "stalled": the stumbling block was the issue of protecting the intellectual property of American companies. But against all odds, trade talks will resume again this week – this time in Washington. This news reduced the demand for defensive tools, including the US dollar.

Thus, the US currency is still under some pressure, which may increase following the results of the January Fed meeting. The events of the weekend did not change the general fundamental alignment of the pair, forcing traders to maintain a cautious position. The single currency, in turn, also has no arguments for growth, especially given tomorrow's Brexit vote. Thus, the EUR/USD pair is likely to fluctuate in the flat, waiting for powerful news drivers.

Analysis are provided byInstaForex.

January Fed meeting: what to expect and what to fear

Tomorrow is an important day for the dollar: we will learn not only the data on the growth of the US economy, but also listen to the head of the Federal Reserve, who will sum up the January meeting of the central bank. This year, Jerome Powell will hold press conferences after each meeting (rather than 4 times a year, as it was before), so traders will be able to get more coherent information about the sentiments of members of the Federal Reserve.

However, at the moment the situation is quite unambiguous. Now, Fed officials observe a 10-day regime of silence on the eve of the next meeting, but until that moment their rhetoric was exclusively "dovish" in character, to one degree or another. In particular, the head of the Federal Reserve Bank of Boston, Eric Rosengren, who for a long time was a consistent hawk, suddenly announced that at the moment there are "potential threats" to tighten monetary policy, given the incoming signals from the markets. His colleague James Bullard, who also has the right to vote this year, again stated that the stakes are now "at an acceptable level" and there is no need to adjust them. The break in the rate increase was also supported by Esther George (he has the right to vote), who was rightly called the "main hawk of the Fed." According to her, the regulator must be patient in raising the rates, "to avoid overheating and prolong the growth of the economy."

https://lh5.googleusercontent.com/bv...Pt7L2uVv7uNJqo

Another Fed official, Charles Evans, is concerned about the slowdown in inflation. According to him, now there are no signs that core inflation will cross the 2% target level, so it is not necessary to rush into tightening monetary policy. But at the beginning of this year, Raphael Bostic implied a probability of easing monetary policy. However, he then somewhat adjusted his position (speaking for a smooth rise in the rate to a neutral level), but his initial statement fits very well into the outline of the general sentiments of the members of the regulator.

Given this soft rhetoric, traders do not expect any "hawkish" surprises from the Fed. According to some experts, the probability of a rate increase until June of this year is only 19%. According to estimates by another group of analysts, the regulator will take a wait-and-see position at least until January next year.

On the one hand, the market has already taken into account in current prices a likely dovish Fed meeting. But on the other hand, a certain intrigue of the January meeting remains. We are talking about reducing the rate of folding the Fed's balance sheet. This issue is discussed at the level of rumors, as representatives of the regulator practically do not comment on the perspectives of this aspect. According to many experts, the reduction of the portfolio will be one of the main causes of volatility for the EUR/USD pair, exerting a strong downward pressure on the dollar.

Let me remind you that the Fed began to reduce the volume of investments by Janet Yellen - at that time this volume was 4.5 trillion dollars. Their reduction began with a "modest" $10 billion, then this figure rose to 50. This fact is a strong source of irritation for Donald Trump, who is in favor of both reducing the rate of monetary tightening and early completion of the balance reduction program. And although the Federal Reserve declares its independence from the White House on a public plane, de facto, the regulator still listens to Trump's "wishes". It should immediately be noted that the Fed is unlikely to announce the suspension of the balance reduction - but it may hint at a decrease in its pace.

So, according to the American press, the regulator is ready to state that in the end it will keep more securities in its portfolio than previously planned. However, insider sources disagreed as to whether it will be announced at the January meeting or at the next one, which will be held in March. The fact is that because of the shutdown, many key macroeconomic indicators will be published after the January meeting, so the Federal Reserve can wait a bit with loud statements, assessing the situation in the country's economy. Therefore, the intrigue in this matter remains, putting pressure on the dollar. If concerns about the Fed's balance sheet are not justified at this time, the greenback can receive significant support, even if the prospects for a rate hike remain questionable.

Now a few words about macroeconomic statistics. Tomorrow, a preliminary estimate of US GDP growth for the 4th quarter of last year will be published. According to the general forecast, the indicator will significantly decrease to 2.6%. In the second and fourth quarters, this indicator came out at 4.2% and 3.4%, respectively. The price index of GDP should also show a negative trend - up to 1.7%.

https://lh3.googleusercontent.com/Wy...quJ1lJN_IAIE_S

On the one hand, all the attention of the market tomorrow will be focused on the outcome of the January Fed meeting. But if the worst fears of investors are realized, then the fact that the American economy slows down will play the role of the "last drop", pulling down the dollar throughout the market. The nearest upward target of the euro/dollar pair is at the level of 1.1525 - this is the top line of the Bollinger Bands indicator on the daily chart. The support level is the price of 1.1380 - the lower boundary of the Kumo cloud.

Analysis are provided byInstaForex.

Intraday level for USD/JPY, Jan 31, 2019

https://forex-images.ifxdb.com/userf...24fe97b85f.jpg

In Asia, Japan will release the Housing Starts y/y, and Prelim Industria lProduction m/m and the US will also publish some economic data such as Natural Gas Storage, Chicago PMI, Unemployment Claims, Unemployment Claims, Personal Income m/m, Personal Spending m/m, Employment CostIndex q/q, Core PCE Price Index m/m, and Challenger Job Cuts y/y. So there is a probability the USD/JPY pair will move with a low to a medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 109.54.

Resistance. 2: 109.32.

Resistance. 1: 109.11.

Support. 1: 108.85.

Support. 2: 108.64.

Support. 3: 108.42.

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

USD/CAD. The loonie ignored a weak GDP, but is waiting for news from China

Canadian economic growth slowed again: on a monthly basis, GDP fell to a negative area and reached -0.1% in November. In annual terms, the indicator also fell, however, was still in the "green zone": with a growth forecast of 1.6%, the indicator rose to 1.7%, while in October the growth was more significant – 2.2%.

In response to this release, the USD/CAD pair moved away from annual lows (that is, from the level of 1,3119), but the further upward dynamics was questionable. The "loonie" remains in the area of multi-month lows - the last time the pair was at the bottom of the 31st figure in November last year. If we ignore the intraday dynamics, we can say that traders actually ignored today's release, focusing on other fundamental factors.

https://lh6.googleusercontent.com/Ff...J7sX2euhEKyTzK

This reaction is explained quite simply: the market was ready to slow down the Canadian economy – this was said by many experts, this was warned by the head of the Bank of Canada at the end of the last meeting. In monthly terms, the indicator fully coincided with the forecast, and in annual terms – slightly exceeded pessimistic expectations. Therefore, against the background of other events, this release did not act as a catalyst for volatility on the pair – traders showed only a formal reaction, which is unlikely to have any significant continuation.

The limiting factor was the oil, which again went up after the announcement of the results of the January Fed meeting. A barrel of Brent crude oil is now trading around 62 dollars, showing a positive trend. And the weak US dollar cannot afford to seize the initiative in the USD/CAD pair: in my opinion, the market has not fully realized the negative consequences of yesterday's meeting of the Federal Reserve. By and large, the regulator has announced a protracted pause in raising interest rates – and no one knows how long this period will be.

According to most analysts, if the key indicators of US inflation continue to show vague dynamics, the regulator may "be patient" until next year. However, even the most optimistic scenarios assume one rate hike - approximately in October or December of the current year. Therefore, the large-scale growth of the USD/CAD pair can be caused either by a significant weakening of the Canadian dollar, or by the failure of the US-China trade negotiations.

As for "internal" factors, the USD/CAD bulls have nothing to count on. On the one hand, at its January meeting, the Bank of Canada lowered its forecasts for the growth of the country's economy in 2019 (from 2.1% to 1.7%). But, on the other hand, it retained a "hawkish" attitude, to talk about their future plans. The head of the Central Bank, Stephen Poloz, said that the interest rate should eventually grow to a neutral value so that the inflation rate would be in the "necessary range." Given the fact that the latest data on GDP growth came out at a predictable level, the Canadian regulator is unlikely to change its position on this issue. The only question is when exactly the Central Bank will decide on another round of rate increase.

The next meeting of the central bank is scheduled for March 6, while most experts are inclined to believe that the rate will be raised at the April meeting (April 24). By and large, the monthly time gap does not play any role in this context, especially since the market expects another rate increase before the end of this year. In other words, the Canadian regulator is still heading for the normalization of monetary credit policy, in contrast to the Federal Reserve, which yesterday announced a pause in this matter.

Thus, internal fundamental factors will not be able to reverse the downward trend for the USD/CAD pair. But the situation with the external fundamental background looks a bit more complicated. Indeed, oil quotes are rising - the cost of Brent and WTI has increased by almost 20% since the beginning of the year, giving support to commodity currencies. However, the shadow of the trade war puts pressure on traders - if the current negotiation process ends in failure, the oil quotes will go down and the dollar, on the contrary, will gain momentum using the status of a safe-haven asset.

https://lh3.googleusercontent.com/Db...KM0L8W0jaKsK_T

At the moment there is no unambiguous information about the two-day negotiations. Trump, using his usual way of communication - Twitter - stated that "good intentions and a positive attitude are felt on both sides". He also confirmed that he will meet with the head of the Chinese delegation in the Oval Office today. But then he somewhat tightened his tone, causing a certain alarm in the markets.

First, he stated that a deal could be concluded only after a personal meeting with Xi Jinping, since he needed to discuss "difficult issues" with him. Secondly, Trump delivered a new ultimatum: he said that China should open its markets not only to financial companies, but also to companies in the industrial, agricultural and other sectors. Beijing has not yet responded to these statements - it is likely that the reaction will follow after the return of the Chinese delegation to their homeland. But in general, the situation remains "in the balance": if the parties fail in negotiations, as early as March 1, the trade war will begin with a new force, and the US dollar will receive a reason for its growth.

That is why the expediency of short positions on the USD.CAD pair depends on the outcome of the US-China negotiations. If, in spite of everything, the parties parted on a positive note, the downward impulse of the loonie can be continued with the first target at around 1.3060 (the upper limit of the Kumo cloud on the weekly chart).

Analysis are provided byInstaForex.

NZD/USD Approaching Support, Prepare For Bounce

https://forex-images.ifxdb.com/userf...7b3928e5ef.png

NZD/USD is approaching its support at 0.6860 (61.8% Fibonacci extension, 23.6% Fibonacci retracement, horizontal pullback support) where it could potentially bounce to its resistance at 0.6936 (horizontal swing high resistance).
Stochastic (55, 5, 3) is nearing its support at 1.65% where a corresponding bounce could occur.
NZD/USD is approaching its support where we expect to see a bounce.
Buy above 0.6860. Stop loss at 0.6796. Take profit at 0.6936.

Analysis are provided byInstaForex.

EUR and GBP: Indices for the services sector in many countries are declining, putting pressure on the economy

https://lh5.googleusercontent.com/C7...YHN3XetX3o1TrA

The euro has once again dropped against the background of data in which stagnation is noted in the economies of Italy and France. Only the prospect of growth in the German economy keeps the EURUSD from a larger downward movement.

According to today's report, the Purchasing Managers Index (PMI) for the eurozone services sector remained unchanged in January of this year and amounted to 51.2 points against 51.2 points in December last year. Economists had expected the PMI for the eurozone services sector to drop to 50.8 points. The eurozone composite PMI fell to 51.0 points in January against 51.1 points in December.

Let me remind you that the index value above 50 points indicates an increase in activity.

The above figures for the euro area were mainly saved due to data on the PMI purchasing managers index for the services sector in Germany, which in January of this year rose to 53.0 points, whereas in December the PMI was 51.8 points.

This is where the good news ends. In France and Italy, similar figures continue to be below 50 points, dropping lower and lower, indicating a decline in activity, which will negatively affect the prospects for economic growth in the first quarter of this year.

According to the report, the Purchasing Managers Index (PMI) for France fell to 47.8 points in January against 49.0 points in December. In Italy, the same indicator for the service sector also turned out to be below 50 points and amounted to 49.7 points.

As a result of such weak data, the euro continued its decline against the US dollar, gradually approaching the support level at 1.1400.

The British pound broke through the next weekly lows and continued to decline after the release of weak data on the services sector. All this, of course, may affect the statements of the Bank of England after the decision on interest rates, which will be known this Thursday.

https://lh5.googleusercontent.com/C7...YHN3XetX3o1TrA

According to the report, PMI for the services sector fell to 50.3 points in January of this year, which is a low of two and a half years. These data once again confirm the concerns associated with Brexit and uncertainty, which negatively affects the economy.

As for the composite index PMI, in January it dropped to 50.1 points from 51.2 points in December. Economists had expected the index to be 51.5 points in December.

The Australian dollar rose today in the morning after the Reserve Bank of Australia left the key interest rate unchanged at 1.50%, but said it had good prospects for the future.

The RBA believes that downside risks for the global economy have increased, but the current monetary policy is consistent with sustainable economic growth.

Annual inflation is expected to return to the target range from 2% to 3%, while Australia's GDP growth is projected at 3% this year. As for unemployment, it can be reduced to 4.75%.

Analysis are provided byInstaForex.

GBP/USD. Results of the day. New grounds for the fall of the pound will be received?

https://lh5.googleusercontent.com/w0...OGlObcZoo7-EaP

The amplitude of the last 5 days (high-low): 90p - 62p - 72p - 74p - 128p.
Average amplitude for the last 5 days: 85p (88p).

The British pound sterling, having completed the second support level of 1.2942, rebounded from it and began a weak upward correction. Yesterday's decline was very noticeable, so a correction is logical. Tomorrow, more precisely, Fed Chairman Jerome Powell will hold a speech by tonight, which could potentially have an impact on all currency pairs, including the US dollar. Given the "dovish" rhetoric of representatives of the Federal Reserve in recent months, now we can hardly expect its change into the direction of a "hawk". At the same time, it should be recognized that even Powell's "dovish" rhetoric did not have a lasting positive effect on the British pound. There are so many problems and uncertainties in the UK, and all are connected with Brexit, that the pound will be prone to fall, even if the Fed starts lowering the key rate. The likelihood that a "soft" scenario for Brexit will be implemented has again decreased in recent days. In addition, the results of the meeting of the Bank of England will be announced tomorrow. No change in monetary policy is expected. But a new portion of the fears and warnings from the head of the Bank of England Mark Carney is expected. And the stronger his fears are, the more chances that we will see another decrease in the British pound. From a technical point of view, the current correction is negligible and can be completed at any time. Thus, we recommend to be ready for a sharp resumption of the downtrend. So far, the full potential of the pound's fall is limited to the level of 1.2500.

Trading recommendations:
The GBP/USD currency pair has started a low correction. Thus, it is not recommended to open shorts until the MACD indicator turns back down. After the reversal, the targets will be 1.2883 and 1.2841.

Long positions will become relevant not earlier than the consolidation of the price above the critical Kijun-sen line. In this case, the target will be the level of 1.3175, but this will require serious fundamental grounds.

In addition to the technical picture, fundamental data and the timing of their release should also be taken into account.

Explanation of illustration:
Ichimoku Indicator:
Tenkan-sen-red line.
Kijun-sen – blue line.
Senkou span a – light brown dotted line.
Senkou span B – light purple dotted line.
Chikou span – green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD:
Red line and histogram with white bars in the indicator window.

Analysis are provided byInstaForex.