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Technical analysis of USD/JPY for Aug 29, 2017

In Asia, Japan will release the BOJ Core CPI y/y, Unemployment Rate, Household Spending y/y data, and the US will release some Economic Data, such as CB Consumer Confidence and S&P/CS Composite-20 HPI y/y. So, there is a probability the USD/JPY will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Resistance. 3: 109.34.
Resistance. 2: 109.13.
Resistance. 1: 108.91.
Support. 1: 108.66.
Support. 2: 108.44.
Support. 3: 108.23.

Analysis are provided by InstaForex

The Euro continued its correction

The euro did not take advantage of the chance to rise against the US dollar after the release of good data on inflation in Germany and the index of sentiment in the euro area economy.

According to the report of the statistics agency, the consumer price index harmonized in accordance with the EU standards in Germany increased by 1.8% in August this year compared to the same period in 2016, while economists expected growth of only 1.7%. Compared to July, inflation increased by 0.1%, fully coinciding with the forecast. As a rule, low prices for energy carriers continue to create the main problem.

Despite the fact that all values are still preliminary, traders were disappointed by the rather weak indicators and core inflation.

However, there are also positive moments. According to the report, the growth of salaries in Germany sharply accelerated in the second quarter of this year. So, in comparison with the second quarter of 2016, salaries increased by 3.8%. From this, we can conclude that a sharp drop in the unemployment rate did not seriously affect the wage index, which is a good indicator for the economy.

Data on sentiment in the euro area economy also supported the euro in the morning. According to the report of the statistical agency, the index of sentiment in the economy of the eurozone in August this year rose to 111.9 points against 111.3 points in July. Economists had expected the index to remain unchanged.

The US labor market and the economy are in perfect order, which was reflected in the quotes of the EUR/USD pair, which declined after the report on changes in the number of employees from ADP.

The number of jobs in the private sector in the US in August this year increased by 237,000, while economists expected growth of only 185,000 jobs. Data for July were revised upward, to 201,000.

Analysis are provided by InstaForex

Technical analysis of USD/JPY for Sept 05, 2017

In Asia, Japan will release the 10-y Bond Auction data, and the US will release some Economic Data, such as IBD/TIPP Economic Optimism and Factory Orders m/m. So, there is a probability the USD/JPY will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Resistance. 3: 110.09.
Resistance. 2: 109.88.
Resistance. 1: 109.66.
Support. 1: 109.40.
Support. 2: 109.19.
Support. 3: 108.97.

Analysis are provided by InstaForex

Brent made friends with hurricanes

Hurricane Harvey did not bring happiness, but this disaster helped the "bulls" in the North Sea and saved them by catching the straw, instead of forcing them to flee the battlefield. The experts of Bloomberg predicted that the US black gold reserves will grow by 2.5 million barrels by the end of the week by 1 September, while the Goldman Sachs announced that it will reach 40 million barrels within a month as the hurricane ends. The oil became a more serious driver of growth which returned refinery to life.

ExxonMobil, Phillips 66, Valero Energy and others reported about the resumption of refining operations. As of September 5, factories with a capacity of 3.8 million b/s (about 20% of the total value for the States) were closed, while at the height of the hurricane it was about 4.2 million b/s capacity. According to the US Energy Information Administration, the continuation process can take several days or weeks. Everything will depend on the damage found at the time of the resumption.

Along with the return to life of the oil refinery, oil has another important hidden driver of growth as the domestic energy increased its demand among the states affected by Harvey. The White House asked the Congress for about $ 7.9 billion in aid to Texas and Louisiana for restoration work, which is regarded as a "bullish" factor for black gold.

However, Goldman Sachs claims that the potential growth of oil is limited, as the current situation is likely to take advantage of mining companies from the States. The possible price hike will increase the hedging of price risks and production volumes, which will affect the global balance of the physical asset market and the futures market. The bank draws attention to the fact that companies have significantly reduced costs in recent years, and the level of revenue showed a growth in profits. This position corresponds to the opinion of the Alexander Novak, Minister of Energy of Russia, saying that in 2018 Brent will cost $45-55 per barrel.

Corrections to the current alignment of forces can make another hurricane. Irma is moving in the direction of Florida, but it is impossible that its impact will be more serious for the US oil industry than Harvey's influence.

Brent and WTI gained support from the weak dollar. The dovish statement of Lael Brainard and Neel Kashkari reduced the potential increase of the federal funds rate in December to 37%. The growth of geopolitical risks related to North Korea put pressure on the yields of US Treasury bonds by pushing futures for the North Sea grade to the maximum levels since May.

Dynamics of oil and the dollar index

Source: Trading Economics.

Technically, the "bulls" renewed July highs of Brent along with the activation of the AB = CD pattern increase the risks of continuing the northern campaign towards the target at 127.2% and 161.8%. This corresponds to $54.7 and $56 per barrel. On the contrary, the inability of buyers to keep prices above the levels of $53.7 and $52.9 will indicate weakness.

Brent Daily Chart

Analysis are provided by InstaForex

The dollar turned into a Whipping Boy

These factors try to justify the current weakening of the dollar. However, the hurricanes did not affect anything important either in the financial world or in oil and gas production. Even the nuclear missiles, that cannot fly as far as the US, have little effect.

Over the past week, the dollar has weakened considerably. Both the euro and the pound have been strengthening day by day. In many ways this was contrary to common sense, or at least it seemed so at first glance. It is often said that the blame for all the hurricanes that hit the south of the United States is the nuclear tests of the DPRK.

The television footage of the destruction caused by the hurricane in Texas, of course, is impressive. Especially when you realize that we are talking about the second-largest economy and the second-largest population in the state. The first thought that this footage led to is panic, which inevitably affected the dollar. Moreover, if you remember, Texas is famous for its oil workers. It's as if the hurricane caused huge damage to France. However, Texas is a huge state, bigger than most countries in the world. The hurricane affected only a small part of it, and oil production in the United States has long ago moved north of Texas itself. Shale oil and gas in the state is not affected too much. Also, do not forget that in terms of the financial world, Texas is simply insignificant. Another thing, it is in New York or Chicago where large investors and financial tycoons live. Well, it was the case back in Boston. In short, it's not worth writing off everything for a hurricane.

North Korea have caused a lot of people to worry about ballistic missile launches. Here, the weakening of the dollar is explained by the fear of investors of the nuclear strikes of Kim Jong-un. However, everything here is very strange. After all, North Korea has never launched a missile capable of flying to the US territory. Experts only suggest that they have them. But here's what the DPRK definitely has: missiles that are capable of hitting the territory of Japan. About South Korea, they said nothing. So, if all these investors are so afraid of a nuclear attack from the DPRK, it is more logical to transfer money to where they will be the least probability of being hit. Namely, in the US and Europe. Despite this, the dollar weakened against all currencies.

There was also the speech by Mario Draghi which was held immediately after the ECB meeting on monetary policy. He said that if necessary, the program of quantitative easing will be extended beyond December of this year. He also added that interest rates will remain low for a long time. After such words, any currency would inevitably collapse. However, a lot rests on the fact that Mario Draghi did not express concern about the euro. It is understandable that he did not speak about it, since the euro is not a priority for the ECB. The European Central Bank has more important tasks.

So it is necessary to state a simple and banal thing: investors are fleeing from the dollar.

The reason is that investors do not care whether things are going badly or well. It is important for them that the situation is understandable and predictable. Here, in Europe, everything is clear. For a long time, the ECB and the Bank of England will pursue an ultra-soft monetary policy. This, of course, is not very good, but at least it's predictable. In the United States, it is not at all smooth. In the first half of the year, it was promised that by the end of the year, the Fed will refinance the rate of 1.5%. This strengthened the dollar. Now, there are a lot of questions to the Fed, including the rate, which, perhaps, will be left at the level of 1.25%. And since the rate will not be raised any more, then there is nothing anymore to lie about without money.

This scenario will please the eyes of market participants this week. Now, a new hurricane will hit Florida, which is the third largest population and the fourth largest economy by the state. However, the value of Florida is much smaller than that of Texas, so it is quite difficult to use it as an excuse to justify the weakening of the dollar. Especially, since in Florida, unlike Texas, there is no serious industry. The state's position on the size of the economy is only because of the size of the population. However, there is no doubt hurricanes will be used as an excuse.

Another argument in favor of the weakening the dollar is the upcoming meeting of the Bank of England on monetary policy. First, there will be data on inflation, which should show acceleration from 2.6% to 2.8%. If these forecasts are justified, then the number of supporters of the increase in the refinancing rate in the Bank of England will increase. Since the hopes for a rapid increase in the rate in the United States have not been justified, it is worth seeing the UK try. So, the dollar still has to fall in price. Moreover, in the US, a significant slowdown in the growth rate of retail sales is expected from 4.2% to 3.1%.

Considering that practically no significant news is coming out in Europe, the EUR/USD pair, if it grows up, is insignificant. Hysteria about the hurricane in Florida will not allow the dollar to strengthen, so there is a high probability of consolidation around 1.2000.

If the number of votes for raising the refinancing rate in the Bank of England is three or more, then the GBP/USD pair will rise to 1.3350. If inflation increases, the members of the Bank of England board will be cautious, and a pound drop to 1.2950 is possible.

Prime News are provided by InstaForex

The Bank of England can raise rates

After the release of strong data on consumer inflation in the UK, as well as the increase in selling and purchasing prices of producers, the question of whether the Bank of England will raise interest rates at the September meeting has surfaced again.

Released on Tuesday, really strong data on consumer inflation unexpectedly showed a significant increase in August, both in monthly terms and in annual terms. This increases the likelihood of an increase in interest rates by the Bank of England at its September meeting. Today there will be more figures on the average level of wages in the UK, as well as on employment. It is expected that wages rose by 2.3% in July against the 2.1% increase in June. Also, growth in applications for unemployment benefits is expected. It can be assumed that if the data prove to be better than forecasts or, at least, not worse than expected, it will support the British currency on the wave of increasing expectations of higher interest rates next week.

In addition to data from the UK, the market will focus today on the publication of figures for industrial inflation in the US. It is estimated that the producer price index will increase sharply both in annual and monthly terms. The annual figures will have to jump to 2.5% from 1.9%, and the monthly increase in August by 0.3% after a 0.1% drop in July.

If these data prove to be worse than forecasts or show higher values, then, the US dollar may receive domestic support against the euro and, possibly, also against the yen.

In general, the currency market can be expected to continue the consolidation period before the meeting of the Bank of England and the Federal Reserve. At the first meeting, a decision may be made to raise interest rates or reduce the volume of asset purchases, while at the second meeting it will be decided to start reducing the balance of the Fed. The first event will support the British currency, and the second will show investors the path of the future monetary policy.

Forecast of the day:

The EURUSD pair may be under pressure on the wave of strong data on production inflation in the US and is able to drop to 1.1925, but its decline will probably be domestic, as the market will expect the release of figures on consumer inflation in the US and the results of the Fed meeting.

The EURGBP pair fell to the level of 0.9000, the overcoming of which can still cause the continuation of its decline to 0.8885. But it is likely that before the meeting of the Bank of England the pair will consolidate, and only the decision of the regulator to raise rates or reduce the volume of asset purchases will lead to its further decline.

Analysis are provided by InstaForex

US Dollar: bulls ready for revenge

The US dollar was sold at the close of the week on Friday after an unexpectedly weak report on retail sales and industrial production for the month of August. The data cast doubt on the prospects for the recovery of the US economy.

Retail sales decreased by 0.2% compared to July. Moreover, the July growth of 0.6% was revised downwards to 0.3%. Meanwhile, the report for June was a;so revised from + 0.3% to -0.1%. Thus, the dynamics of retail sales over the past three months was significantly worse than the market expected, casting doubt on the ability of the US consumer sector to maintain demand at the same level.

For the first time since January, the volume of industrial production has decreased. The decline in August was 0.9%, which is the maximum monthly decline since May 2009, causing the manufacturing industry fell by 0.3%. The reason for such a weak data, according to experts, is the consequences of hurricane "Harvey", which broke out on the southern coast of the United States and contributed to a decline in the oil refining and chemical industries.

The GDP growth rate in the third quarter was now under attack. The GDPNow model from the Atlanta Federal Reserve forecasts an increase of 2.2% in the third quarter, which is noticeably worse than the 4% growth expectations of just 6 weeks ago. Meanwhile, weak economic growth casts doubt on the Fed's plans to normalize monetary policy.

The failed report on retail sales was unexpected given the acceleration in consumer price growth. In August, inflation rose by 0.4% against a growth of 0.1% for the month of July. Year-on-year growth reached 1.9%. The results were better than forecasts and, it would seem, gave a strong argument for the bulls on the dollar. Good dynamics on consumer activity would add credibility to the leaders of the Fed. This is because after the start of the program to reduce the balance sheet following the meeting on September 20, the market considered the matter resolved,and the dollar should have receive the long-awaited impetus for a turn.

However, the dollar's fate is again in question. Of course, the dynamics of retail sales is unpleasant news for the Fed but it will not affect its position. The plan to reduce the balance sheet was announced in advance and the impact of the hurricane will have be temporary. However, the increase in inflation is a much stronger argument, and it will give an opportunity in the updated forecast of September 20 to indicate higher figures than the market expects.

The weakening of the dollar by the end of the week was also caused by the unexpectedly aggressive position of the Bank of England, which announced the imminent start of the rate hike cycle, and fixing profits before the weekend. At the same time, there is a noticeable recovery in the markets, which is reflected in the growth in demand for risky assets with stock indices growing. The dollar is experiencing a clear deficit of good news, and the beginning of the week before the Fed meeting will be held in anticipation of the positive outcome of the meeting.

At the moment, the dollar is ready to resume growth. All the catalysts for its decline in the current year are already played by the market. There are no new catalysts and there are very few reasons for further weakening. The problem with the level of public debt and government funding is removed from the agenda. The fate of the tax reform is in the hands of the democrats with whom Trump, according to recent data, has managed to find a solution that suits everyone. Any announcement of support for reforms by the Congress will serve as a powerful driver for the growth of the dollar, as it will potentially contain the factor of a rapid inflow of investments into the US economy.

The dollar has good chances, primarily against the yen and the franc. The Central Bank of Japan and the NBS continue to adhere to a soft monetary policy, which, against the backdrop of growing interest in risk, will be an additional argument in favor of sales. Against the euro, the dollar does not yet have strong positions, as the ECB is also preparing to wind down the buyback program. However, the euro's rise before the Fed meeting is virtually ruled out. Trade in the Australian and Canadian dollars will be cautious, with greater chances to go into the lateral range, at least until the support from rising commodity prices ceases.

Analysis are provided by InstaForex

Does Brent feel the ceiling?

Oil continues in its northern trend, inspired by the increase in the forecast of global demand by 1.7% from the International Energy Agency, the reduction of Saudi Arabia's exports to the lowest levels over the past three years, and the decline in production of Iraq's second-largest OPEC producer by 260 bpd. Baghdad said that it exceeded its plans brought by the cartel, which is a "bullish" factor for black gold. Moreover, another role in its successes is played by the suspended state of the American dollar.

As a rule, autumn is not the best period for Brent and WTI. The completion of the automotive season in the US leads to a reduction in inventories. In addition, the Energy Information Administration reports that there is an increase of production to 6.08 million bpd in October, encouraged by rising prices of producers of shale oil. Nevertheless, hurricanes allowed for adjustments to the seasonal factor. For a long time, black gold finally felt relief under pressure from the growth of drilling rigs from Baker Hughes. The decline of the indicator for two consecutive weeks reached 749 (-7 on the results of the five-day period by September 15).

As the US refineries restart, the demand for oil should gradually increase and support prices because of optimistic forecasts for the global index from the IEA and OPEC. At the same time, $50 per barrel for WTI is a very dangerous figure. It attracts hedgers like honey bears, so it will be extremely difficult to gain a foothold above this mark.

As the value of black gold rises, the question is returned to the market: what are the limits? It is obvious that the end of the hurricanes "Harvey" and "Irma" and the transition of the market to a normal state will return it to the idea of increasing American production with parallel insurance of price risks. This combination of drivers has repeatedly provoked attacks of "bears." I do not think that something will change in the fall. You can talk endlessly about the fulfillment of the obligations to reduce production by OPEC members. You can also discuss about the extension of the agreement beyond March 2017. However, the fact remains: Americans continue and will continue to use the favorable conjuncture for them.

Dynamics of the US dollar is of no small importance. Since Brent and WTI are quoted in this currency, the growth of the USD index leads to a rise in the cost of imports in the largest consumer countries, and vice versa.

Dynamics of the USD Index and Brent

Source: Trading Economics.

In this regard, the expectations of the start of the process of normalizing the balance of the Fed and a rise in the probability of an increase in the rate for federal funds from 33% to 58% is of special joy to "bulls" that black gold is not able to bring. On the other hand, the positions of the euro against the backdrop of the ECB's desire to roll back QE look strong. After all, it has the largest share in the USD index. Thus, consolidation in EUR / USD does not put obstacles on the way of black gold to the upward trend.

Technically, a resistance break at 55.95 will allow Brent bulls to continue the rally in the direction of the following targets (by 200% and 224%) in the AB = CD pattern. On the contrary, the inability of buyers to take an important level by storm will testify to their weakness and will increase the risks of correction to $ 54.7 and $ 53.1 per barrel.

Brent, daily chart

Analysis are provided by InstaForex

Elections in the Bundestag hold back the euro

Over the past week, despite the fact that the market is pretty polychromic, the euro and the pound remained virtually unchanged. The main event of the week was the meeting of the Federal Commission for Open Markets. The meeting saw the Fed leaving the refinancing rate unchanged. It was quite expected so the market almost ignored this event. The strongest influence was caused by the words of Janet Yellen, which was said during the subsequent press conference. The head of the Federal Reserve did not disappoint investors. She stated that the issue of raising the refinancing rate would be considered during the December meeting. Of course, when making a decision, the Fed will rely on the state of the labor market, as well as inflation. So the chances for another rate increase this year are quite high. After all, the labor market is in fairly good condition and inflation has resumed growth. However, the effect was short-term with the dollar literally losing all its gains within a day. Although, Mario Draghi was partly to blame. The head of the ECB said that there is no reason to continue the program of quantitative easing after December this year.

In fact, there were no other significant events for the week. The final data on inflation in Europe coincided with a preliminary estimate, and inflation accelerated from 1.3% to 1.5%. Apparently, this was the reason for the statements of Mario Draghi. However, such a result was expected so the market did not pay attention to it. Also, the growth rate of retail sales in the UK accelerated from 1.4% to 2.4%. Despite the clearly positive nature of the data, they also did not have a significant impact on the market.

It's all about the German elections which took place on Sunday. The market was waiting for the results. Of course, no one doubted the victory of Angela Merkel and her CDU / CSU. However, the two most influential parties in Germany, the same CDU / CSU and SPD, received the worst result since 1949. Especially since the SPD announced the transition to the opposition. Because of this, Angela Merkel will now have to form a coalition with the Greens and FDP. All three parties have significant differences on a variety of issues, so the coalition is clearly shaky. The German press has already dubbed it "Jamaica". Moreover, the coalition itself does not seem to be the most reliable so the negotiations on its formation will be extremely tough. Obviously, the CDU / CSU will have to make a number of concessions. In such an uncertain situation, investors will not make hasty decisions. Therefore, the potential for strengthening the euro is rather small.

The macroeconomic calendar for the current week does not spoil us with significant news. The preliminary data on the inflation in Europe is worth paying attention to because it may show further acceleration to 1.6%. Given that these data will come out at the very end of the week when the outlines of the new ruling coalition in Germany may be known, the euro will have many reasons for optimism. However, before that, the euro will remain under pressure as the final data on US GDP in the second quarter would show the acceleration of economic growth from 2.0% to 2.2%. Similar data from the UK would confirm the fact of a slowdown in economic growth from 2.0% to 1.7%.

You can also expect a certain reaction to a number of other data. In particular, home sales in the primary market in the US may increase by 3.3% while orders for durable goods may add 1.0%. However, this is about positive news for the dollar. The data on personal incomes and expenses, which should grow by 0.3% and 0.1%, may become negative. Taking into account that the income growth is not ahead of the expense growth, this will be perceived as a signal for a rapid decline in consumer activity. This data will be released on Friday, immediately after the preliminary data on inflation in Europe. The pound has nothing to rejoice for, as a significant reduction in the number of approved applications for mortgages is projected.

In general, the dollar has every chance of strengthening. And only on Friday will it have to give up its position a little. During the week, the EUR/USD pair may fall to 1.1795.

The GBP/USD pair is also waiting for a decline to 1.3395.

Analysis are provided by InstaForex

Daily analysis of USDX for September 28, 2017

USDX is testing upper Bollinger bands across the board and looks forward to testing the next resistance around 94.04. However, we're still expecting a corrective move towards the 200 SMA at H1 chart in a first degree. If the index manages to break above 94.04, we can expect another higher leg to test the 95.00 psychological level.

H1 chart's resistance levels: 93.09 / 94.04
H1 chart's support levels: 91.67 / 90.30

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USD Index breaks with a bearish candlestick; the support level is at 91.67, take profit is at 90.30 and stop loss is at 93.04.

Analysis are provided by InstaForex

Elliott wave analysis of EUR/NZD for September 29, 2017

Wave summary:
We continue to look for more upside pressure towards 1.6875, but we need a break above minor resistance at 1.6410 to get the next "GO" higher. As long as the minor resistance at 1.6410 is able to cap the upside, we should look for a minor dip to 1.6311 before turning up again.

R3: 1.6451
R2: 1.6410
R1: 1.6340
Pivot: 1.6300
S1: 1.6278
S2: 1.6222
S3: 1.6200

Trading recommendation:
We will buy EUR again at 1.6300 or upon a break above 1.6365.

Analysis are provided by InstaForex

Technical analysis of EUR/USD for Oct 03, 2017

When the European market opens, some Economic Data will be released, such as PPI m/m and Spanish Unemployment Change. The US will release the Economic Data, too, such as Total Vehicle Sale, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Breakout BUY Level: 1.1789.
Strong Resistance:1.1782.
Original Resistance: 1.1771.
Inner Sell Area: 1.1760.
Target Inner Area: 1.1732.
Inner Buy Area: 1.1704.
Original Support: 1.1693.
Strong Support: 1.1682.
Breakout SELL Level: 1.1675.

Analysis are provided by InstaForex

Technical analysis of EUR/USD for Oct 05, 2017

When the European market opens, some Economic Data will be released, such as ECB Monetary Policy Meeting Accounts, French 10-y Bond Auction, Spanish 10-y Bond Auction, and Retail PMI. The US will release the Economic Data, too, such as Natural Gas Storage, Factory Orders m/m, Trade Balance, Unemployment Claims, and Challenger Job Cuts y/y, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Breakout BUY Level: 1.1812.
Strong Resistance:1.1805.
Original Resistance: 1.1794.
Inner Sell Area: 1.1783.
Target Inner Area: 1.1755.
Inner Buy Area: 1.1727.
Original Support: 1.1716.
Strong Support: 1.1705.
Breakout SELL Level: 1.1698.

Analysis are provided by InstaForex

EUR/USD testing strong resistance, prepare to sell

The price has bounced up perfectly from our buying area previously and is fast approaching our profit target. We turn bearish today looking to sell below 1.11744 resistance (Fibonacci retracement, horizontal pullback resistance) for a push down to at least 1.1653 support (Fibonacci extension).

Stochastic (21,5,3) is seeing major resistance below 95% and we expect a corresponding reaction from this level.

Sell below 1.1744. Stop loss is at 1.1793. Take profit is at 1.1653.

Analysis are provided by InstaForex

Technical analysis of NZD/USD for October 11, 2017

Overview:
The NZD/USD didn't make significant movement yesterday. There are no changes in my technical outlook. The bias remains bearish in the nearest term testing 0.7000 or higher. Immediate support is seen around 0.7087. The NZD/USD pair fell from the level of 0.7128 towards 0.7087. Now, the price is set at 0.7069 to act as a minor support. It should be noted that volatility is very high for that the NZD/USD pair is still moving between 0.7128 and 0.7040 in coming hours. Furthermore, the price has been set below the strong resistance at the levels of 0.7169 and 0.7220, which coincides with the 23.6% and 38.2% Fibonacci retracement level respectively. Additionally, the price is in a bearish channel now. Amid the previous events, the pair is still in a downtrend. From this point, the NZD/USD pair is continuing in a bearish trend from the new resistance of 0.7128. Thereupon, the price spot of 0.7128/0.7087 remains a significant resistance zone. Therefore, a possibility that the NZD/USD pair will have downside momentum is rather convincing and the structure of a fall does not look corrective. In order to indicate a bearish opportunity below 1.0020, sell below 0.7128 or 0.7087 with the first targets at 0.7040 and 0.7000 (support 3). However, the stop loss should be located above the level of 0.7169.

Analysis are provided by InstaForex

Technical analysis of EUR/USD for Oct 13, 2017

When the European market opens, some Economic Data will be released, such as German Final CPI m/m. The US will release the Economic Data, too, such as Prelim UoM Inflation Expectations, Business Inventories m/m, Prelim UoM Consumer Sentiment, Retail Sales m/m, Core Retail Sales m/m, Core CPI m/m, and CPI m/m, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Breakout BUY Level: 1.1886.
Strong Resistance:1.1879.
Original Resistance: 1.1868.
Inner Sell Area: 1.1857.
Target Inner Area: 1.1829.
Inner Buy Area: 1.1801.
Original Support: 1.1790.
Strong Support: 1.1779.
Breakout SELL Level: 1.1772.

Analysis are provided by InstaForex

Technical analysis of EUR/USD for Oct 16, 2017

When the European market opens, some Economic Data will be released, such as Trade Balance and German WPI m/m. The US will release the Economic Data, too, such as Federal Budget Balance and Empire State Manufacturing Index, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Breakout BUY Level: 1.1870.
Strong Resistance:1.1863.
Original Resistance: 1.1852.
Inner Sell Area: 1.1841.
Target Inner Area: 1.1813.
Inner Buy Area: 1.1785.
Original Support: 1.1774.
Strong Support: 1.1763.
Breakout SELL Level: 1.1756.

Analysis are provided by InstaForex

Technical analysis of EUR/USD for Oct 18, 2017

When the European market opens, some Economic Data will be released, such as German 30-y Bond Auction. The US will release the Economic Data, too, such as Beige Book, Crude Oil Inventories, Housing Starts, and Building Permits, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Breakout BUY Level: 1.1826.
Strong Resistance:1.1819.
Original Resistance: 1.1808.
Inner Sell Area: 1.1797.
Target Inner Area: 1.1769.
Inner Buy Area: 1.1741.
Original Support: 1.1730.
Strong Support: 1.1719.
Breakout SELL Level: 1.1712.

Analysis are provided by InstaForex

AUD/JPY profit target reached perfectly, prepare to buy

The price has dropped perfectly and reached our profit target. We now prepare to buy above major support at 88.39 (Multiple Fibonacci retracements, horizontal overlap support) for a push up to at least 89.10 resistance (Multiple Fibonacci retracements, recent swing high resistance).

Stochastic (21,3,1) is seeing support above 1.2% where we expect a corresponding bounce from.

Buy above 88.39. Stop loss is at 88.17. Take profit is at 89.10.

Analysis are provided by InstaForex

Technical analysis of EUR/USD for Oct 26, 2017

When the European market opens, some Economic Data will be released, such as Minimum Bid Rate, Italian 10-y Bond Auction, Private Loans y/y, M3 Money Supply y/y, Spanish Unemployment Rate, and German GfK Consumer Climate. The US will release the Economic Data, too, such as Natural Gas Storage, Pending Home Sales m/m, Prelim Wholesale Inventories m/m, Goods Trade Balance, and Unemployment Claims, so, amid the reports, EUR/USD will move in a medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Breakout BUY Level: 1.1875.
Strong Resistance:1.1868.
Original Resistance: 1.1857.
Inner Sell Area: 1.1846.
Target Inner Area: 1.1818.
Inner Buy Area: 1.1790.
Original Support: 1.1779.
Strong Support: 1.1768.
Breakout SELL Level: 1.1761.

Analysis are provided by InstaForex

Daily analysis of GBP/USD for October 27, 2017


EUR / USD pair
Trend analysis (Figure 1)
The downward trend prevailed last week. The market tested again the resistance line and drove downwards. The price may fend off the support line and move higher in the following week. Complex analysis will accurately show the price direction.

Fig. 1 (weekly chart).
Indicator analysis on the weekly schedule (Figure 2).
The system of indicators ADX (Figure 2).
On the last run, the fast line (indicator 5 - white) and the slow line (indicator period 8 - blue) moved up.
In this case, the trend should be determined by trend type indicators.
MACD Indicator (period 5/8/13).
The linear part of the MACD indicator. Fast line (signal) - a line of white color.
The slow line (main line) is the blue line.
The result of the MACD indicator is a downward trend (100 points down). Histogram of the MACD indicator.
Histogram - columns of black color.
The result of the histogram of the MACD indicator is a downward trend (100 points down).
Overall: the MACD indicator on the weekly chart gives a downward trend.
Middle lines of the EMA.
On the weekly chart, the following midlines are used.
1 middle EMA line - color white (first shadow).
5 the middle line of the EMA - the color is red (the first shadow).
8 middle EMA line - the color is blue (trend of the week).
13 the middle line of the EMA - the color is yellow (the trend of the week).
21 middle EMA line - brown color (trend of the week).
At the last run 8, the middle EMA line (blue) is moving down over the 13th EMA midline (yellow), which also moved down - the signal is up. At the last run 13, the middle EMA line (yellow) is moving down above the 21 middle line of the EMA (black), which moved downward - the signal gain of the upper work.
The bottom line: the EMA mid-line system on the weekly chart gives an upward signal. The probability distribution of the indicators are as follows:
- average EMA lines - 24% up;
- MACD indicator (linear part) - 38% down;
- MACD indicator (histogram) - 38% down.
Overall: on technical analysis: the price on the weekly chart should have a downward trend.
Calculation of the first shadow of the week (Monday) on a weekly chart.
The middle lines of the EMA 1/5/8 are the lower signal.
The indicator "three lines" (the direction of the lines of indicators CCI (5), RSI (5), stochastics with a period of 3/3/4) is the lower signal.
Calculation of the RSI indicator system for the first tail is the bottom signal.
The bottom line: the calculation of the weekly candle from October 30 to November 04 showed that the price movement on Monday should move downward, but the final outcome depends entirely on the daily chart. Calculation of the second shadow of the week (Friday).
The calculation for the MACD linear part showed a downward trend (100 points down).
Calculation of the MACD histogram gave a downward trend (100 points down).
The bottom line: the calculation on Friday for the technical analysis showed that the price may have a downward trend, which should be confirmed by the daily chart.


Fig. 2 (weekly chart).
Complex analysis:
- indicator analysis - down;
- Fibonacci levels - down;
- volumes - down;
- candle analysis - neutral;
- trend analysis - up;
- Bollinger lines - up;
- monthly chart - down.

Conclusion on complex analysis - up.
The entire result of the calculation of candle currency pair EUR/USD on a weekly chart indicates the weekly price would likely to have an upward trend with the presence of the first lower shadow in the weekly white candle and the presence of a second upper shadow. The upper goal is 1.1670.

GBP / USD Pair
Trend analysis (Figure 1)
The downward trend prevailed last week. The price reached the support line at 1.3087 (white thick line). Most likely, there will be an upward trend next week. The level of probability for this scenario is likely shown in a comprehensive analysis.

Fig. 1 (weekly chart).
Indicator analysis on the weekly schedule (Figure 2).
The system of indicators ADX (Figure 2).
On the last run, the fast line (indicator 5 - white) moved upward, and the slow line (indicator period 8 - blue) moved down. In this case, the trend should be determined from the indicators of the oscillator type.
Stochastic indicator (period 3/3/4) on the weekly chart gives an upward trend (Fig. 2).
The system of indicators RSI (Figure 2).
When working with the daily chart, the following periods are used in the RSI indicator system: 21 (brown), 8 (blue), 13 (yellow), 5 (red).
On the last closed candle.
The calculation of the indicator RSI (5) on properties gives up.
Calculation of the indicator RSI (8) by properties gives up.
The bottom line: the RSI indicator system gives a downward trend.
The calculation of the indicator CCI on the properties moves down.
The bottom line: the CCI indicator system gives a downward trend.
Overall: according to the indicator analysis, the price on the weekly chart should have an upward trend.
Calculation of the first shadow of the week (Monday) on a weekly chart.
Middle lines EMA 1/5/8 - the upper signal.
The indicator "three lines" (the direction of the lines of indicators CCI (5), RSI (5), stochastics with a period of 3/3/4) is a neutral signal.
Calculation of the RSI indicator system for the first tail is the upper signal.
Result: the calculation of the weekly candle from October 30 to November 04, according to technical analysis showed that on Monday there will be an upper trend, but the price movement will determine the daily schedule.
Calculation of the second shadow of the week (Friday). The calculation for the MACD linear part - gave a downward trend (100 points down). Calculation of the MACD histogram - gave a downward trend (100 points down).
The bottom line: the calculation on Friday for the technical analysis showed that there will be a lower trend, but the price movement will determine the daily schedule.

Fig. 2 (weekly chart).
Complex analysis:
- Indicator analysis - up;
- Fibonacci levels - down;
- volumes - down; - candle analysis - neutral;
- trend analysis - up; - Bollinger lines - up;
- monthly graph - up.

Conclusion on the complex analysis is an upward movement.

The total result of the GBP / USD currency pair candlestick calculation according to the weekly chart shows the weekly price would likely to have an upward trend with the absence of the first lower shadow of the weekly white candle and the presence of the second upper shadow. The initial target is 1.3336.

* The presented market analysis is informative and does not constitute a guide to the transaction.
* The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided by InstaForex

NZD/USD profit target reached perfectly, prepare to sell

The price has continued to rise perfectly to our profit target. We now prepare to sell below major resistance at 0.6968 (Fibonacci retracement, Fibonacci extension, bearish divergence) and we expect to see a strong reaction from this level to push the price down to at least 0.6827 support (Fibonacci extension, horizontal swing low support).

Stochastic (55,3,1) is seeing strong resistance below 96% and also sees bearish divergence vs price signaling that a reversal is impending.
Sell below 0.6968. Stop loss is at 0.7043. Take profit is at 0.6827.

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

Analysis are provided by InstaForex

Gold recalled its old ties

The uncertainty surrounding the tax reform, the growth of geopolitical risks in the Middle East and the visit of Donald Trump to Asia allowed the bulls in gold to restrain their opponents who are on the offensive. There were rumors in the market that the start of the transformation of the fiscal system in the US could be postponed for a year due to the fact that the US economy is in good shape. If you add an incentive to this, it will increase the risks of overshooting inflation and a future recession. Given its current position, there is no certainty that the reform will be passed through the Congress: Democrats criticize the bill because of the losses of the middle class, while the number of dissatisfied Republicans is increasing. In general, the revision of the tax system is seen as a "bullish" factor for gold. Therefore, the problems with its implementation allows buyers of the XAU/USD to strike a counterattack.

Investors have raised their share of haven assets in portfolios, looking at events in the Middle East. The mass arrests in Saudi Arabia, the attack on Riyadh by rebels from Yemen, the conflict between Turkey and Kurdistan, and the dissatisfaction of Donald Trump with decisions of his predecessors on Iran's nuclear program have pushed up oil and bond prices. The yield of the latter is under pressure, which, due to the existing correlation, has a positive effect on precious metals.

Dynamics of gold and yield of US bonds

Source: Trading Economics.

An additional factor in supporting gold is U.S. President Donald Trump's tour in Asia. In Japan, Trump has already tickled the nerves of local businessmen, accusing them of non-commercial and non-mutually beneficial trade. In China, the US president raised the issue of ending its economic ties between Beijing and Pyongyang, which certainly provoked North Korea's discontent. Let me remind you that one of the most important drivers of almost 12% of the XAU/USD rally since the beginning of the year have been geopolitical tensions on the Korean peninsula and the US protectionist policy.

At the same time, from the point of view of macroeconomics, the precious metal's situation is not the best. While the euro area and Japan's GDP are growing above the trend, the US economy has been expanding by 3% or more for two consecutive quarters, and is also prepared to increase the rate. In the case of tax reform, investors prefer risky assets. Moreover, global inflation is characterized by sluggish growth. In this scenario, real world market rates have the prerequisites for a movement upwards, which should be considered as a "bearish" factor for XAU/USD.

In my opinion, the situation in the Middle East will soon stabilize, and the absence of conflicts with North Korea and the passage of tax reform through the Congress would raise the demand for the US dollar and return the quotes of precious metals futures for a downward short-term trend.

A technically successful test of the upper limit of the consolidation range at $1262-1281 per ounce will increase the risks of rising gold prices towards $1,299 and $1,320. On the other hand, a breakthrough of support at $1262 will allow the "bears" to count on the implementation of the targets for 161.8% and 200% for the AB=CD pattern.

Gold, daily chart

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

Analysis are provided by InstaForex

Gold emerges from sleep mode

The problems surrounding the tax reform and the related weakness of the US dollar allowed "bulls" for the XAU/USD to go into a counter-attack. Gold enjoys an increased demand for safe-haven during conditions when the risks of correction of the S&P 500 significantly grows. Indeed, the desire of Senate Republicans to connect its plan of repairing the fiscal system with the dismantling of Obamacare, appears to be ideal. To a certain degree, the chances of a compromise plan through Congress before the end of 2017 are extremely low, even though Secretary of the Treasury Steven Mnuchin and economic adviser to the President Gary Cohn claim otherwise. Along with the approaching date when the problem of the ceiling of the national debt should be solved, this factor forces investors to get rid of the shares.

The tightening of monetary policy and the reduction in the balance sheet of the Fed are "bearish" drivers for the S&P 500, which grew due to hopes of an implementation in the tax reform. Now this prize at the stock index is ready for the taking. As a result, investors flee from risk, which is clearly visible as currencies of developing countries are being sold. I do not think that the panic will last long. The Fed remains committed to an extremely slow normalization, the health of the US economy does not cause concern, and the devaluation of the dollar contributes to improved corporate earnings reports. This is not the best news for the recovery of the precious metal from the "bullish" trend in the US stock market.

For more than a month, gold traded in the range of 3.3%, the narrowest since February 2013, while its volatility is at its lowest level in the last 7 years. The yellow metal went into a sleep mode, bulls expect to support short-term drivers of growth, while the medium and long-term outlook for XAU/USD appears "bearish." When central banks move from unconventional to traditional monetary policy, and the global yield of debt markets begins to move away from the area of long-term lows, it is possible to forget about the recovery of the long-term upward trend.

Dynamics of the yield of US and gold bonds

Source: Bloomberg.
At the same time, record shows that from June 2004 to June 2006, when the federal funds rate increased to 5.25%, gold prices rose 50%. From June 1999 to May 2000, the growth rate to 6.5% allowed the precious metal to add 6% to its value. What's the problem? In my opinion, parallels are unlikely to hold parallels, because the asset reacts sensitively to real rates of the debt market, and in conditions of sluggish inflation, the increase in nominal yield will put pressure on prices. Simply put, reasons must be sought in different CPI growth rates in the 2000s and now. It is highly unlikely that the XAU/USD pair will rise above $1,500 an ounce before the US economy plunges into a new recession.

Technically, the release of precious metals beyond the downstream channel increases the risk of an activation of the "Dragon" pattern and the continuation of a downward trend in the direction of $1320 per ounce and above. In order for this scenario to turn into reality, a strike on $1302 is required.

Gold, daily chart

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

Analysis are provided by InstaForex