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Wave Analysis by InstaForex

InstaForex Gertrude · Guru

Elliott wave analysis of EUR/NZD for October 22, 2018

EUR/NZD dipped to 1.7356 (just below our possible downside target at 1.7357). We will now be looking for a break above the resistance-line near 1.7495, and more importantly, a break above the resistance at 1.7557 to confirm that the red wave ii/ has completed and the red wave iii/ towards 1.8345 is developing. Support is now seen at 1.7381 and at 1.7356.

R3: 1.7598
R2: 1.7557
R1: 1.7495
Pivot: 1.7475
S1: 1.7450
S2: 1.7409
S3: 1.7381

Trading recommendation:
We will buy a break above the resistance at 1.7495, while our stop will be placed at 1.7345.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

GBP/USD. Pound stumbled over Brexit again

The pound paired with the dollar after a slight recovery has once again collapsed into the area of the 29th figure, reacting to the negative news background around Brexit.

The immediate reason for the decline in the GBP/USD was the news that the deputies from the Democratic Unionist Party (DUP) together with the conservatives (or rather – some of them) will vote for the draft law that will make the EU proposals on the Irish border illegal. In this case, negotiations on Brexit are highly complicated, and the probability of a chaotic "divorce" from the EU without a deal will increase.

Let me remind you that Brussels is lobbying for the idea of leaving Northern Ireland within the framework of a single European market and a customs union – temporarily, until the parties come to a compromise on this issue. In Britain, many do not agree with this scenario – according to some conservatives, such a decision would be contrary to the constitutional principles of the country and would de facto violate its territorial integrity. Theresa May and the deputies who support her are also not happy with this idea, but are discussing this option among others. Therefore, representatives of the most "hawkish" wing of the Parliament plan to exclude such a scenario at the legislative level. Previously, only a few dozens of conservatives were discussed, but today it has become known that the Democratic Unionist Party will support this legislative initiative.

The DUP is an ally of the conservatives in Parliament, as the Tories were forced to form a coalition after losing the majority in the early elections. The Unionist party has the so-called "golden share" : they have only ten representatives in the Parliament (out of 650), but they provide the majority that allows making legislative decisions. Therefore, May cannot ignore their opinion about the prospects of Brexit. According to one version, for this reason, the October EU summit failed – the prime minister did not rush into compromises (which one way or another, but would have to go), so that the unionists could not block the draft British budget.

Therefore, when the DUP's position on the draft law became public today, the pound collapsed throughout the market. The situation can be divided into two parts. First, the new law will significantly complicate the negotiation process, the deadline of which is December of this year. The second part of the problem is broader. The fact is that many experts again voiced doubts about whether Theresa May will be able to consolidate British politicians to make a compromise decision that is so necessary for the deal? Constant political squabbles, threats of impeachment, destructive legislative initiatives are all signs of London's "incompetence". Today, this fact again reminded itself, putting significant pressure on the pound.

By the way, talks about the possible resignation of Theresa May again began to be actively discussed in the market. One of the British journalists published a letter of a Deputy of the Conservative party, in which he urged his colleagues to express no confidence in the prime minister and to re-elect the party leadership. Similar letters have emerged before, but their authors were members of the so-called "rebel group", who have been advocating impeachment for almost a year.

But in this case, according to the journalist, the author of the appeal is a centrist who previously supported the actions of May. After that, concerns arose in the market that the centrists of the Conservative Party would also support a relatively small group of "rebels". In this case, the likelihood of a resignation will really increase – as well as the probability of Brexit without a deal, because the possible successor of Theresa May is Boris Johnson, who is an uncompromising supporter of a "hard" divorce from the European Union.

The British currency is very sensitive to the news noise regarding the prospects of Brexit. Therefore, the lack of coordination and numerous internal party conflicts against the background of the possible resignation of Theresa May led to the expected result - the pound/dollar pair turned around and tested the 29th figure again.

But in technical terms, bears have not yet confirmed the priority of a downward movement. Now we are dealing with a impulsive price decline, but to talk about a further decline, the pair needs to consolidate below 1.2930 - at this price point, the lower line of the Bollinger Bands indicator coincides with the lower border of the Kumo cloud on the daily chart. If the price overcomes this barrier, the Ichimoku Kinko Hyo indicator will form a bearish "Parade of lines" signal – in this case, the price may fall to the level of 1.2760 (the lower line of the Bollinger Bands on the weekly chart) and even in the area of annual lows (the middle of the 26th figure).

It is worth noting that today Theresa May can encourage market participants with a statement that the deal is ready by 95% - but optimism is unlikely to be long-term. Even one inconsistent percentage can destroy all other agreements, therefore, the upward price pullbacks of the GBP/USD pair should be treated with caution.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

Gold spreads its wings

The high demand for safe-haven assets allowed gold to break a crucial inverse correlation with the US dollar. For a long time, the precious metal was in the shadow of the US currency, but the favorable geopolitical situation and the breakthrough of the upper limit of the medium-term consolidation range of $1185-1215 per ounce allowed the bulls to resist the USD index, which still feels confident. It should show the weakness of the dollar, gold immediately go up. So it was at the auction on October 23, when Donald Trump took the old and criticized the current chairman of the Federal Reserve. The president believes that Jerome Powell is experiencing bouts of happiness when he raises the Federal funds rate. An unusual approach that made financial markets smile.

Overly inflated net shorts on the precious metal, increased demand for gold as a tool to hedge the volatility of stock indices and moderately negative medium-term prospects of the "greenback" are the key drivers of growth of XAU/USD. As the midterm elections in the U.S. are approaching, the growth of political risk is able to rein in bulls in the USD index. It is likely that the Democrats will celebrate the victory in the house of representatives, which increases the risks of impeachment. This is well understood by Donald Trump, who threw the voters a bone in the form of potential tax cuts for the middle class. I don't think that's gonna be enough to save the Republicans. Uncertainty will contribute to the growth of volatility of the US stock market and will force some speculators to withdraw from the dollar. But it was the strength of the US currency that prevented gold from breathing quietly for most of the year.

Dynamics of gold and the US dollar

For a long time, precious metals turned a blind eye to trade wars, Brexit and the Italian political crisis. All these events are regarded as a positive external background for safe haven assets, which investors suddenly remembered in October. As a result, speculative demand for gold, Japanese yen and Swiss franc increased. At the same time, the inability of the analyzed asset to break the lower limit of the consolidation range of $1185-1215 per ounce was the reason for the closure of net short positions by hedge funds. They got rid of them at the fastest pace since March. However, the indicator is not far from the record highs, and its further reduction can raise the quotes of the XAU/USD higher.

Along with the US stock indices, the dollar and the geopolitical background, the fact that Reuters experts predict that the world economy will reach its ceiling in 2018 is important for gold. The fading effect of the fiscal stimulus will lead to a slowdown in US GDP, which will adversely affect the USD index. Slower than at present, the Fed's monetary policy normalization in 2019 also acts as a "bullish" factor for the precious metal. Technically, the "Bat" pattern continues to be implemented on the daily gold chart. Its target of 88.6% is located near $1,255 per ounce.

Gold, daily chart

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

EUR and CAD: The Bank of Canada raises rates. What will the ECB answer?

The Canadian dollar significantly strengthened its position against the US dollar after the Canadian regulator decided to raise interest rates. The Bank of Canada

According to the data, the Bank of Canada raised the key interest rate by 25 basis points to 1.75%, indicating the confidence of the central bank in the prospects of the Canadian economy. Most likely, this decision was also dictated by the conclusion of a new North American trade agreement and an improvement in the situation with household debt.

During the press conference, the Bank of Canada announced the need to raise the interest rate to a neutral level in order to achieve the target level of inflation. The neutral rate range is 2.5%-3.5%. From the statements of the Bank of Canada, the word "gradually" was also removed, which the regulator used when describing further rates of rate increases.

The central bank is confident that the new trade agreement will reduce uncertainty, increase company confidence and investment, but the trade conflict between the US and China will continue to put pressure on economic growth.

Economists predict that Canada's real GDP is expected to grow by 2.1% in 2018 and 2019, but it will slow to 1.9% in 2020. Inflation will remain near the target level of 2% until the end of 2020.

Fundamental statistics on the US, which was released yesterday afternoon, showed support for the US dollar, which managed to strengthen its position against risky assets.

According to the data, activity in the US private sector in October this year increased due to the growth of activity in the service sector. According to IHS Markit, the PMI purchasing managers' index for the manufacturing sector in October was 55.9 points against 55.6 points in September, while economists had expected the index to reach 55.4 points in October.

The PMI for services also rose to 54.7 points in October from 53.5 points in September. The composite PMI index was at the level of 54.8 points.

Although the data are still preliminary, higher growth rates of new orders and employment will continue to contribute to the growth of the overall index.

According to the U.S. Department of Commerce, sales of new homes in the US fell for the fourth consecutive month in September. Thus, sales of new homes in September decreased by 5.5% and amounted to 553,000 homes per year. Economists had expected sales to decline 0.6 percent.

The speech of the President of the Federal Reserve Bank of Dallas Robert Kaplan did not affect the quotes of the US dollar.

Kaplan said he expects less interest rate hikes next year than this year. He believes that the Fed should continue to raise rates gradually and patiently in order to prevent a slowdown in economic growth.

As for the technical picture of the EUR/USD pair, today everything will depend on the decision of the European Central Bank on interest rates, which will become known in the afternoon.

The breakthrough of this month's lows in the area of 1.1380 will lead to the formation of a new downward wave with an update of major support levels of 1.1350 and 1.1300. In case of growth, the upward potential of risky assets will be limited by the resistance range of 1.1470 and 1.1520.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

GBP/USD Forecast for 29 October 2018

GBP/USD

On Friday, the British pound grew by 13 points. The growth was stopped by the downward embedded line in the price channel. At the moment, the price is still testing this line with the support of the upward convergence on the chart of the lower timeframe. If the price manages to overcome this resistance, then a corrective price growth to the level of 1.2936 is possible - this is the low on October 23, and the Krusenstern line converges to this point both on the four-hour chart and on the daily chart.

The low of yesterday (1.2776) becomes the control level. Its overcoming will lead to a further decline in the price to the lower border of the channel in the area of 1.2618.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

EUR and GBP: The political career of German Chancellor Angela Merkel comes to an end

The euro continues to trade in the side channel paired with the US dollar on Monday, October 29. In the first half of the day, the pair fell after the results of the elections for The Christian Democratic Union of Angela Merkel in the land of Hesse, where the financial sector of Germany is mainly concentrated, was announced. Following the elections, the current government received the weakest support in its history.

As a result, German Chancellor Angela Merkel said that she would not be re-elected to the post of Chairman of the Christian Democratic Union. Let me remind you that Merkel has been heading this Union for 18 years. It is worth noting that the position of the head of the Christian Democratic Union in recent years significantly fell, as evidenced by the regional elections in various lands in Germany.

As for the support of the euro, Friday's decision of the S&P ratings agency is still fresh in the memory of traders, as well as statements made by the European Commission.

At the end of last week, S&P left Italy's credit rating unchanged, only downgrading the outlook for the rating to negative.

The European Commission's reaction to Italy's violation of budget rules also contributes to the demand for the European currency. As I noted in my morning review, the European Commission does not intend to respond with hostility to the statements of the Italian authorities, which were addressed to the EU at the beginning of last week. This will smooth out volatility in the financial markets, as well as maintain a strong position in Brussels.

Despite this, a number of investors and traders continue to be cautious, which is reflected in the EUR/USD quotes.

As for the technical picture of the EUR/USD pair, traders are currently focused on the level of 1.1430, the breakthrough of which will move the pair to a wide side channel with a larger resistance of 1.1480. Buyers also managed to hold the level of 1.1365, thus allowing the lower boundary of the rising channel, but this will only be possible after breaking the resistance at 1.1430.

The British pound continues to trade in a narrow side channel paired with the US dollar. Today's data that British consumers took less unsecured loans in September this year, led to a slight decline in the pound. However, the bears failed to resume a major downward trend.

The decline in demand for loans indicates that British households will be more careful about their spending in the future, which may affect the prospects for economic growth.

According to the Bank of England, in September of this year, unsecured consumer loans were issued in the amount of 785 million pounds against 1.2 billion pounds in August. The growth in unsecured consumer lending was 7.7%. The total amount of consumer lending, including mortgage loans, rose to 4.7 billion pounds in September against 4.3 billion pounds in August.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

EUR and GBP: US consumer spending will support GDP. A new bank tax was introduced in the UK

The European currency and the British pound continued to trade in a narrow sideways range on Monday. The euro's rising potential was limited by news that German Chancellor Angela Merkel has announced the end of her political career. The pound also did not show much activity, gradually falling to monthly lows, as traders expect the decision of the Bank of England on interest rates and news on Brexit. The presentation of the budget plan in Parliament by the UK finance minister also did not lead to changes in the GBP/USD pair.

In the afternoon of Monday, data was released, which indicated that Americans had increased their spending in September due to income growth.

According to the report of the US Department of Commerce, personal expenses of Americans increased by 0.4% in September this year compared to the previous month, while personal income of Americans during the reporting period increased by only 0.2% compared to the previous month. Economists had expected growth of expenses at 0,4% and income growth of 0.3%.

Given the current indicators, we can safely talk about maintaining a positive momentum in the US economy. As noted in the report, most of the expenses were related to durable goods, especially the purchase of cars. Medical expenses have also increased.

The share of savings of American households in September was 6.2% against 6.4% in August, which also indicates the belief of Americans in the economy of their country. At the beginning of the year, this figure is at the level of 7.0%.

The issue of US government bonds this year may exceed $1 trillion.

According to the report of the US Treasury Department, the volume of debt securities issued in the 4th quarter of 2018 will be $425 billion, and in total for this year the issue will be equal to $1.338 trillion. This sharp increase is associated with a sharp increase in the budget deficit due to high public spending in the absence of growth in tax revenues. As you can see, the tax reform, which was proposed by the White House administration, has its negative sides.

According to the Federal Reserve Bank of Dallas, the index of business activity amounted to 29.4 points in October this year, while economists expected that the index will be 27 points. The production index fell to 17.6 points in October.

As for the technical picture of the EUR/USD pair, the pressure on the euro may increase significantly after the support breaks at 1.1370. Movement under this level will lead to the demolition of a number of stop orders of euro buyers, who gained long positions last Friday, and to update the lows of 1.1335 and 1.1300. The main goal of the bears will be to achieve support in the range of 1.1250 by the end of the month.

The UK and a new bank tax

Yesterday, the budget plan was presented to the British Parliament. British Finance Minister Hammond said that the era of austerity is coming to an end. UK GDP is expected to grow 1.6% in 2019 and 1.4% in 2020. By 2021, the growth will be 1.4%. Thus, the estimate was revised upwards.

Hammond also noted that public borrowing in the period from 2019 to 2020 will amount to 31.8 billion pounds, the budget deficit for the same period will be at around 1.4% of GDP.

As for the risks, according to the minister of finance, the agreement on Brexit can provide double support to the British economy and will increase public spending.

Hammond also announced changes in taxes. As it became known, the introduction of a tax on remote banking services is expected, which will come into force in April 2020. It is expected that this tax will add to the budget more than 400 million pounds per year.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

Intraday technical levels and trading recommendations for GBP/USD for November 5, 2018

Since September 13, the GBP/USD pair has been demonstrating a successful bullish breakout above the depicted daily downtrend line which came to meet the pair around 1.3025-1.3090.

On September 21, GBP/USD failed to demonstrate sufficient bullish momentum above 1.3296. The short-term outlook turned to become bearish within the depicted H4 bearish channel to test the backside of the broken uptrend.

Bearish persistence below the price level of 1.2970 (50% Fibo level) enhanced a further decline towards 1.2790 where the lower limit of the movement channel and 79.8% Fibonacci Level were located.

On H4 chart, the GBP/USD pair looked oversold around the price levels of 1.2700. BUY entries were suggested around the lower limit of the depicted H4 channel (1.2690).

For the bullish daily breakout scenario to remain valid, bullish persistence above 1.2790 (the depicted channel upper limit) and an early breakout above 1.3000 (50% Fibo level) are needed to maintain sufficient bullish momentum.

That's why, bullish persistence above the price zone of 1.2970-1.3000 (50% Fibonacci zone) is mandatory for a further rise towards 1.3130 and 1.3200.

On the other hand, bearish breakout below 1.2970 (50% Fibo level) allows further decline towards 1.2790 and 1.2660.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

Technical analysis: Intraday level for USD/JPY, Nov 06, 2018

In Asia, Japan will release the Household Spending y/y and the US will release some Economic Data such as 10-y Bond Auction, IBD/TIPP Economic Optimism, and JOLTS Job Openings. So there is a probability that the USD/JPY pair will move with a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Resistance. 3: 113.88.
Resistance. 2: 113.63.
Resistance. 1: 113.43.
Support. 1: 113.16.
Support. 2: 112.94.
Support. 3: 112.72.

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 by InstaForex

InstaForex Gertrude · Guru

Technical analysis: Intraday Level For EUR/USD, Nov 07, 2018

When the European market opens, some Economic Data will be released such as German 10-y Bond Auction, Retail Sales m/m, Italian Retail Sales m/m, and German Industrial Production m/m. The US will also release the Economic Data such as Consumer Credit m/m, 30-y Bond Auction, Crude Oil Inventories, and Mortgage Delinquencies, so amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1524.
Strong Resistance:1.1517.
Original Resistance: 1.1506.
Inner Sell Area: 1.1495.
Target Inner Area: 1.1467.
Inner Buy Area: 1.1439.
Original Support: 1.1428.
Strong Support: 1.1417.
Breakout SELL Level: 1.1410.

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 by InstaForex

InstaForex Gertrude · Guru

EURUSD: lack of retail sales growth is a bad sign for the eurozone economy

The European currency continued its gradual growth against the US dollar, as well as the British pound, after today the division of the US Congress became known. As I noted in the morning review, Democrats gained a majority in the House of Representatives, and Republicans retained a majority in the Senate, which creates a number of problems for US President Donald Trump, who will find it increasingly difficult to implement his political ambitions and plans. We are talking about further tax reform, as well as a trade war with China.

It is possible that the division of Congress could critically interfere with the US president's plans for a further active trade war with China by introducing new duties on Chinese goods.

On the other hand, the risks of impeachment to the current US president have seriously decreased. Even if the Democratic party is able to obtain a majority of votes, further hearings should be held in the Senate, where the advantage is on the side of the Republicans. And impeachment requires the votes of two-thirds of senators.

Fundamental data

The data on the German economy released in the first half of the day and forecasts on its growth rates supported the European currency.

According to the report, industrial production in Germany in September this year increased by 0.2% compared to August, while a number of economists expected that production, on the contrary, will decrease by 0.2%. Let me remind you that industrial production showed an increase of only 0.1% in August. Economists had expected production to remain unchanged. As for the manufacturing industry, the production did not show any change, but the construction sector grew by 2.2%.

Compared to the same period in 2017, industrial production in Germany increased by 0.8% in September this year. Gradually, the increase will have a positive impact on the overall economic growth for the 3rd quarter of this year.

Today, a report from the Council of Economic Experts was published, in which Germany's GDP growth in 2018 was revised in a positive direction. The economy is expected to grow 1.6% in 2018 and 1.5% in 2019. As for the main risks for Germany, they are focused around the escalation of the trade conflict, the hard Brexit and the resumption of the crisis in the eurozone. The Council also believes that the problems can create a late turn of monetary policy by the European Central Bank.

Data on retail sales in the eurozone, which came out in the first half of the day, were ignored by the market. According to a report from the statistics agency, retail sales in the eurozone in September this year remained unchanged compared to August, while economists had expected an increase of 0.1%. Compared to the same period in 2017, retail sales increased by 0.8%. Data for August were revised. The growth was 0.3% compared to July.

The weak report once again shows that the eurozone economy is beginning to show signs of a slowdown in the 3rd quarter of this year, which may seriously affect the plans of the European Central Bank, which is going to resort to significant changes in monetary policy next year. This is a bad sign for the growth of the European currency in the medium term.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

The Fed's November meeting: waiting for hints about the December hike

After the announcement of the first results of the elections to the US Congress, the dollar was under considerable pressure, as the lower and upper houses of the legislature were divided between Democrats and Republicans. The dollar index slipped to 95.55 points, reflecting the weakening of the currency in all dollar pairs. The possible imbalance of the American political system has frightened traders - especially against the background of loud statements of Democrats concerning new investigations concerning the president, as its results could even lead to impeachment.

However, during the US session, the situation was unexpectedly smoothed by Donald Trump himself. He expressed readiness to cooperate with the Democratic party, expecting relevant legislative proposals on the development of health care and infrastructure from their representatives. The main message of yesterday's speech was that the White House (as well as the Republican party as a whole) is ready for constructive negotiations and effective cooperation.

In other words, on the one hand, he admitted the defeat of the Republicans in the House of Representatives, but on the other hand, hinted that now the Democrats have legislative levers that should be used not for their political purposes ("digging" for the Republican President), but "for the benefit of the American people." The willingness of Trump to dialogue pleased the traders, after which the dollar regained its position - in particular, the EUR/USD pair moved away from daily highs (1,1500) and ended the trading day at 1.1425.

In my opinion, Trump's speech from yesterday has the character of a political prop. He was forced to curtsy to the Democrats and "pass the ball" on their field, shifting the responsibility for the further actions of the Lower House of Congress. However, such a broad gesture is unlikely to reduce the intensity of the confrontation between the Democratic party and the White House – especially after the "donkeys" took control of the house of representatives from the "elephants". Of course, the Democrats will not be able to block absolutely all of Trump's legislative initiatives (because in the end it can play against them), but this fact does not prevent them from conducting new investigations against the American president, thereby reducing the likelihood of his re-election for a second term.

Having come to this conclusion, traders again reduced interest in the dollar, after which its growth has been suspended throughout the market. The greenback remained under the background pressure in anticipation of the main event of today - the November meeting of the US Federal Reserve. Although this meeting is considered to be a "walkthrough", its results can cause quite strong volatility among dollar pairs. The fact is that the market is beginning to gradually focus its attention on the future prospects of monetary policy, as the probability of a December rate hike is already at 76%. The slowdown in September inflation and weak wage growth are unlikely to affect the determination of Fed members to raise in December, but at the same time may affect the tone of their rhetoric.

Let me remind you that after today's meeting, there is no press conference for Jerome Powell, so traders will have to "settle for" only an accompanying statement. However, the text of this statement can give answers to many questions – for example, how high is the probability of a rate hike at the spring meeting, taking into account the latest trends in the US economy. And it's not just the slowdown in consumer prices. There are other reasons for concern, which the regulator can turn its attention to (but again – only in the context of future prospects).

In particular, we are talking about the weak dynamics of consumer spending, as well as the decline in the US housing market: in September, the pace of housing construction in the US significantly decreased, and the corresponding figures fell to three-year lows in the southern states. Activity in the country's manufacturing sector also decreased: the number of new orders fell to 1-a-year lows. Thus, in October, the ISM index fell to 57.7 points, while in September this indicator came out at the level of 59.8. Strong Nonfarm, on the one hand, speak about the strengthening of the labor market, but, on the other hand, there is its own "fly in the ointment". An analysis of the Fed's recently published Beige Book suggests that there is a shortage of labor (especially skilled labor) in many regions of the country. Although this nuance is secondary, it can still be taken into account by Fed members.

Thus, the results of the November meeting of the Federal Reserve should: a) confirm the intention of the members of the regulator to raise the interest rate in December; b) outline the future prospects of monetary policy. And if the first point is indicated more or less clearly in the accompanying statement, then the outlines of the long-term prospects will have to be "deciphered" by the traders themselves on the basis of the general tone of the text.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

Technical analysis: Intraday level for USD/JPY, Nov 12, 2018

In Asia, Japan will release the Prelim Machine Tool Orders y/y and PPI y/y, and the US will not release any Economic Data today. So there is a probability that the USD/JPY pair will move with a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Resistance. 3: 114.55.
Resistance. 2: 114.32.
Resistance. 1: 114.10.
Support. 1: 113.83.
Support. 2: 113.60.
Support. 3: 113.38.

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 by InstaForex

InstaForex Gertrude · Guru

EUR/USD. The euro is under pressure, but Brexit could be an unexpected ally

The euro/dollar pair touched the 1.1240 mark today - the last time the price was at such lows was in the summer of the previous year, within the upward trend from the area of historical lows (when the pair was in the area of the third-fourth figure).

The combination of fundamental factors puts pressure on the EUR/USD: the dollar is growing against the background of the hawkish Fed meeting, the euro falls amid panic fears of chaotic Brexit. The Italian question and the soft comments of the ECB representatives only aggravate the gloomy picture. In other words, such a powerful price decline is quite justified – the past weekend did not bring any detente, but, on the contrary, in many respects complicated the situation in many issues.

Let's start with Italy. Last Friday it became known that the Italians will not revise the state budget for the next year and, accordingly, will not reduce the level of its deficit. In fact, Rome ignored the demands of the European Commission, after which Brussels is forced to respond to such a demarche. Tomorrow is the three-week deadline, during which the Italians had to significantly revise the main financial document of the country, while fulfilling the requirements of the EC. The decision of the Italians is already known, so tomorrow the ball will be on the side of Brussels. There is no doubt that the EU leadership will react to the current situation. Otherwise, other European countries may follow the Italian example, thus undermining the financial and political stability of the eurozone.

Therefore, with a high degree of probability we can say that on November 21, members of the European Commission will launch a disciplinary procedure against Italy. The first step in this process will be the publication of a report on the financial condition of the country – this document is necessary for the codification of violations committed by Italian authorities. After that, Brussels will have grounds for the application of financial sanctions: experts believe that the amount of the fine will be about 1.7 billion euros (i.e. 0.2% of GDP). However, this amount may double if the Italians continue to "resist". The implementation of the disciplinary procedure will last for months, so the European currency will remain under the background pressure of this factor for a long time - if, of course, Rome does not make concessions.

However, so far Italy has demonstrated not only a principled, but also a very belligerent attitude. So, the head of the Italian Foreign Ministry said today that Rome can block the adoption of the EU budget, "if European bureaucrats will continue to fool around." Similar threats had previously been expressed by the deputy prime minister. It is worth noting that such intentions are not voiced by Italian leaders in the context of a budget conflict, but because of the failure to provide assistance from Brussels on the issue of illegal migrants. But this fact all the same indicates that the parties are in a state of political clinch, the release of which is not yet in sight.

Thus, the European currency has no power to oppose the dollar, being trapped in the European conflicts - Brussels with London and Brussels with Rome. Today, the greenback is growing throughout the market by inertia, as American trading floors are closed - Veterans Day is celebrated in the United States. The producer price index published on Friday was better than expected: on a monthly basis, it updated the annual high, increasing to 0.6% (with a forecast of 0.2%), and in annual terms increased to 2.9% with a forecast of 2.5%.

This indicator is an early inflation indicator, so such figures caused a considerable resonance among dollar bulls. After the disappointing release of the consumer price index for September, inflation indicators are mainly in the "green zone", increasing the likelihood of tightening monetary policy at the December Fed meeting. Optimistic expectations overshadowed the negative impressions of the elections to the US Congress, especially against the background of Trump's readiness to cooperate with Democrats in the field of the legislative process.

So, the euro-dollar pair has updated the annual low against the background of the "black and white" fundamental background: almost all factors speak in favor of the growth of the US currency and almost all - against the recovery of the European one. In this situation, the potential for the pair's further decline is obvious, and from a technical point of view, the path is open up to the 10th figure (the lower line of the Bollinger Bands indicator on the monthly chart). But there is one "but" that should alert traders, which is the current dynamics of the pound. The GBP/USD pair is trading in the range of one hundred points - the low was marked at 1.2826, the high - at 1.2946.

The British currency reacts to the contradictory news background, which then plunges traders into a state of panic, then returns them to hope for a "soft" Brexit. If London and Brussels will still be able to find a common denominator, then there will be a "squeezed spring effect" on the market: a rising pound will help the EUR/USD pair to recover against general optimism. Therefore, when opening short positions, you should always remember that an unexpected and quite sharp jump may follow – stop loss can be placed at 1.1324, this is the opening price of today's trading day.

Analysis are provided by InstaForex

-- Edited by InstaForex Gertrude on Monday 12th of November 2018 09:36:28 PM

InstaForex Gertrude · Guru

Intraday Level For EUR/USD for November 14, 2018

When the European market opens, some economic data will be released such as German 30-y Bond Auction, Industrial Production m/m, Flash GDP q/q, French Final CPI m/m, and German Prelim GDP q/q. The US will also publish the economic data such as Core CPI m/m, and CPI m/m, 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: 1.1361.

Strong Resistance:1.1354.

Original Resistance: 1.1343.

Inner Sell Area: 1.1332.

Target Inner Area: 1.1305.

Inner Buy Area: 1.1278.

Original Support: 1.1267.

Strong Support: 1.1256.

Breakout SELL Level: 1.1249.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

Gold is betting on inflation

Gold marked the worst weekly dynamics in the last three months after the US dollar withstood the test of the midterm elections in the United States, the Federal Reserve confirmed its intention to continue the cycle of normalizing monetary policy, and producer prices in fact were better than expectations from Bloomberg experts. Acceleration of inflation is an important argument in favor of bringing the federal funds rate to a neutral level, which should be considered as a "bearish" factor for XAU/USD. That is why the futures quotes on the precious metal continue to be in the middle of the consolidation range of $1185-1215 per ounce, despite a number of positive news. Gold is anxiously waiting for the release of data on consumer prices, which is able to inspire fans of the USD index for new feats.

The beginning of negotiations between Beijing and Washington is regarded by investors as a de-escalation of the trade conflict. The breakthrough, according to BofA Merrill Lynch, can lead to selling the US dollar. This currency will lose the status of a safe-haven, which faithfully served it in April-October. The precious metal is supported by the next round of correction of American stock indices and the reluctance of fans of products of specialized exchange-based funds to get rid of them. Despite falling prices, stocks of the largest ETF SPDR Gold Shares rose from 730 tons to 755 tons in the last month. Let me remind you that the pullback of the S&P 500 in October allowed gold to grow in parallel with the US dollar. In November, this does not happen, but the weakness of American inflation will return to the "bulls" on XAU/ USD faith in themselves. Dynamics of gold and Dow Jones index

Controversial news from the eurozone contributes to the stabilization of the USD index. Irish tabloids argue that the deal between Brussels and London has already been concluded, it remains only to ratify it in Parliament. At the same time, Italy stated that it was not going to rewrite the draft budget submitted earlier by the EU with a 2.4% deficit of GDP. The pound and the euro have recently moved synchronously: investors understand that the disorderly Brexit will put pressure not only on Britain, but also on the eurozone. The presence of positive from the first and negative from the second makes them stay away from the market.

Thus, the short-term prospects for XAU/USD will depend on the release of data on US inflation. Strong statistics will allow the dollar to resume the attack, which is fraught with the continuation of the peak of gold. According to TD Securities, the breakthrough of support at $1190 per ounce will be the catalyst for further large-scale sales. On the contrary, the unimpressive growth in consumer prices will allow the precious metal to recall its trump cards in the form of high demand for ETF, de-escalation of the trade conflict and correction of US stock indices.

Technically, the return of gold futures quotations to the middle of the previous consolidation range of $1185-1215 per ounce indicates the activation of the "Cheating-out" pattern. On the other hand, the retreat from support near the target by 88.6% on "bat" pattern will return the initiative to the "bulls". Gold, daily chart

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

Jerome Powell: get used to the smooth growth of interest rates

The turmoil with Brexit overshadowed the dynamics of the US currency, which, by chance, continues to increase its positions on the sly. The dollar index continues to be around one and a half year highs, reflecting the steady demand for the greenback. However, not all pairs are dominated by the dollar – for example, in the pair with the yen and the New Zealand dollar, the situation is mirrored, and the GBP/USD pair is completely at the mercy of Brexit, completely ignoring American events.

But in general, the greenback did not fall off its peak after the elections to Congress, as predicted by many experts. As a result of the elections, the most predictable result was realized (although very unpleasant for the dollar), therefore the weakening of the national currency was temporary. This was followed by quite positive signals that returned confidence to dollar bulls. First, the head of the White House extended a hand of friendship to the Democrats, offering cooperation in terms of the legislative process. And although this curtsey will not save him from a wave of new investigations, nonetheless Trump was able to neutralize nervousness about the possible imbalance of the American political system. Secondly, the US has recently pleased dollar bulls with strong macroeconomic reports. In particular, the labor market traditionally supported the greenback.

Thus, unemployment remained at a record low of 3.7% (the lowest since December 1969), and the unemployment rate of U-6 (that is, taking into account part-time employees) fell to 7.4% last month (in September it was at 7.5%). The number of employed in the non-agricultural sector increased by 250,000 people in October, and the share of the economically active population in the United States rose to 62.9%, showing a positive trend. What is especially important – the growth of salaries accelerated in October. This indicator is closely monitored by the members of the US central bank as its growth or decline demonstrates the level of demand in the labor market and indirectly affects the dynamics of inflationary pressure. According to most economists, for inflation to move to its target level, wage growth in annual terms should be above three percent.

So, in October, this indicator exceeded the key target and amounted to 3.1%, confirming the forecasts of experts. But in order for the puzzle of inflation growth to be fully formed, it was necessary to neutralize the September slowdown in the consumer price index. Then the numbers were frankly disappointing, causing some anxiety in the ranks of dollar bulls. However, the data published this week reassured investors, despite the fact that the release did not exceed the forecast values.

However, experts expected the growth of the CPI, and their expectations were fully justified: on a monthly basis, it reached three-tenths of a percent, and in annual terms, the indicator also came out at the level of forecasts, being at the level of 2.5%. Excluding food and electricity prices, the indicator similarly showed the dynamics of growth. On a monthly basis, it rose to two-tenths of a percent, and on an annual basis to 2.1 percent. However, the core inflation did not reach the forecast level, but it is not critical against the background of the general dynamics.

If we talk about the dynamics of US economic growth, we can not fail to say about today's release. Retail sales also showed a significant breakthrough after a rather weak dynamics in August and September. But in October, the figure came out better than forecasts - both with and without car sales. Consumer activity of Americans also plays an important role for the Fed, as the indicator reflects the growth rate of the country's economy.

All this allows Fed Chairman Jerome Powell to keep the course for further tightening of monetary policy. During the last 24 hours, he gave a speech twice at various events in the United States, answering questions from the audience. After the first speech, the dollar index fell slightly, because Powell, according to the market, took a rather cautious position regarding future prospects. But during the second speech, he "rehabilitated" - in particular, he said that market participants should get used to the idea that the Federal Reserve will gradually but steadily increase the base interest rate. In addition, he recalled that next year he will hold press conferences on the results of each of the eight meetings of the Fed, hinting that the rate can be raised at any of them (now the decisions of the regulator are expected only at extended meetings).

Summarizing the above, we can conclude that the general fundamental background allows the Federal Reserve to further tighten monetary policy: the probability of a rate hike at the December meeting is estimated at 70%, at the first spring meeting next year – at 45%. Recent macroeconomic reports and comments of the Fed's heads once again convinced the market of the regulator's "hawkish" intentions.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

Indicator analysis. Daily review for November 19, 2018 for the pair GBP / USD

The price on Friday rally down worked out the top. Bears were fixing profits, and the market broke off the support line 1.1248 (red thick line). On Monday, there is no strong calendar news. Most likely, the bears once again try to resume movement down.

Trend analysis (Fig. 1).

On Monday, the price will move downward with the first target 1.2751 - the support line (red thick line).
Fig. 1 (daily schedule).
Comprehensive analysis:
- indicator analysis - down;
- Fibonacci levels - neutral;
- volumes - down;
- candlestick analysis is neutral; - trend analysis - up;
- Bollinger lines - up;
- weekly schedule - up.
General conclusion:
On Monday, the price will move downward with the first target 1.2751 - the support line (red thick line).

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

Calm before the storm: the pound in anticipation of Parliamentary battles

British Prime Minister Theresa May, and with it the pound, were able to contain a huge onslaught without succumbing to a barrage of criticism during the previous week. The head of government did not resign, and the British currency remained within the limits of the 27-28 figures.

The "house of cards" did not crumble, despite the resignations – moreover, the minister of environment, who also planned to leave his post, suddenly changed his mind, saying that he supports the actions of the prime minister. The post of Dominic Raab - chief negotiator from Britain - was vacant for just a day and a half: last Thursday, as May appointed former Deputy Minister of Health and Social Care Stephen Barkley to this position. He is a consistent supporter of Brexit, in particular, two years ago, by his own admission, he voted for the country's exit from the EU.

In other words, the design of the current government was able to show its resilience, which means that hopes for a "soft" Brexit remain. Although there are still some political risks: today the Lower House of the British Parliament received a petition for a vote of no confidence in the Prime Minister. "Hawks" among the Conservatives began to collect signatures last week – and it is still unknown whether they managed to find 48 supporters or not (that's how many signatures are needed to start the procedure). In her Sunday interview, Theresa May said that, according to her information, there is no necessary amount. Insider sources of the British press indirectly confirm May's information – according to them, her opponents were able to collect only 42 signatures. By and large, the case is only in six deputies, so the intrigue in this matter remains.

However, the very fact that the procedure is being launched will play an emotional role rather than a "practical" one. To declare a vote of no confidence in the prime minister, the Tories need to enlist the support of the majority of the 316 deputies from the Conservative party. According to experts, the internal party opposition simply does not have such a large number of supporters, so this is a losing initiative. But if conservatives can't even run the corresponding procedure, it will speak about the support of May from the deputies. Although this support is rather forced, it is not so important in the context of the foreign exchange market. The approval of the transaction by the Parliament is at stake, a few traders are interested in what way the prime minister will convince the deputies to support it. The result is important.

As Theresa May herself admitted, the next seven days will be especially difficult for the country. By and large, this is a key stage of Brexit – if the deputies still approve the agreement, the probability of a deal will increase as much as possible, given the volume of concessions to Brussels from London. According to the majority of experts, the approved deal is based mainly on EU conditions – therefore, if it is approved by the British parliamentarians, there should be no delays on the part of the Alliance.

All this means that the pound in the coming days will again live in the information hype about the presence/absence of the required number of votes. All other fundamental factors will play a secondary role, although important events are expected this week.

In particular, the Bank of England's parliamentary hearings on inflation will be held tomorrow. I would like to remind you that the British central bank must report to the Parliament every three months on inflation and the prospects of monetary policy. These hearings are attended not only by the head of the British central bank, but also by other members of the monetary committee. For example, the participation of five officials for tomorrow was announced, in addition to Mark Carney and his deputies.

As a rule, traders closely monitor this event, as it allows you to get a kind of insider perspective on the further actions of the regulator. The inflation report includes not only an overview of the current situation, but also a forecast for a certain time period – medium and long-term. A positive assessment of inflation prospects could increase the likelihood of tightening monetary policy, given the dynamics of the consumer price index this year. But in this case we have to speak in a subjunctive mood, because at the moment the prospects of monetary policy depend mainly not on the dynamics of inflation, but on the fate of Brexit. If a deal is concluded, the interest rate will probably be increased in the first half of next year – the market has little doubt about this. Otherwise, the mirror option is not excluded: Mark Carney recently admitted the probability of a rate reduction in the case of a chaotic Brexit.

Thus, it is not necessary to build illusions about the impact of macroeconomic factors or comments of members of the English regulator. In the near future, all the attention of traders will be focused on the parliamentary battles, the results of which will allow is to build long-term plans for the prospects of the British currency.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

EUR/USD. The European Commission will announce the verdict to the Italians on Tomorrow

On November 21, the European Commission will announce its verdict on the draft budget of Italy. By and large, there is no intrigue here: representatives of the EC have repeatedly stated that the nominal budget deficit is three times higher than the figure provided for by earlier commitments of the Italians. In addition, the submitted document contradicts the Stability and Growth Pact, which defines the tax and budget policy of the European Union. Rome, in turn, refused to change the parameters of the budget – last week it was presented it was in fact presented in the same form. Therefore, it is easy to predict the "verdict" of the European Commission – Brussels will certainly announce the above theses, thereby, launching a disciplinary procedure against Italy.

This scenario is already partially embedded in the current prices, because the further algorithm of mutual actions was obvious even when the Italians refused to revise the budget rejected by the European Commission. Therefore, on Tuesday, the EC members will only state this fact, after which there are two possible scenarios: either Brussels will resort to penalties (having previously prepared a report codifying the violations committed by the Italian authorities), or the European Commission will agree to postpone the introduction of such measures. The second option, though unlikely, but still not excluded – according to some experts, the EC can wait until December – so that the Italians could once again "think about their behavior."

Of course, such a turn of events will be a positive signal for the euro – this will speak about the potential negotiability of Brussels and Rome. But the "sanctions path" certainly will not bring down the position of the single currency. The euro will be under background pressure, but one can hardly expect a downward impulse of several figures. First, the most likely scenario is already taken prices into account – the market is ready for further confrontation between the EU and Italy.

Secondly, the implementation of the disciplinary procedure will last for months, so the European currency will remain only under background pressure, while other, more "live" fundamental factors will set the tone for trade. Third, the outcome of the disciplinary procedure is also predictable: experts believe that the amount of the fine will be about 1.7 billion euros (i.e. 0.2% of GDP). This amount may double if the Italians continue to "resist". But the doubled amount of the fine is unlikely to affect the euro radically against the background of other events of a fundamental nature.

Thus, the question of the Italian budget has already outlived itself somewhat: traders are not so emotional to react to mutual verbal "injections" of politicians and are ready for their further battles. Moreover, some ECB representatives urge not to exaggerate the importance of this problem. For example, the representative of the European central bank Ewald Nowotny said that the increase in the yield of Italian government bonds has a "very limited impact" on the broad stock market. In addition, the budget confrontation itself has a limited impact on other, larger-scale processes.

In my opinion, the cause for concern will appear when the issue of the Italian budget turns into a political crisis in Italy: for example, early re-elections can strengthen anti-European rhetoric among politicians - and this fact will put strong pressure on the euro.

The economic calendar for the EUR/USD pair this week is almost empty - only the report of the last ECB meeting is of interest, the release of which is scheduled for Thursday. Therefore, traders will focus their attention on the events of the external fundamental background: Brexit and prospects of the US-China trade negotiations. Also interesting is the position of Fed members on the prospects of monetary policy in the light of the "correspondence confrontation" of the head of the Federal Reserve Jerome Powell and his Deputy Richard Clarida.

Let me remind you that Powell quite positively assessed the growth dynamics of the American economy and announced a further gradual increase in the rate. Clarida, in turn, noted that the slowdown in the global economy will have a negative impact on the key indicators of the US economy, and the interest rate has already approached its neutral level. Such discord surprised the market, then the dollar index slid to the limits of the 95 points. The rhetoric of the other Fed members will help traders navigate the situation in the context of the regulator's future prospects.

From the technical point of view, the situation for the EUR/USD pair has not changed since yesterday: the price has overcome two resistance levels on the daily chart – the average Bollinger Bands line and the Kijun-sen line. The next price target is the upper line of the Bollinger Bands indicator on D1, which corresponds to the level of 1.1485. If the pair overcomes this target, the Ichimoku Kinko Hyo indicator will form a "Golden cross" signal, which warns of a change in the bearish market to the bullish one. In this case, the price may jump to the middle of the 15th figure. The support level is the middle line of Bollinger Bands and the price of 1.1370.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

EU and Britain reached an agreement on Brexit

The latest news: the European Union and Britain signed a joint declaration on relations after Brexit.

This is an important step to resolve the main problem for Britain and the EU at the moment.

This is an important victory for Theresa May in the fight against opponents in Britain.

On this news, the pound rose sharply by almost 1%.

News are provided by InstaForex

InstaForex Gertrude · Guru

GBP/USD. Will Brexit trip over Gibraltar?

The pound is again under pressure because of the vague prospects of Brexit. The forced pause in this matter created an informational vacuum, but yesterday alarming signals were received regarding further approval algorithm for the deal. And it's not just the obstinacy of the British deputies: some representatives of Europe also expressed their dissatisfaction with the draft "divorce" agreement.

Another stumbling block was the British overseas territory – Gibraltar. A few centuries ago, the British won this strategically important piece of territory from the Spaniards, and since then disputes over its ownership have not subsided between countries. However, the discussion of this issue was conducted in a sluggish mode for many years: just now Madrid found a reason to intensify this process, in other words - took advantage of the situation.

Although a few months ago, Theresa May held talks with the Spanish side regarding Gibraltar, and this point was considered a resolved matter. In particular, in the spring of this year, Brussels proposed to give the Spaniards the veto over Gibraltar's future trade relations with the EU. After months of negotiations, the parties reached a compromise – at least, this was stated by the official representatives of Spain after the October EU summit.

The Spanish foreign minister then stressed that Gibraltar would not be a problem for signing the Brexit deal, despite the fact that some key aspects of future relations had not yet been resolved. The parties refused to disclose the details of the agreements, but according to insider leaks, London and Madrid agreed on the rights of citizens – primarily those citizens who are not British citizens, but live in Spain and work in Gibraltar. Here it is important to emphasize one point: the compromise on Gibraltar was agreed in the form of a protocol, which should be added to the common deal on the withdrawal between Britain and the European Union. The same protocols will be issued in respect of Northern Ireland, as well as the British military base in Cyprus.

This aspect is extremely important in the context of today's requirements of the Spaniards. The fact is that the agreement approved by the British ministers assumes that negotiations on further relations between Britain and the EU (which are not covered by the points of the deal) will continue after March 29, 2019, that is, after the official withdrawal of the country from the European Union. Madrid, in turn, requires that a separate clause be written in the agreement that would oblige London to negotiate with Spain on sovereignty over Gibraltar.

According to rumors, the Spaniards suspect the British of "diplomatic tricks" -after all, the above 184th article of the agreement does not clearly oblige London to return to this issue, and its provisions can be interpreted in different ways. The Spaniards fear (and I think it is justified) that once the draft deal becomes an official document, the Gibraltar issue will be shelved again. That is why Madrid is actively insisting that this issue be included as a separate paragraph in the draft agreement. Moreover, Spain threatened to vote against the draft if its demands were not met.

The British, in turn, reasonably appeal to the fact that, first of all, the draft deal was agreed upon by the negotiators, and the negotiating group includes representatives of the EU, which are responsible for defending the interests of the eurozone countries (including Spain). Secondly, this project has already been agreed upon by the British ministers – any amendments to the document will entail a "domino effect", because there are a lot of claims to this agreement. Third, London reminded Madrid of the results of the October meeting at the EU summit, where the parties agreed to formalize their relations in a separate protocol, which will be an integral part of the overall deal.

In other words, the British flatly refused to make changes to the "body" of the agreement itself, while they can sign other documents regulating the relations of countries with respect to Gibraltar. It is worth noting that Angela Merkel and some other representatives of European countries recently said that the key EU summit on Brexit, which is scheduled for November 25, will not take place unless an agreement is reached on the remaining part of the agreement. It is this fact that brought down the pound to the 27th figure yesterday - uncertainty again prevailed over optimism.

However, according to the Spanish press, this morning London and Madrid signed four memorandums of understanding, as well as a tax treaty. If today Spain will remove its demands (or rather,an ultimatum) about the change in the text of the draft deal, then the British currency will play its position in the context of corrective growth. But a steady and large-scale growth of the GBP/USD is still not expected. At least until November 25, that is, until next Sunday, the pound will be under background pressure in anticipation of the next stage of the "divorce process".

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

GBP / USD Forecast for November 26, 2018

GBP / USD

The trading volume on the British pound on Friday was the smallest in the last 3 months. Under the general pressure of the dollar (USDH 0.46%) and in anticipation of the decision of the EU emergency meeting on Brexit, the pound lost 64 points.

On Sunday, the EU countries unanimously adopted the Brexit plan. In England, the opposition,in particular the Labor Party, spoke out against voting on this draft in Parliament and suggested either changing the text of the treaty or holding a second Brexit referendum. On the other hand, EU representatives replied that there would be no second agreement on the UK leaving the EU, that is, under the most extreme scenario, England would leave the EU without a deal. It seems to us that the treaty will still be ratified until December 25 as required. But we do not expect significant growth of the pound in this case, since in fact, the United Kingdom will still acquire small restrictions. Probably, there will be no growth at all - as the working out of the exchange phenomenon of selling on the facts.

In the current situation, we are waiting for the price to overcome the support of the price channel line on the daily timeframe at about 1.2777. After that, we are waiting for the further decline of the pound to the underlying line in the 1.2560 area.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

Elliott wave analysis of EUR/NZD for November 27 - 2018

We are still looking for a firm break above minor resistance at 1.6767 for a continuation higher to at least 1.6915 and likely even closer to resistance near 1.7023,

Short-term support is seen 1.6698, which ideally will protect the downside for the expected break above 1.6767, but it will take an unexpected break below support at 1.6638 to cause concern and indicate that wave iv/ could have completed prematurely.

R3: 1.6879
R2: 1.6836
R1: 1.6832
Pivot: 1.6767
S1: 1.16731
S2: 1.6706
S3: 1.6642

Trading recommendation:
We are long EUR from 1.6706 with our stop placed at 1.6555. We will raise our stop to break-even upon a break above 1.6767.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

GBP / USD. Pound does not believe in "soft" Brexit

After the turbulent events of the past week, the financial world froze in anticipation. In early December, it will become clear whether the market will return to a state of relative stability or global uncertainty will continue further, defining the corresponding prospects for 2019. Given such an eventual fork, any prediction of currency strategists somehow comes down either to Brexit or to US-China trade relations. In the case of the pound-dollar pair, both topics are relevant - especially now, on the eve of the G20 summit and the key vote in the British parliament.

Brexit has an unconditional priority for the pound - all other fundamental factors are of secondary importance. These may affect the dynamics of the currency only if an information vacuum is temporarily created around the "main" theme. Recently, there are practically no such periods: the prospects for the most important voting are spoken daily, the most diverse speakers - from political scientists to the leaders of British political parties.

The disposition at the moment is as follows : there are 650 deputies in the British parliament. Meanwhile, the prime minister needs 320 votes in favor in order for the deal to pass through the millstones of the House of Commons. The complexity of the situation lies in the fact that, after the extraordinary re-election, the conservatives have lost the majority - now they are only left with 316 votes. In this regard, they entered into a coalition alliance with the Democratic Unionist Party (DUP), 10 deputies of which has provided control over parliament to conservatives. Theoretically, Theresa May has the necessary number of votes. However, in practice, the situation is completely different. Unionists have already managed to declare that they will not vote for the draft deal: a similar statement was made by the representatives of the Labor party and the Scottish National Party.

True, in each case that they did not manage to gain the necessary number ( 48) of supporters - but from this, it can be concluded that the backbone of the inner-party opposition is about three dozen deputies. Overwhelmingly, they are supporters of a more "rigid" Brexit. In their opinion, Theresa May gave in to the pressure of Brussels and allowed too many concessions to the Europeans. And although the number of opponents among conservatives can vary, the prime minister does not have to rely on the monolithic support of party members.

This means that Theresa May needs to do the almost impossible: to win over the representatives of the Labor Party to her side. It is worth noting that among the Laborites, there are also supporters of Brexit, however, it is in their interpretation, which provides for maximum cooperation with the European Union. Even when the possibility of early elections was discussed in London, Labor declared that Brexit would take place anyway if he won, but under different conditions.

According to experts, Theresa May will seek support from those Labor Party deputies who, on the one hand, are in favor of the country's withdrawal from the EU, and on the other hand, are satisfied with the formula for further cooperation with Brussels. Also, the prime minister will continue to put pressure on his party members, emphasizing the lack of an alternative to the achieved deal. Rather, the only alternative in this case is the chaotic Brexit, the negative consequences of which have been voiced more than once.

In this way, The British Prime Minister faces a very difficult political task, which may be unsolvable for her. At least, many analysts doubt that she will be able to consolidate the deputies - especially from the two opposing camps. Other experts are confident that the fear of the disordered Brexit will force many parliamentarians to support the deal, despite the flaws that have been declared. Uncertain prospects put a lot of pressure on the pound. Today, a pair of GBP/USD has finally consolidated in the 27th figure, testing a half-week minimum. And the closer the "hour of the X", the stronger the volatility will be for the pair, since the degree of intensity will only increase. In particular, a televised debate between Theresa May and Labor leader Jeremy Corbyn can take place next week. The premier has already confirmed Theresa May's participation in this event. If the head of the government looks unconvincing, then the British currency will again surrender its position, updating all the new price prima.

One must not forget about the quoted currency GBP / USD - dollar. On the eve of the G20 summit, Trump made a rather unfriendly statement about the introduction of new tariffs on Chinese imports - from January 1 of next year. Such rhetoric only increased the importance of the G20 summit, which will begin this Friday. Against the background of increased uncertainty, the American currency is again increasing its position: the dollar index is in the area of 97 points. In other words, the uncertainty of the British currency and the restoration of the greenback determine the southern trend for the pair. The nearest support level is far below the current levels at around 1.2670. This is the bottom line of the Bollinger Bands indicator on the daily chart.

Analysis are provided by InstaForex

InstaForex Gertrude · Guru

Forecast for USD / JPY on November 29, 2018

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 by InstaForex

InstaForex Gertrude · Guru

Bitcoin analysis for December 03, 2018

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

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 by InstaForex

InstaForex Gertrude · Guru

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

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 by InstaForex

InstaForex Gertrude · Guru

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

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 by InstaForex

InstaForex Gertrude · Guru

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.

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).

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 by InstaForex

InstaForex Gertrude · Guru

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.

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.

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 by InstaForex

InstaForex Gertrude · Guru

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

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 by InstaForex

InstaForex Gertrude · Guru

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.

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.

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 by InstaForex

InstaForex Gertrude · Guru

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

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 by InstaForex

InstaForex Gertrude · Guru

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%.

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 by InstaForex

InstaForex Gertrude · Guru

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

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 by InstaForex

InstaForex Gertrude · Guru

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%).

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.

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.

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 by InstaForex

InstaForex Gertrude · Guru

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."

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.

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 by InstaForex

InstaForex Gertrude · Guru

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

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 by InstaForex

InstaForex Gertrude · Guru

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

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.

News are provided by InstaForex

InstaForex Gertrude · Guru

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

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 by InstaForex

InstaForex Gertrude · Guru

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.

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.

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 by InstaForex

InstaForex Gertrude · Guru

Trading plan for 02/01/2019

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 by InstaForex

InstaForex Gertrude · Guru

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.

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.

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 by InstaForex

InstaForex Gertrude · Guru

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.

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.

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 by InstaForex

InstaForex Gertrude · Guru

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.

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.

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 by InstaForex

InstaForex Gertrude · Guru

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.

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 by InstaForex

InstaForex Gertrude · Guru

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.

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.

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.

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 by InstaForex

InstaForex Gertrude · Guru

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.

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."

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 by InstaForex