Instaforex Analysis

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  1. #191
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    Instaforex Analysis
    USD/JPY Approaching Support, Prepare For Bounce



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

    Analysis are provided byInstaForex.

  2. #192
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    EUR/USD. The shutdown completed – but the dollar is no better

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



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

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

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

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

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



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

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

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

    Analysis are provided byInstaForex.

  3. #193
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    January Fed meeting: what to expect and what to fear

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

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



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

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

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

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

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

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



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

    Analysis are provided byInstaForex.

  4. #194
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    Intraday level for USD/JPY, Jan 31, 2019



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

    TODAY'S TECHNICAL LEVEL:

    Resistance. 3: 109.54.

    Resistance. 2: 109.32.

    Resistance. 1: 109.11.

    Support. 1: 108.85.

    Support. 2: 108.64.

    Support. 3: 108.42.

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

  5. #195
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    USD/CAD. The loonie ignored a weak GDP, but is waiting for news from China

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

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



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

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

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

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

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

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



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

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

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

    Analysis are provided byInstaForex.

  6. #196
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    NZD/USD Approaching Support, Prepare For Bounce



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

    Analysis are provided byInstaForex.

  7. #197
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    EUR and GBP: Indices for the services sector in many countries are declining, putting pressure on the economy



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

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

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

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

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



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

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

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

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

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

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

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

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

    Analysis are provided by InstaForex
    Last edited by IFX Gertrude; 02-06-2019 at 05:37 AM.

  8. #198
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    GBP/USD. Results of the day. New grounds for the fall of the pound will be received?



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

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

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

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

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

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

    Analysis are provided byInstaForex.

  9. #199
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    Intraday Level For EUR/USD, Feb 08, 2019



    When the European market opens, some economic data will be released such as Italian Industrial Production m/m, French Prelim Private Payrolls q/q, French Prelim Private Payrolls q/q, and French Industrial Production m/m. The US will not publish any economic data today, so amid such conditions, the EUR/USD pair will move with a low to a medium volatility during this day.

    TODAY'S TECHNICAL LEVEL:

    Breakout BUY Level: 1.1396.

    Strong Resistance: 1.1389.

    Original Resistance: 1.1378.

    Inner Sell Area: 1.1367.

    Target Inner Area: 1.1340.

    Inner Buy Area: 1.1313.

    Original Support: 1.1302.

    Strong Support: 1.1291.

    Breakout SELL Level: 1.1284.

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

  10. #200
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    Forecast for USD/JPY on February 11, 2019

    The yen continues to build up strength before breaking out on the resistance of the Krusenstern line daily scale. The price is held by the balance line on the chart of the smaller period-H4. The Marlin line seeks to go out into the growth zone. On the daily chart, the line of this oscillator unfolds in the continuation of growth. The price exit over 110.04 - resistance of the Krusenstern line, will make it possible for the price to attack the Krusenstern line of the higher chart and rise to 110.36 - the resistance of the trend line of the price channel on the daily. Exit above this line opens the way to the resistance of the next line at 111.24.





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

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