What will end the recent jump in the yen and what you should pay attention

Trading 03 jan 2019 Commentaire »

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The yen is growing steadily. Investors are betting on the security of the Japanese currency after the warning about the shocking income of Apple heightened concerns about a slowdown in economic growth in China and the world.

At some point, the yen jumped 4.4 percent against the dollar after the flow of automatic stop losses caused a "sudden collapse" in Asian markets. Later, the situation stabilized, but the yen was able to record the largest daily gain in 20 months. Such major changes in foreign exchange markets reflect deep and growing concerns about the global economy, the yen has traditionally been a popular currency in times of turmoil.iWOU8QNeQZClZ71MaEAn6GSDPilbeeP5A6EOrc2UIn general, over the past five weeks, the yen has risen by more than 5 percent, as concerns about the global economy have increased. This trend was observed throughout December and only intensified at the beginning of the year amid weak liquidity and a sudden accident. The weakness of the dollar also reflects concerns about the state of the US economy and the drastic change in investors' expectations regarding the growth of interest rates, many generally speak about the end of the cycle of raising the Federal Reserve.

In the meantime, markets will not find peace, the yen is the best option. By the way, it was the Japanese currency that was recognized as the most highly profitable against the dollar in 2018. The largest increase in the yen was against the traditional high-yielding currencies.

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The dollar still breaks up

Trading 03 jan 2019 Commentaire »

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The risk of weakening the dollar's position due to a slowdown in the US economy is becoming increasingly obvious. However, this is a longer-term process, and in the near future, the EUR / USD pair is unlikely to fulfill the forecast of BofA Merrill Lynch 1.25. The main currency pair is also not breaking the level of 1.185 the other day, as was previously expected. Greenback, apparently, still drink blood from rivals.

So, last year, the dollar grew due to the accelerating dynamics of the US economy over its main competitors. In the coming year, its fate will depend on who will slow down faster. The first to suffer from the recession are regions such as the eurozone and China, investors calculated, which allowed the EUR / USD "bears" to launch a quick attack. For the first time in a year and a half, business activity in the PRC went into the red zone, and the indexes of purchasing managers in Spain and France turned out to be worse than market forecasts. In addition, Apple said that the company's financial performance collapsed due to the slowdown in the Chinese economy. Of course, the United States has its own difficulties, but in the eurozone and the PRC, there may be a lot more.

The question arises if the US economy slows down more slowly than the global one, is it worth it then to get rid of the dollar? Meanwhile, looking at the fundamental factors (the fading of the fiscal stimulus, the tightening of financial conditions, the drop in oil), the US GDP should slow down faster than the global economy. Perhaps this will happen, but not in the coming days. At the very beginning of the year, greenback showed its competitors that it is not necessary to be so self-confident, perhaps this dollar trick will demonstrate once again.

At the moment, currency strategists advise sticking to the forecast of 1.125-1.165 for the EUR / USD pair.TK7UP-nfcXOi9Ss2EXwPfywPXQLi1OYTmGg3bIVm

As for the other currencies traded in a pair with the dollar, the Nordea experts are pessimistic about the greenback. They recommend in the first quarter to look at its sales against the yen, the Australian dollar, and the Norwegian krone. The currencies of Japan and New Zealand may continue to show advancing dynamics since the speculative short positioning on them is too "bearish" by historical standards.

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It is expected that by March, the US Treasury will fill the country's banking system with liquidity and the dollar will weaken. This is due to the fact that the current size of the US government debt ($ 21.9 trillion, according to USDebtClock) is significantly higher than the statutory limit of $ 20.456 trillion. A year ago, for political reasons, the Congress decided not to increase its size, but temporarily (until March 1, 2019) allowed to take new loans. It is worth noting that in March of this year, all funds raised will be added to the official state debt, and members of Congress will have to raise its limit by the appropriate amount.

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BITCOIN Analysis for January 3, 2019

Trading 03 jan 2019 Commentaire »

Bitcoin has been quite impulsive with the recent bullish momentum as expected which lead the price quite closer towards $4,000 area but that high was rejected. The price has recently broken above the dynamic level of 200 EMA having Tenkan, Kijun, 20 EMA, and Kumo cloud as support along the way. The price is currently expected to push higher towards $4,000 area. With a daily close above $4,000, the price is expected to climb impulsively higher towards $5,000 area in the future. As the price remains above $3,000 area with a daily close, the bullish bias is expected to continue.

SUPPORT: 3,000, 3,500, 3,600

RESISTANCE: 4,000, 4,250, 4,500

BIAS: BULLISH

MOMENTUM: VOLATILE

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Bitcoin analysis for January 03, 2019

Trading 03 jan 2019 Commentaire »

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Trading recommendations:

Nothing has changed relative to yesterday's forecast and the BTC is trading sidewas with a slow tempo. According to the H1 time - frame, I found a breakout of the rising channel, which is a sign of changing in trend behaivor from bullish to bearish. I also found a confirmed double top formation and hidden bearish divergence on the MACD oscillator, which is another sign of weakness. My advice is to watch for selling opportunities. The downward targets are set at the price of $3.387 and at the price of $3.100.

Support/Resistance

$3.933 – Intraday resistance

$3.642– Intraday support $3.383 – Objective target 1

$3.100 – Objective target 2

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USD/JPY analysis for January 03, 2019

Trading 03 jan 2019 Commentaire »

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Recently, the USD/JPY pair has been trading downwards. The price tested the level of 105.13. According to the M30 time – frame, I found that there is the selling climax in the background, which is a big warning for a further downside. In my opinion, the downside is limited and there can be an absorption of the climax. My advice is to watch for buying opportunities and potential upward movement. The upward targets are set at the price of 108.47 and at the price of 109.45.

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Fundamental Analysis of AUD/USD for January 3, 2019

Trading 03 jan 2019 Commentaire »

AUD/USD has been quite impulsive amid the recent bearish pressure, pushing the price below 0.6750 with strong momentum. The price is currently being rejected quite impulsively. Despite the lack of macroeconomic reports from Australia and the US earlier today, sudden bearish momentum ahead of US NFP indicates a surge of volatility in the market.

Amid the holiday-thinned market, AUD has been quite silent with no economic reports from Australia. USD has been dominating the pair since the price bounced off the 0.74 area with a bearish daily close. Today US ADP Non-Farm Employment Change report was published with an increase to 271k from the previous figure of 157k which was expected to be at 179k and Unemployment Claims rose to 231k in the final week of 2018 from the previous figure of 221k which was expected to be at 220k. Moreover, today ISM Manufacturing PMI is expected to decrease to 57.7 from the previous figure of 59.3 and ISM Manufacturing Prices are expected to drop to 57.9 from the previous figure of 60.7 as well. Additionally, tomorrow Average Hourly Earnings are expected to increase to 0.3% from the previous value of 0.2%, Non-Farm Employment Change is expected to increase to 178k from the previous figure of 155k, and Unemployment Rate is expected to be unchanged at 3.7%.

Meantime, USD is currently quite firm, having found support from the recent economic reports. Besides, USD is quite optimistic ahead of the upcoming economic reports and events. After the recent US Rate Hike to 2.50%, USD managed to sustain the momentum against AUD that is expected to extend further in the coming days if upcoming economic reports meet the expectations.

Now let us look at the technical view. The price has rejected the bearish pressure quite significantly today which indicates the volatility level of the overall momentum in the pair. As per recent Bullish Continuous Divergence forming in the pair, the price is expected to retrace towards 0.7000-50 resistance area where the dynamic level of 20 EMA is also expected to meet and push the price lower again towards 0.6750 support area in the coming days.

SUPPORT: 0.6750, 0.6850

RESISTANCE: 0.7000-50, 0.7150

BIAS: BEARISH

MOMENTUM: VOLATILE

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Intraday technical levels and trading recommendations for EUR/USD for January 3, 2019

Trading 03 jan 2019 Commentaire »

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On the weekly chart, the EUR/USD pair is demonstrating a long-term Head and Shoulders reversal pattern where the right shoulder is currently in progress.

On the Daily chart, the pair has been moving sideways with slight bearish tendency. Narrow sideway consolidations have been maintained within the depicted daily movement channel since June 2018.

On November 13, the EUR/USD demonstrated recent bullish recovery around 1.1220-1.1250 where the lower limit of the channel as well as the depicted demand zone came to meet the pair.

Bullish fixation above 1.1420 was needed to enhance further bullish movement towards 1.1520. However, the market has demonstrated significant bearish rejection around 1.1420 few times so far.

Recently, the EUR/USD pair has been trapped below the price level of 1.1420 waiting for bullish breakout since November 5.

Yesterday, another unsuccessful attempt of bullish breakout above 1.1420 was executed. The market failed to persist above 1.1420. This brings more sideway consolidations down to 1.1260 as an initial target again.

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Intraday technical levels and trading recommendations for GBP/USD for January 3, 2019

Trading 03 jan 2019 Commentaire »

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Since Mid-November, Successive Lower Highs were demonstrated around the price levels of 1.3060, 1.2920 and 1.2800 maintaining movement within the depicted H4 bearish channel

Shortly after, a quick decline was demonstrated towards the price level of 1.2500 before bullish recovery could take place on December 12.

A bullish Head & Shoulders pattern was demonstrated on the H4 chart with neckline located around 1.2650-1.2680. Hence, a successful bullish breakout above the depicted bearish channel was demonstrated on December 24.

On Thursday, early bullish breakout attempt above 1.2720 was demonstrated on the H4 chart. However, the market failed to maintain sufficient bullish momentum above 1.2800 (mid-range of the depicted consolidation range).

That's why, another bearish pullback was executed towards 1.2500 (backside of the broken channel) where significant bullish recovery is being demonstrated during Today's consolidations.

Another bullish breakout above 1.2720 is mandatory to resume the bullish scenario of the market. Otherwise, the pair remains trapped within the previous consolidation range (1.2500-1.2720).

Bullish persistence above 1.2550 is mandatory for buyers. Any decline below 1.2500 invalidates the bullish scenario suggesting a further decline towards 1.2440 and probably 1.2360.

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EUR / USD: plan for the American session on January 3. Upward correction coming to an end

Trading 03 jan 2019 Commentaire »

To open long positions on EUR / USD pair, you need:

The upward correction in the euro is coming to an end, as the buyers failed to continue and break through above the resistance of 1.1386. Only a real breakthrough and consolidation above this level will lead to the renewal of a larger area of 1.1433, where I recommend taking profits. It is best to consider buying the euro after the formation of a false breakdown in the support area of 1.1352. Otherwise, long positions can be opened to rebound from a minimum of 1.1312.

To open short positions on EUR / USD pair, you need:

In the first half of the day, the bears completed the installation and managed to form a false breakdown in the area of resistance 1.1386, which led to the formation of a new wave of euro sales. The main goal for the second half of the day will be a breakout and consolidation below 1.1352 support, which will lead to the sale of EUR / USD to the area of this week's minimum 1.1312. Further fall of the euro to 1.1272 will directly depend on the data that will be released on the American economy.

Indicator signals:

Moving averages

Trade remains below the 30- and 50-day averages, which indicates that the bearish nature of the market remains.

Bollinger bands

The break of the middle border of the Bollinger Bands indicator around 1.1352 will be a sell signal. The lower limit in the area of 1.1320 will limit the downward potential.

More in the video forecast for January 3

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Description of indicators

MA (moving average) 50 days - yellow

MA (moving average) 30 days - green

MACD: fast EMA 12, slow EMA 26, SMA 9

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Sterling is actively declining, but the bottom is still ahead

Trading 03 jan 2019 Commentaire »

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Sterling could not bear the burden of fears about the state of the global economy, and weak data from China increased the outflow of investors and the sale of currencies, which are considered riskier.

The pound, which at the end of the year struggled to move forward against the background of Britain's withdrawal from the European Union, fell to its lowest level since April 2017 in early Asian trading after a "sudden collapse", provoked by the Japanese yen, which caused massive sales. The British currency fell to 1.2409 dollars and to 91.02 pence per euro, which is a 16-month low. By the opening of European markets, the situation has somewhat stabilized, but the pound continued to fall. In relation to the dollar, it fell by 0.3 percent, to 1.2569 dollars. In relation to the euro by 0.7 percent - 90.535 pence.Y9YTWBZS73kGCuowRbGLBWpZ24g2CcJdzeMf3SO0Given external factors, it can be assumed that the fall will continue. Particular attention should be paid to the publication of a comprehensive review of the UK construction sector. Analysts expect it to be 52.9 points in December compared to 53.4 in the previous month. The decline in activity in one of the important industries for the country's economy will pull the pound down.

An additional negative factor for the currency is also the reduction in expectations of an increase in interest rates by the Bank of England in 2019 and concerns about whether British Prime Minister Theresa May can convince lawmakers to support the Brexit agreement until March. Parliamentary debates about the May deal with Brussels begin next week, and the vote is scheduled for January 14th.

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