GBP/USD analysis for January 16, 2019

Trading 16 jan 2019 Commentaire »

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Recently, the GBP/USD pair has been extremely volatile in the last 24 hours due to the Brexit news. However, I found that buyers and sellers agreed to operate in a range within 1.2895 (resistance) and 1.2835 (support), which is a sign that market is in the balance regime. My advice is to watch for a potential breakout of resistance to confirm further upward continuation. I also found very strong demand in the background and aggressive buyers.

Trading recommendations for today: We will buy GBP/USD at 1.2910 with the targets at 1.2960 and 1.3040.

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Analysis of Gold for January 16, 2019

Trading 16 jan 2019 Commentaire »

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Recently, Gold has been trading sideways at the price of $1,292.00. Gold is in a big consolidation phase and the best thing to do is to wait for the confirmation and for a breakout. The overall trend is still bullish and I would advice you to watch for a bullish breakout. The key resistance level is set at the price of $1,298.00. I also found a rectangular pattern inside of a symmetrical triangle, which is a sign that we may see very soon expansion in price.

Trading recommendations for today: We will buy gold at $1.299.00-$1.300 with the targets at $1,309.30 (rectangle projection) and $1.317.00 (symmetrical triangle projection)

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British authorities hold power, Nomura sells EUR / GBP

Trading 16 jan 2019 Commentaire »

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There is a possibility that British Prime Minister Theresa May will resign within a few days after a devastating vote. Still, Nomura does not believe in tough Brexit, waiting for the stabilization of the political situation in the country and the growth rate of sterling. Thus, currency strategists explained the opening of a short position in EUR / GBP pair from 0.8880.

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London representatives of the bank reported that the position of British Prime Minister Theresa May looks quite constructive. Her desire to lengthen the term of Article 50 of the Lisbon Treaty and the intention to begin inter-party negotiations on the country's withdrawal from the group will most likely allow the British government to retain power.

If a vote of no confidence is announced to the government, the pound may drop by 3%.

The bank estimates that next week traders will focus on what Ms. May can offer as a backup plan.

Many political analysts believe that the British Prime Minister will once again "stand on his feet." May lost in the House of Commons, but "there is no immediate threat to her position." Theresa May will remain in power, as the Democratic Unionist Party and the Conservatives, who voted against her unpopular EU exit deal, will support her.

Note that Ms. May herself contacted, saying that the British government is already busy searching for an acceptable Brexit plan, which would receive the support of parliamentarians.

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BITCOIN Analysis for January 16, 2019

Trading 16 jan 2019 Commentaire »

Bitcoin has been struggling at the edge of $3,500-600 area for a few days in a row. The price is expected climb higher if it can breach above the dynamic resistance of 200 EMA. The price has managed to create higher lows while consolidating at the edge of $3,500-600 area. The price is being held by the Kumo cloud resistance as well as 200 EMA as resistance. If not breached, the price may move much lower in the coming days. The Chikou Span is currently facing the price line resistance whereas a break above it is expected to lead to strong bullish pressure resulting in the upward push towards $4,000 area in the coming days. 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: BEARISH

MOMENTUM: VOLATILE

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Gold should benefit from a weak dollar

Trading 16 jan 2019 Commentaire »

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After reaching the maximum values recorded for the first time since mid-June, the course of the yellow precious metal is stuck in a limited range. The gold rally stalled on the outskirts of the mark at $ 1,300.

"The longer the bulls remain idle, the more active the talk that the XAU / USD pair has already formed a local peak will become more active," analysts said.

"Today, this hypothesis can be confirmed if the economic report published by the Federal Reserve System (FRS) of the USA," Beige Book ", turns out to be quite optimistic. This may give impetus to the dollar. At the same time, gold will be forced to retreat from its cherished goal of $ 1,300. However, in the long run, the precious metal can still make a breakthrough," they added.

It is assumed that the main driver of growth of quotations will be the slowdown in the process of raising interest rates by the Fed.

If relatively recently, investors had expected the regulator to raise the rate three times this year, now even one increase is being questioned.

In addition, it is possible that in the summer of 2019 a recession will occur in the US economy.

The first hints of this may appear in the spring. Then the reduction in the balance of the Fed may be suspended. Instead, another quantitative easing program will be launched. In this case, the dollar will decline, which will be a supporting factor for the value of gold, which, as a rule, acts as a protective asset during economic and political instability.

The material has been provided by InstaForex Company - www.instaforex.com

Intraday technical levels and trading recommendations for GBP/USD for January 16, 2019

Trading 16 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 (The Blue one).

Shortly after, a quick bearish decline was demonstrated towards the price level of 1.2500 where bullish recovery (Bullish Head & Shoulders pattern) could take place on December 12.

Hence, a successful bullish breakout above the depicted bearish channel was demonstrated on December 24.

On December 31, 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).

Last week, another bullish breakout above 1.2720 was attempted to resume the bullish scenario of the market aiming towards 1.2800, 1.2880 and 1.3000.

Bullish persistence above 1.2800 (Mid-Range) is mandatory for buyers. Any decline below 1.2800 invalidates the bullish scenario bringing the GBP/USD pair again into sideway consolidations that may extend down towards 1.2720 (Lower limit of the depicted consolidation range).

On the other hand, the price level of 1.2880 stands as an intraday key-resistance corresponding to the upper limit of the previous consolidation zone (1.2720-1.2880).

Strong bullish breakout above 1.2880 is mandatory for Buyers as a valid BUY signal to look for further bullish advance towards 1.3020 where the depicted downtrend (in Blue) comes to meet the GBP/USD pair.

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GBP / USD pair: plan for the American session on January 16. Traders don’t know what to do after Brexit fails

Trading 16 jan 2019 Commentaire »

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

As I think you all already know, the British Parliament voted against the Brexit agreement, which was quite expected. Today's inflation data in the UK, which coincided with the forecasts of economists, also did not allow to determine the future direction of the pound. It is best to purchase GBP/USD after the formation of a false breakdown in the area of 1.2812 or rebound from support 1.2743. The main objective remains a breakthrough above the resistance of 1.2883, which will resume the upward trend and will allow reaching the highs of 1.2964 and 1.3016.

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

An unsuccessful consolidation above the resistance of 1.2883 will be the first signal in opening short positions in a pound. Yet, the main task will be the breakdown and consolidation under the support of 1.2812, which will collapse GBP/USD to the minimums of 1.2743 and 1.2672, where I recommend to fix profits. In the case of a further uptrend after the release of bad data on the US economy in the afternoon, it is best to consider short positions from the new highs of 1.2964 and 1.3016.

Indicator signals:

Moving averages

Trade returned to the area of 30- and 50-day moving, which indicates the lateral nature of the market.

Bollinger bands

Volatility remains low, which does not give signals to enter the market.

More in the video forecast for January 16

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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

Bollinger Bands 20

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Intraday technical levels and trading recommendations for EUR/USD for January 16, 2019

Trading 16 jan 2019 Commentaire »

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Since June 2018, the EUR/USD pair has been moving sideways with a slight bearish tendency. Narrow sideway consolidations have been maintained within the depicted daily movement channel.

On November 13, the EUR/USD pair demonstrated recent bullish recovery around 1.1220-1.1250 where the lower border 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 demonstrated significant bearish rejection around 1.1420 a few times.

Last week, a recent attempt of a bullish breakout above 1.1520 (upper border of the depicted movement channel) was executed. However, early signs of a bearish rejection are being expressed below 1.1520 and 1.1420 on the daily charts.

This renders the recent bullish breakout above 1.1420 and 1.1520 as a false breakout. Hence, any bullish pullback towards 1.1420 can be considered as a valid SELL entry for intraday traders.

The current bearish decline below the key level of 1.1400 brings more sideway downward consolidations to 1.1250 again where bullish rejection may be anticipated for a valid BUY entry.

On the other hand, in case a successful bullish breakout above 1.1520 is achieved again, this enables further bullish advancement towards 1.1600 (October's High) and probably 1.1720 if enough bullish momentum is maintained.

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EUR / USD pair: plan for the US session on January 16. Inflation data in Germany did not change the market

Trading 16 jan 2019 Commentaire »

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

Trade remained in a narrow side channel, after the report on inflation in Germany, which coincided with the forecasts of economists. Moreover, t is rather difficult to determine the future direction of the euro. You can take a closer look at the euro when forming a false breakout at the level of 1.1375 with confirmation of divergence on the MACD indicator or open long positions to rebound from support 1.1343. The main task of buyers is to return to the resistance level of 1.1430, which will lead to a larger upward correction to a maximum of 1.1481, where I recommend taking profits. The Weak US data may help bulls with correction.

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

Sellers have shown themselves, not allowing the pair to get above the resistance of 1.1430, to which I paid attention in my morning review. In this scenario, the pressure on the euro will remain but the main task will be a breakthrough of support for 1.1375, which will lead to a larger sale of EUR/USD with access to 1.1343 and 1.1312 lows, where I recommend taking profits. If after testing the minimum of 1.1375 and rapid downward movement is not formed, I recommend closing short positions, since a large upward correction in euro can be formed from this level.

Indicator signals:

Moving averages

Trade is conducted below the 30- and 50-moving averages, which indicates that the downward trend in the market continues.

Bollinger bands

Growth is limited by the upper limit of the Bollinger Bands indicator in the area of 1.1430, while the lower limit in the area of 1.1380 can support European currency buyers.

More in the video forecast for January 16

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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

Bollinger Bands 20

The material has been provided by InstaForex Company - www.instaforex.com

EUR and GBP: What does the pound need for further growth? Inflation in Germany is a cause for concern

Trading 16 jan 2019 Commentaire »

The euro continued to decline after inflation data in Germany coincided with economists' forecasts, demonstrating a slowdown in growth to almost zero.

According to the report, which was published today by the Federal Bureau of Statistics Destatis, the final CPI of Germany in December last year grew by only 0.1%, and the annual growth was 1.7%. The data completely coincided with the forecast of economists.

Despite the fact that in 2018 inflation in Germany was almost 2.0% and reached its target level, a sharp slowdown in the 4th quarter is an alarming signal for the European Central Bank, which is going to start raising interest rates this summer.

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The EU-harmonized index rose by 0.3% last month compared with the previous month and by 1.7% compared with the same period of the previous year. As before, the main monthly growth driver was energy prices, which increased by 4.9%. Food prices rose 2.5%.

Today, a report from the European Association of Automakers was also published, which said that the number of registrations of new cars in the EU in December continued to decline, and this suggests probable deeper problems in the European economy.

According to the data, the number of registrations in December decreased by 8.4% compared with the same period of 2017 and amounted to 998,503. The reduction is directly related to the low demand in key EU markets.

As for the technical picture of the EUR / USD pair, there is currently a slowdown in the downward movement, which may lead to the formation of an upward correction in the euro. If the level of 1.1375 is able to keep the pressure of sellers, you can count on a larger increase in risky assets with a return to the resistance of 1.1440, which opens up the prospect of further growth in the maximum area of 1.1480. If the bears can push the support of 1.1375, then it is best to consider new long positions in the trading instrument after updating the minimum of 1.1340 and 1.1310.

Great Britain

The British pound continued to bargain in the side channel after the political fiasco of Theresa May, which was never able to get the approval of the Brexit agreement in the UK Parliament.

The inflation data, which came out in the first half of the day, was ignored by the market, as it completely coincided with economists' forecasts.

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According to the report, the annual inflation rate in the UK has slowed down due to a sharp decline in gasoline and energy prices. Thus, the CPI UK consumer price index in December 2018 increased by 2.1% compared with December 2017, after rising by 2.3% in November. The return of inflation to a target level of 2.0% by the end of the year is good news for the Bank of England, which, in the face of uncertainty with Brexit, does not have to worry about further raising interest rates.

The speech of the head of the Bank of England also did not allow setting the market direction for the British pound.

Mark Carney, in the course of his speech, said that the slowdown of economic growth in China should continue, and the indicative forecast is 6%. In his opinion, the situation in China is one of the factors behind the slowdown in overall global economic growth, but there is no direct UK vulnerability in the face of the problems of the Chinese economy.

As for the technical picture of the GBP / USD pair, for the new powerful impulse growth, a breakthrough of the resistance area of 1.2890-1.2900 is required, which will lead to the formation of a new trend with the updating of monthly highs of 1.3020 and 1.3130. If in the near future the bulls fail to get above the 1.2890-1.2900 range, a downward correction in the trading instrument is likely, which will return the pair to the lows of 1.2750 and 1. 2620.

The material has been provided by InstaForex Company - www.instaforex.com