GBP / USD: plan for the American session on January 21. Pound remains in the channel and waits for news from British Prime

Trading 21 jan 2019 Commentaire »

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

After a slight downward correction to the support area of 1.2822, buyers returned to the market, and their main task in the second half of the day will be to return and consolidate above the resistance of 1.2890, which will lead to a larger upward trend in the area of 1.2944 and 1.3006 maximum, where I recommend taking profits. Any news from British Prime Minister Theresa May on Brexit could lead to a surge in pound volatility. In the scenario of its further decline, it is best to look at long positions for a rebound from the low of 1.2752.

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

An unsuccessful consolidation above the resistance of 1.2890 will be the first signal to open short positions in the pound but the main task will be a breakthrough to the support level of 1.2822, which will lead to the removal of a number of stop orders of buyers and a larger downward correction to 1.2752 and 1.2679, where I recommend to take profits. In the case of an uptrend on the news on Brexit, it is best to consider short positions from the highs around 1.2944 and 1.3006.

Indicator signals:

Moving averages

Trade returned to the area of 30-day 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 21

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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

Euro may strengthen against the dollar to $ 1.22 – CIBC

Trading 21 jan 2019 Commentaire »

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Despite weak eurozone statistics, Canadian Imperial Bank of Commerce (CIBC) analysts remain bullish on the euro.

"Eurozone statistics for the third quarter turned out to be the weakest over the past four years, which apparently explains the uncertain behavior of the single European currency. It is assumed that external trade pressure, as well as political uncertainty in Italy and France, will continue, causing a further slowdown in the pace of recovery in eurozone GDP," representatives of the financial institution said.

"Meanwhile, the situation in the European labor market remains favorable, which ensures a high level of consumer spending, and hence GDP growth. In the third quarter, wages increased by a record value in almost 10 years. At the same time, the unemployment rate fell below 8% for the first time in the last decade," they added.

"Despite the fact that the balance of risks has probably shifted to the negative side, the ECB continues to consider the economic outlook for the eurozone to be rather positive, which will further allow the regulator to carry out, albeit careful, but still raising interest rates. It is possible that this will happen in the second half of the year against the backdrop of consistently high inflation expectations," the experts noted.

According to the CIBC forecast, by the end of this year, the euro against the dollar may rise to $ 1.22.

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

EUR / USD: Plan for the American session on January 21. Major players did not support the euro because of the next weak statistics

Trading 21 jan 2019 Commentaire »

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

Euro buyers failed to return to the resistance level of 1.1388 after the release of weak fundamental statistics on producer prices in Germany, which have fallen sharply. The main task for the second half of the day remains to be the breakdown and consolidation above the resistance level of 1.1388, which will lead to a larger upward correction to the area of maximum 1.1423, where I recommend taking profits. In the event of a further decline with the trend in the euro, it is best to look at long positions with a test of support for 1.1348 or a rebound from this year's low around 1.1312.

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

Sellers showed up after the formation of a false breakdown at the resistance level of 1.1388, to which I paid attention in my morning forecast. Currently, the next task is to break through the support of 1.1348, which will lead to a larger sale of EUR/USD pair with a yield of at least 1.1312, where I recommend taking profits. When the return scenario is above the resistance of 1.1388 against the background of low trading volume due to the holiday in the US, I recommend to consider short positions in euro to rebound from the upper border of the side channel last week in the area of 1.1423.

Indicator signals:

Moving averages

Trade is conducted below the 30- and 50-medium moving, which indicates the nature of the market.

Bollinger bands

The volatility of the Bollinger Bands indicator is low, which does not give signals to enter the market.

More in the video forecast for January 21

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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

Weekly review of the foreign exchange market from 01/21/2019

Trading 21 jan 2019 Commentaire »

Apparently, in Foggy Albion, everything is very bad with entertainment, and this function was forced to assume the entire color of society in the face of the political elite of the United Kingdom. On Tuesday, Theresa May did bring to the parliament a "divorce" agreement with the European Union, which she vowed last year to finalize and achieve the economic part. But none of this was done and realizing that it smells like kerosene, she was able to receive from the head of the European Commission a promise to coordinate with all European countries the very notorious points of trade. But the British parliamentarians, as the true sons of the creators of the largest colonial empire in the history of mankind, are well aware of the price of promises to do something after the signing of the treaty. Their grandfathers and great-grandfathers repeatedly used this method to plunder entire continents, and they clearly did not want to be on the site of the victims, so the result of the vote was known in advance. And it is quite logical that the very next day, a number of parliamentarians demanded a vote on the issue of trust in the government because the Cabinet of Ministers is not able to resolve the issue with Brexit. However, this time, the parliament supported Theresa May, and only for the reason that quite a bit of time is left before the final date of secession from the European Union, and if early elections are held, the UK will go without fail according to a tough option, implying a complete lack of arrangements with Europe. It is precisely this that parliamentarians fear, and it is not just that they demand that the Prime Minister reach an agreement on this particular part. And by the end of the week, words began to sound about the possibility of postponing the withdrawal of the United Kingdom from the European Union to a later date. Some agreed right before the referendum. And naturally, the pound was thrown from side to side because of this, as if he were riding a roller coaster.

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It's funny, but within a couple of hours after the vote in the British parliament on an agreement with Europe, Jean-Claude Juncker expressed his disappointment with its results, adding that the proposed option is the best that Europe can offer the UK. And this is despite the fact that literally the day before that he promised to intensify the coordination with the heads of the countries of the European Union namely the economic part of the agreement. Which is not in it to this day. It turns out that Europe is not going to include in the text of the agreement issues of trade and customs duties. In other words, that there is an agreement, that it does not exist, for the British economy there is no difference. Moreover, the negotiations have been going on for almost two years, but during this time there has been no progress on the most important issue as if it had not been discussed. It turns out that the Europeans are just pulling time, and since they have done it so well in recent years, the UK can knock out any delays for itself, but if she does not want to remember what duties and trade quotas are in Europe, then we need to cancel the referendum results. True, those politicians who will do this will sign the death sentence of their political career.

So the situation is completely unpredictable, and no one can say what will happen tomorrow. But it was precisely this that saved the pound from decline, unlike the single European currency, which gradually went down both under the pressure of inflation, which dropped from 1.9% to 1.6%, and thanks to the content of the text of the minutes of the European Central Bank meeting. The fact is that in words the representatives of the ECB promise that they will begin to consider the possibility of raising the refinancing rate by the end of spring, but the text of the protocol states that only if macroeconomic dynamics permits. And judging by inflation, this very dynamic will not give any resolution.

Also worth noting is the British statistics, which, of course, no one paid attention. And it is very eloquent, since inflation decreased from 2.3% to 2.1%, and the growth rate of retail sales slowed down from 3.4% to 3.0%.

It is clear that the theater of the absurd called "Disputes around Brexit" attracts all the attention to itself, but even without this interesting enough. In particular, the lockdown in the United States of America, which has already broken all records in its duration. However, apparently, this is of no interest to anyone, since government structures continue to work, and to the delight of taxpayers, without paying salaries to government employees. Of course, most congressmen are not particularly fond of Donald Trump, but they are well aware that this cannot last for long, and sooner or later this performance will begin to have a negative effect on the economy. However, this week there are only preliminary data on business activity indices, which should be reduced. And all at once. And this will necessarily be attributed to the shutdown, and not without reason.

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In Europe, preliminary data on business activity indices will also be published, and forecasts for them are somewhat better than in the United States. And if the production index should remain unchanged, then in the services sector they expect good growth. But the main event of the week will be the meeting of the Board of the European Central Bank, and in the accompanying comment, everyone is waiting for instructions on the timing of the consideration of the possibility of raising the refinancing rate. Given the recent decline in inflation, you should not expect that the office of Mario Draghi will confidently announce the consideration of this issue in the spring. Most likely, there will be a streamlined formulation of risks and macroeconomic dynamics. In theory, this should have a negative impact on the single European currency, but investors already assume such a development of events, so no one will be particularly disappointed. Thus, given the negative data on business indices in the US and positive in Europe, it is worth waiting for the growth of the single European currency to 1.1450.

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British politicians do not intend to stop at what has already been achieved and will continue to destroy the tender childish psyche of both investors and ordinary citizens. It is obvious that the topic with a repeated referendum will now be pushed. In addition, data on the labor market will be published, but they will not introduce any diversity since their dull stability is predicted. But the decline in the number of approved mortgage loans may well make many nervous because the real estate market is one of the main factors determining the investment attractiveness of the British economy. So the pound has every chance to meet the end of the working week at the level of 1.2775.

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GBP / USD: uncertainty around Brexit puts pressure on the pound

Trading 21 jan 2019 Commentaire »

Today, British Prime Minister Theresa May is due to submit to the House of Commons an updated plan for the country's withdrawal from the European Union, the vote on which is scheduled for January 29.

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Details of the so-called "plan B" by Brexit were not disclosed.

It is assumed that the head of government will have to significantly change his position on the "divorce" agreement to win over, in particular, the Labor Party. Apparently, the latter are preparing to introduce an amendment that would force Theresa May to request Brussels to extend the membership of the United Kingdom in the alliance.

Also, Brexit supporters, who seek to exclude from the deal with the EU provision on the "insurance plan" for Ireland, in the Conservative Party can submit the proposal. In addition, parliamentarians can propose an amendment requiring a new referendum on Brexit.

Meanwhile, the Prime Minister, not expecting to find a common language with representatives of the opposition and various parties, prefers to try his luck on the continent and achieve a revision of the provisions on the Irish backstop, Bloomberg reports.

It is not excluded that Theresa May is not going to be original at all, presumably retaining a negative attitude regarding the question of postponing the country's withdrawal from the EU in accordance with Article 50 of the Lisbon Treaty, which probably means refusing the deal.

Thus, there are several options for further developments:

1. Conduct a re-referendum on Brexit after clarifying the terms of the transaction.

2. Preservation of the UK stay in the European Economic Area.

3. The United Kingdom leaves the EU without an agreement.

As for the British currency, its recent growth and subsequent attempts of the GBP/USD pair to break up are most likely related to expectations regarding the extension of the Brexit process or the implementation of the "soft" option. However, it should be considered that any of the above scenarios implies the absence of any clear plan on trade and economic relations between Brussels and London, which will adversely affect the country's economy and the sterling pound rate. Based on this, we can expect a decline in the GBP/USD pair in the medium term.

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

Simplified wave analysis of USD / JPY pair for the week of January 21

Trading 21 jan 2019 Commentaire »

Large-scale graph:

On a large scale graph of the yen, a rising wave model is being formed. Starting in March last year, the first 2 parts (AB) were formed so far.

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Medium-scale graph:

Starting December 13, the impulse bearish wave completes the larger downward construction. The structure looks complete.

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Small scale graph:

Since January 3, there is a bullish movement on the chart, which has a strong reversal potential. It is at the level of M30 but in the near future, the scale of the movement will move to a larger TF.

Forecast and recommendations:

The current upward price movement of the pair will only increase over time. Kickbacks are expected in the form of a short-term flat. It is recommended to look for long entry signals.

Resistance zones:

- 111.00 / 111.50

Support areas:

- 109.00 / 108.50

Explanations of the figures:

The simplified wave analysis uses waves consisting of 3 parts (A – B – C). Three consecutive graphs are used for analysis. Each of these analyzes the last incomplete wave. Zones show calculated areas with the highest probability of reversal. The arrows indicate the wave marking by the method used by the author. The solid background shows the formed structure and the dotted exhibits the expected movement.

Note: The wave algorithm does not take into account the duration of tool movements over time. To conduct a trade transaction, you need confirmation signals from the trading systems you use!

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

Pound chaos will not scare

Trading 21 jan 2019 Commentaire »

The British pound does not get tired of confusing those who are watching him. If recently it was thought that the polar results in the form of a soft or erratic Brexit could lead the pair GBP / USD to 1.45 or 1.15, then in 2019, the increased likelihood of the second scenario, to the surprise of investors, triggered a five-week rally of the analyzed pair. Of course, the US dollar was weakening before our eyes, but the fact that the value of sterling options with maturity dates is falling by the end of March indicates that there is no particular concern about Britain's exit from the EU.

In my opinion, the successes of the pound are due to the increased chances of a second referendum or the extension of the term of Article 50 of the European Union Code governing the withdrawal of any country from its structure. Previously, the date of the official divorce of Albion with the EU was considered March 29, but in fact, the term, at the request of London, can be changed. So, Britain will gain time to find a compromise with Brussels or to hold a second referendum and save its place in the European Union. Messy Brexit is not in fashion now, although it's premature to talk about improving the political landscape. If Theresa May's Plan B turns out to be very similar to Plan A and cannot pass the Parliament, then the Laborites will have the opportunity for a second vote of no confidence. The defeat of the Prime Minister will increase the risks of early elections, increase the volatility of sterling and put pressure on the bull position on GBP / USD.

The policy continues to hang like pounds on the legs of the fans of the pound, because, return to the economy and to the markets of Albion, certainty, underestimating sterling from a fundamental point of view would play into the hands of buyers. The slowdown of British inflation in a strong labor market and the steady growth of average wages leads to an increase in real incomes of the population and creates prerequisites for the expansion of consumer activity and GDP.

The dynamics of average wages and inflation in Britain

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At the same time, the reduction of political risks will contribute to an increase in business activity and capital investments, which will have a positive effect on the economy in the future. Simply put, the pound has a very serious hidden potential, and Goldman Sachs does not in vain call him the current year's favorite among G10 currencies. According to the bank, the pair GBP / USD can rise to 1.36 within 12 months. Blomberg experts believe that the sterling will be among the top three performers after the Norwegian and Swedish crowns.

Obviously, the weakness of the US dollar will not do. While the US currency continues to support strong indicators, including industrial production, the USD index feels confident. However, disabling the government, traditionally bad weather for this time of the year, and fading fiscal stimulus effects will contribute to an increase in GBP / USD.

Technically, the "bulls" in the analyzed pair do not lose hope for the implementation of the target by 88.6% in the "Shark" pattern. A prerequisite for the continuation of the rally is to update the January maximum.

GBP / USD, the daily graph

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

Bitcoin analysis for January 21, 2019

Trading 21 jan 2019 Commentaire »

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Bitcoin is expected to move lower towards $3,350 as long as it holds below the bearish trendline. The potential breakout of support at $3,480 will confirm the next move lower towards $3,350 and $3,100. I expect the price to move to the Pitchfork median line. Only a break above the resistance at $3,670 will negate the bearish view.

Trading recommendation: We will sell Bitcoin at the breakout of support at $3,480 with take profit orders at $3,350 and $3,100. If position is triggered, protective stop will be placed at $3,670.

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

Intraday technical levels and trading recommendations for GBP/USD for January 21, 2019

Trading 21 jan 2019 Commentaire »

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On December 12, the previously-dominating bearish momentum came to an end when the GBP/USD pair visited the price levels of 1.2500 where the backside of the broken daily uptrend was located.

Since then, the current bullish swing has been taking place. Recent bullish spike reached the price level of 1.2999 where significant bearish rejection was demonstrated (Bearish Engulfing candlestick around the down trend line).

This probably pauses the bullish scenario for a while, allowing sometime for bearish correction towards 1.2800 where confluence of demand levels as well as the H4 up-trend line come to meet the pair.

For the bullish scenario to remain valid, bullish persistence above the price level of 1.2800 should be maintained on a daily basis. Bullish breakout above 1.3000 will be needed to enhance further advancement towards 1.3130-1.3180.

Otherwise, any decline below 1.2800 invalidates the bullish scenario bringing the GBP/USD pair again into sideway consolidations that may extend down towards 1.2710 (Next demand level to meet the pair).

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

USD/CHF analysis for January 21, 2019

Trading 21 jan 2019 Commentaire »

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USD/CHF is expected to move higher towards 1.0050 as long as it holds above the upward trendline. Ideally support at 0.9930 will be able to protect the downside for a break resistance at 0.9984 that confirms the next push higher towards 1.0070 and 1.0150. Only a break below support at 0.9930 will force a recount of the rally from 0.9975.

Trading recommendation: We are long USD/CHF from 0.9975 with take profits at 1.0007 at the 1.0050. Protective stop is placed at 0.9940.

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