BITCOIN Analysis for February 7, 2019

Trading 07 fév 2019 Commentaire »

Bitcoin recently dropped below $3,400 and formed a double bottom pattern at $3,360 price area. When the price was trading lower and correcting itself between the price range of $3,360 to $3,500, it formed a Bullish Divergence which is expected to lead to certain bullish pressure in the coming days. The price is currently trading at the edge of breaking above the Trend Line resistance from where it is expected to push higher towards $3,500 and later towards $3,600. Though the ultimate bullish target at the current price formation is at $4,000, but as the market is volatile and without strong bullish pressure, a good amount of time will be needed to reach such higher resistance at a current market pace. As the price remains above $3,000 area with a daily close, further bullish pressure is expected.

SUPPORT: 3,000, 3,250, 3,360

RESISTANCE: 3,500, 3,600, 4,000

BIAS: BEARISH

MOMENTUM: VOLATILE

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Indian Central Bank unexpectedly lowered the key rate

Trading 07 fév 2019 Commentaire »

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The Reserve Bank of India (RBI) unexpectedly all reduced the key interest rate from 6.5% to 6.25% per annum. The decision of the Central Bank did not coincide with analysts' forecasts, only 11 out of 43 experts suggested a rate cut. The new head of the Indian regulator Shaktikanta Das, for whom this meeting was the debut, was among the first to support easing of monetary policy.

This decision was facilitated by the weakening of inflation in the country. In December, consumer price growth rates increased to 2.2% in annual terms. However, the target RBI inflation target is 4%. A key factor leading to a weakening of inflation was the decline in food prices.

According to forecasts of the Central Bank, India's GDP will increase by 7.4% in the current fiscal year ending in March 2019.

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Shares of SoftBank Group rose sharply, by 17%

Trading 07 fév 2019 Commentaire »

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The value of shares of the Japanese telecommunications media corporation SoftBank Group rose by more than 17% after reporting repurchase of shares and publication of a report on a record increase in quarterly earnings.

As a result, the company's market capitalization increased by $ 14 billion, reaching $ 100.10 billion. SoftBank shares rose 17.7% to 9.962 yen, the maximum in 5 months, showing a record intraday increase in the last 10 years.

SoftBank management announced that it will hold a repurchase of shares in the amount of $ 5.46 billion at the expense of funds received from the December IPO of the telecommunications division of the corporation.

SoftBank Group operating profit in the last quarter of 2018 was $ 3.99 billion, an increase of 38% over the same period a year earlier.

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EUR / USD: The report of the European Commission and Industrial production data in Germany harmed the euro

Trading 07 fév 2019 Commentaire »

The decline in the euro is not surprising after such data on industrial production in Germany, as well as the report of the European Commission, which revised the forecasts for the growth of the eurozone economy for the worse.

All of these confirm once again the fact that the European Central Bank, after such a weak start at the beginning of this year, is likely to postpone the increase in interest rates planned for this summer. These expectations are reflected in the quotes of the European currency, which reduced the pair with other world currencies, especially against the US dollar.

According to a report from the German Federal Bureau of Statistics, the industrial production declined more than expected in December even despite the increase in the production of automobiles and spare parts.

Thus, the industrial production in Germany decreased by 0.4% in December 2018 compared with the previous month, while economists had forecast growth to be 0.8%. Such a strong divergence of expectations with real data led to a sharp fall in the euro at the beginning of the European session. Compared with December 2017, industrial production in Germany decreased by 3.9%.

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Additionally, the report of the European Commission added "fuel to the fire", which significantly lowered its forecasts for a number of countries, including the eurozone. Let me remind you that the last similar report was published in November 2018.

Thus, the European Commission lowered the forecast for GDP growth in the eurozone in 2019 to 1.3% from 1.9%. In 2020, the European Commission predicts eurozone GDP growth at 1.6% against the previous forecast of 1.7%.

As for the flagship economy of the eurozone, the forecast for German GDP growth in 2019 was revised from 1.8% to 1.1% amid the cooling of world trade.

In other countries, this indicator is even worse. For example, in Italy in 2019, a recession could begin at all. Judging by the data of the European Commission, the Italian economy is expected to grow by only 0.2% in 2019 against the previous value of 1.2%.

As for inflation, the European Commission expects growth only to 1.4% against 1.8% in November 2018. In 2020, inflation will rise by only 1.5%. This is far below the target value of the European Central Bank in the region of 2.0%.

The decline in indicators is directly attributable to the deteriorating situation in world trade, as well as the uncertainty associated with Brexit, which is holding back economic growth in the eurozone. It is possible that the trade conflict between the United States and China also has a negative impact on economic growth.

As for the current technical picture of the EUR/USD pair, the bears did an excellent job with the weekly task and apparently, after updating a large support level around 1.1320, a technical correction may begin. This will last up to the resistance level of 1.1370, which will seriously limit further upside potential.

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GBP / USD plan for the American session on February 7. The pound fell after the decision of the Bank of England on interest

Trading 07 fév 2019 Commentaire »

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

The pound was expected to remain under pressure after the publication of the decision of the Bank of England, which kept the interest rates unchanged but lowered the forecast for economic growth. Currently, buyers are viewed in the support area of 1.2860 but opening long positions are best after returning and fixing above the resistance of 1.2910. A breakthrough of which can occur only after a speech by the Governor of the Bank of England Mark Carney. From his words, it will depend on the further direction of the pound. Returning to the support of 1.2860 may lead to a new wave of sales. In this scenario, it is best to consider new long positions from the lows of 1.2808 and 1.2752.

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

The bears managed to continue the downward trend in the pound after the decision of the Bank of England. If the tone of the statement from Mark Carney turns out negative, the pressure on the pound will continue and a repeated decline in the support area of 1.2860 will form a new downward wave, which will lead to a decrease in GBP / USD in the area of minimums of 1.2808 and 1.2752, where I recommend taking profits. An unsuccessful consolidation above the resistance of 1.2910 will also be a signal to sell the pound. Otherwise, short positions can be opened for a rebound from 1.2972.

More in the video forecast for February 7

Indicator signals:

Moving averages

Trade is conducted below the 30- and 50-day moving, which indicates a possible drop in the pound in the short term.

Bollinger bands

In the case of GBP/USD growth, the upside potential may be limited by the average Bollinger Bands indicator around 1.2926.

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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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EUR / USD plan for the American session on February 7. German economic news puts pressure on the euro

Trading 07 fév 2019 Commentaire »

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

Another weak statistics on industrial production in Germany, as well as a revision by the European Commission of their GDP growth forecasts, led to the sale of the European currency in the first half of the day. At the moment, it is best to return to long positions to rebound from support 1.1317 or from a new minimum of 1.1292. The main task of buyers for the American session will be a return to the resistance level of 1.1340, which the Bulls have missed in the morning. Only after such, you can expect a correction in the area of 1.1365 and 1.1432, where I recommend to fix the profit.

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

The downtrend continues and sellers need to form a false breakdown after correction in the area of resistance 1.1340, which will lead to a new sale of EUR / USD to the area of minimums 1.1317 and 1.1292, where I recommend taking profits. In case of consolidation above the level of 1.1430, a number of stop-orders of sellers may be demolished, which will lead to an increase in the euro in the area of resistance 1.1365, from where it is also possible to sell the euro immediately to rebound.

More in the video forecast for February 7

Indicator signals:

Moving averages

Trade is conducted below the 30- and 50-medium moving, which indicates the continued pressure on the euro.

Bollinger bands

In the case of EUR / USD growth, the upside potential may be limited by the average Bollinger Bands indicator around 1.1360.

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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

NZD / USD: Why did the New Zealand dollar collapse?

Trading 07 fév 2019 Commentaire »

Following the Australian currency today, the New Zealand dollar as its closest "ally" has collapsed. The catalyst for the decline was the disappointing release of data on the labor market in New Zealand, although such a scenario has been brewing for a long time. The slowdown of the Chinese economy, as well as the dovish rhetoric of RBA, could not but affect the New Zealander, which depends heavily on both the PRC and Australia. A weak macroeconomic data served only as a trigger for the downward impulse of NZD/USD.

Data on the labor market in New Zealand was really disappointing. The unemployment rate rose to 4.3% in the fourth quarter of last year, with a growth forecast of 4.1%. The increase in the number of people employed fell to 0.1% in quarterly terms and the last time such weak rates were recorded in the second quarter of 2017. In annual terms, the indicator continued the negative trend, dropping to 2.3% and the decline was recorded for the second quarter in a row. Salaries remained at the same level, although most experts expected the indicator to grow to 0.6%, while the indicator remained at around 0.5%.

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It is likely that in other conditions the New Zealander would react more restrained since nothing catastrophic happened. Although unemployment increased, it remained below the level where it was for many years. For comparison, this figure was at around 5.2% in the fourth quarter of 2016 and over the next two years, it fluctuated in the range of 4.9% -4.4%. The increase in the number of employees certainly disappointed, but here it is necessary to recall the recent decisions of the New Zealand government in the area of labor market development. Thus, the Cabinet plans to send more than three billion dollars to create 10,000 new jobs in rural areas of the country. This is a long-term program but the effect of its implementation will be noticeable already this year - at least, members of the government assure it.

There are other fundamental factors in other conditions that could support the New Zealand dollar. We are talking about the price index for dairy products. Agriculture, especially the dairy industrial population of cows and sheep, plays an important (if not key) role for the economy of New Zealand, along with tourism. Therefore, the positive dynamics in this area is essential for government officials and for the Central Bank.

The main indicator of the state of affairs with the "milk" is the price index for dairy products, which is formed on the basis of the auction (auction) results of the New Zealand GDT (Global Dairy Trade) exchange. Therefore, after a significant decline in December (due to seasonal factors), this index shows a gradual but steady growth at the beginning of this year. Each January auction demonstrates a positive trend, wherein based on the latest results, the index came out at 6.7%. This is the strongest growth rate since November 2016.

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Despite all of the above factors, the New Zealander, paired with the dollar, collapsed more than 150 points in a day, continuing to demonstrate a bearish mood. The fact is that traders are seriously concerned about the softening of the rhetoric of the Reserve Bank of New Zealand, whose meeting will take place as early as next week on February 13. The head of the Australian regulator has already made interest rate cuts this year, given the increased risks of internal and external nature. Adrian Orr may follow the example of his colleague since the economic problems of Australia and New Zealand are due to China as the common cause.

The slowdown of the Chinese economy is most acutely reflected in the dynamics of economic growth in these countries. For example, Australia's GDP growth was only 2.8% by the end of the year, while RBA experts expected this figure to be 3.4%. A similar situation exists in New Zealand, where economic growth has slowed to 2.6%. I repeat that the New Zealand economy depends on both China and Australia, thus, the current situation may really worry the members of the RBNZ.

In the summer of last year, the New Zealand regulator already assumed the possibility of a reduction in the interest rate, after which the NZD/USD pair updated the annual minimum and reached the 64th figure. If the concern of traders next week is confirmed, the southern dynamics of the pair will continue at a fairly dynamic pace. The disappointing data on the labor market in New Zealand only increased the likelihood of such a scenario, despite all the other fundamental factors of a positive nature.

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In technical terms, the NZD/USD pair on the daily chart is located in the Kumo cloud and between the middle and lower lines of the Bollinger Bands indicator. The first level of support is the mark of 0.6690, which is the lower Bollinger Bands. The strongest level looks like the mark of 0.6600, where a correctional pullback is possible from it if the dollar bulls do not strengthen their positions and do not push the price to the 65th figure.

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Intraday technical levels and trading recommendations for GBP/USD for February 7, 2019

Trading 07 fév 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 until January 28 when the GBP/USD pair was almost approaching the supply level of 1.3240.

That's when the current bearish pullback was initiated around slightly lower price levels near 1.3215 (around the depicted supply levels in RED).

This was followed by a bearish engulfing daily candlestick on January 29. Thus, the GBP/USD pair lost its bullish persistence above 1.3155 as a result.

As expected, the recent bearish decline below 1.3150 brought the GBP/USD pair into a deeper bearish correction towards 1.3000 where lack of bullish demand was recently noticed.

That's why, further bearish decline was demonstrated towards 1.2900-1.2850 where (38.2% Fibonacci level) as well as the backside of the depicted broken trend are located (in RED).

For the bullish scenario to remain valid, significant bullish recovery should be demonstrated around the current price levels 1.2900-1.2850. This would enhance a quick bullish visit towards 1.3000 and 1.3150.

Trade Recommendations:

Conservative traders should consider the current bearish pullback towards 1.2900-1.2870 (backside of the broken downtrend in RED) for a valid BUY entry.

T/P levels to be located around 1.3055, 1.3155 and 1.3200. Any bearish H4 closure below 1.2850 invalidates this scenario.

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February 7, 2019: The EUR/USD pair is currently approaching the daily uptrend line around 1.3000.

Trading 07 fév 2019 Commentaire »

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Since June 2018, the EUR/USD pair has been moving sideways with slight bearish tendency within the depicted bearish Channel (In RED).

On November 13, the EUR/USD pair demonstrated recent bullish recovery around 1.1220-1.1250 where the current bullish movement above the depicted short-term bullish channel (In BLUE) was initiated.

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

The EUR/USD pair has lost its bullish momentum since Thursday when a bearish engulfing candlestick was demonstrated around 1.1514. Thus, another descending high was established then.

Hence, the recent bearish closure below 1.1420 has allowed the current bearish movement to pursue towards 1.1350 and 1.1300.

The price zone of 1.1280-1.1300 now constitutes a significant demand zone to be watched for BUY positions on intraday basis.

Trade Recommendations:

Conservative traders should wait for the current bearish pullback to pursue towards the price zone of 1.1285-1.1300 (lower limit of the depicted movement channel) for a valid BUY entry.

T/P level to be located around 1.1350 and 1.1420. S/L to be located below 1.1250.

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

Simplified wave analysis of GBP / JPY pair for the week of February 7

Trading 07 fév 2019 Commentaire »

Large scale graph:

The bearish wave that began in February last year has now been fully formed and the proportion of all its parts have been observed. Given the presence of a reversal pattern, we can state the completion of a bearish trend.

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Medium-scale graph:

Since January 3, the price forms an upward wave with strong potential. On a larger scale chart, it will at least take the place of correction.

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Small-scale graph:

The price decrease that started on January 25 in the time scale wave took the place of the middle part (B). Calculating the support indicates the probable termination area.

Forecast and recommendations:

Given the wave algorithm of the movement, sales of the cross pair in the coming weeks will be hopeless. Supporters of the international trade style are advised to follow the buy signals of the instrument.

Resistance zones:

- 145.50 / 146.00

Support areas:

- 141.50 / 141.00

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