Daily Forex market analyst, Forex analysis online. In this section you will find a fundamental and technical analysis of the Forex market for online trading.
Follow the publications of our experts, and you will be able to objectively assess the situation not only on the international currency market Forex, but on all other world trading platforms. With the help of professional analysis of the foreign exchange market, you can invest your money.
Two weeks ago, a quick bearish decline was demonstrated towards 1.0965 - 1.0950 where the backside of the broken channel came to meet the EURUSD pair again.
Risky traders were advised to look for a valid BUY entry anywhere around the price levels of 1.0950. All T/p levels were successfully reached within the recent bullish movement during last weeks' consolidations.
Earlier last week, the EUR/USD pair was testing the backside of both broken trends around 1.1060-1.1080 where significant bearish pressure pushed the pair directly towards 1.0940 (Prominent Weekly Bottom).
Bearish Breakdown below the price level of 1.0940 was needed to enhance further bearish decline towards 1.0900 and 1.0840 (Fibonacci Expansion Key-Levels).
However, SIGNIFICANT bullish rejection was demonstrated as a quick bullish spike towards 1.1100 where a recent episode of bearish rejection was expressed.
Currently, the GBPUSD is trapped within a narrow consolidation range extending between 1.1090 - 1.0995 until breakout occurs in either directions.
Bearish Breakout below 1.1030 is needed to render the recent bullish spike as a bullish trap. If so, bearish decline would be expected initially towards 1.0940-1.0920.
On the other hand, Bullish breakout above 1.1080 gives an early signal of short-term bullish reversal possibility as a bullish double-bottom pattern with a projected target towards 1.1175.
Trade recommendations :
Risky traders are advised to have a short-term BUY Entry upon bullish breakout above (1.1090-1.1110).
S/L should placed below 1.1050 while target level should be located at 1.1175.The material has been provided by InstaForex Company - www.instaforex.com.
On July 26, Bearish breakdown below 1.2385 (Wedge-Pattern Key-Level) facilitated further bearish decline towards 1.2210 and 1.2100 which corresponded to significant key-levels on the Weekly chart.
In Early August, another consolidation-range was temporarily established between the price levels of (1.2100 - 1.2220) except on August 9 when temporary bearish movement was executed towards 1.2025 (Previous Weekly-Bottom).
Since then, the GBP/USD pair has been trending-up within the depicted bullish channel except on September 3 when a temporary bearish decline was demonstrated towards 1.1960.
Around the price level of 1.1960, early signs of bullish recovery (Bullish Engulfing candlesticks) brought the GBPUSD back above 1.2100 and 1.2220 where the GBPUSD pair looked overbought.
However, further bullish momentum was demonstrated towards 1.2320 maintaining the bullish movement inside the depicted movement channel.
As Expected, Temporary bullish advancement was demonstrated towards 1.2475 - 1.2500 where the upper limit of the current movement channel applied considerable bearish rejection on September 13.
Today, another bullish trial is currently being expressed towards 1.2500 where a possible Double-Top reversal pattern may be established.
The Long-term outlook remains bearish as long as the upper limit of the current movement channel around 1.2475-1.2500 remains defended by the GBPUSD bears.
On the other hand, Bearish breakdown below 1.2400 (Reversal-Pattern Neckline) can turn the short-term outlook into bearish, thus allowing more bearish decline towards the lower limit of the movement channel around 1.2330.
Conservative traders can look for a valid SELL entry anywhere around the price levels of 1.2475-1.2500 for a valid SELL entry.
T/P level to be placed around 1.2330, 1.2280 and 1.2220 while S/L should be placed above 1.2550.The material has been provided by InstaForex Company - www.instaforex.com.
Opportunities, which fate sometimes gives, can turn the whole future life. This is especially true for the financial market, particularly in the cryptocurrency sphere. Seizing a chance in this innovative field is a special skill. The leader of the crypto market, Bitcoin, was usually lucky in such situations, but not this time.
According to some analysts, cryptocurrency No. 1 missed a good chance to grow, ignoring another reduction in the key rate of the US Federal Reserve on Wednesday, September 18. At the same time, many experts predicted a rise in the price of military-technical cooperation at this event.
However, a miracle did not happen. On Thursday, September 19, the leading digital asset fell below an important psychological level of $10,000. Now, it needs to survive amid quantitative easing and a potential reduction in rates, experts emphasized. They admit that due to emergency measures taken by the US Federal Reserve, bitcoin can fly up to $ 20,000, but not in the near future.
According to Travis Kling, the manager of the cryptocurrency fund, a number of specific characteristics of the MTC makes it a safety mechanism that protects capital from the negative effects of the monetary policy of world central banks. Experts believe that the current price of bitcoin near the $ 10,000 mark indicates the consolidation of the leading cryptocurrency. They believe that in the near future, the main digital asset will become a little cheaper but in the future it will regain lost ground.The material has been provided by InstaForex Company - www.instaforex.com.
The Bank of Japan at today's meeting maintained the status quo, leaving all the parameters of monetary policy in the same form. This fact in itself is not remarkable, because the Japanese regulator has not taken any active action since September 2016, when it began an experiment with targeting the yield of 10-year government securities. In July this year, the Bank of Japan adjusted the volume of securities of exchange-traded index funds purchased annually. But in general, the parameters of monetary policy have remained unchanged for several years: the central bank has kept the target yield of 10-year government bonds at "about zero" and the interest rate on deposits of commercial banks at -0.1%.
Although nothing changed at the September meeting, the Japanese currency received some support, strengthening throughout the market (including in the pair with the dollar, falling back to 107th figure). The USD/JPY bears simply took advantage of the situation, turning the "passing" meeting in their favor. The market has been escalating the situation regarding the possible actions of the Japanese Central Bank for several weeks. In particular, 10 days before the meeting, Harukiko Kuroda said in an interview that the issue of reducing the rate further into the negative area is still "on the agenda".
Many journalists picked up the phrase, bringing it to the headlines. At the same time, most of them distorted the context of the voiced position. After all, in fact, the head of the Bank of Japan was not so unambiguous in his assessments – moreover, he immediately made a reservation that at the moment the situation is "not so bad" that the regulator resorted to decisive action now, especially against the background of steady growth in consumer spending and investment. But the market heard what he wanted to hear, so the yen was actively getting cheaper for several days, paired with the dollar going from the 105th to the middle of the 108th figure.
The devaluation of the yen contributed to the overall fundamental background in the foreign exchange market. Anti-risk sentiment fell markedly after Washington and Beijing set a date for high-level talks. Events in the Middle East had only a short-term impact on the dynamics of protective instruments. The oil market stabilized quite quickly (although quotes have not yet returned to their previous positions), and the Saturday incident did not receive its military continuation. Yesterday, Saudi Arabia officially accused Iran of involvement in the attack on oil fields, but the country's defense minister did not talk about any retaliatory measures. The US President also stated his unwillingness to fight with Tehran, while instructing his aides to increase sanctions pressure. In other words, the worst-case scenario has not been realized (yet), so the "Middle East" fundamental factor has ceased to support protective assets, including the yen.
To date, we see a corrective southern pullback on the USD/JPY pair, but in the medium term, the price retains its growth potential, up to the level of 108.90 (the upper line of the Bollinger Bands indicator on the daily chart). The market was surprised by the absolutely "passing" meeting, and this fact provided temporary support for the Japanese currency. But short positions in this situation look risky. First, the Bank of Japan announced that it will review economic and price changes at its next meeting, the results of which we will learn on October 31. At the October meeting, Central Bank members will conduct a quarterly review of their long-term growth and inflation forecasts. According to experts, the regulator will take additional incentive measures. This factor will exert background pressure on the yen.
In favor of the further growth of the USD/JPY pair, the events of the external fundamental background also speak. Relations between the US and China have recently warmed significantly, on the eve of the next round of talks. China exempted certain categories of US imports (including agricultural products) from additional duties, while the United States postponed the date of the increase in duties. Just yesterday, Donald Trump "boasted" to journalists that China has begun to purchase agricultural products from the United States again. At the same time, he expressed hope that the "historic trade agreement" will be concluded before November next year, that is, before the American presidential elections.
Of course, relations between Beijing and Washington are quite windy – in October, the parties may again slam the door and increase mutual sanctions pressure. But until then, the Japanese currency, like all other protective instruments, will be vulnerable. In other words, the southern momentum of USD/JPY is corrective, and upon completion of the correction, the pair can continue to grow to the first resistance level of 108.90.The material has been provided by InstaForex Company - www.instaforex.com.
The Fed will resort to aggressive monetary expansion if things get worse with the announcement by Jerome Powell that the US economy is doing well and also the federal funds rate is down from 2.25% to 2% for preventive purposes. This has made a wicked golden joke. If in 2014-2018, a "bearish" trend established against the background of normalization of monetary policy in the precious metal market. Then, in 2019, it changed to "bullish" due to the Fed's intentions to lower the rate and the September FOMC meeting left more questions than answers. Why did the XAU/USD pair go decline if the federal funds rate fell by 25 bp and the Committee's forecasts indicate its readiness to reduce it to 1.75% by the end of 2019? Where is the logic?
In my opinion, the dog is buried in the recently increased correlation of gold with American stock indices. Jerome Powell dismisses suspicions that he is following Donald Trump, but his speeches at press conferences say that the central bank is dancing in tune to the stock market. The chairman dropped the S&P 500 several times and then was forced to justify himself to rectify the situation. The last time this happened was in July when the phrase "mid-cycle adjustment" shocked investors. In September, Powell was careful. "The economy is strong, but if its condition worsens, the Fed will aggressively lower rates." These words pulled the S&P 500 from the bottom, where the stock index fell after the publication of FOMC forecasts.
S&P 500 reaction to the results of the Fed meeting
Gold changed its side in 2019. If in previous years it went in the opposite direction to the US dollar, now it is sensitive to the behavior of the American stock market. It behaves like a classic safe-haven asset. Therefore, Powell's optimism led to the sale of precious metals. It seems that a recession should be expected only if the Fed begins to actively cut bets until that moment you can sleep peacefully. Moreover, there is a thaw in relations between Washington and Beijing. The risks of promiscuous Brexit after parliament passes a law on the need for a prime minister's letter to the EU to prolong the transition period and Saudi Arabia claims that it will be able to quickly restore oil production after the attacks on its manufacturing sector.
Thus, the degree of the three key international threats has somewhat weakened, but the Fed still lowered the rate. Does the central bank still listen to criticism of Donald Trump, who once again accused Jerome Powell of shortsightedness and inability to communicate with financial markets? Say, the Fed chairman has a small intestine to reduce the rate by 1 pp, or even bring it to zero!
Technically, the "Surge and reversal of acceleration" pattern on the daily gold chart is relevant. The bears stormed the trend line of the burst stage and if they manage to gain a foothold below $1,498 per ounce, the risks of continuing the correction to $1462 and $1404 will increase. We are talking about the level of 23.6% of the last rising wave, as well as the target at 88.6% based on the "Shark" pattern. On the contrary, the bulls are counting on the return of quotes above the trend line of the burst stage.
Gold daily chart
The material has been provided by InstaForex Company - www.instaforex.com.
Over the last trading day, the euro/dollar currency pair showed volatility slightly above the daily average of 61 points, resulting in a zigzag amplitude. From technical analysis, we see that the past days on the EURUSD pair were extremely volatile, the quote jumped up and down. The movement in the previously set limits of 1.1000/1.1080 remains to this day.
As discussed in the previous review, speculators worked at the stage of recovery quotes, outlining the goal of 1.1025-1.1000, where the first point was touched, but the main trading idea in terms of ride on the information and news background did not succeed due to the lack of due market reaction. Considering the trading chart in general terms (daily period), we see not just a corrective move, but a kind of multidirectional interest. Analyze the past ten trading days, and you will see that the movement has a horizontal character, with variable interest, which plays into the hands of the main market trend. Let me remind you that our fulcrum is 1.0926, and the resistance point is 1.1080/1.1115.
The news background of the last day had data on inflation in the eurozone, where the figures were confirmed at the same level of 1.0%, which surprised no one. In the afternoon, we published data on the construction sector in the United States, where the volume of construction of new homes increased from 1,215 M to 1,215 M, and the number of issued building permits increased from 1,317 M to 1,419 M. The key event of the last day was certainly the meeting of the Federal Open Market Committee, where the interest rate was reduced by 25 basis points for the second time in a year. Now, it is 2.0%, and this decision fully coincided with the expectations of most analysts, thus there was no surprise in this regard. After the announcement of the interest rates, a press conference was traditionally held, where Fed Chairman Jerome Powell talked about the reasons for the rate cut – "Although GDP continues to grow at a moderate pace and the labor market remains strong, the Fed lowered the rate in light of the impact of the global situation on economic development prospects and restrained inflationary pressure." At the same time, the head of the Fed noted that the forecasts for the US economy are favorable, and the situation in the job market is stable, in turn, inflation will soon return to the target level of 2.0%. Powell also stressed that he does not expect a recession in the US economy, which has been talked about so much lately.
In turn, US President Donald Trump was not satisfied with such a sluggish move by the Fed in terms of reducing the refinancing rate and traditionally outlined his criticism on Twitter.
"Jerome Powell and the Federal Reserve are failing again. No courage, no sense of reality, no vision of the situation!" – twitter @realDonaldTrump
Trump's systematic criticism does not go unanswered, and at a press conference last week, Jerome Powell recalled the independence of the Federal Reserve from direct political control.
"I continue to believe that the Fed's independence from direct political control has worked well in the past. I assure you that my colleagues and I will continue to pursue monetary policy regardless of political considerations," said Jerome Powell.
By tradition, we conclude our column of information and news background with divorce proceedings – Brexit. So, the plenary session of the European Parliament was held, where the majority of voters supported the resolution on the extension of the postponement of the UK's exit from the European Union, stipulated by Article 50 of the Lisbon Treaty if there are reasons and purpose for this. In turn, London is committed to providing good reasons for the delay, to keep the free movement on the Irish border, and to fulfill financial obligations to the EU even in the absence of a deal with Brussels.
At the same time, the EU issued an ultimatum to Boris Johnson that he must submit his proposals for Brexit by the end of the month or prepare for a hard exit from the EU.
Today, in terms of the economic calendar, we have a package of statistics on the United States. So, the first data are released regarding applications for unemployment benefits, where they expect growth from primary by 9 thousand and repeated by 2 thousand. After that, data on sales on the secondary housing market will be published, where they are expected to decrease from 5.42M to 5.37M. In general terms, statistics can put local pressure on the US dollar.
Analyzing the current trade chart, we see the return of quotations within the upper limits of the lateral movement of the 1.1000/ 1.1080 (of 1.1115). There are no major changes in the quotes, which reflects moderate volatility in the market. Speculators, in turn, considering both works on the principle of testing the upper bounds of a return, at the same time focus on the method of the breakdown of the main boundaries of the 1.1000/1.1080(of 1.1115) to identify key move.
It is likely to assume that in the absence of proper pressure on the dollar, we will feel the periodic ceiling in the area of 1.1080/1.1115 with the subsequent appearance of short positions. Thus, the chosen tactic above – work on the rebound/breakdown – is the most appropriate technique.
Based on the above information, we will derive trading recommendations:
Analyzing different sector timeframes (TF), we see that the indicators unanimously signal an upward interest. It is worth considering such a moment that when considering the current movement, we see a distinct divergence of interests, thus when working with indicators, it is worth considering this moment.
Volatility per week / Measurement of volatility: Month; Quarter; Year.
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(September 19 was built taking into account the time of publication of the article)
The volatility of the current time is 46 points, which, in principle, is not bad for this period. It is likely to assume that volatility may still rise slightly, but for now, we have a limitation in terms of the available price framework.
Resistance zones: 1,1100**; 1,1180*; 1,1300**; 1,1450; 1,1550; 1,1650*; 1,1720**; 1,1850**; 1,2100
Support zones: 1,1000***; 1,0850**; 1,0500***; 1,0350**; 1,0000***
* Periodic level
** Range level
*** Psychological level
**** The article is based on the principle of conducting transactions, with daily adjustments.The material has been provided by InstaForex Company - www.instaforex.com.
EUR/USD has been trading upwards in the past 12 hours. The price tested the level of 1.1070. I found the breakout of the symmetrical triangle to the upside, which is the indication for the bullish strength.
Yellow rectangle – Resistance and profit target
Purple lines – Broken symmetrical triangle
Pink rising trendline – Expected path
My advice is to watch for buying opportunities on the EUR due to break out of the symmetrical triangle in the background and potential new money buying. There is also breakout of the downward channel in the background, which is another indication of the strength. Resistance levels are seen at the price of 1.1075 and 1.1110 and support levels at 1.1016-1.1000.The material has been provided by InstaForex Company - www.instaforex.com.
To open long positions on GBP/USD, you need:
The expected decision on interest rates from the Bank of England and a weak retail sales report all led to a slight decline in the pound in the first half of the day to the lows of yesterday. However, a larger downward movement was not formed again, which locks the pair in an even larger narrow side channel. At the moment, buyers need to break through the resistance of 1.2505, which was formed last week. Only such a scenario will allow us to count on new highs in the area of 1.2555 and 1.2600, where I recommend fixing the profits. If the data on the US economy will help the dollar in the second half of the day, I recommend returning to long positions only for a rebound from the week's low in the area of 1.2397, or the new support of 1.2345.
To open short positions on GBP/USD, you need:
Due to the weak report on the volume of retail sales in the UK, sellers are still able to keep the pair below 1.2505, but the breakdown of this range can create quite serious problems. As long as the trade is conducted under the resistance of 1.2505, the pressure on the pound will remain, which leaves hope for a downward correction to the support area of 1.2397 and for a larger exit to the minimum of 1.2345, where I recommend taking the profits. If reports on the US economy led to the growth of GBP/USD above the resistance of 1.2505, it is best to consider new short positions after updating the maximum of 1.2555 or sell the pound on a rebound immediately from the level of 1.2600.
Trading around 30 and 50 moving averages, indicating some market uncertainty.
Volatility is very low, which does not give signals to enter the market.
Description of indicators
Gold continues to trade sideways at the price of $1,500 and there is potential for breakout very soon. Gold might need fundamental trigger for the next directional movement..
Blue horizontal line – Swing high (Right shoulder)
Red rectangle – Upward target in case of the upward break
Yellow rectangle – Neckline and key support
Blue rectangle – Downward target in case of the down break
My advice from yesterday is still valid and in play. Watch potential breakout of the consolidation zone. The breakout of $1,523 will confirm potential test of the $1.551 (failed head and shoulders). If you see the breakout of the $1,482, there is a chance for test of the $1,452. Be ready for both scenarios. The FOMC meeting minutes yesterday didn't produce any breakout and only thing that we got is test and reject of the key support at $1,483. Watch for potential breakout of symmetrical triangle to confirm next direction.The material has been provided by InstaForex Company - www.instaforex.com.
To open long positions on EURUSD, you need:
Bulls completed the set for the first half of the day and managed to return to the resistance of 1.1075 on the background of good data on the current account balance of the ECB. However, a more important task is to break through this level, which will lead to the demolition of sellers' stop orders and a further upward trend to the highs of 1.1110 and 1.1151, where I recommend fixing the profits. However, the second half of the day is filled with important reports on the US economy, which may put pressure on the pair. In the scenario of EUR/USD decline, it is best to return to long positions on a false breakdown from the support of 1.1031 or buy immediately on a rebound from the minimum of 1.0992.
To open short positions on EURUSD, you need:
It is best to open short positions in EUR/USD after the formation of a false breakdown at 1.1075, which may occur after the release of good fundamental statistics on the US economy. Only this will be the first sell signal, which will push EUR/USD down to the support of 1.1031, and then to the larger level of 1.0992, where I recommend taking the profit. If the bears are unable to protect the resistance of 1.1075, it is best to count on new sales after the pair returns to the previous week's maximum area of 1.1110 or to open short positions immediately on a rebound from 1.1151.
Trading is conducted in the area of 30 and 50 moving averages, which again indicates no market uncertainty.
In the case of a downward correction in the second half of the day, the lower limit of the indicator around 1.1015 will act as support.The material has been provided by InstaForex Company - www.instaforex.com.
BTC did exactly what I expected yesterday. The price did hit our first objective target at the price of $9.865 and almost met second target at $9,512.Further selling opportunities are still preferable.
Yellow rectangle – Broken support
Green arrow – Next expected direction
Horizontal purple line – Second target (Fibo 100%)
MACD oscillator is showing good new momentum down in the background and I do expect at least another move downward. Key support is at $9,600 and resistance at $9,900 and $10.050. Bulls need to be very cautious as there is strong downward momentum in the background and potential selling the rally type of feeling. As long as the BTC is trading below that $10,050 there is a chance for potential more downside and re-test of the $9,600-$9,512.The material has been provided by InstaForex Company - www.instaforex.com.
The Fed meeting did not bring any surprises. As expected, the regulator lowered its key interest rate by 0.25% to 2.00%, but their leader Jerome Powell made it clear that the launch of a new asset purchase is expected. In fact, he said that the Fed will begin the fourth round of the quantitative easing program. In any case, the markets appear to be so.
Indeed the words of the head of the Central Bank of the United States stirred up the markets. American stock indices crawled up against the backdrop of his words, but they couldn't add significantly as Powell, following the promises, did not reveal the details of the new stimulus measures. He only hinted that "it is quite possible for us (the Fed) to renew organic balance growth earlier than we thought." After these words, investors tried to listen to what he said to understand when to begin but they never listened. Powell was limited by the fact that the decision on incentives will be taken between meetings of the regulator. It seems that the fed's QE4 will be decided on only after a significant deterioration of the U.S. economy.
Again, this uncertainty put pressure on the local stock market, and the American dollar managed to maintain its position in the foreign exchange markets as a whole, although it remained in the red to the basket of major currencies.
In General, evaluating such investors' eagerly-awaited event, the meeting of the Federal reserve, it can be argued that it has not actually brought anything truly important, but just regular words and vague promises. Observing this whole picture, we note that the indecision of the Fed and its leader personally can be explained by the ambiguity of the outcome of the trade war between Washington and Beijing. The general prospects for the growth of the world economy and the impact of the customs war on inflation in the United States.
We have repeatedly pointed out earlier that Powell's words signify the bank expecting inflation to grow based on this factor. The increase in customs duties also carries the cost of imports, which, of course, contributes to the promotion of inflation. By the way, the US still imports more than they export. In this case, according to monetarist views, lowering rates is in contradiction with the need but on the contrary, raise them to curb inflation.
Given this state of uncertainty, we can assume that in the near future the dollar will at least be held at about current levels in relation to major currencies. At the same time, we should recognize that the local market share or by injecting fresh air in the form of lower borrowing costs to climb higher.
Forecast of the day:
The AUD/USD pair is trading lower with the expectation of a continued decline in RBA rates. At the same time, the Fed did not give a clear signal on the likely start of a new program to stimulate the country's economy. We believe that the pair needs to be sold either at a pullback, from about 0.6800.0 or at the continuation of the decline below the level of 0.6785 with a probable target of 0.6700.
The USDCAD remains in a short-term uptrend. If the price of oil does not continue to rise, we expect that the price will resume its growth to 1.3345 after the likely decline to 1.3255.
The material has been provided by InstaForex Company - www.instaforex.com.
As expected, the bullish trend of GBP/USD pair for the upcoming sessions as long as the price is above the 1.2404 level.
A upward impulse is anticipated to persist up to a area high at the 1.2526 at least.
Note that intraday resistance level seen is at the 1.2526 price. Major resistance is seen at 1.2568, while immediate support is found at 1.2404 .
The depicted support level of 1.2404 acted as a prominent key level offering a valid buy entry. The signal for entering the market is formed to buy again.
The RSI shows an increase in the volume of long positions and 100 and 50-moving avergae are directed upwards.
Further close above the high end may cause a rally towards 1.2420. Nonetheless, the daily resistance level and zone should be considered.
Accordingly, the USD/CHF pair is showing signs of strength following a breakout of a high at 1.2420.
So, buy above the level of 1.2404 with the first target at 1.2526 in order to test the daily resistance 1 and move further to 1.2568.
Also, the level of 1.2568 is a good place to take profit because it will form the second resistance today. Amid the previous events, the pair is still in an uptrend; for that we foresee the GBP/USD pair to climb from 1.2404 to 1.2605 in coming hours.
In case a reversal takes place and the GBP/USD pair breaks down the support level of 1.2404, then a stop loss should be placed at 1.2375.The material has been provided by InstaForex Company - www.instaforex.com.
The EUR/USD pair looks to be preparing to push higher towards 1.1144/80 levels in the next few trading sessions. The wave structure indicates that EUR/USD is producing at least a corrective rally, that had begun from 1/0925 levels earlier. As labelled here, Waves 1 and 2 seem to be complete while Wave 3 is in progress. Please note that wave ii has dropped to fibonacci 0.618 support of wave i, terminating at 1.0990 levels earlier. Ideally, prices should remain above 1.0990 going forward and push through 1.1145/80 levels, to terminate potential wave 3. EURUSD is still expected to rally which is likely to unfold into 5 waves pushing higher. This would confirm that a meaningful top is in place at 1.0990. Intermediate resistance is seen at 1.1110, while potential support is at 1.0990 levels respectively. Trading point of view, one could remain long with risk at 1.0990 levels.
Long now @ 1.1069, stop @ 1.0990, target @ 1.1145 and 1.1180
Good luck!The material has been provided by InstaForex Company - www.instaforex.com.
Strong impulses in the previous days indicate the presence of interest of large players in the continuation of the ascending medium-term model. Favorable purchase prices must be considered after reducing the pair to 1/4 WCZ of 0.9922-0.9916. The zone is located on the border of the average daily move, which makes it convenient for setting a limit buy order.
In the past two days, the pair was trading within the flat. So, the lower limit of this range will be decisive for the entire upward impulse.
An alternative model will be developed if the closing of today's trading occurs below the level of 0.9916. This will open the way for further decline. The first goal of the fall will be the minimum of last week and further outcome of the upward impulse will be determined at 1/2 WCZ of 0.9861-0.9849. 3
Daily CZ - daily control zone. The area formed by important data from the futures market, which changes several times a year.
Weekly CZ - weekly control zone. The area formed by marks from the important futures market, which changes several times a year.
Monthly CZ - monthly control zone. The area is a reflection of the average volatility over the past year.The material has been provided by InstaForex Company - www.instaforex.com.
EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair performed a reversal in favor of the US currency near the upper line of the downward trend channel and returned to the correctional level of 127.2% (1.1024). Thus, traders did not receive a signal to buy, as the bulls did not have enough strength to close over the downward channel. However, there was no closure under the Fibo level of 127.2%. In general, the situation with the euro/dollar pair is confusing. Given that the downward channel continues to hold the pair's quotes within its limits, it still tends to fall. I do not consider buying the EUR/USD pair before closing over the 11th figure. Today, the divergence is not observed in any indicator.
Now, let's get to the fun part. To the results of the Fed meeting, which traders have been waiting for since the beginning of the week. The results of the meeting turned out to be very banal and expected. There were no surprises from Jerome Powell. Thus, a very restrained reaction of traders fully reflects the essence of the information that the markets received yesterday. By and large, Jerome Powell has been torn in recent months, or even a calendar year, into two fronts. On the one hand, US economic indicators and reports show that the country's economy is in very good condition. That is, it does not need an acute weakening of monetary policy. On the other hand, US President Donald Trump continues to not only criticize the Fed and Powell personally, accusing them of not having the courage to admit their mistakes (earlier rate hikes) and even calling them "enemies of the country", he continues to blame the Fed for others countries whose governments have control over their central banks outperform the US. Yesterday, the Fed decided to lower the key rate by 0.25%, but Donald Trump, even in this case, immediately criticized the Central Bank that the rate was lowering too slowly. The US president needs rates comparable to the rates of his competitors, that is, for example, the EU. In the European Union, interest rates of 0% – credit (refinancing), and -0.5% – deposit. Accordingly, Trump needs zero rates or even lower. But the Fed is not under the control of Trump and probably performs some functions that are unknown to the general public. This may explain the fragmentation of actions and the difference in goals between the US government and the Fed.
Thus, Trump can only criticize the Fed further, and Jerome Powell, meanwhile, reminded Trump in his speech yesterday that the regulator does not obey the president. Powell also said that the Fed took this step (lower rate) to keep the US economy in good shape in the face of certain events and to provide insurance against existing risks. Powell did not say what the events were. The "risks" are probably related to the trade wars that Trump is initiating left and right, and which hamper the global economy.
What to expect today from the euro/dollar currency pair?
On September 19, I expect the euro/dollar pair to fall in the direction of the corrective level of 161.8% (1.0918 or 1.0927) if there is a new signal to close below the level of 127.2%. The euro had yesterday a chance to grow, as the Fed still eased monetary policy. But traders did not take advantage of the chance. Today, when the news calendar is empty, we can hardly expect a sharp growth of the pair. In any case, before the closing of quotations over the channel, I do not recommend buying EU currencies.
The Fibo grid is based on the extremes of May 23, 2019, and June 25, 2019.
Forecast for EUR/USD and trading recommendations:
I recommend today to sell the pair with the target of 1.0927 if a new consolidation is performed under the level of 1.1024. A stop-loss order above the level of 1.1029.
It will be possible to buy a pair after closing above a downward trend channel, but it is better to wait until it consolidates above the correction level of 100.0%.The material has been provided by InstaForex Company - www.instaforex.com.
GBP/USD – 4H.
The British pound did not pay any attention to the Fed meeting, at which the US regulator eased monetary policy for the second time in a row. The pound did not pay attention to the inflation report, which recorded its decline to 1.7% y/y, although traders expected a much higher value. As a result, the GBP/USD pair made a return to the correction level of 38.2% (1.2501), then rebound from it, and now returned to this level. In total, the pair have fought back from the level of 38.2% three times, but the bulls are trying hard to push this level while ignoring the information background, which was not with them for a long time. It was the information background yesterday that should have sent the pound/dollar pair far down. But this did not happen, moreover, the pair continues to try to close above the psychologically important mark of $1.25. If traders do manage to do this, there will be immediately new reasons to buy the pound.
The pound has ignored not only yesterday's news, which was not related to Brexit but also ignores incoming information regarding the exit from the EU. For example, today it became known that Scotland has once again stated its desire to withdraw from the United Kingdom if Boris Johnson implements his Brexit "No Deal". In this case, the Prime Minister of Scotland Nicola Sturgeon notes that the country will suffer heavy financial losses. Moreover, Scotland does not want to leave the EU in principle. In the 2016 referendum, the majority of Scots voted against Brexit. Thus, there is a question of holding a referendum on independence in Scotland. Nicola Sturgeon also expressed the hope that Britain will remain in the European Union, but "there are really few chances for this," the Prime Minister summed up.
Well, new interesting information comes from Boris Johnson. Let me remind you that on Monday, Juncker and Johnson met in Luxembourg, immediately after which the British Prime Minister said about the mythical "progress" in the negotiations on Brexit, and just a few hours later, the European Union denied this statement. Now, Johnson's office said that he had a telephone conversation with European Commission President Juncker, during which the parties discussed their meeting on Monday and were "overwhelmed with determination to agree." I wonder when the refutation of this information from Jean-Claude Juncker himself will follow? The pound ignores this information as well. It seems that traders openly believe that all Johnson's plans will fail, Brexit will not be until October 31, the Parliament will return to its work in the coming week, and the Prime Minister will eventually resign.
What to expect from the pound/dollar currency pair today?
The pound/dollar pair continues to "push" near the retracement level of 38.2% (1.2501). Thus, I expect the pound/dollar pair to close above this level, which will allow traders to expect further growth towards the next Fibo level of 50.0% (1.2668). However, until then, I recommend not to rush with purchases of pounds. The UK retail sales report for August will be released today in Britain, but the chances that traders will ignore this data are also large.
The Fibo grid is based on the extremes of March 13, 2019, and September 3, 2019.
Forecast for GBP/USD and trading recommendations:
I recommend buying the pair with a target of 1.2668 and a stop-loss order below the level of 1.2501 if a close above the Fibo level of 38.2% is performed.
You can stay in small (or even scanty) sales of the pair with a target of 1.2308, since 3 rebounds from the level of 1.2501 were made and a bearish divergence was formed (there are still some chances of falling), with a stop-loss order above Fibo level of 38.2%.The material has been provided by InstaForex Company - www.instaforex.com.
As soon as the results of the meeting of the Federal Committee on Open Market Operations were announced, countless speculators immediately began to open the champagne. After all, they had something to celebrate since the Federal Reserve System could not stand the pressure exerted on it and agreed to these wonderful and deeply self-respected people, lowering the refinancing rate from 2.25% to 2.00%. Even Donald Trump praised Jerome Powell for the right decision made for the good of the United States of America. But before they had time to pour everything into glasses, they had to urgently pour champagne back and cork the bottles. The cause of universal sadness lies in the words of Jerome Powell as he made it clear during his press conference that the decision was not made under the influence of cries of an impending recession, as well as screaming about the difficulties in the markets, which could spread to the real sector of the economy, the reason for the next easing of monetary policy was exclusively external factors. Of course, Jerome Powell did not indicate exactly what external factors are meant, but it is clear that we are talking about a trade conflict with China and further easing the monetary policy of the European Central Bank. In addition, Jerome Powell added that there are simply no internal reasons for lowering the refinancing rate. No recession is expected as indicated by macroeconomic statistics. In other words, everyone was asked to calm down and stop fanning the tantrum about the recession, which, however, has already been shifted from 2020 to 2021. Simply put, speculators will now have to invent a new reason for putting pressure on the Federal Reserve, which is why it is not surprising to the market. In fact, everything fell into place because no one understands what they are now grabbing at.
Today, all attention will be focused on the UK, where the meeting of the Board of the Bank of England will take place, which again must keep all the parameters of its monetary policy unchanged. It is clear that until this issue with Brexit is completed, the Bank of England will continue to pose like an ostrich. Of course, against the background of the actions of the European Central Bank, as well as the Federal Reserve System, the behavior of the Bank of England looks like a vivid example of stability; True, bordering on cowardice. At first glance, it may seem that, after the US lowered its refinancing rate and Europe's deposit rate, keeping the Bank of England's refinancing rate should have a beneficial effect on the pound. But Mark Carney is taking a wait-and-see stance, ignoring not only the political circus, but also macroeconomic statistics, which, frankly, are unhappy. Today, retail data will be published, which should show a slowdown in growth from 3.3% to 2.9%. This is against the backdrop of a slowdown in inflation. So, investors may simply ignore the BoE's board meeting as it is already clear what to expect.
UK Retail Sales Growth:
Nevertheless, American statistics play a much larger role and it can render a disservice to the dollar today. So, the total number of applications for unemployment benefits should increase by 12 thousand. In particular, the number of initial applications for unemployment benefits may grow by 5 thousand, and repeated applications by another 7 thousand. In addition, home sales in the secondary market should be reduced by 0.8%. Thus, come late in the evening, the dollar will be under pressure.
Secondary Home Sales (United States of America):
The euro/dollar currency pair showed a high amplitude of fluctuations over the past days, but as a result, nothing has changed. The quotation continued to fluctuate in a given range of 1.1000/1.1080. It is likely to assume that the fluctuation in the indicated frames will continue with temporary accumulation within the upper limit.
The GBP/USD currency pair passed into the accumulation stage with the boundaries of 1.2440/1.2500 after finding the resistance point at the level of 1.2500. It will likely preserve the current amplitude fluctuation with the analysis of price fixation points relative to existing boundaries.
The material has been provided by InstaForex Company - www.instaforex.com.
Over the past trading day, the pound / dollar currency pair showed a reduced volatility of 72 points. As a result, the quotation developed in a sluggish range. From the point of view of technical analysis, we see that the resistance level of 1.2500 continues to hold the quotation, where as a result, a sluggish fluctuation has formed within 1.2440 / 1.2500. A kind of slowdown came to us from the standpoint of the American dollar, where the pressure subsided to some extent, and variable uncertainty continued to persist in the English currency.
As discussed in the previous review, speculators worked in the recovery phase once again from the level of 1.2500, where expectations coincided almost 100%. The quotation went down to 1.2430-1.2450, and then stagnation with local bursts. There were no other actions on the part of the traders, since there was no special movement either. Considering the trading chart in general terms (the daily period), we see that the phase of elongated correction will still remain in the market, where a distinct stagnation is drawn at its peak. Whether the quotation can work out the level of 1.2500 in the downward direction, until there is a clear answer, it is worth observing the fluctuation and the incoming information. In terms of the main trend, there are no changes yet, it is downward.
The news background of the past day contained data on inflation in Britain, where, as expected, there was a slowdown from 2.1% to 1.7% with a forecast decrease to 1.8%. The pound has locally declined in price, just in the recovery phase of short positions. In the afternoon, data were released on the construction sector in the United States, where the volume of new home construction increased from 1.215M to 1.215M, and the number of issued building permits grew from 1.317M to 1.419M. How did the statistics affected the US dollar? In general, nothing, because of the expectation of a key event. The focus of all market participants was the meeting of the Federal Committee for Open Market Operations, where, as expected, the refinancing rate was reduced by 25 basis points, and now we have a range of 1.75-2%. As previously noted, the news was expected, and the attention of traders was focused on the subsequent press conference, where Fed Chairman Jerome Powell announced the decisions of the regulator. Thus, the decision to reduce the rate was made to maintain the pace of economic growth and insure against risks. At the same time, the head of the Fed emphasized that there is no recession in the United States, and basic economic forecasts remain favorable. In fact, Jerome Powell dispelled all the fears of experts, and as a result - no sharp fluctuations in the market occurred. and basic economic forecasts remain favorable.
The information background contained variable comments regarding Brexit once again. Therefore, during the plenary session of the European Parliament, the head of the European Commission, Jean-Claude Juncker, indicated that the risks of Britain leaving the EU without a ratified agreement on the conditions of this "divorce proceedings" remain. At the same plenary session, the European Parliament supported the postponement of Britain's exit from the European Union. So, Brussels obliges London to provide substantial grounds for a delay, while at the same time maintaining free movement on the Irish border, as well as fulfilling financial obligations to the European Union, even in the event of a hard exit.
In turn, the leader of the Labor Party, Jeremy Corbyn, said that his party would remain neutral if a second Brexit referendum were held.
"Only the Labor government could end the Brexit crisis by returning the decision on it back to the people. I, as the Prime Minister, undertake to fulfill everything that people decide in the vote, "Jeremy Corbyn told The Guardian.
Today, in terms of the economic calendar, we have data on retail sales in the UK, where they expect a slowdown from 3.3% to 2.9%, which will burn local pressure on the British currency. In the afternoon, a meeting of the Bank of England is scheduled with the announcement of the refinancing rate. You should not expect anything important from the meeting, since while the Brexit process is ongoing, the Bank of England will not take any action. A press conference as such is not planned, but it may not be possible to stop the head of the Central Bank, Mark Carney, where afterwards, he may well give his sharp comments.
11:00 Universal time UK - Interest Rate Decision (Sep): 0.75%
Analyzing the current trading chart, we see that the quote is in a clear phase of accumulation with conditional boundaries of 1.2440 / 1.2500, where the volatility has gone down. The accumulation process in this case is a good sign even in terms of the fact that the level of 1.2500 plays its original role of resistance. If we carefully analyze the coordinates of 1.2500, then we will see that at the end of last year and the beginning of the current (12.12.18-04.01.19), the level perfectly played the role of the stop range, which is happening now. Traders, in turn, are in no hurry to prematurely act, working within the existing 1.2440 / 1.2500 boundaries is hypothetically possible, which is what speculators do, but working on the basis of breakdown would be most beneficial.
It is likely to assume that the amplitude fluctuation within the 1.2440 / 1.2500 border with a deviation of 25 points is possible for some time, but most likely, it will not last long. The first thing that can happen is to expand the statutory framework, a more important decision is to resume the movement.
Based on the above information, we derive trading recommendations:
- We consider buying positions in the case of a clear price fixing higher than 1.2530, with the prospect of a move to 1.2550-1.2620.
- We consider selling positions in the case of a clear price fixing lower than 1.2430, with the prospect of a move to 1.2380-1.2350.
Analyzing a different sector of timeframes (TF), we see that indicators on all major time periods signal an upward interest. It is worth taking into account such a moment that the indicators in the short and intraday period are currently volatile due to the accumulation process, as I wrote above.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(September 19 was built taking into account the time of publication of the article)
The volatility of the current time is 23 points, which is an extremely low indicator for this time section. It is likely to assume that the accumulation process and the ongoing decrease in volatility will lead to another surge, and you should be prepared for this. Probably, a breakdown of accumulation will lead to a surge, coupled with an information and news background.
Resistance zones: 1.2500 **; 1.2620; 1.2770 **; 1.2880 (1.2865-1.2880) **.
Support areas: 1.2350 **; 1.2150 **; 1,2000 ***; 1.1700; 1.1475 **.
* Periodic level
** Range Level
*** The article is built on the principle of conducting a transaction, with daily adjustmentThe material has been provided by InstaForex Company - www.instaforex.com.
At the meeting that ended on Wednesday, the Fed reduced the target range by 0.25% to 1.75-2.00% in full accordance with forecasts and keeping macroeconomic forecasts for GDP, unemployment, and inflation virtually unchanged. The accompanying commentary also did not make any noticeable changes. Also, Powell did not reject the possibility of further reduction if there are prerequisites.
The reaction of the market was restrained and the lack of surprises played in favor of the dollar, which could even strengthen slightly after lowering the rate.
At the same time, not everything went so smoothly. With the final decision of the FOMC, 3 members of the Committee disagreed as Rosengren and Esther called for the rate to remain unchanged, while Bullard proposed a reduction of 0.5% immediately. Deviations from consensus on both sides indicate a growing split. Apparently, members of the Committee see different scenarios for the development of the situation. At a press conference, Jerome Powell said that there are 3 factors to monitor: political and trade uncertainty, global data (global PMI, output, and trade), and US inflation. Thus, the growth of the economy and the labor market are fading into the background and apparently, with a different assessment of this alignment, the split within the FOMC is connected.
What does the FOMC solution ultimately report to the markets? Only that unstable stability is still maintained. No comments that made the dollar go out of range; the dollar supports the lack of confirmation of further rate cuts. Most large banks in their morning reviews note that even the Fed's cautious stance does not negate expectations of further rate cuts. For example, DanskeBank suggests that by the beginning of 2020, the difference between the rate and root inflation will decrease to -1.0%. That is, by the end of the year, two more reductions are quite possible, in October and December.
Mizuho points out that Powell's references to a healthy labor market and sustainable consumer demand are erroneous because the Fed was too aggressive in tightening in 2015-2018 and expects long-term US rates to fall.
Nordea sees some oddity in the fact that the Fed has not yet created a permanent repo mechanism in the face of changes in monetary policy. As a result, the repo rate reached 10% in the face of a high level of bank reserves in the Fed and reduced the rate of excess reserves by 30 p. However, should the situation be somehow corrected, Powell hinted at the termination of QT, that is, the rejection of the policy of reducing the balance at the next meeting in October should prevent a further fall in excess reserves. However, according to Nordea, the main danger is that the US economy will fall faster than predicted Fed.
Thus, the markets are gradually forming the opinion that the Fed will be forced to act much more aggressively in the near future. Trends will contribute to the growth of panic; Investors withdrawing from safe assets and growing demand for protective ones. This means that after a pause, gold will resume its growth. Meanwhile, the oil will not be able to move to $ 100 per barrel, as many predicted after the attack on Saudi refineries, and stock markets make their last attempt to stay on the growth path.
Low inflation in the eurozone will not allow the euro to go up against the backdrop of a weak dollar after the Fed meeting, as it strengthens the chances that the ECB will expand the stimulus program in the near future.
The EUR/USD trading range is narrowing with the resistance at 1.1080. It is more likely to decline to 1.0990 with the subsequent movement to 1.0925.
GBP / USD pair
The basic consumer price index rose in August by just 1.5%, which is noticeably worse than forecasted. The Bank of England is in a difficult situation before today's meeting. Obviously, we won't see a reduction in the rate and the upward momentum is close to exhaustion. According to the results of the day, updating the maximum of 1.2526 is hardly possible but the chances of a corrective downward movement have increased.
At the end of the week, it is likely that the pound will decline to support 1.2391 and beyond.The material has been provided by InstaForex Company - www.instaforex.com.
EUR / USD
Wednesday, September 18, ended for the EUR / USD pair with a decrease of 40 basis points. Thus, the general conclusions on wave marking remain the same. Wave 3 or C is completed. The first two waves in the new upward trend section or wave 4 are also completed. In any case, I expect the construction of another rising wave 3 or with goals located above the 11th figure. On the other hand, great expectations of the forex market were associated with the news background on Wednesday. At first, the release of an important report on inflation in the European Union was expected, but the report's values frankly disappointing. No, inflation in the EU did not slow down even more, just predicted and real values coincided, which did not give grounds for the markets to somehow "react" to the report. Well, in the evening, the results of the two afternoon Fed meeting were expected, which, if they did not disappoint, did not fully satisfy the market's expectations. The Fed lowered its base rate by 25 basis points, and Jerome Powell did not say anything interesting at a press conference. Absolutely "passing" meeting of the Fed.
For the euro-dollar pair, Thursday will be much more boring than Wednesday. The news background on September 19 will be practically "zero". Thus, I do not expect major changes and high amplitudes today. The wave pattern still involves the construction of an upward trend section. At a minimum, 100 points up the tool should master. This is exactly what I expect in the coming days, even if the news background remains "zero". A successful attempt to break through the minimum of the alleged wave 2 or b will force us to take a different look at the wave pattern, which will require changes and adjustments.
1.1128 - 61.8% Fibonacci
1.1175 - 76.4% Fibonacci
1.0927 - 0.0% Fibonacci
General conclusions and recommendations:
The euro-dollar pair allegedly completed the construction of a bearish wave 3 or C, as well as wave 2 or b as part of a new trend section, which originates on September 12. If this is true, then the pair expects a continued increase in quotations. I recommend buying a pair with goals near the calculated levels of 1.1128 and 1.1175. Also, I still expect the construction of the third upward wave. A breakthrough of the minimum of September 17 will cancel the execution of this option.
GBP / USD
On September 18, the GBP / USD pair lost 30 basis points but generally continues to build the upward trend section within the framework of the expected wave c . The consumer price index in the UK in August unexpectedly for many decline to 1.7% y / y, but this report did not cause a wave of sales of the British currency. The markets showed amazing resistance to negativity from Britain, showing that Brexit is now more important, which already resembles a Mexican or Argentine series. Thus, we can say that the news background for the pound remains moderately positive and wave c has real chances to continue building. However, not everything is so simple, and the prospects for the pound remain fragile and precarious.
On Thursday, October 19, the GBP / USD pair will pay attention to the economic report on retail sales in the UK in August.
In recent months, retail sales have shown very good dynamics, increasing by 4-5% compared with the values a year earlier. However, in August, a slight decline could occur, and the value may be 2.8% y / y, which is not critical. The pound-dollar instrument may not even notice this report, just as it did not notice much lower inflation yesterday.
Well, you can not ignore the meeting of the Bank of England, The results of which will become known this afternoon. Although no major changes in the monetary policy of the country, which has been unable to leave the EU for three years, are expected by the markets; nevertheless, the accompanying statement may contain interesting information. For example, about economic forecasts.
1.2016 - 0.0% Fibonacci
1.2489 - 61.8% Fibonacci
1.2602 - 76.4% Fibonacci
General conclusions and recommendations:
The upward trend section continues its construction. Thus, quotes are now expected to increase with targets located near the estimated levels of 1.2489 and 1.2602, which corresponds to 61.8% and 76.4% Fibonacci. Wave c can still complete its construction in the near future, even today, if the news background contributes to this. Thus, I recommend buying a pair in case of a successful attempt to break through the 61.8% Fibonacci level, which is not yet available.The material has been provided by InstaForex Company - www.instaforex.com.
Jerome Powell really surprised everyone, somewhat entering the market into confusion and stupor. On the one hand, the Federal Committee for Open Market Operations has decided to lower the refinancing rate from 2.25% to 2.00%, so to speak, meeting the expectations of an innumerable army of exchange speculators. For them, the cost of funding is now slightly reduced. However, this decision itself did not lead to any large-scale movements, since it coincided with most forecasts and expectations. Thus, the market began to wait for Jerome Powell to speak. But the head of the Federal Reserve System during his press conference, in fact, knocked out the feet of all those who advocate easing monetary policy, as he said that the reasons for lowering the refinancing rate are purely external and the state of the American economy is not a concern. Moreover, he added that the Federal Reserve does not see any signs of a recession. In other words, the current decrease in the refinancing rate is caused solely by a further aggravation of the trade conflict with China, as well as by the actions of the European Central Bank. At the same time, one should not expect more easing of monetary policy, since the regulator took into account external factors, but there are simply no internal ones.
In the light of such decisions of the Federal Reserve System, today's meeting of the Board of the Bank of England is of particular interest. It is clear that until Brexit is finally done, Mark Carney will not touch the refinancing rate with his finger, as well as the other parameters of monetary policy. To some extent, this is a good indicator of stability, but bordering on cowardice. However, since both the European Central Bank and the Federal Reserve are lowering their rates, the preservation of the Bank of England monetary policy parameters looks like a positive factor for the pound. True, the pound is pressed not only by political factors in the form of an endless political impasse in the United Kingdom, but also by macroeconomic statistics, which are not particularly encouraging. In particular, data on retail sales will be published today. The growth rate of which should slow down from 3.3% to 2.9%. Thus, the positive from the decision of the Bank of England will obviously be limited and short.
Retail Sales Growth Rate (UK):
The GBP / USD pair found the resistance level in the region of 1.2500 once again, where the quotation worked out and, as a fact, a minor pullback. The development of quotes in the phase of elongated correction has led us to a gradual slowdown, which we now see on the trading chart. Accumulation within 1.2440 / 1.2500 significantly reduced volatility and, as a fact, leaving traders out of the market. Considering the trading chart in general terms, we see that the corrective move is maintained on the market with a resistance point in the face of the level of 1.2500. Meanwhile, a change in the global trend is not currently observed.
It is likely to assume that the amplitude fluctuation within 1.2440 / 1.2500 (+/- 20p.) will still continue for some time, where it is possible to work inside the boundaries, but there is not much point in this. Thus, the breakdown tactics in this case is a priority.
We concretize all of the above into trading signals:
From the point of view of a comprehensive indicator analysis, we see that indicators at minute intervals took a neutral position. On the other hand, intraday and medium-term periods reflect a corrective move - upward interest.
The material has been provided by InstaForex Company - www.instaforex.com.
Yesterday's decision of the Federal Reserve on interest rates was quite expected, which did not lead to significant volatility in the market and a serious weakening of the US dollar against several world currencies. The fact that the Fed refused to resume the bond repurchase program, saying that it would resort to REPO operations only if necessary, and allowed the US dollar to hold positions against the euro and the pound.
According to yesterday's decision, the Fed set the range of interest rates on federal funds between 1.75% and 2.00%. The Fed also lowered the discount rate by 0.25% points to 2.50%.
The committee said that they left the door open for further downgrades, but this would be done if necessary. The federal funds rate is expected to average 1.9% at the end of 2019 and 1.9% at the end of 2020. By the end of 2021, economists forecast the interest rate at 2.1%, and in the long term at 2.5%.
Despite the reduction in rates, serious disagreements arose among Fed leaders regarding the further course of rates. Of the 17 committee members, 7 expected another decline this year, while another 10 opposed such measures. At the same time, a split was also observed in this "ten", where several leaders opposed yesterday's lowering of interest rates.
During a press conference, the Fed chairman said that rates were lowered to hedge against the background of continuing risks, as investment and exports weakened amid uncertainty about trade policy, and the slowdown in global economic growth harms the US economy.
Despite this, Powell expects the economy to grow at a moderate pace as household spending remains strong, as does the labor market. The only concern is inflation, the level of which is far from the target value.
The head of the Fed also said that if the situation worsens in the economy, a long series of rate cuts would be appropriate. Also, the committee will not hesitate to use the tools to counteract the pressure on the money market in the future. We are talking about recent repurchase transactions from the New York Fed, which poured more than $100 billion into the economy in two days to maintain liquidity.
Jerome Powell also noted that low-interest rates abroad are a sign of weak global economic growth, and they are also putting pressure on US rates
As for other fundamental data, which were published yesterday, the attention was drawn only to the report on the pace of housing construction in the United States, which in August rose to the highest since June 2007.
According to the Ministry of Commerce, the number of new home mortgages in August increased by 12.3% compared to the previous month and amounted to 1.364 million per year. Economists had expected the number of bookmarks last month to show a growth of 4.1% to 1.24 million a year.
From a technical point of view, after yesterday's decision of the Fed, nothing serious happened in the market. Only a breakthrough of the maximum in the area of 1.1080 will cause larger purchases of the trading instrument, which will lead to an update of the levels of 1.1110 (last week's maximum) and 1.1150. In the scenario of EURUSD decline, the support will be at the level of 1.0990, and larger areas are already located at the lows of this month in the areas of 1.10950 and 1.0920.The material has been provided by InstaForex Company - www.instaforex.com.
EURUSD is approaching our first support level.
Why it's good : 23.6% Fibonacci retracement, horizontal overlap support
Stop Loss : 1.10365
Why it's good : 38.2% Fibonacci retracement
Take Profit : 1.11049
Why it's good: 100% Fibonacci extension, horizontal swing high resistance
The material has been provided by InstaForex Company - www.instaforex.com.
NZDUSD drop in progress below resistance
Why it's good : Horizontal graphical resistance, 38.2% Fibonacci retracement
Take Profit : 0.6270Why it's good: 61.8% and 100% Fibonacci extension, Horizontal swing lowStop Loss: 0.63315Why it's good:
Horizontal graphical overlap
The material has been provided by InstaForex Company - www.instaforex.com.