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.
The Japanese multinational corporation Sony Corp. announced the launch of the largest share repurchase program (buyback) in the history of the company in the amount of 100 billion yen ($ 910 million).
Last year, the company did not make major purchases of its own shares. The current buyback started on Tuesday, February 5, and will run until March 22. The program will affect approximately 2.2% of the company's outstanding securities.
Last week, Sony published a quarterly financial report, which reported a decrease in revenue and worsened the annual forecast for this indicator, as a result, the company's capitalization dropped sharply by 8.1%.
After the announcement of the buyback value of the shares of Sony Corp. on the Tokyo Stock Exchange rose 4.10% to 4.906 yen.The material has been provided by InstaForex Company - www.instaforex.com.
To open long positions on EUR / USD pair, you need:
Euro buyers returned to the market after good reports in Germany, where the balance of foreign trade increased and the industrial output increased in Italy. At the moment, the main task is to fix above the resistance level of 1.1343, which will lead to a larger upward correction in the area of 1.1366 and 1.1394, where I recommend to fix the profit. In the case of a re-decline of the euro to the support of 1.1322, long positions are best considered on a false breakdown and you can buy the EUR/USD pair for a rebound from a minimum of 1.1292.
To open short positions on EUR / USD pair, you need:
In the morning, sellers did not have enough in the market to resume the downward trend. Short positions in the second half of the day can be seen at the rebound from the resistance of 1.1366 or from a new high in the area of 1.1394, where euro buyers will take profits. The main task of the bears by the end of the week is to sustain trading below the resistance level of 1.1343, which will make it possible to count on a further decline in the EUR/USD pair.
More in the video forecast for February 8
Trade is conducted in the area of 30- and 50-medium moving, which indicates the formation of the lateral nature of the market.
The volatility of the Bollinger Bands indicator falls, which does not give signals on market entry, and a breakthrough of the upper border in the area of 1.1355 may lead to a larger growth of the European currency.
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 20The material has been provided by InstaForex Company - www.instaforex.com.
To open long positions on GBP / USD, you need:
Pound buyers coped well with the support level of 1.2922, which I paid attention to in my morning forecast, which is expected, led to the continuation of the formation of an upward correction. The main goal for the second half of the day will be the test of the resistance level of 1.2993, a breakthrough of which will lead to a new maximum in the area of 1.3048, where I recommend fixing the profits. In the case of a decline in GBP / USD, you can still count on purchases from support at 1.2922.
To open short positions on GBP / USD, you need:
Only bad news on Brexit can put pressure on the pound. Sellers are required to return to the support level of 1.2922, which will lead to a larger sale of GBP / USD with a test of 1.2860, where I recommend fixing the profits. In the case of a further upward correction, you can take a closer look at short positions in the false breakdown around 1.2993 or sell a pound to rebound from a high of 1.3048.
Trade is conducted in the area of 30-day and 50-day moving, indicating a continuation of the upward correction on the pound.
Bollinger Bands indicator volatility is very low. A break of the upper border around 1.2975 will lead to a larger increase in the pound.
Description of indicators
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.
A further bullish advance was expected towards the price level of 1.1550 where the upper limit of both depicted channels (RED & BLUE) was located.
However, the EUR/USD pair has lost its bullish momentum since January 31 when a bearish engulfing candlestick was demonstrated around 1.1514 where another descending high was established then.
Hence, the current bearish closure below 1.1420 terminates the current bullish movement (initiated on January 25) allowing another bearish visit towards 1.1350 and 1.1300.
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.
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 1.2920-1.2950 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 1.2920-1.2950. This would enhance a quick bullish visit towards 1.3000 and 1.3150.
Conservative traders should consider the current bearish pullback towards 1.2940-1.2920 (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 1.2900 invalidates this scenario.The material has been provided by InstaForex Company - www.instaforex.com.
The European currency cannot get out of the tangle of fundamental problems. At the beginning of this year, almost all macroeconomic indicators of the eurozone disappointed. Germany's consumer price index, data on the growth of GDP in Italy, France, and the entire eurozone, all of these indicators were in the "red zone", showing a negative trend.
Against this background, the euro-dollar pair did not keep within the 14th figure, and gradually approaches the borders of the 12th level. The price has consistently declined for more than a week after the EUR / USD bulls have updated their annual maximum at around 1.1502. Despite the ambiguous dynamics of the dollar index, the pair bears still have a common advantage, although the downward movement is not of an impulsive nature.
The latest blow to the euro was yesterday's report by the European Commission, in which a new outlook for economic growth in the eurozone was published. Its essence boils down to a disappointing conclusion: "everything is bad, and it will be even worse." Thus, according to the EC, this year the eurozone economy will increase by only 1.3%, and next year, by 1.6%. For comparison: last fall, the European Commission had a completely different opinion, an increase of 1.9% in 2019 and two percent in 2020.
There are several reasons for such a radical revision of forecasts, but all of them are somehow connected with China. According to the EC, the slowdown of the economy of the Middle Kingdom will lead to a slowdown of the global economy, and the trade war between the United States and China will only aggravate the situation. Also, Brussels actually admitted that it doubted the successful outcome of trade negotiations between Beijing and Washington. Judging by the report of the EC, this factor is associated with the main risks that influenced such negative forecasts.
It is noteworthy that the report of the European Commission was the most pessimistic, compared with similar forecasts, which were published earlier by other financial structures. For example, according to the International Monetary Fund, the EU economy will grow by 1.6% this year. According to the European Central Bank, by 1.7%.
If we look at the structure of the published report, we can make an obvious conclusion: economic growth will slow down to some degree in all EU countries. In this context, Germany, the "locomotive of Europe", is of primary interest. The European Commission lowered the forecast for German GDP growth to 1.1%, whereas previously this figure was at around 1.8%.
It is worth recalling here that at the end of January, the German Ministry of Economy reported that the forecast for the growth of the national economy this year was lowered to 1%. This is a significant revision, as the Germans previously hoped to grow to 1.8%. In other words, here the estimates of the European Commission and the German government almost coincide. And this is a very sad fact since it is very likely that the German economy will pull European-wide indicators behind it, especially against the background of a slowdown in the rest of the eurozone countries. In particular, the growth forecast for the Italian economy was immediately reduced by one percentage, that is, from 1.2% to 0.2%.
This means that, in addition to economic problems, we should expect political ones, when at the end of this year, Italy will impose its budget for 2020. Last year, Brussels and Rome were able to find a compromise, but this was preceded by months-long political battles that put background pressure on the euro. With a high degree of probability, this year this situation may recur, and it is far from a fact that it will end with a happy ending.
Thus, the report of the European Commission once again reminded traders that the key to tightening the monetary policy of the ECB is in China. This simple fact enhances the role of the negotiation process between Beijing and Washington, because the outcome of the global economy, with all the ensuing consequences, depends on their outcome.
To the dismay of the EUR / USD bulls, the anxiety about the success of the US-China dialogue only increases. For example, Donald Trump today surprised traders by not meeting with PRC Chairman Xi Jinping, at least until the negotiation deadline, which is set to be on March 1. This statement is indeed somewhat puzzling. The fact is that he recently said that in order to conclude a trade transaction, he needed to meet with the Chinese leader in order to "discuss some difficult issues." Taking into account the latest statements of Trump, the market once again spread rumors that the negotiation process is "stalling," and the trade war could flare up with a new force in the spring.
Despite such a "bunch" of negative fundamental factors, the bears of the pair will not easily overcome the important support level of 1.1305 (the bottom line of the Bollinger Bands indicator on the daily chart). Overcoming this target will open the way to the 12th figure, but for such a price movement a strong news impulse is needed.The material has been provided by InstaForex Company - www.instaforex.com.
Today, the single European currency continues to develop a "bearish" momentum, declining against the dollar for the past five trading days in a row.
Another portion of negative news for the euro on the eve came from the European Commission, which worsened the forecast for 2019 for GDP growth in the currency bloc from 1.9% to 1.3%. In particular, the estimate for the German economy was lowered by 0.7%, from 1.8% to 1.1%.
In addition, yesterday the ECB reiterated that the risks associated with growth prospects in the eurozone shifted to a downward trend.
"The incoming data turned out to be weaker than expected, reflecting a decrease in the contribution of external demand and some country and industry factors," representatives of the financial institution said.
Rumors about the lack of progress in trade negotiations between the US and the Middle Kingdom have added fuel to the fire, which was another blow to the euro.
According to Larry Kudlow, chief economic adviser to the American president, Washington, and Beijing are still far from concluding a deal. It also appeared that Donald Trump does not intend to meet with Chinese leader Xi Jinping before March 1.
It should be noted that it was trading wars that reduced external demand and served as one of the reasons for the slowdown in European GDP last year.
Therefore, it is not surprising that in the current situation, the euro continues to suffer losses, and the dollar feels great.
Despite the fact that the Fed probably paused the process of raising interest rates this year, greenbacks still seem more attractive to traders than other currencies.
"Paradoxically, but a fact: the dollar is growing even in the face of falling yields on US bonds. If the market again starts laying the price increase later this year, and the yield on 10-year-old treasuries goes up, it will support another wave of the dollar rally," said Win Thin, senior currency strategist at Brown Brothers Harriman.
If we proceed from the fact that the prospects for the European economy are really so bad, and trade wars will resume with a new force, then the EUR / USD route to the south is assured.The material has been provided by InstaForex Company - www.instaforex.com.
The US dollar punished its critics for arrogance, soaring to the maximum level against the euro since the end of January. It was then that Mario Draghi puzzled the EUR/USD "bulls" with a message about conversations inside the Governing Council about the launch of LTRO. Then, the pair began to buy back in the hope of exhaustion of such growth drivers of the "American" amid divergences in monetary policy and economic growth, as well as trade wars. Further events showed that selling the dollar was too early.
If based on the results of 2018, the EUR/USD pair fell by more than 5% due to the aggressive monetary restriction of the Fed, accelerated under the influence of the fiscal stimulus of US GDP growth and demand for safe-haven assets during trade wars. In 2019 Reuters experts painted a different. The Federal Reserve will pause for a long time and the US economy will slow down under the influence of the fading effect of tax reform and the government's shutdown while Beijing and Washington will agree. As a result, the euro will end the year at $1.2 according to a median forecast of more than a hundred specialists. The problem is that the main pair can move as you like until December, including proset to 1.1-1.12. Some investors rushed to get rid of dollars in January and they were punished.
There are always two currencies in any pair and if the "American" lost last year's Trump cards, then this does not mean that he will fall. The euro looks weaker than before and the EU predicts a slowdown in GDP growth in the eurozone to 1.3% in 2019 compared with the Fed's expected expansion of the US economy by 2-2.5%. this figure casts doubt on the ability of the bulls to restore an upward trend in EUR/USD. Let the Fed stand on the sidelines but if the ECB starts to expand incentives through the long-term refinancing program, the euro will definitely go down.
Change in GDP forecasts for the eurozone countries
There is no certainty that the trade negotiations between Washington and Beijing will be complete safely. Advisor to the President, Larry Kudlow, said that the parties are far from agreement, and Donald Trump does not plan to meet with Xi Jinping before March 1. Let me remind you that from March 2, the United States will increase the tariff on $ 200 billion to Chinese imports from 10% to 25% and earlier, the White House owner argued that the agreement could be signed only by the presidents. In addition, having dealt with China, there are fears that the US will take on the European Union, which will be even more painful for European exports.
Yet to sprinkle ashes on your head with the bulls on EUR / USD is not worth it. Surely, in the near future, American macroeconomic statistics under the influence of bad weather and government shutdowns will begin to deteriorate, which again will return to the markets talk of a recession and the need to reduce the federal funds rate.
Technically, the consolidation of EUR/USD pair in the range of 1.1265-1.1485 continues. The breakthrough of support levels at 1.129 and 1.1265 triggers the "Perfect Butterfly" pattern with a target of 127.2%. To save intrigue "bulls", it must return quotes above 1.1355.
EUR / USD daily chartThe material has been provided by InstaForex Company - www.instaforex.com.
The crypto market has been struggling for gains. Bitcoin being the flagship of the whole market of cryptocurrencies is struggling below $3500 area. According to Binance CEO, to make the crypto industry grow ETF's cannot be the core.
Recently Bitcoin mining has become more decentralized and diversified which may determine the upcoming momentum of the most popular crypto currency in the coming days. As for the technical view, the price pushed higher impulsively after breaking above the Trend Line resistance above $3,400. The price is expected to extend a rally higher towards $3,500 and later towards $3,600 in the coming days. The dynamic level of 20 EMA is also being broken above by the current price formation which also signals the strength of the bulls at the moment. As the price remains above $3,360 with a daily close, the bullish pressure is expected to continue.
SUPPORT: 3,000, 3,250, 3,360
RESISTANCE: 3,500, 3,600, 4,000
The material has been provided by InstaForex Company - www.instaforex.com.
EUR/GBP is currently trading lower after a pullback towards 0.8800 area recently. The slowdown of the eurozone's growth is expected to impact further EUR gains versus GBP that might lead to certain bearish pressure in the pair.
Citing ECB board member Benoit Coeure, the eurozone's economic slowdown may be longer and deeper than expected but it is not clear yet that the currency bloc has entered a lasting downturn. Obviously, the slowdown is going to disrupt EUR gains in the medium term. Yesterday the European Commission cut the economic forecast of 2019 to 1.3% from 1.9% in the previous forecast which derived the market sentiment away from EUR, leading to stronger GBP gains.
On the other hand, Bank of England Governor Mark Carney warned about certain tensions emerging in the UK economy which is called as "Fog of BREXIT". This condition is expected to cause short-term volatility in UK economic data and may also affect businesses and consumer spending. This week the Bank of England decided to maintain the key policy rate unchanged at 0.75%, which helped the currency to gain certain momentum.
Meanwhile, EUR has been hurt by fresh evidence of an economic slowdown, whereas GBP is also trading under pressure from the BREXIT uncertainty which indicates certain indecision and correction in the coming days. To sum up, GBP is expected to gain certain momentum over EUR.
Now let us look at the technical view. The price is currently trading lower under certain impulsive bearish pressure which is expected to lead the price towards 0.8600 area in the coming days. The price is also being held by the dynamic level of 20 EMA as resistance which is expected to lead to further bearish momentum. As the price remains below 0.8850 area, the bearish bias is expected to continue.
SUPPORT: 0.8600, 0.8700-25
RESISTANCE: 0.8800-50, 0.90
The material has been provided by InstaForex Company - www.instaforex.com.
The GBP/USD pair has been trading upwards. We found strong impulsive upward move followed by the breakout of the bullish flag pattern, which is sign that buyers are in control and that upward movement is expected. The price is trading above the Ichimoku and kijun-tenkan sen lines, which is another sign of the strength.Short-term support is placed at 1.2920 and short-term resistance at 1.2995.
Trading recommendation: We are long on the GBP/USD pair from 1.2960. Targets are set at the price of 1.2995 and 1.3065. Protective stop is placed at 1.2915.The material has been provided by InstaForex Company - www.instaforex.com.
USD has been the dominant currency in the pair while CHF struggled to maintain the bearish momentum after the price broke above 0.9850 with a daily close. The US FED has been pleased about the recent economic growth in the US that enabled USD to dominate CHF.
Recently Switzerland's Foreign Currency Reserves report showed an increase to 741B from the previous figure of 729B. The positive Foreign Reserve report helped the currency to gain momentum against USD leading to certain correction in the pair. Recently US bank Goldman Sachs is holding talks with the Swiss Market watchdog over possible entering the country's mortgage market. If this step is accepted, the Swiss economy may turn quite volatile for several months.
On the USD side, today FED President of St. Louis Mr. James Bullard stated that the FED is currently trying to tame inflation downward as the inflation target has been already met, but higher inflation than this may affect the economy in the future. Moreover, recently US Unemployment Claims report was published with a decrease to 234k from the previous figure of 253k which unfortunately could not meet the expectation of decreasing to 220k. Ahead of Federal Reserve Chairman Powell's testimony on the state of the economy on 26th February, USD is expected to trade with higher volatility with the gains in the coming days.
Meanwhile, CHF managed to gain certain momentum over USD, blocking the impulsive bullish pressure established recently in the pair. CHF is expected to keep momentum.
Now let us look at the technical view. The price has formed Bearish Divergence recently while sitting at the edge of 1.00 area from where the price is expected to push lower towards 0.9850 support area in the coming days. As the price remains below 1.0050 resistance area with a daily close, the bearish pressure is expected to push lower in the coming days.
SUPPORT: 0.9850, 0.9950
The material has been provided by InstaForex Company - www.instaforex.com.
Gold has been trading upwards. The price tested the level of $1.310.00. I found that price finally made a break of the downward channel in the background, which is a sign that there is potential change in trend dynamic from bearish to bullish. Also, I found that a breakout of the intraday bullish flag pattern, which is another confirmation of strength. Short-term resistance is set at $1.315.90 and short-term support is set at $1.307.00.
Trading recommendation: We are long on Gold from $1.310.00 and targets at $1.315.90 and $1.322.50. Protective stop is placed at $1.301.00.The material has been provided by InstaForex Company - www.instaforex.com.
Our second scenario from yesterday came into the play. Bitcoin did a successful breakout of the resistance at the price of $3.434 and the supply trendline (white line) in the background, which is a sign that buyers took control from sellers. Intraday support is set at the price of $3.425.
Trading recommendation: We are bullish on Bitcoin from $3.450 with the profit target at $3.541. Protective stop is placed at $3.390.The material has been provided by InstaForex Company - www.instaforex.com.
Today, the February option contract will expire, implying an increase in volatility in the American session. This fact may accelerate the implementation of the descending priority model. Yesterday, there was a consolidation below the weekly CZ of 0.6798-0.6784. The next downward target is 1/2 CZ of 0.6714-0.6707. Reaching this zone will allow fixing the rests of sales. This must be done due to the fact that the pair has gone beyond the weekly average move.
A Downward movement at this stage is an impulse, hence, any growth must be perceived as a correction. This will allow you to find better prices for repeat sales of the tool.
An alternative model will be developed if the pair starts to grow from current levels. The main resistance will be at 1/2 CZ of 0.6806 - 0.6799. As long as the pair is trading below this zone, the probability of updating the local minima will be more than 70%. Achieving this zone will provide the most favorable prices for the sale of the instrument. Breakdown and consolidation above the level of 0.6806 will complete the downward impulse and indicate a change of priority.
Daily CZ - daily control zone. The area formed by important data from the futures market that change several times a year.
Weekly CZ - weekly control zone. The area formed by marks from important futures market which change 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.
The USD/CHF pair continues to move upwards from the level of 1.0003. Today, the first support level is currently seen at 1.0003, the price is moving in a bullish channel now. Furthermore, the price has been set above the strong support at the level of 0.9982, which coincides with the 50% Fibonacci retracement level. This support has been rejected three times confirming the veracity of an uptrend.
According to the previous events, we expect the USD/CHF pair to trade between 1.0003 and 1.0067. So, the support stands at 1.0003, while daily resistance is found at 1.0067. Therefore, the market is likely to show signs of a bullish trend around the spot of 1.0003. In other words, buy orders are recommended above the spot of 1.0003 with the first target at the level of 1.0067; and continue towards 1.0103. However, if the USD/CHF pair fails to break through the resistance level of 1.0030 today, the market will decline further to 0.9908.The material has been provided by InstaForex Company - www.instaforex.com.
The NZD/USD pair breached resistance which had turned into strong support at the level of 0.6705 this week. The level of 0.6705 coincides with a golden ratio (61.8% of Fibonacci), which is expected to act as major support today. The RSI is considered to be overbought, because it is above 70. The RSI is still signaling that the trend is upward as it is still strong above the moving average (100). Besides, note that the pivot point is seen at the point of 0.6882. This suggests that the pair will probably go up in the coming hours. Accordingly, the market is likely to show signs of a bullish trend. In other words, buy orders are recommended to be placed above 0.6800 with the first target at the level of 0.6882. From this point, the pair is likely to begin an ascending movement to the point of 0.6882 and further to the level of 0.6984. The level of 0.6984 will act as strong resistance. However, if there is a breakout at the support level of 0.6705, this scenario may become invalidated.The material has been provided by InstaForex Company - www.instaforex.com.
The vector of the dominant direction of the short-term trend of gold is directed upwards. The wave completes a larger ascending design, the preliminary target zone of which is in the region of $ 1400 / oz.
Medium scale graphics:
The rising wave of November 13 formed the final part (C) in the model of the older TF. After a breakthrough of powerful resistance, a rollback took place.
The descending section of the schedule of January 31 in the wave of the hourly scale formed an intermediate correction. The wave is nearing completion.
Forecast and recommendations:
The period of stabilization of the price of gold has not yet come. After the current pullback, a new round of price growth will soon follow, which supporters of the short-term trading style can take advantage of.
- 1375.0 / 1380.0
- 1300.0 / 1295.0
Explanations for the figures: The simplified wave analysis uses waves consisting of 3 parts (A – B – C). The analysis uses 3 consecutive scale graph. Each of them 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, the dotted - 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.
According to Bloomberg, citing the updated forecast of the European Commission (EC), this year the eurozone economy will grow only by 1.3%, not 1.9%, as previously reported. Recall that in the euro area includes 19 European countries, and their official currency is the euro.
In November last year, the EC forecast was more optimistic. He envisioned growth in both 2018 and 2019. In 2020, according to the forecast, the European authorities expected a rise of 1.7%, and at the moment, the estimate is adjusted to 1.6%.
Experts recorded a deterioration in expectations for 2019 with respect to the largest economies of the EU, Germany, France, and Italy. As for the Italian economy, the forecast for GDP growth was revised radically to 0.2% from the previous 1.2%.
The revision of the forecast in the direction of deterioration was affected by the increase in social tensions and political instability associated with the protests of the "yellow vests" in France and the problem of leaving the UK from the EU. Among other factors, the European Commission calls the problem with the budgets of a number of European countries and weak indicators in the automotive industry.
According to experts, the European economy is adversely affected by weak growth in world trade, as well as a slowdown in the PRC economy. This increases the risk of tightening the fiscal policy of the United States, and China's economic growth may decline further, analysts say. At the same time, the markets of developing countries remain vulnerable to global risks, emphasize the European Commission.The material has been provided by InstaForex Company - www.instaforex.com.
AUD / USD pair
The decline in prices for most commodities increases the pressure on the Australian currency, which was observed yesterday. Oil, copper, as well as, coffee and sugar fell by 2.48%, 0.36% and more than 1.0%, respectively. On both daily and the four-hour charts, the downward trend is fully maintained, which allow us to consider the option of fixing below the price channel line at 0.7043 as the main one. However, the reversal of the Marlin signal line on H4 can speak of a maturing correction. If it happens, it is unlikely that the price can go above the range of 0.7118 / 50, where the price consolidated in the 1st and 3rd decade of January.
After completion of the correction when it takes place, it is ideal to wait for the price on the downstream line of the price channel in the area of 0.6920.
The material has been provided by InstaForex Company - www.instaforex.com.
Analysts of the American company Pimco, one of the world's largest investors in the bond market, are advised to pay attention to currencies in emerging markets. They are sure that they should buy them, and not US dollars or euros.
Pimco believes that at the moment, there are many reasons to acquire the assets of emerging markets (EM). Experts consider them to be the most promising, despite warnings by analysts from some of the world's largest banks that growth in this sector may stop.
According to Geraldine Sandstrom, managing director of Pimco, support for securities from emerging markets is provided by such factors as a pause in the Fed raising interest rates, easing the trade conflict between Washington and Beijing, and measures aimed at stimulating the Chinese economy. The expert believes that a mutual agreement will emerge between the two leading economies of the world, and China's rational approach to stimulating the economy will accelerate the growth of the country in the second half of 2019. "The Fed will take a pause for several months. If the trade war ends, and Chinese incentives work, it will be good news for the whole world, especially for emerging markets," G. Sandstrom said.
However, most investors are pessimistic about China because of threats by US President Donald Trump to raise tariffs. At the same time, they are showing excessive and unsubstantiated optimism about the ability of Brazilian President Jair Bolsonaro to successfully carry out economic reforms in the country, notes G. Sandstrom. The Managing Director believes that an improvement in the business cycle in the semiconductor industry could serve as a growth driver for Asian stock markets. As for the Brazilian stock market, it may not justify the hopes of investors who are betting on a complete revision of the pension system. At the same time, dollar bonds in the Chinese real estate sector and stocks of companies in the consumer sphere of China look attractive, Mr. Sandstrom sums up.The material has been provided by InstaForex Company - www.instaforex.com.
It feels like Theresa May flew to Brussels for breakfast, as for them the hospitable Jean-Claude Juncker fed her. Of course, the head of the European Commission promised to make adjustments to the political declaration of intent, which outlines the common and rather vague contours of interaction between the European Union and the United Kingdom after Brexit, in order to take into account a number of concerns of the British parliament. However, expressing regret for extremely tight deadlines, he explained that he would be able to submit amendments to the declaration only after the same parliament adopts the version of the agreement already agreed by the countries of the European Union, to which Europe will not make any changes. Stressing that there can be no talk of changing the agreement. In other words, Theresa May is once again invited to take a word and accept the agreement, which does not suit the UK very much, in the hope that later the European Union will deign to supplement it with those items that will take into account the national interests of the United Kingdom. True, the words that the European Union is ready to expand the number of formulations for a political declaration so strongly inspiring market participants that everything else they had not heard according to the reaction.
Before the results of the intense meeting between Theresa May and Jean-Claude Juncker had a positive impact on the pound, Mark Carney made another attempt to weaken his position. Naturally, following the meeting of the Board of the Bank of England, the parameters of monetary policy remained unchanged, and everyone was looking forward to the speech of his head. The head of the regulator himself said that the risks associated with Brexit are extremely high, and so far there can be no question of raising the refinancing rate. Rather, we need to prepare for its possible reduction. Indeed, only with the most unfavorable developments and as if confirming the fears, the Bank of England once again lowered the forecast for economic growth rates, making it clear that it proceeds from the worst case scenario.
However, although the American statistics did not justify the forecasts, it showed quite good results. Thus, the total number of applications for unemployment benefits decreased by 61 thousand compared to the forecast of 90 thousand. In particular, the number of initial applications decreased by 19 thousand and not by 32 thousand.
Today, any serious data is expected to come out neither in Europe nor in the United States. Hence, the market has a reason to consolidate because it's too early to talk about correction since there are no special reasons for joy in either pound or single European currency. True, some kind of diversity can influence regular statements regarding Brexit as Theresa May will hold a number of more meetings in Brussels today. True, they are of a purely technical and formal nature, and it is unlikely that their results will greatly affect investor sentiment. Therefore, the single European currency will remain in the region of 1.1325 - 1.1350.
The pound will be around 1.2900 - 1.2975. Simply because the volatility of the pound is slightly higher than that of the single European currency.
The material has been provided by InstaForex Company - www.instaforex.com.
Wave counting analysis:
On Thursday, February 7, trading ended with a decline by another 40 basis points. Thus, the main option continues to be worked out, involving the construction of a downward wave 3 with targets located near the minimum of wave 1 and below. Wave 3 in its internal wave structure still does not look complete. After reducing to a minimum of wave 1, it will be necessary to understand whether the tool is ready to further reduce and build the impulse part of the trend, or the segment originating on January 10 is transformed into a three-wave structure with its completion around 13 or slightly lower. The development of a further trading strategy will depend on this.
1,1289 - 100.0% Fibonacci
1.1215 - 0.0% Fibonacci
1.1444 - 38.2% Fibonacci
1.1514 - 50.0% Fibonacci
General conclusions and trading recommendations:
The pair continues to build a downward wave of 3. So now I still recommend selling the EUR / USD instrument with targets located near the levels of 1.1289 and 1.1215, which corresponds to 100.0% and 0.0% Fibonacci. There are no prerequisites for changing the working version and the need to complement the current wave marking.The material has been provided by InstaForex Company - www.instaforex.com.
Yesterday's decision of the Bank of England led to a decrease in the pound, but then buyers returned to the market amid statements made following a meeting in Brussels by representatives of the UK and the EU.
As indicated in the minutes of the meeting of the Bank of England, in February, it was decided to maintain the key rate at the level of 0.75%. This decision was made at a ratio of votes of 9 to 0, that is, unanimously, which fully coincided with the expectations of economists.
Pressure on the pound was formed after the regulator revised its forecasts for economic growth rates. It is expected that UK GDP growth in the 4th quarter of 2018 will be at the level of 0.3%, and in the 1st quarter of 2019, it will slow to 0.2%.
A total of 2019, the Bank of England predicts UK GDP growth to 1.2%, from 1.7%, which was previously expected. For 2020, the Bank of England lowered its forecast for UK GDP growth to 1.5% from 1.7%.
The statement noted a sharper and more steady slowdown in global economic growth. One of the main reasons for the slowdown in the UK economy is the decline in global economic growth due to the tightening of central bank policies and trade tensions.
Despite all these factors, the English regulator still sees the need to raise the key interest rate in the coming years.
The British pound was supported by the UK and the EU. Following the meeting in Brussels, European Commission President Jean-Claude Juncker stated that he was open to adding language to the political declaration regarding the content of the terms of a future agreement. This suggests that the probability of extending the UK exit from the EU is very high. But one should not forget that the political declaration is only of an advisory nature, and it will not affect the vote in parliament.
May and Juncker will meet again this month.
The statements made by the Governor of the Bank of England during the press conference were mainly focused on the situation with Brexit. Mark Carney noted that the UK economy is not ready for Brexit without a transitional period, and Brexit without an agreement will only increase the risk of recession in the UK in the coming years.
As for the technical picture of the GBP / USD currency pair, the chart shows how buyers are trying to reverse the downward trend formed since the end of January of this year. Support is provided by the level of 1.2920, return under which can only increase pressure on the British pound. However, while trading is conducted over this range, one can count on a breakthrough of resistance at 1.2990, with access to fresh highs of 1.3050 and 1.3100.
Yesterday's data on the US labor market remained unaddressed by traders. According to a report by the US Department of Labor, the number of Americans who first applied for unemployment benefits has decreased. So, for the week from January 27 to February 2, the number of applications fell by 19,000 and totaled 234,000. Economists had expected that the number of applications last week would be 225,000.
Fed spokesman Robert Kaplan once again spoke yesterday, who reiterated that the Fed should be patient about rates. Kaplan also noted that fiscal stimulus, which supported the American economy last year, no longer brings the desired result, and new and effective tools to stimulate growth are currently required.
As for the technical picture of the EUR / USD currency pair, yesterday's profit taking was the first signal for the likely formation of an upward correction in the euro. However, to confirm this, buyers need to return and consolidate above the resistance of 1.1365, which will lead to a larger increase in risky assets in the area of highs of 1.1400 and 1.1435.The material has been provided by InstaForex Company - www.instaforex.com.
Wave counting analysis:
On February 7, the GBP / USD pair gained about 20 bp, which did not affect the current wave counting. Now, we can assume that on the eve, an internal correctional wave was built, consisting of 1 or a new downward trend section. this assumption is true, the decline in quotations will resume with targets located near the 50.0% Fibonacci level, after which I will expect to build a wave of 2 or and. Moreover, an unsuccessful attempt to break through the level of 50.0% will show the pair's corrective wave.
1.3216 - 0.0% Fibonacci (formal goal)
1.2827 - 50.0% Fibonacci
1.2734 - 61.8% Fibonacci
General conclusions and trading recommendations:
Wave pattern involves the construction of the first wave of the downward trend. Thus, I recommend selling the instrument with targets located near the estimated marks of 1.2827 and 1.2734, which corresponds to 50.0% and 61.8% in Fibonacci. On the other hand, news background is still not in favor of the pound sterling. Mark carney's speech is neither positive nor negative.The material has been provided by InstaForex Company - www.instaforex.com.