Daily Market Analytics and Trading Recommendations by Tifia Company
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USD/CHF: on the eve of the meeting of the National Bank of Switzerland
Current dynamics
12/12/2018
On Thursday, a regular meeting of the Swiss National Bank will be held on monetary policy issues. The decision on rates will be published at 08:30 (GMT).
Earlier in late September, the National Bank of Switzerland kept its negative interest rates unchanged: the deposit rate was at the level of -0.75%, the range for the 3-month LIBOR rate was between -1.25% and -0.25%. “The bank still considers a negative interest rate necessary and is ready to intervene in the foreign exchange market if the situation requires it”, the NBS said. According to the management of the NBS, the cost of the Swiss franc is still high. It is likely that rates will remain unchanged for much of the next year, while weaker economic data has come from Switzerland. Thus, GDP in the 3rd quarter decreased by -0.2% instead of the expected growth of + 0.4% and against growth of + 0.7% in the 2nd quarter. Other macro data also indicate a slowdown in the economy.
At 09:00 (GMT) the press conference of the NBS will start. The harsh rhetoric of the speech by the head of the NBS Thomas Jordan, will help strengthen the franc. The soft tone of the speech and the tendency to continue the extra soft monetary policy of the NBS will negatively affect the franc.
Support and Resistance Levels
The USD / CHF pair is trading at the beginning of the American session on Wednesday, near the strong short-term resistance level of 0.9960 (ЕМА200 on the 4-hour chart). Breakdown of this level will strengthen the upward trend prevailing above key support levels of 0.9875 (Fibonacci level 61.8% of the upward correction to the last global decline wave from December 2016 and from 1.0300), 0.9860 (ЕМА200 on the daily chart).
As long as USD / CHF is above these key support levels, a long-term uptrend persists and long positions are preferred.
An alternative decline scenario may develop after the breakdown of the support level of 0.9860 with the immediate goal at the support level of 0.9745 (ЕМА200 on the weekly chart and the Fibonacci level of 50%).
Support levels: 0.9935, 0.9915, 0.9875, 0.9860, 0.9745
Resistance Levels: 0.9960, 1.0010, 1.0060, 1.0110
Trading Scenarios
Buy Stop 0.9970. Stop Loss 0.9930. Take-Profit 1.0010, 1.0060, 1.0110
Sell Stop 0.9930. Stop Loss 0.9970. Take-Profit 0.9915, 0.9875, 0.9860, 0.9745, 0.9610, 0.9575
Current dynamics
12/12/2018
On Thursday, a regular meeting of the Swiss National Bank will be held on monetary policy issues. The decision on rates will be published at 08:30 (GMT).
Earlier in late September, the National Bank of Switzerland kept its negative interest rates unchanged: the deposit rate was at the level of -0.75%, the range for the 3-month LIBOR rate was between -1.25% and -0.25%. “The bank still considers a negative interest rate necessary and is ready to intervene in the foreign exchange market if the situation requires it”, the NBS said. According to the management of the NBS, the cost of the Swiss franc is still high. It is likely that rates will remain unchanged for much of the next year, while weaker economic data has come from Switzerland. Thus, GDP in the 3rd quarter decreased by -0.2% instead of the expected growth of + 0.4% and against growth of + 0.7% in the 2nd quarter. Other macro data also indicate a slowdown in the economy.
At 09:00 (GMT) the press conference of the NBS will start. The harsh rhetoric of the speech by the head of the NBS Thomas Jordan, will help strengthen the franc. The soft tone of the speech and the tendency to continue the extra soft monetary policy of the NBS will negatively affect the franc.
Support and Resistance Levels
The USD / CHF pair is trading at the beginning of the American session on Wednesday, near the strong short-term resistance level of 0.9960 (ЕМА200 on the 4-hour chart). Breakdown of this level will strengthen the upward trend prevailing above key support levels of 0.9875 (Fibonacci level 61.8% of the upward correction to the last global decline wave from December 2016 and from 1.0300), 0.9860 (ЕМА200 on the daily chart).
As long as USD / CHF is above these key support levels, a long-term uptrend persists and long positions are preferred.
An alternative decline scenario may develop after the breakdown of the support level of 0.9860 with the immediate goal at the support level of 0.9745 (ЕМА200 on the weekly chart and the Fibonacci level of 50%).
Support levels: 0.9935, 0.9915, 0.9875, 0.9860, 0.9745
Resistance Levels: 0.9960, 1.0010, 1.0060, 1.0110
Trading Scenarios
Buy Stop 0.9970. Stop Loss 0.9930. Take-Profit 1.0010, 1.0060, 1.0110
Sell Stop 0.9930. Stop Loss 0.9970. Take-Profit 0.9915, 0.9875, 0.9860, 0.9745, 0.9610, 0.9575
EUR/USD: Market Expectations
12/13/2018
On Thursday, the focus of attention of participants in the financial market will be the ECB meeting. The bank is expected to leave rates at current levels at least until the end of the summer of 2019. It is also likely that the ECB will confirm the completion of the asset purchase program at the end of December.
The ECB rate decision will be published at 12:45 (GMT), and the ECB press conference will begin at 13:30. If Mario Draghi makes unexpected announcements, then the volatility in euro trading and the financial market will increase significantly. The harsh rhetoric of Mario Draghi on monetary policy prospects will strengthen the euro. Conversely, the soft tone of the ECB statement and the speech of Mario Draghi will have a downward pressure on the euro.
Meanwhile, the euro will remain under pressure against the dollar, which is supported by demand from investors amid expectations of further tightening of the Fed's monetary policy.
While EUR / USD is trading below the key resistance level of 1.1610 (ЕМА200 on the daily chart), short positions are preferable. The likelihood of further decline in EUR / USD remains. After the breakdown of the support level of 1.1362 (EMA200 on the 1-hour chart) EUR / USD will go to support levels of 1.1310 (December lows), 1.1290 (Fibonacci level of the 23.6% of the correction to the fall from the level of 1.3900, which began in May 2014), 1.1210 (November and year lows).
After EUR / USD rises to the zone above the resistance level of 1.1410 (ЕМА50 on the daily chart), further corrective growth is possible to the resistance level of 1.1610.
Support Levels: 1.1362, 1.1310, 1.1290, 1.1210, 1.1000
Resistance Levels: 1.1385, 1.1410, 1.1470, 1.1610, 1.1700, 1.1790
Trading recommendations
Sell Stop 1.1350. Stop-Loss 1.1420. Take-Profit 1.1310, 1.1290, 1.1210, 1.1000
Buy Stop 1.1420. Stop-Loss 1.1350. Take-Profit 1.1470, 1.1610, 1.1700, 1.1790
12/13/2018
On Thursday, the focus of attention of participants in the financial market will be the ECB meeting. The bank is expected to leave rates at current levels at least until the end of the summer of 2019. It is also likely that the ECB will confirm the completion of the asset purchase program at the end of December.
The ECB rate decision will be published at 12:45 (GMT), and the ECB press conference will begin at 13:30. If Mario Draghi makes unexpected announcements, then the volatility in euro trading and the financial market will increase significantly. The harsh rhetoric of Mario Draghi on monetary policy prospects will strengthen the euro. Conversely, the soft tone of the ECB statement and the speech of Mario Draghi will have a downward pressure on the euro.
Meanwhile, the euro will remain under pressure against the dollar, which is supported by demand from investors amid expectations of further tightening of the Fed's monetary policy.
While EUR / USD is trading below the key resistance level of 1.1610 (ЕМА200 on the daily chart), short positions are preferable. The likelihood of further decline in EUR / USD remains. After the breakdown of the support level of 1.1362 (EMA200 on the 1-hour chart) EUR / USD will go to support levels of 1.1310 (December lows), 1.1290 (Fibonacci level of the 23.6% of the correction to the fall from the level of 1.3900, which began in May 2014), 1.1210 (November and year lows).
After EUR / USD rises to the zone above the resistance level of 1.1410 (ЕМА50 on the daily chart), further corrective growth is possible to the resistance level of 1.1610.
Support Levels: 1.1362, 1.1310, 1.1290, 1.1210, 1.1000
Resistance Levels: 1.1385, 1.1410, 1.1470, 1.1610, 1.1700, 1.1790
Trading recommendations
Sell Stop 1.1350. Stop-Loss 1.1420. Take-Profit 1.1310, 1.1290, 1.1210, 1.1000
Buy Stop 1.1420. Stop-Loss 1.1350. Take-Profit 1.1470, 1.1610, 1.1700, 1.1790
EUR/USD: Eurodollar remains under pressure
Current dynamics
14/12/2018
The Eurodollar remains under pressure after the ECB meeting on Thursday.
His head, Mario Draghi, pointed to the risks of the Eurozone economy, which are shifting towards the deterioration of the situation. The ECB confirmed that it will complete the QE program in December. Interest rates will remain unchanged until the summer of 2019.
The euro remains under pressure from the worsening domestic political situation in France, the reluctance of the Italian government to more strongly curtail the planned budget deficit, as required by the European Commission, as well as Brexit and uncertainty due to the forthcoming elections to the European Parliament in May.
On Friday, the decline of the EUR / USD pair continued after the publication of disappointing macro data from the Eurozone. The EUR / USD pair fell from the opening of the trading day by 0.6% and at the beginning of the American session is trading near the 1.1286 mark, trying to break through the important support level of 1.1290 (Fibonacci level 23.6% of the correction to the fall from the level of 1.3900, which began in May 2014) .
Below the key resistance level of 1.1610 (ЕМА200 on the daily chart) negative dynamics prevail. Short positions with targets at support levels of 1.1210 (November and year lows), 1.1000 (bottom line of the downward channel on the daily chart) are still preferred.
The signal for the resumption of long positions will be the breakdown of the resistance level of 1.1400 (ЕМА50 and the upper line of the downward channel on the daily chart) with the target at the resistance level of 1.1610.
Support Levels: 1.1290, 1.1210, 1.1000
Resistance Levels: 1.1310, 1.1360, 1.1385, 1.1400, 1.1470, 1.1610, 1.1700, 1.1790
Trading recommendations
Sell in the market. Stop-Loss 1.1410. Take-Profit 1.1210, 1.1000
Buy Stop 1.1410. Stop Loss 1.1280. Take-Profit 1.1470, 1.1610, 1.1700, 1.1790
Current dynamics
14/12/2018
The Eurodollar remains under pressure after the ECB meeting on Thursday.
His head, Mario Draghi, pointed to the risks of the Eurozone economy, which are shifting towards the deterioration of the situation. The ECB confirmed that it will complete the QE program in December. Interest rates will remain unchanged until the summer of 2019.
The euro remains under pressure from the worsening domestic political situation in France, the reluctance of the Italian government to more strongly curtail the planned budget deficit, as required by the European Commission, as well as Brexit and uncertainty due to the forthcoming elections to the European Parliament in May.
On Friday, the decline of the EUR / USD pair continued after the publication of disappointing macro data from the Eurozone. The EUR / USD pair fell from the opening of the trading day by 0.6% and at the beginning of the American session is trading near the 1.1286 mark, trying to break through the important support level of 1.1290 (Fibonacci level 23.6% of the correction to the fall from the level of 1.3900, which began in May 2014) .
Below the key resistance level of 1.1610 (ЕМА200 on the daily chart) negative dynamics prevail. Short positions with targets at support levels of 1.1210 (November and year lows), 1.1000 (bottom line of the downward channel on the daily chart) are still preferred.
The signal for the resumption of long positions will be the breakdown of the resistance level of 1.1400 (ЕМА50 and the upper line of the downward channel on the daily chart) with the target at the resistance level of 1.1610.
Support Levels: 1.1290, 1.1210, 1.1000
Resistance Levels: 1.1310, 1.1360, 1.1385, 1.1400, 1.1470, 1.1610, 1.1700, 1.1790
Trading recommendations
Sell in the market. Stop-Loss 1.1410. Take-Profit 1.1210, 1.1000
Buy Stop 1.1410. Stop Loss 1.1280. Take-Profit 1.1470, 1.1610, 1.1700, 1.1790
GBP/USD: Support and Resistance Levels
17/12/2018
After another sharp fall in mid-April since early May, GBP / USD continues to trade in a downward channel on a weekly chart, the lower limit of which passes near the support level of 1.1700. In the event of a breakdown of the nearest support level of 1.2600 (lows of June 2017), GBP / USD will head towards the support level of 1.2485 (minimums of the year). The main trend is still bearish. Below the key resistance levels of 1.3215 (Fibonacci level 23.6% of the correction to the decline of the GBP / USD pair in a wave that began in July 2014 near the level of 1.7200), 1.3095 (ЕМА200 on the daily chart) negative dynamics prevail. Short positions are preferred.
The signal for growth will be the breakdown of the short-term resistance level of 1.2642 (ЕМА200 on the 1-hour chart, ЕМА50 on the 4-hour chart). The immediate goal of growth is resistance levels of 1.2780 (ЕМА200 on the 4-hour chart), 1.2820 (ЕМА50 on the daily chart).
With favorable developments, corrective growth of GBP / USD may continue to resistance levels 1.3095 (ЕМА200 on the daily chart), 1.3215.
Support Levels: 1.2600, 1.2500, 1.2485, 1.2365, 1.2110, 1.2000
Resistance Levels: 1.2670, 1.2700, 1.2780, 1.2820, 1.2900, 1.3000, 1.3095, 1.3215
Trading Scenarios
Sell in the market. Stop Loss 1.2650. Take-Profit 1.2500, 1.2485, 1.2365, 1.2110, 1.2000
Buy Stop 1.2680. Stop Loss 1.2580. Take-Profit 1.2700, 1.2780, 1.2820, 1.2900, 1.3000, 1.3095, 1.3215
17/12/2018
After another sharp fall in mid-April since early May, GBP / USD continues to trade in a downward channel on a weekly chart, the lower limit of which passes near the support level of 1.1700. In the event of a breakdown of the nearest support level of 1.2600 (lows of June 2017), GBP / USD will head towards the support level of 1.2485 (minimums of the year). The main trend is still bearish. Below the key resistance levels of 1.3215 (Fibonacci level 23.6% of the correction to the decline of the GBP / USD pair in a wave that began in July 2014 near the level of 1.7200), 1.3095 (ЕМА200 on the daily chart) negative dynamics prevail. Short positions are preferred.
The signal for growth will be the breakdown of the short-term resistance level of 1.2642 (ЕМА200 on the 1-hour chart, ЕМА50 on the 4-hour chart). The immediate goal of growth is resistance levels of 1.2780 (ЕМА200 on the 4-hour chart), 1.2820 (ЕМА50 on the daily chart).
With favorable developments, corrective growth of GBP / USD may continue to resistance levels 1.3095 (ЕМА200 on the daily chart), 1.3215.
Support Levels: 1.2600, 1.2500, 1.2485, 1.2365, 1.2110, 1.2000
Resistance Levels: 1.2670, 1.2700, 1.2780, 1.2820, 1.2900, 1.3000, 1.3095, 1.3215
Trading Scenarios
Sell in the market. Stop Loss 1.2650. Take-Profit 1.2500, 1.2485, 1.2365, 1.2110, 1.2000
Buy Stop 1.2680. Stop Loss 1.2580. Take-Profit 1.2700, 1.2780, 1.2820, 1.2900, 1.3000, 1.3095, 1.3215
XAU/USD: Market expectations
18/12/2018
Against the background of monetary tightening by the Fed since April, gold prices have been in a steady downward trend. In mid-August, the XAU / USD pair reached an annual minimum near the mark of 1160.00, however, then an upward correction began, raising gold prices to the current mark of 1249.00 dollars per troy ounce. Nevertheless, the overall gold trend remains bearish, and the upward correction may end near the reached resistance levels of 1242.00 (ЕМА200 on the daily chart), 1248.00 (Fibonacci level 50% of the correction to the decline wave from July 2016), if the Fed will give clear signals to further tighten its monetary policy in 2019.
About 70% of market participants, according to the CME Group, believe that the rate will be increased in 2019 at least 2 more times. At the same time, the rate increase on December 19, at the last Fed meeting this year, by 0.25% to 2.5% is not in doubt.
The press conference of the Fed will begin on Wednesday 19:30 (GMT). Unambiguous signals from US Federal Reserve Chairman Jerome Powell, indicating a propensity to continue tightening monetary policy, will cause a rise in the dollar and a drop in gold prices. In the face of an increase in interest rates, gold is difficult to compete with other income-generating assets, such as government bonds, for example. At the same time, the cost of acquiring and storing gold is growing.
The breakdown of the support level of 1235.00 (EMA144 on the daily chart) will be the beginning of the return of XAU / USD to the bearish trend.
The soft rhetoric of statements by Fed officials could contribute to weakening the dollar and further rising gold and XAU / USD quotes towards resistance levels of 1260.00 (EMA200 on the weekly chart), 1277.00 (Fibonacci level 61.8%).
Support Levels: 1242.00, 1235.00, 1220.00, 1212.00, 1204.00, 1197.00, 1185.00, 1160.00
Resistance Levels: 1248.00, 1260.00, 1277.00
Trading scenarios
Sell Stop 1234.00. Stop Loss 1250.00. Take-Profit 1220.00, 1212.00, 1204.00, 1197.00, 1185.00, 1160.00
Buy Stop 1250.00. Stop Loss 1234.00. Take-Profit 1260.00, 1277.00
18/12/2018
Against the background of monetary tightening by the Fed since April, gold prices have been in a steady downward trend. In mid-August, the XAU / USD pair reached an annual minimum near the mark of 1160.00, however, then an upward correction began, raising gold prices to the current mark of 1249.00 dollars per troy ounce. Nevertheless, the overall gold trend remains bearish, and the upward correction may end near the reached resistance levels of 1242.00 (ЕМА200 on the daily chart), 1248.00 (Fibonacci level 50% of the correction to the decline wave from July 2016), if the Fed will give clear signals to further tighten its monetary policy in 2019.
About 70% of market participants, according to the CME Group, believe that the rate will be increased in 2019 at least 2 more times. At the same time, the rate increase on December 19, at the last Fed meeting this year, by 0.25% to 2.5% is not in doubt.
The press conference of the Fed will begin on Wednesday 19:30 (GMT). Unambiguous signals from US Federal Reserve Chairman Jerome Powell, indicating a propensity to continue tightening monetary policy, will cause a rise in the dollar and a drop in gold prices. In the face of an increase in interest rates, gold is difficult to compete with other income-generating assets, such as government bonds, for example. At the same time, the cost of acquiring and storing gold is growing.
The breakdown of the support level of 1235.00 (EMA144 on the daily chart) will be the beginning of the return of XAU / USD to the bearish trend.
The soft rhetoric of statements by Fed officials could contribute to weakening the dollar and further rising gold and XAU / USD quotes towards resistance levels of 1260.00 (EMA200 on the weekly chart), 1277.00 (Fibonacci level 61.8%).
Support Levels: 1242.00, 1235.00, 1220.00, 1212.00, 1204.00, 1197.00, 1185.00, 1160.00
Resistance Levels: 1248.00, 1260.00, 1277.00
Trading scenarios
Sell Stop 1234.00. Stop Loss 1250.00. Take-Profit 1220.00, 1212.00, 1204.00, 1197.00, 1185.00, 1160.00
Buy Stop 1250.00. Stop Loss 1234.00. Take-Profit 1260.00, 1277.00
EUR/USD: on the eve of the publication of the Fed rate decision
12/19/2018
It is widely expected that the Fed will raise the key interest rate by 0.25% to 2.5%. The probability of this is 72%, according to the CME FedWatch Tool. The decision of the Fed on the rate will be published at 19:00 (GMT). In November, Fed Chairman Jerome Powell said that the stakes are "slightly below" the neutral level, at which they neither restrain nor accelerate economic growth. It is likely that the accompanying Fed statement will state that in the future rates will increase depending on economic data.
The Fed’s press conference will begin at 19:30 (GMT), and investors will closely monitor Powell’s performance to catch signals from him regarding the Fed’s future plans.
If he talks about the pause in the boost cycle in 2019, the dollar will fall under sales.
US President Donald Trump does not cease to criticize the Fed for its monetary policy.
If Powell confirms the inclination of the Fed to tighten its policy next year, then the dollar will receive a positive impetus for further growth. The discrepancy in the monetary policy of the Federal Reserve System and the European Central Bank in 2019 will increase. Even if EUR / USD rises in the near future against the backdrop of a restrained Fed statement, in the medium term and probably in the long term, the Eurodollar will decline.
Currently, EUR / USD is trading near a strong resistance level of 1.1400 (EMA50 on the daily chart). Below the key resistance level of 1.1595 (ЕМА200 on the daily chart), negative dynamics prevail. The signal for the resumption of the decline will be the breakdown of the short-term support level of 1.1355 (ЕМА200 on the 1-hour chart), and the targets for the decline will be the support levels of 1.1290 (Fibonacci level 23.6% of the correction to the fall from the level of 1.3900, which began in May 2014), 1.1270 (minimums December), 1.1210 (November and year lows), 1.1000 (bottom line of the downward channel on the daily chart).
In the alternative scenario and in case of breakdown of the local resistance level of 1.1470, corrective growth will be possible to the resistance level of 1.1595.
Support Levels: 1.1376, 1.1355, 1.1310, 1.1290, 1.1210, 1.1000
Resistance Levels: 1.1400, 1.1470, 1.1595, 1.1700, 1.1790
Trading scenarios
Sell Stop 1.1370. Stop-Loss 1.1420. Take-Profit 1.1355, 1.1310, 1.1290, 1.1210, 1.1000
Buy Stop 1.1420. Stop-Loss 1.1370. Take-Profit 1.1470, 1.1600, 1.1700, 1.1790
12/19/2018
It is widely expected that the Fed will raise the key interest rate by 0.25% to 2.5%. The probability of this is 72%, according to the CME FedWatch Tool. The decision of the Fed on the rate will be published at 19:00 (GMT). In November, Fed Chairman Jerome Powell said that the stakes are "slightly below" the neutral level, at which they neither restrain nor accelerate economic growth. It is likely that the accompanying Fed statement will state that in the future rates will increase depending on economic data.
The Fed’s press conference will begin at 19:30 (GMT), and investors will closely monitor Powell’s performance to catch signals from him regarding the Fed’s future plans.
If he talks about the pause in the boost cycle in 2019, the dollar will fall under sales.
US President Donald Trump does not cease to criticize the Fed for its monetary policy.
If Powell confirms the inclination of the Fed to tighten its policy next year, then the dollar will receive a positive impetus for further growth. The discrepancy in the monetary policy of the Federal Reserve System and the European Central Bank in 2019 will increase. Even if EUR / USD rises in the near future against the backdrop of a restrained Fed statement, in the medium term and probably in the long term, the Eurodollar will decline.
Currently, EUR / USD is trading near a strong resistance level of 1.1400 (EMA50 on the daily chart). Below the key resistance level of 1.1595 (ЕМА200 on the daily chart), negative dynamics prevail. The signal for the resumption of the decline will be the breakdown of the short-term support level of 1.1355 (ЕМА200 on the 1-hour chart), and the targets for the decline will be the support levels of 1.1290 (Fibonacci level 23.6% of the correction to the fall from the level of 1.3900, which began in May 2014), 1.1270 (minimums December), 1.1210 (November and year lows), 1.1000 (bottom line of the downward channel on the daily chart).
In the alternative scenario and in case of breakdown of the local resistance level of 1.1470, corrective growth will be possible to the resistance level of 1.1595.
Support Levels: 1.1376, 1.1355, 1.1310, 1.1290, 1.1210, 1.1000
Resistance Levels: 1.1400, 1.1470, 1.1595, 1.1700, 1.1790
Trading scenarios
Sell Stop 1.1370. Stop-Loss 1.1420. Take-Profit 1.1355, 1.1310, 1.1290, 1.1210, 1.1000
Buy Stop 1.1420. Stop-Loss 1.1370. Take-Profit 1.1470, 1.1600, 1.1700, 1.1790
EUR/USD: has the Eurodollar growth stopped?
12/21/2018
Current situation
Stocks and the dollar continued to fall on Thursday after the Fed raised interest rates on Wednesday. The Fed leaders unanimously decided to raise the key rate to a range of 2.25% -2.5%. However, the central bank announced a possible slowdown in monetary tightening next year.
At a press conference, Fed Chairman Jerome Powell said that, according to central bank executives, next year the economy will be strong enough that rates could be raised twice. Earlier, the Fed planned 3 rate increases in 2019 and 2 more increases in 2020.
The US dollar declined significantly this week. On Thursday, the DXY dollar index, which tracks the US currency against a basket of 6 other major currencies, fell to an 8-week low, dropping to 95.73. At the beginning of the European session on Friday, futures for the DXY index traded higher (near the mark of 96.06), however, the pressure on the dollar persists.
US Treasury Secretary Stephen Mnuchin tried to reassure investors, saying that the reaction of markets to the results of the last Fed meeting was excessive. "I think we are clearly in a situation in which the market over-responded to the statements of the Fed", said Mnuchin. According to him, the central bank may not have to raise rates at all next year if inflation remains low.
However, investors' pessimism persists. The Fed continues to reduce its balance sheet and raise interest rates, but tensions remain in US political and trade relations with China.
Sales in stock markets led to a sharp strengthening of the yen and the euro, which are the funding currencies.
The Eurodollar strengthened since the beginning of the week, reaching a local maximum of 1.1485 on Thursday. However, on Friday the EUR / USD pair is falling. Investors take profits at the end of the week and close their positions ahead of the long weekend due to the celebration of Catholic Christmas early next week.
From the news today, attention should be paid to the publication (at 13:30 GMT) of a whole block of important macro data from the United States, including GDP data (final release), which are one of the key (along with labor market and inflation data) for the Fed in terms of its monetary policy. The forecast for the 3rd quarter of this year is +3.5% GDP growth. Despite the relative decline (in the previous quarter, GDP growth was + 4.2%), this is a strong indicator. If the data turns out to be worse than the forecast, the dollar and stock indices will react with a decrease.
It was the last full trading week this year. On Monday, markets in many countries will be closed. In full, trading will be restored only on Wednesday, and next Monday the world will celebrate the New Year.
Support and Resistance Levels
EUR / USD rose sharply this week, despite the Fed raising interest rates. Sales in stock markets led to an increase in demand for the yen and the euro, as for funding currencies. On Thursday, the EUR / USD pair reached a 5-week high near the 1.1485 mark. However, growth expected by many investors to the first strong resistance level of 1.1545 (ЕМА144 on the daily chart) did not take place, and on Friday EUR / USD is falling. A decline below the support level of 1.1400 (EMA50 on the daily chart) and inside the downward channel on the daily chart will indicate return of EUR / USD to the global bearish trend, and a breakdown of the short-term support level of 1.1384 (EMA200 on the 1-hour and 4-hour charts) will be a signal for opening short positions. The targets for further decline are support levels of 1.1290 (Fibonacci 23.6% correction to a fall from 1.3900, which began in May 2014), 1.1270 (December lows), 1.1210 (November and year lows), 1.1000 (bottom line of the downward channel on the day chart).
In the case of the resumption of growth and breakdown of the local resistance level of 1.1485, corrective growth will be possible to the resistance level of 1.1595 (ЕМА200 on the daily chart). Below this key resistance level of 1.1595 negative dynamics prevails.
Support Levels: 1.1400, 1.1384, 1.1310, 1.1290, 1.1270, 1.1210, 1.1000
Resistance Levels: 1.1470, 1.1485, 1.1545, 1.1595, 1.1700, 1.1790
Trading Scenarios
Sell in the market. Stop-Loss 1.1490. Take-Profit 1. 1.1400, 1.1384, 1.1310, 1.1290, 1.1270, 1.1210, 1.1000
Buy Stop 1.1490. Stop-Loss 1.1390. Take-Profit 1.1545, 1.1600, 1.1700, 1.1790
12/21/2018
Current situation
Stocks and the dollar continued to fall on Thursday after the Fed raised interest rates on Wednesday. The Fed leaders unanimously decided to raise the key rate to a range of 2.25% -2.5%. However, the central bank announced a possible slowdown in monetary tightening next year.
At a press conference, Fed Chairman Jerome Powell said that, according to central bank executives, next year the economy will be strong enough that rates could be raised twice. Earlier, the Fed planned 3 rate increases in 2019 and 2 more increases in 2020.
The US dollar declined significantly this week. On Thursday, the DXY dollar index, which tracks the US currency against a basket of 6 other major currencies, fell to an 8-week low, dropping to 95.73. At the beginning of the European session on Friday, futures for the DXY index traded higher (near the mark of 96.06), however, the pressure on the dollar persists.
US Treasury Secretary Stephen Mnuchin tried to reassure investors, saying that the reaction of markets to the results of the last Fed meeting was excessive. "I think we are clearly in a situation in which the market over-responded to the statements of the Fed", said Mnuchin. According to him, the central bank may not have to raise rates at all next year if inflation remains low.
However, investors' pessimism persists. The Fed continues to reduce its balance sheet and raise interest rates, but tensions remain in US political and trade relations with China.
Sales in stock markets led to a sharp strengthening of the yen and the euro, which are the funding currencies.
The Eurodollar strengthened since the beginning of the week, reaching a local maximum of 1.1485 on Thursday. However, on Friday the EUR / USD pair is falling. Investors take profits at the end of the week and close their positions ahead of the long weekend due to the celebration of Catholic Christmas early next week.
From the news today, attention should be paid to the publication (at 13:30 GMT) of a whole block of important macro data from the United States, including GDP data (final release), which are one of the key (along with labor market and inflation data) for the Fed in terms of its monetary policy. The forecast for the 3rd quarter of this year is +3.5% GDP growth. Despite the relative decline (in the previous quarter, GDP growth was + 4.2%), this is a strong indicator. If the data turns out to be worse than the forecast, the dollar and stock indices will react with a decrease.
It was the last full trading week this year. On Monday, markets in many countries will be closed. In full, trading will be restored only on Wednesday, and next Monday the world will celebrate the New Year.
Support and Resistance Levels
EUR / USD rose sharply this week, despite the Fed raising interest rates. Sales in stock markets led to an increase in demand for the yen and the euro, as for funding currencies. On Thursday, the EUR / USD pair reached a 5-week high near the 1.1485 mark. However, growth expected by many investors to the first strong resistance level of 1.1545 (ЕМА144 on the daily chart) did not take place, and on Friday EUR / USD is falling. A decline below the support level of 1.1400 (EMA50 on the daily chart) and inside the downward channel on the daily chart will indicate return of EUR / USD to the global bearish trend, and a breakdown of the short-term support level of 1.1384 (EMA200 on the 1-hour and 4-hour charts) will be a signal for opening short positions. The targets for further decline are support levels of 1.1290 (Fibonacci 23.6% correction to a fall from 1.3900, which began in May 2014), 1.1270 (December lows), 1.1210 (November and year lows), 1.1000 (bottom line of the downward channel on the day chart).
In the case of the resumption of growth and breakdown of the local resistance level of 1.1485, corrective growth will be possible to the resistance level of 1.1595 (ЕМА200 on the daily chart). Below this key resistance level of 1.1595 negative dynamics prevails.
Support Levels: 1.1400, 1.1384, 1.1310, 1.1290, 1.1270, 1.1210, 1.1000
Resistance Levels: 1.1470, 1.1485, 1.1545, 1.1595, 1.1700, 1.1790
Trading Scenarios
Sell in the market. Stop-Loss 1.1490. Take-Profit 1. 1.1400, 1.1384, 1.1310, 1.1290, 1.1270, 1.1210, 1.1000
Buy Stop 1.1490. Stop-Loss 1.1390. Take-Profit 1.1545, 1.1600, 1.1700, 1.1790
S&P500: The threat of a nearly 10-year bull trend breaking down is high
12/27/2018
Current situation
On Wednesday, US stock indexes showed a sharp increase after falling for 4 consecutive sessions before.
DJIA rose 1086 points, or 5%, to 22878 points, which in percentage terms was the most significant one-day increase since March 2009. S&P500 added 5%, while the Nasdaq Composite rose 5.8%.
On Tuesday, US financial markets were closed due to the celebration of Catholic Christmas, while most European markets on Wednesday were still closed due to Boxing Day. On Monday, the DJIA and S&P500 fell by 2.5%, and on Wednesday the DJIA declined at the opening of the trading day to around 21620, losing more than 1,800 points in four sessions. At the opening of the trading day on Wednesday, futures on the S&P500 stood at 2333.0, however, it increased during the day, closing the trading day on Wednesday at 2467.0.
Financial markets continue to be feverish at the end of the year. Investors were nervous about the rising interest rates of the Federal Reserve and the US-China trade conflict. Also on the dynamics of stock markets and the dollar in recent days reflected the continuing criticism of the Fed and its head Powell by US President Donald Trump, as well as the uncertainty associated with the closure of the US government.
On Wednesday, Kevin Hasset, Chairman of the Council of Economic Advisers at the White House, said there was no likelihood of the dismissal of Fed Chairman Jerome Powell, despite criticism of the central bank by President Donald Trump. The recovery of stock market quotes and the dollar on Wednesday also was helped by the positive macro data, according to which, retail sales in the US excluding cars for the period from November 1 to December 24 increased by 5.1% compared with the same period of the previous year, which was the most significant increase in six years.
On Thursday, investors' pessimism returns to the markets. US stock indexes are falling. All 11 sectors of the S&P500 are moving towards ending the year with losses, for the first time since 2008. The threat of breaking a nearly 10-year bull trend is higher than ever before.
Support and Resistance Levels
In October, the S&P500 rose to an absolute maximum near the 2938.0 mark. However, a sharp decline in the index began later. Having broken through the strong support levels of 2720.0 (ЕМА200 on the daily chart), 2677.0 (Fibonacci 23.6% of the correction to the growth since February 2016), the S&P500 reached a local minimum near 2333.0 on Wednesday. The last time near this mark S&P500 was in May 2017.
Negative dynamics and pessimism of investors still prevail. On Thursday, the S&P500 declined again after rising the previous day, trading at a key support level of 2433.0 (ЕМА200 on the weekly chart). Fixing below the support level of 2380.0 (Fibonacci level 50%) and a further decline will speak about breaking the bullish trend of the S&P500.
Only after returning to the zone above the resistance level of 2720.0, it will be possible to talk about the resumption of the bull trend. In the current situation, short positions are preferred.
Support Levels: 2433.0, 2380.0, 2333.0, 2250.0, 2130.0
Resistance Levels: 2515.0, 2572.0, 2677.0, 2720.0, 2812.0, 2877.0, 2900.0, 2938.0
Trading Scenarios
Sell Stop 2410.0. Stop Loss 2490.0. Goals 2380.0, 2333.0, 2250.0, 2130.0
Buy Stop 2490.0. Stop-Loss 2410.0. Goals 2515.0, 2572.0, 2677.0, 2720.0, 2812.0, 2877.0, 2900.0, 2938.0
12/27/2018
Current situation
On Wednesday, US stock indexes showed a sharp increase after falling for 4 consecutive sessions before.
DJIA rose 1086 points, or 5%, to 22878 points, which in percentage terms was the most significant one-day increase since March 2009. S&P500 added 5%, while the Nasdaq Composite rose 5.8%.
On Tuesday, US financial markets were closed due to the celebration of Catholic Christmas, while most European markets on Wednesday were still closed due to Boxing Day. On Monday, the DJIA and S&P500 fell by 2.5%, and on Wednesday the DJIA declined at the opening of the trading day to around 21620, losing more than 1,800 points in four sessions. At the opening of the trading day on Wednesday, futures on the S&P500 stood at 2333.0, however, it increased during the day, closing the trading day on Wednesday at 2467.0.
Financial markets continue to be feverish at the end of the year. Investors were nervous about the rising interest rates of the Federal Reserve and the US-China trade conflict. Also on the dynamics of stock markets and the dollar in recent days reflected the continuing criticism of the Fed and its head Powell by US President Donald Trump, as well as the uncertainty associated with the closure of the US government.
On Wednesday, Kevin Hasset, Chairman of the Council of Economic Advisers at the White House, said there was no likelihood of the dismissal of Fed Chairman Jerome Powell, despite criticism of the central bank by President Donald Trump. The recovery of stock market quotes and the dollar on Wednesday also was helped by the positive macro data, according to which, retail sales in the US excluding cars for the period from November 1 to December 24 increased by 5.1% compared with the same period of the previous year, which was the most significant increase in six years.
On Thursday, investors' pessimism returns to the markets. US stock indexes are falling. All 11 sectors of the S&P500 are moving towards ending the year with losses, for the first time since 2008. The threat of breaking a nearly 10-year bull trend is higher than ever before.
Support and Resistance Levels
In October, the S&P500 rose to an absolute maximum near the 2938.0 mark. However, a sharp decline in the index began later. Having broken through the strong support levels of 2720.0 (ЕМА200 on the daily chart), 2677.0 (Fibonacci 23.6% of the correction to the growth since February 2016), the S&P500 reached a local minimum near 2333.0 on Wednesday. The last time near this mark S&P500 was in May 2017.
Negative dynamics and pessimism of investors still prevail. On Thursday, the S&P500 declined again after rising the previous day, trading at a key support level of 2433.0 (ЕМА200 on the weekly chart). Fixing below the support level of 2380.0 (Fibonacci level 50%) and a further decline will speak about breaking the bullish trend of the S&P500.
Only after returning to the zone above the resistance level of 2720.0, it will be possible to talk about the resumption of the bull trend. In the current situation, short positions are preferred.
Support Levels: 2433.0, 2380.0, 2333.0, 2250.0, 2130.0
Resistance Levels: 2515.0, 2572.0, 2677.0, 2720.0, 2812.0, 2877.0, 2900.0, 2938.0
Trading Scenarios
Sell Stop 2410.0. Stop Loss 2490.0. Goals 2380.0, 2333.0, 2250.0, 2130.0
Buy Stop 2490.0. Stop-Loss 2410.0. Goals 2515.0, 2572.0, 2677.0, 2720.0, 2812.0, 2877.0, 2900.0, 2938.0
WTI: Support and Resistance Levels
09/01/2019
After in October, the price of WTI oil reached a multi-month and annual maximum near the mark of 76.80 dollars per barrel, then its sharp decline began.
In November, the WTI oil price broke the long-term bullish trend, breaking through the key support levels of 63.50 (Fibonacci 38.2% of the correction to the growth wave that began in February 2016 with the support level near the 27.30 mark), 56.50 (ЕМА200 on the weekly chart) . At the end of last month, the price reached a local and annual minimum near the mark of 42.00 dollars per barrel.
From this level there was a rebound, and the price tried to develop an upward trend.
At the moment, corrective growth has stopped near the local resistance level of 50.50 (ЕМА200 on the 4-hour chart).
A signal for further growth will be the breakdown of this resistance level of 50.50. Medium-term growth targets are resistance levels of 59.40 (Fibonacci level 50%), 60.50 (ЕМА200 on the daily chart).
The breakdown of the short-term support level of 47.80 (ЕМА200 on the 1-hour chart) will return the prices of WTI crude oil to a bearish trend that began in October, with a target at the support level of 42.00 (Fibonacci 100% and the minimums of 2018 and 2017).
Support Levels: 49.00, 47.80, 46.00, 44.50, 42.00
Resistance Levels: 50.50, 52.70, 55.30, 56.50, 59.40, 60.50, 63.50
Trading Scenarios
Sell Stop 48.80. Stop Loss 51.10. Take-Profit 47.80, 46.00, 44.50, 42.00
Buy Stop 51.10. Stop Loss 48.80. Take-Profit 52.70, 55.30, 56.50, 59.40, 60.50, 63.50
09/01/2019
After in October, the price of WTI oil reached a multi-month and annual maximum near the mark of 76.80 dollars per barrel, then its sharp decline began.
In November, the WTI oil price broke the long-term bullish trend, breaking through the key support levels of 63.50 (Fibonacci 38.2% of the correction to the growth wave that began in February 2016 with the support level near the 27.30 mark), 56.50 (ЕМА200 on the weekly chart) . At the end of last month, the price reached a local and annual minimum near the mark of 42.00 dollars per barrel.
From this level there was a rebound, and the price tried to develop an upward trend.
At the moment, corrective growth has stopped near the local resistance level of 50.50 (ЕМА200 on the 4-hour chart).
A signal for further growth will be the breakdown of this resistance level of 50.50. Medium-term growth targets are resistance levels of 59.40 (Fibonacci level 50%), 60.50 (ЕМА200 on the daily chart).
The breakdown of the short-term support level of 47.80 (ЕМА200 on the 1-hour chart) will return the prices of WTI crude oil to a bearish trend that began in October, with a target at the support level of 42.00 (Fibonacci 100% and the minimums of 2018 and 2017).
Support Levels: 49.00, 47.80, 46.00, 44.50, 42.00
Resistance Levels: 50.50, 52.70, 55.30, 56.50, 59.40, 60.50, 63.50
Trading Scenarios
Sell Stop 48.80. Stop Loss 51.10. Take-Profit 47.80, 46.00, 44.50, 42.00
Buy Stop 51.10. Stop Loss 48.80. Take-Profit 52.70, 55.30, 56.50, 59.40, 60.50, 63.50
S&P500: Optimism returns to stock market
10/01/2019
Current situation
Published on Wednesday, the minutes of the December Fed meeting, hinting that the next increase in interest rates in the United States can take place not soon. The protocols showed that Fed leaders are concerned about the slowdown in global economic growth and the tension in trade relations, which destabilized markets before the December meeting. Therefore, "the extent and timing of further policy tightening has become less certain than before".
On Friday, Powell hinted that the Fed could be more patient with raising rates. Jerome Powell said that the central bank is ready to "change" its policy "if necessary" and that it will listen carefully to the market.
Powell’s statement supported investors, and US stock markets have grown in recent days.
There is still a long way to full recovery, but investors' optimism is gradually returning to the stock markets.
On Thursday, investors are expecting speeches by Fed Chairman Jerome Powell at a meeting of the Economic Club in Washington, which will begin at 17:00 (GMT). If Powell repeats his Friday statement, then stock indexes will rise. If Powell changes his mind and his Friday statement, then investors may consider this a negative signal.
Support and resistance levels
In the last days of last year, the S&P500 attempted to recover from a multi-week drop. Nevertheless, the correctional growth of the S&P500 stopped near the resistance level of 2584.0 (ЕМА200 on the 4-hour chart).
The breakdown of the resistance level of 2584.0 will trigger further growth of the S&P500 with targets at resistance levels of 2603.0, 2615.0 (ЕМА50 on the daily chart).
However, only after returning to the zone above the resistance level of 2700.0 (ЕМА200 on the daily chart) it will be possible to speak about the resumption of the bull trend.
The signal for the resumption of sales will be the breakdown of the support level of 2533.0 (ЕМА200 on the 1-hour chart).
The targets for the decline will be the support levels of 2435.0 (ЕМА200 on the weekly chart), 2386.0 (Fibonacci 50% of the correction to the growth since February 2016). Fixing below these levels and a further decline will talk about breaking of the bullish trend S&P500.
Support Levels: 2533.0, 2507.0, 2435.0, 2386.0, 2335.0, 2250.0, 2130.0
Resistance Levels: 2584.0, 2603.0, 2615.0, 2676.0, 2700.0
Trading scenarios
Sell Stop 2550.0. Stop Loss 2595.0. Goals 2533.0, 2507.0, 2435.0, 2386.0, 2335.0, 2250.0, 2130.0
Buy Stop 2595.0. Stop Loss 2550.0. Objectives 2603.0, 2615.0, 2676.0, 2700.0
10/01/2019
Current situation
Published on Wednesday, the minutes of the December Fed meeting, hinting that the next increase in interest rates in the United States can take place not soon. The protocols showed that Fed leaders are concerned about the slowdown in global economic growth and the tension in trade relations, which destabilized markets before the December meeting. Therefore, "the extent and timing of further policy tightening has become less certain than before".
On Friday, Powell hinted that the Fed could be more patient with raising rates. Jerome Powell said that the central bank is ready to "change" its policy "if necessary" and that it will listen carefully to the market.
Powell’s statement supported investors, and US stock markets have grown in recent days.
There is still a long way to full recovery, but investors' optimism is gradually returning to the stock markets.
On Thursday, investors are expecting speeches by Fed Chairman Jerome Powell at a meeting of the Economic Club in Washington, which will begin at 17:00 (GMT). If Powell repeats his Friday statement, then stock indexes will rise. If Powell changes his mind and his Friday statement, then investors may consider this a negative signal.
Support and resistance levels
In the last days of last year, the S&P500 attempted to recover from a multi-week drop. Nevertheless, the correctional growth of the S&P500 stopped near the resistance level of 2584.0 (ЕМА200 on the 4-hour chart).
The breakdown of the resistance level of 2584.0 will trigger further growth of the S&P500 with targets at resistance levels of 2603.0, 2615.0 (ЕМА50 on the daily chart).
However, only after returning to the zone above the resistance level of 2700.0 (ЕМА200 on the daily chart) it will be possible to speak about the resumption of the bull trend.
The signal for the resumption of sales will be the breakdown of the support level of 2533.0 (ЕМА200 on the 1-hour chart).
The targets for the decline will be the support levels of 2435.0 (ЕМА200 on the weekly chart), 2386.0 (Fibonacci 50% of the correction to the growth since February 2016). Fixing below these levels and a further decline will talk about breaking of the bullish trend S&P500.
Support Levels: 2533.0, 2507.0, 2435.0, 2386.0, 2335.0, 2250.0, 2130.0
Resistance Levels: 2584.0, 2603.0, 2615.0, 2676.0, 2700.0
Trading scenarios
Sell Stop 2550.0. Stop Loss 2595.0. Goals 2533.0, 2507.0, 2435.0, 2386.0, 2335.0, 2250.0, 2130.0
Buy Stop 2595.0. Stop Loss 2550.0. Objectives 2603.0, 2615.0, 2676.0, 2700.0
AUD/USD: Market Expectations
11/01/2019
US Federal Reserve Chairman Jerome Powell confirmed on Thursday the central bank’s intention to be patient this year in deciding to raise interest rates, taking into account the turbulence observed in recent weeks in financial markets concerned about the problems of global economic growth. “The US economy is strong”, said Powell. “The main source of concern is global growth”. He noted that the economies of the world today are much more interconnected than before, and the question is how much the slowdown in global economic growth will affect the US economy. Powell's optimism and his restraint in raising interest rates the Fed supported stock indexes and commodity currencies, including the Australian dollar.
From the news today we should pay attention to the publication (at 13:30 GMT) of data on consumer inflation in the United States. Inflation data is one of the main, along with data on GDP and the state of the labor market, on which the Fed's monetary policy depends. It is expected that in December, inflation in the United States decreased by -0.1%, but increased by 2.2% in annual terms. If the data turns out to be better than the forecast, then the USD will be strengthened. A decrease in performance will have a negative impact on the dollar.
In general, the long-term bearish trend AUD / USD is still in force. In the long run, short positions are preferable. The reached local maximums probably provide a good opportunity to enter a short position at AUD / USD.
The breakdown of the support level of 0.7150 (ЕМА200 on the 4-hour chart) will cause the resumption of the AUD / USD decline with long-term targets at the support levels of 0.6910 (September 2015 minimum), 0.6830 (2016 lows).
Below the resistance level of 0.7255 (EMA200 on the daily chart) short positions are preferable.
Support Levels: 0.7200, 0.7150, 0.7100, 0.7025
Resistance Levels: 0.7255, 0.7320, 0.7385, 0.7460
Trading Scenarios
Sell in the market. Stop Loss 0.7260. Take-Profit 0.7200, 0.7150, 0.7100, 0.7025, 0.6910, 0.6830
Buy Stop 0.7260. Stop Loss 0.7190. Take-Profit 0.7320, 0.7385, 0.7460
11/01/2019
US Federal Reserve Chairman Jerome Powell confirmed on Thursday the central bank’s intention to be patient this year in deciding to raise interest rates, taking into account the turbulence observed in recent weeks in financial markets concerned about the problems of global economic growth. “The US economy is strong”, said Powell. “The main source of concern is global growth”. He noted that the economies of the world today are much more interconnected than before, and the question is how much the slowdown in global economic growth will affect the US economy. Powell's optimism and his restraint in raising interest rates the Fed supported stock indexes and commodity currencies, including the Australian dollar.
From the news today we should pay attention to the publication (at 13:30 GMT) of data on consumer inflation in the United States. Inflation data is one of the main, along with data on GDP and the state of the labor market, on which the Fed's monetary policy depends. It is expected that in December, inflation in the United States decreased by -0.1%, but increased by 2.2% in annual terms. If the data turns out to be better than the forecast, then the USD will be strengthened. A decrease in performance will have a negative impact on the dollar.
In general, the long-term bearish trend AUD / USD is still in force. In the long run, short positions are preferable. The reached local maximums probably provide a good opportunity to enter a short position at AUD / USD.
The breakdown of the support level of 0.7150 (ЕМА200 on the 4-hour chart) will cause the resumption of the AUD / USD decline with long-term targets at the support levels of 0.6910 (September 2015 minimum), 0.6830 (2016 lows).
Below the resistance level of 0.7255 (EMA200 on the daily chart) short positions are preferable.
Support Levels: 0.7200, 0.7150, 0.7100, 0.7025
Resistance Levels: 0.7255, 0.7320, 0.7385, 0.7460
Trading Scenarios
Sell in the market. Stop Loss 0.7260. Take-Profit 0.7200, 0.7150, 0.7100, 0.7025, 0.6910, 0.6830
Buy Stop 0.7260. Stop Loss 0.7190. Take-Profit 0.7320, 0.7385, 0.7460
GBP/USD: Market Expectations
14/01/2018
On Tuesday, a vote will be taken in the British Parliament on a Brexit deal with the EU. As you know, British Prime Minister Theresa May made a Brexit deal with the EU at the end of November, which caused a flurry of criticism from British parliamentarians.
Probably, the parliament will vote against the proposed agreement and the deadline for the British withdrawal from the EU will be postponed from March 29 to a later date. The expected failure of the Brexit vote is, in general, negative news for the pound. However, the effect of this factor on the dynamics of the pound will most likely be short-term, since it has already been taken into account in the quotes.
Below the key resistance level of 1.3035 (ЕМА200 on the daily chart) and due to important fundamental factors, GBP / USD remains under pressure.
In case of breakdown of the support level of 1.2735 (EMA200 on the 4-hour chart) GBP / USD will go into the descending channel on the daily chart and to the support levels of 1.2600 (June 2017 minimums), 1.2485, 1.2365.
The main trend is still bearish. Below the key resistance levels of 1.3215 (Fibonacci level 23.6% of the correction to the decline of the GBP / USD in the wave that started in July 2014 near the 1.7200 level), 1.3035 (ЕМА200 on the daily chart) negative dynamics prevail. Short positions are preferred.
Support Levels: 1.2735, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365, 1.2110, 1.2000
Resistance Levels: 1.2955, 1.3035, 1.3125, 1.3215, 1.3300, 1.3470, 1.3740
Trading Scenarios
Sell Stop 1.2790. Stop Loss 1.2880. Take-Profit 1.2735, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365
Buy Stop 1.2880. Stop Loss 1.2790. Take-Profit 1.2955, 1.3035, 1.3125, 1.3215
14/01/2018
On Tuesday, a vote will be taken in the British Parliament on a Brexit deal with the EU. As you know, British Prime Minister Theresa May made a Brexit deal with the EU at the end of November, which caused a flurry of criticism from British parliamentarians.
Probably, the parliament will vote against the proposed agreement and the deadline for the British withdrawal from the EU will be postponed from March 29 to a later date. The expected failure of the Brexit vote is, in general, negative news for the pound. However, the effect of this factor on the dynamics of the pound will most likely be short-term, since it has already been taken into account in the quotes.
Below the key resistance level of 1.3035 (ЕМА200 on the daily chart) and due to important fundamental factors, GBP / USD remains under pressure.
In case of breakdown of the support level of 1.2735 (EMA200 on the 4-hour chart) GBP / USD will go into the descending channel on the daily chart and to the support levels of 1.2600 (June 2017 minimums), 1.2485, 1.2365.
The main trend is still bearish. Below the key resistance levels of 1.3215 (Fibonacci level 23.6% of the correction to the decline of the GBP / USD in the wave that started in July 2014 near the 1.7200 level), 1.3035 (ЕМА200 on the daily chart) negative dynamics prevail. Short positions are preferred.
Support Levels: 1.2735, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365, 1.2110, 1.2000
Resistance Levels: 1.2955, 1.3035, 1.3125, 1.3215, 1.3300, 1.3470, 1.3740
Trading Scenarios
Sell Stop 1.2790. Stop Loss 1.2880. Take-Profit 1.2735, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365
Buy Stop 1.2880. Stop Loss 1.2790. Take-Profit 1.2955, 1.3035, 1.3125, 1.3215
EUR/USD: Trading Scenarios
01/15/2019
A report published on Tuesday showed that Germany’s GDP growth over the past year was 1.5% after a 2.2% increase in 2017. The data suggest a substantial recession risk in the German economy. The minimum annual GDP growth since 2013 has been recorded.
The slowdown in the German economy may cause weakening results for other European countries that supply components for the German automotive industry and other products.
Hard Brexit, the escalation of trade conflicts and factors of political instability in the Eurozone are the main threats to the European economy.
EUR / USD pair declined after published data, closely approaching to the support level of 1.1420 (ЕМА200 on the 4-hour chart, ЕМА50 on the daily chart).
Below the key resistance levels of 1.1525 (EMA144), 1.1575 (EMA200 on the daily chart), the downward trend prevails.
A breakdown of support levels of 1.1420, 1.1400 will return the EUR / USD pair to a long-term bearish trend. Long-term goals of decline are support levels of 1.1285 (Fibonacci level of 23.6% of the correction to a fall from 1.3900 level that began in May 2014), 1.1270 (December lows), 1.1210 (November and year lows), 1.1120 (bottom line of the downward channel on the daily chart, lows of June 2017).
Support Levels: 1.1420, 1.1400, 1.1350, 1.1285, 1.1215, 1.1120
Resistance Levels: 1.1525, 1.1575, 1.1700, 1.1780
Trading recommendations
Sell Stop 1.1390. Stop-Loss 1.1490. Take-Profit 1.1350, 1.1285, 1.1215, 1.1120
Buy Stop 1.1490. Stop-Loss 1.1390. Take-Profit 1.1525, 1.1575, 1.1700, 1.1780
01/15/2019
A report published on Tuesday showed that Germany’s GDP growth over the past year was 1.5% after a 2.2% increase in 2017. The data suggest a substantial recession risk in the German economy. The minimum annual GDP growth since 2013 has been recorded.
The slowdown in the German economy may cause weakening results for other European countries that supply components for the German automotive industry and other products.
Hard Brexit, the escalation of trade conflicts and factors of political instability in the Eurozone are the main threats to the European economy.
EUR / USD pair declined after published data, closely approaching to the support level of 1.1420 (ЕМА200 on the 4-hour chart, ЕМА50 on the daily chart).
Below the key resistance levels of 1.1525 (EMA144), 1.1575 (EMA200 on the daily chart), the downward trend prevails.
A breakdown of support levels of 1.1420, 1.1400 will return the EUR / USD pair to a long-term bearish trend. Long-term goals of decline are support levels of 1.1285 (Fibonacci level of 23.6% of the correction to a fall from 1.3900 level that began in May 2014), 1.1270 (December lows), 1.1210 (November and year lows), 1.1120 (bottom line of the downward channel on the daily chart, lows of June 2017).
Support Levels: 1.1420, 1.1400, 1.1350, 1.1285, 1.1215, 1.1120
Resistance Levels: 1.1525, 1.1575, 1.1700, 1.1780
Trading recommendations
Sell Stop 1.1390. Stop-Loss 1.1490. Take-Profit 1.1350, 1.1285, 1.1215, 1.1120
Buy Stop 1.1490. Stop-Loss 1.1390. Take-Profit 1.1525, 1.1575, 1.1700, 1.1780
GBP/USD: Current Dynamics
01/16/2019
In December, the annual rate of consumer price inflation in the UK slowed down. According to official data released on Wednesday, the UK consumer price index (CPI) rose by 2.1% in December compared with the same period last year, after rising 2.3% in November. The retail price index (RPI) +0.4% m/m, +2.7% y/y (the forecast was +0.5% m/m, +2.9% y/y), the producer selling prices index (Output PPI) -0.3% m/m, +2.5% y/y (the forecast was 0% m/m and +2.9% y/y). The data can be called ambiguous. On the one hand, they point to an increase in inflation, while inflation remains above the target level of the Bank of England at 2%. But, on the other hand, the data indicate a slowdown in inflation.
The publication of the data remained almost unnoticed, as all market attention focused on Brexit. The proposed by Prime Minister Theresa May, the plan of the deal was rejected on Tuesday by parliament. The vote in the British Parliament on the confidence of Theresa May will begin at 19:00 (GMT). With the opening of the trading day, GBP/USD is moderately decreasing, trading in the middle of the European session near the level of 1.2850.
Probably, Theresa May will be able to defend their post. However, the uncertainty of the future relationship between the EU and the UK is a negative factor for the pound. "Hard" Brexit without a trade agreement with the EU countries will deal a severe blow to the UK economy.
Support and resistance levels
The pound remains under pressure due to the domestic political crisis in the UK and Brexit.
The main trend of GBP/USD is still bearish. Below the key resistance levels of 1.3210 (Fibonacci level 23.6% of the correction to the decline of the GBP/USD in the wave that started in July 2014 near the level of 1.7200), 1.3030 (ЕМА200 on the daily chart) negative dynamics prevail. Short positions are preferred.
Support Levels: 1.2750, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365, 1.2110, 1.2000
Resistance Levels: 1.2950, 1.3030, 1.3125, 1.3210, 1.3300, 1.3470, 1.3740
Trading scenarios
Sell Stop 1.2820. Stop Loss 1.2920. Take-Profit 1.2750, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365
Buy Stop 1.2920. Stop Loss 1.2820. Take-Profit 1.2950, 1.3030, 1.3125, 1.3210
01/16/2019
In December, the annual rate of consumer price inflation in the UK slowed down. According to official data released on Wednesday, the UK consumer price index (CPI) rose by 2.1% in December compared with the same period last year, after rising 2.3% in November. The retail price index (RPI) +0.4% m/m, +2.7% y/y (the forecast was +0.5% m/m, +2.9% y/y), the producer selling prices index (Output PPI) -0.3% m/m, +2.5% y/y (the forecast was 0% m/m and +2.9% y/y). The data can be called ambiguous. On the one hand, they point to an increase in inflation, while inflation remains above the target level of the Bank of England at 2%. But, on the other hand, the data indicate a slowdown in inflation.
The publication of the data remained almost unnoticed, as all market attention focused on Brexit. The proposed by Prime Minister Theresa May, the plan of the deal was rejected on Tuesday by parliament. The vote in the British Parliament on the confidence of Theresa May will begin at 19:00 (GMT). With the opening of the trading day, GBP/USD is moderately decreasing, trading in the middle of the European session near the level of 1.2850.
Probably, Theresa May will be able to defend their post. However, the uncertainty of the future relationship between the EU and the UK is a negative factor for the pound. "Hard" Brexit without a trade agreement with the EU countries will deal a severe blow to the UK economy.
Support and resistance levels
The pound remains under pressure due to the domestic political crisis in the UK and Brexit.
The main trend of GBP/USD is still bearish. Below the key resistance levels of 1.3210 (Fibonacci level 23.6% of the correction to the decline of the GBP/USD in the wave that started in July 2014 near the level of 1.7200), 1.3030 (ЕМА200 on the daily chart) negative dynamics prevail. Short positions are preferred.
Support Levels: 1.2750, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365, 1.2110, 1.2000
Resistance Levels: 1.2950, 1.3030, 1.3125, 1.3210, 1.3300, 1.3470, 1.3740
Trading scenarios
Sell Stop 1.2820. Stop Loss 1.2920. Take-Profit 1.2750, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365
Buy Stop 1.2920. Stop Loss 1.2820. Take-Profit 1.2950, 1.3030, 1.3125, 1.3210
EUR/USD: good reasons are needed for the Eurodollar growth
01/17/2019
Current situation
The updated data, published on Thursday, confirmed the forecasts of economists that in December annual inflation in the Eurozone amounted to 1.6% against 1.9% in November. In conjunction with the recently published weak data, inflation indicators indicate a decrease in the likelihood that the ECB will be able to increase the rate in 2019.
Against the background of the situation with Brexit, the ECB is likely to take a waiting position at the next meeting to be held next week. January 24 will be published by the ECB decision on rates. Probably, the ECB will also express concern about the worsening growth prospects of the economy.
On Tuesday, ECB President Mario Draghi said that the European economy still needs substantial stimulation. Investors considered this a signal for a possible extension of the QE program.
At the same time, the Beige Book, published Wednesday, drew a positive picture for the US economy. “Overall, the outlook remains positive”, the report says.
Thus, according to economists, the prospects for a substantial strengthening of the euro and the growth of EUR / USD look inconclusive. Probably further weakening of the Eurodollar. For the growth of the pair EUR / USD we need good reasons and a significant weakening of the dollar.
Support and resistance levels
Despite the corrective growth of EUR / USD, which began in mid-November, negative dynamics prevail below the resistance level of 1.1570 (ЕМА200 on the daily chart).
In case of resumption of reduction, the nearest targets will be the support levels of 1.1350, 1.1285 (Fibonacci level 23.6% of the correction to the fall from 1.3900 level, which began in May 2014), 1.1270 (December lows), 1.1215 (November and year lows).
An alternative scenario involves the breakdown of the short-term resistance level of 1.1440 (ЕМА200 on the 1-hour chart) and the resumption of corrective growth. However, the growth of EUR / USD will be limited by the resistance level of 1.1570.
Support Levels: 1.1350, 1.1285, 1.1215
Resistance Levels: 1.1400, 1.1417, 1.1440, 1.1520, 1.1570, 1.1680, 1.1780
Trading recommendations
Sell in the market. Stop-Loss 1.1450. Take-Profit 1.1350, 1.1285, 1.1215
Buy Stop 1.1450. Stop-Loss 1.1390. Take-Profit 1.1520, 1.1570, 1.1700, 1.1780
01/17/2019
Current situation
The updated data, published on Thursday, confirmed the forecasts of economists that in December annual inflation in the Eurozone amounted to 1.6% against 1.9% in November. In conjunction with the recently published weak data, inflation indicators indicate a decrease in the likelihood that the ECB will be able to increase the rate in 2019.
Against the background of the situation with Brexit, the ECB is likely to take a waiting position at the next meeting to be held next week. January 24 will be published by the ECB decision on rates. Probably, the ECB will also express concern about the worsening growth prospects of the economy.
On Tuesday, ECB President Mario Draghi said that the European economy still needs substantial stimulation. Investors considered this a signal for a possible extension of the QE program.
At the same time, the Beige Book, published Wednesday, drew a positive picture for the US economy. “Overall, the outlook remains positive”, the report says.
Thus, according to economists, the prospects for a substantial strengthening of the euro and the growth of EUR / USD look inconclusive. Probably further weakening of the Eurodollar. For the growth of the pair EUR / USD we need good reasons and a significant weakening of the dollar.
Support and resistance levels
Despite the corrective growth of EUR / USD, which began in mid-November, negative dynamics prevail below the resistance level of 1.1570 (ЕМА200 on the daily chart).
In case of resumption of reduction, the nearest targets will be the support levels of 1.1350, 1.1285 (Fibonacci level 23.6% of the correction to the fall from 1.3900 level, which began in May 2014), 1.1270 (December lows), 1.1215 (November and year lows).
An alternative scenario involves the breakdown of the short-term resistance level of 1.1440 (ЕМА200 on the 1-hour chart) and the resumption of corrective growth. However, the growth of EUR / USD will be limited by the resistance level of 1.1570.
Support Levels: 1.1350, 1.1285, 1.1215
Resistance Levels: 1.1400, 1.1417, 1.1440, 1.1520, 1.1570, 1.1680, 1.1780
Trading recommendations
Sell in the market. Stop-Loss 1.1450. Take-Profit 1.1350, 1.1285, 1.1215
Buy Stop 1.1450. Stop-Loss 1.1390. Take-Profit 1.1520, 1.1570, 1.1700, 1.1780
GBP/USD: Market Expectations
01/18/2019
The pound is falling on Friday after strong growth on the eve amid rumors about a possible postponement of the UK exit from the EU, as well as the possibility of a second Brexit referendum.
The past week’s vote in the British Parliament on the Brexit deal with the EU failed for British Prime Minister Theresa May, and now she will have to submit a new plan on Monday. Most likely, it will differ little from the previous plan.
Brexit uncertainty is getting stronger, putting pressure on the pound. According to the National Bureau of Statistics (ONS), presented on Friday, retail sales in the UK decreased by 0.9% in December compared with the previous month. This report was another signal that the growth momentum of the UK economy faded in the last three months of 2018. According to economists, more stringent credit conditions, as well as the uncertainty of future UK relations with the EU have a negative impact on consumer confidence.
Meanwhile, the dollar remains stable and attractive, despite the domestic political crisis in the United States. Investors are worried about slowing global economic growth, trade conflicts, market volatility, partial suspension of government agencies and weak production data, and Fed officials said they would continue to be patient with rising interest rates.
On Friday, between 14:15 and 15:00 (GMT), important macro data from the United States will be published, including industrial production data for December and consumer confidence for January. Overall, the data is expected to be strong, despite a relative decline of values. The data should support the dollar, which is still in demand against the background of domestic political problems in Europe, as well as a slowdown in the growth of the Chinese economy due to the trade conflict between the US and China.
On Friday, GBP / USD is falling, bargaining at the beginning of the European session near the level of 1.2940, below the resistance levels of 1.3030 (EMA200), 1.2950 (EMA144 on the daily chart). A break of the short-term support level of 1.2770 (EMA200 on the 4-hour chart) will confirm the scenario for the resumption of the bearish trend and direct GBP / USD to the support levels of 1.2600 (June 2017 lows), 1.2485, 1.2365.
The main trend is still bearish. Below the key resistance levels of 1.3210 (Fibonacci level 23.6% of the correction to the decline of the GBP / USD pair in the wave that started in July 2014 near the level of 1.7200), 1.3030 (ЕМА200 on the daily chart) negative dynamics prevail.
Support Levels: 1.2770, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365, 1.2110, 1.2000
Resistance Levels: 1.2950, 1.3030, 1.3125, 1.3210, 1.3300, 1.3470, 1.3740
Trading scenarios
Sell in the market. Stop Loss 1.3010. Take-Profit 1.2770, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365
Buy Stop 1.3010. Stop Loss 1.2920. Take-Profit 1.3030, 1.3125, 1.3210
01/18/2019
The pound is falling on Friday after strong growth on the eve amid rumors about a possible postponement of the UK exit from the EU, as well as the possibility of a second Brexit referendum.
The past week’s vote in the British Parliament on the Brexit deal with the EU failed for British Prime Minister Theresa May, and now she will have to submit a new plan on Monday. Most likely, it will differ little from the previous plan.
Brexit uncertainty is getting stronger, putting pressure on the pound. According to the National Bureau of Statistics (ONS), presented on Friday, retail sales in the UK decreased by 0.9% in December compared with the previous month. This report was another signal that the growth momentum of the UK economy faded in the last three months of 2018. According to economists, more stringent credit conditions, as well as the uncertainty of future UK relations with the EU have a negative impact on consumer confidence.
Meanwhile, the dollar remains stable and attractive, despite the domestic political crisis in the United States. Investors are worried about slowing global economic growth, trade conflicts, market volatility, partial suspension of government agencies and weak production data, and Fed officials said they would continue to be patient with rising interest rates.
On Friday, between 14:15 and 15:00 (GMT), important macro data from the United States will be published, including industrial production data for December and consumer confidence for January. Overall, the data is expected to be strong, despite a relative decline of values. The data should support the dollar, which is still in demand against the background of domestic political problems in Europe, as well as a slowdown in the growth of the Chinese economy due to the trade conflict between the US and China.
On Friday, GBP / USD is falling, bargaining at the beginning of the European session near the level of 1.2940, below the resistance levels of 1.3030 (EMA200), 1.2950 (EMA144 on the daily chart). A break of the short-term support level of 1.2770 (EMA200 on the 4-hour chart) will confirm the scenario for the resumption of the bearish trend and direct GBP / USD to the support levels of 1.2600 (June 2017 lows), 1.2485, 1.2365.
The main trend is still bearish. Below the key resistance levels of 1.3210 (Fibonacci level 23.6% of the correction to the decline of the GBP / USD pair in the wave that started in July 2014 near the level of 1.7200), 1.3030 (ЕМА200 on the daily chart) negative dynamics prevail.
Support Levels: 1.2770, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365, 1.2110, 1.2000
Resistance Levels: 1.2950, 1.3030, 1.3125, 1.3210, 1.3300, 1.3470, 1.3740
Trading scenarios
Sell in the market. Stop Loss 1.3010. Take-Profit 1.2770, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365
Buy Stop 1.3010. Stop Loss 1.2920. Take-Profit 1.3030, 1.3125, 1.3210
EUR/USD: support and resistance levels
01/21/2019
Since mid-November, EUR / USD has been rising in the upward channel on the daily chart, the upper limit of which is above the key resistance level of 1.1565 (ЕМА200 on the daily chart). Last week, from the level of 1.1565 there was a rebound, and the pair could not develop an upward trend. EUR / USD declines again, trading on Monday below the important short-term resistance level of 1.1415 (EMA200 on the 4-hour chart, EMA50 on the daily chart).
The immediate targets for the decline in case of breakdown of the local support level of 1.1350 will be the support levels of 1.1300, 1.1285 (Fibonacci 23.6% of the correction to the fall from 1.3900, which began in May 2014), 1.1270 (December lows), 1.1215 (November and year lows) .
Breakdown of the short-term resistance level of 1.1415 will be a signal for the realization of the scenario for the resumption of growth of EUR / USD. However, below the resistance level of 1.1565 negative dynamics prevail. Short positions are preferred.
On Thursday, the next ECB meeting will be held on monetary policy issues. Most likely, the ECB will keep current key interest rates at the same level. The basic interest rate will remain at the same level of 0%; the ECB deposit rate for commercial banks is also likely to remain unchanged at -0.4%.
As the ECB head Mario Draghi said last week, the recent economic indicators were worse than expected, and the European economy still needs substantial stimulation. If Mario Draghi reiterates this possibility in the coming months, the euro will decline.
Support Levels: 1.1350, 1.1300, 1.1285, 1.1215
Resistance Levels: 1.1400, 1.1415, 1.1515, 1.1565, 1.1680, 1.1780
Trading Scenarios
Sell in the market. Stop-Loss 1.1420. Take-Profit 1.1350, 1.1285, 1.1215
Buy Stop 1.1420. Stop-Loss 1.1340. Take-Profit 1.1500, 1.1515, 1.1565
01/21/2019
Since mid-November, EUR / USD has been rising in the upward channel on the daily chart, the upper limit of which is above the key resistance level of 1.1565 (ЕМА200 on the daily chart). Last week, from the level of 1.1565 there was a rebound, and the pair could not develop an upward trend. EUR / USD declines again, trading on Monday below the important short-term resistance level of 1.1415 (EMA200 on the 4-hour chart, EMA50 on the daily chart).
The immediate targets for the decline in case of breakdown of the local support level of 1.1350 will be the support levels of 1.1300, 1.1285 (Fibonacci 23.6% of the correction to the fall from 1.3900, which began in May 2014), 1.1270 (December lows), 1.1215 (November and year lows) .
Breakdown of the short-term resistance level of 1.1415 will be a signal for the realization of the scenario for the resumption of growth of EUR / USD. However, below the resistance level of 1.1565 negative dynamics prevail. Short positions are preferred.
On Thursday, the next ECB meeting will be held on monetary policy issues. Most likely, the ECB will keep current key interest rates at the same level. The basic interest rate will remain at the same level of 0%; the ECB deposit rate for commercial banks is also likely to remain unchanged at -0.4%.
As the ECB head Mario Draghi said last week, the recent economic indicators were worse than expected, and the European economy still needs substantial stimulation. If Mario Draghi reiterates this possibility in the coming months, the euro will decline.
Support Levels: 1.1350, 1.1300, 1.1285, 1.1215
Resistance Levels: 1.1400, 1.1415, 1.1515, 1.1565, 1.1680, 1.1780
Trading Scenarios
Sell in the market. Stop-Loss 1.1420. Take-Profit 1.1350, 1.1285, 1.1215
Buy Stop 1.1420. Stop-Loss 1.1340. Take-Profit 1.1500, 1.1515, 1.1565
GBP/USD: macro statistics remain in the background
01/22/2019
Current dynamics
British Prime Minister Theresa May on Monday presented her new plan for secession from the European Union, which is very similar to the previous one.
The leader of the Labor Party of Great Britain, Jeremy Corbin, said that "it really starts to sound like something like Groundhog Day" and called for a vote in the House of Commons on the second Brexit referendum.
In Brussels, it was repeatedly repeated that the transaction could not be subjected to significant changes. "This withdrawal agreement cannot be changed", said Irish Foreign Minister Simon Coveney on Monday.
It seems that the situation again comes to a standstill, and the likelihood of "hard" Brexit is growing every day. This puts pressure on the pound, not allowing the uptrend to develop above the key resistance levels of 1.2955, 1.3030.
According to the data of the National Bureau of Statistics of the United Kingdom published on Tuesday, the number of employed citizens in the period from September to November increased by 141,000 compared with the previous three-month period, while the employment rate reached a record 75.8%.
The Bank of England expects that a decrease in free resources in the labor market will contribute to wage growth and keeping inflation above the target level in the coming years. However, until the situation with Brexit is resolved, the Bank of England will remain neutral in relation to changes in monetary policy, despite the high inflation rate in the country after the Brexit referendum held in June 2016.
Despite the failure of the Brexit vote in the British parliament, GBP / USD continues to develop an upward correction, trading above the important short-term support levels of 1.2860 (ЕМА200 on the 1-hour chart), 1.2785 (ЕМА200 on the 4-hour chart).
However, GBP / USD remains below key resistance levels of 1.2955 (EMA144 on the daily chart), 1.3030 (EMA200 on the daily chart).
Above the resistance level of 1.3030, GBP / USD growth is unlikely. The pound remains under pressure due to the domestic political crisis in the UK and Brexit.
In the event of a breakdown of the support level of 1.2785, the GBP / USD will go into the downstream channels on the daily and weekly charts to the support levels of 1.2600 (June 2017 lows), 1.2485, 1.2365. The main trend is still bearish. Below the key resistance levels of 1.3210 (Fibonacci 23.6% of the correction to the decline of the GBP / USD pair in the wave that started in July 2014 near 1.7200), 1.3030 (ЕМА200 on the daily chart) negative dynamics prevail and short positions are preferable.
Support Levels: 1.2860, 1.2785, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365, 1.2110, 1.2000
Resistance Levels: 1.2955, 1.3030, 1.3125, 1.3210, 1.3300, 1.3470, 1.3740
Trading recommendations
Sell in the market. Stop Loss 1.3040. Take-Profit 1.2860, 1.2785, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365
Buy Stop 1.2930. Stop Loss 1.2850. Take-Profit 1.2955, 1.3030
01/22/2019
Current dynamics
British Prime Minister Theresa May on Monday presented her new plan for secession from the European Union, which is very similar to the previous one.
The leader of the Labor Party of Great Britain, Jeremy Corbin, said that "it really starts to sound like something like Groundhog Day" and called for a vote in the House of Commons on the second Brexit referendum.
In Brussels, it was repeatedly repeated that the transaction could not be subjected to significant changes. "This withdrawal agreement cannot be changed", said Irish Foreign Minister Simon Coveney on Monday.
It seems that the situation again comes to a standstill, and the likelihood of "hard" Brexit is growing every day. This puts pressure on the pound, not allowing the uptrend to develop above the key resistance levels of 1.2955, 1.3030.
According to the data of the National Bureau of Statistics of the United Kingdom published on Tuesday, the number of employed citizens in the period from September to November increased by 141,000 compared with the previous three-month period, while the employment rate reached a record 75.8%.
The Bank of England expects that a decrease in free resources in the labor market will contribute to wage growth and keeping inflation above the target level in the coming years. However, until the situation with Brexit is resolved, the Bank of England will remain neutral in relation to changes in monetary policy, despite the high inflation rate in the country after the Brexit referendum held in June 2016.
Despite the failure of the Brexit vote in the British parliament, GBP / USD continues to develop an upward correction, trading above the important short-term support levels of 1.2860 (ЕМА200 on the 1-hour chart), 1.2785 (ЕМА200 on the 4-hour chart).
However, GBP / USD remains below key resistance levels of 1.2955 (EMA144 on the daily chart), 1.3030 (EMA200 on the daily chart).
Above the resistance level of 1.3030, GBP / USD growth is unlikely. The pound remains under pressure due to the domestic political crisis in the UK and Brexit.
In the event of a breakdown of the support level of 1.2785, the GBP / USD will go into the downstream channels on the daily and weekly charts to the support levels of 1.2600 (June 2017 lows), 1.2485, 1.2365. The main trend is still bearish. Below the key resistance levels of 1.3210 (Fibonacci 23.6% of the correction to the decline of the GBP / USD pair in the wave that started in July 2014 near 1.7200), 1.3030 (ЕМА200 on the daily chart) negative dynamics prevail and short positions are preferable.
Support Levels: 1.2860, 1.2785, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365, 1.2110, 1.2000
Resistance Levels: 1.2955, 1.3030, 1.3125, 1.3210, 1.3300, 1.3470, 1.3740
Trading recommendations
Sell in the market. Stop Loss 1.3040. Take-Profit 1.2860, 1.2785, 1.2700, 1.2670, 1.2600, 1.2485, 1.2365
Buy Stop 1.2930. Stop Loss 1.2850. Take-Profit 1.2955, 1.3030
NZD/USD: New Zealand dollar strengthened on Wednesday
01/23/2019
Current Dynamics
As the Statistics Bureau of New Zealand reported on Wednesday, in the 4th quarter of 2018, consumer prices increased by 0.1% compared to the 3rd quarter, and the annual increase in consumer prices was 1.9%. The forecast was 0% and + 1.8%, respectively.
At the same time, as noted by the Bureau of Statistics, the increase in prices for domestic goods turned out to be quite high, reaching 0.7% compared with the previous quarter (the forecast was + 0.4%). The annual increase in prices for these goods was 2.7%.
According to economists, the published data give reason to expect further growth in domestic inflation. This is a positive factor for the New Zealand currency, as talk about the possibility of lowering the rate of the RBNZ in February subsided.
The New Zealand dollar rose after the publication of data on inflation, and the NZD / USD pair jumped to the level of 0.6800, through which the strong resistance level passes (200-period moving average on the daily chart).
Nevertheless, one should not expect a stronger strengthening of the New Zealand dollar.
Economists continue to point out signs of slowing economic growth and stick to the previous forecast, suggesting that the RBNZ will lower its key interest rate in 2019. But even if this does not happen, the need to raise interest rates will not arise soon. And this is a constraining fundamental factor for the further strengthening of the New Zealand currency.
The slowdown in the growth of the Chinese economy and the decline in imports to China represents a direct threat to the New Zealand economy, which can be expressed in a decline in the volume of export earnings and the level of New Zealand GDP. Nevertheless, the New Zealand dollar so far remains stable, despite the deterioration of the international trading environment.
Meanwhile, the US dollar is moderately declining on Wednesday. The DXY dollar index, which tracks the US currency against a basket of 6 other major currencies, has grown over the past four trading days by 1.0%, exceeding the 96.00 mark. However, on Wednesday, DXY futures traded near the 95.88 mark, while maintaining a long-term positive trend.
Trading scenarios
Since the beginning of the month, NZD / USD has been growing, attempting to consolidate above the key level of 0.6800 (ЕМА200 on the daily chart). The breakdown of the strong resistance level of 0.6860 (Fibonacci level 23.6% of the upward correction to the global wave of the pair's decline from the level of 0.8800, started in July 2014; the lows of the wave are near the level of 0.6260) could mean breaking the bearish trend of NZD / USD, which began in April 2018. In this case, NZD / USD will go towards the resistance level of 0.7100 (ЕМА200 on the weekly chart).
An alternative scenario will be associated with the breakdown of the support level of 0.6765 (EMA144 on the daily chart and EMA200 on the 4-hour chart), which confirms the return of NZD / USD to a bearish trend.
Below the support level of 0.6765 (EMA200 on the 4-hour chart) short positions are again preferred.
Support levels: 0.6765, 0.6708, 0.6655, 0.6515, 0.6430
Resistance levels: 0.6800, 0.6860, 0.6970, 0.7100
Trading Scenarios
Sell Stop 0.6760. Stop Loss 0.6810. Take-Profit 0.6710, 0.6655, 0.6515, 0.6430
Buy Stop 0.6810. Stop Loss 0.6760. Take-Profit 0.6860, 0.6970, 0.7000, 0.7100
01/23/2019
Current Dynamics
As the Statistics Bureau of New Zealand reported on Wednesday, in the 4th quarter of 2018, consumer prices increased by 0.1% compared to the 3rd quarter, and the annual increase in consumer prices was 1.9%. The forecast was 0% and + 1.8%, respectively.
At the same time, as noted by the Bureau of Statistics, the increase in prices for domestic goods turned out to be quite high, reaching 0.7% compared with the previous quarter (the forecast was + 0.4%). The annual increase in prices for these goods was 2.7%.
According to economists, the published data give reason to expect further growth in domestic inflation. This is a positive factor for the New Zealand currency, as talk about the possibility of lowering the rate of the RBNZ in February subsided.
The New Zealand dollar rose after the publication of data on inflation, and the NZD / USD pair jumped to the level of 0.6800, through which the strong resistance level passes (200-period moving average on the daily chart).
Nevertheless, one should not expect a stronger strengthening of the New Zealand dollar.
Economists continue to point out signs of slowing economic growth and stick to the previous forecast, suggesting that the RBNZ will lower its key interest rate in 2019. But even if this does not happen, the need to raise interest rates will not arise soon. And this is a constraining fundamental factor for the further strengthening of the New Zealand currency.
The slowdown in the growth of the Chinese economy and the decline in imports to China represents a direct threat to the New Zealand economy, which can be expressed in a decline in the volume of export earnings and the level of New Zealand GDP. Nevertheless, the New Zealand dollar so far remains stable, despite the deterioration of the international trading environment.
Meanwhile, the US dollar is moderately declining on Wednesday. The DXY dollar index, which tracks the US currency against a basket of 6 other major currencies, has grown over the past four trading days by 1.0%, exceeding the 96.00 mark. However, on Wednesday, DXY futures traded near the 95.88 mark, while maintaining a long-term positive trend.
Trading scenarios
Since the beginning of the month, NZD / USD has been growing, attempting to consolidate above the key level of 0.6800 (ЕМА200 on the daily chart). The breakdown of the strong resistance level of 0.6860 (Fibonacci level 23.6% of the upward correction to the global wave of the pair's decline from the level of 0.8800, started in July 2014; the lows of the wave are near the level of 0.6260) could mean breaking the bearish trend of NZD / USD, which began in April 2018. In this case, NZD / USD will go towards the resistance level of 0.7100 (ЕМА200 on the weekly chart).
An alternative scenario will be associated with the breakdown of the support level of 0.6765 (EMA144 on the daily chart and EMA200 on the 4-hour chart), which confirms the return of NZD / USD to a bearish trend.
Below the support level of 0.6765 (EMA200 on the 4-hour chart) short positions are again preferred.
Support levels: 0.6765, 0.6708, 0.6655, 0.6515, 0.6430
Resistance levels: 0.6800, 0.6860, 0.6970, 0.7100
Trading Scenarios
Sell Stop 0.6760. Stop Loss 0.6810. Take-Profit 0.6710, 0.6655, 0.6515, 0.6430
Buy Stop 0.6810. Stop Loss 0.6760. Take-Profit 0.6860, 0.6970, 0.7000, 0.7100