Bitcoin analysis for October 20, 2017

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The Bitcoin (BTC) has been trading sideways at the price of $5.635. President Donald Trump's Attorney General, Jeff Sessions, testified before the Senate Committee on the Judiciary. The committee is given rather broad powers concerning federal criminal law and internet privacy. During a quick exchange, hours into the hearing, Mr. Sessions was asked about the "dark web." His answers might foreshadow what's ahead for digital privacy and bitcoin users. The intraday picture looks bullish.

Trading recommendations:

According to the 15M time - frame, I found a fake breakout of the pivot point at the price of $5.630, which is a sign that selling looks risky. There is also a tweezer bottom in the background, which is another sign of strength. My advice is to watch for potential buying opportunities. The upward targets are set at the price of $5.780 (R1) and $5.880 (R2).

Support/Resistance

$5.630 – Pivot level

$5.780 – Pivot resistance 1

$5.880 – Pivot resistance 2

$5.534 – Pivot support 1

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USD/JPY analysis for October 20, 2017

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Recently, the USD/JPY pair has been trading upwards. As I expected, the price tested the level of 113.46. According to the 15M time – frame, I found a broken pivot resistance 1 at the price of 113.03, which is a sign that buyers are in control. Stochastic is showing oversold condition on latest downward correction, which is sign that that bullish activity may resume. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 113.50 (R2) and extreme target at the price of 113.85 (S3).

Resistance levels:

R1: 113.03

R2: 113.50

R3: 113.85

Support levels:

S1: 112.17

S2: 111.80

S3: 111.32

Trading recommendations for today: watch for potential buying opportunities.

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GBP/USD analysis for October 20, 2017

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Recently, the GBP/USD has been trading sideways at the price of 1.3180. According to the 15M time - frame, I found that shooting star candle and few doji candles near the pivot level at the price of 1.3170, which is a sign that buying looks risky. The stochastic oscillator is in overbought zone, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.3115 (S1) and 1.3085 (S2).

Resistance levels:

R1: 1.3215

R2: 1.3270

R3: 1.3315

Support levels:

S1: 1.3115

S2: 1.3070

S3: 1.3015

Trading recommendations for today: watch for potential selling opportunities.

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Global macro overview for 20/10/2017

The headline reading, Retail Sales With Auto Fuel, was released at the level of -0.8% after 0.9% increase a month ago. The market consensus was at the level of -0.1.%. Moreover, the data indicated that the underlying pattern in the retail industry is one of growth; for the three-months on three-months measure, the quantity bought increased by 0.6%. Year-on-year, the quantity bought in the retail sector increased by 1.2% with non-food (household goods, clothing stores) and non-store retailing all providing growth. Store prices continue to rise across all store types and are at their highest year-on-year price growth since March 2012 at 3.3% (non-seasonally adjusted). Online sales values increased year-on-year by 14%, accounting for approximately 17% of all retail spending.

In conclusion, despite the weaker one-month data, there is a continuation of the underlying trend of steady growth in sales volumes following a weak start to the year, and a background of generally rising prices. These increased costs are reflected in the more rapid growth in the amount spent when compared with the quantity bought.

Earlier this week, Silvana Tenreyro, a new member of the BOE, said in her speech in the British Parliament that it is necessary to raise interest rates in the current economic climate. Tenreyro points out that the BOE is quite close to the point at which the scale of monetary stimulation should be reduced. In addition, it stresses the problem of a rather poor trajectory of economic growth, which in her opinion is a problem of temporary rank.

Let's now take a look at the GBP/USD technical picture on the H4 time frame. The market is trading below the dashed black short-term trend line in oversold conditions. A bounce from the level of 1.3087 might indicate a correction towards the level of 1.3155 where the dashed trend line will provide a dynamic resistance. As long as the level of 1.3342 is not clearly violated, the near-term outlook remais bearish.

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Global macro overview for 20/10/2017

The recent comments from Bank of Japan Governor Kuroda did not cause any substantial reaction on financial markets. During his today's speech, he reiterated that weakness on the price front is going on and prices will rise towards 2%, so this was nothing new for market participants.

In late September, Japanese Prime Minister Shinzo Abe unexpectedly announced a snap parliamentary election slated for October 22. Despite the problems within the ruling party, the opposition is also shattered, as Abe wants to capitalize on the positive economic climate and growing threats from North Korea. The very good result of the 2014 elections is unlikely to be repeated, but Abe and his Liberal Democratic Party (LDP) should keep the majority and are poised to remain the biggest party by far and continue in the government after the general election. The support for the Abe party is understandable. Japan is out of economic stagnation and Prime Minister Abe's goal of increasing Japan's GDP by one fifth from 2012 to 2020 is achievable. Unemployment is the lowest in 30 years and the government has managed to stabilize public finances. In addition, the prime minister is favored by the conflict over North Korea, as it has highlighted Abe's leadership in the face of the threat of war.

The continuation of Abenomania implies the pressure to weaken the Yen in the medium term across the board.

Let's now take a look at EUR/JPY technical picture on the H4 time frame. After testing the support at the level of 131.70 three times, the market reversed and now is close to the recent highs at the level of 134.40 again. The market conditions are overbought, but there is no sign of any bearish divergence just yet. The nearest support is seen at the level of 133.50.

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