Wave analysis of GBP / USD for September 24. The pound hit down with news from the EU

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Analysis of wave counting:

During the trades on September 21, the GBP / USD currency pair lost about 200 percentage points after an unsuccessful attempt to break through the level of 161.8% on the senior Fibonacci grid. Thus, the construction of a downward wave began, presumably 4. An unsuccessful attempt to break through the 50.0% Fibonacci level constructed by wave 3 will lead to the completion of wave 4. Significant importance now has a news background, since not the least role in the fall of the pound was played the EU summit, during which the EU and Britain could not advance in the negotiations, as later announced by Prime Minister Theresa May.

The objectives for the option with purchases:

1.3301 - 161.8% of Fibonacci (the senior grid)

The objectives for the option with sales:

1.3041 - 50.0% of Fibonacci

1,2982 - 61.8% of Fibonacci retracement

General conclusions and trading recommendations:

The GBP / USD currency pair supposedly completed the construction of wave 3. Wave 4 can also be completed if it takes a shortened view in the temporal sense of the word. However, it would be more logical to see a retracement from the level of 50.0% in Fibonacci, or from 61.8%. Such a retreat will be a signal of the readiness of the instrument to resume the construction of the upward trend section. In the implementation of this option, I recommend that you resume the pair purchases.

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Wave analysis of EUR / USD for September 24. The rising wave 3 can take an even more complicated form

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Analysis of wave counting:

During the trades on Friday, the currency pair EUR / USD lost about 30 percentage points. An unsuccessful attempt to break through the 127.2% Fibonacci level led to the withdrawal of quotations from the peaks achieved. However, the proposed wave 3 may become even more complicated and continue its construction. Its internal wave structure is quite complex, so it can take an even more complicated look. An unsuccessful attempt to break the level of 100.0% will help to resume the rise of the pair

The objectives for the option with sales:

1.1525 - 0.0% of Fibonacci retracement

The objectives for the option with purchases:

1.1791 - 127.2% of Fibonacci retracement

1.1844 - 161.8% of Fibonacci

General conclusions and trading recommendations:

The currency pair still remains in the stage of constructing wave 3, a. Thus, I recommend buying a pair on the rebound from the level of 100.0% with targets that are near the estimated marks of 1.1791 and 1.1864. If the attempt to break through the level of 100.0% will be successful, the decline will continue, perhaps even within the downward correctional wave, presumably 4, a.

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EUR and GBP: Italy's political risks are pressured by the euro. Theresa May crashed the pound

Overbought risky assets, disagreements in trade negotiations between the US, Canada, and Mexico, as well as fears that the draft budget of Italy will go beyond the permissible EU framework. All this had a negative effect on the European currency, which began to decline rapidly after the monthly maximum update paired with the US dollar. The British pound also collapsed on Friday after the speech of British Prime Minister Theresa May.

Fundamental indicators

Data released in the second half of the day on the US economy, slightly affected the quotes.

According to the report, activity in the US manufacturing sector in September this year showed a significant slowdown. According to the company IHS Markit, the preliminary composite index of supply managers PMI was at 53.4 points against 54.7 points last month. Let me remind you that the indicator above 50 points indicates an increase in activity.

As noted by IHS Markit experts, partial slowdown is associated with Hurricane Florence, while new orders and employment grew at a fairly significant pace.

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Trade agreement with Mexico

On Friday, it also became known that the administration of the White House can enter into a trade agreement with Mexico even without Canada participating in it. With such an address, the chairman of the Council of Economic Advisers under the US President, Kevin Hassett.

Hassett said that the US had a successful negotiation and reached an excellent deal with Mexico, which for both sides is more profitable than the current agreement on NAFTA. He expressed the hope of concluding such an agreement with Canada and the EU. The representative of the president was disappointed by the fact that Canada has not yet signed a trade agreement.

Italy

Additional pressure on risky assets has political risks associated with Italy. Let me remind you that this Thursday, the first draft of the budget of Italy will be presented, which can seriously disappoint the markets. The point is that the budget may largely diverge from the EU's Stability and Growth Pact. Experts are concerned that the pre-election promises of the new government can seriously affect the new budget, which will lead to overstepping the limits of allowable costs, which will increase Italy's public debt and leave room for fiscal maneuvers in the future.

Technical picture EUR / USD

As for the technical picture of the EUR / USD currency pair, it is best to buy back to purchases after a larger downward correction in risky assets, which was formed at the end of last week. The main support levels are located in the area of 1.1715 and 1.1680, from where a large surge of volume can be observed. Also in this span, the bulls will try to form the lower boundary of the short-term ascending channel, formed on the 10th of September.

British pound

The British pound collapsed against the US dollar after the British Prime Minister stated that negotiations on Brexit had reached a dead end.

May said that there are still differences on two important issues, one of which is the customs border with Northern Ireland, which the UK will never agree to. According to the Prime Minister, it is better not to reach an agreement at all than to reach a bad agreement on Brexit. The government expects respect from the EU, and unless a clear proposal is made, progress is unlikely to be achieved.

At the end of the speech, May said that even if an agreement was not reached, the rights of European citizens would be protected.

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GBP / USD. 24th of September. The trading system "Regression channels". Negotiations on Brexit at the EU summit failed

4-hour timeframe

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Technical data:

The senior channel of linear regression: direction - down.

The younger channel of linear regression: the direction is up.

Moving average (20, smoothed) - down.

CCI: -143.6352

The currency pair GBP / USD on Monday, September 24, continues the downward movement, which began on Friday. On Thursday, we already wrote that the information that negotiations on Brexit allegedly reached an agreement have not been confirmed. And on Friday, Theresa May issued an official statement summing up the results of the EU summit, in which she announced that the negotiations had reached a dead end. According to the British Prime Minister, it is the EU that is to blame for this, which rejected May's proposal and did not provide its alternative proposal. Thus, as before, two key questions remain unresolved: trade relations between the EU and Britain after Brexit and the border between Ireland and Northern Ireland. Conclusion: no agreements have been reached, as we wrote earlier, and the pound sterling completely logically fell down. It will continue to fall if May does not find a way to negotiate with the EU. And there are fewer and fewer chances for this every day. New concessions to May will cause even greater displeasure in the British Parliament and among the public. May's plan and so many are displeased, even inside her own Party. New concessions will further undermine the credibility of her. A group of dissatisfied with its conservative policies can withdraw its premier earlier than planned in April 2019. All this political crisis will continue to put pressure on the British pound.

Nearest support levels:

S1 = 1.3062

S2 - 1,3000

S3 - 1.2939

Nearest resistance levels:

R1 = 1.3123

R2 = 1.3184

R3 = 1.3245

Trading recommendations:

The currency pair GBP / USD overcame the removals. Thus, short positions with a target of 1.3062, which has already been worked out, are relevant. Overcoming this target will allow you to hold short positions with the next target of 1.3000.

Orders for purchase are recommended to be considered no earlier than the reverse fixing of the price above the removals for the purpose of 1.3184. But to do this, you need a strong fundamental foundation, and it's even hard to imagine what they can be.

In addition to the technical picture, one should also take into account the fundamental data and the time of their release.

Explanations for illustrations:

The upper channel of linear regression is the blue lines of unidirectional motion.

The junior channel is linear-violet lines of unidirectional motion.

CCI - the blue line in the regression window of the indicator.

Moving average (20; smoothed) - the blue line on the price chart.

Levels of Murray - multi-colored horizontal stripes.

Heikin Ashi is an indicator that color bars in blue or purple.

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

EUR / USD. 24th of September. The trading system "Regression channels". Will the Federal Reserve go on cooperation with Trump?

4-hour timeframe

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Technical data:

The senior channel of linear regression: direction - sideways.

The younger channel of linear regression: the direction is up.

The moving average (20; flattened) is up.

–°CI: 38.8128

The currency pair EUR / USD at the beginning of the new trading week continues to be adjusted, as indicated by the blue bars of the indicator Heikin Ashi. The purpose of correction is the moving average line. The rebound of the price from the moving-out will provoke the resumption of the upward movement, and the upward trend will be preserved. On Monday, September 24, no important macroeconomic reports are expected in either the States or the European Union. Thus, traders will have to rely on making trade decisions solely on technology. Volatility today can be lowered. Also, you should continue to monitor any reports from US President Donald Trump. His recent comments on the introduction of new trade duties for an unprecedented amount of $ 267 billion, which together with the previous sanctions will cover all imports from China, remained without reaction. This suggests that the market is tired of news on this topic and does not look so rosy in the future, expecting a serious positive effect for the US economy. Moreover, China does not go backward and does not concede to Trump in anything. From this point of view, the prospects for the US dollar now do not look as rosy as they did a month or two ago. Moreover, Trump seems to have taken up seriously the question of the high cost of the US dollar. Let's see what decision on the rate the Fed will take this week.

Nearest support levels:

S1 = 1.1719

S2 = 1.1658

S3 - 1,1597

Nearest resistance levels:

R1 = 1.1780

R2 - 1.1841

Trading recommendations:

The EUR / USD currency pair is corrected. The color of 1-2 bars by the indicator of Heikin Ashi in purple will signal about the possibility of opening new purchase orders with the target of 1.1780. The rebound of the price from the removals will also indicate the resumption of the upward movement.

Sell-positions can be opened after fixing the price below the removals. In this case, for some time, the trend for the instrument will change to a downward trend, and the first target for short positions will be 1.1658.

In addition to the technical picture, one should also take into account the fundamental data and the time of their release.

Explanations for illustrations:

The upper channel of linear regression is the blue lines of unidirectional motion.

The lowest linear regression channel is the violet lines of unidirectional motion.

CCI - the blue line in the indicator window.

Moving average (20; smoothed) - the blue line on the price chart.

Levels of Murray - multi-colored horizontal stripes.

Heikin Ashi is an indicator that color bars in blue or purple.

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