EUR / USD: Euro buyers urgently need to correct the situation

Euro buyers failed to cope yesterday with a large level around 1.1325, which led to a downward correction. However, the fundamental data on the American economy and the statements of the Fed representatives did not greatly help the dollar to continue its strengthening against risky assets.

Yesterday, there was news that the United States and China had drawn up an approximate schedule for the next round of trade negotiations, which is a good signal for the markets. The agreement is expected to be signed by the end of May. It is already known that the US sales representative Lighthizer planned a trip to Beijing on April 29.

The fundamental data released yesterday indicated that the trade deficit in the USA in February of this year was reduced due to a stronger increase in exports over imports.

As indicated in the report of the US Department of Commerce, the foreign trade deficit decreased by 3.4% in February 2019 compared with the amounted to 49.38 billion US dollars in the previous month.

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As I noted above, exports in February increased by 1.1% and amounted to 209.69 billion dollars, while imports increased by only 0.2% compared with the previous month. It is noteworthy that the deficit of trade in goods with China decreased by 9.3% compared in the previous month and amounted to 30.12 billion dollars.

Stocks from wholesale companies in the US resumed their growth. According to the report of the Ministry of Commerce, inventories in the wholesale trade increased by 0.2% in February 2019 compared with the previous month, while economists expected growth of 0.4%.

The Philadelphia Fed President is one of the few who is still optimistic about interest rates, especially given the fact that at a recent meeting the Central Bank hinted that rates could be lowered if necessary. Perhaps one of the few who still believes in changes in monetary policy is Patrick Harker, the president of the Federal Reserve Bank of Philadelphia. In the course of yesterday's interview, Herker said that one more rate increase is still possible this year and another one in 2020. In his opinion, the labor market is strong and inflation is restrained. Harker expects inflation to average more than 2% this year and the US GDP will grow by 2% this year and the next year.

As for the technical picture of the EURUSD pair, it has not undergone major changes. Major support remains the lower boundary of the lateral channel at 1.1280, while the upper region of 1.1325 acts as resistance. All of these are in harmony with the average boundary of the channel in the area of 1.1300. Further movement of the euro today will depend on the upcoming economic data from the euro area.

The Canadian dollar has temporarily regained its position against the US dollar after a report that annual inflation in Canada accelerated in March. According to a report by the National Bureau of Statistics of Canada, Canada's total CPI rose by 1.9% in March against 1.5% in the previous month. The data completely coincided with economists' forecasts and inflation rose by 0.7% compared with the previous month. The base CPI increased by 2.2% compared with the same period last year.

Canada's foreign trade deficit declined in February, which also provided temporary support for the Canadian dollar. According to the report, the shortage of foreign trade in goods amounted to 2.90 billion Canadian dollars. Meanwhile, economists had expected the deficit to reach $3.6 billion. Exports fell by 1.3% in February, while imports fell by 1.6%.

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Daily review of Indicator analysis for GBP / USD pair on April 18, 2019

On Wednesday the market moved in the side channel. Traders could not decide whether the support line of 1.3067 (yellow thin line) was broken or not. On Thursday, a strong calendar news comes out at 9.30 and 13.30 London time.

Trend analysis (Fig. 1).

On Thursday, the technical analysis gives a downward movement. The first lower target is at 1.3002, which is the 38.2% pullback level (blue dashed line).

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Fig. 1 (daily schedule).

Comprehensive analysis:

- indicator analysis - down;

- Fibonacci levels - down;

- volumes - down;

- candlestick analysis is neutral;

- trend analysis - down;

- Bollinger lines - down;

- weekly schedule - up.

General conclusion:

On Thursday, the technical analysis gives a downward movement. The first lower target is at 1.3002, which is the 38.2% pullback level (blue dashed line).

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Bitcoin breaks above $5,250. April 18, 2019

Bitcoin managed to break above $5,250 after a series of consolidations and corrections at the edge of the $5250 area. The cryptocurrency is likely to set new records.

The recent rally of Bitcoin after breaking above $5,000 area with a daily close is a sign of the strengthening crypto market. Although the recent upwards momentum appears to be fizzled out, analysts believe, Bitcoin is going to reach its strong resistance level around $5,500. Moreover, it can open the gates for even greater gains if BTC breaks above this level. Bitcoin, the flagship of the overall Crypto industry, is anticipated to attract more buyers and increase volatility in the coming days.

The price is currently being restrained by the dynamic level of 20 EMA, Tenkan, and Kijun lines as a support level. Meanwhile, the Chikou span remains above the price line indicating further upward pressure. After the price broke above the $5250 area, it retested it as support. Now, it is likely to move higher towards $6,000 in the coming days if the bullish sentiment persists.

SUPPORT: 5,000, 5,250

RESISTANCE: 5,500, 5,750, 6,000

BIAS: BULLISH

MOMENTUM: VOLATILE

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EUR/AUD Fundamental Analysis for April 18, 2019

EUR/AUD has been the most volatile pair recently making highly impulsive spikes without any definite trend momentum in the process. The eurozone is struggling with the economic slowdown. Thus, AUD is taking advantage of downbeat data from the eurozone. At the same time, AUD is also suffering the fallout of the global economic headwinds.

This week there was positive news from the ZEW economic sentiment survey on Germany, which is a key gauge of investor confidence. The indicator has been stalled on negative territory for the past 12 months and eventually climbed into positive territory in April 2019. This week, the business climate index jumped to 3.1 from -3.6 in March. Such improvement added confidence to institutional investors and analysts. The eurozone ZEW indicator also surged to 4.5 from -2.5 which is also a positive sign. The ECB maintained the key interest rate at a record low of 0.0% along with the deposit rate. The ECB stated at the last policy meeting that they don't have any plan to increase the rate at least until late 2019. The main focus for the ECB would be to ensure the continued sustained conjunction of inflation to levels that are below, but close to 2% in the medium term.

The inflation has been moving towards the governing council's inflation target. The euro area's real GDP rose by 0.2% in the fourth quarter of 2018, following an increase of 0.1% in the Q3. The manufacturing sector is still feeble due to soft external demand. Annual HICP inflation edged down to 1.4% in March 2019 from 1.5% in February because of a decline in food, services, and non-energy industrial goods price inflation. Broad money growth improved by 4.3% in February 2019 from 3.8% in January. The annual growth rate of loans to non-financial corporations recovered to 3.7% in February 2019 from 3.4% in January. Overall, the European economy in on the recovery mode. Besides, BREXIT tensions have also calmed down for some month.

On the other hand, today Australia's Employment Change report was published with an increase to 25.7k from the previous figure of 10.7k which was expected to be at 15.2k. On the minus side, an unemployment rate grew to 5.0% in March as expected from 4.9% in February. The Reserve Bank of Australia left the cash rate unchanged at 1.5% with a dovish policy update that put pressure on AUD. However, strong data from China cushioned AUD from bearish momentum. The Australian labor market is also healthy that is certainly bullish for AUD.

RBA policymakers admitted softer growth in the domestic economy and cancelled their forecast of 3% GDP growth for this year. The global slowdown in the economy is affecting the international trade of Australia. The long-term bond yields have fallen while short-term bank funding costs have weakened further.

Meanwhile, AUD has been quite firm in light of the upbeat employment change. So, AUD is expected to assert strength over EURO. On the flip side, an uptick in the unemployment rate may indicate further AUD weakness against EUR in the short term. Despite the eurozone's economic slowdown, EUR could gain ground while AUD has to struggle for keeping momentum.

Now let us look at the technical view. The pair has been trading quietly amid the bearish pressure which is being held b level of 20 EMA as resistance along the way. The price recently formed Bullish Divergence as well which also indicates a probability of the price pushing higher along the way before moving lower with a target towards 1.5500 and later towards 1.5300 support area in the coming days. As the price remains below 1.60 area with a daily close, the pair is likely to trade with a bearish bias.

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Trading Plan for EUR / USD and GBP / USD pairs on 04/18/2019

Only investors were in a positive mood and prepared to make wholesale purchases of a pound with a single European currency, as the sad news came again. Inflation in the United Kingdom did not grow as expected but remained unchanged while in Europe, the total confirmed the preliminary estimate and inflation fell from 1.5% to 1.4%. By contrast, data on inventories at wholesale warehouses in the United States were better than expected, as they grew by only 0.2% instead of the expected 0.5%. oddly enough, this was enough for investors to believe in the dollar even more and even forgot that these same stocks have been growing for fifteen months in a row.

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In fact, today is the last working day and tomorrow marks as non-working holiday Good Friday in Europe. On this pre-holiday day, oddly enough, a lot of interesting macroeconomic data that will give considerable food for thought just at the time of prayer. Thus, the growth rate of retail sales in the United States should accelerate from 2.2% to 2.7%, which is naturally impressive, especially if we recall the recent increase in inflation. However, the growth rate of retail sales should also accelerate from 4.0% to 4.6% in the United Kingdom, which to some extent compensates for the disappointment with yesterday's inflation data. In addition, preliminary data on business activity indices will be published in both Europe and the United States. The forecasts for the Old World are rather moderately optimistic since the business activity index in the services sector should decrease from 53.3 to 53.2. However, in the manufacturing sector, it grew from 47.5 to 47.9. In sum, this should give rise to a composite index of business activity from 51.6 to 51.8 but in the United States, the expectations are not so optimistic, as the business activity index in the service sector can be reduced from 55.3 to 55.0 and also the production index can fall from 52.4 to 51.8. Hence, we are waiting for a decline in the composite index of business activity from 54.6 to 54.0 and of course, they are once again waiting for an increase in the number of applications for unemployment benefits. If the number of repeated applications for unemployment benefits can grow up to 7 thousand, then the number of primary applications can increase as much as 11 thousand. Regardless, the significant increase in retail sales will smooth all this negativity.

The euro/dollar currency pair continues to fluctuate within the level of 1.1300. It is likely that the amplitude fluctuation within 1.1290/1.1320 will continue and concentrate closer to the upper boundary.

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The pound/dollar currency pair felt temporary support in front of it after approaching the lower limit of the range move at 1.3030, resulting in stagnation. It is likely to assume that instability continues around 1.3030/1.3050, where it is worth tracking down the fixation points outside the borders to place trade orders.

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