Daily analysis of GBP/JPY for October 18, 2017

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Overview

The GBP/JPY pair traded downwards yesterday moving away from the resistance at 149.10, which confirms its affection by the bearish correctional domination. We will keep waiting for the price to reach the first correctional target at 146.80, reminding you that extra negative pressure will allow the price to resume its bearish attack and reach 145.50, to test the moving average 55. Stochastic is currently settling below 50 levels, supporting our bearish suggestion by new negative momentum and ease the price attempt to reach the suggested negative targets. The expected trading range for today is between 149.10 and 146.80.

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Daily analysis of Gold for October 18, 2017

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Overview

Gold price is trading lower, heading for the key support at 1,281.17. Traders are advised to excercise caution in the short term, as settling below this level will extend Gold price losses to reach 1,263.15 in the upcoming period. In general, we will keep today's bullish scenario valid on condition of holding above 1,281.17. Let me remind you that our initial targets begin by breaching 1,299.20 followed by 1,305.00 to open the way to head towards 1,321.49, followed by 1,357.53 on the near-term basis. The expected trading range for today is between 1,280.00 support and 1,305.00 resistance.

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Daily analysis of Silver for October 18, 2017

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Overview

Silver price is trading lower to move below the bearish trend line again. This might push the price to test the key support 16.56 before turning back to rise again. Stochastic keeps getting rid of its negative momentum to support the expectations of a further overall bullish trend, which is holding above 16.56. The targets are seen at 17.43 to reach 18.30. The expected trading range for today is between 16.95 support and 17.40 resistance.

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BITCOIN Analysis for October 18, 2017

Bitcoin has been quite corrective recently. As expected, the price is retracing towards the Kumo Cloud support before launching higher with a target towards $6,000 price level. Today, Bitcoin has breached below the $5,500 price level which made the market quite indecisive about the upcoming bullish movement in this cryptocurrency. A daily close below $5,500 is expected to take the market to more corrective and volatile atmosphere in the coming days. Ahead of the upcoming Bitcoin Split in November, the market sentiment was quite confused before the impulsive bullish move but the price is expected to move clean towards $6,000 price level before any strong bearish counter-trend. There are also certain news coming up where buying Bitcoin has been discouraged by various regulators and elite executives like JP Morgan Chase CEO Jamie Dimon. Apart from the negative statements, the Bitcoin remained unaffected but ahead of the upcoming Bitcoin split it is struggling well. As for the current scenario, the price has moved below the dynamic level of 20 EMA whereas Tenkan and Kijun line is about to have a bearish cross and Chikou Span is currently residing inside the corrective structure. As the price remains above the Kumo Cloud and $5,000 support area, the bullish bias is set to continue further in the coming days.

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Fundamental Analysis of USD/CAD for October 18, 2017

USD/CAD has been quite corrective recently inside the range of 1.2420 to 1.2660. USD has been weighed down by weak economic reports recently whereas a positive report from Canada today helped with CAD gains. Recent FOMC minutes were bearish for USD which led to further weakness against CAD. Nevertheless, the bias is bullish in the long term. Today CAD Manufacturing Sales report was published with an increase to 1.6% from the previous negative value of -2.6% which was expected to be at -0.1%. It is the leading indicator of the economic health, so positive outcome of the economic report is expected to provide a better push to the CAD for further gains against USD. On the USD side, today Building Permits report was published with a worse figure of 1.22M from the previous figure of 1.27M which was expected to be at 1.25M, Housing Starts report also showed a decrease to 1.13M which was expected to be unchanged at 1.18M, and Crude Oil Inventories report was published with a greater deficit to -5.7M from the previous deficit of -2.7M which was expected to be at -4.7M. Along with the economic reports today, FOMC Member Dudley and Kaplan spoke about the interest rate and future monetary policies, expressing the neutral stance. As for the current scenario, USD is quite weak against CAD now but still there are certain possibilities of USD to regain the strength and proceed further upwards. This week, US Unemployment Claims and Canada's CPI and Core Retail Sales report are due to be published which is expected to provide a further directional indication of this pair in the coming days.

Now let us look at the technical chart. The price is currently residing above the support level of 1.2420 and a dynamic level of 20 EMA which is expected to push the price higher towards 1.2660 and later towards 1.28 resistance area. The recent trend has been bullish which is currently corrective. As the trend consists of impulsive and corrective moves, the pair is expected to trade higher towards 1.2660 in the coming days.

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Technical analysis of USD/JPY for October 18, 2017

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USD/JPY is expected to continue its upside movement. Despite the pair retreated from 112.45 (the high of October 17), a support base at 112.25 has formed and has allowed for a temporary stabilization. Even though a continuation of consolidation cannot be ruled out, its extent should be limited.

Hence, as long as 112.25 is not broken, look for a further upside with targets at 113.20 and 113.45 in extension.

Alternatively, if the price moves in the opposite direction, a short position is recommended below 112.25 with a target at 112.00.

Chart Explanation: The black line shows the pivot point. The current price above the pivot point indicates a bullish position, while the price below the pivot point is a signal for a short position. The red lines show the support levels and the green line indicates the resistance level. These levels can be used to enter and exit trades.

Strategy: BUY, Stop Loss: 112.25, Take Profit: 113.20

Resistance levels: 113.20, 113.45 and 113.75 Support Levels: 112.00, 111.65, 111.25

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Technical analysis of USD/CHF for October 18, 2017

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All our targets which we predicted in yesterday's analysis have been hit. USD/CHF is still expected to trade with bullish bias . Although the pair posted a pullback, it is still supported by a rising 50-period moving average. The downside potential should be limited by the key support at 0.9765. Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

To conclude, while the price holds above 0.9765, expect another rise to 0.9840 and even to 0.9865 in extension.

At the same time, as long as 0.9765 is not broken, look for a further drop with targets at 0.9805 and 0.9835 in extension.

Chart Explanation: The black line shows the pivot point. The present price above the pivot point indicates a bullish position, and the price below the pivot points indicates a short position. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Strategy: BUY, Stop Loss: 0.9765, Take Profit: 0.9805

Resistance levels: 0.9805, 0.9835, and 0.9865

Support levels: 0.9745, 0.9730, and 0.9700

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Technical analysis of GBP/JPY for October 18, 2017

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GBP/JPY is expected to trade with a bullish bias above 148.05. The pair seems to have formed a "double-bottom" pattern on an intraday basis, which should confirm a bullish reversal. The 50-period moving average is now below the prices, and should play a strong support role. Besides, the relative strength index is above its neutrality area at 50.

Therefore, as long as 148.05 is not broken, the pair is likely to advance to 148.80 and 149.05 in extension.

Alternatively, if the price moves in the direction opposite to the forecast, a short position is recommended below 148.05 with the target at 147.75.

Strategy: BUY, Stop Loss: 148.05, Take Profit: 148.80

Chart Explanation: the black line shows the pivot point. The price above the pivot point indicates long positions; and when it is below the pivot points, it indicates short positions. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 148.80, 149.05 and 150.05

Support levels: 147.75, 147.50, and 147.00

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Technical analysis of NZD/USD for October 18, 2017

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NZD/USD is expected to trade in a lower range as key resistance is set at 0.7165. The pair is trading below its key resistance at 0.7165, which should limit the upside potential. The relative strength index is mixed with a bearish bias. Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.

To sum up, as long as 0.7165 holds on the upside, a further decline to 0.7100 and even to 0.7080 seems more likely to occur.

The black line is showing the pivot point. Currently, the price is above the pivot point, which indicates long positions. If it remains below the pivot point, it will indicate short positions. The red lines are showing the support levels and the green line is indicating the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 0.7180, 0.7195, and 0.7220

Support levels: 0.7100, 0.7080, and 0.7050

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Global macro overview for 18/10/2017

Global macro overview for 18/10/017:

One of the most anticipated political events this autumn has just begun - the Communist Party of China, which takes place every five years, is gathering to elect new authorities (including the president) and set new political goals. President Xi Jinping's speech did not bring surprises, but for the markets may be more important than what not been said. This time, there is not much uncertainty: Xi Jinping is expected not only to be re-elected but also to strengthen his power. Therefore, the markets focus on the economic visions that can flow from China. There was not much of it during President Xi's inaugural speech, which focused on long-term goals, emphasizing that the future is bright, though with serious challenges. This is not the most important thought for the financial markets. As it is known, China in the end of 2015 strongly stimulated its economy to avoid a more severe downturn and succeed in coming to this year's Congress. However, according to the recent macro data, the momentum of monetary policy is weakening, and without a new idea of stimulating the economy, it may begin to lose its growth dynamics.

The Australian Dollar is the most exposed currency to China in the main basket, so let's take a look at the AUD/USD technical picture at the H4 time frame. The market has managed to stay above key support at 0.7732 supported by rising commodity prices, but any negative information could quickly change the current situation. Violation of the technical support at 0.7732 will open the road to much deeper decline.

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Global macro overview for 18/10/2017

Global macro overview for 18/10/017:

Estimates from the German ZEW Economic Sentiment index prepared by the Mannheim Institute were worse than expected. The rating component of the German ZEW Current Situation index was 87.0 points (previously: 87.9 points) against the expected increase of 0.6 points. Another disappointment was the German ZEW Economic Sentiment index (17.6 points, consensus: 20.0 points, previously: 17.0 points), moreover, the indicator still remains below the long-term average of 23.8 points.

The ZEW President Professor Achim Wambach commented on the data: "The improved outlook for the coming six months is not least the result of the surprisingly positive growth figures seen in the previous months. In August, figures for both production and incoming orders were significantly better than expected. The framework conditions for German exports, which have already seen a significant rise, are further improved by positive growth figures for Europe. The fact that the inflation rate is rising again, and expected to climb further, equally points towards a positive economic development in Germany, making a change in the ECB's monetary policy more likely".

In conclusion, the sentiment among the German survey participants remains on elevated levels as the German economy is still seen as expanding, albeit at a slower pace. The economic growth in the whole Eurozone is anticipated despite recent Catalan referendum uncertainty and growing unemployment rates among young adults in Spain, Portugal, and Italy. Moreover, ZEW is yet another economic think-thank which is expecting a change in ECB monetary policy by an interest rate hike or a decrease in the quantitative easing program. The question remains how much of this anticipation has already been discounted by markets?

Let's now take a look at the EUR/USD technical picture at the daily time frame. There is a clear Head and Shoulder pattern at the end of the rally from the level of 1.0335 with a horizontal neckline at the level of 1.1660. Breakout below this level would directly expose the next important technical support to test at the level of 1.1489., but the more probable target is even lower, at the level of 1.1294.

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Bitcoin analysis for October 18, 2017

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The Bitcoin (BTC) has been trading downwards. The price tested the level of $5.231. Dutch bank ING is flustered over the fact bitcoin consumes so much energy. Recently, the bank released a report saying bitcoin transactions consume as much electricity as a house does in a month. They seem to believe this is problematic since traditional electronic payment methods do not use near as much energy, according to the bank. They went on to say fiat cash will still be how people get paid and pay taxes. The intraday picture looks bearish.

Trading recommendations:

According to the 15M time frame, I found broken pivot support 2, which is a sign that Bitcoin changed trend dynamic from bullish to bearish. My advice is to watch for potential selling opportunities on the rallies. Downward targets are set at the price of $5.150 (S3) and at the price of $5.050 (FE 161.8%)

Support/Resistance

$5.619 – Intraday pivot

$5.150 – Pivot support 3

$5.050 – Fibonacci expansion 161.8%

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Analysis of Gold for October 18, 2017

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Recently, Gold has been trading downwards. The price tested the level of $1,278.90. According to the 15M time - frame, I found that sellers are in control and that pivot support 1 at the price of $1,278.95 is on the test. If the price breaks the S1, watch for potentential selling opportunities. The downward targets are set at the price of $1,273.00 (S2) and $1,264.1 (S3). Short - term trend is bearish. MACD is trading below the zero level, which is another sign that sellers are in control.

Resistance levels:

R1: $1,293.80

R2: $1,302.50

R3: $1,308.70

Support levels:

S1: $1,278.95

S2: $1,273.00

S3: $1,264.10

Trading recommendations for today: watch for potential selling opportunities.

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NZD/USD Intraday technical levels and trading recommendations for October 18, 2017

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Daily Outlook

A recent bullish breakout above the downtrend line took place on May 22. Since then, the market has been bullish as depicted on the chart.

The price zone of 0.7150-0.7230 (Key-Zone) stood as a temporary resistance zone until a bullish breakout was expressed above 0.7230.

This resulted in a quick bullish advance towards the next supply zone around 0.7310-0.7380 which was temporarily breached to the upside.

Recent bearish pullback was executed towards the price zone of 0.7310-0.7380 (newly-established demand-zone) which failed to offer enough bullish support for the NZD/USD pair.

Re-consolidation below the price level of 0.7300 enhanced the bearish side of the market. This brought the NZD/USD pair again towards 0.7230-0.7150 (Key-Zone) which failed to pause the ongoing bearish momentum.

An atypical Head and Shoulders pattern was expressed on the depicted chart indicating high probability of bearish reversal.

Bearish persistence below the neckline 0.7150 confirms the reversal pattern. Next bearish targets are located around 0.7050, 0.6925 and eventually 0.6800.

As expected, the price level of 0.7050 offered significant bullish support which allowed bullish pullback towards 0.7190-0.7230 (Key-Zone) to be watched for further decisions.

Recent signs of bearish rejection are manifested around the depicted supply zone ( 0.7190-0.7230 ). That's why, another bearish wave should be expected towards 0.7050.

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GBP/USD analysis for October 18, 2017

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Recently, the GBP/USD pair has been trading downwards. As I expected, the price tested the level of 1.3139. According to the 15M time - frame, I found strong rejection from sellers at the pivot point at the price of 1.3212, which is a sign that buying looks risky. Stochastic oscilator is in the overbought zone, which is another sign that buying looks risky. The short-term trend is bearish. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.3135 (S1) and 1.3080 (S2).

Resistance levels:

R1: 1.3270

R2: 1.3345

R3: 1.3400

Support levels:

S1: 1.3135

S2: 1.3080

S3: 1.3005

Trading recommendations for today: watch for potential selling opportunities.

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Intraday technical levels and trading recommendations for EUR/USD for October 18, 2017

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Monthly Outlook

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2050-1.2100 (multiple previous bottoms set in July 2012 and June 2010). Hence, a long-term bearish target was projected toward 0.9450.

In March 2015, EUR/USD bears challenged the monthly demand level around 1.0500, which had been previously reached in August 1997.

In the longer term, the level of 0.9450 remains a projected target if any monthly candlestick achieves bearish closure below the depicted monthly demand level of 1.0500.

However, the EUR/USD pair has been trapped within the depicted consolidation range (1.0500-1.1450) until the current bullish breakout was executed above 1.1450.

The current bullish breakout above 1.1450 allowed a quick bullish advance towards 1.2100 where recent evidence of bearish rejection was expressed (Note the previous Monthly candlestick of September).

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Daily Outlook

In January 2017, the previous downtrend reversed when the Head and Shoulders pattern was established around 1.0500. Since then, evident bullish momentum has been expressed on the chart.

As anticipated, the ongoing bullish momentum allowed the EUR/USD pair to pursue further bullish advance towards 1.1415-1.1520 (Previous Daily Supply-Zone).

The daily supply zone failed to pause the ongoing bullish momentum. Instead, evident bullish breakout is being witnessed on the chart. The next Supply level to meet the pair is located around 1.2100 (Level of previous multiple bottoms) where bearish rejection and a valid SELL entry can be anticipated.

On the other hand, If the current bearish breakout persists below 1.1800 and 1.1700, a quick bearish decline should be expected towards the price zone of 1.1415-1.1520 where BUY entries can be offered.

Trade Recommendations

Bullish pullback towards the price zone of 1.1835-1.1850 (the backside of the broken uptrend line) should be considered for a valid SELL entry.

Initial T/P level should be placed at 1.1550. S/L should be placed above 1.1950.

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US Dollar: Growth trajectory

The dollar slowly but surely returns with the initiative of preparing for a protracted growth, and there are several reasons for increasing demand for it.

The volume of industrial production in September increased by 0.3% compared to August, which is the first increase since June. It shows that the industry has overcome the consequences of hurricanes. The report of the Ministry of Labor on foreign trade prices also shows a positive trend whereas import prices rose from 2.1% to 2.7% and export grew by 2.9% compared to 2.3% a month earlier. This is a good sign that an additional price growth factor will appear in the consumer sector.

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Following the comments of representatives of the Fed, the regulator pays more attention to the labor market than to inflation, considering its decline as a temporary phenomenon. This position has been repeatedly voiced earlier and is intended primarily to give guidance to investors since only a growing labor market is able to maintain a high level of consumer activity. Inflation will also grow automatically due to revenue growth. Looking at the situation, the dynamics of prices for imports and exports support the growth of inflation and the recovery of industrial production also plays in favor of the dollar. Moreover, the market has currently no concerns that the rate will be raised for the third time this year at the FOMC meeting in December. According to CME, there is a probability for the futures market to be a step more than 90%.

Expectations for inflation are beginning to change in favor of its growth. The yield on 5-year bonds and its Treasury Inflation-Protected Securities (TIPS) began to increase once again and pushing away from the June low. This indicator is valuable as it reflects the expectations of business and not just of consumers. Therefore, outrunning growth in yields, as a rule, has also indicated an increase in inflation in the near future.

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Why does the dollar have no way out on the growth trajectory?

One reason is connected with uncertainty about the future policy of the Fed. The mandate of Janet Yellen expires in February. To date, the shortlist of Donald Trump contains five names from which he intends to choose the future head of the Fed before the tour scheduled for early November in Asia. The top choices are Powell and Taylor, and they both hold more hawkish views than Janet Yellen. If Trump chooses one of these two candidates, the likelihood of a continuation of the normalization policy will not decrease, but will even increase further. This could increase market expectations at the rate for 2018 by another quarter point. Trump's announcement of the candidate for the post as the Federal Reserve's head, which still has to be approved by the Congress, may serve as an excuse for aggressive buying of the dollar.

There are also concerns about the worsening of financial conditions due to the appreciation of the dollar. The whole framework will be under threat if the growth of the US economy is insufficient to compensate for the tightening of credit policy in connection with the growth of rates. The rate hike should not lead to a slowdown of the business activity while the worsening financial conditions should be compensated by the tax reform. In the end, this can be accomplished by easing fiscal pressure on the business. Based on this idea, reducing the tax burden will help accelerate the growth rate of wages, which in the end will give a powerful stimulus to increased consumption. Congress has not yet received the final draft of reforms, but expectations establish a powerful pent-up demand for the dollar.

The U.S. financial authorities should prevent the contraction of the lending market in the U.S. currency which requires a strong dollar policy. Most likely, the scenario will include raising the yield of securities which automatically results from higher rates, and the compensation for the deterioration in the trade balance will go along the tightening line customs regulation.

The dollar is in the position of a runner and frozen at the start as it waits for the shot of the starting pistol. The absence of important macroeconomic reports this week could push the growth in demand for the dollar at the beginning of next week. Yet, the mood has already reversed investors. The dollar will gain more advantage although, the primary concerns are the euro, franc, and yen.

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Fundamental Analysis of EUR/JPY for October 18, 2017

EUR/JPY has been quite corrective and volatile recently after a period of bearish pressure, bouncing off from 133.50 resistance area. JPY has been quite stronger than EUR recently which led to bearish pressure but the long-term trend is still very bullish which is expected to push the price higher again in the coming days. Today ECB President Mario Draghi spoke about the monetary policy, adjustments to shock and long-term growth. He stated that the unemployment rates have decreased in certain countries like Spain and Portugal but certain challenge of reforms is also to be considered as a lesson from the crisis which will contribute to better future of the economy. The speech was quite neutral in nature for the present situation but quite positive for the long-term goal which did not help the currency to gain significant momentum over JPY by now but expected to have a positive impact in the future. On the JPY side, today there are no economic events or reports from Japan but tomorrow Japan's Trade Balance report is going to be published which is expected to publish with a a smaller value of 0.31T from the previous figure of 0.37T and All Industrial Activity report is expected to show growth to 0.2% from the negative previous value of -0.1%. To sum up, ECB President Draghi has been quite positive about the long-term growth of the economy showing some positive attitude about the crisis that arouse the bullish market sentiment to push towards the bullish side over JPY's recent bearish trend. As for the current scenario, EUR is expected to gain momentum against JPY until Japan comes up with a positive high impact economic reports to support its gain against EUR in the future.

Now let us look at the technical chart. The price is currently residing inside the range of 131.70 to 132.50 which is a corrective area whereas the long-term trend is still quite bullish. There has been a good amount of correction going in this market after the price bounced off the 134.50 resistance area. As for the current situation, the price is expected to proceed up towards 134.50-135.00 resistance area in the coming days if we see a daily bullish close above 132.50 in the coming days. As the price remains above 131.70 support level the bullish bias is set to continue further.

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Bitcoin analysis for 18/10/2017

Bitcoin analysis for 18/10/2017:

Users of Blockchain will be able to have their Bitcoin Cash. On October 11, the company announced that it was allowing customers to access their BCH resources. Blockchain informed about his support for the board yet in August. Users have not been able to sell or transfer their Bitcoin Cash yet. A hard fork on August 1 and the creation of Bitcoin Cash was the first opportunity for many people to acquire "free" altcoins created at the time of division. The desire to tap into additional funds was also one of the driving forces of the trend, which tightened the price of Bitcoin ahead of the ford. The blockchain is one of the first major players to provide access to Bitcoin Cash. According to the information available on the cyberwallet page: "We are excited to announce that today anyone who has had a Bitcoin balance on their Blockchain wallet at the moment of activation of the board will have access to the same amount of BCH."

In the near future, cryptocurrency users can expect more companies to unlock Bitcoin Cash remaining in their hands. On October 7th, the Gemini exchange allowed its customers to view the balance in the BCH and order the payout. Transfers were supposed to be made on October 11th. In the next few days, Bitcoin Cash's cash outflow from Gemini is expected to be 5 days.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market has managed to break out below the technical support at the level of $5,384 and now is heading towards the key technical support at the level of $4,968. This might be the level where the corrective cycle for wave (iv) will terminate and the price will reverse to complete the wave (v) at new highs.

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Daily analysis of major pairs for October 18, 2017

EUR/USD: There is a "sell" signal on the EUR/USD pair. The EMA 11 has crossed the EMA 56 to the downside, and the Williams' % Range period 20 is in the oversold territory. The support line at 1.1750 has been tested and it would be tested again, as price goes towards another support line at 1.1700.

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USD/CHF: There is a "buy" signal on the USD/CHF pair. The EMA 11 has crossed the EMA 56 to the upside, and the Williams' % Range period 20 is in the overbought territory. The resistance level at 0.9800 has been tested and it would be tested again, as price goes towards another resistance level at 0.9850.

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GBP/USD: There is a short-term bearish signal on the GBP/USD. Price has moved downwards by 110 pips this week, and it could continue going further downwards, reaching the accumulation territories 1.3150 and 1.3100. There is a Bearish Confirmation Pattern in the 4-hour chart.

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USD/JPY: This currency trading instrument has bounced upwards in the context of a short-term downtrend. Further upwards movement above the supply level at 113.00 would result in a bullish bias. That is the expectation for today and tomorrow, for the JPY is now showing some signs of weakness.

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EUR/JPY: This cross has done nothing significant this week. It is possible that price would continue to go downwards towards the demand zones at 132.00 (which was previously tested), 131.50 and 131.00. A northwards movement of 150 pips from here would render this expectation invalid.

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Trading plan for 18/10/2017

Trading plan for 18/10/2017:

The FX market remains tight and stock indices consolidate recent gains. Gold reverses Tuesday's gains and Crude Oil is rallying higher by a good API report. The 19th Congress of the Communist Party of China has started, but so far the conference has brought more pompous language than the announcement of actual action.

On Wednesday 18th of October, the event calendar is quite busy with important economic news releases. During the London session, the UK will post Claimant Count Change, Average Earnings Index, and Unemployment Rate data. Moreover, ECB President Mario Draghi will give a speech early in the morning as well. Later, during the US session, Canada will post Manufacturing Sales data and the US will reveal Building Permits and Housing Starts data. Two FOMC members will give a speech as well: Robert Kaplan and William Dudley.

GBP/USD analysis for 18/10/2017:

The Claimant Count Change, Average Earnings Index, and Unemployment Rate data are scheduled for release at 08:30 am GMT and market participants expect good data from the UK job market. The Unemployment Rate is expected to stay unchanged at the level of 4.3% and the Average Earnings Index is expected to stay unchanged at the level of 2.1% as well. A number of those individuals who are out of work and who are claiming some sort of unemployment benefit is expected to increase from -2.8k to 1.3k for the reported month. If the data will meet market expectations, it will be no real game changer for the Bank of England before its next meeting in November. Nevertheless, the market would cheer some better than expected news from the UK as the recent poor results of Brexit negotiations worsened the sentiment toward the British Pound across the board.

Let's now take a look at the GBP/USD technical picture on the H4 time frame. The market has broken below the dashed black short-term trend line support, bounced from the technical support at the level of 1.3154 and now is testing the trend line from below. The momentum indicator is clearly pointing down, so there is still a possibility of a further down move extension towards the level of 1.3111 and below. The key support remains at the level of 1.3030.

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Market Snapshot: SPY in a Rising Wedge?

The price of SPY (SP500 ETF) has made another marginal new high at the level of 255.46, but the volume was very low. Currently, the market is testing this recent high while the momentum is decreasing significantly. Moreover, the whole structure from the low at the level of 254.00 looks like a Rising Wedge pattern, which indicates a reversal might happen anytime soon. The nearest technical support is seen at the level of 253.43.

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Market Snapshot: Crude Oil bounces on good API data

The price of Crude Oil has bounced back towards the recent highs after the API data, but the price is still moving inside of a channel. The nearest technical resistance is seen at the level of 52.42, but the key resistance for bulls is still at the level of 52.86. The market conditions are overbought and there is a clear divergence between the price and the momentum oscillator, so the price is likely to fall out of the channel soon.

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Trading plan 10/18/2017

Trading plan 10/18/2017

The overall picture - EUR/USD: We are preparing a breakout of the range for the Fed.

On Tuesday, trading on the market was calm in the absence of strong news.

Our recommendations are the same. We are waiting for the release of EUR/USD from the range and preparing inputs for a breakthrough. The output looks more likely to be lower, below 1.1668 but a breakthrough is possible above the level of 1.1880.

On Wednesday, at 19.00, there will be a report on the US economy FRS Beige Book. As always, the report goes 14 days before the Fed meeting. The market is waiting for a strong report indicating a gradual increase in inflation.

The euro is pressured by the expectation of a new wave of the Catalonia-Madrid crisis on Thursday. The deadline for an ultimatum, presented by the Spanish authorities in Catalonia.

We buy for the breakthrough of 1.1820 and for the breakthrough of 1.1880.

We sell from 1.1780 and on the breakthrough of 1.1668.

The stop-loss is 45 points. The purpose of the transaction is not less than 100 points.

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Breaking forecast 10/18/2017

Breaking forecast 10/18/2017

EURUSD: We are preparing a breakout of the range for the Fed.

On Tuesday, trading on the market was calm in the absence of strong news.

Recommendations for trading are the same - wait for the release of EURUSD from the range and preparing inputs for a breakthrough. The output looks more likely to be lower, below 1.1668 - but a breakthrough is possible above the level of 1.1880.

Wednesday at 6:00 pm London Time, the report on the US economy by the Fed Beige Book will be released. As always, the report is published 14 days before the Fed meeting. The market is waiting for a strong report, indicating a gradual increase in inflation.

The euro is pressured by the expectation of a new wave of the Catalonia-Madrid crisis on Thursday - the deadline for an ultimatum, presented by the Spanish authorities in Catalonia.

Buy for the breakthrough of 1.1820 and for breakthrough 1.1880.

Sell from 1.1780 and on the breakthrough of 1.1668.

Stop-loss is 45 points. The target of the transaction is not less than 100 points.

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Ichimoku indicator analysis of USDX for October 18, 2017

The Dollar index is in a bullish short-term channel breaking above the 4-hour cloud resistance. Price is approaching the 61.8% Fibonacci retracement of the recent decline. A rejection around this area will be a bearish sign and what I expect. The upward bounce is considered corrective.

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Blue lines - bullish channel

The Dollar index is breaking above the 4-hour cloud. Price is inside the short-term bullish channel but there are a lot of chances even if price makes a new higher high above 93.73. In this case, it would produce a bearish divergence in the RSI and would complete the final correction before down trend resumes.

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Black lines - bearish channel

Blue lines - bullish channel

On a daily basis, we are currently inside the Kumo (cloud) implying trend is neutral. Price is trying to break above the black longer-term bearish channel while trading inside the short-term bullish channel. Support is at 93 while resistance is at 94. Breaking above 94 will increase the chances of a bigger bounce in play for the index.

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Ichimoku indicator analysis of gold for October 18, 2017

Gold price is near short-term support of $1,280-82. Gold price should bounce from current levels and break above $1,303 in order to move towards $1,400 to get started. Otherwise, we are in danger of moving lower towards $1,277 where the 61.8% Fibonacci retracement is found.

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Gold price is at the upper Kumo (cloud) boundary and at the 50% Fibonacci retracement. Price could test today the lower cloud boundary and very important short-term support at the 61.8% Fibonacci retracement at $1,277. Resistance is at $1,289 and next at $1,293. For the bullish scenario to be valid, price must reverse soon to the upside.

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The weekly candle is testing the kijun-sen (yellow line indicator) support. Price should bounce strongly from current levels. Otherwise, the short-term bullish expectations will be vanished. If the kijun-sen is broken, we could see price test the weekly cloud at $1,245-40.The material has been provided by InstaForex Company - www.instaforex.com

Daily analysis of USDX for October 18, 2017

The index was under a buying interest across the board, pushing higher above the 200 SMA on the H1 chart. Currently, it is targeting the resistance level of 94.58, at which lies a key barrier for buyers. With a pullback below 93.35, we can expect a leg lower towards the psychological level of 93.00. The MACD indicator remains in the positive territory.

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H1 chart's resistance levels: 93.35 / 94.58

H1 chart's support levels: 93.00 / 91.67

Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the USD Index breaks with a bullish candlestick; the resistance level is at 93.35, take profit is at 94.58 and stop loss is at 92.66.

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Daily analysis of GBP/USD for October 18, 2017

The pair is resuming the bearish bias below the 200 SMA and looks to test the October 12th lows. If it manages to rebound around that area, we can expect another testing of the resistance level of 1.3309. However, odds are still on the bearish side and the next target is placed at the 1.3216 level. The MACD indicator remains in the negative territory.

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H1 chart's resistance levels: 1.3309 / 1.3373

H1 chart's support levels: 1.3216 / 1.3037

Trading recommendations for today: Based on the H1 chart, sell (short) orders only if the GBP/USD pair breaks a bearish candlestick; the support level is at 1.3216, take profit is at 1.3037 and stop loss is at 1.3398.

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Brent saddled geopolitics

Markets can be punished for conceit. For a long time, investors ignored geopolitical risks and were confident that the North Sea grade of oil would be quoted within the range of $40-60 per barrel for long term. The is because the prices increased above the resistance level that will probably increase production in the U.S., and dropping below the support level will be the reason for its reduction. Unfortunately, the resultant strategy began to fail for a long time after the market returned to the balance sheet. This lead the reserves of the OECD countries to reach above their five-year averages of 170 million barrels but the difference from the beginning of the year was halved, indicating the effectiveness of the Vienna OPEC treaty.

It is one thing for the geopolitician in periods of global surplus, when the conflicts worsen and causes only short-term surges in prices for black gold. Another situation is considering it as a factor for long-term. The military clashes between Iraq and Kurdistan which reinforce the risks of export suspension around 400,000 barrels per stream day. If Turkey desires, they can block all supplies at 600,000 barrels per stream day, which will increase the chances of the market to move with a deficit. At the same time, this will help overcome Brent psychologically important mark of $60 per barrel. The main objective is that OPEC will not fail and extended the agreement on production cut beyond March 2018. The decision to roll over will be concluded in November, and it looks like investors have already believed in a favorable outcome.

OPEC actions in bringing the oil market to the balance

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Source: Financial Times.

According to the IEA, the cartel in September fulfilled its Vienna obligations by 86%, which is somewhat higher than in August. OPEC itself predicts that in 2018 the demand for its oil will increase to 33.1 million barrels per stream day, which is 200,000 more than the previous estimate. The main reasons are cuts in supplies from other countries and growth in global demand. From the latter point of view, China's active efforts to build up domestic reserves of black gold are important. In September, the oil imports of the Celestial Empire jumped to 9.03 million barrels per stream day, which is the second largest indicator in history and 11% higher than last year.

For Kurdistan, OPEC's readiness to extend the Vienna agreement and the growing demand from China added more risks in view of the resumption of economic sanctions against Iran and the effectiveness of implementing agreements on the cessation of the production of nuclear weapons, which U.S/ President Donald Trump questioned. Previously, it was about the loss of about 1 million barrels per stream day of exports from Tehran, and if the story repeats, then the quotes of Brent can go much higher than $60 per barrel.

Technically, the September peak update near the $59.5 mark will activate the AB = CD pattern and increase the risks of selling its targets at 127.2% and 161.8%. These are located near the marks of $60.7 and $62.3 per barrel. In order for the "bears" to expect a correction, they need to take the price of Brent below the lower limit in the upward trading channel and take the resistance at $55.9.

Brent, daily chart

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Technical analysis of USD/CHF for October 17, 2017

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USD/CHF is expected to trade with bullish bias above 0.9765. The pair is consolidating above its key support at 0.9765, which should limit the downside potential. The relative strength index is above its neutrality level at 50 and lacks downward momentum.

U.S. government bonds weakened again, as Federal Reserve Chair Janet Yellen pointed out on Sunday that she remains inclined to keep raising interest rates. The U.S. dollar remained firm, buoyed by rising Treasury yields as well as progress in President Donald Trump's proposed tax reform.

To conclude, as long as 0.9765 is not broken, look for a further drop with targets at 0.9805 and 0.9835 in extension.

Chart Explanation: The black line shows the pivot point. The present price above the pivot point indicates a bullish position, and the price below the pivot points indicates a short position. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Strategy: BUY, Stop Loss: 0.9765, Take Profit: 0.9805

Resistance levels: 0.9805, 0.9835, and 0.9865

Support levels: 0.9745, 0.9730, and 0.9700

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Technical analysis of GBP/JPY for October 17, 2017

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GBP/JPY is under pressure and expected to trade with a bearish outlook. The pair is capped by a declining trend line, which confirmed a negative outlook. The downward momentum is further reinforced by both falling 20-period and 50-period moving averages. The relative strength index is heading downward.

Therefore, below 148.95, expect a return with targets at 147.45 and 146.95 in extension.

Alternatively, if the price moves in the direction opposite to the forecast, a long position is recommended above 148.95 with the target at 149.25.

Strategy: SELL, Stop Loss: 148.95, Take Profit: 147.45

Chart Explanation: the black line shows the pivot point. The price above the pivot point indicates long positions; and when it is below the pivot points, it indicates short positions. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 149.25, 149.50 and 150.05

Support levels: 147.45, 146.95, and 146.40

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Global macro overview for 17/10/2017:

Global macro overview for 17/10/2017:

A surprising information on the Brexit negotiations is attacking the financial markets every day now. On Monday, the Pound went through a moment of increased volatility after reports that negotiations were heading for a "catastrophic collapse" unless the EU agreed to move forward the trade talks. The leaks come from the British neighborhood and show a sharpening of the position of London,

even though it is the EU that still has a stronger hand in this clash. The discouraging dispute over the progress of the talks concerns the costs of separation for the UK to pay. In a recent speech in Florence, Prime Minister of the United Kingdom Theresa May, pledged up to EUR 20 billion during the transitional period, but the European side sees an amount closer to EUR 60 billion. Compromise is needed, and perhaps the EU summit will bring that to the end of the week, but for now, the negotiations are in a big mess. If we add a worse than expected recent economic data, then the Pound might get hit significantly in the coming days.

Let's now take a look at the GBP/JPY technical picture at the H4 time frame. There is a Bearish Flag pattern forming at this time frame, but any breakout above the technical resistance at the level of 149.63 will invalidate this pattern. The immediate support is seen at the level of 148.10, but the overbought market conditions indicate lower levels will be tested soon.

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Global macro overview for 17/10/2017:

Global macro overview for 17/10/2017:

According to the Minutes, the RBA members noted that the Australian economy had grown by 0.8% in the June quarter, in line with the Bank's forecast. Growth in consumption and the contribution from net exports had been higher than in the March quarter, partly reflecting the unwinding of temporary factors. Moreover, members noted that the effect of the decline in mining investment had mostly passed and, with resource exports increasing, recently the mining sector had been contributing to overall growth. Growth in public demand and non-mining business investment had picked up and private sector investment intentions for 2017/18, as recorded in the June quarter ABS capital expenditure survey, had been revised higher. The household consumption has picked-up despite ongoing weakness in household disposable income growth. Both full-time and part-time employment had recorded solid growth in August.

On the international front, indicators of global economic conditions had remained consistent with growth continuing around recent rates. Exports of electronics and conditions in the electronics-manufacturing sector had increased significantly. In China, growth in output appeared to have moderated a little in recent months following stronger-than-expected growth in the first half of 2017.

The financial market developments indicated that long-term government bond yields had generally increased over the previous month. The FOMC announced it would begin to reduce the size of the Federal Reserve's balance sheet and RBA members noted that economic conditions internationally and domestically had been more positive since 2016, nevertheless, financial market pricing suggested that policy rates were expected to remain low for some time. Moves towards higher interest rates in other economies were a welcome development but did not have mechanical implications for the setting of policy in Australia, where the timing of any changes in interest rates would be dependent on developments in domestic economic conditions. The RBA Board decided to leave the cash rate unchanged at 1.5%.

Let's now take a look at the AUD/USD technical picture at the H4 time frame. The meeting minutes did not bring anything completely new and radical, so the AUD did not react strongly to the news. After the rejection of the 61% Fibo at the level of 0.7900, the price declined towards the level of 0.7833. The overall market conditions are overbought, so there is still a possible test of the lower support at the level of 0.7807. Daily time frame trend remains up.

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Fundamental Analysis of GBP/USD for October 17, 2017

GBP/USD has been quite bearish recently after bouncing off the resistance area of 1.3270-1.3330. GBP has been quite weak in nature recently due to the Brexit effect but PM May recently spoke about positive results in Brexit talks that did not quite help the currency to gain momentum. Today, a series of downbeat economic reports was published on the GBP side which made the currency lose ground against USD. Today, the UK CPI report was published with a slight increase as expected to 3.0% from the previous value of 2.9%, PPI Input report was published with worse value at 0.4% from the previous value of 2.3% which was expected to be at 1.2%, RPI report was published as unchanged at 3.9% which was expected to increase to 4.0%, Core CPI report was published unchanged as expected at 2.7%, HPI report was published worse than expected at 5.0% from the previous value of 4.5% which was expected to be at 5.4%, and PPI Output report was published as expected at 0.2% decreasing from the previous value of 0.4%. Along with these economic reports today, MPC Member Tenreyro and BOE Governor Carney spoke about the nation's key interest rate and future monetary policies. They expressed a dovish stance that led to further weakness in GBP against USD. On the USD side, today Import Prices report is going to be published which is expected to be unchanged at 0.6%, Capital Utilization Rate is expected to have a slight increase to 76.2% from the previous value of 76.1%, Industrial Production report is expected to show a positive change to 0.3% from the previous negative value of -0.9%, NAHB Housing Market Index is expected to be unchanged at 64. Besides, FOMC Member Harker is going to speak today about the upcoming interest rate decision and future monetary policies of the central bank. To sum up, despite having weak economic reports last week USD is currently dominating over GBP. GBP is expected to lose more ground in the coming days, thus leading to further bearish pressure in the pair until the UK comes up with positive macroeconomic reports to recover against the USD in the future.

Now let us look at the technical chart. The price is currently expected to proceed lower towards 1.2780 support area in the coming days. The price has rejected and retested off the 1.3300 resistance area recently along with dynamic level of 20 EMA resisting the price to proceed higher, which does indicate that the bearish pressure will continue further.

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Technical analysis of NZD/USD for October 17, 2017

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NZD/USD is expected to trade with a bullish outlook. Although the pair posted a pullback, a support base at 0.7160 has formed and has allowed for a temporary stabilization. The relative strength index is above its neutrality level at 50.

Therefore, as long as 0.7150 holds on the downside, look for a further advance with targets at 0.7205 and 0.7225 in extension.

The black line is showing the pivot point. Currently, the price is above the pivot point, which indicates long positions. If it remains below the pivot point, it will indicate short positions. The red lines are showing the support levels and the green line is indicating the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 0.7205, 0.7225, and 0.7260

Support levels: 0.7130, 0.7100, and 0.6955

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Bitcoin analysis for October 17, 2017

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The Bitcoin (BTC) has been trading sideways at the price of $5.665. At the moment there are two forks planned for the Bitcoin network, and cryptocurrency proponents are curious about taking the best preparations. One fork is called Bitcoin Gold which is scheduled for October 25, while the other hard fork Segwit2x (BTC1) will take place roughly around mid-November or block height 494784. The intraday technical picture looks bullish.

Trading recommendations:

According to the 30M time frame, I found a fake breakout of pivot at the price of $5.628, which is a sign that selling looks risky. I also found an intraday double bottom formation, 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 (S2).

Support/Resistance

$5.628 – Intraday pivot

$5.780 – Intraday resistance 1

$5.880 – Intraday resistance 2

$5.517 – Intraday support 1

With InstaForex, you can earn on cryptocurrency's movements right now. Just open a deal in your MetaTrader4.

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NZD/USD Intraday technical levels and trading recommendations for October 17, 2017

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Daily Outlook

A recent bullish breakout above the downtrend line took place on May 22. Since then, the market has been bullish as depicted on the chart.

The price zone of 0.7150-0.7230 (Key-Zone) stood as a temporary resistance zone until a bullish breakout was expressed above 0.7230.

This resulted in a quick bullish advance towards the next supply zone around 0.7310-0.7380 which was temporarily breached to the upside.

Recent bearish pullback was executed towards the price zone of 0.7310-0.7380 (newly-established demand-zone) which failed to offer enough bullish support for the NZD/USD pair.

Re-consolidation below the price level of 0.7300 enhanced the bearish side of the market. This brought the NZD/USD pair again towards 0.7230-0.7150 (Key-Zone) which failed to pause the ongoing bearish momentum.

An atypical Head and Shoulders pattern was expressed on the depicted chart indicating high probability of bearish reversal.

Bearish persistence below the neckline 0.7150 confirms the reversal pattern. Next bearish targets are located around 0.7050, 0.6925 and eventually 0.6800.

As expected, the price level of 0.7050 offered significant bullish support which allowed bullish pullback towards 0.7190-0.7230 (Key-Zone) to be watched for further decisions.

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Intraday technical levels and trading recommendations for EUR/USD for October 17, 2017

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Monthly Outlook

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2050-1.2100 (multiple previous bottoms set in July 2012 and June 2010). Hence, a long-term bearish target was projected toward 0.9450.

In March 2015, EUR/USD bears challenged the monthly demand level around 1.0500, which had been previously reached in August 1997.

In the longer term, the level of 0.9450 remains a projected target if any monthly candlestick achieves bearish closure below the depicted monthly demand level of 1.0500.

However, the EUR/USD pair has been trapped within the depicted consolidation range (1.0500-1.1450) until the current bullish breakout was executed above 1.1450.

The current bullish breakout above 1.1450 allowed a quick bullish advance towards 1.2100 where recent evidence of bearish rejection was expressed (Note the previous Monthly candlestick of September).

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Daily Outlook

In January 2017, the previous downtrend reversed when the Head and Shoulders pattern was established around 1.0500. Since then, evident bullish momentum has been expressed on the chart.

As anticipated, the ongoing bullish momentum allowed the EUR/USD pair to pursue further bullish advance towards 1.1415-1.1520 (Previous Daily Supply-Zone).

The daily supply zone failed to pause the ongoing bullish momentum. Instead, evident bullish breakout is being witnessed on the chart. The next Supply level to meet the pair is located around 1.2100 (Level of previous multiple bottoms) where bearish rejection and a valid SELL entry can be anticipated.

On the other hand, If the current bearish breakout persists below 1.1800 (the depicted uptrend line) and 1.1700, a quick bearish decline should be expected towards the price zone of 1.1415-1.1520 where BUY entries can be offered.

Trade Recommendations

Bullish pullback towards the price zone of 1.1835-1.1850 (the backside of the broken uptrend line) should be considered for a valid SELL entry.

S/L should be placed above 1.1950. Initial T/P level should be placed at 1.1550.

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USD/JPY analysis for October 17, 2017

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Recently, the USD/JPY pair has been trading sideways at the price of 112.17. According to the 15M time - frame, I found tweezer bottom from the pivot level at the price of 112.04, which is a sign that selling looks risky. The price is trading above the pivot, which is a sign that buyers are in control. Stochastic oscilator looks overbought and my advice is to watch for potential buying opportunities. The upward targets are set at the price of 112.43 (R1), 112.65 (R2), and 113.05 (R3).

Resistance levels:

R1: 112.43

R2: 112.65

R3: 113.05

Support levels:

S1: 111.80

S2: 111.40

S3: 111.15

Trading recommendations for today: watch for potential buying opportunities.

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