Pound fled from politics

A busy economic calendar and the departure of political risks into obscurity allows us to hope for the return of investors in actively trading the pound. Semiannual negotiations between London and Brussels, judging by the statements of the latter, were completed successfully, which makes it necessary to shift attention to macroeconomic data. In general, there is plenty of data at the beginning of the second week of the month for the UK. Inflation, the labor market, retail sales and the meeting of the Bank of England will satisfy even the highest demands of trade analysts on the news.

The fall of sterling in response to positive news from the negotiation table on Brexit has become a classic example of the implementation of the principle of "buy on the rumor, sell on the facts." Traders sold the GBP/USD quotes on the factor of harmonizing the conditions of the divorce between Britain and the EU, and the message that the round-the-clock work was over and the issue of the Irish border was resolved. This launched a wave of selling against the backdrop of profit taking. Moreover, popular media referring to competent sources reported that the trade deal before the spring of 2018 will not be achieved. However, the bridgehead is laid, and the bulls on sterling, including Nomura and ING, believe that the reduction of political risks of the UK will push the GBP/USD pair in the direction of 1.4 in 2018 and 1.36 in the near future.

On the contrary, "bears" criticize the agreement that was reached, blaming it for lack of details, and referred to the futures market, where the value of options to sell sterling is higher than the purchase. Derivatives are used for risk insurance, and the current dynamics of an indicator such as the risk of reversal (the ratio of premiums on call and put), indicates that investors still fear the sterling's collapse.

Dynamics of the ratio of premiums on options

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Source: Bloomberg.

On the other hand, speculators in the futures market held a net long position on the pound for 6 of the last 10 weeks, although before that they acted as net sellers for 98 five-day consecutive days.

Lately, there have been too many news with political coloring, and it's time for the sterling to turn its focus on the economy. In general, the outlook for upcoming releases is moderately positive. Bloomberg experts do not expect inflation to exceed the critical level of 3%, while the acceleration of average wages from 2.2% to 2.5% y/y. In addition to that, the exit from the negative territory of retail sales inspires optimism for bulls in the GBP/USD pair. Moreover, it is beneficial for the Bank of England to maintain a strong pound with the help of "hawkish" rhetoric, and the dollar cannot take advantage of strong data on the US.

It is possible that the growth of the fiscal deficit as a result of the implementation of the tax reform, the reluctance of Donald Trump to see the US currency strong and the recovery of the economies of the competing countries will force the USD index to restore the downward trend in 2018.

Technically, the GBP/USD pair is preparing to retest the upper bound of the previous consolidation range at 1.304-1.332. Assuming that it, like the previous one, ends with the defeat of the "bears", the likelihood of a restoration of the uptrend in the sterling will then increase.

GBP/USD, daily chart

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Daily analysis of major pairs for December 11, 2017

EUR/USD: Throughout last week, the EUR/USD pair went downwards by 120 pips, thus leading to a Bearish Confirmation Pattern in the market. While the support levels at 1.1750 and 1.1700 could be tested, it is also expected that a rally will occur sometime this week, owing to a bearish run on the USD/CHF pair.

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USD/CHF: Throughout last week, the USD/CHF pair went upwards by 160 pips, thus leading to a Bullish Confirmation Pattern in the market. While the resistance levels at 0.9950 and 1.0000 could be tested, it is expected that the pair would end up plummeting this week, because CHF would showcase an extraordinary level of stamina. Other currencies would also drop versus CHF.

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GBP/USD: The bullish bias on the GBP/USD pair is not currently strong, because there were some subtle bearish attacks on the market last week. For the bullish bias to become strong, price would need to overcome the distribution territory at 1.3550. A movement below the accumulation territory at 1.3250 would result in a bearish outlook.

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USD/JPY: This currency trading instrument went downwards on Monday and Tuesday, and then went upwards on Thursday and Friday. There is a bullish bias on the market, and the supply level at 113.50 is expected to be reached – even if there is going to be any major pullback at last.

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EUR/JPY: This is a choppy, directionless market (both in the longer-term and the shorter-term), and it is prudent to stay away from the market until there is a break above the supply zone at 134.50; or until there is a break below the demand zone at 131.50. This would require a big momentum, and would happen in less than 14 days to this time.

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Global macro overview for 11/12/2017

At the start of the week, New Zealand Dollar jumped after information that Adrian Orr, the president of the NZ Super Fund will become the new president of Reserve Bank of New Zealand. This name does not tell us much, but it suffices to add that Orr has been employed in the central bank twice in his career and that domestic monetary policy is his domain. Although it is not yet possible to say a lot about the new chairperson attitude (hawkish-dovish), his choice removes from NZD the risk that the government could appoint a less predictable candidate more conducive to forced economic policy (or more dovish).

Currently, the NZD value exaggerated the political risk premium and in the short term, the NZD looks the most attractive among the commodity currencies. The global investors still expect the NZ economy to grow at a modest underlying pace, beneath the quarterly volatility in GDP. The September quarter is shaping up to be the weak spot for the year, but recent activity data points to a strong start to the December quarter. There are some challenges to the outlook for next year, but the economy seems to be coming from a stronger starting point than financial markets and business surveys are giving it credit for.

Let's now take a look at the NZD/USD technical picture in the H4 time frame. The market is still trading sideways in a narrow zone between the levels of 0.6779 - 0.6970. At the present, the price is testing the golden trend line dynamic resistance at the level of 0.6910 as it tries to bounce from the oversold levels.

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Global macro overview for 11/12/2017

Neither better than expected (+228k) increase in NFP Payrolls employment, nor the preservation of unemployment from December 2000 at a minimum level of 4.1% could not exceed the disappointing salary statistics. The failure of the wage growth index in the annual (+ 2.5%) and monthly (+ 0.2%) settlements to reach the consensus of forecasts is weighing on the positive sentiment among the US Dollar bulls.

Investors still do not want to believe in Greenback and one is enough for them as a significant factor to return to buying EUR / USD again. Neither the tax reform in the US, nor the impressive US GDP growth, nor the historical maximum of US stock indices, nor the divergence in ECB and FED monetary policy, nor an increase in confidence in Donald Trump's economic policy does not deprive them of a desire not to buy, not recently glistening. fundamental drivers, the euro. Markets are upset because of the risk of the Federal Reserve's concern about slowing inflation. The private consumption expenditure index in October increased by 1.6%, the base indicator - by 1.4%. The target at the level of 2.0% is still far away, and more importantly, even close to the level of full employment, the economy can not generate the required inflation for the time being. In this case, the slower than expected rebound in the average wages after the hurricanes in the USA only increases the risk of "hawkish" rhetoric of Janet Yellen during the FOMC meeting in Wednesday this week.

In conclusion, at the next FOMC meeting, Jannet Yellen will most likely hike the interest rates to 1.50% and raise the economic forecast by 2.5% in this and next year, and replaced by Stanley Fischer Jerome Powell from the beginning was adopted as the new hawk of the Federal Committee for Open Market Operations.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market has managed to break out above the upper channel line and hit the level of 94.05, which is just above of 127% Fibo Expansion. The nearest technical support is seen at the level of 93.51, but the key technical resistance zone between the levels of 94.18 - 94.41 will be tough to break.

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Bitcoin analysis for December 11, 2017

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Bitcoin (BTC) has been trading upwards. As I expected, the price tested the level of $16,645. Latin America has known far more than its fair share of economic troubles over the years. Whether it's populist revolutions, military coups or some other calamity, the rich in the region always had to think of how to protect their wealth from possible confiscation, hyperinflation or whatever may come. Unlike in the past when they turned to offshore banking, real estate and gold, the best solution right now is also easily accessible by the poor and middle class, bitcoin. The technical picture looks bullish.

Trading recommendations:

According to the 15M time frame, I found the potential bullish flag pattern in creaction, which is a ign that selling looks risky. My advice is to watch for potential bullish breakout of the pattern to confirm futher upward continuation. The upward target is set at the price of $17,141.00.

Support/Resistance

$16,684– Intraday resistance (price action)

$15,648 – Intraday support

$17,141 – Objective point

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

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Analysis of Gold for December 11, 2017

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Recently, Gold has been trading downwards. The price tested the level of $1,244. Anyway, according to the 30M time- frame, I found that price is trading inside of a trading range between the price of $1,252.30 (resistance) and the price of $1,244.00 (support). Since the short-term trend is bearish, my advice is to watch for potential selling opportunities. The downward targets are set at the price of $1,244.00 and at the price of $1,239.70

Resistance levels:

R1: $1,252.37

R2: $1,256.57

R3: $1,260.77

Support levels:

S1: $1,243.97

S2: $1,239.77

S3: $1,235.57

Trading recommendations for today: watch for potential selling opportunities.

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NZD/USD Intraday technical levels and trading recommendations for December 11, 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.

This resulted in a quick bullish advance towards next price zones around 0.7150-0.7230 (Key-Zone) and 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 which initiated bearish reversal.

As expected, the price level of 0.7050 failed to offer enough bullish support for the NZD/USD pair. That's why, further bearish decline was expected towards 0.6800 (Reversal pattern bearish target).

Evident signs of bullish recovery was expressed around the recent low (0.6780). That's why, a bullish pullback was expected towards 0.7050.

On the other hand, an inverted Head and Shoulders pattern is being established on the chart indicating bullish reversal.

That's why, the price zone of 0.6800-0.6830 can be considered for a short-term BUY entry. S/L should be placed below 0.6770. T/P level remains projected towards 0.7050.

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Intraday technical levels and trading recommendations for EUR/USD for December 11, 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 was reversed when the Inverted 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 was expressed towards the price level of 1.2100 where the depicted Head and Shoulders reversal pattern was expressed.

If the recent bearish breakout persists below 1.1700 (Neckline of the reversal pattern), a quick bearish decline should be expected towards the price zone of 1.1415-1.1520 (Initial targets for the depicted H&S pattern).

Bearish target for the depicted Head and Shoulders pattern extends towards 1.1350. However, to pursue towards the mentioned target level, significant bearish pressure is needed to be applied against the mentioned zone (1.1415-1.1520).

However, recent price action around the price zone of 1.1520-1.1415 indicated evident bullish recovery. This hindered further bearish decline as long as the recent low around 1.1550 remains unbroken.

Trade Recommendations

The price levels around 1.1900-1.1950 were suggested for a valid short-term SELL entry. It's already running in profits.

S/L should be lowered to 1.1870 to secure some of the profits. T/P levels to be located at 1.1700 and 1.1590.

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Trading Plan for EUR/USD and US Dollar Index for December 11, 2017

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Technical outlook:

The EUR/USD pair dropped close to 1.1720/30 levels on Friday as expected and discussed earlier. The pair is seen to be pulling back through 1.1800 levels at this moment and is expected to drop lower again towards 1.1700/10 levels at least. A meaningful correction can be expected after that drop, towards 1.1850/60 levels. Please also note that immediate price support is seen at 1.1710 levels as well and hence pullback rally seems to be a natural process. The overall wave count also suggests that EUR/USD should be looking to push lower towards 1.1500 levels at least but after a pullback is complete. Besides, note that bullish divergences are beginning to show up on short-term time frames and hence taking profits on short positions around 1.1700/10 levels is a good plan for now.

Trading plan:

Please remain short, move stop to breakeven, target 1.1700/10

US Dollar Index chart setups:

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Technical outlook:

The US Dollar Index has pushed higher to estimated soft targets and remained shy by just about 10 points on Friday. The index has retraced a bit for now and it is expected to push through 94.20 levels, before producing a meaningful correction lower. It is also possible that the index produces the necessary correction now, before pushing higher. Please note that US Dollar Index bulls are wanting to take out price resistance at 94.20 levels as plotted here. Also note that the index should be looking to continue rallying towards 95.00 and higher levels till prices remain broadly above 92.50 levels going forward. For now, it is suggested to take profits off the desk around the 94.20 levels since a meaningful pullback can be expected then.

Trading plan:

Please remain long for now, stop at breakeven levels, target 94.20

Fundamental outlook:

No major fundamental events are lined up for the day.

Good luck!

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GBP/USD analysis for December 11, 2017

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Recently, the GBP/USD pair has been trading downwards. The price tested the level of 1.3342. According to the 15M time- frame, I found that price broke the intraday bearish flag formation, which is a sign that buying looks risky. I also found a stochastic oscillator in the overbought zone, which is another sign of weakness. My advice is to watch for potential selling opportuntities. The downward targets are set at the price of 1.3333 and at the price of 1.3265.

Resistance levels:

R1: 1.3496

R2: 1.3590

R3: 1.3662

Support levels:

S1: 1.3333

S2: 1.3262

S3: 1.3170

Trading recommendations for today: watch for potential selling opportunities.

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Technical analysis of EUR/USD for December 11, 2017

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Overview:

  • The EUR/USD pair continues to move downwards from the level of 1.1817. Last week, the pair dropped from the level of 1.1817 to the bottom around 1.1729. But the pair has rebounded from the bottom of 1.1729 to close at 1.1800. Today, the first support level is seen at 1.1756, the price is moving in a bearish channel now. Furthermore, the price has been set below the strong resistance at the level of 1.1817, which coincides with the 38.2% Fibonacci retracement level. This resistance has been rejected several times confirming the veracity of a downtrend. Additionally, the RSI starts signaling a downward trend. As a result, if the EUR/USD pair is able to break out the first support at 1.1756, the market will decline further to 1.1729 in order to test the weekly support 2. Consequently, the market is likely to show signs of a bearish trend. So, it will be good to sell below the level of 1.1817 with the first target at 1.1756 and further to 1.1729. However, stop loss is to be placed above the level of 1.1872.
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Technical analysis of GBP/USD for December 11, 2017

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Overview:

  • Pivot: 1.3017.
  • The GBP/USD pair is still moving upwards above the levels of 1.3017 and 1.3200. The first support level is currently seen at 1.3017. The trend is still set above the level of 1.3017 and 1.3200 for that the price is moving in a bullish channel now. Furthermore, the price has been set above the strong support at the level of 1.3017, which coincides with the 61.8% Fibonacci retracement level. This support has been rejected three times confirming the veracity of an uptrend. According to the previous events, we expect the GBP/USD pair to trade between 1.3100 and 1.3655. So, the support is seen at 1.3017, while daily resistance is found at 1.3298. Therefore, the market is likely to show signs of a bullish trend around the spot of 1.3017/1.3200. In other words, buy orders are recommended above the zone of 1.30171.3200 with the first target at the level of 1.3298; and continue towards 1.3655 in coming days. On the other hand, if the GBP/USD pair fails to break through the resistance level of 1.3298 today, the market will decline further to 1.2820.
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Bitcoin analysis for 11/12/2017

The moment awaited by investors has become a fact. On Sunday, Bitcoin futures began trading. Despite the problems created by the big banks, the quotes started immediately, despite the fact, that the trade had to be halted twice because of reaching the upper limits of the price range.

The race in the launch of Bitcoin futures was won by the CBOE (Chicago Board Options Exchange), where the pre-session quotes (ie outside the official duration of the CBOE stock exchange session) took off on Sunday afternoon local time (around midnight GMT time). The deadline for launching contracts has begun a major correction, which took place in the Bitcoin market. After reaching record highs on Friday (depending on the source of data, Bitcoin beat $17,000 according to Coindesk, or even $18,000, according to Coinmarketcap), the Bitcoin rate fell by nearly 25%, approaching $ 13,000 on Sunday morning. But then, as usually after such big corrections on Bitcoin, the exchange rate strongly rebounded and on Monday morning Bitcoin quotations again exceed $16 500. This means that over the last 24 hours, nearly 25% could be gained on the Bitcoin itself, and over 10% on the north on Monday.

Next week, another US stock market will launch quotes for Bitcoin futures - it will be CME (Chicago Mercantile Exchange). For both CBOE and CME, Bitcoin contracts are not "physically" based on Bitcoins, which means that the buyer of the contract after its expiration, will not be able to demand the "physical" delivery of the underlying instrument for Bitcoins. Contracts will only be settled in cash.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market has made an abc correction towards the level of $12, 627 and then rebounded towards the all-time highs. Please notice, that there is still one more wave missing, wave (v), to complete the impulsive five-wave progression towards the new highs. The nearest technical support is seen at the level of $14,066.

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Trading plan for 11/12/2017

The New Zealand Dollar is the star at the start of the new week in reaction to the election of the president of the RBNZ. The rest of the market is calmly awaiting the central bank marathon. The stock market in Asia is green. Japanese Nikkei225 increased by 0.6%, Hang Seng growing by 0.8%. It's calm on the commodity market. Crude Oil falls by 0.3% up to 57.2 USD, Gold is growing 0.1%. up to 1250 USD.

On Monday 11th of December, the event calendar is light in important news releases. Only data to be released are Retail Sales in Italy and JOLTs Job Openings from the US.

EUR/USD analysis for 11/12/2017:

In general, this week we have a central bank marathon with the main focus on the Fed, where the interest rate increase is almost certain. Banks from Switzerland, Norway, the United Kingdom and the Eurozone may also be interesting as all of them will make the interest rate decision later this week. Moreover, a series of inflation readings will provide information on chances for changes in monetary policy. The British Pound will be sensitive to information about Brexit agreements before the EU summit.

Let's now take a look at the EUR/USD technical picture at the H4 time frame in this quiet Monday morning. After retracing 50% of the previous swing up the market is ready for a bounce higher towards the first technical resistance at the level of 1.1807. The oversold market conditions support the temporary bullish outlook. The key level to the upside remains at 1.1961. The market might keep trading sideways as it awaits the central bank's interest rates decision (Fed on Wednesday, ECB on Thursday).

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Market Snapshot: USD/JPY breaks above 61% Fibo

The price of USD/JPY has broken above the 61% Fibo retracement at the level of 113.24 and managed to violate the technical resistance at the level of 113.44. New local high at the level of 113.68 is the key level for bears, as any violation of this high before the local low at the level of 113.09 would directly expose the level of 113.90 for a test.

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Market Snapshot: DAX30 Head and Shoulders pattern still on table

The price of German DAX is still hovering around the right shoulder zone as it opened with a gap up towards the level of 13,254. Only a violation of the level of 13, 254 and then 13,336 would invalidate the current trend reversal pattern and pushed the price higher towards the recent swing high.

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Ichimoku cloud indicator analysis of USDX for December 11, 2017

The Dollar index has hit the first important resistance area and is turning back downwards. From last week when we reached our 92.50 target in the index, we said a strong bounce should follow but bulls will also need to be careful in case we see a rejection at 94-94.15 area.

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Black rectangle - support area

The Dollar index has broken below the 4-hour tenkan-sen. This is an initial reversal signal. Support is at 93.55. Next is at 93.40. Resistance remains at 94-94.15. Important short-term support is at 93-92.80. A break below this area will cancel my bullish view for 96-97.

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The Dollar index reached our target of 92.50 and bounced as expected. Now price has reached the first important resistance area of 94. This area is crucial if we are to see a bigger bounce towards 96-97. Bulls will need to break above it, otherwise a strong rejection here will open the way for a move below 90. Confirmation for this bearish scenario will come on a break below 92.80-93 support area.The material has been provided by InstaForex Company - www.instaforex.com

Ichimoku cloud indicator analysis of gold for December 11, 2017

Gold price remains in a bearish trend. However Gold is showing signs of at least a bounce in the short-term. Gold price is expected to bounce at least for a couple of days. Minimum bounce target is at $1,260.

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Gold price is trading above the 4-hour tenkan-sen (Red line indicator). Both MACD and the RSI are turning upwards from oversold levels. This suggests that today we should see a bounce. First important resistance is at $1,260 and next at $1,271. Support is at $1,242.

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On a weekly basis Gold price has reached the Kumo support. This is an area where I do not prefer to be short. I expect a bounce from this area. Important weekly resistance is at $1,274-79. A weekly close above this area will turn trend to strongly bullish again.

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Trading plan for December 11-15, 2017

Trading plan for December 11-15, 2017

The picture: Two important news - the Fed and the ECB. And the end of the year.

The last full week before Christmas and New Year starts.

And there are two major events - the Fed and the ECB.

The Fed will not surprise the public: Inflation in the US is below the lower limit of the attention of the Fed (that is below 2%), in addition, the dollar is strong, and the Fed's leadership will change in the coming months. There is no reason to surprise the public - expect to raise the rate by + 0.25% and will raise further - but very gradually. The Fed will meet on on December 13th.

But the decision of the ECB on December 14 may bring surprises - in favor of the euro.

Play breakthrough euro short-term range: buy on the breakdown of 1.1815, sell on breakdown of 1.1728

GBPUSD:

Slowly and painfully - but upward.

Buy from 1.3415 with the target of 1.3550.

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Burning Forecast 12/11/2017

Burning Forecast 12/11/2017

EURUSD: Good buying opportunities.

The euro exchange rate experienced a significant decline last week - but the key support at 1.1712 is not broken. It is very likely that the previous decline is just a correction to growth, and that growth will continue.

On the new week, there are two major events - the decisions of the Fed and the ECB on December 13 and 14.

It is not guaranteed that the Fed will accelerate the rate hike, but the ECB can bring surprises: The ECB still has a negative deposit rate for banks, despite a significant improvement in the economy of the EU. You can expect the ECB to strengthen monetary policy - and the sharp increase in the euro.

Buy the EURUSD pair for a breakdown of 1.1815 to the top, stop-loss at 1.1770, target of 1.1940 and further towards 1.2080.

Reserve option - sell for a breakthrough downwards of 1.1728.

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Elliott wave analysis of EUR/NZD for December 11, 2017

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Wave summary:

We have seen the expected decline and with the break below 1.7077 and continuation closer to 1.7000 is expected. Short-term resistance is now seen at 1.7105 and stronger resistance is seen at 1.7150, which should be able to cap the upside for the expected decline to 1.7000 and maybe even closer to 1.6922.

R3: 1.7220

R2: 1.7150

R1: 1.7105

Pivot: 1.7077

S1: 1.7050

S2: 1.7000

S3: 1.6981

Trading recommendation:

We are short EUR from 1.7200 and will move our stop lower to 1.7125.

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Daily analysis of USDX for December 11, 2017

The index has been rallying above the 200 SMA across the board and it's facing the resistance level of 94.00, which should act as a strong barrier for buyers. To the downside, the moving average needs to hold in order to allow further gains in USDX. However, if it breaks below that area, next target to face lies at 92.70.

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H1 chart's resistance levels: 94.00 / 94.37

H1 chart's support levels: 93.40 / 92.70

Trading recommendations for today: Based on the H1 chart, place buy (sell) orders only if the USD Index breaks with a bullish candlestick; the resistance level is at 94.00, take profit is at 94.37 and stop loss is at 93.73.

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Daily analysis of GBP/USD for December 11, 2017

The pair starts a decisive week as it can be the latest one of the year, in terms of volatility. BoE's interest rate decision is due this Thursday and GBP/USD is preparing the ground to decide the next path. If the pair manages to break above 1.3417, then we can expect an advance towards the 1.3541 level. MACD indicator remains in the negative territory, favoring to the downside.

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H1 chart's resistance levels: 1.3417 / 1.3541

H1 chart's support levels: 1.3303 / 1.3228

Trading recommendations for today: Based on the H1 chart, buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.3417, take profit is at 1.3541 and stop loss is at 1.3298.

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Elliott wave analysis of EUR/JPY for December 11, 2017

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Wave summary:

EUR/JPY remains lock inside the 131.14 - 134.50 range, which we think is a topping pattern developing. It will eventually resolve itself to the downside and a break below important support at 131.14 confirm that wave (D) has completed and wave (E) lower to the ideal target at 123.43 is developing.

That said, an unexpected break above 134.50 will shift the bias towards more upside pressure to 137.37 to complete wave (D).

R3: 134.50

R2: 134.17

R1: 133.97

Pivot: 133.41

S1: 133.11

S2: 132.69

S3: 132.23

Trading recommendation:

Our break-even stop at 133.75 has been hit. We will sell EUR again at 134.00 or upon a break below 133.41 with the stop placed at 134.60.

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Technical analysis of EUR/USD for Dec 11, 2017

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When the European market opens, some economic data will be released such as Italian Retail Sales m/m. The US will present several economic reports as well such as 10-y Bond Auction and JOLTS Job Openings. So amid the reports, EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1829

Strong Resistance: 1.1822

Original Resistance: 1.1811

Inner Sell Area: 1.1800

Target Inner Area: 1.1772

Inner Buy Area: 1.1744

Original Support: 1.1733

Strong Support: 1.1722

Breakout SELL Level: 1.1715

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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Technical analysis of USD/JPY for Dec 11, 2017

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In Asia, Japan will release the Prelim Machine Tool Orders y/y, M2 Money Stock y/y, and BSI Manufacturing Index. The US will release some Economic Data as well such as 10-y Bond Auction and JOLTS Job Openings. So there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance 3: 114.19

Resistance 2: 113.96

Resistance 1: 113.74

Support 1: 113.47

Support 2: 113.25

Support 3: 113.03

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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

USD/JPY time to turn bullish on pullback support

Price has broken a key level of support triggering our bullish move. We look to buy above major support at 113.11 (Fibonacci retracement, horizontal overlap support) for a push up to at least 113.90 resistance (Fibonacci retracement, horizontal swing high resistance).Stochastic (34,3,1) is showing major resistance at 96% so we expect a retracement first to get us into a good entry position before our bounce.

Buy above 113.11. Stop loss at 112.79. Take profit at 113.90.

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EUR/USD approaching strong support, prepare to buy

Price has been dropping strongly from last week. We look to buy above major support at 1.1712 (Fibonacci retracement, horizontal swing low support, Fibonacci extension area) for a push up to at least 1.1811 resistance (Fibonacci retracement, horizontal overlap resistance).Stochastic (55,3,1) is seeing strong support above 1.8% and has good upside potential.

Buy above 1.1712. Stop loss at 1.1633. Take profit at 1.1811.

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Euro and pound will be determined with direction

Eurozone

The euro area economy continues to expand at a steady pace, GDP growth in Q3 was 0.6%, at an annual rate of 2.6%, preliminary data was revised upwards, which is consistent with the overall economic trend.

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Growth is primarily due to increased investment and exports. Despite the fact that household expenditures have decreased somewhat, the general level of optimism continues to improve, as indicated by the recent reports of ZEW and IFO.

On Wednesday, a report on industrial production will be released, on Thursday - PMI Markit index. This will be the latest data ahead of the ECB meeting, they will help to predict the overall tone of the commentary and the position of Mario Draghi at a subsequent press conference.

On Thursday, investors do not expect the ECB to decide to make any concrete steps, since there is no reason for this yet. However, forecasts for economic growth and inflation will be updated upwards, as indicated by both growing business activity in recent months and rising oil prices.

The euro as a reaction to the meeting of the FOMC may decline to a support level of 1.1670, growth is limited to the level of 1.1880.

United Kingdom

The pound on the eve of the meeting of the Bank of England on December 14 is seent to be positive. According to Halifax, housing prices have stabilized after more than a year of decline and activity in the construction sector decreased. The inflation forecast published by the Bank of England rose from 2.8% to 2.9%, the trade deficit instead of expanding has unexpectedly remained virtually unchanged. Sufficiently, the industry appears much better, which was clearly facilitated by the protracted period of the weak pound, which supported the export industries.

The industrial sector is growing for the sixth month in a row, on an annualized basis, growth was 3.9%, which is higher than expected

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The National Institute for Economic and Social Research (NIESR) reports that, according to their calculations, UK GDP growth for the last 3 months was 0.5%, which exceeds both the indicators of the beginning of the year and 0.4% in the third quarter.

These factors increase the likelihood that the Bank of England will continue to gradually raise rates, and will also contribute to the growth of the pound. Although at the next meeting, the Bank of England will not raise the bid, the general trend is in favor of an increase, which is clearly a bullish factor for the pound.

On Friday, there was news that the UK and the EU agreed on three key points in the first phase of the Brexit talks. The border between Ireland and Northern Ireland was agreed upon, migration policies concerning the rights of EU citizens in the UK, and, most importantly, London's payment for the withdrawal from the EU. Thus, the first phase of negotiations is completed, and at the EU meeting on December 14, it will be possible to announce the progress achieved. This news will strengthen the positions of both the euro and pound.

The pound, nevertheless, will still be under pressure, since there are no serious internal drivers in the coming week. Presumably, a decline towards 1.3250 as an intermediate target and 1.2850 as a long-term goal.

Oil

China, which is the world's major oil consumer, supported the growing trend on Friday, posting significantly higher than expected trade balance data in November. Crude oil imports increased by 19.37% in November, demand remains firmly high, which, combined with a number of restrictive measures by OPEC + and significant financial losses of shale companies in the US, contribute to the formation of a stable demand against the backdrop of stable production in the context of the price war with OPEC. Together, these factors support oil, which allows us to predict a breakthrough of resistance at 63.50 for Brent in the short term.The material has been provided by InstaForex Company - www.instaforex.com

The FOMC will determine the fate of the dollar

A contradictory report on employment in the US economy, published on Friday, did not allow the dollar to continue its rise.

The number of new jobs in November rose more than expected, recording an increase of 228, 000, which exceeded the average forecast of 195, 000. Also, the average working week increased from 34.4 to 34.5 hours, reaching a five-month high, which was also a surprise for analysts, who did not expect change. The share of the able-bodied population in the labor force remained unchanged at 62.7%, unemployment stood at 4.1%, and at its lowest level in more than 17 years.

These rather positive for the dollar data were overshadowed by the weaker than expected average wage growth. Growth relative to October was 0.2% with a forecast of 0.3%, as year-on-year growth was 2.47%, which is better relative to November's 2.3%, but worse than the forecast of 2.7%.

The weak growth of average wages casts doubt on the Fed's view that the labor market recovery will lead to an increase in inflation due to the growth of household incomes. Indeed, for the period of 2015- 2016. and it was, as is clearly seen in the graph below, but after the growth in wages in December 2016 reached 2.87% maximum since January 2009, the growth rate began to slow down, which immediately affected the fact that after this inflation began to slow down.

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On this, the troubles for the dollar did not end. The Atlanta Fed was forced to lower the US GDP growth rate estimate in the fourth quarter from 3.2% to 2.9%, and thus two of the three key indicators that the Fed is targeting in monetary policy-inflation, unemployment and GDP growth, were at stake.

Of course, these factors will not prevent the Fed from raising the rate at the next meeting on Wednesday, December 13, but may serve as a reason for fixing profits and pulling back the dollar from the achieved levels. The rate hike has long been taken into account in prices and is unlikely to have a significant impact on markets, but the issue is the intention of the Fed to raise the rate three times in 2018.

However, despite the fears, the dollar still remains the favorite in the upcoming week, the reason for this is a noticeable drop in tension in the political life of the United States. First, Donald Trump managed to pass through the Congress a tax reform project without any significant losses, the changes were superficial, which indicates that the Democrats have no substantial objections. Secondly, the issue of impeachment, which only recently seriously worried the president's team, was removed from the day's story. Thirdly, Trump managed to defend in the Constitutional Court a law prohibiting the entry of Muslim migrants into the country. These factors have significantly strengthened the political position of Trump, and therefore one should expect that the policy will go to the background and investors will focus on the economy, which for the dollar will be clearly a positive driver.

The level of optimism continues to be high, despite some slowdown. On Friday, the University of Michigan presented a preliminary result on consumer confidence in December, which showed a decline to 96.8p. against 98.5p a month earlier which was unexpected, but still much higher than before Trump's election as the president.

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Banks advise selling the dollar before the FOMC meeting. Deutsche Bank forecasts EURUSD to rise to 1.21, Danske Bank expects that trade will remain in the range 1.17-1.20 with a growth trend, Scotiabank sees support at 1.18 and suggests that a break above 1.19 will pave the way for further growth. These forecasts are largely based on the fact that the eurozone, unlike the United States, looks much better for a number of key indicators, and therefore the ECB at its meeting next week will announce a move to stop the stimulus program.

Thus, there is no consensus on the fate of the dollar next week. The chances for continued growth look slightly more preferable, but we must proceed from the fact that central banks are entering the game, which can completely change the alignment of forces by the end of the week.

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Bitcoin analysis for December 08, 2017

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Bitcoin (BTC) has been trading downwards. The price tested the level of $13,696. Deutsche Bank has issued a market briefing for 2018. The document, created by Chief International Economist Torsten Slok, lists 30 possible threats that could disrupt global markets next year. Alongside entries like "North Korea" and "Brexit", is bitcoin. Its inclusion shows the extent to which the banking sector is eyeing the revitalized digital currency. While some institutional investors see bitcoin as an opportunity, many more consider it a threat. The technical picture is bullish.

Trading recommendations:

According to the 15M time frame, I found a potential double bottom formation and a broken supply trednline, which is a sign that selling looks risky. I also found a hidden bullish divergence on the moving average oscillator, which is another sign of strength. My advice is to watch for potential buying opportunities.

Support/Resistance

$17,120 – Intraday resistance (price action)

$16,065 – Objective 1

$17,120 – Objective 2

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

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Global macro overview for 08/12/2017

The volume of British industrial production remained just at the September levels, which was widely expected by the surveyed market participants (consensus: 0.0% m / m). The factory production was just above expectations, which increased its annual dynamics by 1.2 pp up to 3.9%. A slight dose of surprise was provided by net exports, as the trade deficit widened by only GBP 328 million to GBP 10,771. A quite disturbing component turns out to be construction production, which in October recorded a monthly decline of 1.7%. against the expected increase of 0.1%.

The British Pound remains insensitive to the above data, thus expecting new reports related to the Brexit negotiations. Cable in the last few hours has recorded about 60 pips downslide. This fall is behind the headline of Bloomberg, who reports that it is unlikely that a trade agreement between the EU and Great Britain will be reached by March 2019.

Let's now take a look at the GBP/JPY technical picture at the H4 time frame. The bulls were able to push the price higher to the new highs at the level of 153.38, but the market quickly reversed and now is trading just above the technical support at the level of 151.91. The clear bearish divergence between the price and momentum oscillator support the bearish bias as the GBU remains highly sensitive to the Brexit negotiations rumors and news.

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GBP/USD analysis for December 08, 2017

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Recently, the GBP/USD pair has been trading downwards. The price tested the level of 1.3403. According to the 30M time – frame, I found that price broke the pivot level at 1.3426, which is a sign that sellers are in control. I also found a broken upward trendline in the background, which is another sign of weakness. My advice is to watch for potetnial selling opportunities. The downward targets are set at the price of 1.3370 (pivot support 1) and at the price of 1.3260 (pivot support 2).

Resistance levels:

R1: 1.3532

R2: 1.3590

R3: 1.3697

Support levels:

S1: 1.3370

S2: 1.3260

S3: 1.3202

Trading recommendations for today: watch for potential selling opportunities.

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EUR/USD analysis for December 08, 2017

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Recently, the EUR/USD pair has been trading downwards. The price tested the level of 1.1731. According to the 15M time – frame, I found an intraday trading range between the price of 1.1747 and the price of 1.1730. Since the trend is bearish, my advice is to watch for potential breakout of 1.1730 for selling opportunities. The downward targets are set at the price of 1.1715 and at the price of 1.1665.

Resistance levels:

R1: 1.1800

R2: 1.1825

R3: 1.1843

Support levels:

S1: 1.1755

S2: 1.1745

S3: 1.1715

Trading recommendations for today: watch for potential selling opportunities.

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Trading plan for EUR/USD and USDX for December 05, 2017

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Technical outlook:

The EUR/USD pair drops closer to 1.1700 levels, just a few pips away now from the expected levels. The structure still remains intact for bears to continue dropping lower but it is recommended to take profits around the 1.1680/1.1700 levels. Please also note that fibonacci 0.618 support comes in around the same price hence an interim bounce can be expected before the drop may continue. The wave count also suggests that the pair is either carving out a corrective A-B-C drop or it would continue dropping and unfold as an impulse. Please keep the bigger picture in mind that EUR/USD may drop towards 1.14 and lower as well as discussed during early this week. Support comes in around 1.1700 levels, while resistance lies around 1.1850 levels.

Trading plan:

Please remain short and look to take maximum profit at 1.1700 levels.

US Dollar Index chart setups:

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Technical outlook:

The US dollar index is approaching our soft targets defined around 94.10/20 levels as discussed earlier. Please look to take maximum profits around those levels and be prepared for a corrective drop to go long again. Also note that the Fibonacci 0.618 resistance of earlier drop is also passing through 94.10 levels and a temporary bearish reaction is expected there. The wave structure also indicates that the index is carving out an A-B-C corrective rally from 92.50 levels or it is unfolding into a 5 wave impulse. Let us remind to please keep the bigger picture in mind that indicates the US dollar index may be ready to push through 95.00 and higher levels after a corrective drop. Resistance is seen at 94.20 while support lies at 92.50.

Trading plan:

Please remain long and look to take maximum profits around 94.10/20 levels.

Fundamental outlook:

Watch out for US Non farm payrolls coming in at 08:30 am EST

Good luck!

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Intraday technical levels and trading recommendations for NZD/USD for December 8, 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.

This resulted in a quick advance towards the next price zones around 0.7150-0.7230 (the key zone) and 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 (the key zone) which failed to pause the ongoing bearish momentum.

An atypical Head and Shoulders pattern was expressed on the depicted chart which initiated bearish reversal.

As expected, the price level of 0.7050 failed to offer enough bullish support for the NZD/USD pair. That's why, further bearish decline was expected towards 0.6800 (Reversal pattern bearish target).

Evident signs of bullish recovery were expressed around the recent low (0.6780). That's why, a bullish pullback was expected towards 0.7050.

On the other hand, an inverted Head and Shoulders pattern is being established on the chart indicating bullish reversal.

That's why, the price zone of 0.6800-0.6830 can be considered for a short-term BUY entry. S/L should be placed below 0.6770. T/P level remains projected towards 0.7050.

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Intraday technical levels and trading recommendations for EUR/USD for December 8, 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 had 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 advance towards 1.2100 where the 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 was reversed when the Inverted 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 a further advance towards 1.1415-1.1520 (previous daily supply zone).

The daily supply zone failed to pause the ongoing bullish momentum. Instead, an evident bullish breakout was expressed towards the price level of 1.2100 where the depicted Head and Shoulders reversal pattern was expressed.

If the recent bearish breakout persists below 1.1700 (the neckline of the reversal pattern), a quick decline should be expected towards the price zone of 1.1415-1.1520 (initial targets for the depicted H&S pattern).

Bearish target for the depicted Head and Shoulders pattern extends towards 1.1350. However, to pursue towards the mentioned target level, significant bearish pressure is needed to be applied against the mentioned zone (1.1415-1.1520).

However, the recent price action around the zone of 1.1520-1.1415 indicated evident bullish recovery. This hinders further bearish decline as long as the recent low around 1.1550 remains unbroken.

Trade Recommendations

The price levels around 1.1900-1.1950 were suggested for a valid short-term SELL entry. It's already running in profits.

S/L should be lowered to 1.1870 to secure some of the profits. T/P levels to be located at 1.1700 and 1.1590.

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