Trading Plan for EUR/USD and US Dollar Index for October 09, 2017

analytics59db781673af7.jpg

Technical outlook:

The EUR/USD pair has been forming a series of lower highs and lower lows since forming a potential top at 1.2092 levels earlier. Looking at the current price action, a short-term hourly structure has been presented here for trade direction in the next 1-2 days. The pattern that is taking shape at the moment could be of an ending diagonal, which unfolds into 5 waves (labelled i through iv here) with each wave sub dividing into 3 waves. If the above wave count holds true, prices should ideally remain below 1.1786 levels and push lower through 1.1660 levels at least. Please also note that 1.1660 is also previous price support seen on the 4H chart view and that could be the next short-term target before bulls come back into play. Furthermore, please understand that any rallies after that should be corrective and taken as opportunities to go short again. Immediate price resistance is at 1.1786 while support is at 1.1660 levels respectively.

Trading plan:

Aggressive: Please remain short with stop above 1.1786 and target lower at 1.1660/70.

Conservative: Please look to go long at lower levels 1.1660/70, targeting 1.1830 and 1.1900/30.

US Dollar Index chart setups:

analytics59db7aa6077e3.jpg

Technical outlook:

The US Dollar Index has been consistently forming higher highs and higher lows since printing lows at 91.00 levels back in September 2017. Besides, its uptrend channel support trend line remains well intact without breaking below any lows as well. Looking at the recent wave pattern, the US Dollar Index might be producing a potential ending diagonal structure and could be into its last leg rally, which could push through 94.50 levels. If this wave count holds to be true, the index would stay above 93.25 levels and look to push through its channel resistance line which is seen passing through 94.40/50 levels for now. On the flip side, a drop below 93.25 levels would indicate an intermediate top is in place and that prices should look to retrace lower. Immediate support is at 93.25 while resistance is seen at 94.40/50 levels respectively.

Trading plan:

Immediate short term, please remain long with risk below 93.25 and target 94.40/50

Medium term strategy would be to remain flat for now and look to sell higher at 94.40/50

Fundamental outlook:

No major events are lined up for the rest of the day.

Good luck!

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

Bitcoin analysis for October 09, 2017

analytics59db6ffa9ee64.png

The Bitcoin (BTC) has been trading upwards. As I expected, the price tested the level of $4.617 driven on the news that Malaysia central bank Governor is taking bitcoin cues from China. His glib statements are attracting widespread regional attention, as Southeast Asia's 4th largest economy attempts to reconcile notorious financial conservatism with radical financial change. Anyway, current technical sugest that buyers should be careful about buying.

Trading recommendations:

According to the 4H time frame, I found strong resistance on the test at the price of $4.615. I found rising wedge formation in creation, which is a sign that buying looks very risky. The upward trendline is on the test and my advice is to watch for potential selling opportunities. The downward targets are set at the price of $4.423 and $4.340.

Support/Resistance

$4.615 - Short term resistance (price action)

$4.660 – Short-term resistance cluster (price action)

$4.535 – Intraday support (price action)

$4.423 – First downward objective (price action)

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

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

USD/JPY analysis for October 09, 2017

analytics59db6ba06046a.png

Recently, the USD/JPY pair has been downwards. The price tested the level of 112.33. According to the 15M time – frame, I found a fake breakout of Friday's low at the price of 112.48, which is a sign that selling looks risky. There is a hidden bullish divergence on moving average oscilator and a confirmed reversal head and shoulders formation, which is another sign of strength. My advice is to watch for potential buying opportunties. The upward targets are set at the prie of 112.90, 113.00 and 113.43.

Resistance levels:

R1: 112.73

R2: 112.79

R3: 112.90

Support levels:

S1: 112.60

S2: 112.50

S3: 112.42

Trading recommendations for today: watch for potential buying opportunities.

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

GBP/USD analysis for October 09, 2017

analytics59db6895e3b15.png

Recently, the GBP/USD has been trading upwards. The price tested the level of 1.3183 in an ultra high volume. According to the 30M time - frame. I found a testing of upper trendline of an upward intraday channel, which is a sign that buying looks risky. The price is in overbought intraday zone according to the Relative Strength Index oscillator, which is another sign that buying looks risky. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.3124 and 1.3030.

Resistance levels:

R1: 1.3130

R2: 1.3150

R3: 1.3170

Support levels:

S1: 1.3090

S2: 1.3070

S3: 1.3050

Trading recommendations for today: watch for potential selling opportunities.

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

Trading plan 09 - 10/13/2017

Trading plan 09 - 10/13/2017

This week has unproductive news. Monday is the US Columbus Day.

The important point of the week is Friday which is the released of inflation data in the US. On Wednesday is the publication of Fed "minutes" but the policy of the Fed is very open and the probability of a surprise is not high.

EURUSD: We are preparing for a breakthrough in the range.

EUR/USD has stopped in a narrow range which would likely have a breakthrough of borders with a strong movement.

On Monday, a dull trade is possible and it is a holiday in the US (Columbus Day).

The direction of the movement is difficult to determine. On Friday, the data on the labor market from the US came out strongly contradictory.

The number of new jobs decreased by 33 thousand and expected to grow by 100 thousand. Because of the strong hurricanes that hit in September. At the same time, the unemployment rate fell to 4.2%.

The overall picture in the euro area is also unclear.The tension of Catalonia in Spain seems to decrease slightly, but the mutual threatening statements from the authorities of Catalonia and Spain continues.

We are ready to take positions towards the movement direction with a breakthrough:

Upward - 1.1790 level.

Down - 1.1668 level.

analytics59db20c228816.jpg

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

NZD/USD Intraday technical levels and trading recommendations for October 9, 2017

analytics59db449b74403.png

Daily Outlook

In February 2017, the depicted short-term downtrend was initiated around the depicted supply zone (0.7310-0.7380).

However, 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.

The 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 a 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.

On the other hand, the price level of 0.7050 should be watched for bullish pullbacks before further bearish decline can occur.

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

Global macro overview for 09/10/2017

Global macro overview for 09/10/2017:

The result of New Zealand's general election was finalized over the weekend, but remains inconclusive, so uncertainties remain. Accounting for 422,094 special votes caused the preliminary result to change as expected: Labour Party and Green Party each picking up an extra seat, the National Party losing two seats. The NZ First party remains the monarch-maker, with major blocs National/Act (57 seats), on the center-right, and Labour/Green (54 seats), on the center-left, both shy of the 61 seat majority required to govern alone. It remains unclear which way NZ First will swing, and when it will announce its intentions.

In conclusion, the election-related uncertainty hanging over NZD markets is likely to persist until the composition of the government is announced.With the economy at a crossroads as housing, construction, tourism, and migration all come off their peaks, gaining some political certainty is going to be key to avoid a more abrupt loss of confidence and sharper slowdown of the New Zealand economy. That situation would definitely have an impact on NZD as it could be pushed even lower across the board.

Let's now take a look at the NZD/USD technical picture at the H4 time frame. The market has broken below the daily technical support at the level of 0.7089 and made a new local low at the level of 0.7057. The market conditions look oversold, so a corrective bounce towards the level of 0.7089 is expected soon. In a case of a deeper correction, the next technical resistance is seen at the level of 0.7131.

analytics59db448a2ed95.jpg

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

Intraday technical levels and trading recommendations for EUR/USD for October 9, 2017

analytics59db441555dbf.png

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.

analytics59db44235e0d9.png

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, an 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.

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

Global macro overview for 09/10/2017

Global macro overview for 09/10/2017:

The NFP-Payroll data surprised global investors. The highlight number was worse than expected, (30k vs. 80k0, but that were the only data that did not beat the expectations and can easily be attributed to statistical disturbances related to the effects of hurricanes.The fact that the Unemployment Rate unexpectedly fell by 0.2 percentage point to 4.2% confirms this thesis. The Labor Force Participation widened to 63.1% from 62.9% during the same period to mark the highest reading since March 2014. However, the main point of the report is a wage jump of 0.5% with an additional upward revision of August data (from 0.1% to 0.2%). Together, the data provides the basis for inflationary pressures to increase, as the Fed counts.

In general, the job market data is positive for USD and the US economy. A strong rebound should be expected in October, when hurricanes effects on data will disappear. Nevertheless, Fed Fund futures indicate that the FOMC will stay on hold throughout the first three months of 2018 especially as Chair Jannet Yellen's term is set to expire on February 3, and the committee may largely endorse a wait-and-see approach at the start of the year. The current data are still supporting the possibility of the third interest rate hike in December 2017, just as projected by Fed. This move should strengthen the US Dollar across the board.

Let's now take a look at the US Dollar Index technical picture on the H4 time frame. The market has broken above the technical resistance at the level of 94.16, but reversed quickly towards the support at the level of 93.63. The whole structure looks like an Ending Diagonal pattern and a violation of the level of 93.63 will confirm a further weakness.

analytics59db3e3eef64e.jpg

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

Bitcoin analysis for 09/10/2017

Bitcoin analysis for 09/10/2017:

According to the Wall Street Journal, an international cryptocurrency may soon be launched. This might be an answer to recent comments by Christine Lagarde, chief of the IMF, to encourage banks and governments to become interested in Bitcoin and other cryptocurrencies. Following a recent announcement by the Dubai government of its intention to release a local cryptocurrency, the message should not be a surprise. In addition, recent information indicates a large number of banks interested in using Blockchain technology.

The difficulty of the global digital currency is the centralization factor, and the Bitcoin protocol is decentralized, creating a truly free market in which value is based without pricing. A global digital currency, providing decentralized security, would require the IMF to set and regulate values in order to manage the flow of money in different countries. Such a system would run counter to the principles underlying Bitcoin and is definitely not what the cryptocurrency users are expecting. Some Bitcoin supporters also argue that the new currency will never replace Bitcoin, because it already exists as a global currency and will always be more demanding because there is no centralization.

Let's now take a look at Bitcoin technical picture at the H4 time frame. The market has almost hit the second target projection for wave (c) at the level of $4,661, but was capped as the market conditions started to be overbought. Currently, the price is trading just above the weekly pivot at the level of $4,466 and might reverse lower soon as the top for the wave (c) of the wave B is about to complete. Any violation of the level of $4,444 and then $4,371 will confirm this scenario. Any violation of the level of $4,965 will invalidate the main count.

analytics59db35fea428e.jpg

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

Technical analysis of gold for October 09, 2017

Forex analysis review
Technical analysis of gold for October 09, 2017

Trading plan for 09/10/2017

Trading plan for 09/10/2017:

A quiet start of the week in Asia due to the absence of investors from Japan. The overnight PMI data from China has disappointed the global investors. The currency market is stable with a slight advantage of GBP and CHF. The GBP/USD bounce to 1.3100 level is the strongest, though without much conviction. EUR/USD was stuck at 1.1730, and USD/JPY has returned to consolidation from the last days and is now at the level of 112.60.

On Monday 9th of October, the event calendar is light in important economic releases. Only two data releases are scheduled: Industrial Production from Germany and Sentix Investor Confidence from Eurozone. Both will be posted during the early London session.

EUR/USD analysis for 09/10/2017:

The Industrial Production data from Germany has beaten the market participants expectations who anticipated a 0.9% increase after -0.1% drop a month ago. Nevertheless, the figure posted was at the level of 2.6% on monthly basis and 4.7% on yearly basis. Industrial production is significant as a short-term indicator of the strength of German industrial activity. High or rising Industrial Production figures suggest increased production and economic expansion, healthy for the Euro. However, uncontrolled levels of production and consumption can spark inflation. This is the best result for German industrial output in 7 months, which indicates this sector of the economy keeps expanding and slow, but persistent pace.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The price has bounced from the technical support at the level of 1.1662 and now might be forming a Rising Wedge pattern. The momentum indicator does not support this scenario for now because it still stays below its fifty level. THe most important support is still at the level of 1.1610 and the key resistance zone is still between the levels of 1.1821 - 1.1847.

analytics59db2a6889b0f.jpg

Market Snapshot: USD/JPY reverses after triangle breakout

The price of USD/JPY had broken out of the triangle to form the new local high at the level of 113.34 but reversed quickly to the nearest support at the level of 112.19. There is still a chance that the market will reverse lower as the bearish divergence between the price and momentum indicator is still on the table. The next technical support is seen at the level of 112.19 and 111.45.

analytics59db2a72311d6.jpg

Market Snapshot: Gold bounces from 61%Fibo level

The price of Gold had bounced from 61%Fibo at the level of $1,263 and currently is testing the broken golden trend line from above. The upward momentum remains strong, but the key level to the upside is still at $1,300 and as long as the price remains below this level, the bias is still to the downside.

analytics59db2a7bce799.jpg

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

Breaking forecast 10.09.2017

Breaking forecast 10.09.2017

EURUSD: Prepare for the breakthrough of the range.

The course of the EURUSD has stopped in a narrow range - it is likely that the breakthrough of limits will be with a strong movement.

On Monday, trading will be potentially muted - in the US there is a holiday (Columbus Day).

The direction of the movement is difficult to determine: on Friday there were data on the labor market in the US that were very contradictory.

The number of new jobs decreased (!) By 33, 000- contrary to the expected gain of 100, 000. However, the reason for the decline is strong hurricanes in September. At the same time, the unemployment rate fell to 4.2%.

In the eurozone, the picture is also unclear: the tension of Catalonia - Spain seems to have decreased slightly - but the mutually heated statements of the authorities of Catalonia and Spain continue.

Be ready to take positions in the direction of the movement with a breakthrough:

Upward - level of 1.1790.

Downward - level of 1.1668.

analytics59db1f9d28bbf.jpg

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

Daily analysis of major pairs for October 9, 2017

EUR/USD: Since September 25, the EUR/USD pair has lost roughly 200 pips. The current kind of the market situation favors selling on short-term rallies (as indicated by the recent price action). Price moved briefly below the support line at 1.1700 but closed above it on Friday. Once price turns south again, another clean opportunity would emerge, which would enable selling at slightly higher and better prices.

1.png

USD/CHF: This pair has been bullish for the past few weeks, moving briefly above the resistance level at 0.9850, and closing below it on Friday. The outlook on the market is bullish for this week, but the bullish movement would be limited as long as CHF is not that vulnerable. The ongoing bullishness also would be supported for some time by the weakness in EUR/USD.

2.png

GBP/USD: The GBP/USD pair sank by 320 pips last week, having dropped more than 480 pips since September 25, when the initial "sell" signal was generated. There is a huge Bearish Confirmation Pattern in the market, and a further downwards movement is expected this week. There could, however, be a rally before the end of the week.

3.png

USD/JPY: This trading instrument has been able to maintain its bullishness in spite of the ongoing equilibrium phase in the market. A movement above the supply level at 114.00 would affirm the long-term bullish bias, while a movement below the demand level at 111.00 would result in bearish bias. One of these two conditions would be met this week, since it is expected that momentum would soon go out of balance.

4.png

EUR/JPY: This cross is bullish in the long term, but bearish in the short term. Price did practically nothing last week, but a closer look at the market reveals that bears are subtly gaining upper hands, and they may push price lower this week, as it tests the demand zones at 132.00, 131.50, and 131.00. But that would not be serious enough to become a threat to the overall bullish bias.

5.png

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

Ichimoku indicator analysis of USDX for October 9, 2017

The Dollar index is showing reversal signs of the daily Ichimoku cloud resistance at 94. Price remains inside the bearish channel however we do not have a confirmation that a new downward move has started.

analytics59db1f0129798.png

Black lines - bullish channel

Red lines - bearish divergence signs

The Dollar index continues to trade above the 4-hour Kumo (cloud) support. Trend remains bullish as price is making higher highs and higher lows. However there are several warning signs justifying a full-scale reversal. Both RSI are diverging. Price has broken below the bullish channel. Price is at important resistance.

analytics59db1f5fcdda1.png

Black lines - bearish channel

On a weekly basis price remains inside the bearish channel. Price has reached the upper channel boundary and is showing signs of rejection. However only a break below 93 would confirm the bigger reversal in prices. My view is that we will see that reversal materialize.

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

Technical analysis of gold for October 09, 2017

Gold price is trading higher after the reversal on Friday. We have been warning Gold bears that the bullish divergence signs combined with the important support of 61.8% Fibo at $1,260 justified a strong bounce. However we do not see this as just a bounce but the start of a bigger move higher.

analytics59db1d7197383.jpg

Black line - resistance (broken)

Red line - resistance (broken)

Gold price has made an important low at $1,260. I believe we have started the next leg up towards $1,400. I'm very bullish Gold. Short-term support is now at $1,272. Resistance is at $1,293 and next at $1,316. Breaking above these levels will open up the way towards $1,350-75.

analytics59db1e1e0a6ba.jpg

Long lower tail in the weekly candle of Gold price bouncing off the 61.8% Fibonacci retracement of the rise from $1,205 to $1,356. This candlestick formation is considered a bullish reversal signal specially if this week's candle is also bullish.The material has been provided by InstaForex Company - www.instaforex.com

Elliott wave analysis of EUR/JPY for October 9, 2017

analytics59da39569a4a8.png

Wave summary:

Important resistance at 132.77 should continue to cap the upside for more downside pressure through 131.70 for a decline to at least 130.37 and possibly a lot deeper as wave (E) develops.

A break above 132.77 will delay the expected decline for another spike higher to 133.25 before turning lower again.

R3: 133.25

R2: 133.11

R1: 132.89

Pivot: 132.50

S1: 131.95

S2: 131.70

S3: 131.45

Trading recommendation:

We are short EUR from 133.00 with stop placed at 132.80. If you are not short EUR yet, Then sell near 132.77 or upon a break below 131.95 and use the same stop at 132.80.

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

The dollar develops offensive

The report on the US labor market for September was significantly different from the market expectations and led to an increase in demand for the dollar. The number of new jobs declined by 33, 000 , marking the first decline in seven years. The data for the two previous months were revised downwards by 3, 000, and without taking into account other factors, such weak figures were supposed to weigh down the dollar, because they turned out to be much worse than the forecasts.

However, the negative was more than offset by other indicators. First, the Ministry of Labor issued a caveat- it said that the the decline is mainly due to the consequences of hurricanes "Harvey" and "Irma", which means it is a temporary factor. Secondly, the qualitative picture has improved - unemployment has decreased from 4.4% to 4.2% and updated the 16-month high, while the share of population participation in the labor force has increased from 62.9% to 63.1%.

But most importantly - there is the growth of the average hourly wage. Analysts expected September increase of 0.3%, but the figures came in showing a 0.5% year-on-year increase from 2.5% to 2.9%, making it the best result since 2009.

analytics59d8737503d88.png

As we know, the Fed sees a direct correlation between the growth of employment along wage growth and inflation (Philippe's curve). The leadership of the Federal Reserve constantly mentions this dependence in its public statements. Full employment leads to employers' competition for skilled workers, which is reflected in the growth of wages, which in turn provokes consumer demand growth and, at the final stage, the growth of inflation.

Inflation is one of the key factors in the change in monetary policy. Strong wage growth in September suggests that on October 13, the report on consumer inflation in September will show a result that is better than the current expectations. At the moment, the forecast is a gain of 2.0% vs. 1.9% in August, but now the markets will not be surprised if the figures show a 2.2% increase, which is a powerful bullish factor for the dollar and will allow the bulls to launch a new assault on Monday.

The futures market confidently forecasts a rate hike in December and a high probability of the next step already in March 2018, which is also a strong argument in favor of the dollar.

analytics59d8738a2a3e7.png

One more news should be noted, which has not yet been fully realized by the market. On Friday, the US Treasury published a report, which contains a set of recommendations for changing the regulation of financial markets. First of all, the document is important in that it contains a direct proposal to abolish part of the requirements of the Dodd-Frank law, which will cause a positive reaction of the markets and will promote the inflow of capital into the United States.

In particular, it is proposed to remove the requirement to disclose the size of the difference between the earnings of the company's management and ordinary employees, to abolish the provision on "minerals mined in the conflict zone" (which will allow American companies to actively expand into external sources of raw materials, in fact, stand in solidarity with one of the belligerents). It is also proposed to lower the margin requirements for derivatives trading. This step is able to attract, in addition to investment, hot speculative capital.

Thus, the Trump administration continues to create attractive conditions for doing business in the United States, and the expected tightening of financial conditions due to the rate increase will more than offset by the weakening of administrative regulation. Joint actions of the Federal Reserve and the administration should create a source of economic growth, that is, exactly what should, according to the plan, contribute to the inflow of capital into the American economy.

The dollar received several bullish signals at once, and the market will respond with rising demand. For the rest of the world, the news is rather negative, so the currencies of the developing countries and the commodity bloc may become the most affected next week, but the safe-haven currencies, primarily the yen, can compete with the dollar for investors' attention.

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

Euro, pound, oil: main trends

Eurozone

Against the backdrop of the political crisis caused by Catalonia's desire to withdraw from Spain, the German economy continues to hit record growth rates and provide the euro with support against the strengthening dollar. Preliminary data on production orders in August showed a significant excess over forecasts. Growth was at 3.6% against expectations of +0.7% with year on year growth of 7.8%. This is the best result for six months and the second best for the last 7 years.

analytics59d8865614d4a.png

On Monday, a report on industrial production in Germany will be published. The markets are waiting for good data. Also, on this day, Sentix will present an indicator of investor confidence in the euro area. After a 10-year high in June, there was a slight decline. However, currently, experts believe that the index will update the record and grow to 28.5 p, which could significantly support the euro.

Despite a number of positive news, the euro is still under pressure. The probability of a move to 1.16 remains high. Some support for the euro could have an increase in anti-risk sentiment but in general, the dollar looks stronger at the moment.

United Kingdom

The key day for the pound is the report on industrial production for August that will be published on Tuesday. The expectations are neutral. Experts do not expect any growth in production or any decline. Also on Tuesday, the NIESR will publish the research results on GDP growth rates for the last 3 months. Given the rather weak PMI indices, it is not necessary to expect economic growth. At the moment, the forecast is +0.3% which is kind of too weak to expect the pound to resume its growth.

analytics59d886665b35d.png

The pound continues to experience political pressure. After the unsuccessful elections in June, the positions of Theresa May were somewhat shaken by the parliament. The Conservative Party congress, which ended on Friday, may be the last one in the post of prime minister Theresa May. She is losing ground as the party leader. Meanwhile, there is also growing tension between the ambassador and the leaders of European countries, who are already openly annoyed about May's position on the Brexit.

As everybody knows, Britain intends to leave the EU in March 2019. However, the country wants to retain a two-year transition period during which it will have access to EU markets on current terms. The position of the pound largely depends on whether May will be able to insist on this point of negotiations, since the pound may be either a winner or a loser.

At the moment, the pound continues to remain under pressure. An attempt is likely to happen towards a technical correction to 1.3250. However, the general trend is not in its favor. The growing confidence of the dollar and the tightening financial conditions will play against the pound.

Oil

Baker Hughes on Friday reported a slight reduction in the number of active drilling rigs. The news could not support the declining oil. At the moment, there is no explicit driver for oil, which is able to withdraw quotes from an unstable equilibrium. News about the growth in production in the US is short-term, as there is no data on the return of investment in the industry. This will inevitably lead to a decline in production.

Russia and Saudi Arabia are actively working to prolong the agreement to limit production. Given the serious political changes, one can be sure that the agreement will be held. Brent, in the short term, may adjust to the support level of 53.20 / 70, but long-term chances for growth remain higher.

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