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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Bitcoin analysis for 17/10/2017

Bitcoin analysis for 17/10/2017:

In the last week in Beijing, the "First Workshop on Universal Access to Fiat Digital Currencies" was organized by the International Telecommunication Union (ITU) and the Institute of World Economics and Politics of the Chinese Academy of Social Sciences. The event was held under the patronage of the Chinese government. Many experts and entrepreneurs from over 40 countries participated in the workshop. The future of digital currency and the challenges of its legal regulation was a major theme of the conference. Many Chinese scholars, despite their decisive refusal to recognize the decentralized Bitcoin as a currency, are interested in creating a national cryptocurrency. Yao Qian, Director of the Digital Currency Research Institute of the People's Bank of China, commented on the most popular cryptocurrency. He stressed the importance of supporting the government's digital currency, but undermined Bitcoin's value. According to Yao Qian, it lacks a real value, which is why it is unreliable. Its apparent size is based solely on market speculation, and the recognition of Bitcoin by the states as a real currency will lead to tragedy.

In the past few months, China has introduced a series of regulations against the cryptocurrency market like banned ICO and trading on stock exchanges. In the face of such a tough government policy, organizing such workshops brings many cryptocurrency users into confusion. Should the start of discussion by experts prove to be the beginning of the Chinese central, national cryptocurrency? Time will tell.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market continues to consolidate the gains in corrective cycle labeled as wave (iv). The key technical support is seen at the level of $5,384 an in a case of a breakout lower the next technical support is seen at the level of $4,968. Nevertheless, there is still one more wave to the upside missing and the projected target for this wave is at the level of min. $6,000.

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GBP/USD analysis for October 17, 2017

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Recently, the Silver has been trading downwards. As expected, the price tested the level of 1.3250. According to the 15M time - frame, I found bearish flag in creation and fake breakout of pivot point at 1.3260. I also found shoting star candle in the background, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.3215 (S1) and at the price of 1.3175 (S2).

Resistance levels:

R1: 1.3300

R2: 1.3350

R3: 1.3385

Support levels:

S1: 1.3213

S2: 1.3175

S3: 1.3125

Trading recommendations for today: watch for potential selling opportunities.

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Trading plan for 17/10/2017

Trading plan for 17/10/2017:

At night we saw transient reactions after CPI from New Zealand and RBA minutes, but overall the Asian session went into a sleepy atmosphere. The stock market maintains a positive sentiment, which indirectly weakens the gold.However, the value of USD on the market remains modest. EUR/USD drops below 1.1770 and USD/JPY is at 112.15, although at night it was already 112.30.

On Tuesday 17th of October, the event calendar is quite busy with important news releases. The UK will post Consumer Price Index data, Germany will post ZEW sentiment data and the Eurozone will post Consumer Price Index data. During the US session, the US will release Import Price Index data, Industrial Production data, and Capacity Utilization Rate data. Some speeches are scheduled as well: first to speak will be BOE Governor Mark Carney and MPC Member Silvana Tenreyro, then FOMC Member Patrick T. Harker and BOC Senior Deputy Governor Carolyn Wilkins.

GBP/USD analysis for 17/10/2017:

The headline CPI data from the UK were released at the level of 0.3% (3.0% on yearly basis), which was in line with expectations. Slightly worse was PPI Input ( 0.4% vs. 1.2%, 2.4% prior), but PPI Output was unchanged at the level of 0.2% (0.4% prior). Nevertheless, the Retail Price index was much worse than expected as it was released at the level of 0.1%, while market participants expected a lower drop to 0.3% after 0.7% advance a month ago. In conclusion, the inflationary pressures were worse than expected in the UK, although at 3%, September's UK inflation rate is the highest it has been in five years and will continue to test the patience of the hawks at the Bank of England. But the key question is how much of this spike is domestically-generated? The latest headline figures were boosted by a 2.1% pick-up in fuel costs as pump prices respond to the recent increase in oil prices. Food prices, which are highly influenced by import costs, increased sharply by 0.8% on the month. Nevertheless, it is clear that the impact of the pound's post-Brexit plunge is still very much at play so it is quite possible the BoE will decide to hike the interest rate at the November meeting.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. The market has tested the broken golden trend line from below at the level of 1.3342 and reversed back towards the technical support at the level of 1.3220. The market conditions are overbought and there is a clear bearish divergence between the price and the momentum indicator, which suggest the decline might extend towards the next technical support at the level of 1.3154 and 1.3111.

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Market Snapshot: USD/JPY breaks above the trend line

The price of USD/JPY has broken above the short-term black trend line after a bounce from the level of 111.75. The bulls have managed to test the level of 112.30, but no decisive breakout was made yet. The oversold market conditions indicate a stronger rally towards the old high might happen anytime soon.

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Market Snapshot: Gold fails at 50% Fibo

The price of Gold has failed to break out above the 50% Fibo at the level of $1,308 and after touching 200 periods moving average it reversed towards the old technical support at the level of $1,289. The bearish divergence is still is play as the market conditions are still overbought. The next important technical support is seen at the level of $1,278.

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Breaking forecast 10.17.2017

Breaking forecast 10.17.2017

EURUSD under pressure.

The EURUSD rate is under pressure from selling on Tuesday morning. The reasons are: the strong data on the US economy and the gradual acceleration of inflation. Strong data on the growth of industrial production in the US was released on Monday.

The second reason: Madrid's ultimatum to the authorities of Catalonia expires on Thursday. Madrid's tough stance may trigger a new wave of mass protests in Catalonia - and still trigger the Catalan exit mechanism from Spain.

Otherwise, the news background is calm.

Continue with strategy- prepare entry for the breakdown of the range boundaries: buying above 1.1880 and selling below 1.1668.

At the same time, you can act more aggressively: sell from 1.1780 - with a stop-loss at 1.1825 - and in case of a reversal - buy above 1.1825 with a stop-loss at 1.1780.

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Ichimoku indicator analysis of USDX for October 17, 2017

The Dollar index is finally bouncing as part of the correction of the downward move from the 94 area highs. Price has reached important short-term cloud and Fibo resistance.

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Price is trading below the Ichimoku cloud in the 4-hour chart. Support is at 93.10 and resistance is at 93.60. A rejection here will be a bearish sign. If price manages to break above the 61.8% Fibonacci retracement, then we could even see new monthly highs for the index.

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Blue lines - bullish channel

Black lines - bearish channel

Although price is still trapped inside the bearish daily channel, price in ichimoku terms on a daily basis has a neutral trend as price is trapped inside the Kumo (cloud). Channel support is at 93. Only a break below that level will confirm the resumption of the downward trend.

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Ichimoku indicator analysis of gold for October 17, 2017

Gold price reversed yesterday and has pulled back below $1,300. As we mentioned a couple days ago, the area of $1,305-$1,310 is an important resistance area and a pullback from that area towards $1,280 was justified.

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In Ichimoku cloud terms, this pullback is considered a buying opportunity. Price is above the 4-hour Kumo. Price is correcting the recent upward move from $1,260 to $1,306. Price has just reached the 38% Fibonacci retracement. Price could reach the Kumo and the 50% retracement before the up trend resumes.

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On a weekly basis, we see a rejection at the tenkan-sen (Red line indicator). For the bullish scenario to remain valid, we need to see a long lower tail in this week's candle and eventually a break above the weekly tenkan-sen. A weekly close below the kijun-sen (yellow line indicator) will be a bearish sign.The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of USD/CHF for October 17, 2017

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Overview:

  • The USD/CHF pair is showing signs of strength following a breakout of the highest level of 0.9734. On the H1 chart. the level of 0.9734 coincides with 23.6% of Fibonacci, which is expected to act as minor support today. Since the trend is above the 23.6% Fibonacci level, the market is still in an uptrend. But, major support is seen at the level of 0.9734. Furthermore, the trend is still showing strength above the moving average (100). Thus, the market is indicating a bullish opportunity above the above-mentioned support levels, for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside. Therefore, strong support will be found at the level of 0.9734 providing a clear signal to buy with a target seen at 0.9808. If the trend breaks the minor resistance at 0.9808, the pair will move upwards continuing the bullish trend development to the level 0.9836 in order to test the double top.
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Technical analysis of NZD/USD for October 17, 2017

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Overview:

  • A weekly pivot point is seen at the price of 0.7128.
  • The NZD/USD pair continues to rise from the level of 0.7128 in the long term. It should be noted that the support is established at the level of 0.7128 which represents the 38.2% Fibonacci retracement level on the H1 chart.
  • The price is likely to form a double bottom in the same time frame. Accordingly, the NZD/USD pair is showing signs of strength following a breakout of the highest level of 0.7128.
  • So, rebuy above the level of 0.7128 with the first target at 0.7171 in order to test the daily resistance 1 and further to 0.7203. Also, it might be noted that the level of 0.7242 is a good place to take profit because it will form a double top.
  • However, in case a reversal takes place and the NZD/USD pair breaks through the support level of 0.7128/0.7087, a further decline to 0.7055 can occur which would indicate a bearish market.
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Elliott wave analysis of EUR/NZD for October 17, 2017

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Wave summary:

Wave a of ii completed with a spike to 1.6341 and wave b towards at least 1.64755 and possibly even closer to 1.6529 should now be expected before the final decline in wave c close to 1.6160 to complete wave ii and set the stage for the next strong rally higher.

R3: 1.6584

R2: 1.6529

R1: 1.6475

Pivot: 1.6415

S1: 1.6397

S2: 1.6375

S3: 1.6341

Trading recommendation:

We will sell EUR at 1.6525 and place stop at 1.6635.

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Elliott wave analysis of EUR/JPY for October 17, 2017

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Wave summary:

We continue to look for a clear break below minor support at 131.70 for a decline to 130.73 and possibly lower. Short-term, we expect minor resistance at 132.39 will be able to cap the upside for a new test of the 131.70 support. The next time this support is being tested it should be broken for a continuation lower.

R3: 132.92

R2: 132.72

R1: 132.39

Pivot: 132.00

S1: 131.70

S2: 131.34

S3: 131.00

Trading recommendation:

We are short EUR from 132.65, We will move our stop to break-even and we will take half profit on our short position at 130.80.

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Technical analysis of EUR/USD for Oct 17, 2017

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When the European market opens, some Economic Data will be released, such as Final Core CPI y/y, Final CPI y/y, ZEW Economic Sentiment, German ZEW Economic Sentiment, and Italian Trade Balance. The US will release the Economic Data, too, such as TIC Long-Term Purchases, NAHB Housing Market Index, Industrial Production m/m, Capacity Utilization Rate, and Import Prices m/m, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1851.

Strong Resistance:1.1844.

Original Resistance: 1.1833.

Inner Sell Area: 1.1822.

Target Inner Area: 1.1794.

Inner Buy Area: 1.1766.

Original Support: 1.1755.

Strong Support: 1.1744.

Breakout SELL Level: 1.1737.

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 Oct 17, 2017

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In Asia, Japan today will not release any Economic Data, but the US will release some Economic Data, such as TIC Long-Term Purchases, NAHB Housing Market Index, Industrial Production m/m, Capacity Utilization Rate, and Import Prices m/m. So, there is a probability the USD/JPY will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 112.71.

Resistance. 2: 112.49.

Resistance. 1: 112.27.

Support. 1: 112.00.

Support. 2: 111.78.

Support. 3: 111.56.

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

EUR/JPY testing major support, remain bullish

The price has dropped strongly to our buying area. We look to buy above major support at 131.90 (Fibonacci retracement, Fibonacci extension, horizontal overlap support) for a bounce up to at least 133.42 resistance (Fibonacci retracement, Fibonacci extension, horizontal overlap resistance).

Stochastic (34,3,1) is seeing major support at 3.7% and we expect to see a corresponding bounce off this level similar to the one we are expecting on price.

Buy above 131.90. Stop loss is at 131.12. Take profit is at 133.42.

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AUD/USD dropping perfectly as expected, remain bearish

The price is dropping perfectly as expected from our selling area. We remain bearish looking to sell below major resistance at 0.7891 (Multiple Fibonacci retracements, bearish price action) for a push down to at least 0.7789 support (Fibonacci retracement, horizontal overlap support).

Stochastic (34,3,1) is seeing major resistance at 97% where we expect a reaction from.

Sell below 0.7891. Stop loss is at 0.7955. Take profit is at 0.7789.

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Daily analysis of major pairs for October 17, 2017

EUR/USD: The EUR/USD has been going downwards gradually since Friday, creating a directionless scenario on the market. It is better to stay away from the market until there is a strong breakout to the upside or to the downside, which would create a directional bias (a movement of about 200 pips).

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USD/CHF: The USD/CHF simply consolidated yesterday, but a rise in momentum is expected anytime this week. Soon, the price would either go above the resistance level at 0.9850; or it would go below the support level at 0.9650, creating a directional bias on the market.

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GBP/USD: The Cable is now bullish both in the long-term. There is a Bullish Confirmation Pattern in the market, which would become more conspicuous as price goes further upwards towards the distribution territories at 1.3300 and 1.3350. There are accumulation territories at 1.3200 and 1.3151, which would try to hinder some bearish attempts.

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USD/JPY: On Monday, this currency trading instrument 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; while a movement to the downside would confirm the recent short-term bearish bias on the market.

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EUR/JPY: This currency trading instrument is bullish in the long-term. The outlook on EUR pairs is bearish for 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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Daily analysis of USDX for October 17, 2017

USDX is dealing with the dynamic resistance offered by the H1 chart and it can help to make a pullback in the index and to resume the bearish bias across the board. With a bearish continuation, USDX might be looking for the next critical support lying at the 91.67 level. MACD indicator is temporarily supporting the bearish price action.

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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 17, 2017

GBP/USD is looking to correct the last week's rally as the resistance zone of 1.3309 is capping gains in the pair. The 200 SMA at H1 chart could act as dynamic support, but if it gives up, we might expect a leg lower to test the support area of 1.3216. MACD indicator remains in the negative territory and it should be an indication that bears could re-take the control of the Cable.

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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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The pound took poison

The British pound managed to grow against the US dollar by the end of the week of October 13. This success could be more significant than it turned out. The uncertainty surrounding the negotiations on Brexit and the future of Theresa May as the head of the conservative party and as prime minister restrict the attacks of bulls on the GBP / USD pair. Politics is a kind of poison for sterling, limiting its growth potential even against the background of the firm desire of the Bank of England to raise the repo rate.

If in the beginning of October the focus of investors was on the possible displacement of Theresa May as the leader of the Conservative Party, by the middle of the month their gaze shifted to negotiations on the withdrawal of Britain from the EU. The pound collapsed to the base of the 31st figure, after Michel Barnier stated that the dialogue between London and Brussels had reached a dead end. Nevertheless, information leaked to the press after a few minutes stating that he could offer the Foggy Albion a transitional period. This allowed the "bulls" on GBP / USD to go into a counterattack.

Divorce is not easy. Most often, the focus is on mercantile interests. In particular, the question of how much Britain should pay for it. Large banks believe that the absence of a deal will be disastrous for sterling. In particular, Morgan Stanley believes that its course in this development will collapse to $ 1.11. Meanwhile, other experts commented about the shift of GBP / USD. Mizuho says a figure of $ 1.1 will be the result while Nomura predicts that it will go to the range of $1.1-1.2. However, there are also optimists. ING believes that the maximum that "bears" can count on is at 1.2 while Rabobank and does say about the field of 1.3.

In any case, uncertainty contributes to the growth of volatility and does not bode well for the sterling. In this respect, the increase in the ratio of premiums on options with no intrinsic value and options in money to a 2-month high is an original answer to the question of why the pound is not growing. Investors doubt that the tightening of monetary policy by the Bank of England will be able to outweigh political risks. They expect higher volatility in the coming days, particularly, up until November 2 when the Bank of England will make a statement about the fate of repo rates.

Dynamics of the ratio of demand for options

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Source: Bloomberg.

It is curious that the Chamber of Commerce and Industry calls on Mark Carney and his colleagues not to tighten up monetary policy, nodding at the weakness of the economy of the Foggy Albion. In this regard, releases of data on inflation, the labor market, and retail sales are able to clarify the situation. According to forecasts of Bloomberg experts, consumer prices in September rose to 3%, exceeding the forecasts of the Central Bank and forcing the latter to raise the repo rate. In conditions when employment will continue to rejoice and retail sales, judging by the leading indicator from BRC, may exceed the BoE consensus estimate, there will be no arguments to keep it at the same level. It's another matter if statistics disappointment.

Technically, the future fate of GBP / USD will depend on the ability of the bulls to hold the quotes above the area of 1.325-1.327.

GBP / USD, daily chart

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BITCOIN Analysis for October 16, 2017

Bitcoin has been quite corrective today showing no directional bias after reaching above the $5,500 price level. After an impulsive bullish move, the corrective sequence is quite, as expected from a mature financial instrument. The price is expected to proceed towards the $6,000 price level in the coming days, but certain retracement is expected to push the price towards the Kumo Cloud before the price pushes higher. There is certain news about Bitcoin acceptance in various organizations and places, which has contributed well enough to the recent Bitcoin gains by shifting the market sentiment from the Risky instrument to Safe Haven again. Currently, the price is showing bullish pressure inside the corrective structure whereas breaking above $5,822 will eliminate chances of further retracement towards the Cloud and push the price higher towards the $6,000 price level. As the price remains above the $5,500 level, the bullish pressure is expected to be intact creating more higher highs in the future.

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Fundamental Analysis of USD/JPY for October 16, 2017

USD/JPY has been quite bearish recently after bouncing off 113.00-40 resistance area. After the dovish FOMC Meeting last week and recent worse economic reports from the US, JPY has gained notably against USD recently. Yellen recently stated that low inflation effected the growth of USD, so December Rate Hike is still quite uncertain. On the JPY side, amid quantitative easing the Bank of Japan is looking forward for a weaker JPY compared to USD to support the future trades. Today, Japan's Revised Industrial Production report was published with a decreased value of 2.0% which was expected to be unchanged at 2.1%. Despite the worse economic report JPY, strength sustained in the market which indicates that USD is a very weak currency. On the USD side, today Empire State Manufacturing Index report was published with a significant increase to 30.2 from the previous figure of 24.4 which was expected to decrease to 20.3. Despite the positive economic reports, USD could not provide any pressure to push against JPY today. To sum up, USD is currently weaker in comparison to JPY now which is being reflected in the market. JPY is expected to push the price lower in the coming days if the US does not come up with high impact positive economic report to interfere in the bearish trend.

Now let us look at the technical chart. The price is currently residing below the dynamic level of 20 EMA after being bearish straight for a week. The price is expected to push lower towards 110.60 in the coming days before it shows any directional change of bullish price action. As the price remains below the 20 EMA and 113.00-40 resistance area with a daily close, the bearish bias is expected to continue further.

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Fundamental Analysis of EUR/USD for October 16, 2017

After a bullish bias, EUR/USD has been trading in a range after rejecting off the 1.1870 resistance area. The USD weakened last week as FOMC failed to provide detailed information and recent economic data from the US was quite disappointing which made the bulls take over the bears. On the other hand, recently EUR has been quite positive amid economic reports and events. The market today was very slow and quiet amid lack of high impact economic events and reports on EUR and USD. Today, German WPI report was published with an increase to 0.6% from the previous value of 0.3% which was expected to be at 0.4% and Trade Balance report was published with an increase to 21.6B from the previous figure of 17.9B which was expected to be at 20.3B. On the USD side, today the Empire State Manufacturing Index report was published with a better than expected figure of 30.2 from the previous figure of 24.4 which was expected to decrease to 20.3. As for the current scenario, both the eurozone and the US released positive economic reports today. Importantly, this week the economic calendar is packed with high impact economic reports on the EUR side like ECB President Draghi's speech. On the USD side, Building Permits and Unemployment Claims report are expected to inject a good amount of volatility in the market. Such a busy economic calendar is likely to determine a further direction of this pair.

Now let us look at the technical chart. The price is currently residing below the dynamic level of 20 EMA and resistance area of 1.1870 which is expected to push the price lower towards 1.1620 support area in the coming days. The price has already rejected off the level a few times before pushing the price lower which indicates the strength of the level is quite good. So, as the price remains below the resistance area of 1.1870 the bearish bias is expected to continue further.

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