Global macro overview for 24/10/2017

Global macro overview for 24/10/2017:

The New Zealand Dollar is usually strong in the periods of risk appetite, but in recent days has been hit by the domestic political developments. The overnight bumps sparked reports that the new government is planning to "revise and reform" the law governing the Reserve Bank of New Zealand. This statement at first glance sounds disturbing, in fact, it may not be so. The 1989 law gives the exclusive right to the president of the RBNZ, while decisions are now made by a committee composed of a president and two vice presidents. The bill does not provide for the publication of a report after the meeting (Meeting Minutes), however, this takes place anyway.

Moreover, today the governing coalition has announced plans to raise the minimum wage - a pro-inflation factor, which should strengthen expectations of interest rate hikes. The minimum wage will go up to $20 by 2021. Jacinda Ardern, New Zealand PM, said: "We are a low wage economy... New Zealanders deserve a wage they can live on... it is no longer acceptable to try and expect families to survive on the minimum wage as it currently is." The $16.50 payout is starting in April 2018, will rise in steps since then.

Let's now take a look at the NZD/USD technical picture at the daily time frame. After the test of the golden lower channel line, the price reversed and is currently trading below the technical support at the level of 0.6970. The outlook is bearish and the next technical support is seen at the level of 0.6814. The key level to the upside is the gray rectangle zone between the levels of 0.7057 - 0.7089.

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Global macro overview for 24/10/2017

President Donald Trump said that he is "very, very close" to announcing his nominee for chairman of the Fed. Trump is considering Stanford University economist John Taylor and Fed Governor Jerome Powell, although Fed Chair Janet Yellen could be reappointed (but it's clear that Yellen is never a favorite of Trump). Reportedly, Trump's advisors are trying to persuade him to choose between Taylor and Powell. The former is considered by the markets as a hawk and if appointed as Fed chairman it would provide the US dollar with a boost on the back of market speculations that the pace of monetary policy tightening may accelerate. Replacing Yellen with Powell would imply that the Fed will continue to raise rates gradually as Powell is rather a cautious dove. Another potential scenario is that Powell will become chairman with Taylor as vice-chairman. Soon we will find out.

The USD remains also sensitive to progress in the US budget procedure developments, which will open the way for tax reform. The House of Representatives may approve the budget on Thursday, which would be a fresh injection of optimism for the Dollar.

Let's now take a look at the US Dollar Index technical picture. The market has bounced from the golden trend line support at the level of 93.06 and now is heading towards the recent local high at the level of 94.26. This is the key level for bulls, so it needs to be violated in impulsive fashion as there is no doubt the breakout is genuine.

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Bitcoin analysis for October 24, 2017

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The Bitcoin (BTC) has been trading downwards. As I expected, the price tested the level of $5.527. Banks such as Barclays and HSBC retain some cryptocurrency business, though reluctantly. Citing money laundering and general criminality, HSBC said it's "monitoring the development of virtual and digital currencies such as bitcoin as well as regulations governing their use," continuing it has a "very limited appetite to bank issuers or dealers in virtual currencies," Financial Times quotes the bank. The intraday technical picture looks bearish.

Trading recommendations:

According to the 15M time frame, I found a bearish flag in the creation and broken pivot level at the price of $5.852, which is a sign that buying looks risky. My advice is to watch for a potential breakout of a bearish flag to confirm further downward continuation. Downward targets are set at the price of $5.435 (S2) and $5.255 (S3, extreme intraday target)

Support/Resistance

$5.852 – Intraday pivot level

$6.089 – Intraday pivot resistance 1

$5.435 – Intraday pivot support 2

$5.255 – Intraday pivot support 3

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Trading Plan for EUR/USD and US Dollar Index for October 24, 2017

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Technical outlook:

The EUR/USD pair is seen to be unchanged from what was discussed yesterday. The pair has managed to hold intraday gains until now after printing lows at 1.1723 levels and it looks like it has completed minimum requirements for a corrective drop from 1.1880, in 3 waves now. Either a flat or a triangle still remains a possibility for this consolidation termination point. If the above count holds to be true, prices should remain above 1.1670 levels and push through 1.1950 and 1.2000 levels in the coming sessions. It could be in the process of forming a down gartley around 1.2000 levels, before dropping lower again. On the flip side, a drop below 1.1670 levels would indicate further drop and also that a meaningful top is in place at 1.1880 levels. We shall be looking to change the plan then.

Trading plan:

Aggressive traders, please remain long with risk below 1.1670 levels targeting 1.1950/1.2000 while conservative traders might want to sell higher.

US Dollar Index chart setups:

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Technical outlook:

The US Dollar Index also remains mostly unchanged for now since we presented yesterday. A high probable trade setup in the short term should be lower from here, forming an up Gartley towards 92.00/20 levels, before beginning to push higher again. If this wave count holds to be true, prices would ideally stay below 94.30 levels and push lower towards Fibonacci convergence seen at 94.25 levels, as presented here. On the flip side though, a push higher, through 94.25 levels would confirm that a meaningful low is formed at 92.80 levels and bulls would want to remain in control going forward. Immediate resistance is seen at 94.20/30 levels, while support is at 91.80 levels respectively. A break below 93.00 levels from here, confirms that downside remains intact.

Trading plan:

Aggressive traders would want to remain short with risk above 94.30 levels targeting 92.00/25, while conservative traders would want to buy lower around 92.20 levels.

Fundamental outlook:

No major event is lined up for the rest of the day.

Good luck!

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NZD/USD Intraday technical levels and trading recommendations for October 24, 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.

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.

As expected, the price level of 0.7050 offered temporary bullish support before bearish breakdown could take place. That's why the further bearish decline should be expected towards 0.6925 and eventually 0.6800 (Reversal pattern bearish targets).

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Analysis of Gold for October 24, 2017

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Recently, the Gold has been trading sideways at the price of $1,278.00. Anyway, I found rejection from supply cluster near the pivot resistance 1, which is a sign that buying looks risky. There is also a hidden bearish divergence on the MACD oscillator, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of $1.275.30 (S1) and $1.268.58 (S2).

Resistance levels:

R1: $1,286.00

R2: $1,290.00

R3: $1,296.73

Support levels:

S1: $1,275.30

S2: $1,268.58

S3: $1,264.60

Trading recommendations for today: watch for potential selling opportunities.

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Intraday technical levels and trading recommendations for EUR/USD for October 24, 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, 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 and 1.1700, a quick bearish decline should be expected towards the price zone of 1.1415-1.1520 where BUY entries can be offered.

Trade Recommendations

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

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

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USD/JPY analysis for October 24, 2017

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Recently, the USD/JPY has been trading sideways at the price of 113.70. Anyway, I found today double bottom formation, which is a sign that selling looks risky. There is also a broken pivot level at the price of 113.50, which is another sign of strength. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 113.94 (R1) and 114.43 (S2).

Resistance levels:

R1: 113.93

R2: 114.43

R3: 114.78

Support levels:

S1: 113.08

S2: 112.74

S3: 112.23

Trading recommendations for today: watch for potential buying opportunities.

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Bitcoin analysis for 24/10/2017

Bitcoin analysis for 24/10/2017:

The planned Bitcoin fork will be held not on 25/10/2017 as originally announced, but the day before, at the height of block 491407, when miners begin to form blocks with the new proof-of-work algorithm, Equihash. Of course, Blockchain Bitcoin will remain the same, while the new segment will be split from the original chain. This will be the second division of Bitcoin this year. Users have received their BitcoinCash (BCH) portfolios, now it's time for BitcoinGold (BTG).

BitcoinGold has focused on a group of developers and miners supporting its development. These are Jack Lia or CEO of Hong Kong LightningAsic. The project is also expected to support Jinse.com, the Chinese mining tycoon and the owner of the Bitcoin information portal. The main developer is under the pseudonym H4x3 and remains anonymous. BTG will be received exactly the same way as BitcoinCash. BitcoinGold will receive Bitcoin holders in a 1 to 1 ratio. To be sure BitcoinGold is given, you must have your own BTC private keys. The exchanges are not obliged to pass on "extra Bitcoin" and here everything depends on their policy. It should be borne in mind that some companies have not yet transferred their users to BCH today.

Full implementation of the proof-of-work system or implementation of replay protection is currently not ready and many people, despite the assurances of their creators and their good intentions, have serious doubts about BitcoinGold. Developers recommend caution in making transactions, especially at the beginning before the BTG stabilizes. The price of the currency remains a mystery, while it is expected that initially, the BitcoinGolg unit can cost about $300.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The corrective cycle in wave 4 continues and the first target for wave 4 low has been projected at the level of $5,092. The second target is projected at the level of $4,968. Only a sudden, violate breakout above the wave 3 top at the level of $6,168 would invalidate the short-term corrective bearish scenario.

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Trading plan for 24/10/2017

Trading plan for 24/10/2017:

The markets are still waiting to settle in a set of political themes, which condemns trade to remain in the narrow band. Speculation that the central bank's mandate to change in New Zealand harms NZD, which is today the weakest.The rest of FX is relatively stable, waiting for settlement on the ECB side, Brexit, US tax reform, the election of the Fed Chair. EUR/USD rebounded at 1.1770 overnight. USD/JPY has fallen to 113.20 in the New York session but is already heading towards 113.50.

On Tuesday 24th of October, the event calendar is busy with important data releases in form of a set of Flash PMI Manufacturing, Services and Composite data from France, Germany, Eurozone and the US.

EUR/USD analysis for 24/10/2017:

The market participants expect the Flash PMI reading to be at least in line with the expectations, which means, the indicators should stay above the fifty level that separates expansion from contraction. Except for today's data, the list of topics that may move the markets this week is long, but for now, not much is moving in the financial markets and the volatility is low. As a result, the EUR remains frozen until Thursday ECB interest rate decision and investors are not even willing to open the limit orders before the event.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. Before the week's main event, the price is moving inside of the tight horizontal zone between the levels of 1.1729 - 1.1880. The 61% Fibo at the level of 1.1876 is still the key level to the upside and any violation of this level will lead to range breakout and a rally towards the next technical resistance at the level of 1.1936. The key level to the downside is seen at the level of 1.1665.

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Market Snapshot: is DAX about to start a correction?

The price of German DAX index has been trading around the level of 13,000 for some time now and has established a horizontal zone between the levels of 13,095 - 12, 908. Due to the clear and visible bearish divergence between the price and the momentum oscillator, the possibility of a deeper local correction is high. The first target would be the gap between the levels of 12.809 - 12, 849, but the dip might extend much lower.

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Market Snapshot: EUR/GBP in horizontal range

The price of ERU/GBP has tested the 50% Fbo at the level of 0.9025 again but did not manage to break out above it. The market returned to the consolidation zone between the levels of 0.8856 - 0.9025 and this two levels will be the key levels for both bulls and bears in the coming days.

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Technical analysis of USD/CHF for October 24, 2017

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Overview:

  • The USD/CHF pair continues to move upwards from the levels of 0.9744 and 0.9800. Hence, the spot of 0.9744 and 0.9800 represents strong support today. Since the trend is above this level, the market is still in an uptrend. Furthermore, the trend is still strong above the moving average (100). The USD/CHF pair didn't make any significant movements yesterday. Hence, the market is indicating a bullish opportunity above the mentioned support levels. The bullish outlook remains valid as long as the 100 EMA is headed to the upside. Therefore, strong support will be found around the spot of 0.9744-0.9755 providing a clear signal to buy with a target seen at 0.9836. If the trend breaks the first resistance at 0.9836, the pair will move upwards continuing the bullish trend development to the level of 0.9920 in order to test the daily resistance 2. Also, it should be noted that the major resistance is seen at 0.9980 on the H4 chart. On the other hand, the stop loss should be set at price of 0.9677.
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EUR / USD pair prepares for a breakthrough

The EUR / USD pair is preparing for a breakthrough.

Morning review.

Monday did not bring profit to supporters of direct trades. The EUR / USD pair stayed in the narrow range for almost the entire day, trying to break below the level of 1.1730, but invariably faced with fierce resistance from buyers.

At the end of the session, the euro still managed to break through the mark of 1.1728. However, the forces were enough to move the price in the direction of another breakout just for a few 4 points up to the level of 1.1724, which is undoubtedly a false breakdown.

The plans are unchanged. It is advised to sell after a breakdown at the level of 1.1723 and further on the level of 1.1668 or buy after a breakout at 1.1860 and 1.1880.

Stop Losses positioned with 45 points in 4 digits.

Strong news on orders for durable goods from the U.S. is expected to come out on Wednesday while Catalonia's decision on independence and ECB's monetary policy decision will be released on Thursday. Lastly, the U.S. GDP is scheduled to be published on Friday.

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Technical analysis of NZD/USD for October 24, 2017

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Overview:

  • Last week, the NZD/USD pair has fallen from the level of 0.7067 towards 0.6972. Right now, the price is set at 0.6921 to act as a minor support. It should be noted that volatility is very high for that the NZD/USD pair is still moving between 0.7020 and 0.6900 in coming hours.
  • Furthermore, the price has been set below the strong resistance at the levels of 0.7020 and 0.7067, which coincides with the 23.6% Fibonacci retracement level. Additionally, the price is in a bearish channel now. Amid the previous events, the pair is still in a downtrend. From this point, the NZD/USD pair is continuing in a bearish trend from the new resistance of 0.7067. Thereupon, the price spot of 0.7067 remains a significant resistance zone.
  • Therefore, a possibility that the NZD/USD pair will have downside momentum is rather convincing and the structure of a fall does not look corrective. In order to indicate a bearish opportunity below 0.7067, sell below 0.7067 or 0.7021 with the targets at 0.6900 and 0.6849.
  • However, the stop loss should be located above the level of 0.7067 (the first daily resistance).
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Ichimoku indicator analysis of USDX for October 24, 2017

The Dollar index remains in a bullish trend. Yesterday after reaching new highs at 94 area, price pulled back towards the broken trend line area for a backtest. A bounce off this trend line will increase the bullish scenario strength.

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Blue line - resistance (broken)

The Dollar index is trading above the Ichimoku cloud in the 4-hour chart. The trend is bullish as the price is also making higher highs and higher lows. Support is at 93.50 while resistance is at the recent highs at 94. There are some warning divergence signs in the 4-hour chart but as long as the price is above 93, bulls remain in control.

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Black lines - bearish channel

Blue lines -bullish channel

The Dollar index remains inside the bearish medium-term and bullish short-term channel. Key levels to watch are at 93.40 and at 94. Price is trading above the tenkan-sen (Red line indicator) and below the kijun-sen (yellow line indicator). The Dollar index could continue higher towards 95 as long as the price is above 93.50-93. If this level is broken, we are starting the next leg down towards 90.

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Last minute burning forecast 24.10.2017

Last minute burning forecast 24.10.2017

GBP - the way to the top is not hindered.

As clearly seen on the chart - for the last few days, the situation on the market is practically unchanged - there is essentially no movement, neither up nor down. Entirely calm.

It is clear that the market is waiting for important news - the news will be released from Wednesday to Friday. Wednesday - a report on durable goods in the US, Thursday - ECB decision on rates, Friday - US GDP report for the 3rd quarter. In addition, on Thursday, a news report which is unplanned - the declaration of independence by the Parliament of Catalonia (independence from Spain).

On the technical picture of GBPUSD - a long-term trend is maintained upward. The support line (clearly visible in the graph below) is not broken.

Therefore: we buy from 1.3110 and below to 1.3030.

A stop loss below 1.2980.

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Ichimoku indicator analysis of gold for October 24, 2017

The Gold price has broken out of the downward sloping wedge pattern but has stopped right at the short-term cloud resistance at $1,282. Price needs to break above $1,282 and especially $1,290 for any upward move to consider the start of the next upward move to $1,400.

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Blue line - resistance (broken)

Red lines - bullish divergence signs

Gold price is trading below the Ichimoku cloud in the 4-hour chart. Price bounced off the 61.8% Fibonacci support area but the important short-term resistance at $1,282 is not clearly broken, Next important resistance for bulls is at $1,290. As long as the price is below that level, we remain in a short-term bearish trend.

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Magenta line - resistance

Blue line - support

On a weekly basis, Gold prices try to move back above the kijun-sen (yellow line indicator). This would be a bullish sign. However, as long as we are trading below the tenkan-sen (red line indicator) there will always be a danger of moving lower towards the weekly Kumo (cloud) and the blue trend line support.

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Analysis of Bitcoin for October 23, 2017

The Bitcoin has recently reached $6,000 resistance area and bounced off the area with the bullish rejection and a daily close below it. Ahead of the Bitcoin split in November the price has bounced off the $6,000 price level as expected. Though there are certain restrictions about Bitcoin trading going on in few countries which affected the growth of Bitcoin earlier but currently it has soon good recover and reached all time high which does signal that the Bitcoin is quite strong now to create more highs in the future. Currently the price is residing below $6,000 resistance area and after a strong impulsive rejection off the level last week and a retest today it is currently expected that the price will consolidate and might show some bearish pressure towards $5,000 support area before it launches up much higher in the future. As of the current scenario, the price is expected to consolidate and show some bearish pressure until Bitcoin Split happens and after that we will be getting good amount of positive push to buy the Bitcoin again.

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