Global macro overview for 15/12/2017

The Bank of Russia Board of Directors decided to cut the key rate from 8.25% to 7.75%, thus implementing the assumptions of the forward-looking policy. Unlike in previous statements, the central bank did not say that global geopolitical risks along with fluctuations in the Rouble posed upside risks for Russian consumer inflation, but justify the decision as the consequences of extension of the agreement to reduce oil production that brings pro-inflationary risks down. Market participants expected to maintain a more smoothed path, because the consensus assumed a reduction of the main interest rate only by 25 bp. The Russian officials see further room for rate cuts in the next six months horizon, which will partially contribute to stabilizing the growth of consumer prices at 4.0% at the end of 2018 (from current 2.5%). Moreover, The Bank of Russia holds open the prospect of some key rate reduction in the first half of 2018.

Let's now take a look at the USD/RUR technical picture at the H4 time frame. After the decision, the weakening of the Rouble is observed. In the first reaction USD/RUB records traffic exceeding 10 figures above the technical support level at 58.45, but then the price quickly drops back to the range. Currently, the market is trading sideways in a zone between the levels of 58.70 - 58.54. In a case of a further drop, the next technical support is seen at the level of 58.19, and in a case of a further rally, the next technical resistance is seen at the level of 59.92.

analytics5a33c83720be1.jpg

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

Global macro overview for 15/12/2017

The decisions of the four leading central banks and key data from the US economy were all released yesterday, but in the FX market, we can not see any interesting developments. Norges Bank provided the most emotions, which brought the expectations of the interest rate hike closer, but the Norwegian Krone rally was taken to a greater extent from disastrous liquidity conditions than from the scale of surprise by the decision. The SNB and BoE did what they were supposed to do, that is not much, so it is difficult to require a stronger response from CHF and GBP. But the ECB meeting is never to be ignored. Yesterday investors have forgotten what they should be are looking at. Before the meeting, expectations were raised to strengthen the hawk's sector in the ECB Governing Council after a series of excellent data on economic activity in the Eurozone. We received higher GDP forecasts, but the inflation path projection was disappointing, as only in the case of 2018 we had a revision upwards of 0.2 percentage points and only on the basis of higher fuel prices. In the long horizon, the bank sees inflation at 1.7%, which is quite far from the 2.0% inflation target. Thus, Mario Draghi showed that the monetary expansion remains and repeated, that interest rates will not be moved long after the end of QE. Nevertheless, the Euro reaction across the board was less than interesting and this trading conditions might continue until the end of the next week.

Let's now take a look at the EUR/CHF technical picture at the daily time frame. We can clearly see the growing bearish divergence between the price and the momentum oscillator. Moreover, the price is moving inside of an Ending Diagonal pattern, whcih could soon terminate. In that case, the market should reverse and try to test the nearest support at the level of 1.1538.

analytics5a33c8168e6d4.jpg

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

Trading Plan for EUR/USD and US Dollar Index for December 15, 2017

analytics5a33b9b6e8733.jpg

Technical outlook:

The EUR/USD pair reversed exactly from 1.1850/60 levels yesterday, shedding almost 100 pips yesterday. At the moment the pair is working out a lower degree wave ii as labelled here and should be dropping lower towards 1.1600 levels immediately. Please note that the medium-term targets are well poised to drop below 1.1550 levels and selling on rallies remains a safe trading strategy. Price resistance should be strong at 1.1860 levels and EUR/USD should ideally remain below 1.1860 going forward. A 3rd of 3rd wave should be ready to resume any moment now which should bring prices much lower, going forward. Besides, note that 1.1860 level is also fibonacci 0.618 resistance, from where prices reversed yesterday.

Trading plan:

Remain short for now, stop above 1.1960, target 1.1550 and lower.

US Dollar Index chart setups:

analytics5a33bd36ec161.jpg

Technical outlook:

The US Dollar Index has bounced from expected levels yesterday and rallied almost 50 pips before retracing lower again. Please note that the index has carved out a flat corrective wave structure at the moment and should be poised to resume its rally towards 95.00 levels as depicted here. Please note that the index is carving out a 3rd of 3rd wave as labelled here and is expected to raise sharply higher from here unless it goes into a consolidation mode. It is suggested to trade on the long side and also look to add o dips going forward. Support is expected to be very strong around the 92.50 levels and till prices stay above 92.50, bulls are expected to remain in control.

Trading plan:

Remain long and stop below 92.50 targeting 95.00 and higher.

Fundamental outlook:

No major fundamental announcements are lined up today.

Good luck!

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

Bitcoin analysis for December 15, 2017

analytics5a33b06b4da54.png

Bitcoin (BTC) has been trading upwards. The price tested the level of $18,408. South Korea's government released emergency measures for cryptocurrency regulation on Thursday. Bitcoin exchanges will now be regulated. Among other measures, there will be a ban on banks, minors, and foreigners trading cryptocurrency as well as a clampdown on virtual bank accounts needed to trade cryptocurrencies in Korea. Technical picture looks bullish.

Trading recommendations:

According to the 1H time - frame, I found broken sideways base, which is a sign that selling look risky. I have placed Fibonacci expansion to find potential upward targets. I got Fibonacci expansion 61.8% at the price of $17,958 (on the test), Fibonacci expansion 100% at the price of $19,415 and Fibonacci expansion 161.8% at the price of $21,733. Watch for buying opportunities.

Support/Resistance

$17,532 – Resistance became support

$17,958– FE 61.8%

$19,412 – FE 100 %

$21,733 – FE 161.8%

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

Technical analysis of USD/CHF for December 15, 2017

USDCHFH1.png

Overview:

  • The price is still moving around the area of 0.9806 and 0.9921. Besides, it should be noted that the bias remains bullish in the nearest term testing 1.0037 or higher. The USD/CHF pair continues to move upwards from the level of 0.9806. Last week, the pair rose from the level of 0.9806 to the top around the area of 0.9921 (pivot). Today, the first resistance level is seen at 0.9972 followed by 1.0037, while daily support 1 is seen at 0.9886. According to the previous events, the USD/CHF pair is still moving between the levels of 0.9886 and 1.0037; for that, we expect a range of 150 pips.
USDCHFH4.png
  • If the USD/CHF pair fails to break through the support level of 0.9886, the market will rise further to 0.9972. This would suggest a bullish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. The pair is expected to climb higher towards at least 1.0037 with a view to testing the double top. Briefly, the major support is seen at the price of 0.9806. So, it will be very useful to buy above the spot of 0.9806 with the targets of 0.9921 and 1.0037. On the other hand, if a breakout takes place at the support level of 0.9800, then this scenario may become invalidated.
The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD analysis for December 15, 2017

analytics5a33a94757522.png

Recently, the EUR/USD pair has been trading downwards. The price tested the level of 1.1764. According to the 30M time – frame, I found out that Fibonacci retracement 38.2% is on the test, which is a sign that buying looks risky. I also found a poor low from yesterday, which indicates that EUR/USD might create new low. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.1750 and at the price of 1.1730.

Resistance levels:

R1: 1.1836

R2: 1.1895

R3: 1.1927

Support levels:

S1: 1.1745

S2: 1.1711

S3: 1.1652

Trading recommendations for today: watch for potential selling opportunities.

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

Technical analysis of NZD/USD for December 15, 2017

NZDUSDH1.png

Overview:

  • Again, the NZD/USD pair will continue to rise from the level of 0.6948. The support is found at the level of 0.6948, which represents the 61.8% Fibonacci retracement level in the H1 time frame. The price is likely to form a double bottom. Today, the major support is seen at 0.6948, while immediate resistance is seen at 0.7026.
  • Accordingly, the NZD/USD pair is showing signs of strength following a breakout of a high at 0.6948. So, buy above the level of 0.6948 with the first target at 0.7026 in order to test the daily resistance 1. Also, the level of 0.7026 is a good place to take profit because it will form a double top. Amid the previous events, the pair is still in an uptrend; for that we expect the NZDUSD pair to climb from 0.7026 to 0.7065 today.
  • At the same time, in case a reversal takes place and the NZD/USD pair breaks through the support level of 0.6948, a further decline to 0.6822 can occur, which would indicate a bearish market.
The material has been provided by InstaForex Company - www.instaforex.com

USD/JPY analysis for December 15, 2017

analytics5a33a6ddcf268.png

Recently, USD/JPY has been trading downwards. The price tested the level of 112.03. Anyway, according to the 30M time – frame, I found a fake breakout of yesterday's low at the price of 112.06, which is a sign that selling looks risky. I also found a hidden bullish divergence on the moving average oscillator, which is another sign of strength. The price is trading below yesterday's value and my advice is to watch for potetnial buying opportunities. The upward target is set at the price of 112.75.

Resistance levels:

R1: 112.83

R2: 113.26

R3: 113.65

Support levels:

S1: 112.00

S2: 111.62

S3: 111.20

Trading recommendations for today: watch for potential buying opportunities.

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

Bitcoin analysis for 15/12/2017

In a film released on Tuesday, Israeli Prime Minister Benjamin Netanyahu said that the activities of traditional banks would eventually become obsolete and could be replaced by Bitcoin. He based his claims on the reliability of Blockchain technology and on the constant, notable increase of Bitcoin. In the film, Netanyahu said with conviction that the banks will eventually become obsolete and will be replaced, although when and by what, it still turns out:"Is the purpose of the banks ultimately disappearing? Yes. The answer is yes. Does it have to happen tomorrow? Do we have to do it with Bitcoin? This is an open question."

The head of the Israeli state also talked about the role of banks, explaining that they were created and still exist to provide credibility and security for the transaction. Banks, not to mention governments, still control how they spend money and continue to use this control at the expense of the parties to the transaction. Blockchain, the basic cryptocurrency technology, enables people to make transactions without intermediaries. At the same time, this decentralized technology gives the same as centralized institutions - reliability and security."The truth behind what I just said is what drives Bitcoin" said Netanyahu, but at the same time, he expressed doubts about Bitcoin's ability to grow further at such an amazing pace.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. After a bounce from the local support at the level of $15,952, the price of Bitcoin tested the recent high at the level of $17,390. Currently, the price stays around this high, but the upwards momentum is diminishing and there is a clear bearish divergence between the price and momentum oscillator. In a case of a further downside breakout, the nearest support is seen at the level of $14,066.

analytics5a3398087851f.jpg

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

Trading plan for 15/12/2017

The US Dollar slightly loses overnight because there are obstacles on the way to approval of the US Tax Act. The stock market is restless in the wake of the weak Thursday session in Europe and the US. Nikkei225 fell 0.6% and Hang Seng lost 13%. Gold minimally benefits from Dollar problems and the price of an ounce is consolidated at 1255 USD. Crude oil WTI drifts close to 57.2 USD.

On Friday 15th of December, the event calendar is light in important economic releases. There were some data from Japan released overnight (Tankan Manufacturing and Non-Manufacturing Index). So Manufacturing Sales from Canada and Empire State Manufacturing Index and Industrial Production data from the US are the missing data left before the weekend.

EUR/USD analysis for 15/12/2017:

Wednesday's increase in the federal fund's rate by FOMC members has launched a marathon with central banks. During the Thursday trading session, the volatility of major currency pairs was influenced by decisions made on the Old Continent. Before the decision of the European Central Bank, the volatility of euro-related currency pairs tried to conquer initial estimates of PMI indices. In case of a measure reflecting the sentiment in industry one should speak about establishing a new high (60.6 points), which was not widely expected by the surveyed market participants (59.7 points). The very good data on the accelerating economy did not cause any significant reshuffle in the market, neither did the ECB decision to leave the interest rates unchanged. After very busy week today's trading session should be much calmer as Christmas are just around the corner.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. After the ECB decision, the market rallied, but bulls were not strong enough to break out above the 61% Fibo at the level of 1.1855 and the price dropped towards the middle of the trading zone. The momentum is still positive, but is hovering around its fifty level as liquidity is diminishing from the market. The nearest technical support is seen at the level of 1.1725.

analytics5a3395848b258.jpg

Market Snapshot: Gold about to test the resistance?

The price of Gold bounced from the technical support at the level of $1,235, broke through the local resistance at the level of $1,251 and currently is about to test the key resistance zone at the level of $1,260 - $1,265. The momentum remains strong, but the market conditions are starting to look overbought.

analytics5a33958e84019.jpg

Market Snapshot: DAX still developing the Head & Shoulders pattern

The price of German DAX has dropped again and broke through the technical support at the level of 13,085. The right shoulder is still in progress as the price is moving inside of the channel. The next technical support is seen at the level of 12.953.

analytics5a339596122b4.jpg

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

BITCOIN Analysis for December 15, 2017

Bitcoin is currently residing between the price range of $16,600 to $17,400 area where the price is expected to break upward after certain period of correction. Bitcoin price gained some momentum recently breaking above the $16,600 price level but the momentum was not quite impulsive. As for various financial sources, Malaysian Government and South Korean Bitcoin Foundation have provided the guidelines of proper operation of Bitcoin which is expected to impose more security and better transactions. The impact of the news was quite hawkish in the market but was not sufficient to help the Cryptocurrency to break above $17,400 price area and head towards $18,000 price level. As for the current scenario, price is expected to show some impulsive bullish move bouncing off the dynamic level of 20 EMA, Tenkan and Kijun line which is expected to help the price to break above $17,400 price area in the coming days. As the price remains above $16,600 price area, the bullish bias is expected to continue further.

analytics5a338ffd63026.jpg

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

Ichimoku cloud indicator analysis of USDX for December 15, 2017

The Dollar index pulled back towards our short-term target and Ichimoku cloud support. Price is bouncing after the post FOMC decline. There are a lot of chances that the pullback is over and a new leg upwards has already started.

analytics5a33831e298f3.png

Black lines - wedge pattern

Black rectangle - target area

Red rectangle - support area (broken)

The Dollar index reached the black rectangle target area after price broke out of the upward sloping wedge and the red rectangle support. Price has found support at the 4-hour Kumo. Resistance is at 93.75 and next at 94.15 where we got rejected during the FOMC on Wednesday. Support is at 93-93.30.

analytics5a3383aaa83e7.png

The Dollar index got rejected at the weekly kijun-sen (yellow line indicator). A break above this week's high will be a bullish sign confirming my view that the Dollar index is heading towards 96-97. Support is 92.50-93 area. A break below that level will be very bearish for the index.

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

Ichimoku cloud indicator analysis of gold for December 15, 2017

Gold price is trading near its weekly highs after bouncing from $1,237. We warned Gold bears that a bounce towards cloud resistance was coming. The market delivered what was expected. Now Gold is being tested at important short-term resistance.

analytics5a338030069b5.png

Red lines - bearish channel

Gold price has bounced as expected, because price broke out of the bearish channel and the RSI was giving bullish divergence signs. Gold price has reached the bounce target at the 4-hour Kumo (cloud) resistance. A rejection here will most probably push Gold price towards $1,200. Support is at $1,250 and next at $1,246.

analytics5a33809211782.png

On a daily basis, Gold price is testing the tenkan-sen (red line indicator). A daily close above it will open the way for a move towards the kijun-sen (yellow line indicator) at $1,268. Daily trend remains bearish and this upward move is still considered as a bounce. I prefer to be neutral at the current levels or slightly bearish if price breaks below $1,250.The material has been provided by InstaForex Company - www.instaforex.com

Trading plan 12/15/2017

Trading plan 12/15/2017

The overall picture: Euro received a strong blow.

On Thursday, the decision of the ECB was issued. The ECB left the policy unchanged - and this disappointed the euro.

Euro fully retreated from growth on the decision of the Fed and closed the day with a strong fall.

On Friday morning, the continued fall of the euro is more likely. Sell the euro in case of a breakout of 1.1715 down.

GBPUSD

The pound is still looking up; buy with a pullback from 1.3380 or lower target of 1.3550.

analytics5a3373e94702e.jpg

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

Markets see no reason to worry

Following the meeting on December 12-13, the AHC Committee on Open Markets (FOMC) hiked, as expected, the federal funds rate by 0.25%, while keeping the forecast for 2018 unchanged. The moderate tone of the accompanying statement led to the fact that players preferred to lock in profits. At a subsequent press conference, Janet Yellen also tried to avoid hawkish language.

Thus, as the market expected, another 3 rate increases are planned for 2018, the CME futures market implies a 45% likelihood that the next step will take place in March. The forecast for GDP growth rates from 2.1% to 2.5% in 2018 has significantly increased, and the unemployment rate has been reduced from 4.1% to 3.9%. These two positive factors are crossed out by the invariability of the inflation forecast. According to the Fed, it will be 1.9% next year, as in the September release.

analytics5a3233580b062.jpg

Apparently, the Fed hoped that unnecessary volatility in the markets would not take place, this goal was achieved. The dollar index fell back slightly as part of the profit-taking, but we still do not expect a full-fledged reversal.

Eurozone

Before the key ECB meeting on monetary policy, the eurozone economy continues to please investors with excellent indicators.

The ZEW index of current economic conditions in Germany increased in December to 89.3p, the best result since July 2011. Economic sentiment in the euro area, despite the decline from 30.9p to 29.0p, continues to remain near two-year highs.

Industrial production grew by -.2% in December, and a year-on-year growth of 3.7%, both results exceeded the forecast.

analytics5a32336af2c7b.jpg

The ECB meeting, which was held on Thursday, is regarded by the market as a gateway. The objectives of the asset redemption program are determined before the end of 2018, low inflation in the eurozone does not provide any reason to expect a rise in rates. The main intrigue is the answer to the question - will the ECB support the growth of the euro? This can be facilitated by the revision of macroeconomic forecasts towards improvement, for which there are all grounds.

The mood is quite complacent, investors do not assume that Draghi is capable of hawkish comments following the meeting, and the euro will be stable, but a slight increase to 1.19 is not ruled out.

United Kingdom

The Bank of England ahead of its meeting is in a more difficult position than the ECB - against a background of relatively weak growth of the economy, a number of indicators that are growing, implying an increase in price pressure.

The index of retail prices rose in November to 3.9%, house prices, according to DCLG, to 4.5% year-on-year, producer prices are rising. Consumer prices in November increased by 0.3%, year-on-year growth is already 3.1%, and this is a peak since April 2012.

The average salary, taking into account premiums, rose by 2.5% in October for the last 3 months, and this is a 10-month peak.

analytics5a323380ed729.jpg

The general price dynamics indicates that growth will continue, which means that the Bank of England may need to raise rates again. While the market proceeds from the fact that the first increase in many years in November was one-time, it can also reconsider its position, given that the trend does not change.

However, the strong movement of the pound in any case should not wait. The meeting is a passing one, as it is not accompanied by the release of updated macroeconomic data. The pound, most likely, will remain stable at the end of the day.

Oil

Oil received a fairly sensitive blow on Wednesday after the publication of the EIA report. However, the fall was not deep, for Brent at least from December 6 as it resisted, and now a local base is being formed. The reasons for a deep correction are few, for growth much more. We expect that the bulls will make a new attempt to raise quotes above $66/bbl, which will be facilitated by a temporary weakening of the dollar.The material has been provided by InstaForex Company - www.instaforex.com

BITCOIN Analysis for December 14, 2017

Bitcoin has been quite corrective as expected today and the deepest pullback was down to the $15,500 price area. The market focus seemed to have shifted from Bitcoin to Ethereum as the price of Ethereum has been quite impulsive with the gains recently. The sentiment change means that the price of Bitcoin residing currently was unexpected by a huge portion of the market whereas investors are looking for cheaper coins to invest, which has some growth potentiality. Despite the consolidation, Bitcoin has been quite stable having no impulsive bearish pressure in the market, which is indeed a good sign. As of the current market scenario, the price has breached the Kumo Cloud in the intraday market, but still the bulls seem quite strong as the price resides above the $15,500 price area and the Chikou Span is on its way to break above the candle resistance of the consolidation period. The price is expected to surge higher towards the $18,000 price area in the coming days but with some correction along the way.

analytics5a32ac0f91a85.jpg

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

Fundamental Analysis of USDCHF for December 14, 2017

USD/CHF has been quite volatile recently having impulsive bearish and bullish daily candles. Recently, the Fed Funds Rate report was published, despite the increase in the rate to 1.50% from the previous value of 1.25 as expected, USD lost significant grounds against CHF, which is currently recovering. Today the Libor Rate report was published: it was unchanged as expected at -0.75%. The PPI report showed some increase to 0.6% from the previous value of 0.5%, which was expected to decrease to 0.3%. The SNB Monetary Policy Assessment and SNB Press Conference was also held today where the outcome was not quite favorable for CHF resulting to losing some grounds against USD very quickly. On the other hand, today the US Core Retail Sales report was published with an increase of 1.0% from the previous value of 0.4% which was expected to increase to 0.6%. Retail Sales report is expected to increase to 0.8% from the previous value of 0.5% which was expected to decrease to 0.3%. Import Prices increased to 0.7% as expected from the previous value of 0.1% and Unemployment Claims showed a decrease to 225k from the previous figure of 236k, which was expected to increase to 237k. The positive economic reports did help the currency to regain its momentum which was expected from the Fed Funds Rate increase recently. As of the current scenario, USD is expected to sustain the gain over CHF providing more push to surge higher in the coming days.

Now let us look at the technical view, the price has been impulsively bearish recently despite the Fed Funds Rate hike, which took the price all the way down towards the support area of 0.9830-50. Today, the price has been quite bullish with the gains having bounced off the support area with an aim of reaching the higher resistance area of 1.01. As the price remains above the 0.9830-50 support area, the bullish bias is expected to continue further.

analytics5a32a87b33f65.jpg

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