Technical analysis of USD/JPY for December 18, 2017

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USD/JPY is expected to trade with a bullish outlook. The pair remains on the upside after breaking above a declining trend line drawn from December 12. Currently, it is striking against the upper Bollinger band while being supported the ascending 20-period moving average, which stands above the 50-period one. The relative strength index is well directed into the 60s, showing continued upward momentum for the pair. Intraday bullishness persists, and the pair should target 113.15 upon reaching 112.90. Key support is located at 112.25.

However, as long as the key support at 113.15 is not breached, the intraday outlook is still bullish and the pair stands chances of revisiting 113.75 on the upside.

Alternatively, if the price moves in the opposite direction, a short position is recommended below 112.25 with a target of 112.05.

Chart Explanation: The black line shows the pivot point. The current price above the pivot point indicates a bullish position, while the price below the pivot point is a signal for a short position. The red lines show the support levels and the green line indicates the resistance level. These levels can be used to enter and exit trades.

Strategy: BUY, Stop Loss: 112.25, Take Profit: 112.90

Resistance levels: 112.90, 113.15 and 113.50 Support Levels: 112.05, 111.70, 111.30

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Global macro overview for 18/12/2017

The Confederation of British Industry (CBI) announced that its index of factory orders for the second consecutive month was 17 points, the highest since August 1988. The export orders index fell to 16 points from 20 points, but remained above the long-term average.The boom in the British industry is favored by two factors - the weakening of the British Pound exchange rate caused by Brexit voting and the revival of global trade. CBI reported that 14 out of 17 industries in December recorded higher orders than usual, and the demand was particularly strong in the automotive and mechanical industries.The CBI report coincides with other data sent by the BDO auditing company, which reported that British exports have been growing continuously for four months more than in other European countries, among others due to a weaker pound. This course is currently 11%. lower than before the Brexit referendum.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. The market bounced yet again from the technical support at the level of 1.3300 after the news was released and currently is heading back towards the golden trend line resistance around the level of 1.3415. The momentum indicator is still hovering around its fifty level, but it points to the north, so there is still a chance the market will test the resistance again.

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Global macro overview for 18/12/2017

Today, the pre-Christmas week on the financial markets begins, therefore it should be expected that the closer to the holidays the more volatility and liquidity will be limited. Data for durable goods and the PCE index will be published from the most important US data. Tomorrow, we will also know the December reading of the Ifo index. On the other hand, we will get acquainted with the next series of central bank decisions. The bank in the Czech Republic, Sweden, Japan and Hungary will decide on the monetary policy parameters this week. Negotiations on the Brexit officially went into the next phase, which was confirmed by the President of the European Council Donald Tusk. At present, talks will focus on the transitional period and future relations between Great Britain and the European Union. The final vote on tax reform in the US is scheduled for this week - today in the House of Representatives and tomorrow in the Senate. A positive result of the vote will be a pro-market factor.

Let's take a look at the US Dollar Index technical picture. Strong resistance is seen around 94.18 level and local support is seen at the level of 93..32 (post-FOMC low). Quotations continue to oscillate around the 50-period moving average on a daily time frame. The market might keep trading in this narrow zone until the tax reform bill is officially announced by Trump Administration.

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Bitcoin analysis for December 18, 2017

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Bitcoin (BTC) has been trading upwards. As I expected, the price tested the level of $19,468. French Finance Minister Bruno Le Maire announced on Sunday December 17th that the next Group of 20 (G20) meeting would include discussion about how to regulate the world's most popular cryptocurrency, bitcoin. The digital asset hasn't ceased in making news all year, and European politicians appear more concerned in direct proportion to its price increase, as shown by the EU legislative body urging strict compliance laws upon coin exchanges this week. The G20 establishing regulatory frameworks, however, would spread across the world and have enormous impact. Technical picture looks bearish.

Trading recommendations:

According to the 30M time frame, I found strong rejection from Fibonacci expansion 100% at the price of $19,420, which is a sign that buying looks risky. My advice is to watch for a potential breakout of a rising wedge forrmation to confirm a further lower price. The downward target is set at the price of $17,980.

Support/Resistance

$17.890 – Intraday support (price action)

$17.271 – Second support level

$19.468– Key rersistance

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

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USD/JPY analysis for December 18, 2017

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Recently, the USD/JPY pair has been trading sideways around price of 112.51. According to the 30M time – frame, I found a breakout of the supply trendline in the background, which is a sign that selling looks risky. I also found successful re-test of the supply trendline and rejection from Fibonacci retracement 61.8% at the price of 112.34. My advice is to watch for potential buying opportunities. The upawrd targets are set at the price of 112.75, 113.00 and at the price of 113.45.

Resistance levels:

R1: 112.89

R2: 113.17

R3: 113.60

Support levels:

S1: 112.18

S2: 111.75

S3: 111.45

Trading recommendations for today: watch for potential buying opportunities.

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Trading Plan for EUR/USD and US Dollar Index for December 18, 2017

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Technical outlook:

The EUR/USD pair is again preparing to drop lower till prices remain below 1.1960 levels going forward. The pair has reversed lower from 1.1860 levels last week, which is also the fibonacci 0.618 resistance of wave (2) as labelled here. Ideally the pair should be continuing its bearish outlook towards printing lower lows and lower highs and push below 1.1550 levels at least. Looking at the 4H chart wave counts, the earlier drop from 1.2092 levels could be labelled as (A), followed by (B) terminating at 1.1960 levels respectively. The subsequent waves are (1) and (2) and wave (3) is unfolding at present. If the above count holds true, prices should remain broadly below 1.1960 levels and continue lower.

Trading plan:

Please remain short, stop above 1.1960, target lower below 1.1550.

US Dollar Index chart setups:

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Technical outlook:

The US Dollar Index continues to carve higher lows and higher highs since 92.50 levels, and it seems to be into wave (3) of the same degree for now. Since 91.00 levels, we presume that the index has carved out a potential (A) and (B) waves at a higher degree and could be on its way to carve out wave (C), unfolding into 5 waves. Waves (1) and (2) seem to be ready and wave (3) is unfolding at the moment, which could push prices higher through 95.00 and 98.00 levels going forward. If this hold to be true, the US Dollar Index should ideally stay above 92.50 levels going forward. Only a break below those critical supports, will indicate the the index is looking at an alternate count possible. Immediate support comes in at 93.30 level.

Trading plan:

Please remain long for now, stop below 92.50 levels, target is 95.00 and 98.00 at least.

Fundamental outlook:

No major fundamental events are lined up for the day.

Good luck!

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Technical analysis of EUR/USD for December 18, 2017

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Overview:

  • The EUR/USD pair continues to move downwards from the level of 1.1817. The pair dropped from the level of 1.1817 to the bottom around 1.1729. But the pair has rebounded from the bottom of 1.1729 to set around the spot of 1.1793 now. Today, the first support level is seen at 1.1756, the price is moving in a bearish channel now. Furthermore, the price has been set below the strong resistance at the level of 1.1817, which coincides with the 38.2% Fibonacci retracement level. This resistance has been rejected several times confirming the veracity of a downtrend. Additionally, the RSI starts signaling a downward trend. As a result, if the EUR/USD pair is able to break out the first support at 1.1756, the market will decline further to 1.1729 in order to test the weekly support 2. Consequently, the market is likely to show signs of a bearish trend. So, it will be good to sell below the level of 1.1817 with the first target at 1.1756 and further to 1.1729. However, stop loss is to be placed above the level of 1.1872.
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EUR/USD analysis for December 18, 2017

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Recently, the EUR/USD pair has been trading upwards. The price tested the level of 1.1798. According to the 15M time – frame, I found successful rejection from pivot resistance 1 at the price of 1.1792. I also found a hidden bearish divergence on the stochastic oscillator, which is sign that buying looks risky.

Resistance levels:

R1: 1.1792

R2: 1.1835

R3: 1.1855

Support levels:

S1: 1.1730

S2: 1.1710

S3: 1.1667

Trading recommendations for today: watch for potential selling opportunities.

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Technical analysis of GBP/USD for December 18, 2017

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Overview:

  • The GBP/USD pair is still trading upwards above the levels of 1.3017 and 1.3203. The first support level is currently seen at 1.3017. The trend is still set above the level of 1.3017 and 1.3203 for that the price is moving in a bullish channel now. Furthermore, the price has been set above the strong support at the level of 1.3017, which coincides with the 61.8% Fibonacci retracement level. This support has been rejected three times confirming the veracity of an uptrend.
  • According to the previous events, we expect the GBP/USD pair to trade between 1.3100 and 1.3655. So, the support is seen at 1.3017, while daily resistance is found at 1.3298. Therefore, the market is likely to show signs of a bullish trend around the spot of 1.3017/1.3203. In other words, buy orders are recommended above the zone of 1.30171.3203 with the first target at the level of 1.3298; and continue towards 1.3655 in coming days.
  • On the other hand, if the GBP/USD pair fails to break through the resistance level of 1.3298 today, the market will decline further to 1.2823.
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Intraday technical levels and trading recommendations for EUR/USD for December 18, 2017

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Monthly Outlook

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2050-1.2100 (multiple previous bottoms set in July 2012 and June 2010). Hence, a long-term bearish target was projected toward 0.9450.

In March 2015, EUR/USD bears challenged the monthly demand level around 1.0500, which had been previously reached in August 1997.

In the longer term, the level of 0.9450 remains a projected target if any monthly candlestick achieves bearish closure below the depicted monthly demand level of 1.0500.

However, the EUR/USD pair has been trapped within the depicted consolidation range (1.0500-1.1450) until the current bullish breakout was executed above 1.1450.

The current bullish breakout above 1.1450 allowed a quick bullish advance towards 1.2100 where recent evidence of bearish rejection was expressed (Note the previous Monthly candlestick of September).

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Daily Outlook

In January 2017, the previous downtrend was reversed when the Inverted Head and Shoulders pattern was established around 1.0500. Since then, evident bullish momentum has been expressed on the chart.

As anticipated, the ongoing bullish momentum allowed the EUR/USD pair to pursue further bullish advance towards 1.1415-1.1520 (Previous Daily Supply-Zone).

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

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

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

However, In November, recent price action around the price zone of 1.1520-1.1415 indicated evident bullish recovery.

This hindered further bearish decline which allowed the current bullish pullback to occur towards the price level of 1.1900.

Trade Recommendations

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

S/L should be lowered to 1.1870 to offset the associated risk. Remaining T/P levels to be located at 1.1700 and 1.1590.

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NZD/USD Intraday technical levels and trading recommendations for December 18, 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 which initiated bearish reversal.

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

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

Moreover, further bullish advance should be expected towards 0.7150 if enough bullish momentum is expressed above the price level of 0.7050.

Trade Recommendations:

An inverted Head and Shoulders pattern is being established on the chart indicating a high probability of bullish reversal.

That's why the price zone of 0.6800-0.6830 could be considered for a short-term BUY entry. Bullish persistence above 0.6950 (neckline) is mandatory to pursue towards next bullish targets.

S/L should be moved to 0.6900 to secure some profits. T/P level remains projected towards 0.7050 and 0.7110.

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Trading plan 18 - 12/22/2017

Trade plan 18 - 12/22/2017

General picture: The final movement of the year.

The main events of December took place. First, there were meetings of the Federal Reserve and the ECB. The Fed was not surprised for the rate hiked by 0.25% and the promised of 0.25% increase by 2-3 times in 2018.

The ECB was disappointed the market without changing the policy, the markets were waiting for an increase in the euro rate.

Nevertheless, the market did not reacted with a strong movement.

It is assumed that the "last strong movement of the year" will still take place, along with the euro as well.

For EUR/USD: Traders should buy at the break above 1.1865.Traders can sell at the break of 1.1715 down.

GBP / USD:

The pound failed to keep up and returned to the range.

Traders should buy after the breakout to the top 1.3380.

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* The presented market analysis is informative and does not constitute a guide to the transaction.

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Technical analysis of GBP/JPY for December 18, 2017

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Our first target which we predicted in our previous analysis has been hit. GBP/JPY is still under pressure. The pair retreated from 151.70 and broke below its 20-period and 50-period moving average. The relative strength index is calling for another decline. The upside potential should be limited by the key resistance at 151.05.

To sum up, as long as this key level holds on the upside, a further decline to 149.85 and even to 149.40 seems more likely to occur.

Alternatively, if the price moves in the direction opposite to the forecast, a long position is recommended above 151.05 with the target at 151.50

Strategy: SELL, Stop Loss: 151.05, Take Profit: 149.85

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: 151.50, 152.00, and 152.55

Support levels: 149.85, 149.40, and 140.40

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Technical analysis of USD/CHF for December 18, 2017

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USD/CHF is expected to trade with a bearish outlook. The pair retreated from 0.9930 and broke below its 20-period and 50-period moving averages. The relative strength index is below its neutrality level at 50.

The U.S. dollar strengthened further, boosted by optimism on Congress, getting closer to passing a tax-cut plan.

Hence, below 0.9930, look for a further drop with targets at 0.9865 and 0.985 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: SELL, Stop Loss: 0.9930, Take Profit: 0.9865

Resistance levels: 0.9955, 0.9975, and 1.0015

Support levels: 0.9865, 0.9835, and 0.9795

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Bitcoin analysis for 18/12/2017

The Financial Stability Oversight Council (FSOC), claims that Bitcoin and other cryptocurrencies do not pose a threat to existing financial systems around the world. In its 152-page report, FSOC has declared that virtual currencies are used only by a small number of consumers, and Blockchain technology offers potential in a variety of industrial applications. They said in the report: "Virtual currencies are used by a small number of consumers. We give slightly more loans of trust for much wider applications of the so-called technology of a dispersed book, which is the basis for innovation. It is worth noting that this wave is also a regulatory challenge because data storage is decentralized."

The opinion on digital currencies is somewhat surprising due to the negative attitude of several personalities from the financial industry. An example is the recent claim of the president of JPMorgan Chase, Jamie Dimon, about which I have written many times. The report also cites various monetary, geopolitical and cybernetic risks that are confronted with the global financial system. Bitcoin, however, has not been mentioned as a threat.

The virtual currency market has seen significant growth throughout 2017. However, despite phenomenal statistics, the total market value is still well below $ 1 trillion and is probably too small to be a systemic threat to the global financial sector. At the same time, the potential that can be released by cryptocurrencies is extreme.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The price has made a new high at the level of $19,661, which can be labeled as the top for the wave (5). The local support at the level of $17,894 has been tested and together with a weekly pivot at the level of $18.062 will now act as a strong support zone for the price. Please notice a strong bearish divergence between the price and momentum indicator, which clearly favors the downside correction scenario.

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Technical analysis of NZD/USD for December 18, 2017

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NZD/USD is expected to trade with a bullish outlook. The pair accelerated on the upside and broke above its key resistance at 0.6990, which becomes the key support now. The 20-period moving average crossed above the 50-one. The relative strength index is bullish and calls for a further rise.

To sum up, above 0.6990, look for a new challenge with targets at 0.7050 and 0.7070 in extension.

The black line shows the pivot point. Currently, the price is above the pivot point, which is a signal for 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: 0.7050, 0.7070, and 0.7105

Support levels: 0.6975, 0.6960, and 0.6920

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Trading plan for 18/12/2017

The US Dollar bears a modest loss against other currencies, partially erasing the Friday's strengthening, which can be associated with excitement about getting closer to the end of the battle for the tax bill. The stock market is predominantly green as Tokyo Nikkei2225 increased by 1.6% and Chinese Hang Seng increased by 0.9%.

On Monday 18th of December, the event calendar is light in important events releases, but the market participants will keep an eye on Consumer Price Index Core data from Eurozone, Foreign Securities Purchases data from Canada and NAHB Housing Market Index data from the US.

EUR/USD analysis for 18/12/2017:

On Sunday, leading representatives of the Republican Party signaled that Congress this week passed a tax bill. The Senate will hold its vote at the earliest on Tuesday, and President Trump may receive a document for signature on Wednesday, although each deadline will be good by the end of the week (Friday is an unofficial boundary). USD and US bond yields conducted a mini-rally on Friday on the wave of preliminary speculation, although today the market is more controlled, because everyone realizes that politics can surprise in the least expected moment. Additionally, by the end of the week, congressmen will have to agree on a further extension of budget funding to avoid so-called "government shutdown". I do not think that there will be an unpleasant surprise in both cases, but the market seems to blow a little cold, which will limit the scale of Dollar fluctuations.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. After a failure at the level of 61% Fibo at 1.1855, the market dropped back towards the level of 1.1725, but did not make it either. Currently, the price is hovering around the middle of the zone, testing the internal dashed trend line resistance at the level of 1.1792. No big developments in momentum have been noticed as well as all the moves are really not impressive.

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Market Snapshot: Gold fails at the resistance

The price of Gold has failed to break out above the technical resistance at the level of $1,260 and got back to the consolidation at the level of $1,253. The overbought market conditions favor more bearish price action. The key level to the downside is technical support at the level of $1,250.

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Market Snapshot: DAX out of the channel

The price of German DAX has broken out from the dashed channel and now is testing the technical resistance at the level of 13,254. The Head & Shoulders technical pattern is still valid, but the right shoulder is getting very extended in time. The key level to the downside remains at 12.809.

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Ichimoku cloud indicator analysis of USDX for December 18, 2017

The Dollar index bounced strongly off the 50% Fibonacci retracement and the cloud support in the 4-hour chart as expected. The Dollar index reached 94 which is important short-term resistance and is showing rejection signs.

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Red rectangle - resistance area

Black rectangle - support area

The Dollar index is at an important junction. A break above 94.05 will open the way for a move towards 96. A fall below 93.40 will push price towards 92.50 critical low. First important short-term support is at 93.30-93.40. Bulls do not want to see it broken.

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Last week's weekly candle is a bullish one, implying price should continue higher towards weekly kijun-sen resistance at 94-94.30. A weekly break above this resistance level will be a very bullish break out that will eventually push price towards our target of 96-97. The bullish scenario gets canceled if we break below 92.50.The material has been provided by InstaForex Company - www.instaforex.com

Ichimoku cloud indicator analysis of gold for December 18, 2017

Gold price got rejected at the cloud resistance on Friday but remains above short-term support. Short-term trend is neutral as price is inside the 4-hour Kumo (cloud).

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Short-term support is at $1,250. Resistance is at $1,266 (upper cloud boundary). I expect Gold price to move lower towards $1,220-$1,200 once we break below $1,250. I currently am neutral positioned.

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Gold price is bouncing off the weekly cloud support. This is good news for bulls. Weekly resistance is at $1,267 and next at $1,282. Trend is bullish as price is above the Kumo, but technically price is making lower lows and lower highs. Bulls are not out of danger yet.The material has been provided by InstaForex Company - www.instaforex.com

Burning Forecast 18/12/2017

Burning Forecast 18/12/2017

EURUSD: Trade for a breakout of the range.

The latest most important news - the decisions of the Fed and the ECB - have not yet resulted in strong movements. Nevertheless, the euro out of the range will happen very soon.

We have clear order levels for entering the breakout of the range boundaries, both in the case of upward and downward movement.

Presumably, the output will take place in the coming days, but if not - that is, there is strong news on the US on Friday - orders for durable goods.

Therefore:

Buy in the event of a breakdown upwards from 1.1865, stop-loss at 1.1820, target of 1.2080.

Sell in the breakdown downwards of 1.1715, stop-loss at 1.1760, target of 1.1515.

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Elliott wave analysis of EUR/NZD for December 18, 2017

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Wave summary:

EUR/NZD is now trading just above its 1.6720 targets, which is expected to mark the low for wave (iv) and set the stage for a strong rally in wave (v) towards 1.7770. Short-term a break above minor resistance at 1.6873 will indicate that wave (iv) has completed, while a break above resistance at 1.6965 will confirm that wave (iv) has completed and wave (v) higher is developing.

R3: 1.6965

R2: 1.6918

R1: 1.6873

Pivot: 1.6836

S1: 1.6757

S2: 1.6720

R3: 1.6695

Trading recommendation:

We will buy EUR at 1.6735 or upon a break above 1.6873.

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Elliott wave analysis of EUR/JPY for December 18, 2017

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Wave summary:

We continue to look for more downside pressure to important support at 131.14 and a break below here will confirm that wave (D) completed with the test of 134.50 and wave (E) lower to 123.43 is developing.

Short-term resistance is now seen at 132.78 and again at 133.76, which needs to cap the upside for the expected decline towards 131.14.

R3: 133.89

R2: 133.76

R1: 132.78

Pivot: 132.11

S1: 131.70

S2: 131.14

S3: 130.56

Trading recommendation:

We are short EUR from 133.40 with stop placed at 133.80.

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Daily analysis of major pairs for December 18, 2017

EUR/USD: The EUR/USD made some bullish effort last week, but the further rally was rejected when the resistance line at 1.1850 was tested. Since then, the price has gone down by 100 pips, now almost below the support line at 1.1750. Further bearish movement is expected this week as price goes towards another support line at 1.1700.

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USD/CHF: This pair is bearish in the short-term, but neutral in the long-term. The only factor that would help push the market upwards is a continuous weakness in the EUR/USD. Another factor that would help is the fact that, the Greenback is expected to be strong this month, and that is already visible in some pairs.

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GBP/USD: This market is consolidating at best, and there is no directional, perpetual movement at the present. Last week, the market reached the distribution territory at 1.3450 and the accumulation territory at 1.3300. Either of these boundaries would be breached this week, as price assumes a directional movement.

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USD/JPY: There is a Bearish Confirmation Pattern in the short-term (on the USD/JPY). Price consolidated on Monday and Tuesday and then dropped 150 pips, to test the demand level at 112.00. There has been an upward bounce since then, but the market would come down again to test that demands level, and possibly breach it to the downside.

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EUR/JPY: This currency cross is quite choppy and without any direction on the higher time horizon. This kind of directionless scenario has been going on for more than two months and it seems to just be the beginning unless there is a 300-pip movement to the upside or to the downside, which would result in a directional bias.

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Fundamental Analysis of EUR/USD for December 18, 2017

EUR/USD has been quite bearish recently after bouncing off the 1.1850 resistance area. The market is still quite volatile, but the price is expected to be bearish in the coming days. Despite having a hike in interest rates USD was quite weak against EUR which was recovered well enough with the positive development based on Tax Reform, yet the gain was not quite impulsive due to worse economic reports published recently. Today EUR Italian Trade Balance report is going to be published which is expected to decrease to 3.23B from the previous figure of 3.99B, Final CPI is expected to be unchanged at 1.5%, Final Core CPI is also expected to remain unchanged at 0.9% and German Buba Monthly Report which is the report of current and future economic conditions is expected to be quite neutral. On the USD side, today we have only NAHB Housing Market Index which is expected to be unchanged at 70 and Final GDP report is going to be published on Thursday which is also expected to be unchanged at 3.3%. Ahead of the Christmas holiday this week, the pair is expected to be quite corrective and experience lack of liquidity. As of the current market scenario, USD is expected to gain momentum over EUR despite any positive economic reports or events from the EUR side.

Now let us look at the technical view, the price has recently broken below the 1.1770 support level with a daily close which is expected to have a retest before price continues further down towards 1.1660 support level in the coming days. The previous bearish daily candle is also being held by the dynamic level of 20 EMA as resistance which explains the confluence of upcoming bearish move in the pair. As the price remains below 1.1850 the bearish bias is expected to continue further.

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Technical analysis of EUR/USD for Dec 18, 2017

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When the European market opens, some Economic Data will be released, such as German Buba Monthly Report, Final Core CPI y/y, Final CPI y/y, and Italian Trade Balance. The US will release the Economic Data, too, such as NAHB Housing Market Index, so, amid the reports, EUR/USD will move in a ... volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1805.

Strong Resistance:1.1798.

Original Resistance: 1.1787.

Inner Sell Area: 1.1776.

Target Inner Area: 1.1748.

Inner Buy Area: 1.1720.

Original Support: 1.1709.

Strong Support: 1.1698.

Breakout SELL Level: 1.1691.

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

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Technical analysis of USD/JPY for Dec 18, 2017

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In Asia, Japan will release the Trade Balance data, and the US will release some Economic Data, such as NAHB Housing Market Index. So, there is a probability the USD/JPY will move with a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 113.21.

Resistance. 2: 112.99.

Resistance. 1: 112.77.

Support. 1: 112.49.

Support. 2: 112.27.

Support. 3: 112.05.

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

AUD/JPY approaching major resistance, remain bearish

The price continues to rise towards our major resistance area. We remain bearish looking to sell below 86.67 resistance (Fibonacci extension, Fibonacci retracement, horizontal pullback resistance) for a push down to at least 84.69 support (Fibonacci retracement, horizontal swing low support).

Stochastic (55,3,1) is seeing major resistance below 98% and we expect a corresponding reaction off this level.

Sell below 86.67. Stop loss is at 87.34. Take profit is at 84.69.

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AUD/USD reversing perfectly, time to start selling

The price touched our selling level and reversed perfectly. We remain bearish below our selling area major resistance at 0.7698 (Fibonacci retracement, horizontal swing high resistance) for a further drop down to at least 0.7537 support (Fibonacci retracement, horizontal overlap support). Stop loss is at 0.7751 (Multiple Fibonacci retracements, horizontal pullback resistance).

Stochastic (34,3,1) is seeing major resistance below our 97% and is reversing nicely below this level.

Sell below 0.7698. Stop loss is at 0.7751. Take profit is at 0.7537.

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Daily analysis of USDX for December 18, 2017

USDX managed to recover above the 200 SMA at H1 chart and looks forward to reaching the next resistance zone lying at 94.09. If the index does a break over there, the next hurdle is located at 94.85. To the downside, if the index makes a pullback to resume the bearish bias held since December 12th session, then the next target could be the 93.29 level.

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H1 chart's resistance levels: 94.09 / 94.85

H1 chart's support levels: 93.30 / 92.83

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USD Index breaks with a bearish candlestick; the support level is at 93.30, take profit is at 92.83 and stop loss is at 93.76.

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Daily analysis of GBP/USD for December 18, 2017

GBP/USD plummeted strongly during Friday's session and tested December 12th lows. Following the sharp decline, the pair entered in a consolidation phase that could allow a lower low pattern formation across the board, which should deliver further losses in the pair. If it manages to break below 1.3303, the next step should be the 1.3234 level to overcome.

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H1 chart's resistance levels: 1.3444 / 1.3516

H1 chart's support levels: 1.3303 / 1.3234

Trading recommendations for today: Based on the H1 chart, buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.3444, take profit is at 1.3516 and stop loss is at 1.3372.

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Weakness of the dollar will not last long

Retail sales in November rose above expectations, allowing the dollar to complete a short-term correction, which it left immediately after the FOMC meeting in 2017. The growth was 0.8% with a forecast of 0.3%. Preliminary data from Markit was more upbeat than expected, the industrial sector's growth, the index PMI in December stood at 55.0p from 53.9p a month earlier. This result somewhat does not correspond to the composite PMI index, since the same indicator for the service sector decreased to 52.4p, which is a low for 12 months.

The economic picture as a whole for the dollar remains favorable. The indicator of optimism of small business NFIB has risen to record highs, growth is connected with positive expectations of the consequences of tax reform. Combined with strong consumer confidence, this indicates a fairly strong positive momentum, expansion should continue in the coming years, which will ultimately contribute to both consumption growth and investment growth.

The forecast for GDP for the 4th quarter of the Atlanta Fed looks positive, with a growth of 3.3% - even slightly higher than expected.

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The reasons for the economic nature, which can justify the fall of the dollar index, are very few. The main one is that inflation is not strong enough. At a press conference on Wednesday, Janet Yellen reiterated that low inflation is temporary, but there are risks that it will remain below the 2% target level for quite some time. This probability is the main reason for the dollar to lose momentum for growth. Since in this case, the Fed will not have any reasons to raise the interest rate three times in 2018, that is, the Fed will not be able to fulfill its own schedule.

There is no consensus among the members of the Cabinet. On Wednesday, Kashkari and Evans voted against the rate hike, but they lose the right to vote next year, so the Cabinet as a whole will become a bit more hawkish. Realizing that weak inflation data could be the reason for the market's strong disappointment, the FOMC (as it could) compensated for the potential effect of improving unemployment forecasts and GDP growth rates. These two factors, in combination with each other, are bound to lead to higher inflation. In any case, the markets regard this signal as FOMC, and therefore the correction of the dollar turned out to be so short.

What next? There will be a reassessment of risks. The Fed managed to get the main result - against the background of weak inflation, the growth rate forecast did not change. According to the data of the CME futures market, it already holds above 55% for the March meeting, that is, the markets share the optimism of the Fed in terms of inflation growth in the coming months.

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At the moment, the dollar has no significant reasons for weakening. In any case, the causes would be internal. This could be facilitated by a more confident position of other central banks on the exit from a soft monetary policy. However, the ECB and the Bank of England also held their meetings in a dovish manner, without giving the market a chance to increase volatility.

The economic calendar for the dollar is calm. On Monday, Tuesday and Wednesday, there will be data on the housing market, forecasts are moderately positive, and they will not have a strong impact on the dollar quotes. On Thursday, the final data on GDP in the third quarter will be published, and the most important event will take place on Friday, when data on personal consumption in November and the volume of orders for durable goods will be released. Markets are waiting for the growth of the PCE index from 1.6% to 1.7%. The confirmation of the forecast will serve as a strong driver for the resumption of the growth of the dollar.

Contrary to expectations, the euro does not have many chances to resume growth, we expect the EUR/USD pair to decline towards a support of 1.1650 in the short term. Perhaps some strengthening of the AUD and NZD, which are more focused on China, reported on the growth of industrial production and investment, but the effect of this factor is unlikely to be long.

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Markets intend to complete the year without excessive volatility

Eurozone

The ECB did not make any additional statements regarding the pace of normalization of monetary policy at its regular meeting on Thursday. The markets assumed that a strong economic growth and a positive inflation forecast could provoke the ECB to come up with more specific wordings regarding the timing and pacing of the reduction of its incentive program but the bank preferred to remove unnecessary hype. In fact, it instead started calling on the markets to focus on previous indicators.

As a result, the euro immediately lost all the advantage over the dollar, which was gained literally only a day before. Now, the probability of continued growth has again become low. Key rates, as expected, were retained and they will "stay at current levels for a long period of time, even after the purchases of the asset regulator". Meanwhile, the buy-back program will last until September 2018 or further, depending on the development of the situation.

Thus, the possible driver of euro's growth disappeared without time for another driver to replace it. The market focuses once more on economic performance. PMI indexes continue to grow steadily. In particular, the production PMI has already exceeded the pre-crisis levels, reaching 60.6p, which is a 212-month high.

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On Monday, the final data on inflation for the month of November will come out. On Tuesday, economic indices from IFO and a report on wages for the month of November will be published. The trend is positive. It is expected to grow to 2.0% but the overall level is still significantly lower than the pre-crisis level of 2.4%. This is one of the reasons why inflation forecasts are still acute.

The euro is losing initiative. We expect a decline to 1.1650 in the short term and fall even further to 1.1550 in the longer term.

United Kingdom

The meeting of the Bank of England merely passed, as it was not accompanied by the publication of updated macroeconomic forecasts. The rate remained unchanged and the Bank did not give any new signals regarding the change in monetary policy.

The report on retail sales published on Thursday confirmed the upward trend but did not make any impression on the markets. Apparently, the strength of inflationary pressures and the growth rates of average wages are still viewed by the market as not very optimistic.

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The EU summit, which was concluded in Brussels, recorded the achievement of agreements on the first phase of talks between the EU and the UK regarding Brexit. However, this success is relative because of a number of key issues that are far from uniting the two region. The UK will remain within the scope of EU legislation and will pay membership fees at approximately 13 billion next year but will not have the right to vote. The pound has not received any advantages at the current stage and the only driver for its growth remains to be the high inflation.

This factor may not be enough. We expect the pound to fall to 1.3240 in the short term and move to 1.30 in the medium term.

Oil and ruble

Contrary to fears, oil prices continue to remain in the rising channel. OPEC + confidently seizes the initiative in regulating the supply. Three years of low prices have washed away many small companies that have come in search of quick profits from the market and US actions in the Middle East have increased political risks, which usually leads to an increase in oil prices. IEA indicates that oil reserves in developed countries have decreased to a minimum over the past two years and even the growth in production in the US and countries outside the OPEC + agreement does not guarantee the growth of reserves. Most of the factors indicate the approximation of the balance of supply and demand.

Oil continues to search for a point of equilibrium above the level of 65.30. There should not be a strong movement. However, the reasons for a turn to the south are still not enough.

Contrary to expectations, the Bank of Russia, having lowered the rate by 0.5% to 7.75% per annum, reserved the right to another decline in the first half of 2018. Despite the decisive actions of the bank, the ruble did not react with a decrease but, on the contrary, began to strengthen against the dollar. The likely reason is that the rate of decline in inflation was stronger than the market calculated which was less than 3% at the end of the year despite the conditions of lower rates, increase real wages, and a support for demand. In addition, the Bank of Russia raised its forecast for GDP in 2018, which, combined with improved forecasts for oil prices, may be the reason for the growth in the popularity of Russian assets.

The ruble will seek support at 57 rubles / dollar. However, there will not be a rapid decline.

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