EUR/USD. Trump again made the dollar nervous

"Fear has big eyes": something like this can be said about the situation on the foreign exchange market on the eve of the last Federal Reserve meeting this year. The dollar index dives down, showing the weak position of greenback against a basket of major currencies, and the yield of 10-year treasuries fell to 2.83%, finally leaving the area of three percent. It is likely that panic in the near future will only increase, especially after the recent comments of US President Donald Trump.

It is worth noting here that members of the American regulator are forced to observe a "silence regime" for 10 days prior to the meeting itself – this rule is strictly observed by them. But the president of the country is not burdened with such restrictions. And although Trump's predecessors tried not to comment on the Fed's actions at all, the current owner of the Oval Office has been putting verbal pressure on the Fed for several months. In the summer of this year, he rather rigidly commented on the next rate hike, saying that the actions of the central bank harm the economic growth of the country. After that, Trump returned to this issue several times, calling the Fed's policy "insane."

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Jerome Powell diplomatically ignored the criticism of the head of state and did not change the tone of his rhetoric. This fact calmed the markets for a while — until the end of autumn, the Fed members started talking about the level of the neutral rate. Initially, Richard Clarid said that the interest rate has almost reached its neutral level, so further tightening of monetary policy may have a negative impact on the key indicators of the US economy. Then Powell touched on this topic: in his opinion, the rate is "just below" the neutral range. And although this range is quite wide (2.5%-3.5%), this position of the Fed chief has disappointed market participants. After all, not so long ago he said that the regulator may exceed the neutral level if the main indicators of the economy grow at an advancing pace.

In other words, traders have well-founded fears that the regulator will take a more cautious position regarding future prospects. That is why the dollar feels rather uncertain at the beginning of this week. Donald Trump also added fuel to the fire, which a few hours before the beginning of the two-day meeting again criticized the possible tightening of monetary policy. In his Twitter account, he said that raising the rate in the current conditions is "unbelievable." In his opinion, in the conditions of a strong dollar, low inflation and a slowing economy of China, it is absolutely impossible to raise the rate.

Today he supplemented his opinion with another tweet, the text of which is worth quoting: "Do not let the market become even less liquid than it is now. Feel the market, don't just chase the meaningless numbers." I think any comments are unnecessary here. And although de jure Trump has no direct influence on the Fed, the position he voiced complemented the gloomy picture on the eve of the key meeting for the dollar.

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The weakening of the US currency allowed the euro-dollar pair to demonstrate a more or less clear correction: the price again approached the boundaries of the 14th figure. The single currency has also found a reason for its growth: an epic with the problem of the Italian budget could end tomorrow. According to the European press, the European Commission will announce its verdict on Wednesday. If the parties still come to a compromise, the euro will receive a strong enough support, since this issue has kept traders in suspense since the beginning of autumn.

In addition, against the background of an empty economic calendar, a report from the IFO was published today: on the one hand, the indicators came out worse than the forecast values, but, on the other hand, the comments to the report offset the negative effect. According to experts of the research institute, although the German economy is slowing, it does not show signs of recession. This is a very weak reason for optimism, but against the backdrop of a weakening dollar, it was the impetus for a small increase in EUR/USD.

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From a technical point of view, the situation is as follows. On the four-hour chart, the pair reached the upper line of the Bollinger Bands indicator (1,1401), but failed to break it, so it retreated by several dozen points. Despite an unsuccessful assault attempt, the price still remains within the short-term upward movement, as the Ichimoku Kinko Hyo indicator formed a bullish "Parade of lines" signal. The nearest target of the impulse is the 1,1401 mark, when overcoming which it will be possible to talk about the development of the upward movement (up to the 15th figure, that is, to the upper limit of the Kumo cloud on the daily chart). But this growth can only be due to the "dovish" results of tomorrow's Fed meeting.

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GBP/USD. December 18th. Results of the day. Theresa May continues to walk on the blade of a knife

4-hour timeframe

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The amplitude of the last 5 days (high-low): 158p - 195p - 77p - 137p - 79p.

Average amplitude for the last 5 days: 129p (164p).

Following the Conservative Party of Great Britain, a vote of no confidence in Theresa May can be made by the Labour Party. That's what Jeremy Corbyn, her leader, said. This decision was made by Corbyn on the basis of the postponement of the vote in Parliament on the Brexit bill in mid-January. According to Corbyn, this is unacceptable, and the vote should be held before the Christmas and New Year holidays. Thus, just a few days after a similar event in the Conservative Party, it can happen again. Will Prime Minister May be able to keep her post this time? One thing is for sure, since September, distrust within the Parliament and among the country's population is only growing. If Theresa May is still dismissed, then further events can be absolutely anything. Starting from the abolition of Brexit, according to the decision of the European Court of Justice under article 50 of the Lisbon Treaty, ending with the disordered Brexit. The pound sterling in the last few days only thanks to Donald Trump, who came to the forefront right before the Federal Reserve meeting, has risen slightly. However, as before, almost everything will depend on the final decision of the Parliament on Brexit, if the vote, of course, will take place at all. Thus, we believe that the growth potential of the British currency is not just limited, but very limited. The pound may get some support if the Fed does not raise the key rate tomorrow, which will be quite unexpected. But this chance is extremely small. So far, the price has managed to overcome the Ichimoku cloud, but the upward movement is weak and uncertain.

Trading recommendations:

The GBP/USD currency pair continues its weak upward movement and hardly overcame the Ichimoku cloud. Thus, formally, it is now possible to consider long positions with the targets of 1,2734 and 1,2774, but with extreme caution.

It is recommended to resume sell positions not earlier than the reverse consolidation of the price below the Kijun-sen line with the first target of 1.2514. Tomorrow's announcement of the results of the Fed meeting may have a strong impact on the movement of the currency pair.

In addition to the technical picture, fundamental data and the timing of their release should also be taken into account.

Explanation of illustration:

Ichimoku Indicator:

Tenkan-sen-red line.

Kijun-sen – blue line.

Senkou span a – light brown dotted line.

Senkou span B – light purple dotted line.

Chikou span – green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD:

Red line and histogram with white bars in the indicator window.

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EUR/USD. December 18th. Results of the day. Intrigue: will the Fed be led by Trump?

4-hour timeframe

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The amplitude of the last 5 days (high-low): 94p - 72p - 62p - 95p - 60p.

Average amplitude for the last 5 days: 77p (83p).

The EUR/USD currency pair on Tuesday, December 18, quite expectedly continued its upward movement within the side border with inaccurate boundaries, the upper of which lies near the level of 1.1420. Donald Trump today managed to throw another stone in the garden of the Federal Reserve, calling for "feeling the market" and not just "chasing after numbers." It is clear that his post on Twitter belonged to the members of the Fed's monetary committee, whose meeting began yesterday and will end tomorrow. Many expect that the Fed's key rate will be raised by another 0.25%, however, after several "dovish" statements by Jerome Powell and two calls by Trump not to raise the rate in December, the probability of tightening monetary policy is reduced. It becomes even interesting whether the Fed will be led by Trump or at least take into account his arguments? The Fed is not subservient to Trump, but it's probably impossible to completely ignore the US leader. Anyway, we get the intrigue for tomorrow. Almost with a probability of 100% if the rate is not raised, the dollar may collapse or, at least, seriously fall in price. As for today, no important macroeconomic reports have been published. In addition to Trump's tweet, no other macroeconomic information was available to traders. From a technical point of view, the pair is fixed above the Ichimoku cloud, but this does not mean anything in the current conditions of a high probability of a flat. The upward movement can result in the area of 1,1420 – 1,1440, especially if the Fed will raise its key interest rate tomorrow.

Trading recommendations:

The EUR/USD currency pair overcame the Ichimoku cloud. Thus, formally, longs with targets of 1,1408 and 1,1448 are now relevant. But we note that the probability of a reversal in the zone of 1.1420 is high.

Short positions can be considered not earlier than the consolidation of the price below the critical Kijun-sen line with the target of 1.1294. The potential for the instrument to fall is also limited at the moment.

In addition to the technical picture, fundamental data and the timing of their release should also be taken into account.

Explanation of illustration:

Ichimoku Indicator:

Tenkan-sen-red line.

Kijun-sen – blue line.

Senkou span a – light brown dotted line.

Senkou span B – light purple dotted line.

Chikou span – green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD:

Red line and histogram with white bars in the indicator window.

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BITCOIN Analysis for December 18, 2018

Bitcoin has been quite impulsive with the recent bullish momentum, leading the price towards $3,500-600 area. The price is currently residing inside the resistance area of $3,500-600 area from where it is expected to push higher towards $4,000 in the coming days if it manages to break above $3,600 area with a daily close. The dynamic levels such as 20 EMA, Tenkan and Kijun line is working as dynamic support, whereas breaking above 200 EMA signaled the upcoming bullish pressure. As the price remains above $3,000 area, the bullish pressure is expected to continue. Moreover, a daily close above $3,600 is expected to lead the price towards $4,000 area in the future.

SUPPORT: 3,000, 3,350, 3,500

RESISTANCE: 3,600, 4,000

BIAS: BULLISH

MOMENTUM: VOLATILE but IMPULSIVE

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Brexit and the euro: Theresa May makes an interesting move. The US dollar continues to weaken before tomorrow's Fed decision

The euro continues to rise against the US dollar, as many traders close their positions before the Federal Reserve decision on interest rates tomorrow. On the one hand, the probability of raising the rate to 2.5% is very high. But on the other hand, how the Fed will behave next year remains a mystery. .

Donald Trump's recent statements about the inadmissibility of raising interest rates, as well as a weak report on industrial production and inflation indicate that Fed economists may not see the results on GDP growth in the 4th quarter of this year, which they are counting on.

Eurozone

In the meantime, the weak data that has arrived today on the German economy was ignored by traders. However, the European currency, which is currently growing, is not so much strong as the American dollar shows weakness amid talk of an impending recession and a financial crisis.

According to the report of the Institute Ifo, the index of business sentiment in Germany in December of this year fell more than economists had expected. This indicates that the largest European economy will continue its weak growth against the backdrop of tensions in trade relations.

Despite the leading nature of the data, the German business sentiment index on Tuesday dropped to 101 points against 102 points in November, while economists expected the index to be 101.6 points in December. Ifo noted that concern is growing in a number of German companies. Many of them noted the deterioration of the business environment.

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The decrease in the Ifo index also confirms that the growth of the German economy is slowing.

As for the technical picture of the EUR/USD pair, a fixation above the upper border of the side channel of 1.1385 will indicate a further likelihood of European currency growth to highs in areas 1.1420 and 1.1450. However, one should not forget that tomorrow the decision of the Fed on interest rates will be published, which can drastically affect the market situation. Failing to fix above resistance 1.1385 could cool down the buyers of risky assets, which will lead to a correction in the trading instrument to the support area 1.1360 and 1.1315.

Great Britain

The significant weakness of the American dollar is also indicated by the growth of the British pound, which seemingly due to major political differences cannot strengthen its position.

It has become known that the leader of the Labor Party of Great Britain, Jeremy Corbyn, may offer to submit a vote of no-confidence to Prime Minister Theresa May, as it was recently in the Conservative Party.

Such a proposal may come from the fact that yesterday, Theresa May refused to bring the Brexit agreement to a vote in parliament before the Christmas holidays. This suggests that May intends to schedule a vote on the agreement for the week starting on January 14, which leaves even less time to work out and change the current Brexit agreement, which does not suit the British Parliament. From another point of view, the Prime Minister of Great Britain will leave even less time for parliament to reflect on such a maneuver, as there will be nothing at all until March 2019.

As for the technical picture in the GBP/USD pair, apparently, the demand for the pound is unlikely to be supported above the large resistance of 1.2690, which limits the upward correction. An unsuccessful consolidation above this range may lead to the closure of a number of long positions and the demolition of buyers' stop orders, which will return the GBP/USD pair to the lows of the day in the 1.2610 area.

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The pound will spread its wings by March

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The British pound currently has no chance of growth and yet, it managed to get away from a 20-month low on Monday paired with the dollar, and today sterling continues to try to strengthen. Traders became interested in buying British currency due to the fact that the British Prime Minister Theresa May decided to postpone the vote on the Brexit agreement in the House of Commons of Great Britain to the end of January 2019. It seems that the specifics contributed to the reduction of political uncertainty and improve market sentiment.

However, the problems of the British prime minister with the approval of the agreement on Brexit by the parliamentarians have not gone away, and the situation is unlikely to change in the near future.

British high-ranking officials on Tuesday will discuss the possibility of secession from the EU without a deal, or without preserving access to the single European market. This means that the country's legislators are seriously considering the possibility of a "tough" Brexit scenario that could drag a pound to multi-year lows.

In addition, the potential strengthening of the dollar in connection with the upcoming Fed meeting, at which the rate increase is expected, will play against sterling. This event may trigger price losses of currency risk along the entire broad market. Therefore, you can use the fact that the GBPUSD rate in the coming days has a chance to test support at 1.25.

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As for the longer-term forecast, the pound may well break out in winners, at least against the euro. The fact is that the sterling appreciated a lot of bad news, and the euro, not yet.

None of these currencies in the outgoing year can boast of any achievements in relation to each other. This is due to the fact that the problems of Great Britain related to leaving the group were offset by political uncertainty on the continent. According to OppenheimerFunds, the slowdown in economic growth in the eurozone will put pressure on the single currency rate. At this time, Commerzbank analysts predict that Britain will postpone its exit from the EU as a result. Such news will boost the pound by the end of March by more than 3% against the euro.

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Now the pound is crushed, and by historical standards is extremely cheap, so it can be strengthened on any positive news. As for the euro, its prospects were overshadowed by the pessimistic data and the ECB's forecast of a bias towards reducing economic risks. The single currency has a mass of its own political "demons". This, in particular, the opposition of Italy and the EU, the protests in France, insecurity against Brexit. Although it is worth noting that on Monday, the euro grew on the message of the assignment of the Italian government to Brussels.

Focus on Brexit

Vision experts OppenheimerFunds suggests a rise in the pound by the end of March to 85-87 pence per euro compared with the level of closing on Monday. Commerzbank expects the pair to move to 87 over the same period. At the same time, the average forecast of Bloomberg respondents indicates a more modest rise, economists see sterling at 88 pence at the end of the first quarter of 2019.

Bank of England this week is likely to signal once again that its short-term forecasts depend on Brexit. The rate hike in Britain is not expected until 2020, however, the relatively positive result of Brexit will allow the management of the Central Bank to consider the possibility of tightening the policy. The pound in this situation will rise in price even more.

Societe Generale considers it dangerous to delay Brexit negotiations, as the risk that "nothing will be completed on time and that after the deadline at the end of March the negotiations with the EU will be extended".

"This will leave the trade-weighted index of the pound in the lower limit of the range that has developed after Bretton Woods, and at the same time, like an albatross, it will curl around the neck of the euro," experts write.

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The Swedish regulator will make the most important decision in the last 7 years

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According to Bloomberg, this week a number of leading economists expect the Central Bank of Sweden to raise interest rates. Note that the regulator has not resorted to such a measure for the past seven years.

Experts do not exclude that the upcoming meeting of the Board of the Central Bank of Sweden will be the most difficult since 2011. Seven years ago, the regulator last raised interest rates. Since then, the financial incentive program has not changed.

At the moment, 10 out of 24 economists surveyed by Bloomberg expect the change regulator, considering that a quarter point should be added to the base repo rate and raised to -0.25%. The rest of the analysts are confident in maintaining the old strategy of the Central Bank of Sweden.

The interest rate hike in Sweden may take place a week after the announcement by the management of the European Central Bank (ECB) to end its quantitative easing program (QE) lasting four years. It was this measure that forced Stefan Ingves, head of Riksbank, to launch his own bond purchase program and reduce rates below zero. In 2017, after the curtailment of the quantitative easing program, the board of directors of the Riksbank split into two camps - supporters and opponents of QE. However, due to inflationary fluctuations at the level of 2%, the board of the bank admits the possibility of raising the rate in December of this year or in February 2019.

Many analysts believe that now is not the right time to tighten monetary policy. The reasons for this experts believe the slowdown in global and domestic economic growth against the background of the escalating trade war between the United States and China, as well as the collapse of stock markets. In this situation, an increase in rates may cause difficulties. Swedish politicians need to take into account all the "pitfalls", experts summarize.

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Brent oil returned to the level of October 2017

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The cost of oil prices has continued to decline for the past three days in a row, today reaching $ 57.23 a barrel, thereby updating at least October last year. On the eve of Brent was under pressure from the mass "flight" from the risks that led to the collapse of Wall Street indices.

Today, "black gold" quotes showed some recovery to the level of $ 58.13 per barrel, however, the potential for further asset growth is limited by the expectation of further growth in US crude oil inventories. Today and tomorrow you should pay attention to the statistics from the American Petroleum Institute (API) and the US Department of Energy.

Additional pressure on Brent is exerted by continued skepticism of market players regarding the effectiveness of the OPEC + transaction. Market participants are beginning to doubt the success of the organization and its ability to return the market to a balanced state.

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The euro is rising against the backdrop of a weaker dollar, the American is waiting for the Fed meeting

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Euro gains weight amid a weaker dollar. Investors are betting that concerns about growth will cause the Fed to slow down the pace of rising interest rates.

The defeat on Wall Street, caused by the flow of weak data on a global scale, reinforced the view that the expected increase in the Fed rate this Wednesday will lead to a slowdown or even a pause in the three-year period of steady growth in rates. The prospect of raising rates at low gear will keep the dollar. The best of the major currencies this year, under pressure. That helps the euro, which on Tuesday rose by 0.2 percent, to $ 1.1373, partially recovering its losses. However, according to analysts at Goldman Sachs and the ECB, the balance of risks is shifting to the downside, given the protests in France, which are already beginning to put pressure on the business, it can be concluded that the euro will begin to grow only after a few months.MhOKUJ-7mMUYeaqwmp6q9Jw3osVs-ijVrZukxwwWMarkets have focused their attention on the Fed meeting, trying to understand what the economy looks like against the background of the trade conflict between the US and China and the volatility of the global financial market. Probably, the dollar will remain at the same level for the time being, and tomorrow's meeting will become a significant catalyst for choosing a direction. The rise of the dollar may continue if the Fed keeps to its strategy of tightening monetary policy next year. Most likely, the Fed will continue to normalize policy next year, and fears of a recession are in vain. The economy, where there are more jobs than the unemployed, does not need large-scale stimulation, this is a reason to be optimistic about the dollar.

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Oil seeks protection from the Fed

You start to feel bad when you make a seemingly reasonable forecast, and the market refuses it a day later. The International Energy Agency said with optimism that the agreement between OPEC and other producing countries allowed oil to grope the floor under their feet near the $ 60 mark per barrel, and a few hours later Brent began to knock on this floor. Strikes will go further south. Against the background of a record growth in production in Russia (11.42 million b / s) and in the United States (11.7 million b / s), no one will be surprised by the continuation of the downward trend. And the bets on the fact that shale mining in the States against the background of low prices for black gold, sooner or later, capitulate, in fact, are not worth a damn. Not so long ago, oil was quoted at $ 30 a barrel, and its growth to more than $ 80 allowed American companies to hedge risks.

Optimists claim that since OPEC production cuts will begin in January, prices will go up a little later. Pessimists, on the contrary, nod to the growth of global stocks. Trade wars, a slowdown in the economies of the United States, the eurozone, and China, coupled with a strong dollar, which makes oil in the consumer countries even more expensive, exert pressure on global demand. Nevertheless, the IEA in its latest forecast left its growth in 2019 at the level of +1.4 million b / s, motivating its decision by the fall in the value of black gold in October-December. The increase in production in non-OPEC countries, according to an authoritative organization, will decline from +2.4 million bpd in 2018 to +1.5 million bpd in 2019.

I do not think that the fact that the cartel will begin to reduce production only in January does not yet provide support to the bulls in Brent and WTI. Markets are growing on expectations, but for some reason they prefer to wait for the facts. There are doubts that OPEC will fulfill its obligations? In fact, it is not yet known how the negotiations between Washington and Beijing will end and how much the global economy will slow down; the main "bearish" driver is the States. The growth of stocks in Cushing continues, which indicates the oversaturation of the American market.

Dynamics of oil reserves in Cushing and oil pricesA9DLeYuFhwiYx8sjqtOHdZ_k7ce9xNUGgn4wuaYuNot only that the United States has already overtaken Saudi Arabia and Russia, as well as shale production in the seven largest American basins for the first time in history has risen above 8 million b / s. Given the activity of US producers in the derivatives market, it can be assumed that a further fall in prices does not particularly bother them. To contain the offensive outburst of the "bears" over Brent and WTI, active actions are needed from Riyadh and Moscow, as well as ... a weak dollar. In this regard, the hopes of fans of black gold in the December meeting of the FOMC can be realized. Jerome Powell's "pigeon" rhetoric and the Fed's worsening forecasts for key indicators can put pressure on the USD index.

Technically, after reaching a target of 113% for the Shark pattern, the risks of recoil increased, at least to 23.6% of the CD wave as part of its transformation into a 5-0 model. As a result, Brent may enter the consolidation state in the range of $ 57.5-64.5 per barrel.

Brent, the daily chart

Sn_wRDC6kjQAIp0G04xKVfSiHVHVQe8scu8LqDHvThe material has been provided by InstaForex Company - www.instaforex.com

US stock markets fall amid worsening consumer sentiment

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US stock markets show a negative trend, as investors fear a slowdown in the country's economic growth and expect the US Federal Reserve to meet with the interest rate decision.

The index of the largest US companies S & P 500 updated at least since October 2017. As of 11:50 Moscow time, the index lost 2.08% of its value, falling to the level of 2545.94. Shares of the American online retailer Amazon.com (AMZN) before the start of trading fell by 4.46% to $ 1,520.91, amid investor concerns about a deterioration in consumer sentiment.

The Dow Jones Industrial Average also fell by 2.11%, to 23,592.98, the lowest since the beginning of the year, the index of high-tech companies NASDAQ Composite, by 2.27%, to 6,753.73.

US Federal Reserve officials have previously hinted market participants to a possible slowdown in rates hike next year, which may temporarily reassure investors. At the same time, the regulator's plans for future monetary policy are not completely clear. In addition, the US president continues to criticize the position of the Fed, which also worries investors.

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Fed meeting: markets lose their balance, risks of explosive movements increase

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The closer the meeting of US Central Bank officials, the more nervously investors look. US stocks, along with the dollar fell at the beginning of the week, while the paper reached the mark, which was not observed since February.

Fed policy can now restrain economic growth, already affected by trade and geopolitical tensions. In addition, there is a very real risk of closing the US government. The process can begin by the end of this week if lawmakers and Trump do not decide how much money to allocate to the Trump wall along the Mexican border. This will be an additional test for the dollar along with the FOMC meeting, which starts today.

The Fed constantly radiated confidence that it would raise rates at the last meeting this year, so the market does not build other assumptions. Traders will carefully study the final statement of the regulator to find out whether his plans for 2019 have changed.

So what we have for today. According to Jerome Powell, the rate level is close to neutral. The forecasts made by the FOMC representatives in September have lost their relevance. The derivatives market gives a 37 percent chance of one series of policy tightening over the next year and a 20 percent chance that this will happen two or more times. The chances that the regulator will not adjust the policy are estimated at 34%. By the way, in early November, the market was convinced of three increases.

In favor of slowing the normalization of monetary policy says the drop in oil. The collapse of Brent and WTI restrains consumer price growth. At the same time, the withdrawal of capital from specialized exchange-based funds oriented to inflation-protecting US securities (TIPS) indicates that investors are not afraid of the uncontrolled rise in prices.

Oil

As for oil, the January futures for WTI, traded on the NYMEX, fell on Monday in the evening trading in New York to $ 49.09 a barrel. Thus, the American benchmark WTI lost 4% against Friday's closing levels and reached its lowest level since September 13, 2017.

Technical analysts saw a signal implying a further decline in prices in the short term. After a sharp drop in quotations from October 3 to November 29, the market formed a consolidation in the form of a converging triangle, and yesterday its lower limit was broken through. Such a move may herald a drop in oil by another $ 13 (50% of the "bearish" trend from the beginning of October to the end of November), up to $ 37 per barrel.

Dollar before and after meeting

Some traders in the run-up to the FOMC rate decision are trying to get rid of dollars, while others expect Powell to point out the proximity of the neutral range of rates.

Recall, the head of the Fed said earlier that interest rates are now just below the neutral range. However, not all of his colleagues adhere to a similar point of view, and, more importantly, even if the regulator slows down the pace of policy tightening, it may remain the only major central bank to raise interest rates in 2019. This is one of the main reasons why market participants prefer to keep dollars on hand before publishing the FOMC decision.

If we talk about trade as a result of the December meeting, there are a number of factors that are worth seeing. Firstly, the market fully took into account in quotations an increase in the rate by 25 bp. Secondly, many traders are waiting for the Central Bank "pigeon" comment. If Powell speaks of the need for further tightening of the policy and the forecast for the three rounds of raising the rate does not change, the flight of the dollar will be ensured.2DobmPitqIMAiAc76omnznQgRAm0DlYh28b2-U8dThe USD / JPY rate, which significantly saves on Monday, should test the mark of 112.40 before the Fed meeting. Movement below the specified level can occur only after the news on the rate. Any pullback of the USD / JPY pair will be short-term if the Central Bank does not announce a cardinal softening of the policy.

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GBP / USD pair: plan for the American session on December 18. The pound strengthened against the backdrop of a weak US dollar

To open long positions on the GBP / USD pair, you need:

Pound buyers coped with the goal for the first half of the day, which I talked about in more detail in the morning forecast . At the moment, all the attention of the bulls will be focused on the formation of a false breakdown and retention of the level of 1.2686, which will lead to a larger increase in the second half of the day to the area of 1.2740, where I recommend taking profits. In the case of a decline in GBP / USD, long positions can return to rebound from the support of 1.2643.

To open short positions on the GBP / USD pair, you need:

Pound sellers need to return to the resistance level of 1.2686, which will lead to the closure of a number of long positions in GBP / USD and a decrease to the support area of 1.2643, where I recommend taking profits. In the absence of bears around 1.2686 and a rapid decline in the pound, it is best to look at short positions at a rebound from the high of 1.2740. Any negative news on Brexit can quickly return the market to a steep downward peak.

Indicator signals:

Moving averages

Trade persisted above the 30- and 50-day moving, which indicates the formation of the bullish nature of the market.

Bollinger bands

In the case of a decrease in the pound in the afternoon, long positions can be considered immediately to rebound from the middle border of the Bollinger Bands indicator around 1.2625, which acts as a support.

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Description of in dicators

MA (moving average) 50 days - yellow

MA (moving average) 30 days - green

MACD: fast EMA 12, slow EMA 26, SMA 9

Bollinger Bands 20

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

EUR / USD pair: plan for the US session on December 18. Weak inflation data did not harm the euro

To open long positions on EUR / USD pair, you need:

Again, weak statistics on the eurozone economy is ignored by traders. A report from the IFO Institute on a weaker growth in activity did not harm the euro, which indicates serious problems for the US dollar ahead of a key meeting of the Federal Reserve System. While the trade will be conducted above the resistance of 1.1384, the demand for the euro will remain. the main goal for the second half of the day will be a maximum of 1.1414, where I recommend taking profits. In the case of a downward correction of EUR / USD, long positions can be return on a false breakdown from the support level of 1.1384 but at least the level of 1.1362 will be a more acceptable area for purchases.

To open short positions on EUR / USD pair, you need:

Returning to short positions in the euro is best to rebound from a major resistance 1.1414. However, the main task for the second half of the day will be consolidation below the level of 1.1384, which will force traders to close a number of long positions. This will lead to a decrease in EUR / USD in the area of larger support of 1.1362, where I recommend taking profits. Attention can be paid to data on the US, which is expected in the afternoon. Weak statistics on the housing market can weaken the position of the US dollar.

Indicator signals:

Moving averages

Trade is conducted above the 30-day and 50-day average, which indicates continued growth of the euro.

Bollinger bands

If the euro declines in the second half of the day, it is best to return to purchases from the middle border of the Bollinger Bands indicator around 1.1365.

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Description of indicators

MA (moving average) 50 days - yellow

MA (moving average) 30 days - green

MACD: fast EMA 12, slow EMA 26, SMA 9

Bollinger Bands 20

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

EUR/USD: Trump again criticizes the Fed before tomorrow's increase in interest rates. Eurozone data disappoints

While the US Federal Reserve is preparing to raise interest rates at its meeting tomorrow, US President Donald Trump has once again spoken out a number of criticisms of the committee and such actions.

Donald Trump said it is inconceivable even to consider the possibility of raising rates at the present time, as this may affect the growth of the US economy. At the same time, Trump focused on low inflation and the possibility of maintaining rates at the same level.

Let me remind you that the US president has repeatedly criticized the Fed policy in the past few months, tying up actions and accusing the Central Bank of the October sale in the US stock market. As we can see, stock indexes reached the next annual lows yesterday and show already negative values compared to the beginning of the year.

Eurozone

The data that came out yesterday in the Eurozone did not hurt the European currency much, although they were negative, indicating a further slowdown in economic growth in the 4th quarter of this year.

According to the statistics agency report, consumer prices in the eurozone increased by 1.9% in November of this year compared to the same period in 2017. The expected increase was 2% and let me remind you that in October, prices rose by 2.2%.

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As for core inflation in annual terms, in November it slowed to 1% from 1.1% in October.

Let me remind you that in October prices rose by 2.2%. It slowed to 1% in November from 1.1% in October.

Weak data reduced the trade surplus also did not harm the euro. As indicated in the report, a slight increase in exports was offset by a larger increase in imports. Thus, the export of goods from the eurozone increased in October compared to 2.1% in September, while imports increased by 2.6%. The overall trade surplus fell to 12.5 billion euros from 13 billion euros in September.

USA

The US data released in the afternoon did not help buyers of the American dollar.

According to the report, manufacturers in the area of responsibility of the Federal Reserve Bank of New York in December indicated a slower increase in business activity. According to the data, the Fed-New York manufacturing index fell to 10.9 points in December against 23.3 points in November. Let me remind you that the positive values of the index indicate an increase in activity. Economists had expected the index to be 21 points. The index of new orders for the reporting period fell to 14.5 points from 20.4 points, while the supply index fell to 21 points.

As for the mood of housing builders in the United States, it sharply declined in December due to concerns about the availability of homes. As indicated in the report of the National Association of Home Builders, the housing market index fell to 56 points in December this year. Economists had expected the index to be 61 points.

Today there will be a number of data on the number of new housing bookmarks and the volume of building permits issued in the United States.

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

Intraday technical levels and trading recommendations for EUR/USD for December 18, 2018

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On the weekly chart, the EUR/USD pair is demonstrating a high-probability Head and Shoulders reversal pattern where the right shoulder is currently in progress.

On the Daily chart, the pair has been moving sideways with slight bearish tendency. Narrow sideway consolidations have been maintained within the depicted daily movement channel since June 2018.

On November 13, the EUR/USD demonstrated recent bullish recovery around 1.1220-1.1250 where the lower limit of the channel as well as the depicted demand zone came to meet the pair.

Bullish fixation above 1.1420 was needed to enhance further bullish movement towards 1.1520. However, the market has demonstrated significant bearish rejection around 1.1420 few times so far.

The EUR/USD pair remains trapped between the price levels of 1.1420 and 1.1270 until breakout occurs in either direction.

If early bearish breakout below 1.1270 is achieved on lower timeframes, a quick bearish decline should be expected towards 1.1150-1.1100.

On the other hand, bullish fixation above 1.1420 enhances further bullish advancement towards 1.1520 and 1.1610.

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

Intraday technical levels and trading recommendations for GBP/USD for December 18, 2018

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Since Mid-November, Successive Lower Highs were demonstrated below the depicted H4 downtrend line around the price levels of 1.2870 and 1.2780.

Shortly after, a quick decline was demonstrated towards the price level of 1.2500 before bullish recovery could take place on December 12.

A bullish Head & Shoulders pattern is being demonstrated on the H4 chart with the neckline located around 1.2660-1.2680. Pattern confirmation projects a bullish target towards 1.2880 again.

On the other hand, the current scenario could pursue as a bearish flag continuation pattern provided that bearish persistence below 1.2660 (corresponding to a prominent daily low) is maintained on a daily basis.

The current bullish pullback towards the price zone of 1.2660-1.2700 can be watched for a valid SELL entry as this price zone corresponds to the backside of the broken consolidation range as well as the depicted downtrend on H4 chart.

Projected target for the bearish flag continuation pattern is located around 1.2300. Initial bearish destination is located around 1.2580 while S/L should be set as daily closure above 1.2800.

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

Bitcoin analysis for December 18, 2018

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Trading recommendations:

According to the H1 time - frame, I found that BTC reached my yesterday's target at $3.543 but it found sellers there at Fibonaci expansion 100%. I also found the breakout of the intraday support trendline, which indicates that sellers are in control today. My advice is to watch for intraday selling opportunities. The downward targets are set at the price of $3.342 and at the price of $3.251.

Support/Resistance

$3.543 – Intraday resistance

$3.342– Intraday support

$3.342 – Objective target 1

$3.251 – Objective target 2

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

EUR/USD analysis for December 18, 2018

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Recently, the EUR/USD pair has been trading upwards. As I expected, the price tested the level of 1.1400. According to the H4 time – frame, I have found the breakout of the resistance trendline and the breakout of the 20-hours balance to the upside, which is a sign that buyers are in control. I also found a confirmed double bottom pattern with a fake breakout on the right side. Watch for buying opportunities. The upward targets are set at the price of 1.1440 and at the price of 1.1470.

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

EUR/USD: plan for the European session on December 18. The situation is becoming more uncertain

To open long positions on EURUSD you need:

Tomorrow's interest rate decision and Christmas all bring more uncertainty to the markets. Data is ignored, and the direction becomes unpredictable. Today I recommend to make purchases on a false breakout in the area of 1.1332, and it is better to rebound from the low of 1.1311. The main task will be a breakthrough and consolidation above 1.1356, but this is subject to the release of good statistics from the IFO in Germany. In this case, you can count on the continuation of the upward trend to 1.1385, where I recommend to lock in the profit.

To open short positions on EURUSD you need:

Only an unsuccessful consolidation above resistance 1.1356, which coincides with the release of a weak report from the IFO Institute in Germany, will be a signal to open short positions in euros in order to return and retest the support of 1.1332. Fixing below this level will lead to a sale of the EUR/USD and the return of the pair to the area of a low of 1.1311, where I recommend taking profits in the first half of the day. In case of growth above 1.1356, it is possible to open short positions on the euro to rebound from a high of 1.1385.

Indicator signals:

Moving averages

Trade is conducted slightly above the 30-day and 50-day moving average, with a short-term advantage of buyers of the European currency.

Bollinger bands

The euro can be supported by the lower limit of the Bollinger Bands indicator, which is located in the area of 1.1330. Its breakthrough will lead to a large sale of the EUR/USD. The upper limit, which coincides with the resistance of 1.1356, limits the growth of the euro.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
The material has been provided by InstaForex Company - www.instaforex.com

Breaking forecast 12/18/2018

Breaking forecast 12/18/2018

EURUSD: We are preparing a breakthrough and movement.

The main news of the week - on Wednesday - the Fed decision on rates and the Fed forecast on the economy.

The market fluctuates in ranges.

The range for the euro: 1.1265 - 1.1400.

We are ready to buy the euro from 1.1400, stop 1.1355, target 1.1600.

Alternative: We are ready to sell euros from 1.1265.

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

Analysis of Gold for December 18, 2018

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Recently, Gold has been trading upwards. The price tested the level of $1,249.00. According to the H4 time – frame, I found that there is the breakout of the bullish flag pattern (bullish), which is a sign that buyers are in control. I also found the successful rejection of the support (lower diagonal of the rising channel) at the price of $1,234.00 and the breakout of the 16-hour balance, which is another sign of the strength. My advice is to watch for buying opportunities. The upward target is set at the price of $1,266.70.

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

Trading Plan for 12/18/2018

Although inflation in Europe slowed from 2.2% to 1.9%, while waiting for a decline of only 2.0%, which showed a preliminary estimate, the single European currency could even strengthen. This is largely due to concerns about the upcoming meeting of the Federal Commission on Open Market Operations, the results of which will be announced tomorrow evening. Indeed, many people are really worried that the Federal Reserve will reduce the pace of increase in the refinancing rate, and perhaps even leave it unchanged. And the trouble is that many have already put in the value of the dollar raising the refinancing rate to 3.25% at the end of next year. Revising the Fed's plans will force investors to reconsider their positions. Moreover, the slowdown in inflation in Europe only confirmed Mario Draghi's words that the European Central Bank will not rush to tighten monetary policy. So the decline in inflation scared few people. Interestingly, the pound did not follow the example of the single European currency and remained almost unchanged. Once again, the reason lies in internal political squabbles, as now the Labour party are going to initiate a vote on a vote of confidence to the prime minister. Of course, many people understand that this initiative will not be crowned with success, but it has done a lot of hype, which had a negative effect on the pound.

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Today, investors will remain cautious, since quite a lot is at stake. More recently, no one doubted that the Fed would raise the refinancing rate in December, and three more in the coming year, bringing it to 3.25%. This is reflected in the purchase of interest rate futures by the Fed, and if something goes wrong tomorrow, a massive sale of these contracts will begin, followed by a flight from the dollar. Even if the rate is raised, but the rates of increase for the next year are revised, investors will have to reconsider their investments, and the result for the dollar will be negative. But no one has clarity on these issues, so it is better to take a wait-and-see attitude.

The euro/dollar currency pair has returned to the lateral movement framework of 1.1300/1.1440, where it has since become closer with a 50% deviation of 1.1360. Probably assume that the turbulence within the current values, forming a low amplitude 30-40 p.

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The pound/dollar currency pair once again hovered within the periodic level of 1.2620, forming a slowdown later. Probably to preserve ambiguous fluctuations within the level of 1.2620.

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Technical analysis of USD/CHF for December 18, 2018

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Overview: The USD/CHF pair continue to trade upwards from the level of 0.9951 on the H4 chart. Today, the first support level is currently seen at 0.9951, the price is moving in a bullish channel now. There are no changes in our technical outlook. The bias remains bullish in the nearest term testing 1.0142 or heigher. Furthermore, the price has been set above the strong support at the level of 0.9951, which coincides with the daily pivot point. This support has been rejected three times confirming the veracity of an uptrend. According to the previous events, we expect the USD/CHF pair to trade between 0.9951 and 1.0058. So, the support stands at 0.9951, while daily resistance is found at 1.0058. Therefore, the market is likely to show signs of a bullish trend around the spot of 1.0058. In other words, buy orders are recommended above the spot of 1.0058/0.9951with the first target at the level of 1.0142; and continue towards 1.0216. However, if the USD/CHF pair fails to break through the resistance level of 1.0058 today, the market will decline further to 0.9863.The material has been provided by InstaForex Company - www.instaforex.com

GBP/USD: the pound agrees to a second referendum

Brexit's topic has left the front pages of European and British publications, but the foreign exchange market closely monitors the development of events on this issue. After a series of unsuccessful attempts to find a compromise, the parties dispersed "at the corners of the ring", apparently - until the middle of January next year. Nevertheless, a heated discussion of possible scenarios still has a serious impact on the pound: the GBP/USD pair practically ignores the American events, fully concentrating on the prospects of the "divorce process". The external struggle has grown into an internal one - the British are again trying to figure out how to get out of the political impasse, where they, in fact, have driven themselves.

The immunity against impeachment that was acquired last week allows Theresa May to feel more or less confident throughout the year: deputies cannot return to this issue during this period. However, this fact did not bring relief to the supporters of the "soft" Brexit. First, May protected herself only from her own party members, while she could still get a vote of no confidence from the entire House of Commons. Secondly, the voting itself made a double impression: on the one hand, the prime minister received the support of the majority of Conservatives, on the other hand, the number of her opponents clearly increased as of late: 117 deputies, that is almost 40%, gave their votes for the announcement of her vote of no confidence. This is a really disappointing fact: in order to approve the deal, Theresa may needs not only the absolute support of party members, but also additional votes – this is evidenced by simple arithmetic.

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There are 650 deputies in the House of Commons, 315 of which are Conservatives. That is, to overcome the threshold of a simple majority, the prime minister needs another 10 votes (provided that the Conservatives vote "for" without exception). A temporary ally of the Tories is the Democratic Unionist Party - at the expense of their representatives, the Conservatives have a majority in parliament. But this is in "peaceful" time, whereas now unionists are also categorically opposed to the approval of the deal. The remaining parties represented in the British Parliament - the Scottish National Party, the Liberal Democrats, the Greens and the Party of Wales - are long-time opponents of the Conservatives in general and Theresa May in particular, so it will be extremely difficult for the prime minister to lure them to her side.

Moreover, the European Union last week refused to meet the British, so May didn't have any additional trumps, except as a fact of the catastrophism of the "hard" Brexit. But this circumstance, the opposition is trying to neutralize. In particular, some representatives of the Conservatives are now actively promoting the topic of holding a repeated referendum - they are holding relevant consultations with Labor and other parliamentary factions. Moreover, the British press reported that many of May's allies were holding "separate talks" with supporters of a repeated referendum, seriously considering this idea in the context of its implementation.

Theresa May strongly opposes such a scenario. In her opinion, in this case, the British authorities "will undermine the faith of the people" and demonstrate their incapacity. Speaking in parliament today, she said that it was planned to vote on the draft deal in mid-January, namely on the 14th. In her opinion, the scandalous backstop mechanism will not be" eternal " and may not be necessary at all. May did not clarify any details, so this statement can be interpreted in different ways. One way or another, the leader of the Labor Party once again declared that the representatives of his party would not support the deal.

It is noteworthy that the idea of a repeated referendum, which was announced at the weekend in the British press, found a positive response from traders. For example, before such scenarios put pressure on the pound, as it entailed uncertainty. Now, on the other side of the scale, the "hard" Brexit, so in such conditions a repeated referendum does not look like a catastrophe. By the way, one of the supporters of this idea is the former prime minister of Britain, Tony Blair, who enjoys a certain influence both in Brussels and in London. According to rumors, he recently held informal talks with the European side, thus preparing the ground for the possible implementation of this scenario.

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Thus, at the moment there are several scenarios: "hard" Brexit, "soft" Brexit and a repeated referendum. The third option looks like a compromise, but you have to fight for it, taking into account Theresa May's categorical position.

As some experts believe, if this idea is not implemented, then a vote of confidence in the entire House of Commons is possible. According to the head of the Labor Party, his party is ready to initiate this issue, but "at the right moment". It is obvious that the Laborists do not want to repeat the mistake of the Conservatives, who made a "single shot". Their initiative can be supported not only by four opposition parties, but also by some Conservatives (about a hundred) - therefore, this scenario cannot be dismissed. There are 650 deputies in Parliament, while Theresa May can count on the support of only two hundred of them. If the entire House of Commons votes for a vote of no confidence of the government, the representatives of the Conservative Party will have to form a new government or go to early elections.

As you can see, the rates are high - so up to the Catholic Christmas, we can expect increased volatility in the GBP/USD pair. If the rumors of a repeated referendum will increase, then the pound will get support - apparently, the market has come to the conclusion that this is the most optimal final of the two-year divorce epic.

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

Technical analysis of AUD/USD for December 18, 2018

analytics5c18cfa8e68d0_source!.png

Overview:

The AUD/USD pair continues to trade upwards from the level of 0.7185. The pair rose from the level of 0.7185 to a top around 0.7299 but it rebounded to set around the spot of 0.7212 and 0.7249 . Today, the first resistance level is seen at 0.7299 followed by 0.7352, while daily support 1 is seen at 0.7185 (50% Fibonacci retracement). According to the previous events, the AUD/USD pair is still moving between the levels of 0.7250 and 0.7352; so we expect a range of 102 pips. Furthermore, if the trend is able to break out through the first resistance level at 0.7299, we should see the pair climbing towards the double top (0.7299) to test it. Therefore, buy above the level of 0.7299 with the first target at 0.7352 in order to test the daily resistance 1 and further to 0.7394. Besides, it might be noted that the level of 0.7394 is a good place to take profit because it will form a double top. On the other hand, in case a reversal takes place and the AUD/USD pair breaks through the support level of 0.7185, a further decline to 0.7069 can occur which would indicate a bearish market.

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Simplified wave analysis of EUR / GBP pair for the week of December 18

Large-scale graph:

Price fluctuations of the cross from April are consistent with the algorithm of the last ascending wave. The formed standard plane has entered the final phase.

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Medium-scale graph:

The rising wave of November 13 gave rise to the final part of the model senior timeframe. A large scale resistance zone has been reached and the wave looks complete.

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Small-scale graph:

The decline that began on December 19 gave rise to a correctional section of a larger wave. Signals of the completion of the entire trend wave and the subsequent change of the course on the chart have not yet been observed.

Forecast and recommendations:

The price reduction is expected to occur against the main trend this week. Hence, sales may be risky. It is recommended to refrain from trade deals until the wave pattern is cleared.

Resistance zones:

- 0.9030 / 0.9080

Support areas:

- 0.8870 / 0.8820

Explanations of the figures:

The simplified wave analysis uses waves consisting of 3 parts (A - B - C). For the analysis, three main TFs are used. On every last part, the incomplete wave is analyzed. Zones show calculated areas with the highest probability of reversal. The arrows indicate the wave marking by the method used by the author. The solid background shows the formed structure while the dotted shows the expected movement.

Note: The wave algorithm does not take into account the duration of tool movements over time. To conduct a trade transaction, you need confirmation signals from the trading systems you use!

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

GBP / USD pair: plan for the European session on December 18. Teresa May rescheduled Brexit vote for January 2019

To open long positions on the GBP / USD pair, you need:

News that British Prime Minister Theresa May postponed the Brexit vote the following year did not hurt much the pound, which regained its position yesterday against the US dollar. To continue the upward trend, buyers need a breakthrough and consolidation above the resistance of 1.2643, which will open a direct road to the area of maximum 1.2686 and 1.2740, where I recommend taking profits. In the case of a decrease in the pound in the first half of the day, long positions can be seen in the area of 1.2566 or a rebound from the low of 1.2527.

To open short positions on the GBP / USD pair, you need:

Sellers need a false breakout in the area of resistance 1.2643, which will be the first signal to short positions in the pound with an exit under the support level of 1.2609. Only a fixation below this range will allow us to count on the resumption of the downward movement in GBP / USD with a rise to yesterday's lows in the area of 1.2566 and updating a larger level of 1.2527, where I recommend taking profits. If the GBP / USD pair continues to grow, it is best to open short positions to rebound from the upper border of the side channel 1.2686.

Indicator signals:

Moving averages

Trade is conducted just above the 30- and 50-day moving average, with a short-term advantage of buyers of the British pound.

Bollinger bands

The downward correction in the pair will be limited to the lower limit of the Bollinger Bands indicator around 1.2601, where a breakthrough of which will lead to a large sale of the pound.

Found in the video review.

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Description of indicators

MA (moving average) 50 days - yellow

MA (moving average) 30 days - green

MACD: fast EMA 12, slow EMA 26, SMA 9

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

Simplified wave analysis of USD / CHF for December 18

Large-scale graphics:

The general vector of the price movement of the pair from February of the current year is directed upwards. The last wave of the scale H4 forms the final part of the ascending model.

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Medium scale graphics:

From November 13, the price forms a downward wave. Its structure to the current moment looks dead. In the wake of the older TF, it became a correction.

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Small-scale graphics:

The bullish wave of December 11 does not yet have a turning potential, but maybe the beginning of a turning structure.

Forecast and recommendations:

This week, the most likely scenario for a pair to move will be a flat in the corridor between the opposite zones. Before shopping, it is recommended to wait for the confirming signals of the vehicles used.

Resistance zones:

- 1.0000 / 1.0050

Support areas:

- 0.9870 / 0.9820

Explanations for the figures: The simplified wave analysis uses waves consisting of 3 parts (A – B – C). For analysis, 3 consecutive graphs are used. Each of them analyzes the last, incomplete wave. Zones show calculated areas with the highest probability of reversal. The arrows indicate the wave marking by the method used by the author. The solid background shows the formed structure, the dotted - the expected movement.

Attention: The wave algorithm does not take into account the duration of tool movements over time. To conduct a trade transaction, you need confirmation signals from the trading systems you use!

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

Wave analysis of GBP / USD for December 18. Pound: new correctional wave?

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Wave counting analysis:

During the December 17 trading session, the GBP / USD currency pair added a total of about 15 basis points. Thus, wave 5, a, continues to be considered complete. If this is true, then the increase in quotations will continue with targets located near the levels of 100.0% and 76.4% Fibonacci. This version is opposed to the news background, which continues to support the dollar, not the pound. Therefore, until the moment when it becomes clear what kind of Brexit is waiting for the UK, under what conditions, it is unlikely that the tool will be able to build a long uptrend of the trend.

The objectives for the option with purchases:

1.2696 - 100.0% of Fibonacci

1.2807 - 76.4% of Fibonacci

The objectives for the option with sales:

1.2398 - 161.8% of Fibonacci

1.2218 - 200.0% of Fibonacci

General conclusions and trading recommendations:

The currency pair GBP / USD supposedly completed the construction of wave 5, a. A break of 1.2696, which corresponds to 100.0% Fibonacci, will confirm the transition of the pair to the construction of the ascending wave b. At the same time, this wave can take a shortened look. If on the subject of Brexit will continue to receive only negative news, in the coming weeks, the pair can go to the construction of a new downtrend trend or complicate the current. I recommend buying very carefully.

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Wave analysis of EUR / USD for December 18. Wave counting is complicated before the holidays

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Wave counting analysis:

During the Monday trading, the EUR / USD currency pair gained about 45 basis points. Thus, the pair remains within the framework of the construction of the supposed wave from the corrective part of the trend, since the wave b was not broken at least. The whole wave takes a very complex and non-standard form and can be repeatedly complicated. Until a successful attempt to break through the minimum of November 28 is made, the increase will remain the working variant with targets that are near the 38.2% level in the older Fibonacci grid.

The objectives for the option with sales:

1.1215 - 0.0% of Fibonacci

The objectives for the option with purchases:

1.1471 - 100.0% of Fibonacci

1.1528 - 127.2% of Fibonacci

General conclusions and trading recommendations:

The currency pair continues to be in the framework of building an upward wave c. A break of 1.1266 (minimum b) will lead to a resumption of the instrument decline with targets located near the mark of 1.1215, which is equal to 0.0% Fibonacci, and below. The current wave counting is not entirely unambiguous and may require adjustments. I highly recommend buying a pair, as the wave with great difficulty continues its construction.

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Fundamental Analysis of GBP/USD for December 18, 2018

GBP/USD is currently trading sideways with higher volatility at the edge of 1.2600 area from where the price is expected to push lower in the coming days. The pair is very sensitive to the BREXIT deal developments and the FED's Rate Hike decision this week. In this context, certain volatility is expected in this pair where USD is likely to dominate GBP further in the coming days.

Recently UK Prime Minister Theresa May is looking forward for 30 more days to save the BREXIT deal as she thinks it is the only way to avoid chaotic split from the European Union. May's talks with the EU is expected to continue in January. The deadline for the actual leave from the EU is March 2019. So, a certain decision is going to be taken before that will lead to a long-term decisive momentum for GBP in future. Recently UK Rightmove HPI report was published with a slight increase to -1.5% from the previous value of -1.7% which helped the currency to gain certain momentum but how much time it can sustain it is still uncertain. Tomorrow CPI report is going to be published which is expected to decrease to 2.3% from the previous value of 2.4%, PPI Input is expected to decrease to -2.8% from the previous value of 0.8%, RPI is expected to slightly decrease to 3.2% from the previous value of 3.3%, and Core CPI is expected to decrease as well to 1.8% from the previous value of 1.9%.

On the other hand, this week US Federal Funds Rate report is going to be published which is expected to increase to 2.50% from the previous value of 2.25%. The FED is still determined to raise the official funds rate this week that is priced in by the markets. On the other hand, President Trump is against too fast pace of monetary tightenening as he thinks it could trigger recession in the coming years. The FED recently declared that a cyclle of rate hikes can be suspended in 2019, but it will fulfill its target. Today US Building Permits report is going to be published with increase to 1.27M from the previous figure of 1.26M and Housing Starts is expected to be unchanged at 1.23M.

Meantime, GBP is expected to struggle further against USD amid weak expectations for the upcoming economic reports. USD has a better chance for gaining strength because of the rate hike this week.

Now let us look at the technical view. The price is currently residing inside the strong bearish daily candle formed on Friday as well as at the edge of 1.2600 area. The price is still quite indecisive but being below 1.2700 area along with the dynamic level of 20 EMA as resistance, it is expected to push the price lower towards 1.2500 support area in the coming days. As the price remains below 1.30 area with a daily close, the bearish bias is expected to continue.

SUPPORT: 1.2500, 1.2600

RESISTANCE: 1.2700, 1.2800-50

BIAS: BEARISH

MOMENTUM: NON-VOLATILE but CORRECTIVE

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GBP / USD. December 18th. The trading system. "Regression Channels". Pound sterling: hopes for correction

4-hour timeframe

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Technical details:

The senior linear regression channel: direction - down.

The junior linear regression channel: direction - down.

Moving average (20; smoothed) - sideways.

CCI: 46.7664

The GBP / USD currency pair has once again adjusted to the moving average line, but the bulls are still not strong enough to overcome it. The price rebound from the MA may trigger a resumption of the downward movement, however, its potential is now also limited due to the lack of new negative information on the Brexit topic. It should be said that in recent days, the Brexit theme has gone from the front pages of the media. Firstly, all deputies are preparing to go on vacation, respectively, no important decisions or statements from December 20 will come from the British Parliament. Secondly, Theresa May did everything possible to postpone the key moment for Britain at a later date (this is about parliamentary voting). Third, Theresa May is still walking along the blade of a knife. The media is filled with rumors that the prime minister will leave his post anyway after the beginning of the transition period. May received political immunity for only 1 year from her party, not from the entire House of Commons. In general, this whole situation is just paused at the moment. And after the new year may begin to discourage markets. Still not clear on what to count May, shifting the vote to January? Will she succeed in luring to her side the necessary number of deputies to pass the bill under the Checkers plan?

Nearest support levels:

S1 - 1.2573

S2 - 1.2512

S3 - 1.2451

Nearest resistance levels:

R1 - 1.2634

R2 - 1.2695

R3 - 1.2756

Trading recommendations:

The currency pair GBP / USD continues the downward trend. Therefore, turning the Heikin Ashi indicator down will be a signal to open new sell orders with a target of 1.2512. However, the new strong fall of the pound requires fundamental reasons, which are not yet available. Fall potential is small.

Buy-positions are recommended to consider the minimum lots with the goal of 1.2695 if traders manage to overcome the moving. Pound buyers are now extremely small, so the growth potential of the currency is also limited.

In addition to the technical picture, you should also consider the fundamental data and the time of their release.

Explanations for illustrations:

The senior linear regression channel is the blue lines of the unidirectional movement.

The junior linear channel is the purple lines of the unidirectional movement.

CCI is the blue line in the indicator regression window.

The moving average (20; smoothed) is the blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heikin Ashi is an indicator that colors bars in blue or purple.

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EUR / USD. December 18th. The trading system. "Regression Channels". Trump asks Powell not to raise

4-hour timeframe

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Technical details:

The senior linear regression channel: direction - down.

The junior linear regression channel: direction - down.

Moving average (20; smoothed) - sideways.

CCI: 6.4182

The currency pair EUR / USD on Tuesday, December 18, corrected to the moving average line and Murray's level of "2/8" - 1.1353, but could not overcome them. Despite the rather tangible strengthening of the European currency, the pair is still in a downtrend. The only thing that should be noted is that there are no new important data from the European Union or the States. Yesterday's inflation report was completely ignored, and this suggests that traders do not want to risk on the eve of holidays and are not ready for new sales of euro, while the pair is near its annual lows. To date, not a single macroeconomic report has been scheduled either in the eurozone or in the USA. Therefore, the influence of the foundation on the movement of the currency pair today will also be absent. Also noteworthy is the speech of Donald Trump, or rather the appeal to Jerome Powell. This time the leader of the USA did not criticize the head of the Fed and did not hint to him that he didn't need to raise his bid, but asked openly not to do so. Trump can be understood that the US dollar rose in price very strongly in 2018, which greatly complicates the servicing of public debt. In addition, economic growth in the States is slowing down, which Powell himself understands. It seems that the difference in opinions is only in the timing of the suspension of the course on tightening monetary policy.

Nearest support levels:

S1 - 1.1292

S2 - 1.1230

S3 - 1.1169

Nearest resistance levels:

R1 - 1.1353

R2 - 1.1414

R3 - 1.1475

Trading recommendations:

The EUR / USD currency pair continues its upward correction. A reversal of the Heikin Ashi indicator down, when the price is below the moving average, will signal the opening of new short positions with the target at 1.1292.

Buy positions are recommended to open in small lots if the pair overcomes the level of 1.1353 with the target of 1.1414. As before, for a stronger growth of the euro currency, fundamental fundamentals will be required.

In addition to the technical picture, you should also consider the fundamental data and the time of their release.

Explanations for illustrations:

The senior linear regression channel is the blue lines of the unidirectional movement.

The younger linear regression channel is the purple lines of the unidirectional movement.

CCI - blue line in the indicator window.

The moving average (20; smoothed) is the blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heikin Ashi is an indicator that colors bars in blue or purple.

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

Technical analysis of gold for December 18, 2018

Gold price bounced as expected from 38% Fibonacci retracement level. The price is now challenging the recent highs and could provide one more new higher high towards $1,260 if we manage to break above the resistance at $1,250.50.

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Red rectangles - resistance areas

Green rectangle - major short-term support

Blue rectangle- target if green rectangle fails to hold

Blue line - short-term trend line support

Green line - major trend line support

Gold price continues to make higher highs and higher lows. Last week's lows are a very important short-term support. If they are broken, I expect gold price to move towards $1,225 and test the major trend line support. Gold is about to break above the recent highs at $1,250. This could lead to a move towards $1,260. However I do not believe it is risk worthy to be buying gold now as I see the entire move higher from $1,196 is about to end around $1,260 which was our longer-term target once we broke above $1,200 back in October. Bulls need to be very cautious now. The trend continues to be bullish but I believe the precious metal will need to make a bigger pullback once it completes the move from $1,196, around $1,260. The $1,260 area is a very important resistance area and I believe gold will stop the uptrend around that area.

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Forecast for EUR / USD pair on December 18, 2018

EUR / USD pair

On Monday, the single currency itself has undertaken growth despite the deterioration in the economic data of the eurozone. Probably, investors were worried about the forthcoming decision of the Fed regarding the monetary policy prospects for the next year, as the pressure on the regulator due to the rapid pace of the rate hike increased. The eurozone trade balance fell from 13.0 billion euros to 12.5 billion in October while the consumer price index decreased from 2.0% y / y to 1.9% y / y in November. Later, the situation for the dollar was worsened by its own American indicators as the index of business activity in the manufacturing sector of New York collapsed from 23.3 to 10.9 in December. The activity in the housing market from the NAHB decreased from 60 to 56.

On the technical side, there are no conditions for growth. 120-point-wide range. The Marlin oscillator is a line formed. On the four-hour chart, the price reverses down from the balance line. It is a hike is over. If there is a tendency to increase, there is a one-year increase in the coming year. Of course, if the international situation escalates, it will be a weakening dollar. Yet, these are just general thoughts and concerns of investors, which is why the US stock market lost more than 2% yesterday.

Resolution of the situation, as the risk of price increase, may occur tomorrow but it may not happen. In order to form a stable upward trend for the euro, it is necessary to go above the MACD indicator line on a daily scale and more than 100 points at 1.1465 before it. The rising scenario suggests an increase to 1.1621 with the maximum from October 16. The main option suggests a continuation of the decline to 1.1170.

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