Fundamental analysis of AUD/USD for February 22, 2018

AUD/USD has been quite impulsive with the bearish pressure which is currently proceeding towards the support area of 0.7750. AUD has been struggling with the worse economic reports recently which affected its gains against USD. Recently, the Australian Construction showed an increase to 19.4% from the previous reading of 16.6% which was a significant decrease in Housing Development. The worse economic report affected the overall growth of AUD against USD recently. Today on the USD side, Unemployment Claims report was published with better outcome at 222k decreasing from the previous figure of 229k which was expected to increase to 230k. The positive economic report with a decrease in Unemployment Claims indicates the positive changes in the US jobs market which is expected to push the currency much higher against CAD. Moreover, today USD CB Leading Index report is going to be published which is expected to increase to 0.7% from the previous value of 0.6%, Natural Gas Storage is expected to show less deficit at -121B from the previous figure of 194B. The Crude Oil Inventories is expected to increase to 2.2M from the previous figure of 1.8M. Furthemore, FOMC Member Dudley is going to speak today about upcoming changes in the monetary policy and interest rate decision which is expected to be hawkish. To sum up, USD is expected to gain more momentum in the coming days against AUD whereas certain correction may be observed before the price becomes impulsive with the bearish pressure pushing the price much lower in the future.

Now let us look at the technical view. The price has been quite impulsive with the bullish gains today after having a week of bearish pressure in the pair. The price is currently residing below the dynamic level of 20 EMA whereas certain correction is expected before it proceeds lower towards 0.7750 and later towards 0.7550 support area in the coming days. As the price remains below 0.80 price area, the bearish bias is expected to continue further.

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Fundamental Analysis of USD/CAD for February 22, 2018

USD/CAD has been quite impulsive with the bullish gains recently after breaking above 1.2620 resistance area which has also been retested as support. USD has been quite impulsive with the gains recently having Rate Hike prediction in March which is expected to inject more USD bulls in the process whereas CAD has been struggling with the worse economic reports. Today CAD Core Retail Sales report was published with a negative value of -1.8% decreasing from the previous value of 1.7% which was expected to be at 0.1%. At the same time, the Retail Sales report was published with a decrease to -0.8% from the previous value of 0.3% which was expected to be at 0.0% and Corporate Profits also decreased to -1.9% which previously was at 8.5%. The worse economic reports from Canada helped USD gain impulsive momentum today which is expected to push the price much higher in the coming days. On the USD side, today the Unemployment Claims report was published with better outcome at 222k decreasing from the previous figure of 229k which was expected to increase to 230k. The positive economic report with a decrease in Unemployment Claims indicates the positive developments in the US jobs market which is expected to push the currency much higher against CAD. Moreover, today the US CB Leading Index report is going to be published which is expected to increase to 0.7% from the previous value of 0.6%. The Natural Gas Storage is expected to show a smaller deficit at -121B from the previous figure of 194B, while the Crude Oil Inventories are expected to increase to 2.2M from the previous figure of 1.8M. Furthemore, FOMC Member Dudley is going to speak today about upcoming changes in monetary policy and interest rate decision which is expected to be hawkish in nature. As of the current scenario, USD is expected to take the lead in the coming days whereas CAD is expected to struggle for gains until any positive economic reports help to counter the impulsive pressure of USD gains.

Now let us look at the technical view. The price is quite impulsive and non-volatile with the bullish gains above 1.2620 and with certain retracement above the level, the price is expected push much higher towards 1.29 resistance area in the coming days. As the price remains above 1.2620 with a daily close, the bullish bias is expected to continue further.

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Global macro overview for 22/02/2018

In the last three months of 2017, the British economy grew at a quarterly rate of 0.4%, which clearly disappointed economists as a rise of 0.5% was expected. The lower reading was significantly influenced by lower individual consumption (0.3%, consensus: 0.4%), whose impact was strongly sought by the increase in the government spending (0.6%, consensus: 0.3%) or returning to favor investments in fixed assets (1.1%, consensus: 0.5%). The trade data also failed to provide support to the British economy. In quarterly terms, the volume of exports fell by 0.2% with an expected increase of 0.5%. Only the Services Index data has beat the expectations of 0.4% as the number released was slightly better at the level of 0.6%.

Let's now take a look at the GBP/USD technical picture at the H4 time frame after the data was published. The pound remains relatively insensitive to the above indications. In the first reaction, GBP/USD fell by about 10 pips to the level of 1.3880 so far, but the recent breakout through the technical support at the level of 1.3921 looks irreversible. The next technical support is seen at the level of 1.3818 and it might be tested soon, as the momentum is below its fifty level and clearly points to the downside.

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Global macro overview for 22/02/2018

The minutes of the January FOMC meeting did not include any hawkish hints, which resulted in temporary disappointment of investors and weakening of the US Dollar. Nevertheless, the assessment of the outlook for the US economy which was raised in the recent FOMC statement means that the March interest rate hike is decided. Such a move on the part of the Fed is already priced by market participants with over 85%. probability. In the one-year horizon, the interest rate is discounted by 75 bp. Let us add that the document described the discussion at the meeting, which took place before the last turbulence on Wall Street and a high reading of inflation indicators. At the beginning of Powell's term, the Fed seems to be more confident and ignores the dynamics of inflationary processes, paying more attention to financial conditions. If such an attitude is confirmed at the March meeting with a press conference and new macro projections, it will be a sign of a positive exchange rate change and rhetoric for the US Dollar. Moreover, it is worth to notice that in 2018 L. Mester and J. Williams will have the right to vote in FOMC, which moves the center of gravity slightly towards supporters of a more restrictive policy.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The price has hit the lower line of the downward channel around the level of 90.20 again and so far the rally from the low at the level of 88.26 was capped. The next technical resistance is seen at the level of 90.59 and the nearest support is seen at the level of 89.63. Please notice the overbought market conditions favour the temporary pull-back before any potential new high is made.

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Technical analysis of USD/JPY for February 22, 2018

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USD/JPY is expected to trade with bullish above 107.00. The pair keeps challenging the overhead resistance at 107.90. Currently intraday bullishness is maintained by those well-directed 20-period and 50-period moving averages. And the relative strength index refuses to stay below the neutrality level of 50, showing a lack of downward momentum for the pair. Upon crossing 107.90, the pair should proceed toward the second upside target at 108.40.

Alternatively, if the price moves in the opposite direction, a short position is recommended to be above 107.00 with a target of 107.90.

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 at 107.00, take profit at 107.90.

Resistance levels: 107.90, 108.40, and 108.45

Support levels: 106.70, 106.45, and 106.00.

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Technical analysis of USD/CHF for February 22, 2018

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All our upside targets which we predicted in yesterday's analysis have been hit. USD/CHF is expected to continue its upside movement. The pair has recorded a process of higher tops and higher bottoms since February 16, confirming a bullish outlook. Both rising 20-period and 50-period moving averages should push the prices higher. The relative strength index advocates for a further upside.

Hence, as long as 0.9350 is not broken, look for a further advance to 0.9410 and even to 0.9450 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 point indicates a short position. The red lines show the support levels, and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Strategy: BUY, stop loss at 0.9350, take profit at 0.9410.

Resistance levels: 0.9410, 0.9450, and 0.9485

Support levels: 0.9325, 0.9295, and 0.9250.

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Technical analysis of GBP/JPY for February 22, 2018

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GBP/JPY is under pressure. The pair retreated from around 150.80 (the high of February 21) and broke below its 20-period and 50-period moving averages. In addition, the bearish cross between 20-period and 50-period moving averages has been identified. The relative strength index is below its neutrality level at 50. To sum up, below 149.80, look for another drop with targets at 148.35 and 147.90 in extension.

Alternatively, if the price moves in the direction opposite to the forecast, a long position is recommended to be above 149.80 with the target at 150.20.

Strategy: SELL, Stop loss at 149.80, Take profit at 148.35

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 point, 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: 150.20, 150.50, and 150.00

Support levels: 148.35, 147.90, and 147.50

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Technical analysis of NZD/USD for February 22, 2018

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Our first downside target which we predicted in yesterday's analysis has been hit. NZD/USD is Under pressure. The pair is trading below its declining 20-period and 50-period moving averages, which play resistance roles and maintain the downside bias. The relative strength index is bearish and calls for a further downside.

Therefore, as long as 0.7360 holds on the upside, look for a new drop with targets at 0.7300 and 0.7280 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 show the support levels, while the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 0.7375, 0.7400, and 0.7450.

Support levels: 0.7300, 0.7280, and 0.7250.

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Technical analysis of NZD/USD for February 22, 2018

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Overview:

  • Pivot : 0.7337.
  • The NZD/USD pair continued moving upwards from the spot of 0.7337/0.7314. The pair rose from the area of 0.7337/0.7314 (support zone) to the top around 0.7436.
  • The trend was rebounded to the price of 0.7314 again. Today, the first support level is seen at 0.7314 followed by 0.7285, while daily resistance is seen at 0.7360.
  • According to the previous events, the NZD/USD pair is still moving between the levels of 0.7314 and 0.7394.
  • For that, we expect a range of 80 pips in coming hours. This would suggest a bullish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. Furthermore, if the trend is able to break out through the first resistance level of 0.7360, we should see the pair climbing towards the second resistance (0.7374) to test it. On the contrary, if a breakout takes place at the support level of 0.7314, then this scenario may become invalidated. Remember to place a stop loss; it should be set below the second support of 0.7261.
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Analysis of Gold for February 22, 2018

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Recently, the Gold has been trading downwards. As I expected, the price tested the level of $1,321.00. According to the 30M time – frame, I found that price is trading inside of the multiday downward channel, which is a sign that sellers are in control. I also found weak rally and weak demand, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward target is set at the price of $1,317.50.

Resistance levels:

R1: $1,333.00

R2: $1,341.54

R3: $1,346.84

Support levels:

S1: $1,319.16

S2: $1,313.85

S3: $1,305.30

Trading recommendations for today: watch for potential selling opportunities.

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GBP/USD analysis for February 22, 2018

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Recently, the GBP/USD has been trading downwards. The price tested the level of 1.3869. Anyway, according to the 30M time – frame, I found a successful rejection of the pivot support 1 at the price of 1.3875, which is a sign that selling looks risky. I also found a hidden bullish divergence on the stochastic oscillator, which is another sign of strength. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 1.3940 and at the price of 1.3982.

Resistance levels:

R1: 1.3980

R2: 1.4048

R3: 1.4087

Support levels:

S1: 1.3878

S2: 1.3840

S3: 1.3773

Trading recommendations for today: watch for potential buying opportunities.

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Technical analysis of USD/CHF for February 22, 2018

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Overview:

  • The USD/CHF pair broke resistance at 0.9361 which turned into strong support yesterday. This level coincides with 61.8% of Fibonacci retracement which is expected to act as major support today. Equally important, the RSI is still signaling that the trend is upward, while the moving average (100) is headed to the upside. Accordingly, the bullish outlook remains the same as long as the EMA 100 is pointing to the uptrend. This suggests that the pair will probably go above the daily pivot point (0.9361) in the coming hours. The USD/CHF pair will demonstrate strength following a breakout of the high at 0.9361. Consequently, the market is likely to show signs of a bullish trend. In other words, buy orders are recommended above 0.9361 with the first target at 0.9409. Then, the pair is likely to begin an ascending movement to 0.9436 marks and further to 0.9469 levels. The level of 0.9469 will act as strong resistance because it forms the double top on the H1 chart. On the other hand, the daily strong support is seen at 0.9328. If the USD/CHF pair is able to break out the level of 0.9328, the market will decline further to 0.9254.
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Daily analysis of major pairs for February 22, 2018

EUR/USD: A bearish signal has been generated on the EUR/USD, which has been going downwards since last Friday. The EMA 11 is below the EMA 56, and the Williams' % Range period 20 is in the oversold region. While there may be temporary rallies, the market is bound to go further downwards.

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USD/CHF: A bullish signal has been generated on the USD/CHF, which has been upwards since last Friday. The EMA 11 is above the EMA 56, and the Williams' % Range period 20 is in the overbought region. While there may be temporary dips, the market is bound to go further upwards.

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GBP/USD: A new "sell" signal has already been generated on the Cable. There is a Bearish Confirmation Pattern in the chart, which means further downwards journey is a possibility. Some fundamental figures are expected today, and they may have an impact on the markets. They may also aid the existing short-term bearishness on the Cable.

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USD/JPY: This USD/JPY has been going upwards in the context of a downtrend. About 200 pips has been gained since last Friday – and the bias could turn bullish when the supply level at 108.00 is breached to the upside. The market is currently hovering around the supply level at 107.50, and it may go upwards from here.

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EUR/JPY: After consolidating for a few days this week, the EUR/JPY broke southwards in the context of a downtrend. The price is now below the supply zone at 132.00, going towards the demand zone at 131.50. Once that zone is breached, the next target would be the demand zone at 131.00.

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Bitcoin analysis for February 22, 2018

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The Bitcoin (BTC) has been trading downwards.As I expected, the price tested the level of $10.039. Criticism aimed at authorities and the new legislation on "digital financial assets" is mounting in Russia. Local officials have rebuked lawmakers in the capital over slow progress, warning that the country will have to catch up with others. Experts from the crypto sector have expressed concerns about many unresolved issues in the proposed legal framework. Russian deputies are preparing to introduce two drafts on cryptocurrencies and crowdfunding, while more than 50 other digital economy bills are pending in parliament. Technical picture looks bearish.

Trading recommendations:

According to the 30M time - frame, I found strong selling pressure on the market, which is sign that buying looks risky. Also, Fibonacci retracement 61.8% at the price of $10.410 is broken, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of $9.667 and at the price of $9.440.

Support/Resistance

$10.877 – Intraday resistance

$9.667– Intraday support

$9.667 – Objective target 1

$9.440 – Objective target 2

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NZD/USD Intraday technical levels and trading recommendations for February 22, 2018

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Daily Outlook

In July 2017, an atypical Head and Shoulders pattern was expressed on the depicted chart which indicated an upcoming bearish reversal.

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

Evident signs of bullish recovery were expressed around the depicted low (0.6780). An inverted Head and Shoulders pattern was expressed around these price levels.

The price zone of 0.7140-0.7250 (prominent Supply-Zone) failed to pause the ongoing bullish momentum. Instead, a bullish breakout above 0.7250 was expressed on January 11.

That's why a quick bullish movement was expected towards the depicted supply zone (0.7320-0.7390) where evident bearish rejection and a valid SELL entry were expected.

On February 2, a bearish engulfing daily candlestick was expressed. This enhances the bearish scenario towards the price levels of 0.7230 - 0.7165 where bullish recovery should be expressed.

Trade Recommendations:

The current price zone (0.7320-0.7390) remains a significant supply zone to offer a valid SELL entry.

Stop Loss should be set as a daily candlestick above 0.7450.

Bearish fixation below 0.7300 is needed to allow further bearish decline towards 0.7160 and 0.7090.

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Intraday technical levels and trading recommendations for EUR/USD for February 22, 2018

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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 and recently above 1.2075.

Another bullish breakout above 1.2250 was expressed on the chart. This hinders the bearish momentum allowing bullish advancement to occur towards 1.2750 provided that the price level of 1.2250 remains defended by the bulls.

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Daily Outlook

In September, a bearish target for the depicted Head and Shoulders pattern was projected towards 1.1350. However, the market failed to apply significant bearish pressure against the mentioned zone (1.1415-1.1520).

Instead, In November, evident bullish recovery was manifested around the price zone of 1.1520-1.1415.

This hindered further bearish decline which allowed the current bullish momentum to occur towards the price level of 1.2100 which failed to pause the ongoing bullish momentum as well.

Daily persistence above 1.2470-1.2500 is needed to confirm a recent bullish flag continuation pattern with projected targets around the price level of 1.2750.

On the other hand, a recent bearish pullback is being expressed below the price level of 1.2450. This could extend towards 1.2070 if a bearish breakdown of the level of 1.2200 is achieved on a daily basis.

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Bitcoin analysis for 22/02/2018

On Tuesday, February 20, the Financial Times reported that the Venezuelan government began pre-selling the world's first Petro-based Petr Criminal Investigation (PTR) based on oil. 82.4 million Petro is already on sale, both for cash and cryptocurrency, although it remains unavailable for Venezuelan Bolivar.

According to Venezuelan Minister of Foreign Trade and International Investments, Jose Vielma Mora, this action of the Venezuelan government intends to attract foreign investors from countries such as Poland, Denmark, and Norway and thereby oppose the sanctions imposed by the US and the EU. Earlier, President Nicolas Maduro ordered 100 million Petro emissions worth one barrel of oil. The president hopes to collect over $ 6 billion from the sale of PTR. To buy and trade Petro, investors need to download the Petro digital wallet, developed by the Venezuelan government. After downloading the wallet, an address is generated, which can be given to anyone who wants to send a PTR to it.

The dismal decline in Bolivar's value forced the country's government to seek alternative ways to save the economy from collapse. In the last 12 months, inflation in Venezuela amounted to 4.115%, and Bolivar lost to 96% of its value, which led the economy of this country to collapse.

It looks like the cryptocurrency will now be another interesting asset to invest in a case of national emergency. This is, however, the first time any government has made this kind of actions, so it will be very interesting to keep an eye on how the situation will unfold in the future.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The price is reversing slowly lower and so far it has hit the weekly pivot at the level of $10,180. The reversal was possible after the market has tested the golden trend line resistance at the level of $11,800, but the question remains whether the bull camp will be strong enough to break out higher again to make a new local high or to hit the next technical resistance at the level of $12,030. Time will tell, so far it is a correction time anyway.

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Trading plan for 22/02/2018

During the night, the negative sentiment for the stock market was crystallized during the bust of Wall Street from the last few tens of minutes of trading. Futures on the SP500 are below 2700 points, the EUR/USD subsided at 1.23 and USD/JPY is below 107.50. Profitability of 10-year US Treasury bonds is growing towards long-term highs at 2.95%. Oil is also under considerable pressure as the barrel price in New York falls towards USD 61. An ounce of gold is valued at 1324 USD - the negative effect of the stronger dollar and cheaper bonds over the positive effect of discounts on stock exchanges.

On Thursday 22th February, the main event of the day is ECB Monetary Policy Meeting Accounts release, but the market participants should keep an eye on German Ifo sentiment data release, Second Estimate GDP data from the UK, Retail Sales data from Canada and Unemployment Claims data from the US. Moreover, there are three speeches of the FOMC representatives: William Dudley, Raphael W. Bostic, and Robert Kaplan.

EUR/USD analysis for 22/02/2018:

Yesterday the FOMC Meeting Minutes were published - today it is the European Central Bank turn. The global investors should do not expect ECB to bring revelations because, after the turmoil caused by the notes from the December meeting, the Governing Council tended to learn to control the message. It does not change the fact that the market will focus on comments regarding the strength of the currency and in particular the number of decision-makers ready to extinguish the purchase of assets in a very decisive manner and start to try to raise interest rates.

Let's now take a look at the EUR/USD technical picture at the H4 time frame before the ECB Meeting Minutes are released. The support zone between the levels of 1.2333 - 1.2295 was violated, so now the next technical support is seen at the level of 1.2212. The market conditions are now oversold at this time frame, so a bounce higher to test the resistance zone from the below will not be a surprising move. Nevertheless, a weak momentum indicator supports the bearish outlook.

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Market Snapshot: USD/JPY retraces almost 50%

The price of USD/JPY pair has retraced almost 50% of the last leg down and stalled below the level of 108.10. The recent gains are now being consolidating and the market might again start to move higher to hit the 61% at the level of 108.60. Please notice this zone between the levels of 108.12 - 108.43 is a key technical resistance zone for bulls and might be a tough nut to crack.

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Market Snapshot: SPY reversing down

The price of SPY (SP500 ETF) has closed close to the level of 270.00 yesterday after a reversal and possible Double Top formation around the level of 275.27. The next technical support is seen at the level of 268.26 and 266.60. The momentum is about to drop below its fifty level and that could even accelerate the sell-off.

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Ichimoku cloud indicator analysis of USDX for February 22, 2018

The Dollar index has reversed its short-term trend to bullish. The price is breaking above important resistance levels for the short-term and is challenging medium-term trend change levels. There is many chances the Dollar index decline from 103.60 is over.

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Red line - long-term resistance

The Dollar index has broken above the Ichimoku cloud in the 4-hour chart and above the long-term trend line resistance. The trend is bullish as the price is making higher highs and higher lows. Support is at 89.60 once again. Resistance is at 90.55.

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Black line -long-term support

The Dollar index bounced off the long-term 50% Fibonacci retracement of the rise from 72.75 to 103.60. The price is still inside the monthly Kumo (cloud). I expect a strong bounce towards the upper cloud boundary over the next few weeks. I would not chase short positions in the Dollar index at current levels.

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Ichimoku cloud indicator analysis of gold for February 22, 2018

The Gold price is trading below the 4-hour Kumo. This is a short-term bearish sign. The price bounced towards cloud resistance yesterday and was unable to break it. The price got rejected and moved to new lows yesterday.

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The price is making lower lows and lower highs. The price is below the Ichimoku cloud. Resistance is at $1,331 and next at $1,341. Support is at $1,308. Short-term oscillators are oversold and justify a bounce. In the 4-hour chart, there is no reversal signal to the upside yet.

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Magenta line - long-term resistance

Blue line - long-term support

On a weekly basis, the weekly candle is testing the weekly tenkan-sen support. The 2nd rejection at the magenta trend line resistance was a bearish sign. I still believe we are going to test the kijun-sen at $1,300. If we hold it, we could bounce higher. Otherwise, I cannot rule out even a pull back towards the blue long-term trend line support around $1,220-40.

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Burning Forecast 02/22/2018

Burning Forecast 02/22/2018

EURUSD: We are waiting for the breakthrough of the range.

On Wednesday, the only important event of the week for the market was held - the report of the last meeting of the Fed ("minutes" of the Fed) was published.

The report showed the Fed's great optimism about the state of the US economy and the prospects for economic growth, employment and inflation. The mood of hiking rates was very noticeable.

The euro tried to rebound, but the spurt lasted only 15 minutes and was set to selling. In the morning, the euro is trading at the low of the current week at 1.2268.

Frankly, I thought it would more likely turn up - and move towards 1.2555, along with the trend. Now the picture appears like a willingness to test down the level of the weekly order of 1.2205 - if this happens and ends with a breakthrough, it will raise a question of a trend reversal.

We sell from 1.2205 to break, stop at 1.2250, profit 1.2100.

The level for the purchase will appear later.

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Technical analysis of USD/JPY for February 22, 2018

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In Asia, today, Japan will not release any Economic Data but the US will release some Economic Data such as Crude Oil Inventories, Natural Gas Storage, and Unemployment Claims. So there is a probability that the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 107.89.

Resistance. 2: 107.68.

Resistance. 1: 107.47.

Support. 1: 107.20.

Support. 2: 106.99.

Support. 3: 106.78.

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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Gold returns to the previous drivers

After displaying an irrational behavior in early 2018, the dollar and gold gradually return to the previous drivers. If in January and in the first half of February the increase in the yield of US Treasuries led investors to confusion causing the decline in the USD index, then on the eve of the publication of the minutes of the January FOMC meeting, the situation radically changed. The precious metal remembered the old days when speculations of an increase in the rate of federal funds launched a wave of selling, and the facts gave way to large-scale buying.

In my opinion, the weakness of the US currency is due to investors' uncertainty that the US will be able to raise the necessary amount to finance the overhaul of the tax system. The fiscal stimulus will lead to an increase in the budget deficit by $1.5 trillion over 10 years. Another $300 billion over two years will increase costs. Thus, the results of selling, which are scheduled to place papers worth $258 billion during the week of February 23, including 96 billion on three-month and three-month bonds, can give serious food for thought. If foreigners continue to buy American government debt with the same zeal, why didn't the USD index show an upward trend?

Indeed, the strength of the US economy can not be doubted, the chances of overclocking inflation and four interest rate increases in the federal funds rate in 2018 are growing, and the increased attractiveness of government bonds compared to bonds from other countries, usually leads to capital inflow and currency strengthening. Gold is beginning to feel uncomfortable against the backdrop of the dollar rising from the ashes, and the increase in interest in ETF, oriented to shares of gold mining companies, can easily be replaced by their sales.

Capital Flows in ETF Gold Mining Companies

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Source: Bloomberg.

On the other hand, the medium-term outlook for the US dollar does not look rosy. It is obvious that the fiscal stimulus in the conditions of the economy at full capacity is an overkill. It accelerates inflation, which in turn causes the Fed to act aggressively and, ultimately, leads to a recession. At the same time, central banks around the world- peers of the Fed - in the conditions of rapid growth of global GDP are gradually moving towards the normalization of monetary policy. And if in 2014-2016 the American dollar easily played out the factor of monetary divergence, then in 2017-2018 it was replaced by convergence, which deprives it of the main trump card.

Of course, to write off failures or, on the contrary, achieve "bulls" for XAU/USD solely on the health of the dollar, at first glance, it is impossible. In past years, the dynamics of gold were influenced by the rates of the US debt market, and politics to geopolitics, and investors' appetite for risk. It is likely, a little later, that the previous drivers will return, but so far all the attention of investors is focused on the USD index.

Technically, the production of precious metals outside the upstream trading channel will increase the risk of continuing correction in the direction of $ 1310-1315 and $ 1,300 per ounce. On the contrary, the release will create the prerequisites for the return of the uptrend.

Gold, daily chart

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Daily analysis of USDX for February 22, 2018

The USDX managed to advance above the support zone of 89.36 and it's now targeting the resistance area of 90.63. Bulls are still trying to gather enough momentum to consolidate the structure above the 200 SMA on the H1 chart, so the risk to the downside remains high. Once the index breaks below the 89.36 level, doors will open for a testing of the 87.88 level.

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H1 chart's resistance levels: 90.63 / 91.75

H1 chart's support levels: 89.36 / 87.88

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 89.36, take profit is at 87.88 and stop loss is at 90.81.

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Daily analysis of GBP/USD for February 22, 2018

The pair had a bearish journey during Wednesday's session as the price action consolidates below the 200 SMA and remains well supported by the 1.3939 level, which is the last hurdle before reaching the 1.3753 level. If bulls regain the control, the next target to the upside would be the 1.4078 zone.

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H1 chart's resistance levels: 1.4078 / 1.4209

H1 chart's support levels: 1.3939 / 1.3753

Trading recommendations for today: Based on the H1 chart, sell (short) orders only if the GBP/USD pair breaks a bearish candlestick; the resistance level is at 1.3939, take profit is at 1.3753 and stop loss is at 1.4130.

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Bitcoin analysis for February 21, 2018

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The Bitcoin (BTC) has been trading downwards. As I expected, the price tested the level of $10.645 and met the first target. Public consultations on a new regulatory regime for crypto companies in Italy are now closed. Interested parties were invited by the Ministry of Economy and Finance to share suggestions and comments on a draft decree introducing registration and reporting requirements in the sector. The new set of rules will come into force within 3 months of adoption. Technical picture looks bearish.

Trading recommendations:

According to the 30M time - frame, I found a rejection of the resistance at the price of $11.115, which is a sign that buying looks risky. I also found a breakout of Fibonacci retracement 38.2% (10.683), which is anotherr sign of weakness. My advice is to watch for potential selling opportunities. The downward target is set at the price of $10.410.

Support/Resistance

$11.137 – Intraday resistance

$10.645– Intraday support

$10.410 – Objective target

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

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Global macro overview for 21/02/2018

The British Pound is starting to get more attention under the pressure of Brexit information noise. Recently, the British currency gained through the article in Business Insider that the European Parliament is considering leaving Great Britain access to the single European market. The UK Parliament is to prepare a resolution allowing more flexibility in the negotiations, but analysts recommend a reduction in enthusiasm. First of all, each EP project must be approved by the European Council and all 27 EU members, so nothing is certain. Secondly, even the best indirect solution cannot be better than EU membership, so more stringent conditions for such an agreement should be expected. And that certainly would not appeal to the biggest supporters of Brexit in the British Parliament. Their determination is confirmed by Prime Minister Theresa May's "ransom demand" from 62 members of the conservative party with a list of postulates in Brexit (including regaining control over legislation and trade). The number of signatories has an additional meaning here, because the same number of votes is needed to submit a vote of no confidence in the government). If Prime Minister May gets scared and adjusts to demands for maintaining power in the country, it will also mean stirring up the conflict in negotiations with Brussels. Tomorrow meets the so-called The "War Council" of the British government, so we can count on leaks regarding potential compromises (or their absence).

In the meantime, GBP will focus on the report from the UK labor market. Signs of acceleration in wage dynamics will strengthen expectations for an earlier BoE interest rate hike, helping the currency strengthen its position to the other currencies across the board.

Let's now take a look at the GBP/USD technical picture in the H4 time frame. The market has hit the golden trendline two times already, but so far no avail. The price keeps returning to the consolidation zone as the local highs are getting lower. If the market will start to make more lower lows, then this will be a good justification for a local downtrend to continue towards the level of 1.3760 and 1.3691. The nearest support is seen at the level of 1.3921 and the resistance is seen at the level of 1.3986.

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Global macro overview for 21/02/2018

In the absence of important data and big events, the US Dollar's bounce is the path along the line of the least resistance. Today, the release of FOMC Meeting Minutes is attracting attention, but the market participants may have too high expectations.

The US Dollar continues to rebound this week, although it is difficult to attribute this to a greater extent, such as a temporary rebound of the last wave of weaknesses. The lack of key events and publications encourages the reduction of positions, because it does not look like the global investors will have to deal with the mass opening of long positions in USD yet. Although many economists do not agree with the scale of the US Dollar's decline in recent weeks, such alleged sell-off arguments (double US deficit, a strength of the global recovery, mild expectations towards the Fed against other central banks) have not weakened. It does not change the fact that EUR / USD and USD / JPY easily break the levels of support/resistance.

Today, the calendar is starting up a bit with the main attention to the report of the FOMC meeting. It seems that the market had expectations for hawkish notes in the document that would strengthen the argumentation for three or more interest rate hikes this year. Assessment of inflation outlook and attitudes towards rate hikes will be an important starting point for the new FOMC Chair J. Powell, although one can not forget that the document will not present FOMC views on recent market turmoil and strong CPI reading for January (the FOMC meeting is ahead of these events). In the current climate, the FOMC Metting Minutes release might turn out to be a big disappointment.

Let's now take a look at the EUR/USD technical picture in the H4 time frame. The market is still being supported by the levels of 1.2333 - 1.2295 and only a sustained, impulsive breakout below this levels would bring the bears back to control over this market. Please notice the market conditions are entering the oversold levels. The next technical resistance is seen at the level of 1.2384, 1.2408 and 1.2434.

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Trading plan 02/21/2018

Trading plan 02/21/2018

The general picture: The market is preparing the movement.

The last days in the market are correctional, range sentiments. This is normal: There is NO news, in fact. The last news was a week ago. The growth of inflation in the United States, it caused a correction in currencies but it has already won. The new news today at 19:00 London Time, the "minutes" of the Fed. What to expect? It is more likely that there will be no strengthening of the Fed's tight position and the dollar will decline. But there are also possible surprises.

More likely, a new round of growth against the dollar is expected.

This is the last week without important news. Next week, there will be a data package for the United States.

The euro is in the range of 1.2205 - 1.2555. We are waiting for release.

Pound: We are waiting for growth, we buy from 1.3940.

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Fundamental Analysis of GBP/USD for February 21, 2018

GBP/USD has been correcting itself above the support area of 1.3850-1.3950 for a few days now from where the price is expected to push higher in the coming days. Today GBP has been quite mixed with the economic reports but positive Claimant Count is expected to help the economy grow better in the coming days. Today GBP Average Earning Index report was published unchanged as expected at 2.5%, Claimant Count had a better figure of -7.2k decreasing from the previous figure of 8.6k which was expected to be at 2.3k, Public Sector Net Borrowing was also published with positive report of decrease to -11.6B from the previous figure of 1.0B which was expected to be at -11.5B, Unemployment Rate was slightly increased to 4.4% which was expected to be unchanged at 4.3% and Inflation report hearing is going on currently which is expected to have positive impact on the GBP gains in the coming days. On the other hand, today USD Flash Manufacturing PMI report is going to be published which is expected to have slight decrease to 55.4 from the previous figure of 55.5, Flash Services PMI is expected to have slight increase to 53.8 from the previous figure of 53.3 and Existing Home Sales increase to 5.61M from the previous figure of 5.57M. Moreover, today in the FOMC Meeting Minutes, upcoming Rate Hike in March is expected to be discussed which is expected to have a certain impact in the upcoming gains of USD. As of the current scenario, GBP is expected to gain good momentum against USD which may lead to further bullish pressure in the coming days.

Now let us look at the technical view. The price is currently residing at the edge of 1.3850-1.3950 support area with a dynamic level of 20 EMA holding the price as well. The price is currently expected to push higher towards 1.4250 price area in the coming days as it remains above the support area with a daily close.

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Fundamental Analysis of USD/CHF for February 21, 2018

USD/CHF has been in a strong bearish trend since it bounced off 1.00 price area which is still quite stable and expected to continue further. Recently USD has pushed the price higher against CHF having positive Employment Change report but the bullish pressure is expected to end very soon. Recently CHF Trade Balance report was published with a significant decrease to 2.09B from the previous figure of 2.63B which was expected to increase to 2.78B. The worse outcome of the Trade Balance, CHF lost grounds against USD significantly which is expected to be recovered soon in the coming days. On the USD side, today Flash Manufacturing PMI report is going to be published which is expected to have slight decrease to 55.4 from the previous figure of 55.5, Flash Services PMI is expected to have slight increase to 53.8 from the previous figure of 53.3 and Existing Home Sales increase to 5.61M from the previous figure of 5.57M. Additionally, today FOMC Meeting Minutes is going to be held where it is expected to have a discussion about upcoming March 2018 Rate hike decision which might lead to certain volatility in the market. As of the current scenario, CHF is expected to proceed further with its gains against USD until USD comes up with any high impact positive economic report or event to help sustain the bullish gains in the pair. Ahead of the upcoming Rate Hike in March, USD is expected to correct itself against CHF before having impulsive gains.

Now let us look at the technical view. The price is currently being held at the dynamic level of 20 EMA below 0.9450 price area. Though the bullish pressure has been quite impulsive recently as the price being contained by the dynamic level which is a sign of non-volatility and 0.9450 price area, the bearish gains are expected to continue further with the target towards 0.9200-50 price area and later towards 0.90.analytics5a8d5c4cd8f20.png

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Fundamental Analysis of EUR/AUD for February 21, 2018

EUR/AUD is currently residing at the edge of breaking above 1.5750 resistance area with a daily close in the coming days. EUR has been quite positive with the recent economic reports which helped the currency to gain momentum over AUD which has been struggling with its worse economic report results. Today EUR has been struggling with the economic reports having French Flash Manufacturing PMI report decreasing to 56.1 from the previous figure of 58.4 which was expected to be at 58.1, French Flash Services PMI decreased to 57.9 decreasing from the previous figure of 59.2 which was expected to be at 59.1, German Flash Manufacturing PMI report also showed decrease to 60.3 from the previous figure of 61.1 which was expected to be at 60.6 and German Flash Services PMI decreased to 55.3 from the previous figure of 57.3 which was expected to be at 56.9. Moreover, EUR Flash Manufacturing PMI report was published with a decrease to 58.5 from the previous figure of 59.6 which was expected to be at 59.2 and Flash Services PMI report decreased to 56.7 from the previous figure of 58.0 which was expected to be at 57.7. The worse economic report started to show its impact on the market already leading to impulsive AUD gains which might lead to certain indecision and correction in the market. On the AUD side, today Construction Work report was published with a significant decrease to -19.4% from the previous value of 16.6% which was expected to be at -9.8% but Wage price report was published with a slight increase to 0.6% which was expected to be unchanged at 0.5%. As of the current scenario, the pair is expected to be volatile and corrective for certain period of time before EUR takes over AUD with upcoming better economic reports and events in the coming days. As of the long-term perspective, EUR is expected to sustain the gains and push the price much higher in the future.

Now let us look at the technical view. The price has been struggling below 1.5750 for a few days now where the price has currently found support at dynamic level of 20 EMA rejecting off the 1.5600 price area. Despite having worse economic reports EUR is expected to gain momentum against AUD in the coming days as the price remains above 1.56 and dynamic level of 20 EMA with a daily close.

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Pound is in the turbulence zone

Eurozone

The indicator of economic sentiment in the eurozone ZEW fell in February to 29.3p against 31.8p a month earlier, however, the results of the month it was still higher than the forecasts maintaining the long-term highs. A similar index for Germany was also slightly better than expected.

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Given some decline in ZEW, it is expected that the indices on Thursday will come down, but it will continue to show a confident expansion of the economy. The euro does not experience any pressure from this side, as a number of important parameters, such as GDP growth and the trade balance, indicate a steady growth.

Even inflation, which is the last stronghold of the ECB, unwilling to succumb to market pressures and announce the need to raise rates, may continue to accelerate. Production prices in Germany rose by 0.5% in January and an annual growth rate of 2.1%, which significantly exceeded forecasts.

On Friday, the inflation data for January will come out. This can have a significant impact on the mood of players if they show a deviation from the forecasts. Meanwhile, the inflation forecast will remain at 1.3%, like a month earlier. It is rather a bearish level, as it gives the ECB a variety of decision-making.

From a technical point of view, the bears have more chances for the next two days. One should expect an attempt to test the recent low at 1.2206.

United Kingdom

The published report on the UK labor market on Wednesday has sparked serious interest as it came out with positive results. Chances for an increase in the rate of the Central Bank of England could increase, which could eventually give the pound an additional driver for growth. .

In general, the report came out quite good with the average wage growth rates at the same level of 2.5%, which coincided with the forecasts. The number of applications for unemployment decreased. At the same time, the unemployment rate has risen from 4.3% to 4.4% and the average working week has decreased.

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The report was mixed and the pound reacted with the decline, which turned out to be shallow.

Perhaps, the pound will have the opportunity to experience increased volatility today. The Bank of England's head Mark Carney and chief economist Eric Haldane will address the Parliament with annual reports today. Most likely, details of the preparations for the exit from the soft monetary policy will be disclosed and inflation expectations will be commented upon, which may ultimately have a significant impact on investor sentiment.

While the pound remains in the side range, the nearest support is at the level of 1.3929 and the resistance is at 1.4145. By the end of the week, the decline is likely to be lower than the level of 1.3929 and move to the local minimum of 1.3763.

Oil

After a short drop in oil prices, it returned to the middle of the range of 60-70 dollars per barrel, which is recognized as fair by most manufacturers. The reasons for the collapse of quotations of a fundamental nature was not found, and therefore after the panic, the rollback was the most logical.

OPEC Secretary General Mohammed Barkindo said on Tuesday that OPEC + and other countries reached the agreement in January at 133 percent. No one has any intention to complete the agreement ahead of schedule. The agreement of OPEC is maturing in the path of the balance of supply and demand in two to three quarters instead of the end of the year. However, even after achieving the balance and completion of the agreement, OPEC + will retain mechanisms for coordinated actions in the oil market.

This is certainly a bullish news, which can support the growth of quotations. Today, a report on the API reserves is expected, if it is not negative, oil growth may continue.

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Technical analysis of USD/CHF for February 21, 2018

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Overview:

  • The USD/CHF pair will continue to climp from the level of 0.9295 (38.2% of Fibonacci retracement levels) in the long term. It should be noted that the support is established at the level of 0.9295 which represents the daily pivot point on the H1 chart. The price is likely to form a double bottom in the same time frame. Accordingly, the USD/CHF pair is showing signs of strength following a breakout of the highest level of 0.9295. So, buy above the level of 0.9295 with the first target at 0.9361 in order to test the daily resistance 1. If the trend is able to break the level of 0.9361, then the market will call for a strong bullish market towards the objective of 0.9409 today. The level of 0.9409 is a good place to take profits. Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). This suggests that the pair will probably go up in coming hours. On the other hand, in case a reversal takes place and the USD/CHF pair breaks through the support level of 0.9254, a further decline to 0.9180 can occur. It would indicate a bearish market. Since the trend is below the 38.2% Fibonacci level, the market is still in an utrend. Overall, we still prefer the bullish scenario.
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The ideas for market movements have ended

The US dollar continued to strengthen and develop its momentum, which was formed last Friday. According to the markets, the wave of panic that formed excessively strong caused the employment report to decline, there are not so many reasons for accelerating the normalization policy by the Fed.

It should be noted that both the Fed and the US government continue to coordinate policies on global cash management. The Fed reduces the balance as it reduces the global supply while raising the rate leads to a tightening of credit conditions.

The government, proceeding from the fact that the Fed reduces the purchase of treasuries, relies on other sources of financing, particularly on the repatriation of capital and the revival of economic activity through tax reform. Everything goes to the fact that the value of the dollar will rise, as the hedging transactions using the dollar will also rise, which reflects to the latest dynamics of overnight index swap (OIS) in favor of the dollar.

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In order to pass between "Scylla" and "Charybdis", the dollar remains nothing either. More difficult conditions will cause its cost and increase the weight of the dollar, but at the same time, it will serve as the basis for continuing the policy of excluding the dollar from international settlements.

To prevent this, a policy is required as the dollar will become "as reliable as gold" again. This can be achieved by compromising the economic support of the competitors' currencies Among the possible measures is the imports restriction of steel in the US from China, Russia and other several countries. This step is currently under consideration by the government, its introduction can seriously undermine the position of the single European currency. The European Union, in any case, reacted as quickly as China regarding the event of imposing protective duties, the response will be rapid and adequate

On the other hand, the dollar should be strong and shall not strengthen against the euro, this will disperse inflation due to the rise in import prices. The American financial authorities will manage to get out of this contradiction until it remains uncertain.

The investors' reaction towards the recent turmoil in the financial markets is rather calm before the publication of the FOMC minutes. On December 1, the markets proceeded from the fact that the rate will be raised in March, with a probability of more than 60% rate hike in June again, and the third raise will take place either in September or in December.

At this point in time, there are no signs of the possibility of four rate increase. According to CME, the probability of an increase in the rate in June is 54.3%, which is less than 3 weeks ago, and the probability for September is reduced from 40.1% to 32.6%, hence, there is no more discussion about the fourfold rate increase.

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Hence, it is clear that the January 31 minutes of meeting will not contain the opinion of the markets and any hint of four increases. This also means that the tightening of rates does not increase, so you can return to the previous models.

In the absence of significant macroeconomic reports, the focus will be on the speech of the Fed leadership. There are quite a few planned performances for the second half of the week. Most likely, the members of the Committee will calm markets, as usual, and assure that the policy of "gradual normalization" remains unchanged. The majority of attention will be on the speech of the Federal Reserve Bank of New York head, William Dudley scheduled on Friday night. Dudley is considered the most influential member of the Fed after Fischer's resignation.

The business activity data in February from Markit will be published today, the outlook is positive, while PMI in the service sector is expected to grow which may give the dollar an additional impulse.

Based on the set of indicators, the strengthening of the dollar in the short term appears to be more logical. Gold pulled back again from resistance at 1.370, which indicates a decrease in tension. After a long weekend, stock indices on Tuesday traded in a narrow range which indicates the lack of market driver. Moreover, markets need new benchmarks.

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

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Technical analysis of NZD/USD for February 21, 2018

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Overview:

  • The NZD/USD pair continued moving upwards from the level of 0.7370. Last week, the pair rose from the level of 0.7370 (pivot) to the top around 0.7436. But the trend was rebounded to the price of 0.7370 again. Today, the first support level is seen at 0.7314 followed by 0.7285, while daily resistance is seen at 0.7360. According to the previous events, the NZD/USD pair is still moving between the levels of 0.7314 and 0.7394. For that, we expect a range of 80 pips in coming hours. This would suggest a bullish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. Furthermore, if the trend is able to break out through the first resistance level of 0.7360, we should see the pair climbing towards the second resistance (0.7374) to test it. On the contrary, if a breakout takes place at the support level of 0.7314, then this scenario may become invalidated. Remember to place a stop loss; it should be set below the second support of 0.7261.
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Analysis of Gold for February 21, 2018

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Recently, the Gold has been trading downwards. The price tested the level of $1,325.30. According to the 30M time – frame, I found lower lows and lower highs, which is a sign that sellers are in control. I also found an overbought condition on the stochastic oscillator, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of $1,322.72 and at the price of $1,315.65.

Resistance levels:

R1: $1,342.26

R2: $1,355.09

R3: $1.361.95

Support levels:

S1: $1,322.70

S2: $1,315.60

S3: $1,302.82

Trading recommendations for today: watch for potential selling opportunities.

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GBP/USD analysis for February 21, 2018

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Recently, the GBP/USD has been trading downwards. The price tested the level of 1.3972. Anyway, according to the 30M time – frame, I found a successful rejection of pivot support at the price of 1.3940, which is a sign that selling looks risky. I also found a hidden bullish divergence on the stochastic oscillator, which is another sign of the strength. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 1.4035 and at the price of 1.4075.

Resistance levels:

R1: 1.4035

R2: 1.4075

R3: 1.4130

Support levels:

S1: 1.3945

S2: 1.3890

S3: 1.3850

Trading recommendations for today: watch for potential buying opportunities.

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