Global macro overview for 19/01/2018

The political turmoil in Germany is doing its best. On Sunday there will be a congress of the German SPD party, on which there are big chances to reject the idea of forming the Great Coalition with Angela Merkel's CDU party. In this case, Germany may wait for repeated elections or the CDU will decide on a minority government, which, however, Merkel does not want. For EUR, as for USD, the result of political scuffles can be positive or negative. However, how much political stability in Germany is an important factor building the strength of the EUR? It is certainly losing on importance with market expectations for the hawkish ECB comeback next Thursday, but during the period of deadly anticipation of the statement after the meeting, the SPD's rejection of the coalition may easily turn into a reason to push the Euro off. For now, however, it remains in a waiting mode until Monday.

Let's now take a look at the EUR/USD technical picture at the H4 time frame from the Elliott Wave point of view. The top of the wave (iii) is already in place at the level of 1.2321 and now the market has entered a corrective cycle wave (iv). The first three waves to the downside are done and the price has hit 38% Fibo (minimal requirements are met), but there is still a chance for a more complex and time-consuming corrective pattern is a form of a triangle. The next support is seen at the level of 1.2166 and the next resistance at the level of 1.2321.

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Global macro overview for 19/01/2018

The Government Shutdown threat still active

The US Dollar is feeling the weight of the dispute in the US Congress in a dozen or so hours before the deadline, for which funding must be fixed for public administration activities, otherwise, public employees may stay home from tomorrow. The House of Representatives approved the bill extending funding until February 16 yesterday, but there is still a vote in the Senate, where Democrats threaten to block the law. The risk of so-called "Government Shutdown" has clearly increased in recent days, but the pressure on the US Dollar is not that high as it was at the beginning of the week. As previous experience with freezing administration works shows, it does not last long and the impact on the economy is moderately negative, so investors see no reason to do more. Generally, the sentiment towards USD is negative on the market and the argument in Congress only adds arguments, but nothing more. The USD sell-off is not easy either when the US debt yields go up - the 10-year interest rate approaches 2.64 and it is worth to notice that it was not that high since 2016.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market has made another lower low at the level of 90.11 but bounced quickly to the consolidation zone between the levels of 90.11 - 90.98. Nevertheless, the momentum remains below its fifty level, so another leg down should be expected.

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Bitcoin analysis for January 19, 2017

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Bitcoin (BTC) has been trading sideways at the price of $11.750. South Korean banks have been providing virtual account services to cryptocurrency exchanges and earning commissions from them. According to data obtained by the country's Financial Supervisory Service, banks made 36 times more in commission income from crypto exchanges last year than the previous year. Technical picture looks neutral.

Trading recommendations:

According to the 30M time - frame, I found a potential bearish pennant pattern in creation, which is a sign that market is in the consolidation phase and that resistance near the price of $12.615 might be on the test. My advice is to watch for potential selling opportunities near the resistance and then to watch for a potential bearish breakout of the pennant support to confirm a further downward continuation.

Support/Resistance

$11.856 – Intraday resistance

$12.615– Short-term resistance

$11.022 – Intraday support

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

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GBP/USD analysis for January 19, 2018

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Recently, the GBP/USD pair has been trading sideways at the price of 1.3878. According to the 30M time – frame, I found a successful rejection of pivot resistance 1 at the price of 1.3936 (strong price action resistance), which is a sign that buying looks risky. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.3829 (pivot support 1) and at the price of 1.3763 (pivot support 1).

Resistance levels:

R1: 1.3936

R2: 1.3979

R3: 1.4045

Support levels:

S1: 1.3829

S2: 1.3763

S3: 1.3719

Trading recommendations for today: watch for potential selling opportunities.

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EUR/USD analysis for January 19, 2018

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Recently, the EUR/USD pair has been trading upwards. The price tested the level of 1.2295. According to the 30M time – frame, I found a successful rejection of pivot resistance 1 at the price of 1.2281, which is a sign that buying looks risky. I also found a hidden bearish divergence on the moving average oscillator, which is another sign of weaknesss. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.2223 and at the price of 1.2182.

Resistance levels:

R1: 1.2281

R2: 1.2323

R3: 1.2380

Support levels:

S1: 1.2180

S2: 1.2123

S3: 1.2080

Trading recommendations for today: watch for potential selling opportunities.

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Intraday technical levels and trading recommendations for EUR/USD for January 19, 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.

The current bullish breakout above 1.1450 allowed a quick bullish advance towards 1.2200 where recent evidence of bearish rejection was expressed (Note the Monthly candlestick of last September).

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Daily Outlook

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

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

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

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

This hindered further bearish decline which allowed the current bullish pullback to occur towards the price level of 1.2100 which has failed to pause the ongoing bullish momentum so far.

Daily persistence above 1.2150-1.2200 confirms the depicted bullish continuation pattern with projected targets towards 1.2500.

Otherwise, bearish pullback will be expected towards 1.2070 before further bullish advancement can take place.

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NZD/USD Intraday technical levels and trading recommendations for January 19, 2018

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Daily Outlook

In July 2017, an atypical Head and Shoulders pattern was expressed on the depicted chart which indicated 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, further bearish decline was expected towards 0.6800 (Reversal pattern bearish target).

Evident signs of bullish recovery was expressed around the recent 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, the current bullish movement extended towards the price levels of 0.7240 and 0.7320.

A quick bullish movement is expected towards the depicted supply zone (0.7320-0.7390) where price action should be watched for evident bearish rejection and a valid SELL entry.

Trade Recommendations:

Conservative traders should be looking for a valid SELL entry anywhere around the depicted supply zone (0.7320-0.7390).

S/L should be located above 0.7450. T/P levels should be located around 0.7230, 0.7150 and 0.7090.

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BITCOIN Analysis for January 19, 2018

Bitcoin has been quite steady with the gains after bouncing off the $9,200 price area. Despite having a lot of regulatory issues and bans on exchanges, Bitcoin is currently trying to be stable with small gains that is indeed a good sign for the cryptocurrency industry. The uncertainty still exists in the market while market participants are indecisive whether to invest money in Bitcoin for further profit or not. The recent strong pullback cleared some weak participants of the market. But some speculators still consider the possibility in the market to push higher. As for the current scenario, the price has breached the dynamic level of resistance which has been holding the price lower. As the price remains above this dynamic level and $9,200 price area, further bullish pressure with a target towards $15,500 area is expected. Moreover, the Bullish Divergence in the daily chart is still in place to support gains as well.

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Fundamental Analysis of AUD/JPY for January 19, 2018

AUD/JPY has been quite impulsive with the bullish gains recently. As a result, the price is currently holding at the edge of 89.00 resistance area from where the price is expected to show some bearish intervention. AUD has found suport from better than expected Employment Change report at 34.7 which was expected to be at 13.2k and from a slight change in the Unemployment Rate to 5.5% from the previous value of 5.4%. On the other hand, Japan presented a series of downbeat economic reports this week, so that AUD has been more impulsive with the gains. Today, no economic report have been published in Japan and Australia but on Monday, the Bank of Japan is going to release Policy Rate report along with Monetary Policy Statement. The Bank of Japan Press Conference is also due. These events are expected to help JPY to recover against AUD in the coming days. As for the current scenario, a counter move from JPY is expected against AUD which might lead to bearish pressure in the pair for the coming week.

Now let us look at the technical chart. The price is residing below the resistance area of 89.00 from where the price bounced off impulsively with some strong bearish pressure. Though the recent price action was bullish, the 89.00 area has been quite successful bringing the price down earlier. This is strong evidence that something similar could happen in this case. Besides, a pullback is expected to be shorter this time. As the price remains below 89.00 area, the bearish bias is expected to continue with a target towards the dynamic level of 20 EMA before pushing higher again in the future.

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Bitcoin analysis for 19/01/2018

Host of the Bitcoin Knowledge and well-known lawyer Trace Meyer suggested that Bitcoin could reach $115,000 in 2018 after the correction is completed. Meyer informed another analyst Tony Vays about suggestion, what to expect in the next eleven and a half months: "$115,000, despite the theoretical capability based on previous behavioral cycles, would be very overvalued" added Mayer.

The main exchanges offered $11,500 yesterday, the lowest level since the end of November. Mayer's optimism has in the meantime been partially echoed by the mainstream edition of the Business Insider magazine earlier this month. There is also a talk of Wall Street's involvement in moves in the cryptocurrency markets. The publication suggested that this additional investment could result in a "discount" Bitcoin. Mayer claims that the "fair" value would be between $ 9,500 and $ 14,340.

Prior to this year's crisis, investor Fundstrat Tom Lee suggested returning to $20,000 in 2018, which, if completed by June, could lead to another move towards record highs: "I think Bitcoin is still something that should be your property", Lee said in an interview with CNBC network.

Let's now take a look at Bitcoin technical picture at the H4 time frame. The market is still testing the technical resistance at the level of $12,024. Any breakout above this level would lead to the test of the next technical resistance at the level of $12,737. A breakout above $12, 737 will confirm the bottom at the level of $9,200.

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Fundamental Analysis of USD/CHF for January 19, 2018

CHF has been quite impulsive with the gains over USD recently. So the pair has been trading in a non-volatile manner since it broke below 0.97 support area. Due to recent weakness of USD amid downbeat economic reports, CHF gained momentum which is expected to extend further in the coming days. Today, Switzerland's PPI report was published with a decrease to 0.2% from the previous value of 0.6% which was expected to be at 0.4%. Despite the worse-than-expected economic report from Switzerland today, the CHF gains are still quite strong against USD that indicates severe weakness of USD at the current moment. On the USD side, yesterday a Building Permits report was published with an unchanged reading along with disappointing economic reports on Housing Starts and Philly Fed Manufacturing Index. Today, US Prelim UoM Consumer Sentiment report is going to be published which is expected to increase to 97.0 from the previous figure of 95.9, Prelim UoM Inflation Expectation is expected to be neutral where previous it was at 2.7%, and FOMC Member Quarles is going to speak today on the Fed's key interest rate and future monetary policy. His speech is also expected to neutral and have a minor impact on further USD growth. As for the current scenario, CHF is expected to continue its gain further in the coming days against USD until the US comes up with better economic reports.

Now let us look at the technical view. The price is currently on its way towards 0.9450 support area with an impulsive price action and pressure. The price has been non-volatile and impulsive with the bearish gains. Without further correction the pair is expected to touch the support of 0.9450 in the short term. As the price remains below 0.97 with a daily close, the bearish bias is expected to continue further.

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Trading plan for 19/01.2018

Yields of 10-year US Treasury Bonds are rising towards four-year highs, but this does not help the US Dollar, as the risk of a government shutdown threatens investors. The stock market in Asia drifted close to the Thursday reference point. Gold is higher a little, Crude Oil is losing 1.3%.

On Friday 19th of January, the event calendar is light in important news releases, but the market participants will keep an eye on Current Account data from Eurozone, Retail Sales With Auto Fuel data from the UK, Manufacturing Sales data from Canada and Preliminary University of Michigan Consumer Sentiment data from the US.

EUR/USD analysis for 19/01/2018:

The House of Representatives approved the law on the extension of government administration financing until February 16, however, Democrats say they are able to block a document in the Senate. The deadline for extending funding is today at midnight. The risk of freezing administration work and suspending payouts for employees negatively affects the condition of the USD. Today, the US Dollar losing all of the main currencies with the exception of NZD. The strongest is Yen with USD/JPY approaching the level of 110.70.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market has managed to break out from the channel and now is heading higher towards the level of 1.2321, but the upward momentum still looks weak and there is a chance of another pull-back towards the level of 1.2193 or 1.2155. The nearest resistance is seen at the level of 1.2321 and the next one is seen at the level of 1.2400.

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Market Snapshot: Crude Oil on the channel support

The price of Crude Oil has pulled-back towards the level of 62. 80, which the golden channel upper support line and lies just above the important technical support at the level of 62.67. The longer time frame trend is still up, so another rally towards the high at the level of 64.89 should be expected.

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Market Snapshot: DAX close to the resistance

The price of German DAX index bounced up from the support at the level of 13,108 and currently is trading close to the technical resistance level of 13, 422. If this level is violated, then the price might rally towards the swing high at the level of 13, 515 and test it as well.

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Fundamental analysis of EUR/AUD for January 19, 2018

EUR/AUD has been quite volatile and bearish. The trend started since the price bounced off the 1.58 price area. AUD has surged strongly against EUR recently due to positive economic reports which are expected to make the bearish pressure dominate further in the coming days. Recently, Australia's Employment Change report was published with the figure of 34.7k which was lower than the previous figure of 63.6k but better than the expectation of 13.2k. Besides, the Unemployment Rate slightly increased to 5.5% which was expected to be unchanged at 5.4%. The better-than-expected employment report again helped the currency to sustain its gains against EUR but could not push the price as lower as expected. On the EUR side, today the current account report was published with an increase to 32.5B from the previous figure of 30.3B which was expected to be at 31.3B. However, the positive economic data helped EUR to put a pause on the bearish pressure which AUD created in the pair. But the hold is expected to be temporary, as bears are expected to take the price much lower in the coming days. As of the current scenario, AUD is likely to dominate further in the pair for a certain period before EUR tries to fight back with strong bulls on its side in the future.

Now let us look at the technical view. The price is currently showing some bullish rejection off the dynamic level of 20 EMA, whereas the recent impulsive pressure was strongly bearish. As of the current price action, it is expected to reach lower towards 1.51 support level in the coming days before the price surges up higher with target towards 1.55 in the coming days. The bulls are still stronger and expected to continue its pressure as the price remains above 1.51 with a daily close.

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Trading plan 01/19/2018

Trade plan 01/19/2018

General picture: The market is waiting for important news.

Overall, there is readiness for a new wave of growth against the dollar which is the basis of the dollar-dollar graphs.

However, it is intriguing that on Thursday, January 25, the question arises on the ECB meeting on the monetary policy if the ECB will finalize its program of injecting liquidity into the market. As we know, this program has already been reduced twice from the beginning of 2018.

I think the probability that the ECB will announce a further reduction is about 50/50, But this is not all uncertainty.

It is even more unclear how the foreign exchange market will react to the decision. It turns out that it is possible both a strong fall of the euro and a new wave of growth. It is also important that the exchange rate is up to 400 points (in 4-digit).

As we wait for the decision of the ECB, as well as the reaction of the market and stop the movement of the EUR/USD pair, the pair could possibly go out of the range between 1.2160 - 1.2325 only at the end of the new week.

GBP / USD pair

The pound in the forensic days looks stronger than the euro against the dollar.

The target for growth is the level of 1.4160. However, a strong correction is possible.

The target level of buying the pair is 1.3940 with a rollback from 1.3730.

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Technical analysis of NZD/USD for January 19, 2018

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Overview :

  • As expected; the NZD/USD pair continues to move upwards from the areas of 0.7290. Yesterday, the pair rose from the level of 0.7290 to 0.7314. Today, resistance is seen at the levels of 0.7331 and 0.7355. However, the support levels are seen at 0.7290 and 0.7258. So, we expect the price to set above the strong support at the levels of0.7290 and 0.7258; because the price is in a bullish channel now. Amid the previous events, the price is still moving between the levels of 0.7290 and 0.7331. In overall, we still prefer the bullish scenario as long as the price is above the level of 0.7309. Furthermore, if the NZD/USD pair is able to break out the top at 0.7331, the market will rise further to 0.7355. On the other hand, if the price closes below the strong support of 0.7258, the best location for a stop loss order is seen below 0.7258; hence, the price will fall into a bearish trend in order to go further towards the strong support at 0.7236 to test it again. The level of 0.7236 will form a double bottom.
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Technical analysis of USD/CHF for January 19, 2018

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Overview:

  • The USD/CHF pair opened below the weekly pivot point (0.9592). It continued to move downwards from the level of 0.9592 to the bottom around 0.9541. Today, the first resistance level is seen at 0.9592 followed by 0.9644, while daily support 1 is seen at 0.9481. Furthermore, the moving average (100) starts signaling a downward trend; therefore, the market is indicating a bearish opportunity below 0.9541. So it will be good to sell at 0.9541 with the first target of 0.9481. It will also call for a downtrend in order to continue towards 0.9422. The strong daily support is seen at the 0.9422 level, which represents the double bottom on the H4 chart. According to the previous events, we expect the USD/CHF pair to trade between 0.9592 and 0.9422 in coming hours. The price area of 0.9592 remains a significant resistance zone. Thus, the trend is still bearish as long as the level of 0.9592 is not broken. On the contrary, in case a reversal takes place and the USD/CHF pair breaks through the resistance level of 0.9592, then a stop loss should be placed at 0.9644.
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Ichimoku cloud indicator analysis of USDX for January 19, 2018

The Dollar index is near it's lows. Trend remains bearish. Price got rejected at the weekly high and is making lower lows and lower highs in the small time frames. Bulls need to break and close the week above 91 for a bullish reversal.

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Black rectangle- resistance

The Dollar index is trading below the kijun-sen and tenkan-sen again. Trend is bearish. Price got rejected at the kijun-sen (yellow line indicator) resistance yesterday and we are now testing recent lows at 90.20. The most probable outcome would be to break below 90. As long as price is below 91 trend is bearish.

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Blue lines - bearish channel

The Dollar index remains in a Daily bearish trend inside the bearish channel. Support is at 89.75 and resistance is at 91.40 on a daily basis. Breaking above 91.40 could push the index towards cloud resistance at 93-93.30. Only a break above the cloud could signal a bigger reversal in the index. So far we do not have confirmation even for a short-term reversal. Trend is dominantly bearish.

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Technical analysis of gold for January 19, 2018

Gold price continues to trade above the $1,320-$1,309 support area where it last made a consolidation before the breakout to $1,345. Trend remains bullish in the medium-term. Important long-term resistance is at $1,350.

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Orange rectangle - support area

Gold price has made a sharp rise off the $1,237 lows in past December and has reached the long-term resistance of $1,350. Price is expected to pull back towards the 38% Fibonacci retracement at least. Only a break below $1,260 could signal that a decline below $1,237 is possible.

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Blue line - long-term support

Magenta line -long-term resistance

Gold price has reached important resistance area. A rejection here is very possible. A lower high on a Daily basis here could signal a move lower even towards the long-term blue trend line support. The slope of the rise was very sharp and stopped right at the triangle resistance. I expect a pull back.

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Technical analysis of USD/JPY for January 19, 2018

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USD/JPY is under pressure. The pair retreated from 111.45 (the high of January 18) and recorded the process of lower tops and lower bottoms, which confirmed a negative outlook. The downward momentum is further reinforced by both declining 20-period and 50-period moving averages. The relative strength index is mixed to bearish.

Therefore, below 111.20, look for a new drop with targets at 110.50 and 110.20 in extension.

Alternatively, if the price moves in the opposite direction, a long position is recommended above 111.20 with a target of 111.45.

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: SELL, stop loss at 111.20, take profit at 110.50.

Resistance levels: 111.45, 111.70, and 112.05

Support levels: 110.50, 110.20, and 109.65.

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EUR/USD: from hope to disappointment

The single European currency continues to surprise, not bending under the influence of verbal interventions of the ECB and losing previous drivers of growth. According to Vice President of the European Central Bank Vitor Constancio, the current take-off of the EUR/USD is not justified from the fundamental point of view. The sluggish dynamics of inflation in December makes us talk about the need to maintain an ultra-soft monetary policy for a very long time. The head of the Bank of France, Francois Villeroy de Galhau, expressed concern over the rapid strengthening of the euro, and one of the main "hawks" of the Governing Council, Ewald Nowotny, said that the current dynamics of the single European currency creates obstacles to achieving the HCPI target of 2%.

Thus, the ECB's words on the possibility of revising the parameters of the quantitative easing program in the case of improving the eurozone economy's state should not to be taken as the driver of the EUR/USD growth. Even if the president of the Bundesbank, Jens Weidmann, says that QE will last until September, and rates will not be raised earlier than mid-2019, then what is the euro growing at? On the potential reduction in the volume of purchases of assets from €30 billion to €10-15 billion? It is doubtful that this will happen before inflation approaches 1.8%. Yes, oil can support consumer prices, however, when something similar happened in the past, Mario Draghi turned investors' attention on the weakness of core inflation.

What's the matter? Why does the market ignore the speeches of the FOMC spokespersons, calling for 3-4 acts of monetary tightening, an increase in the likelihood of a 3-fold hike in the federal funds rate in 2018 to 55%, strong macroeconomic data on US inflation, retail sales and industrial production? Restoration of the latter, incidentally, allows you to count on the continuation of the rally of major US stock indices.

Dynamics of the Dow Jones and Industrial Production Index

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Source: Zero Hedge.

Perhaps the reason lies in the risk of a potential shutdown in the government after January 19? In my opinion, this is not so. At the end of 2017, concerns over the inability of the tax reform to pass Congress has exerted pressure on the dollar, but as soon as they were dispelled, the "bears" for the EUR/USD could not derive any benefit from this.

The main culprit for the current weakness of the "greenback" is its failure from last year. Optimistic forecasts in early 2017 gave way to complete disappointment at the end. The USD index lost about 10%, which was not a result of internal data or actions of the Fed, but to the successes of the currencies of other countries. In the end, the actual GDP data turned out to be better than the estimates, and the Fed raised rates not twice but 3 times. At the moment, the situation is reversed by 180 degrees, and there is a certain risk that history will repeat itself: excessive optimism about the bright future of the euro will turn into disappointment.

Technically, much will depend on the ability of the "bears" for the EUR/USD to maintain the level of 1,225. It turns out - the probability of a correction in the direction of 1.21 will increase. No - the initiative will pass to the "bulls", ready to continue the rally in the direction of 1.244 (161.8% in the pattern AB = CD).

EUR/USD, daily chart

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Risk appetite defines the main trends

Eurozone

Consumer prices in the eurozone rose by 1.4% in 2017, as evidenced by the final data of Eurostat, published on Wednesday. The result was slightly lower than the level of November (+ 1.5%), but it coincided with the forecasts, and therefore did not have a noticeable effect on the fluctuations of the euro.

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A little later, a member of the Board of Governors of the ECB, Ewald Nowotny, commenting on the confident dynamics of the euro, said that its strengthening was not useful. According to Nowotny, the regulator does not have any specific target at the euro rate, and therefore will simply follow the developments.

Despite neutral comments, the ECB is obviously concerned about the growth of the euro against the backdrop of a tightening of the Fed's policy. From the dynamics of events, one can make a simple conclusion that if the ECB starts its own tightening program, the euro will react to it with an even more confident growth that will look nonsense against the background of a growing spread of yields in favor of the dollar.

The euro has formed a local high, and will now, most likely, decline in the technical correction. The nearest resistance at 1.2092 is the level of the previous high, the next is 1.1916, if it survives, the chances of resuming growth will remain high.

United Kingdom

Slowing consumer inflation did not spare the UK, which happened for the first time in six months. The annual growth in 2017 was 3.0%, which is slightly lower than 3.1% a month earlier, when the highest price growth was registered in five years. The result coincided with the forecasts, but the pound reacted with confident growth, because, in addition to macroeconomic indicators, several political parameters played in its favor.

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It is unclear who initiated the discussion of the idea of a repeat vote on Brexit, but it is clear that European officials liked this idea. The head of the EU, Donald Tusk responded first, saying that the desire of the British to remain in the European Union will be met with the approval of European politicians.

A little later, European Commission President Jean-Claude Juncker went even further by announcing that he hoped for the return of Great Britain to the European Union after it left the bloc next year.

Meanwhile, by the end of March an agreement on the transition period must be concluded. British banks, according to Reuters, are preparing to move their operations to the territory of the EU, if the agreement is not reached. This will be a compulsory measure, as banks may lose the ability to serve customers from the EU due to changes in legislation. If this threat is realized, it will have a negative impact on the pound rate, as part of the investment flows will be deployed from the UK to the European continent.

The pound in the meantime completely declined after Brexit, coming close to level 1.40. The pound is supported by external factors, in particular, the rise in commodity prices and the general weakness of the dollar. Until the end of the week the upward momentum will push the pound up a possible correction to 1.3720 or 1.3612 players will use for new buying.

Oil

Oil is trading near the three-year highs, close to the level of $ 70/bpd. The number of long speculative contracts on BRENT on the New York Stock Exchange (NYMEX), according to the latest report of the CFTC, also reached three-year highs, according to WTI the situation is even clearer - the long-term odds are the highest for the whole history of observations, that is, since 2006.

Oil is supported by several factors at the same time - a tough OPEC + position, which leads to market balancing, the obvious weakness of the US shale sector, which, despite the growth of quotations, does not return investments so far, as well as a worldwide trend towards growing interest in risk. In the current conditions, it is not necessary to expect a full turn, the risk of decline to 67.95 exists, but it is highly likely to be used for new purchases.

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