Global macro overview for 24/01/2018

During the Wednesday session, global investors received preliminary readings of economic activity indicators in Europe and the USA. In connection with the observed boom in the Eurozone and solid December readings, today's data also did not disappoint. After yesterday's higher than expected market consensus indicating the ZEW index from Germany, today we also had solid readings from the local economy. The PMI index for the industrial sector fell to 61.2 pts. from 63.3 points, however, it still remains above the barrier of 60 points. In turn, the German PMI index for the services sector increased above expectations to 57.0 pts. in January from 55.8 pts in the previous period. A similar trend could be observed in the entire Eurozone, where the PMI index for the industry fell to 59.6 pts. from 60.6 points and its equivalent for services increased above market consensus to 57.6 points. from 56.6 points. This high level of performance of the PMI indicators supports the positive sentiment towards the future of Eurozone economy.

Let's now take a look at the EUR/JPY technical picture at the H4 time frame. The recent V-shape reversal from he level of 113.00 did not bring any new highs as the market stalled below the level of 136.31 and now is consolidating the recent gains. The momentum is still hovering around its fifty level and the stochastic indicator is even below that level as it approaches the oversold zone. The nearest technical support is seen at the level of 134.97.

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Global macro overview for 24/01/2018

Interest in the January meeting of the ECB increased after the minutes of the December meeting surprised the market by stating that the Governing Council may revise its bias regarding the asset purchase program "at the beginning of the year", which is earlier than expected so far. From that moment, the central bank has to fight with speculation, but it is not easy when economic data remain strong and deny the need to maintain ultra-soft policy for a long time. On the other hand, granting the market a risk of firing a shot at the euro, which may weigh heavily on the outlook for inflation and will bury the chances of achieving the 2.0% target. in the medium term. The most recent estimates say that the EUR / USD rally lasting since the last bank meeting in December will translate into lower inflation forecasts for 2018 and 2019 by around 0.2 percentage points. Thus, the ECB will probably look for a way to emphasize the dovish attitude, even if at the same time it wants to leave flexibility for later changes based on economic developments (in order to reconcile the dovish and hawkish members of the ECB Governing Council). This means repeating in the message that the QE program will last at least until September and that interest rates will not change long after the asset purchase is completed. If the ECB is actually considering changes in the forward guidance, the March meeting may also be considered the "beginning of the year", where the Governing Council will additionally have new forecasts available to the economy.

The European Central Bank will publish its decision and statement on Thursday 24 January at 12:45 pm GMT. The global investors do not expect any changes in the parameters of monetary policy (the reference rate: 0.0%, deposit rate: -0.40%, asset purchase amount: EUR 30 billion / month). At 13:30 pm GMT a press conference of the President of the ECB, M. Draghi, is scheduled.

Let's now take a look at the EUR/GBP technical picture at the H4 time frame. The market has broken below the technical support at the level of 0.8732 and is currently in the demand zone. The next key technical support is seen at the level of 0.8688 and the strong momentum is indicating a possible test of this level soon. Please notice the overbought market conditions.

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NZD/USD Intraday technical levels and trading recommendations for January 24, 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 0.7320 and probably 0.7390.

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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Intraday technical levels and trading recommendations for EUR/USD for January 24, 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, 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 pullback to occur towards the price level of 1.2100 which failed to pause the ongoing bullish momentum as well.

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

Otherwise, bearish pullback may occur towards 1.2070 if a bearish breakout below 1.2160 is achieved on a daily basis (low probability).

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Bitcoin analysis for January 24, 2018

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Bitcoin (BTC) has been trading sideways at the price of $10.992. The South Korean government has officially released two sets of previously promised guidelines that specify cryptocurrency regulatory measures. In addition to details of the new real-name system to end anonymous trading of cryptocurrencies, the government also published its anti-money laundering guidelines for banks providing services to cryptocurrency exchanges. The technical picture is neutral to bearish.

Trading recommendations:

According to the 30M time - frame, I found a potential intraday head and shoulders formation in creation, which is a sign that buying looks risky. My advice is to watch for potential selling opportunities if you see the breakout of the neckline. The downward projection for this pattern is set at the price of $9.200.

Support/Resistance

$11.131 – Intraday resistance

$10.716 – Intraday support

$9.200 – Pattern Objective target

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

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Analysis of GBP/USD for January 24, 2018

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Recently, the GBP/USD pair has been trading upwards. The price tested the level of 1.4118. According to the 30M time frame, I found that price broke the daily pivot resistance 2, which is a sign that buyers are in control. I also found fresh upward cross on the stochastic oscillator, which is another sign of strength. My advice is to watch for potential buying opportunities. Intraday upward target is set at the price of 1.4158.

Resistance levels:

R1: 1.4046

R2: 1.4090

R3: 1.4158

Support levels:

S1: 1.3935

S2: 1.3870

S3: 1.3822

Trading recommendations for today: watch for potential buying opportunities.

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Technical analysis of USD/CHF for January 24, 2018

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Overview:

  • The USD/CHF pair faces resistance at 0.9567, while strong resistance is seen at 0.5658. Support is found at 0.9420 and 0.9330 levels. Today, the USD/CHF pair continues to move downwards from 0.9567 level. The pair could fall from 0.9567 level to a minor support around 0.9493. In consequence, if the USD/CHF pair will break support at 0.9493, this level will turn into resistance today. In the H4 time frame, we expect the USD/CHF pair to continue moving in the bearish trend from 0.9493 level towards the target at 0.9420. In the long term, if the pair succeeds in passing through 0.9420 level , the market will indicate the bearish opportunity below 0.9420 level in order to reach the second target at 0.9330. However, the 0.9567-0.9658 mark remains a significant support zone. Thus, the trend will probably rebound again from 0.9658 level as long as this level is not breached. in overall, we still prefer the bearish scenario below the area of 0.9658.
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Analysis of Gold for January 24, 2018

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Recently, Gold has been trading upwards. The price tested the level of $1,350.60. According to the 30M time – frame, I found that price broke the resistance cluster at the price of $1,344.65, which is a sign that buyers are in control. Now, the strong resistance cluster at the price of $1,344.65 became strong support and my advice is to watch for potential buying opportunities around that level. The upward target is set at the price of $1,357.00.

Resistance levels:

R1: $1,344.97

R2: $1.348.60

R3: $1,355.39

Support levels:

S1: $1,334.55

S2: $1,327.78

S3: $1,324.13

Trading recommendations for today: watch for potential buying opportunities.

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Technical analysis of NZD/USD for January 24, 2018

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Overview:

  • The NZD/USD pair continued moving upwards from the level of 0.7260. Yesterday, the pair rose from the level of 0.7260 (weekly support) to the top around 0.7400. Today, the first support level is seen at 0.7260 followed by 0.7168, while daily resistance is seen at 0.7465. According to the previous events, the NZD/USD pair is still moving between the levels of 0.7391 and 0.7465; for that we expect a range of 74 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 0.7465, we should see the pair climbing towards the double top (0.7557) to test it. On the contrary, if a breakout takes place at the support level of 0.7260, then this scenario may become invalidated. Remember to place a stop loss; it should be set below the second support of 0.7168.
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Fundamental Analysis of USD/CAD for January 24, 2018

USD/CAD has been trading with impulsive pullbacks. The pair is currently residing below the 1.2400 support area. CAD has been quite strong amid economic reports which enabled the currency to gain impulsive momentum over USD last month. USD has been struggling to gain ground since the recent rate hike decision taken by the US Fed in December. USD has been affected by lower inflation which has dealt a blow to the US economy. As a result, USD weakened against CAD. Today, US PMI report is going to be published which is expected to decrease to 0.4% from the previous value of 0.5%, Flash Manufacturing PMI report is expected to have a slight increase to 55.2 from the previous figure of 55.1, Flash Services PMI report is also expected to increase to 54.5 from the previous figure of 53.7, Existing Home Sales report is expected to decrease to 5.72M from the previous figure of 5.81, and Crude Oil Inventories is expected to show less deficit at -1.0M from the previous figure of -6.9M. On the other hand, tomorrow Canada's Core Retail Sales report is going to be published which is expected to increase to 0.9% from the previous value of 0.8% and Retail Sales is expected to decrease to 0.8% from the previous value of 1.5%. Though the outcome is expected to be quite mixed, any positive result in the high impact report is expected to provide more impulsive pressure for CAD in the coming days. To sum up, CAD is expected to gain more momentum against USD in the coming days unless any positive high impact economy report is released in the US.

Now let us look at the technical view. The price is residing below the 1.24 support area with an impulsive bearish pressure which is expected to lead to further bearish pressure in the coming days with a target towards 1.21. As the price remains below 1.25 price area, the bearish bias is expected to continue further.

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Bitcoin analysis for 24/01/2018

The president of the Swiss UBS Bank, Axel Weber, announced today that he will not advise bank clients on investing in cryptocurrencies, although he distinguishes institutional and retail clients when discussing the topic. In an interview with CNBC at the World Economic Forum (WEF) in Davos, Weber made a distinction between helping institutional clients to enter cryptographic markets, as opposed to helping retail customers: "There are institutional clients and if they want to invest in Bitcoin, that's okay, they are adults. I mean, they know what they are doing, they have the ability to assess this risk." On the other hand, according to Weber, individual customers - often referred to as "Main Street investors" - must be protected from investing in the crypto market due to the alleged ignorance of products. Referring to the blame imposed on banks for selling complex financial products to clients before the economic disaster in 2008, Weber said he wants to avoid a recurring scenario and not take responsibility if the cryptographic market experiences a similar crash: "If a retail client appears in the future, the question will be asked again, which bank sold the products to them and then the bank will be blamed again for what happened."

In January of this year, the North American Association of Securities Administrators (NASAA) and the US Securities and Exchange Commission (SEC) warned individual investors against buying cryptocurrencies and ICOs. One of the main reasons why NASAA cited this warning was that individual investors were not sufficiently informed about the products they are potentially investing in

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market keeps consolidating in the zone between the levels of $9,813 - $11,143, but the possibility of a test of the recent low at the level of $9,200 is still high. On the other hand, the important levels to the upside are the weekly pivot at the level of $11,440 and local resistance at the level of $12,024.

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Trading plan for 24/01/2018

It was a hard night for the US Dollar, which loses to all major currencies, and the US Dollar index is the lowest for over three years. The strongest are JPY and CHF. USD/JPY violated 110, EUR/USD trying to break 1.23, GBP/USD approached the 1.4050. The stock market does not show a clear direction, but the trend is still up. The US API report disappointed, but Crude Oil keeps high.

On Wednesday 24th of January, the event calendar is busy with important data releases in form of Flash Manufacturing, Services and Composite PMI from Germany, France, Japan and USA. Moreover, there are Claimant Count Change data releases from the UK as well.

EUR/USD analysis for 24/01/2018:

There is no specific information explaining the US Dollar sell-off, only a return to the trends observed at the turn of the year. Only today's Flash PMI data release might slightly change the trend and provide the base for a pull-back, but they must be exceptionally good. The Eurozone economy is in a very good shape, so it might be possible.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The price has broken out above the short-term golden trend line resistance and currently is trading around the level of 1.2343 despite the extremely overbought market conditions and growing bearish divergence. The nearest technical support is seen at the level of 1.2321, but the key technical support is seen at the level of 1.2193. The next technical resistance is seen at the level of 1.2400.

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Market Snapshot: US Dollar Index goes lower

The US Dollar Index fell to the level of 90, the first time since December 2014. US debt market does not help the Dollar when 10-year yields fell to the level of 2.62%. The next technical support is seen at the level of 89.62 and is being tested currently. Please notice the growing bullish divergence.

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Market Snapshot: Crude il made Double Top?

The price of Crude Oil has hit the level of 64.89 again, so now traders can suspect a Double Top pattern in progress, especially if we take into the account the clear bearish divergence between the price and momentum that confirms the negative outlook. The nearest support is seen at the level of 63.10.

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Trading plan 01/24/2018

Trading plan 01/24/2018

The general picture: The new head of the Fed, Jerome Powell, takes over on February 3.

On January 23, the US Congress approved the new head of the Fed in office by an absolute majority, 85 against 12.

Jerome Powell will become the head of the Federal Reserve on February 3.

The outgoing head of the Fed, Janet Yellen, will hold a meeting of the Fed on January 31.

The news was slightly worried about the market and went virtually unnoticed against the background of the budget crisis in the US. As you obviously know, the decision to finance the government was taken with great difficulty by the US Senate on Monday but this temporary solution is only until February 8.

The main news ahead is the ECB's meeting on monetary policy on Thursday, January 25.

The market is waiting for the curtailing of the liquidity program? When? What about ECB rates?

Probably strong movement.

In the morning on Wednesday, the euro broke through the January highs at 1.2325.

GBP/USD:

The pound rose sharply to 1.4030 and purchases at such prices are unattractive.

The sales from 1.4140 are possible, and the stop is not more than 45 pp.

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Fundamental Analysis of EUR/JPY for January 24, 2018

EUR/JPY has been making corrective moves, having no definite trend or market pressure above the 134.50-135.00 support area. Both currencies in the pair is struggling amid mixed economic reports which made market participants hesitate about preferences. This lead to further correction in the pair. Recently, BOJ Policy Rate report was published with the unchanged key interest rate at -0.10% as expected and All Industry Activity report showed a significant increase to 1.0% from the previous value of 0.3% which also helped the currency to gain momentum over EUR. Today, Japan's Trade Balance report showed a different picture of a notable decrease to 0.09T from the previous figure of 0.29T which was expected to be at 0.27T and Flash Manufacturing PMI report showed a slight increase to 54.4 from the previous figure of 54.0 which was expected to be at 54.3. On the other hand, today French Flash Manufacturing PMI report was published with a decrease to 58.1 from the previous figure of 58.8 which was expected to be at 58.7 and French Flash Services PMI report showed an increase to 59.3 from the previous figure of 59.1 which was expected to be at 58.9. Moreover, German Flash Manufacturing PMI report is going to be published which is expected to have a slight decrease to 63.2 from the previous figure of 63.3, German Flash Services is expected to decrease to 55.6 from the previous figure of 55.8, eurozone's Flash Manufacturing PMI is expected to decrease to 60.4 from the previous figure of 60.6 and eurozone's Flash Services PMI is expected to have a slight decrease to 56.5 from the previous figure of 56.6. As for the current scenario, investors expect mixed economic reports today from the eurozone. Speaking about JPY, correction and indecision is expected to continue further in the coming days. JPY has found support from the economic reports recently that is expected to lead to further bearish pressure in the pair until the eurozone comes up with any positive economic reports in the short term to change the market sentiment.

Now let us look at the technical view. The price is residing above the support area from 134.50 to 135.00 and the dynamic level of 20 EMA as well. Due to higher volatility and correction, the price is expected to break lower having Bearish Regular Divergence in place. The price is likely to be impulsive with pullbacks after it breaks below 134.50 with a daily close in the coming days. As the price remains below 136.30 resistance area, the bearish bias is expected to continue further.

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Daily analysis of major pairs for January 24, 2018

EUR/USD: Following the recent consolidating in the market, price has broken out to the upside. There is a Bullish Confirmation Pattern in the 4-hour chart, and therefore, price may be able to go further upwards, reaching the resistance lines at 1.2350, 1.2400, and 1.2450. Those are the targets for the remaining of this week.

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USD/CHF: The USD/CHF pair is trending downwards. It has gone downwards by 84 pips this week, and there is still much room to go downwards. Therefore, it is projected that the support levels at 0.9500, 0.9450, and 0.9400 would be reached within the next several trading days. Rallies in the market ought to be temporary.

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GBP/USD: The GBP/USD pair has continued to go upwards in a slow and steady manner. Minor bearish corrections have led to a further northward journey. Since price has gone upwards by 190 pips in this week alone, it is expected that it would go further upwards, reaching the distribution territories at 1.4050, 1.4100, and 1.4150.

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USD/JPY: This currency trading instrument is weak. Since the second week of January, the market has gone downwards by 330 pips, now below the supply level at 110.00. The EMA 11 is below the EMA 56, and the RSI period 14 is below the level 50. This is a bearish signal, which indicates more bearishness in the market.

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EUR/JPY: The EUR/JPY cross is essentially consolidating, oscillating between the supply zone at 136.50 and the demand zone at 135.00. The market is neutral in the short term, but bullish in the long term. The neutrality in the market could continue until a rise in volatility puts an end to it, resulting in a directional movement.

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Ichimoku cloud indicator analysis of USDX for January 24, 2018

The Dollar index as expected made a new low. Trend remains bearish. The bullish divergence signs in the 4 hour chart are signaling that bears need to be very cautious and lower their stops to 91. As long as we are below 91 trend is bearish.

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Green lines - bullish divergence signs

The Dollar index could reach the downward sloping green trend line at 89.50 this week. Trend is bearish as price is below both the tenkan- and kijun-sen indicators at 90.16 and 90.40 respectively. Cloud resistance is at 91.60-90.60 so as long as we are below it, bears are in control.

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On a monthly basis the Dollar index is challenging long-term cloud support and could even reach the 61.8% Fibonacci retracement at 88.50 where we also find the upward sloping black trend line support and the lower cloud boundary. Looking at the bigger picture this is not the time to be bearish the Dollar. The decline from 103 will soon be complete.The material has been provided by InstaForex Company - www.instaforex.com

Ichimoku cloud indicator analysis of gold for January 24, 2018

The Gold price remains in a bullish trend. The price is about to make one more new higher high above $1,344.30. Despite the bearish divergence signs price continues to rise above the cloud respecting support levels.

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Red lines - bearish divergence

Support is at $1,337 and next and more important short-term support at $1,332. As long as price is above $1,332 trend is bullish. Break below that support level and Gold will go towards $1,320-$1,310. Resistance is at $1,345 and next at $1,350.

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The Gold price remains above the tenkan-sen on a daily basis. This support has been respected and a break below it will be an exit sign. This sign is expected to come this or next week. The critical daily support is at $1,332.70. A daily close below it is a bearish sign. Minimum target will be the $1,297 level.

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Technical analysis of USD/JPY for Jan 24, 2018

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In Asia, Japan will release the Flash Manufacturing PMI and Trade Balance data, and the US will release some Economic Data such as Crude Oil Inventories, Existing Home Sales, Flash Services PMI, Flash Manufacturing PMI, and HPI m/m. So there is a probability the USD/JPY will move with a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 110.80.

Resistance. 2: 110.58.

Resistance. 1: 110.36.

Support. 1: 110.10.

Support. 2: 109.88.

Support. 3: 109.66.

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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Daily analysis of USDX for January 24, 2018

USDX is moving in a decisive stage, as it remains supported by the 90.20 level across the board and that should give a hint that the index could start a new trend. However, as long as the greenback remains under pressure below the 200 SMA, we might expect further declines towards the 89.36 level. MACD indicator is reaching the neutral territory.

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H1 chart's resistance levels: 91.75 / 92.57

H1 chart's support levels: 90.59 / 89.36

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 90.59, take profit is at 89.36 and stop loss is at 91.81.

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Daily analysis of GBP/USD for January 24, 2018

The pair was rejected by the resistance level of 1.3979 and awaits to post fresh highs in the short-term. If that level gives up in favor of the bulls, then GBP/USD could have enough steam to reach the next hurdle placed around 1.4112. To the downside, the nearest support lies at 1.3847, where it coincides with the 200 SMA at the H1 chart.

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H1 chart's resistance levels: 1.3979 / 1.4112

H1 chart's support levels: 1.3847 / 1.3612

Trading recommendations for today: Based on the H1 chart, buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.3979, take profit is at 1.4112 and stop loss is at 1.3847.

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Burning forecast 01/23/2018

Burning forecast 01/23/2018

The euro is waiting for the decision of the ECB.

On Monday, an important event took place: The US Senate approved the financing of the US government on the second attempt, giving it funding until February 8, but this gives time for a compromise on the disputed migration issue between Trump and the Democrats in Congress.

This news is positive for the market - the US market showed a new strong daily growth and new historical highs (by major indices).

However, contrary to the expectations of many experts, the EURUSD exchange rate remained in a narrow range.

From the point of view of the play on the break - it is a good thing: The longer worth the price in the range - the stronger the subsequent movement.

Obviously, the euro is waiting for its own main event: the ECB's decision on monetary policy on Thursday.

Nevertheless, the movement may take place before the news - such cases have happened before.

So, we play out of range:

Buy from 1.2300 stop at 1.2255 profit at 1.2400

Sell from 1.2160, stop at 1.2205, profit at 1.2060

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