BITCOIN Analysis for January 29, 2018

Bitcoin has been trading in a range between the $10,000 and $12,000 for a few days. Meanwhile, the bears are setting the tone for bitcoin. Over the weekend, the price was following a bullish bias but today the impulsive bearish pressure has engulfed the recent bullish price action with ease. The ban on bitcoin exchanges has now been viewed as a rumor because regulators are more inclined to impose a corporate tax on exchanges rather than shutting them down which indeed is good news for cryptocurrencies. Despite some relief from the recent pressure, market participants are still quite confused about bitcoin investment at present. As for the current scenario, the price is expected to proceed down towards $10,000 price area from where it is expected to bounce higher towards $15,500 price area as a Bullish Continuation Divergence is in progress. As the price remains above $10,000, the bullish bias is expected to continue further. On the other hand, a daily close below $10,000 will lead to a devastating fall which is expected to lead the price towards $6,000 in the future.

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Fundamental Analysis of EUR/USD for January 29, 2018

EUR/USD has been quite impulsive with the recent bullish gains which lead the price to break above the important price area of 1.23. EUR has been the dominant currency in the pair with mixed economic reports whereas USD is struggling to regain its momentum due to worse economic reports in the process. EUR having not much to offer in the market has been dominated by other currencies but USD failed to gain in this situation which does indicate the severe weakness of USD at the current situation. Today EUR German Import Prices report was published with a decreased value as expected at 0.3% from the previous value of 0.8%. The worse outcome of the economic report did provide USD to gain some momentum in the process but it is expected to be very short in duration. On the other hand, today USD Core PCE Price Index report was published with an increase to 0.2% as expected from the previous value of 0.1%, Personal Spending decreased to 0.4% from the previous value of 0.6% which was expected to be at 0.5% and Personal Income increased to 0.4% which was expected to be unchanged at 0.3%. Despite having mixed economic reports today, USD is expected to gain momentum this week having Non-Farm Employment Change, Average Hourly Earnings and Unemployment Rate report to be published on Friday. As of the current scenario, a good amount of volatility is expected to hit the market this week whereas EUR is expected to gain a long-term momentum in the coming days with certain retracement or pullback in the process.

Now let us look at the technical view. The price is currently showing impulsive bearish pressure having 2 days of correction in the pair after breaking above the 1.23 price area recently. A bearish regular divergence can also be spotted in the market currently which does increase the probability of proceeding lower towards 1.23 or dynamic level of 20 EMA in the coming days before price bounces up higher with the target towards 1.25 and later towards 1.2850 area. As the price remains above 1.2050 area the bullish bias is expected to continue further.

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Global macro analysis for 29/01/2018

President Donald Trump, speaking on Friday at Davos, hinted that he would continue to promote the America First program, but he does not mean "America alone" because when "America is growing, the whole world is growing". He added that Washington would no longer tolerate unfair commercial practices. He added that the US supports free trade, but it should be "equal and reciprocal". He encouraged investors to invest in the US, making it clear that tax reform has improved the investment climate, and the country is experiencing strong economic growth after years of stagnation. Referring to the TPP project (Trans-Pacific Partnership, from which the USA withdrew a year ago), it did not rule out the possibility of negotiating bilateral trade agreements with selected countries. The media estimated that the White House chief's visit was better than expected, and Trump turned out to be more pragmatic.

Nevertheless, the US Preliminary GDP data released on Friday were worse than expected - in the past year, the increase amounted to 2.6% against estimated 3.0% (3.2% prior). However, inflation measures slightly exceeded the estimates - GDP deflator 2.4% and PCE Core 1.9% q/q. The Durable Goods Orders dynamics were released at 2.9% m/m in December, which was much better than expected 0.8% m/m. However, without the inclusion of transport, the figures were in line with the forecast at 0.6% m/m.

Let's now take a look at the USD/JPY technical picture at the H4 time frame. The price is still testing the local lows at the level of 108.27 and all of the bounces are were limited in price. The momentum remains below its fifty level and the market conditions are still oversold. The key resistance zone is still seen at the level of 110.19 - 110.32.

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Global macro overview for 29/01/2018

This may be an important week for the future of USD, considering how merciless the recent currency sale has become. However, to stop the market, a particularly successful combination of factors is needed. First, PCE Core inflation would surprise with an acceleration higher than 1.6% y/y (consensus). Good data would open the way for the Fed to strengthen its hawkish message. Nevertheless, the January FOMC meeting (on Tuesday evening) should not abound in clear changes in the message. This is the last meeting led by Janet Yellen, and in January there is no press conference or new economic forecasts. On the other hand, this way the crossbar for hawk surprises is hung quite low. At the end of the week, the attention will shift to the labor market report, where employment is likely to rebound (185,000) at a weak pace in December (146,000). Traditionally, the tone of the report will depend on the dynamics of wages, and here a solid reading of 0.3% is expected due to the increase of the minimum wage in some states. If it pushes the annual dynamics to at least 2.7% (from 2.5% in December), it will be a positive impulse for USD.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market is trying to bounce after establishing the local low at the level of 88.45. The next important resistance is at the level of 89.52, and only a sustained breakout above the level would change to short-term outlook from bearish to slightly bullish. A bounce from the oversold market conditions supports the view.

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Intraday technical levels and trading recommendations for EUR/USD for January 29, 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 29, 2018

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The Bitcoin (BTC) has been trading sideways at the price of $11,200. The Russian ministry is preparing a bill for the regulation of cryptocurrency mining which reportedly includes a "special system" to detect crypto miners. In addition, there may be a 2-year tax break for miners as well as energy quotas and special tariffs. Technical picture is neutral to bearish.

Trading recommendations:

According to the 30M time - frame, I found a bearish breakout of upward trendline in the background, which is a sign of strength. I also found a hidden bearish divergence on the stochastic oscillator, which is another sign of strength. My advice is to watch for potential selling opportunities. The downward targets are set at the price of $10,839 and $10,277.

Support/Resistance

$11.912 – Intraday resistance

$11.069– Intraday support

$10.839 – Objective target 1

$10.277 – Objective target 2

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

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NZD/USD Intraday technical levels and trading recommendations for January 29, 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 was expected towards the depicted supply zone (0.7320-0.7390) where evident bearish rejection and a valid SELL entry is still expected.

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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Technical analysis of EUR/USD for January 29, 2018

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Overview:

  • The EUR/USD pair will continue to rise from the spot of 1.2396 and 1.2352. The support is found at the level of 1.2352, which represents the 50% Fibonacci retracement level in the H1 time frame. The price is likely to form a double bottom. Today, the major support is seen at 1.2352, while immediate resistance is seen at 1.2458. Accordingly, the EUR/USD pair is showing signs of strength following a breakout of a high at 1.2396. So, buy above the level of 1.2396 with the first target at 1.2458 in order to test the daily resistance 1 and move further to 1.2498. Also, the level of 1.2538 is a good place to take profit because it will form a double top. Amid the previous events, the pair is still in an uptrend; for that we expect the EUR/USD pair to climb from 1.2396 today. At the same time, in case a reversal takes place and the EUR/USD pair breaks through the support level of 1.2396, a further decline to 1.2254 can occur, which would indicate a bearish market.
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USD/JPY analysis fo January 29, 2018

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Recently, the USD/JPY pair has been trading upwards. The price tested the level of 109.05. Anyway, according to the 30M time – frame, I found a hidden bearish divergence on the stochastic oscillator, which is a sign that buying looks risky. I also found that price successfully tested the pivot level (108.90), which is another sign that buying looks risky. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 108.03 and at the price of 107.40.

Resistance levels:

R1: 109.51

R2: 110.30

R3: 111.00

Support levels:

S1: 108.02

S2: 107.40

S3: 106.54

Trading recommendations for today: watch for potential selling opportunities.

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Technical analysis of GBP/USD for January 29, 2018

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Overview:

  • Pivot : 1.1415.
  • A trend in the USD/GBP pair was argumentative as it was trading in a narrow sideways channel, the market showed signs of instability. Amid the previous events, the price is still moving between the levels of 1.4217 and 1.4044. Resistance and support are seen at the levels of 1.4217 (also, the double top is already set at the point of 1.4347) and 1.4044 respectively. Therefore, it is recommended to be cautious while placing orders in this area. So, we need to wait until the sideways channel has completed. The current price is seen at 1.4115 which represents a key level today. The level of 1.4217 will act as the first resistance today. Hence, if the pair fails to pass through the level of 1.4217, the market will indicate a bearish opportunity below the strong resistance level of 1.4217. Sell deals are recommended below the level of 1.4217 with the first target at 1.4044. If the trend breaks the support level of 1.4044, the pair is likely to move downwards continuing the development of a bearish trend to the level 1.3972.
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GBP/USD analysis for January 29, 2018

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Recently, the GBP/USD pair has been trading downwards. The price tested the level of 1.4093. Anyway, according to the 15M time – frame, I found a hidden bullish divergence on the stochastic oscillator, which is sign that selling looks risky. I also found that prrice didn't got power to test pivot support 1 (1.4077), which is another sign of strength. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 1.4180 and at the price of 1.4255.

Resistance levels:

R1: 1.4180

R2: 1.4255

R3: 1.4360

Support levels:

S1: 1.4077

S2: 1.4003

S3: 1.3900

Trading recommendations for today: watch for potential buying opportunities.

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Bitcoin analysis for 29/01/2018

Chinese citizens continue to invest in Bitcoin and the crypto market, despite the government's intense attack. In September 2017, the Chinese cryptocurrency exchanges BTCC China, Huobi, and OKCoin were closed by the government. At some point, the management of these exchanges could not leave the country because of a government investigation into local cryptocurrencies. Three months later, in December 2017, the same largest Chinese cryptocurrency exchanges moved to Hong Kong. BTCC China, Huobi and OKCoin have changed the brand to BTCC, Huobi Pro and OKEx respectively. They were aimed at satisfying the rapidly growing demand from Hong Kong investors. Shortly after they were carried out, trading platforms began to notice that the daily quantities of Chinese investors are growing exponentially. Somehow, Chinese investors have managed to circumvent China's trade restrictions by using the Hong Kong stock exchanges. How is it possible?

In Hong Kong, it is relatively easy for investors to set up a business. For less than $ 1,000 you can legally create companies, which allows you to open bank accounts in financial institutions based in Hong Kong. Since December 2017, many Chinese investors have transferred funds from their Chinese bank accounts to bank accounts in Hong Kong and began to more actively trade in cryptocurrencies, effectively bypassing Chinese restrictions. But unlike China, Hong Kong has much less supply to meet the growing demand. While China is home to large miners, such as Bitmain, Hong Kong does not produce much Bitcoin and other cryptocurrencies. As a result, bonuses on the Hong Kong cryptocurrency market have increased, surpassing even the South Korean market. On January 18, when the average Bitcoin price in the world was around $ 11,500, Bitcoin was sold over $ 13,000 to Huobi Pro.

Krystal Hu, a Hong Kong financier, noted that non-Chinese traders also began to exploit arbitrage opportunities presented by the Hong Kong market. For example, January 18, the price of Bitcoin on Coinbase was $ 11,800. Buying Bitcoin on Coinbase and selling it on any Hong Kong market would yield a profit of $ 1,200 on every Bitcoin.

The Hong Kong stock exchanges have also integrated the widely used fintech applications in China, such as Alipay and TenCent WeChat Pay. Alipay is a $ 60 billion fintech application that is used by over 50 percent of mobile users. WeChat Pay, which was used by only seven percent of mobile users in 2014, is now used by over 40 percent of mobile users in China. The integration of two fintech payment networks has increased the availability of OTC cryptocurrency exchanges in Hong Kong for Chinese investors, facilitating the investment process in the cryptocurrency market.

In order to prevent Chinese investors from buying digital currency, the Chinese government and the People's Bank of China (PBoC) have asked local banks to disclose any suspicious transactions related to markets based in Hong Kong. However, even this action will not prevent Chinese investors from accessing markets in Hong Kong, due to applications such as Alipay and WeChat Pay.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market keeps consolidating below the weekly pivot at the level of $11,143 in neutral market conditions. The nearest resistance at the level of $11,986 is the key intraday resistance for the further moves up. On the other hand, any violation of the level of $10,000 will lead to the test of the key technical support at the level of $9,151.

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Trading plan for 29/01/2018

The new week starts well with the US Dollar, although the changes are not big enough to look for a specific justification for the willingness of market participants to take profits off the table. The stock market in Asia has a mixed session behind, Nikkei 225, for a moment, enjoyed an increase of 0.65%, but eventually closed at the level of Friday's close. Shanghai Composite loses 1.0%. There is nothing interesting in the oil and gold markets, both are in consolidation.

On Monday 29th of January, the event calendar is light with important news releases, but market participants should keep an eye on the Personal Income and Personal Spending data from the US and Trade Balance data from New Zealand.

Analysis of EUR/USD for 29/01/2018:

On Sunday, a hawkish member of the ECB Klaas Knot said that "there is no single reason to continue the program" of the asset purchase. "The program has done what could realistically be expected of it," Knot, who also heads the Dutch Central Bank, said in an interview on the TV talk show Buitenhof on Sunday.The market has not reacted to these words because the position of Knot is nothing new. EUR / USD managed to move away to 1.2385 in a relatively calm session, although the opening of trade in Europe brings a return in demand.

Let's now take a look at the EUR/USD technical picture on the H4 time frame. The market is still in a corrective cycle after the high at the level of 1.2537 was made. The price has respected the channel support and bounced nicely twice off it.The market conditions are overbought, so the down move might continue a little longer. The next technical support is seen at the level of 1.2324.

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Market Snapshot: gold at the critical level

The price of gold has hit the level of $1,344, which is a key technical support on the H4 time frame. At the same time, this level is a purple trend line support, so any violation of this level would lead to test the local low at the level of $1,340 and then the level of $1,321. Weak momentum at the fifty level supports the negative outlook.

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Market Snapshot: DAX retraces 38% and bounces

The German Dax index has retraced 38% of the previous swing up and it does not make a new low below the level of 13,136 yet. That level is the key level for the further down moves as it lies close tot he 50% Fibo retracement as well. Only a sustained breakout below this level will open the road towards the technical support at the level of 12,728.

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Technical analysis of USD/JPY for January 29, 2018

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USD/JPY is expected to trade in a lower range as the key resistance is at 109.10. Though the pair rebounded from 108.25 (the low of January 26), it is still capped by the key resistance at 109.35 and the declining 50-period moving average. The relative strength index is below its neutrality level at 50 and lacks upward momentum.

To conclude, below 109.35, look for a further decline with targets at 108.35 and 108.00 in extension.

Alternatively, if the price moves in the opposite direction, a LONG position is recommended above 109.35 with a target of 109.55.

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 109.35, take profit at 108.35.

Resistance levels: 109.55, 109.80, and 110.15

Support levels: 108.35, 108.00, and 107.50.

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Technical analysis of USD/CHF for January 29, 2018

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USD/CHF is under pressure. The pair is trading on the downside, capped by its falling 50-period moving average. The nearest key resistance at 0.9430 maintains the strong selling pressure on the prices. Last but not least, the process of lower highs and lows remains intact, which should confirm a negative outlook.

Therefore, as long as 0.9430 is a resistance, look for choppy price action with a bearish bias. Our next down targets are set at 0.9290 and 0.9240.

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: SELL, stop loss at 0.9465, take profit at 0.9285.

Resistance levels: 0.9465, 0.9500, and 0.9540

Support levels: 0.9290, 0.9240, and 0.9200.

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Technical analysis of GBP/JPY for January 29, 2018

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GBP/JPY is tradking under pressure. The pair remains under pressure below its key resistance at 154.40, and is expected to post a new pullback towards 154.40. The falling 20-period and 50-period moving averages maintain the strong selling pressure, and should continue to push the prices lower. Even though a technical rebound cannot be ruled out, its extent should be limited.

As long as 154.40 is not surpassed, likely decline to 153.40 and 153.10 in extension.

Alternatively, if the price moves in the direction opposite to the forecast, a LONG position is recommended above 154.40 with the target at 155

Strategy: SELL, Stop loss at 154.40, Take profit at 153.40

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: 155.00, 155.40, and 155.70.

Support levels: 153.40, 153.10, and 152.60

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Ichimoku cloud indicator analysis of USDX for January 29, 2018

The US dollar index remains in a bearish trend. The dollar index will need to break above last week's high in order to confirm that at least a short-term low is in. The dollar index should break above 90.60 to change short-term trend.

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Red lines- bearish channel

The dollar index is trading inside the red bearish channel and below the 4 hour Kumo (cloud). Trend is clearly bearish. Resistance is at 89.60 and if broken, we will then challenge the bearish channel and the Kumo resistance. Only a break above 90.60 will confirm short-term trend reversal.

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On a weekly basis, the dollar index is bouncing off the 61.8% Fibonacci retracement of the rise from the 79 level since 2014. Next weekly support is at 87 and is going to be tested if we break below 88.44 (last week's low). My longer-term view is neutral to bullish. Bears must be very cautious and lower their stops. The downside is limited.The material has been provided by InstaForex Company - www.instaforex.com

Trading plan 01/29/2018

Trading plan 01/29/2018

The general picture: The market needs a respite.

A lot of news came out:

According to the ECB, the rate hike until the end of 2018 is unlikely. On a direct question to the head of the ECB, Mario Draghi: Is the sharp rise in the euro making him worried? The refusal to discuss the topic (Read - do not bother, ready for both 1.3000 and 1.3500).

US: The dollar does not worry about falling (yet).

Britain: The growth of the pound is wonderful (it helps to lower inflation).

In general, this way: Do you want to move on? Nobody interferes.

In this case: We see a stop. That is, you need to get used to new levels.

This week: On Wednesday, January 31, the Fed does not expect sensations.

On Friday, February 2, the nonfarms may have a traffic.

Pound: Sales are still risky.

We buy from a rollback from 1.3900

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Ichimoku cloud indicator analysis of gold for January 29, 2018

Gold price is showing signs of weakness and could pull back towards cloud support of $1,330 before resuming the upward trend. Trend remains bullish.

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Gold price is trading below both the Tenkan- and Kijun-sen. Besides, it is trading above the 4 hour cloud. The short-term trend is bullish as long as price is trading above the 4 hour cloud. Resistance is at $1,357. Breaking above it will be a bullish signal.

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Magenta line -resistance

Blue line -long-term support

Gold price is trading around the long-term resistance area. This weekly candle is very important. Trend remains bullish but a rejection at $1,350 area will be a bearish sign. Price could pull back towards $1,300 where we find the important weekly support by the Kijun- and Tenkan-sen.

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Nobody wants currency wars

Eurozone

Markets continue to assess under the microscope the results of the ECB meeting on Thursday. Mario Draghi's press conference started with a few dovish statements, as Draghi focused on the slowness and austerity, indicating that it is not necessary to wait for surprises and, especially, some severe steps from the ECB.

Draghi called for dividing the expectations for the rate and the regulation of the asset purchase program. Regarding the rate, Draghi spoke directly, he said, the chances of an increase this year are small. With regards to the repurchase of assets, the position is more hawkish, as Draghi had to declare sustainable economic growth, which could mean confirmation of plans to curtail the repurchase program.

The ECB's lending report released on Friday showed that in December the growth rate of lending to the private sector and non-financial organizations slowed somewhat, but annual rates remain firmly strong, which confirms the conclusion about the sustainability of economic growth in the euro area.

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A member of the ECB Executive Board, Benoit Coeure, commented on US Treasury Secretary Munchin's previous statements, saying that attempts to target exchange rates could provoke a currency war, and this is the last thing the world needs. On Thursday, indicating a similar tone, Draghi spoke out, as the issue for the euro is important - excessive strengthening can put downward pressure on inflation, as imports cheapen.

On Tuesday, a preliminary GDP report will be released for the fourth quarter, with a forecast of a 2.6% growth, which is no worse than in the US, which means it will support the euro, all other things being equal. On Wednesday, the report on inflation in January will be released, the forecast is negative, the euro could be under pressure. In general, the reasons for the euro to continue growth without a correction are few, likely a decrease to 1.2323 and consolidation just below the peaks that were reached.

United Kingdom

The UK economy grew slightly stronger in the fourth quarter than forecast, which had a limited support for the pound, which once again renewed its peak after Brexit. However, NIESR forecasted the possibility of growth up to 0.6%, so the market was not very surprised by the result.

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The head of the Bank of England, Mark Carney, made an attempt on Friday to knock down a wave of demand for the pound, which, however, proved unsuccessful. Answering a question in an interview with the BBC about quantifying damage from Brexit, Carney said that the country's GDP lost 1% of its growth rate, and by the end of 2018 these losses will grow to 2%. To date, the result of Brexit has been a decline in economic activity of tens of billions of pounds, and it takes time to achieve a higher growth potential.

Carney highlighted the main point - companies are cutting back on investments, as they are waiting for clarity on the UK's trading positions after it leaves the EU.

On Tuesday, the Bank of England will report on consumer and mortgage lending in December. On Wednesday, the Gfk index on consumer confidence will be released. The pound looked very strong last week, and went far into the overbought zone, but the momentum is still strong, and therefore the highs will likely be updated, the nearest support is 1.3995.

Oil

Oil adheres to the most likely scenario, once again the peak is updated, the trends remain the same. Saudi Energy Minister Khaled al-Faleh said in Davos that $25 from its current price is secured by the OPEC + deal, confirming the cartel's position to adhere to the plan to stabilize the market. There is no reason to expect that the OPEC + countries will voluntarily give up the mechanism that fills the scarce state budgets of the oil-producing countries.The material has been provided by InstaForex Company - www.instaforex.com

Donald Trump supported the dollar

The dollar exchange rate, the decline of which sharply accelerated after the introduction of protectionist measures on a number of goods from China and South Korea, against the backdrop of the comments of US Treasury Secretary Munchina about the weak dollar, won back some losses on Friday. The immediate reason for stopping the decline of the dollar was the comment of Donald Trump in an interview in Davos, in which he said that "the dollar will become stronger and stronger, and in the end I want to see a strong dollar."

The markets reacted to the words of Mnuchin in a downward direction, largely because in itself this statement was unusual - US officials prefer to stick to comments about a strong dollar. Trump smoothed the impact of the statements, saying that Mnuchin's words were taken out of context.

On Friday, the dollar also utilized the preliminary report of the Bureau of Economic Analysis for the 4th quarter. Despite the fact that GDP growth was worse than the forecast, the price index rose to 2.4% vs. 2.1% a quarter earlier, which plays in favor of inflation expectations.

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Another factor in favor of the dollar is the report on orders for durable goods in December. The growth was 2.9%, which is higher than 1.7% in November and significantly above the forecast of 0.8%, meaning, the US consumer sector is growing steadily.

Nevertheless, the strengthening of the dollar is unlikely to be sustainable. The ECB on Thursday presented the markets with a bullish view on the outlook for the euro area, moreover, the focus of financial flows is not yet in favor of the dollar. The dynamics of the current accounts of the eurozone and the US are multidirectional. The CFTC report published on Friday confirms this conclusion - speculators resumed buying euro, the volume of long positions is increasing simultaneously with the growth of open interest, which clearly indicates a trend.

The dynamics of the bond market is mixed, but the growth rate of 10-year German bonds in recent days has sharply accelerated and is somewhat faster than the growth rate of similar treasuries. The ECB poured some oil on the fire, with the words of Mario Draghi expressing confidence in the further growth of inflation, which is facilitated by a strong economic recovery and clear signs of an increase in the average wage. It is clear that the market could not perceive these statements other than hawks.

The policy of revision of customs regulations can be continued next week. On January 30, Donald Trump will address the Congress, he is expected to raise the issue of investigating the transfer of intellectual property rights in exchange for access to Chinese markets, which ultimately can lead to sanctions against China's high-tech sectors. The probability of such a development is quite high, which can lead to an escalation of trade wars and a decrease in the dollar.

The main event next week is the Fed meeting on Wednesday, but the chances of raising the rate are very poor, the markets are set for a rate hike March and expect to see three increases this year. This meeting will be the last for Yellen.

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On Thursday, the ISM report on the manufacturing sector will be published in January, the outlook is negative, as regional reports indicate a slowdown, and there is a notable gap between ISM and Markit, which it will seek to narrow down.

On Friday - the employment report for January, after a weak previous report, a small increase in the number of new jobs is expected, but the focus will be on the growth rate of average wages - the key factor in consumer demand and inflation at the moment.

After updating the lows and the subsequent rollback, the dollar will take some time to consolidate, so on Monday we do not expect strong moves. EURUSD may fall to 1.2323, where it will find support, the favorites will be commodity currencies, supported by a common interest in risk, AUD and CAD can update the highs immediately at the opening.

At the same time, its prospects remain weak, at least until the markets see that there is no problem with the budget's filling.

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