Technical analysis of GBP/JPY for February 8, 2018

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All our targets which we predicted in the previous analysis have been hit. GBP/JPY is expected to trade with a bullish outlook. The pair is trading above its rising 20-period and 50-period moving averages, which play support roles and maintains the bullish bias. The relative strength index is supported by an ascending trend line.

Therefore, as long as 151.85 is not broken, look for a further advance with targets at 154.60 and 155.40 in extension.

Alternatively, if the price moves in the direction opposite to the forecast, a short position is recommended to be below 151.85 with the target at 151.25.

Strategy: BUY, Stop loss at 151.85, Take profit at 154.60

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: 154.60, 155.40, and 156.00

Support levels: 151.25, 150.40, and 149.65.

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Global macro overview for 08/02/2018

The last 48 hours have shown investors how potentially dangerous effects may be caused by the growing role of ETF / ETNs. One of them virtually zeroed the capital for its investors yesterday and may have deepened Monday's drops on the New York Stock Exchange. As we remember, on Monday, there was a real "slaughter of bull market" on Wall Street. After two years of practically non-stop increases, Dow Jones slumped by 4.6%, and the SP500 plummeted by 4.1%. The very correction of strong gains from recent months with almost record high valuations of shares was no surprise. Moreover, some of the US government officials commented that it was indeed an event long awaited and desirable.

What surprised investors the most was the unprecedented "speed" of the market. At the end of Monday's session, the declines suddenly accelerated - in several minutes, Dow Jones lost almost a thousand points, for a moment dropping by more than 6.0%. The stock prices were changing so fast that the human eye could not keep up with their changes. It was almost like a repetition of a sudden crash in May 2010.

The culprit of Monday's sell-off on Wall Street is ETN called VelocityShares Daily Inverse VIX Short-Term ETN (XIV). It is a fashionable American instrument that allows you to earn a drop in volatility. Its value changed in the opposite direction from the VIX index, an index built over a quarter of a century ago measuring the implied options volatility of the SP500 index. In America, they call it the "fear index" because option prices grow as investors fear increased volatility. And volatility grows when stock prices are falling (usually falls in stock markets are much more rapid than increases). The VIX index went straight down from its highs and erased seven years of gains in one day.

Let's now take a look at the Dow Jones technical picture at the H4 time frame after the 48 hours of the drops.The market did not manage to retrace above the key technical resistance at the level of 25,240 and the price reversed. The momentum is still weak, but the market conditions are extremely oversold at this timeframe. The next support is at the levels of 24,893 and 24,690.

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Daily analysis of major pairs for February 8, 2018

EUR/USD: There is a clean bearish signal on the EUR/USD. The recent bearish attempt has paid off, and the price is now below the resistance line at 1.2250. The market is supposed to go further downwards as it is poised to reach the support lines at 1.2200 and 1.2150.

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USD/CHF: There is a clean bullish signal on the USD/CHF pair. The recent bullish attempt has paid off, and the price is now above the support level at 0.9400. Another support level at 0.9450 is being breached to the upside as the price goes further upwards, poised to reach the resistance levels at 0.9500 and 0.9550.

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GBP/USD: There is a strong bearish outlook on the GBP/USD pair. The EMA 11 is below the EMA 56, and the RSI period 14 is below the level 50. Price has dropped massively this week, testing the accumulation territory at 1.3850. There has been an upwards bounce since then, and the price is currently moving sideways. Some fundamental figures are expected toda,y and they may have impact on the markets.

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USD/JPY: The USD/JPY pair is currently choppy. Price has come down this week, but it is now going upwards. The market is generally sideways, but when there is a breakout in the market, it would most probably be in favor of bulls. A breakout is expected before the end of this week, or early next week.

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EUR/JPY: There is a Bearish Confirmation Pattern in this market, which plummeted heavily earlier this week. Although the market environment is rough, the bias remains clearly bearish. The demand zone at 134.00 has been tested, and it could be tested again (and possibly breached to the downside).

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Global macro overview for 08/02/2018

Recent macroeconomic data show that the UK economy follows global trends and no signs of uncertainty around Brexit clearly weighing on the mood of consumers and business. The final estimate of GDP for the second quarter was increased to 0.5% q/q, and the first readings for the fourth quarter at 0.4% they slept by 0.1% above forecasts. The last available data fro Industrial production in November was solid, and the decline in December retail sales is mainly the effect of the recovery of impressive figures from November. The labor market shows a slight acceleration in wage growth while maintaining the unemployment rate at the lowest level until the 1970s (4.3%). However, the most recent data on business activity (PMI) indicate a slowdown in the rate of expansion to levels that historically met with the Bank Bank's easing position. In addition, inflation is slowly ceasing to be a problem for the central bank (in December CPI fell to 3.0% y / y from 3.1%), as the effects of Pound depreciation after the Brexit referendum are beginning to expire.

The decision to keep the interest rate unchanged should not cause any emotions unless it is taken unanimously (9-0). A hawkish surprise would be if some members would like to present arguments for an earlier increase in interest rates, but economists consider such a scenario rather unlikely. The GDP growth rate, although it surprised positively and should translate into an increase in growth forecasts in 2018, is still low and sensitive to the effects of ongoing Brexit negotiations. The bounce of the Pound in recent weeks supports a gradual lowering of inflation and reduces pressure on monetary policy tightening.

The Bank of England interest rate decision will be published on Thursday, February 8 at 02:00 pm GMT. The market participants expect the interest rate to stay on the spot at 0.50%. Together with the decision, the Inflation Report will be published and economic forecasts.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. The market has broken below the lower channel trend line, tested the main channel support and bounced back to the range zone. Unfortunately, the bounce was rather weak and now the price is back to test the support at the level of 1.3818. The weak momentum (below its fifty level) confirms the bearish scenario.

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Bitcoin analysis for February 08, 2018

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The Bitcoin (BTC) has been trading sideways at the price of $8.430. Jobs and applicants for employment in the cryptocurrency sector have increased substantially in India, despite the current attitude in Delhi towards bitcoin. The significant growth has been registered in the second half of last year, a period of great uncertainty about the crypto future of the country. This month Indian government reaffirmed its commitment to eliminate illicit use of cryptocurrencies. New regulations are expected in March. Technical picturer is neutral to bearish.

Trading recommendations:

According to the 30M time - frame, I found broken bearish pennant in the background, whcih is a sign that buying looks risky. I also found a hidden bearish divergence on the mocing averrage oscillator in the background, which is another sign of weakness. My advice is to watch for potential selling opportunities if you see the breakout of lower diagonal of new crreated upward trendline. Downward targets will be set at the price of $7.490 and at the price of $5.960.

Support/Resistance

$8.573 – Intraday resistance

$7.845– Intraday support

$7.502 – Objective target 1

$5.960 – Objective target 2

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USD/JPY analysis fo February 08, 2018

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Recently, the USD/JPY pair has been trading upwards. The price tested the level of 109.78. According to the 30M time – frame, I found a successful breakout of the ascending triangle, which is a sign that buyers are in control. I also found a breakout of pivot resistance 1, which is another sign of strength. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 110.10 and at the price of 110.50.

Resistance levels:

R1: 109.74

R2: 110.10

R3: 110.50

Support levels:

S1: 108.93

S2: 108.53

S3: 108.15

Trading recommendations for today: watch for potential buying opportunities.

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Technical analysis of NZD/USD for February 08, 2018

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Overview:

  • The NZD/USD pair.
  • The bias remains bullish in the nearest term testing 0.7437 or higher. The NZD/USD pair is climbing from the area of 0.7305/0.7202 in the long term. It should be noted that the support is established at the level of 0.7305 which represents the daily pivot point on the daily chart. The price is likely to form a double bottom in the same time frame. The NZD/USD pair is showing signs of strength following a breakout of the highest level of 0.7305. So, buy above the level of 0.7202 with the first target at 0.7364 in order to test the daily resistance 1. Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). This suggests that the pair will probably go up in the coming hours. If the trend is able to break the level of 0.7364, then the market will call for a strong bullish market towards the target of 0.7437. The level of 1.4250 is a good place to take profits today. On the other hand, in case a reversal takes place and the NZD/USD pair breaks through the level of 0.7305 (pivot point), a further decline to 0.7202 can occur. It would indicate a bearish market.
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EUR/USD analysis for February 08, 2018

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Recently, the EUR/USD pair has been trading downwards. The price tested the level of 1.2225. According to the 30M time – frame, I found a broken intraday bearish flag (pennat), which is a sign that sellers are in control. I also found a bearish cross on stochastic oscillator, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.2220, 1.2146 and at the price of 1.2050.

Resistance levels:

R1: 1.2365

R2: 1.2465

R3: 1.2525

Support levels:

S1: 1.2205

S2: 1.2146

S3: 1.2050

Trading recommendations for today: watch for potential selling opportunities.

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Technical analysis of USD/CHF for February 08, 2018

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Overview:

  • The USD/CHF pair continued to move upwards from the level of 0.9399. Since yesterday, the pair has risen from the level of 0.9399 (the level of 0.9399 coincides with the ratio of 38.2% Fibonacci Expansion) to the top around 0.9460. In consequence, the USD/CHF pair broke resistance at 0.9444, which turned into strong support at the level of 0.9444 (pivot). In the H1 time frame, the level of 0.9444 is expected to act as major support today. Currently, the price is moving in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish market. The price is still above the moving average (100). From this point, we expect the USD/CHF pair to continue moving in the bullish trend from the new support level of 0.9444 towards the target level of 0.9489. If the pair succeeds in passing through the level of 0.9489, the market will indicate the bullish opportunity above the level of 0.9489 so as to reach the second target at 0.9552. At the same time, if the USD/CHF pair is able to break out the level of 0.9399, the market will decline further to 0.9300 (daily support 2).
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Technical analysis of USD/CHF for February 08, 2018

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Overview:

  • The USD/CHF pair continued to move upwards from the level of 0.9399. Since yesterday, the pair has risen from the level of 0.9399 (the level of 0.9399 coincides with the ratio of 38.2% Fibonacci Expansion) to the top around 0.9460. In consequence, the USD/CHF pair broke resistance at 0.9444, which turned into strong support at the level of 0.9444 (pivot). In the H1 time frame, the level of 0.9444 is expected to act as major support today. Currently, the price is moving in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish market. The price is still above the moving average (100). From this point, we expect the USD/CHF pair to continue moving in the bullish trend from the new support level of 0.9444 towards the target level of 0.9489. If the pair succeeds in passing through the level of 0.9489, the market will indicate the bullish opportunity above the level of 0.9489 so as to reach the second target at 0.9552. At the same time, if the USD/CHF pair is able to break out the level of 0.9399, the market will decline further to 0.9300 (daily support 2).
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Analysis of Bitcoin for 08/02/2018

Bitcoin should establish itself as means of quick, safe and cheap payments. New technologies and diagrams are implemented that will ensure almost instant payments with low-value Bitcoin. Conner Fromknecht and Olaoluwa Osuntokun proposed a new system that they call Atomic Multi-Path Payments (AMP) over Lightning. According to AMP supporters, sending payments via this protocol would bring a number of benefits, such as improving the privacy of Lightning Network brokers and reducing fees.

This system now joins countless programs and new technologies that promise to solve the Bitcoin scalability problem. Other options include SegWit, Schnorr signatures, and Lightning Network. The AMP protocol would operate via the Bitcoin Lightning Network.

Segwit is another key Bitcoin optimizer that can improve its scalability and reduce transaction fees. It would also help to improve the continuity of transactions in the Lightning Network. Since activating SegWit in August 2016, programmers are increasingly integrating SegWit with Bitcoin portfolios, and several exchanges are already implementing it. Recently, on February 5 2018, Coinbase announced that the final testing phase had begun and that Segwit would be available to Coinbase customers in the next few weeks.

AMP is another program that together with Lightning Network promises to help solve the problem of Bitcoin scalability. Bitcoin enthusiasts and investors predict that AMP will receive support from all cryptocurrency stakeholders.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market bounced right from the weekly pivot support at the level of $5,912, just a little below the grey rectangle target zone of $6,314 - $6,742. Currently, the price is trying to bounce higher towards the level of $9,118 and then possibly towards the level of $9,515. Those two levels are the key to future gains.

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Trading plan for 08/02/2018

The biggest overnight drop is being observed in NZD after the RBNZ interest rate decision and the RBNZ Governor Grant Spencer dovish comments. The Shanghai Composite Index broke successfully from the rising sentiment on the Asian stock exchanges when it dropped -1.5% mostly because of the selling of companies from the energy industry and financial institutions. On the energy market, a delicate reverse of demand is observed. Currently, the West Texas Intermediate barrel is valued at USD 61.60, or 0.2% lower than yesterday's close.

On Thursday, February 8th, the main event of the day will be the Bank of England interest rate decision in the early afternoon, but the market participants should keep an eye on German Trade Balance data, Canadian Housing Starts data, and Continuing Claims data from the US.

The EUR/USD analysis for 08/02/2018:

In the US, the main topic was politics that effectively distracted attention from the sell-off on Wall Street. According to the latest reports, the leaders of the factions sitting in Congress reached a consensus on the increase in government spending by another USD 300 billion. The scale of introduced budget changes clearly reflects the expectations of market participants, who expected the gradual introduction of measures to minimize the budget gap. The above reports raise the reshuffle in the debt market. At present, the yield on US ten-year bonds fluctuates around the level of 2.8380%.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. the market is still moving lower towards the next important technical support at the level of 1.2212. The market conditions are now oversold, but the momentum remains below its fifty level, indicating a further drop. The nearest important resistance is seen at the level of 1.2314.

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Market Snapshot: SPY reversing back to sell-off mode

The price of SPY (SP500 ETF) has touched the 50% Fibo at the level of 272.83 and reversed lower towards the level of 268.61 which was quickly broken. Currently, the price is dropping towards the next technical support at the level of 266.60 on a weak momentum.

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Market Snapshot: DAX fails to break out higher

The price of German DAX Index has failed to break out above the trend line at the level of 12,645 and opened with a gap down around the level of 12,520 today. This level will now act as a support, but in a case of a further breakout, the next technical support is seen at the level of 12,414. Please notice the extremely oversold market conditions.

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Ichimoku cloud indicator analysis of USDX for February 8, 2018

The Dollar index has reversed short-term trend to bullish. Price broke above the 89.60 resistance level, has also broken out above the 4-hour cloud, back tested it as expected and is making new higher highs.

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For the last few weeks I have been saying that the downside was limited and we should expect a big bounce in the Dollar index. We have now confirmation that such a bounce is underway. Price is trading above the 4-hour cloud. Support is at 89.60 which was previous resistance.

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On a daily basis Gold remains in a bearish trend but with signs of trend reversal. Price is below the kijun-sen at 90.70, but a break above it will open the way for a move towards 91.50-92. Support is at yesterday's low. A daily close below yesterday's low will bring selling pressures back at the Dollar index. This would not be a good sign for bulls.

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Ichimoku cloud indicator analysis of gold for February 8, 2018

Gold remains in a bearish trend making lower lows and lower highs. Gold has the potential to fall below $1,300 towards $1,290-80 at least. Any bounce as long as price remains below $1,345 is a selling opportunity.

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Gold price is trading below both the tenkan- and kijun-sen. Trend is bearish as long as price is below $1,345. Support is now at $1,300 and next at $1,380. Resistance is at $1,320 and next at $1,329.

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The rejection on the daily kijun- and tenkan-sen indicators has kept price below them and vulnerable to a move towards cloud support at $1,290-80 as we mentioned in previous analysis. Daily resistance is at $1,340. A daily close above it will be a bullish sign. Until then bears are in control of the short-term trend.The material has been provided by InstaForex Company - www.instaforex.com

Gold chose a favorite

Gold has long been tormented, suffering between the largest drop in US stock indices in the past 6.5 years and the decline in the yield of US Treasury bonds. Moreover, the dollar is strengthening. Ultimately, the last factor won, forcing the quotes of the XAU / USD pair to collapse to four-week lows. Impressed with strong statistics on the US labor market, bears in precious metal went on the attack amid growing rumors of an aggressive monetary restriction of the Fed.

In 2018, gold broke more than one correlation. And if in previous years it reacted sensitively to the rates of the US debt market, now the decline in profitability is perceived as information that given the worsening global appetite for risk, treasury bonds appear to be a more serious saving port than precious metals. There are rumors that the reluctance of the XAU / USD pair to go north indicates that the correction of the S & P500 will be shallow. This happened against the background of the first take-off since August 2015 of the index of fear VIX above the 50 mark. In my opinion, the dollar is to blame for everything, which at the turn of 2017-2018 ignored a lot of "bullish" factors for itself, forcing gold to rise in parallel with the increase in the likelihood of monetary tightening of the Fed in March from less than 60% at the beginning of this year to 78%.

On the wreckage of old relationships there are often new ones and the fact that gold pays attention to the USD index and ignores the American stock markets allows one to look closely at its correlation with European stock indices. If it continues to work, the problems with the creation of a coalition in Germany, the Italian parliamentary elections, and and the weakened revaluation of the euro, corporate reporting by the issuers of the Old World can serve the bulls for XAU / USD a good service.

Dynamics of gold and EuroStoxx600

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Source: Bloomberg.

However, according to Standard Chartered, in the near future, gold may move to medium-term consolidation. Firstly, the upward trend can not last indefinitely because it needs a pause. Secondly, if in January the inflow of capital into precious metals-oriented ETF significantly accelerated (+32 tons) compared to the dull fourth quarter (+10 tons), now it is slowing down again. Without the support of investment demand, the "bulls" for the XAU / USD will find it difficult to reach the psychologically important level of $ 1,400 per ounce mark.

Gold can be supported by the growing risks of the repeated disconnection of the US government and the aggravation of trade relations between Washington and Beijing. The Celestial Empire filed a complaint with the World Trade Organization on the unilateral introduction by the States of duties on the import of solar batteries and washing machines. When Canada did the same thing not so long ago, the American administration was outraged. If Congress does not extend government funding for six weeks by February 8, fears of a slowdown in the US economy could help fuel demand for safe haven assets.

Technically, after reaching the target by 113% on the pattern of the "Shark", the risks of a rollback to $ 1309-1316 and $ 1310 per ounce would increase.

Gold, daily chart

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