Global macro overview for 13/02/2018

During Tuesday's trading session, investors' eyes were turned towards the British Pound due to a publication of inflation data in the United Kingdom. This release was particularly awaited by the market participants after the Bank of England signaled a possible faster pace of interest rate hikes. It turned out, the CPI inflation was higher than expected by market consensus. The consumer price and services index stabilized in January at 3.0% y/y against expected drop to 2.9% y/y. In turn, core CPI inflation increased more than anticipated - to 2.7% from 2.5% per annum. On the other hand, PPI inflation decelerated slightly. The above data together with better prospects for the British economy support expectations for the start of a cycle of monetary policy tightening by BoE. Risk aversion and uncertainty surrounding Brexit negotiations now have a greater impact on the Pound than CPI data.

Let's now take a look at the GBP/JPY technical picture at the H4 time frame. The market has tried to rally after the data was released, but dropped eventually to test the recent technical support at the level of 148.90. It is worth to notice, that the market conditions are now oversold and there is a clear bullish divergence forming between the price and the momentum indicator, which might spark a bounce towards the nearest technical resistance at the level of 150.44 and above.

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Global macro overview for 13/02/2018

The stock market continues to dictate the conditions for other asset classes while maintaining volatility at an elevated level. Since Monday the risky currencies(EUR, AUD, NZD, SEK, NOK) are under pressure, and "safe havens" are doing better. Although on Monday, more characters said that the worst was over and we are returning to stability, today after the Asian session there is no continuation of peace. Nikkei gets into a row, and stock exchanges in China reduce growth after a solid start driven by a good session on Wall Street. The currency market is traditionally lowered by USD/JPY rate, which breaks 108 this morning. Optimism comes from commodity currencies and emerging markets currencies are saved only by the fact that the market has lost the eagerness to return to the USD. This is why the market participants are right to conclude, that the US Dollar will not gain on the basis of strengthening its own foundations, but as a result of closing the short positions accumulated in previous weeks. It is not a solid fuel. If the direct attitude of investors to USD is to change, it will sooner come from rising inflation expectations and implications for the Fed's monetary policy. From this point of view, tomorrow's CPI reading from the US remains the key. However, it is uncertain whether the data will be favorable, given the high consensus (0.4% m/m). Higher volatility can save USD against risky currencies, but it will not help in confronting JPY, CHF or EUR.

Let's now take a look at the USD/JPY technical picture at the H4 time frame. The price has broken below the technical support at the level of 108.12 and now is testing the nearest support at the level of 107.53. The downward momentum is still strong, despite the oversold market conditions. In a case of an extension, the next support is seen at the level of 107.32 (daily time frame support).

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Daily analysis of major pairs for February 13, 2018

EUR/USD: The EUR/USD has continued the bullish journey which started last week. At this time, it can still be called a bullish movement in the context of a downtrend, which would end up threatening the recent bullish bias (once the resistance line at 1.2400 has been breached to the upside). A movement to the downside would help restore the bearishness in the market.

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USD/CHF: This pair moved sideways on Monday, and then started moving southwards today. This has resulted in a short-term "sell" signal, which could help to propel the price towards the support levels at 0.9300 and 0.9250. The market is currently below the resistance level at 0.9350.

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GBP/USD: What is happening on the Cable is merely a rally attempt in the context of a downtrend. Should the market come down from here, the recent bearishness in the market would be saved; otherwise, a new bullish bias would form (especially when the distribution territories at 1.4000 and 1.4050 are breached to the upside).

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USD/JPY: According to the expectation for this week, the USD/JPY has been going southwards. Price has shed 120 pips this week, following the brief consolidation that was seen on Monday. The demand level at 107.50 has been tested, and it would be breached to the downside, as another demand level at 107.00 is being targeted.

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EUR/JPY: This cross was indecisive on February 12, but it has resumed the bearish movement, which started last week. There is a Bearish Confirmation Pattern in the market, which signals a further plunge. The next targets are the demand zones at 132.50, 132.00, and 131.50. Strong volatility is a possibility this week.

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Brent is on the heels of shares

The oil futures marked the worst five-day period in the last 2 years, and only the rebound of US stock indices allowed the bulls to find the ground under the feet of the black gold. Over the past few months, Brent and WTI have confidently moved north due to optimism about improving the health of the global economy and the associated increase in global demand, but a correction in the US stock markets has questioned the effectiveness of the above connection. Especially since the slate mining is not slumbering.

The OPEC raised oil production forecasts in the States by 0.15 million b / s, to 1.3 million b / s in 2018, adding that it is the US that is the main threat to the bulls for Brent and WTI, because they form the majority of increase in the aggregate indicator (+1.4 million b / s). At the same time, the International Energy Agency expressed concern that US companies could disrupt the return of global black gold reserves to the boundaries of their five-year averages. Currently, the difference is 52 million barrels, and over the past year, it has decreased by 80%. In December, global stocks fell at the fastest pace in the last 6 years.

Dynamics of deviation of global stocks from 5-year averages

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Source: Bloomberg.

The threat that the States will flood the market with oil, is increasing as the number of drilling rigs increases from Baker Hughes. By the end of the week, by February 9, the indicator increased by 26 and reached the level of 791, the highest since April 2015.

And ye,t the main reason for the panic was the behavior of stock indices, which increased fears for global demand. It is his dynamics that lay a solid foundation for rising trends for Brent and WTI. At the same time, OPEC forecasts an increase in the indicator by 1.59 million, to 98.6 million barrels, and the IEA increased its estimate for 2018 from +1.3 million to +1.4 million b / s. In this regard, the sooner the pullback in the US stock markets ends, the faster the oil prices will recover.

Dynamics of WTI and Dow Jones

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Source: Bloomberg.

In this, hedge funds also sincerely believe, only slightly reducing the record net-long. Their cumulative value for the two main grades of black gold still exceeds 1 billion barrels in equivalent, which indicates the hopes of speculators for a quick rebound.

Not the least role in the fate of oil is the dollar, whose positions have become stronger in the light of the growth in the volatility of financial instruments. Strengthening the US currency theoretically makes oil more expensive in the countries-largest consumers, that is, slows down demand. In this respect, investors should closely monitor the release of inflation data in the US in January. A sharp upward spurt of the indicator can provoke a new wave of S & P500 sales, strengthen the dollar and put pressure on black gold.

Technically, after reaching a target of 88.6% for the pattern of the "Shark", the risks of Brent's recoil in the direction of $ 65 per barrel increase. Updating the February low will create prerequisites for the development of a correction to $ 60.

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Technical analysis of USD/CHF for February 13, 2018

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Overview:

  • The USD/CHF pair continued to move upwards from the level of 0.9344/0.9399. The pair rose from the level of 0.9399, but it rebounded from the price of 0.9399 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.
  • 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).
  • The USD/CHF pair continues 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.
  • However, if the USD/CHF pair is able to break out the level of 0.9399, the market will decline further to 0.9300.
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Technical analysis of NZD/USD for February 13, 2018

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Overview:

  • Pivot: 0.7298.
  • The NZD/USD pair continues to move upwards from the level of 0.7213. The pair rose from the level of 0.7213 to a top around 0.7298. Today, the first resistance level is seen at 0.7359 followed by 0.7394, while the daily support 1 is seen at 0.7213 (38.2% Fibonacci retracement). According to the previous events, the NZD/USD pair is still moving between the levels of 0.7255 and 0.7359; so we expect a range of 104 pips. Furthermore, if the trend is able to break out through the pivot point at 0.7298, it should see the pair climbing towards the first resistance (0.7359) to test it. Therefore, buy above the level of 0.7298 with the first target at 0.7359 in order to test the daily resistance 1 and further to 0.7394. Also, it might be noted that the level of 0.7394 is a good place to take profit. On the other hand, in case a reversal takes place, and the NZD/USD pair breaks through the support level of 0.7213, a further decline to 0.7157 can occur which would indicate a bearish market.
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NZD/USD Intraday technical levels and trading recommendations for February 13, 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 depicted low (0.6780). An inverted Head and Shoulders pattern was expressed around these price levels.

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

That's why, the current bullish movement extended towards the price levels of 0.7320 and 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 were expected.

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

Bearish fixation below 0.7160 is needed to allow a further decline towards 0.7090.

On the other hand, the price zone (0.7320-0.7390) remains a significant supply zone to be watched for possible bearish rejection and another SELL entry.

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Intraday technical levels and trading recommendations for EUR/USD for February 13, 2018

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Monthly Outlook

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2050-1.2100 (multiple previous bottoms set in July 2012 and June 2010). Hence, a long-term bearish target was projected toward 0.9450.

In March 2015, EUR/USD bears challenged the monthly demand level around 1.0500, which had been previously reached in August 1997.

In the longer term, the level of 0.9450 remains a projected target if any monthly candlestick achieves bearish closure below the depicted monthly demand level of 1.0500.

However, the EUR/USD pair has been trapped within the depicted consolidation range (1.0500-1.1450) until the current bullish breakout was executed above 1.1450 and recently above 1.2075.

Another bullish breakout above 1.2250 is being expressed on the chart. This hinders the bearish momentum allowing bullish advancement to occur towards 1.2750.

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Daily Outlook

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

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

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

Daily persistence above 1.2470-1.2500 is needed to confirm a recent bullish flag continuation pattern with projected targets towards 1.2750.

However, a recent bearish pullback is being expressed below the price level of 1.2350. This may extend towards 1.2070 if a bearish breakdown of the level of 1.2200 is achieved on a daily basis.

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Analysis of Gold for February 13, 2018

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Recently, Gold has been trading upwards. The price tested the level of $1,330.00. Accorrding to the 15M time – frame, I found a successful rejection of the support at the price of $1,328.00, which is a sign that selling looks risky. I also found a higher highs and higher lows today, which is a sign of a healthy intraday bullish trend. My advice is to watch for potential buying opportunities. The upward targets are set at the price of $1,333.75 and at the price of $1,340.50.

Resistance levels:

R1: $1,328.15

R2: $1.333.80

R3: $1,340.80

Support levels:

S1: $1,315.50

S2: $1,308.55

S3: $1,302.90

Trading recommendations for today: watch for potential buying opportunities.

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EUR/USD analysis for February 13, 2018

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Recently, the EUR/USD pair has been trading upwards. The price tested the level of 1.2337. Accorrding to the 30M time – frame, I found a breakout of the pivot resistance 1, which is a sign that buyers are in control. I also found a successful rejection of the upward trendline, which is another sign of the strength. My advice is to watch for potential buying opporrtunities. The upward target is set at the price of 1.2375.

Resistance levels:

R1: 1.2315

R2: 1.2337

R3: 1.2375

Support levels:

S1: 1.2250

S2: 1.2212

S3: 1.2190

Trading recommendations for today: watch for potential buying opportunities.

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Bitcoin analysis for February 13, 2018

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Bitcoin (BTC) has been trading downwards. As I expected, the price tested the level of $8.342. The South Korean government intends to introduce an approval system for cryptocurrency exchanges based on the Bitlicense model, developed by the New York State Department of Financial Service. The technical picture looks bearish.

Trading recommendations:

According to the 30M time - frame, I found successful rejection of resistance (the upper diagonal of the channel), which is a sign that sellers arer in control. I also found a breakout of the median line of the channel, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward target is set at the price of $8.000.

Support/Resistance

$8.706 – Intraday resistance

$8.342– Intraday support

$8.000 – Objective target

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

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Technical analysis of USD/JPY for February 13, 2018

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USD/JPY is under pressure. The pair has repeatedly tested the immediate support at 108.45. Currently, it has returned to levels above both the 20-period and 50-period moving averages, but remains capped by the key resistance at 108.45.

The U.S. dollar consolidated some of its recent gains, as stock markets showed signs of stabilization following two weeks of sharp declines.

Below 108.45, choppy trading with a bearish bias is expected. Crossing at 107.30 on the downside would trigger a further fall toward 107.05.

Alternatively, if the price moves in the opposite direction, a long position is recommended to be above 108.45 with a target of 108.95.

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 108.45, take profit at 107.30.

Resistance levels: 108.85, 109.25, and 109.55

Support levels: 107.30, 107.05, and 106.75.

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Technical analysis of USD/CHF for February 13, 2018

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USD/CHF is under pressure. The pair is trading below the key resistance at 0.9410 (the high of February), which should maintain the selling pressure. The relative strength index lacks upward momentum. Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.

Therefore, below 0.9410, look for a return with targets at 0.9300 and 0.9275 in extension.

Chart Explanation: The black line shows the pivot point. The present price above the pivot point indicates a bullish position, and the price below the pivot point indicates a short position. The red lines show the support levels, and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Strategy: SELL, stop loss at 0.9410, take profit at 0.9300.

Resistance levels: 0.9440, 0.9470, and 0.9500

Support levels: 0.9300, 0.9275, and 0.9240.

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Technical analysis of GBP/JPY for February 13, 2018

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GBP/JPY is under pressure. Although the pair posted a rebound, it is still capped by a key resistance at 150.20. The relative strength index is mixed with a bearish bias.

Hence, as long as 150.20 is not surpassed, look for a return to 148.65. A break below this level would trigger a new decline with the target at 147.80.

Alternatively, if the price moves in the direction opposite to the forecast, a long position is recommended to be above 150.20 with the target at 150.90.

Strategy: SELL, Stop loss at 150.20, Take profit at 148.65

Chart Explanation: the black line shows the pivot point. The price above the pivot point indicates long positions; and when it is below the pivot point, it indicates short positions. The red lines show the support levels, and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 150.90, 152.10, and 153.00

Support levels: 148.65, 147.80, and 147.00.

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Technical analysis of NZD/USD for February 13, 2018

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Our first upside target which we predicted in yesterday's analysis. NZD/USD is expected to trade with a bullish outlook. The pair posted a rebound from 0.7230 and broke above its 20-period and 50-period moving averages. The relative strength index is bullish and call for a for a new upleg.

Hence, as long as 0.7255 is not broken, look for a new advance with targets at 0.7325 and 0.7355 in extension.

The black line shows the pivot point. Currently, the price is above the pivot point, which is a signal for long positions. If it remains below the pivot point, it will indicate short positions. The red lines show the support levels, while the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Resistance levels: 0.7325, 0.7355, and 0.7385.

Support levels: 0.7225, 0.7200, and 0.7175.

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Bitcoin analysis for 13/02/2018

The Chinese state news agency seems to strengthen its position on the OTC exchange of crypto and foreign ICOs, which are still active in the country, calling them an attempt to circumvent the existing rules. The report published by Xinhua News Agency describes in detail how easy it is to acquire cryptocurrency assets via the OTC channel. Journalists have registered on exchanges such as Huobi Pro and bought Bitcoins using available payment tools such as AliPay. After the ICO prohibition last year issued by the People's Bank of China, domestic stock exchange platforms started using OTC and moved their operations abroad.

Relying on a report published by the Chinese Commission on Financial Security on the Internet, the news agency stressed that from November last year, 21 OTC exchanges remain active among Chinese investors, while these platforms are located abroad, e.g. in Hong Kong, Japan, and the USA. Moreover, the report also identifies trading platforms that are based outside of China but are available to Chinese investors who can participate in buying the first tokens via OTC channels. In addition, the agency stated that all these activities are only new attempts to circumvent the existing rules and called for more stringent regulation. These reports also apply to ICOs, which have moved the place of registration outside of borders: "Currently, some ICO projects are being transferred abroad in order to continue operations. Although they are officially set up and issuing tokens abroad, their project development, key personnel and investors are based in mainland China." - was stated in the CCFS report.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market is still trading around the weekly pivot at the level of $7,827, so the breakout through the technical resistance at the level of $9,146 has so far failed to occur. The next price target below the weekly pivot is the technical support at the level of $7,531.

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Ichimoku cloud indicator analysis of USDX for February 13, 2018

The Dollar index is pulling back as expected towards the cloud support and previous resistance of 89.60. Price remains above the cloud support in the 4-hour chart, so the short-term trend remains bullish.

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Short-term support is at 89.60. Resistance is at 90.56. Price has broken below the kijun-sen and is heading towards cloud support. Bulls need to bounce from the support levels and eventually break above 90.56. Making a higher low is important for bulls. If price however breaks through and below the 4-hour cloud, this will imply that the entire bounce is most probably over and we are heading for new lows towards 87.

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On a daily basis, the Dollar index got rejected at the kijun-sen and is heading towards the tenkan-sen (red line indicator) support. Daily trend remains bearish. Support on a daily basis is at 89.60. A daily close below it will be a bearish sign.

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Trading plan for 13/02/2018

The global stock market shows some signs of calm, which helps to trigger a correction risky currencies, but it hurts the US Dollar. JPY, CHF and EUR are strong, AUD, CAD and NZD perform less well. EUR/USD approached 1.2320, USD/JPY dives to 108.15.The stock market behavior is still the main clue for sentiment and after a good session on Wall Street on Monday, Asia started trading positively, although the indices began to return profits every hour. Shanghai Composite maintains growth by 1.0%, but Nikkei225, returning after a one-day break, scored a more aggressive withdrawal and eventually lost 0.65%.

On Tuesday 13th of February, the main event of the day is Consumer Price Index data releases from the UK, but the market participants should pay attention to Producer and Import Prices data from Switzerland and NFIB Small Business Optimism data from the US.

GBP/USD analysis for 13/02/2018:

The market is already pricing in around 70% probability of a Bank of England rate hike in May. This means, todays data need to provide a significant upside surprise in the CPI figures to lift UK interest rates higher. The market participants expect a decrease in CPI of -0.6% from 0.4% last month and a drop from 3.0% to 2.9% on a yearly basis. If the data will disappoint, then the odds for another interest rate hike will decrease significantly and the optimism over a soft Brexit might evaporate.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. After a bounce from the level of 1.3760, the price returned to the consolidation zone and now is trying to break out above the technical resistance at the level of 1.3874. The key technical resistance is still seen at the level of 1.4080 and due to the growing bullish divergence, there is a possibility for the market to test this level, especially if the data will beat the consensus significantly.

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Market Snapshot: SPY retraces 61% of the latest leg down

The price of SPY (SP500 ETF) has retraced to the level of 266.60, which is just above the 61% Fibo of the latest leg down. The upward momentum remains above its fifty level, so there is still a chance for another move higher. The technical resistance at the level of 272.23 is still the most important level to the upside.

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Market Snapshot: DXY fails to break out higher

After touching the lower channel line around the level of 90.54, the price of US Dollar Index has reversed lower form the overbought market territory. The next technical support is seen at the level of 89.62 and this level must hold if the bulls want to push the price higher anytime soon.

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Ichimoku cloud indicator analysis of gold for February 13, 2018

Gold price remains in a bearish short-term trend as price is below the 4-hour Kumo (cloud) at $1,334-41. Price is bouncing to challenge cloud resistance. Bulls need to be cautious in case we see a rejection at $1,334. On the other hand, bears need to push price back below $1,321 as soon as possible.

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Black line - resistance

Gold price is above the tenkan- and kijun-sen indicators and is heading towards cloud resistance at $1,334. This is also where we find the downward sloping trend line resistance. So the $1,334 level is very important. Support is at $1,317. A break below it will open the way for a move towards $1,307.

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On a daily basis, Gold price remains below the tenkan-sen (red line indicator). The tenkan-sen resistance is now at $1,330 and the kijun-sen at $1,336. As long as price is below these two indicators, I expect Gold price to move towards the Daily Kumo at $1,300-$1,290.The material has been provided by InstaForex Company - www.instaforex.com