Pound dreams of leaving with minimal losses

Disappointing statistics on U.K. retail sales for January (+ 0.1% with a forecast of + 0.5% m / m) and profit taking on short positions on the U.S. dollar put an insurmountable barrier to the pound "bulls" to the north. Looking at how the profitability growth of the 10-year treasury bonds, the chances of the Federal Reserve's four monetary restrictions for the year 2018 has increased and the U.S. macroeconomic statistics has improved that makes it difficult to understand why the USD index fell. Undoubtedly, it is playing out the factor of growing fears about the future recession, but is it too early to talk about it?

Sterling, on the other hand, still can not find a balance between the "hawkish" position of the Bank of England and political risks. By the end of the week on February 23rd, the EU summit and the meeting between Angela Merkel and Theresa May in Berlin are planned, which can shed light on the issue on the severity of the Brexit. The leaders of the European Union will decide what to do with the budget of € 1 trillion after the divorce from Britain. Germany is not averse to increasing costs, but the Netherlands, Finland, and Denmark would prefer to reduce them. As for the Prime Minister, there are rumors on the market that she wants to maintain relations with the European Union in certain areas (financial services, agriculture) and exit without significant losses in others.

The main support for the pound is provided by the hawkish rhetoric of the Bank of England, which is allowed to grow to 78%. And yet, the indicator was at the level of 38% in January. Supporters of sterling wrote off the weakness of retail sales for the post-Christmas syndrome. Indeed, the main problems came from the food products.

The dynamics of the probability of raising the repo rate.


Source: Bloomberg.

By issuing moderately optimistic assessments of the Albion economy in the future, the BoE proceeds from the assumption that the acceleration of the average wage against the background of the slowdown in inflation will lead to an increase in the real incomes of the population, expand its purchasing power and eventually accelerate GDP. In this respect, the release of data on the labor market in Britain is able to test this theory for strength. Contrary to the expectations of the regulator, CPI does not want to go far from the psychologically important mark of 3 percent. It remains to look at the average salary. According to forecasts of Bloomberg experts, the results will grow by 2.5% y / y in December. The best evidence will open the way of the GBP / USD pair northward.

An important role in the fate of the pair will be the behavior of the U.S. dollar. Currently, many investors are switching from the Fed's monetary policy to a dual budget deficit and current account, arguing that the deteriorating financial situation puts the wheel on the capital inflow to the United States and leads to the sales of the U.S. currency.

Technically, a successful assault on $ 1,415 is required to continue the pound rally. On the contrary, a breakthrough of support near $ 1.38 will strengthen the risks of correction development in the direction of $ 1.36.

GBP / USD pair, daily chart


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


Daily Outlook

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

Evident signs of bullish recovery were 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 further bearish decline towards 0.7090.

On the other hand, the current price zone (0.7320-0.7390) remains a significant supply zone to offer a possible bearish rejection and another SELL entry. Stop Loss should be as a daily candlestick above 0.7450.

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Intraday technical levels and trading recommendations for EUR/USD for February 19, 2018


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 was expressed on the chart. This hinders the bearish momentum allowing bullish advancement to occur towards 1.2750.


Daily Outlook

In September, the 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.

On the other hand, a recent bearish pullback was being expressed below the price level of 1.2450. This could extend towards 1.2070 if a bearish breakdown of the level of 1.2200 is achieved on a daily basis (low probability).

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Bitcoin analysis for February 19, 2018


The Bitcoin (BTC) has been trading upwards. The price tested the level of $11.010. 2018 might be a breakout year for cryptocurrency wallets. The Bitcoin.com wallet is set to reach 2,000,000 downloads soon and has integrated Shapeshift into its platform. More recently, San Diego-based Edge released its wallet from a three month long beta, going fully live 15 February, providing what it claims is "a private, secure, open-source, and easy to use multi-asset wallet." Technical picture looks bullish to neutral.

Trading recommendations:

According to the 30M time - frame, I found shooting star candle (bearish) at the pivot resistance 3, which is a sign that buying looks risky. I also found an overbought 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 $10.730 and at the price of $10.325.


$10.918 – Intraday resistance

$10.730– Intraday support

$10.730 – Objective target 1

$10.325 – 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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USD/JPY analysis fo February 19, 2018


Recently, the USD/JPY has been trading upwards. The price tested the level of 106.65. Anyway, according to the 30M time – frame, I found a successful rejection of pivot resistance 1 at the price of 106.60, which is a sign that buying looks risky. I also found a hidden bearish divergence on the 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 106.40 and at the price of 106.08.

Resistance levels:

R1: 106.60

R2: 106.93

R3: 107.46

Support levels:

S1: 105.75

S2: 105.22

S3: 104.90

Trading recommendations for today: watch for potential selling opportunities.

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Bitcoin analysis for 19/02/2018

While many European countries are looking for stricter rules on cryptocurrencies, Spain wants to follow Switzerland, proposing a friendly legacy for the cryptocurrency market. The People's Party of Spanish Prime Minister Mariano Rajoy is ready to take full advantage of Blockchain technology. In particular, the conservative party has tax breaks.Teodoro Garcia Egea - legislator preparing a bill - thinks that it is in the interest of a large European country to welcome Blockchain because new technology can potentially drive innovation in the fields of finance, health, and education. Garcia Egea explained: "The level of digitization for companies will be crucial. We hope the legislation will be ready this year. The People's Party plans to invite Blockchain experts to the country to testify in parliament. They are also interested in studying countries such as Switzerland, which is probably the capital of Blockchain in the world." In addition, Garcia Egea strives to make Spain a safe and friendly place to invest in cryptocurrencies, proposing the possibility of not disclosing cryptocurrency investments below a certain number, while providing an effective regulatory environment. "We want to establish the safest framework for Europe to invest in ICO." added Egea.

The cryptocurrency market regulation and legislation are unavoidable in the future and the sooner will be done the better. Spain is another example of forward thinking and opens to new technology country, which will benefit from it in the nearest future.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. There is a possibility of an impulsive wave development towards the new local highs with the target around the level of $12,030. Nevertheless, the market must first complete the wave 4 correction. The first target for wave 4 is at the level of $9.707 and then at $9,432.


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Trading plan for 19/02/2018

The currency market is more or less where it was left on Friday after a correction before the long weekend. Today, apart from the excluded Chinese market, there is a holiday in the USA and Canada, so liquidity may not be a strong attribute of trade.

On Monday 19th of February, the event calendar is light in important news releases, but the market participants should keep an eye on Rightmove House Prices data from the UK and Bundesbank Monthly Report data from Germany.

EUR/USD analysis for 19/02/2018:

Trading activity in Asia was thin and this will be like that for all Monday: China has Lunar New Year holidays and US markets are shut for Presidents' Day. Not much on the event calendar either, except for the Bundesbank Monthly Report data. It contains relevant articles, speeches, statistical tables, and provides a detailed analysis of current and future economic conditions from the bank's viewpoint. Market impact tends to be greater when the report reveals a viewpoint that clashes with the ECB's stance.

Let's now take a look at the EUR/USD technical picture in the H4 time frame. The market broke through the recent swing top at the level of 1.2539 and mace a new local high at the level of 1.2555, but quickly reversed back towards the technical support at the level of 1.2384. So the breakout was a fake one and now the market is back to the consolidation zone. If the price will fell out of the dashed black channel, then the next support is seen at the level of 1.2333 level.


Market Snapshot: SPY hit the next resistance

The price of SPY (SP500 ETF) has hit the next technical resistance at the level of 275.27 and now is pulling back from this level. The nearest support is seen at the level of 272.32, so if it will hold, then another leg up is possible. Please notice the market conditions remain overbought.


Market Snapshot: DAX testing the resistance

The price of German DAX index has bounced higher towards the level of 12,505 and now is testing this level. Any breakthrough will lead to the test of the next technical resistance at the level of 12,676. The stochastic indicator bounce from the oversold levels supports this view.


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Trading Plan for EUR/USD and US Dollar Index for February 19, 2018


Technical outlook:

The EUR/USD pair is still looking to form a top and reversal it seems. The pair is into its 5th wave of the same degree that began in January 2017, and we expect the same to terminate around 1.2600/20 levels if not higher. View the educational wave counts video version on my channel. The current wave count suggests that EURUSD may either produce an expanded flat as wave 4 termination before rallying into its 5th wave or it is already unfolding its 5th wave and maybe just one leg away from terminating the same. Price support is seen at 1.2205 levels for now while interim resistance is at 1.2550 levels. Intraday resistance can be seen at 1.2450/1.2500 levels. A safe trading strategy would be to look for opportunities to sell at higher levels.

Trading plan:

Aggressive traders remain short and also look to sell around 1.2600 levels.

US Dollar Index chart setups:


Technical outlook:

The US Dollar Index is also looking to terminate into its 5th of 5th wave or might have already done that. A fresh low was print at 88.25 levels on Friday last before the index rallied more than 100 points above 89.20 levels. A break above 90.50/60 levels would certainly confirm that a meaningful bottom is in place and that the index is looking to produce higher highs and higher lows going forward. Price resistance is seen at 90.50 while interim support is seen at 88.25 levels respectively. Looking at the bigger picture, it is not advisable to go short for a potential final wave before turning long; in fact looking for opportunities to go long on dips would certainly be termed as a favorable strategy.

Trading plan:

Aggressive traders look to remain long and buy more around 88.60 levels.

Fundamental outlook:

Watch out for BOE's Carney speech in London at 12:45 EST.

Good luck!

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EUR/USD analysis for February 19, 2018


Recently, the EUR/USD has been trading downwards. The price tested the level of 1.2405. Anyway, according to the 30M time – frame, I found a fake brreakout of Friday at the price of 1.2393, which is a sign that selling looks risky. I also found a hidden bullish divergence on the stochastic oscillator in the background, which is another sign of the strength. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 1.2450 and at the price of 1.2510.

Resistance levels:

R1: 1.2511

R2: 1.2615

R3: 1.2675

Support levels:

S1: 1.2350

S2: 1.2290

S3: 1.2190

Trading recommendations for today: watch for potential buying opportunities.

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Trading plan 02/19/2018

Trading plan 02/19/2018

The general picture: A weekend in the US, in the pause markets.

Last week, the market was led by two factors: The US market showed a turn to growth after a strong corrective decline.

In addition, inflation in the US showed acceleration.

On a new week: On Monday, it is a day off in the US.

On Wednesday, there will be "minutes" of the FRS.

The market will wait for a new signal to strengthen the dollar.

For the euro, a clear range of 1.2205 is 1.2555.

According to the pound: I suppose the continuation of growth.

Purchases from 1.3900.


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Breaking Forecast 02/19/2018

Breaking Forecast 02/19/2018

EURUSD: Waiting for an exit from the range.

Gentlemen, be cautious. On Monday, markets in the US will be closed, trading will be sluggish and "narrow" - it is worthwhile to be cautious.

Our buying have gone in these footsteps: they were honest stops, the euro broke through the main levels of 1.2525 and 1.2540 up, but reached only 1.2555 and drastically went down, closing the day and the week at the lows around 1.2400.

You can not be right all the time, or rather, it is impossible.

The market has now taken a pause, determined.

There is an almost horizontal range of 1.2205 - 1.2555.

Playing in the range is possible, but effective from the borders.

Buy for the breakthrough of 1.2555, stop at 1.2510, profit at 1.2655.

Sell for the breakthrough of 1.2205, stop at 1.2250, profit at 1.2100.


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NZD/USD is testing major resistance, watch for a reversal

Price is testing major resistance at 0.7431 (Fibonacci extension, horizontal swing high resistance), and a strong reaction could occur at this level to push the price down towards the 0.7256 support (Fibonacci retracement, horizontal swing low support).

Stochastic (34,5,3) is seeing major resistance at 95% where a corresponding reaction could occur.

Sell below 0.7431. Stop loss at 0.7532. Take profit at 0.7256.


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The dollar takes the initiative

Positive macroeconomic data allowed the dollar to finally recoup from a prolonged fall caused by panic sell-offs in stock markets.

Against the euro, the dollar fell below the psychological level of 1.24, the reason was the increased demand for the dollar after unexpectedly positive data on the housing market for January. The number of new buildings grew by 9.7%, experts expected growth of only 3.4%, and also by 7.4% the number of building permits increased with a forecast of 3.5%. Growth in activity in the construction sector may lead to a slowdown in housing prices.

The University of Michigan's report on consumer confidence turned positive, the sentiment index rose to 99.9 against 95.7 in December, apparently, the mood of the taxation was positively influenced by the start of the tax reform, with a deterioration in sentiment rather than growth. The peak that was formed - the second since 2004 - indicates that in the American society, the perception of reforms is assessed positively.

In addition, the rise in prices for imports and exports were above forecasts, which will affect inflation, and we will get quite a confident growth in the dollar, even despite the recent turmoil in the stock market.


The forecast for GDP growth in the first quarter from the Federal Reserve Bank of Atlanta improved slightly and amounts to 3.2% on Monday evening. The negative from the weak data on retail sales and consumer inflation is somewhat stable, the threat to the selling of the dollar has decreased significantly.

Markets can not yet understand how the tax reform will affect the US economy. In pre-election promises, Trump focused on the fact that he would begin to reduce the budget deficit and the huge debt, but in reality so far everything is developing in the opposite scenario. The budget deficit will significantly increase this year, as well as the level of public debt. As for the corporate sector, there is still no desire to reduce borrowing, on the contrary, the benefits of tax cuts can cause not a decrease in debt, but its growth - companies intend to issue more bonds this year than in 2017. This trend , if it is implemented, can completely reverse the intent of the tax reform on its head.

The key event of the upcoming week is the publication of the minutes of the FOMC meeting on January 31. The test of the statement slightly changed in regards to the meeting in December, but it was impossible to understand what estimate the members of the Cabinet gave to the launched tax reform. A detailed alignment can again lead to an increase in volatility, since the forecast for the number of rate hikes this year will directly depend on it. While the markets are confident of two increases in March and June, further opinions vary, and the protocol can greatly affect market sentiment.

Business activity indexes from Markit will also be released on Wednesday.


At the moment, the dynamics of the indices is opposite, the production PMI rose in January to 55.5p compared to 55.1p in December, which indicates the strongest growth in the manufacturing industry since March 2015. Regional data show continued growth, the ISM index rose more than expected , so on Wednesday, most likely, there will be a confirmation of growth in business activity.

At the same time, in the service sector, activity slowed for several months in a row, which quite distorted the overall picture. It is expected that against the backdrop of growing consumer confidence and confident labor market data, the PMI index in the services sector will also show growth, which will provide additional support to the dollar.

Thus, by the end of the week, the dollar managed to survive the blow and has good chances to stay on the achieved levels.

Monday is a holiday in the US, so strong movements due to lack of objective data are not expected. The likelihood against commodity currencies appears to be at its highest, however, the yen will not enjoy less demand, the growth of usdjpy is unlikely. It is also possible to resume demand for gold and the Swiss franc.

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Euro and pound took a breather


The euro feels most confident among the G10 currencies, and the main reason for this confidence is a strong economic base. The eurozone demonstrates high growth rates in production, the trade balance is confidently proficient, and the indices of business activity and consumer confidence are overshooting.

The GDP growth rate in 2017 was 2.7%. This data coincided with the forecasts. Industrial production in December grew by 5.2%, which is higher than expected, and the trade surplus surpassed expectations.


Against the backdrop of strong economic growth and the inevitability of an exit from the soft monetary policy, the euro enjoys steady demand, and ECB officials are yet to show miracles of resourcefulness, at least somehow to cool bullish sentiments.

ECB board member Benoit Coeure said on Friday that the regulator is not too concerned about recent volatility in world markets, as the correction was orderly and limited. Also Coeure reiterated the position of the ECB - the rates will not be raised "for a long time" after the completion of the asset purchase program, and this position is shared unanimously by everyone in the ECB.

On Monday, the publication of the monthly report of the Bundesbank deserves attention. On Tuesday, ZEW will publish the index of economic sentiment in the eurozone, and on Thursday its version will be presented by IFO. For both studies, the forecasts are positive with an inclination towards a small decrease.

Also on Thursday the minutes of the January meeting of the ECB will be published, which are interesting from the point of view of the development of internal discussion.

The euro remains within the uptrend, the current decline is corrective, there is a potential to decline to 1.2320.

United Kingdom

The British pound was down on Friday in sync with the euro. The catalysts for the decline, in addition to strong data from the US, were rather weak figures in the report on retail sales in January. After a fall of 1.4% in December, January's growth was only 0.1%, with an annual growth rate of just 1.6%, the general trend heading towards a slowdown in sales after the referendum on Brexit is apparent.


Today, Prime Minister Theresa May will deliver a speech in Munich about Brexit, which can change the overall assessment of the situation on the state of the exit negotiations. Next week on Wednesday, a similar speech will be made by Boris Johnson. Demand for the pound in recent weeks was largely due to the fact that there was confidence in the favorable outcome of the negotiations, which both sides are striving for, and therefore investors do not particularly pay attention to the tension that is being pumped into the media.

The key day of the coming week will be released on Wednesday, when a report on the labor market will be published, and a report on inflation will be reported to parliament. On Wednesday, the market will develop a position in relation to the May policy meeting of the Bank of England and whether to wait for an increase in the rate.

The pound went into correction, but its positions look confident. The pound is in a downward channel since January, but this week it will look for an opportunity to go above 1.4140.

Oil and ruble

Oil sustained a period of panic selling, not falling below $ 60/bpd, convincing players of the fundamental solidity of current quotes. Despite the fact that the US continues to receive strong data on the record growth of production, it is more propagandistic in nature, as there is no growth in employment in the mining sector after the failure of 2014/17, employment has fallen to the level of 2007 and is in no hurry to recover. Oil has a chance to restore growth, which will support commodity currenices.

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