Global macro overview for 23/02/2018

The majority of the ECB's Governing Council considered that the change in communication with the market demanded by some representatives to remove the most dovish formulas (like easing bias) at the first meeting in 2018 would be premature. However, the bank maintained the state of the possibility of changing the attitude (forward guidance) at a later date as part of the regular assessment of the economic situation and maintaining stable communication with the market. With regard to the Euro currency, it was written that although , the strengthening did not have a significant negative impact on Eurozone demand so far, volatility in currency markets is a risk factor that requires monitoring. The ECB expects that basic interest rates will remain at current levels for a long time; significantly exceeding the horizon of the QE program, which is expected to last until September this year. The ECB is prepared for its increase or prolongation, if necessary.

On the other hand, there are many dovish accents in the ECB report, which the bank does not have to withdraw (and will not have to in the near future), because inflationary pressures remain low. The emerging weak impulses for CPI are the result of cyclical improvement and concern mainly food and energy prices. Domestic demand or wages do not generate base rate increases. There are, however, signs of economic downturn, which in the perspective of several quarters will have a weakening effect on CPI. The German institute Ifo said that the economic climate index in February fell more than expected (115.4 pts vs. 117.0 pts) with the subindex of expectations at the lowest level in 10 months. Still high, but also weakening subindex of the current situation indicates the passing of the peak of economic activity in Germany in the first quarter.

In conclusion, the current macroeconomic developments will likely limit the opportunities to deepen appreciation of the Euro currency in the medium term.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The bounce from the technical support at the level of 1.2257 was short lived and the market was too weak to break through the level of 1.2366 so far. This technical resistance level is the key level to the upside, otherwise, the bears will regain the control over the market and push the price towards the golden trendline support around the level of 1.2257. Any violation of this level would directly expose the technical support at the level of 1.2203 for a test.

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Global macro overview for 23/02/2018

The undecided behavior of the USD this week raises uncertainty among market participants. The USD has had a weak Thursday, a recovery during the night session in Asia and the return of troubles at the opening of Europe. In general, however, we do not move much in any direction. There is a lack of conviction what to do next. Events that could change something have failed to do so. The minutes of the FOMC meeting were received as slightly dovish or slightly hawkish. Notes from the ECB meeting were also not enough for more than an hour of emotion because they did not bring anything to debate about the future of monetary policy. Stopping the depreciation of USD from the previous week violated the confidence of the sellers, and the trade interrupted by holidays added to indecision. Under its own weight, the market slightly reduces positions and makes profits, especially as the end of the month is approaching. At the same time, braver investors are looking for luck in attempts to awake some uptrends, which will hardly succeed.

USD is waiting for an impulse to confirm or invalidate the current stagnation period. This move might be triggered during the hearing of Fed President J. Powell in Congress on February 28 or a report from the labor market on March 9. It gives global investors a lot of time to think about it, and this is bad news from the side of maintaining a non-sustaining position.

Let's now take a look at the US Dollar Index technical picture on the H4 time frame. The market remains locked in a consolidation zone between the levels of 90.25 - 89.63, which also means it is still under the channel lower trend line. Moreover, the overbought trading conditions are indicating a possible pullback towards the level of 89.63 or even 89.37.

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Bitcoin analysis for February 23, 2018

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Bitcoin (BTC) has been trading sideways at the price of $10.050. The state of California has introduced a new bill that aims to recognize blockchain transactions, digital signatures, and smart contracts as a legal form of record. Assemblyman Ian Calderon introduced Assembly Bill 2658 on February 20 in order to re-define laws that apply to electronic records that take place within the state. Technical picture on bitcoin looks bearish.

Trading recommendations:

According to the 30M time frame, I found that the price is trading inside the well-defined downward channel, which is a sign that sellers are in control and that buying looks risky. I also found overbought conditions 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 prices of $9.555 and $9.136.

Support/Resistance

$10.160 – Intraday resistance

$9.555 – Intraday support

$9.555 – Objective target 1

$9.136 – Objective target 2

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NZD/USD Intraday technical levels and trading recommendations for February 23, 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, 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 towards the price levels of 0.7230 - 0.7165 where bullish recovery should be expressed.

Trade Recommendations:

The current price zone (0.7320-0.7390) remains a significant supply zone to offer a vaid SELL entry.

Stop Loss should be set as a daily candlestick above 0.7450.

Bearish persistence below 0.7300 should be maintained to allow further bearish decline towards 0.7160 and 0.7090.

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Analysis of Gold for February 23, 2018

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Recently, gold has been trading sideways at the price of $1,328.20. According to the 30M time frame, I found that the price is trading in the range between the support of $1,322.00 and the resistance $1,332.00. Gold is in the downward trend and my advice is to watch for selling opportunities with a potential target at $1,322.00 (support).

Resistance levels:

R1: $1,335.80

R2: $1,339.55

R3: $1,346.95

Support levels:

S1: $1,324.60

S2: $1,317.20

S3: $1,313.45

Trading recommendations for today: watch for potential selling opportunities.

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Intraday technical levels and trading recommendations for EUR/USD for February 23, 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 was expressed on the chart. This hinders the bearish momentum allowing bullish advancement to occur towards 1.2750 provided that the price level of 1.2250 remains defended by the bulls.

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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 the recent bullish flag continuation pattern with projected targets around the price level of 1.2750.

On the other hand, the recent bearish pullback is being expressed below the price level of 1.2450 thus expressing a double-top reversal pattern with projected target around 1.1990.

This bearish pullback may extend towards 1.2070-1.1990 if a bearish breakdown of the level of 1.2200 (the depicted uptrend line) is achieved on a daily basis.

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GBP/USD analysis for February 23, 2018

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Recently, the GBP/USD has been trading upwards. The price tested the level of 1.3994. Anyway, according to the 30M time frame, I found a fake breakout of yesterday's high at the price of 1.3989, which is a sign that buying looks risky. I also found a overbought condition 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 prices of 1.3933 and 1.3878.

Resistance levels:

R1: 1.4010

R2: 1.4065

R3: 1.4140

Support levels:

S1: 1.3878

S2: 1.3800

S3: 1.3745

Trading recommendations for today: watch for potential selling opportunities.

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Technical analysis of USD/CHF for February 23, 2018

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Overview:

  • The NZD/USD pair continued moving upwards from the spot of 0.7285. This week, the pair rose from the area of 0.7285 (support zone) to the top around 0.7310. Today, the first support level is seen at 0.7285 followed by 0.7262 and 0.7238, while the daily resistance is seen at 0.7360. According to the previous events, the NZD/USD pair is still moving between the levels of 0.7285 and 0.7394. Hence, we expect a range of 109 pips in coming hours. This would suggest a bullish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. Furthermore, if the trend is able to break out through the first resistance level of 0.7360, we should see the pair climbing towards the second resistance (0.7374) to test it. On the contrary, if a breakout takes place at the support level of 0.7285 , then this scenario may become invalidated. Remember to place a stop loss; it should be set below the second support of 0.7203.
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Technical analysis of USD/CHF for February 23, 2018

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Overview:

  • The USD/CHF pair could not break support at the 0.9328 level. This level coincides with 50% of Fibonacci retracement which is expected to act as major support today. Equally important, the RSI is still signaling that the trend is upward, while the moving average (100) is headed to the upside. Accordingly, the bullish outlook remains the same as long as the EMA 100 is pointing to the uptrend. This suggests that the pair will probably go above the price of 0.9328 in the coming hours. The USD/CHF pair will demonstrate strength following a breakout of the high at 0.9328. Consequently, the market is likely to show signs of a bullish trend. In other words, buy orders are recommended above 0.9328 with the first target at 0.9409. Then, the pair is likely to begin an ascending movement to 0.9436 marks and further to 0.9469 levels. The level of 0.9469 will act as strong resistance because it forms the double top on the H1 chart. On the other hand, the daily strong support is seen at 0.9328. If the USD/CHF pair is able to break out the level of 0.9328, the market will decline further to 0.9250.
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Daily analysis of USD/JPY for February 23, 2018

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Overview

The USD/JPY pair traded with clear negativity yesterday to settle below 23.6% Fibonacci correction level for the decline from 113.37 to 105.54, which puts the price under negative pressure that might return trades to the main bearish trend again. However, on the other hand, stochastic shows clear positive signals that might help the price recover and show more bullish correction, especially that the price is still out of the main bearish channel that appears on the chart. Therefore, we prefer to stay aside until we get a clearer signal for the next trend. A breach of 107.40 will make the price resume the correctional bullish track with the next target located at 108.53. A break of 106.30 represents the key to returning to the main bearish trend with its main targets beginning at 105.54. The expected trading range for today is between the 106.00 support and the 107.70 resistance.

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Daily analysis of Gold for February 23, 2018

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Overview

The gold price has begun today's trading with bearish bias after the yesterday rise. Stochastic lost its bullish momentum clearly to move in the overbought areas, approaching it to confirm the negative overlap and creating negative momentum that we are waiting to push the price downwards again. This is also supported by the negative pressure formed by the EMA50. Therefore, we still expect the bearish trend in the upcoming sessions unless the price manages to breach the 1.335.40 level and hold above it, reminding you that our next main target is located at 1,316.48. The expected trading range for today is between the 1,310.00 support and the 1,335.00 resistance.

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Bitcoin analysis for 23/02/2018

According to a BBC report from February 22, the British Parliament's Treasury Committee will start investigating cryptocurrencies and their impact on the British investors and the company. The investigation is caused by the growing global interest in cryptocurrencies, as well as the recent rise and fall of the crypto market from the new year. Nicky Morgan, chairman of the Treasury Committee, told the BBC that she wanted to protect people who "may not be aware that cryptocurrencies are currently unregulated in the UK", but do not want to interfere with the blockchain technology behind digital currencies. "The Treasury Committee will look at the potential risks that digital currencies can bring to consumers, businesses and governments, including the risk of price volatility, money laundering and cyber crime, as well as the potential benefits of cryptocurrencies and Blockchain technology. It will also assess the creation of innovative opportunities and the possible degree of disruption of the economy and the replacement of the traditional method of payment." - Morgan told the BBC.

The BBC writes that the commission will examine what it considers crucial in the sphere of cryptocurrencies, namely, whether they could ever replace traditional payment systems. And if so, what benefits would it bring to society, businesses and governments. Regarding regulation, the committee will hear evidence on how regulation could "bring benefits to digital currency start-ups by increasing consumer confidence" and examine how other countries have dealt with regulating digital currencies. The British House of Parliament also recommended exploring the blockchain technology for government services, including national security and public security, healthcare, cyber security, customs and immigration.

Let's now take a look at the bitcoin technical picture on the H4 time frame. The price has retraced 38% of the previous swing up and bounced from the level of $9,404. This level might be a bottom for the wave 2 as there is a clear double ZigZag structure inside this wave. Currently, the key resistance is seen at the level of $10.120, so if this level is violated, then the price will rally towards the wave 1 high at the level of $11,750.

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Trading plan for 23/02/2018

Overnight Asia has returned to buying the US dollar, but market activity is below average, keeping the main pairs in the known ranges of fluctuations. The stock market is dominated by increases. The Japanese Nikkei 225 increased by 0.72% and the Chinese Shanghai Composite by 0.5%. Gold is under pressure from the stronger USD and the price drops today to $1,326. The WTI oil is defending itself just under $63 thanks to yesterday's good US inventory data.

On Friday, 23rd of February, the event calendar is quite busy with important data releases, but the market participants should keep an eye on speeches by the Fed's William Dudley, Eric Rosengren, Loretta Mester and John Williams. Before that, the eurozone will release the CPI data, Germany will reveal the GDP data and Canada will post its Consumer Price Index data as well.

NZD/USD analysis for 23/02/2018:

The retail sales data from New Zealand has beaten market expectations by the dynamics of 1.7% q/q versus a 1.4% forecast. In annual terms, sales increased by 5.4%. However, the data did not help much because the market remains under the influence of sentiment for the USD recovery and even after a good data release, the NZD/USD pair went down under 0.7290. Moreover, the uncertain future of risk currencies (in the face of stronger USD) may encourage the reduction of NZD's position, and spill over especially in relation to AUD - the market has been building short positions in the recent days.

Let's now take a look at the NZD/USD technical picture on the various time frames after the news had been released. On the daily time frame, we can see a clear Double Top pattern located at the level of 0.7437 which might suggest a possible reversal of the market. This scenario will be confirmed when the key daily support at the level of 0.7173 is broken. On the H4 time frame, the price has retraced by 38% of the previous leg down and then attempted to rally again, but was capped at the level of 0.7437. Since then it moves in a descending channel that is visible on the H1 time frame. The intraday supports are 0.7286 and 0.7239. The intraday resistance is seen at the level of 0.7364 and 0.7385. In order to rally again, the price must break out of the golden channel first, otherwise, the slow descending consolidation will continue.

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Ichimoku cloud indicator analysis of USDX for February 23, 2018

The US dollar index pulled back yesterday towards the broken resistance of 89.60 and is now bouncing again. The trend has changed to bullish in the short term. The US dollar index has many chances of finishing the entire decline from 103.60.

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Red line - resistance trend line

The US dollar index is trading above both the tenkan- and the kijun-sen. The price is also above the red downward sloping trend line from 94. The US dollar index will at least make a corrective bounce of the decline from 95.15. The most probable target is at 92.50.

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The daily trend remains bearish. The price has moved above the tenkan- and kijun-sen indicators. As long as the price is above the 89.45-89.20 support area by these two indicators, I would expect the price to move towards the daily Kumo (cloud) resistance at 91. The horizontal resistance of a the previous high is at 90.60. So it will be a bullish sign if we break above 90.60.

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Ichimoku cloud indicator analysis of gold for February 23, 2018

The gold price bounced yesterday towards the first important resistance at $1,334 but there are signs of rejection. The price is in a bearish short-term trend as we are now again below the 4-hour Ichimoku cloud.

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The gold price moved above the 4-hour tenkan-sen briefly but got rejected at the lower cloud boundary. The price is now again below the tenkan-sen. The trend is clearly bearish in the short term. Support is at the recent low of $1,320. Resistance is at $1,334 and next at $1,335.60. A break above $1,335.60 will open the way for a move towards the upper cloud boundary at $1,346.

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Magenta line - long-term resistance

On a daily basis, the gold price has made a double top at $1,355. The price is again below both the tenkan- and kijun-sen indicators. The price is heading towards the cloud support at $1,300. Resistance is at $1,340. So far the price has made a higher low relative to the February low on the 8th. As long as the price is above the low from the 8th, a break higher would be very bullish.

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Daily analysis of major pairs for February 23, 2018

EUR/USD: A bearish signal has been generated for the EUR/USD pair, which has been going downwards since last Friday. There is a Bearish Confirmation Pattern in the market, which shows that it is not advisable to place long trades for now. While there may be temporary rallies, the market is bound to go further downwards.

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USD/CHF: A bullish signal has been generated on the USD/CHF, which has been upwards since last Friday. The EMA 11 is above the EMA 56, and the Williams' % Range period 20 is not too far from the overbought region. While there may be temporary dips (just as it has happened recently), the market is bound to go further upwards.

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GBP/USD: The GBP/USD is bearish, although the market has not gone significantly lower this week. An upside movement of about 200 pips would result in a bullish bias; whereas a movement towards the accumulation territories at 1.3900, 1.3850 and 1.3800, will result in more emphasis on the bearishness of the market.

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USD/JPY: From Monday to Wednesday, the price moved upwards by 170 pips (from the demand level at 106.00 and to just above the demand level at 107.50). That become a threat to the existing bearishness in the market, but bears were able to save the day as the price was pushed lower on Thursday, thus saving the week in favor of the bearish bias. The market can go lower.

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EUR/JPY: The EUR/JPY pair has been engaged in a slow and steady downwards movement since February 5, having lost about 560 pips since then. There is a strong Bearish Confirmation Pattern in the market and the price is poised to go lower and lower, reaching the demand zones at 131.50 and 131.00.

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Elliott wave analysis of EUR/NZD for February 23 - 2018

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Wave summary:

The important support near 1.6740 has done a perfect job in protecting the downside. The break above the minor resistance at 1.6850 is the first good indication that wave ii has completed and wave iii higher towards 1.7470 is developing now.

The short-term support is seen near 1.6820 which ideally will be able to protect the downside for continuation higher to 1.7000 and 1.7101 as the next target on the way towards 1.7470.

R3: 1.7000

R2: 1.6915

R1: 1.6870

Pivot: 1.6820

S1: 1.6800

S2: 1.6766

S3: 1.6740

Trading recommendation:

We are long EUR from 1.6790 and we will move our stop higher to 1.6730.

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BITCOIN Analysis for February 23, 2018

Bitcoin has recently closed below the $10,000 price area, which is expected to push the price much lower in the coming days. The impulsive bullish pressure has been quite impressive lately, but it was not sustained as expected. the price was expected to bounce off the $10,000 price area as it was a crucial level but as it did not, the market participants has turned quite indecisive currently. Though a lot of countries in the world have been quite optimistic about digital currencies, due to lack of positive fundamentals recently, the crypto market seemed to have slowed down a bit. As of the current scenario, the price is expected to head towards the $7,500 price area in the coming days as the price remains below $10,000 with a daily close.

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Three reasons to sell the euro

The Financial Times gave 17 reasons for the weakening of the US dollar, and as if to spite the tabloid, the US currency is beginning to strengthen. It must be understood that the press finds out about all of the latest events, and if you want to survive in the market, you need to get into the head of big players and understand exactly what fundamental factors they rely on the basis of their short-term strategies. Currently, the focus of investors is the parliamentary elections in Italy, a disappointing start to the European economy and the slow normalization of the ECB's monetary policy.

As a rule, growth of populism effectively recoups in conditions of the weakened national economy. A year ago, Marine Le Pen with her National Front was building a pre-election program on the problems of France. Theoretically, they could be solved by the output of their eurozone and a return to the franc, wherein a competitive devaluation of which would facilitate the growth of exports. By March 2018, everything had changed. Looking at the rapid development of neighboring states, even Italy, which is not doing well in recent years, is gradually rising from its knees. As a result, the Eurosceptics "Five Stars" party can celebrate the Victory, reject the idea of a referendum on membership in the currency bloc, according to the latest opinion polls. The political risks in the Old World are muffled, but they are there. First of all, problems can arise with debt restructuring. The value of the latter is about 130% of GDP, and this is the largest indicator in the euro area after Greece. A capital flight will undermine the authority of the euro.

If by the end of 2017, the GDP of the countries of the currency block significantly exceeded the consensus forecast of the Bloomberg experts (+ 2.7% vs. + 1.7%), then there is no reason to rejoice in a vigorous start this year. Weak statistics on European PMI and consumer confidence, as well as on German business confidence, lowered the index of economic surprises to the lowest level since 2016. At the same time, the Fed officials are not tired of talking about the strength of the US economy, unlike the eurozone that relies in the indicators.

The dynamics of the index of economic surprises and the yield of US Treasury bonds.

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Source: Citigroup.

The inability of EUR / USD to gain a foothold above the psychologically important level of 1.25 and the neutral rhetoric of a "hawkish" Governing Council make investors think that the euro rally was too quick. The ECB is unlikely to curtail the European QE ahead of schedule, and if inflation continues to look weak, then it does prolong the program's timing of asset purchases. Given the focus of the Fed on three to four increases in the federal funds rate in 2018, the position of "bulls" for the main currency pair is beginning to look shaky.

Parliamentary elections in Italy, a weak start to the euro-zone economy and the resuscitation of the divergence in the monetary policy of the ECB and the Fed are strong arguments in favor of profit-taking on the euro by hedge funds and asset managers.

Technically, the fall in quotes of the EUR / USD pair below the level of 1.22 will activate the "Expanding Wedge" pattern and open the southward course towards the range of 1.2 - 1.205.

EUR / USD, daily chart

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Fundamental analysis of EUR/CAD for February 23, 2018

EUR/CAD has been non-volatile with the gains after breaking above the 1.5350 price area which is expected to be retested in the coming days. Due to recent worse economic reports from Canada, EUR has been the dominant currency in the pair with mixed economic reports. The weakness of CAD emerged, having minimum development after the recent rate hike. Today the German Final GDP report is going to be published which is expected to be unchanged at 0.6%. The Final CPI and Final Core CPI are also expected to be unchanged at 1.3% and 1.0% correspondingly. Though the economic reports are expected to be unchanged, any positive or negative outcome of the reports can impact the growth of EUR in the coming days. On the other hand, today CAD CPI report is going to be published which is expected to increase to 0.4% from the previous negative value of -0.4%. The Common CPI is expected to increase from the previous value of 1.6%, Median CPI is expected to increase from the previous value of 1.9%, Trimmed CPI is expected to increase from 1.9% and Core CPI is also expected to be have better result increasing from the previous negative value of -0.5%. As of the current scenario, CAD is expected to have better outcome today whereas EUR is expected to be unchanged. The indecisive economic reports from Europe are likely to result in the euro losing some grounds for a certain period which can be regained in the longer term. To sum up, CAD is expected to take the lead for a certain period before EUR takes the lead again.

Now let us look at the technical view. The price has been non-volatile with the bullish gains and the Bearish Divergence has been spotted. As of the current scenario, the price is expected to retrace towards 1.5350 in the coming days before showing any bullish momentum in the pair. The lower volume in the bullish gains recently indicates the weakness of bulls which is expected to lead to bearish pressure in the pair. As the price remains above 1.5350, the bullish bias is expected to continue further but with certain retrace.

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Fundamental analysis of EUR/GBP for February 23, 2018

EUR/GBP is currently showing bearish squeeze towards 0.8700-50 support area which is expected to break below in the coming days. Despite having worse economic reports recently, GBP sustained it momentum against EUR which is expected to continue further in the coming days. Today the German Final GDP report is going to be published which is expected to be unchanged at 0.6%. The Final CPI and Final Core CPI are also expected to be unchanged at 1.3% and at 1.0% correspondingly. On the other hand, today Bank of England Deputy Governor David Ramsden is going to speak about the upcoming monetary policies and the key interest rates which is expected to be neutral with its impact for the GBP. As of the current scenario, EUR economic reports forecasted to be quite indecisive with an unchanged value whereas any positive comments from Ramsden are expected to inject volatility and impulsive pressure on the GBP side in the coming days.

Now let us look at the technical view. The price is currently residing below 0.8850 trend line resistance after a rejection off the level. The trend line has been respected quite well along the bearish squeeze from where the price is expected to hold as a resistance and push lower towards the support area of 0.8700-50. As the price remains below 0.89 price area, the bearish bias is expected to continue further.

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Elliott wave analysis of EUR/JPY for February 23, 2018

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Wave summary:

EUR/JPY should continue to move lower towards the next downside target near 127.52 on the way towards the ideal wave (E) target seen at 123.43. Short-term resistance is now seen at 132.10 and again at 132.50, while the ideal resistance at 132.10 will be able to cap the upside for the expected push lower.

R3: 132.50

R2: 132.25

R1: 132.10

Pivot: 131.65

S1: 131.55

S2: 131.20

S3: 130.73

Trading recommendation:

We will sell EUR at 132.10 or upon a break below 131.45.

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Technical analysis of NZD/USD for February 23, 2018

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Our first downside target which we predicted in yesterday's analysis has been hit. NZD/USD is under pressure. The pair retreated and broke below its 20-period and 50-period moving averages. In addition, the 20-period moving average is turning down. The relative strength index is heading downward.

To conclude, as long as 0.7335 is not surpassed, look for a new drop with targets at 0.7250 and 0.7215 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: 0.7360, 0.7395, and 0.7430.

Support levels: 0.7250, 0.7215, and 0.7180.

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Technical analysis of USD/JPY for February 23, 2018

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USD/JPY is expected to trade with a bearish outlook as the key resistance is at 107.60. The pair is off the low of 106.58 seen overnight (February 22). Currently, it has returned to levels above the descending 20-period moving average while being capped by the 50-period one and the key resistance at 107.15. The relative strength index has not yet recovered the neutral level of 50, indicating a lack of upward momentum for the pair. As long as the key resistance at 107.65 is not surpassed, intraday bearishness persists, and the pair could pull back to 106.55 (around the yesterday low) before declining further to 106.10.

Alternatively, if the price moves in the opposite direction, a long position is recommended to be above 107.60 with a target of 107.90.

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 107.60, take profit at 106.55.

Resistance levels: 107.90, 108.40, and 108.90

Support levels: 106.55, 106.10, and 105.70.

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Technical analysis of USD/CHF for February 23, 2018

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USD/CHF is turning down. The pair retreated from 0.9410 (the high of February 22). The 20-period moving average crossed below the 50-period one. The relative strength index shows downside momentum.

Hence, as long as 0.9380 holds on the upside, look for further drop to 0.9315 and even to 0.9280 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 0.9380, take profit at 0.9315.

Resistance levels: 0.9410, 0.9450, and 0.9485

Support levels: 0.9315, 0.9280, and 0.9250.

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Technical analysis of GBP/JPY for February 23, 2018

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GBP/JPY is expected to trade with bearish outlook as key resistance is at 149.50. Although the pair posted a rebound from 148.50, it is still capped by a declining 50-period moving average. The upside potential should be limited by the key resistance at 149.50. The relative strength index is below its neutrality level at 50.

Therefore, below 149.50, look for another drop with targets at 149.50 and 147.90 in extension.

Alternatively, if the price moves in the direction opposite to the forecast, a long position is recommended to be above 149.50 with the target at 150.00.

Strategy: SELL, Stop loss at 149.50, Take profit at 148.50

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: 150.00, 150.50, and 150.00

Support levels: 148.50, 147.90, and 147.50

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Technical analysis of EUR/USD for Feb 23, 2018

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When the European market opens, some economic data will be released such as the Final Core CPI y/y, Final CPI y/y, German Final GDP q/q. Meanwhie, the US will unveil the Fed Monetary Policy Report. Therefore, amid the reports EUR/USD will move with a medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.2386.

Strong Resistance:1.2379.

Original Resistance: 1.2367.

Inner Sell Area: 1.2355.

Target Inner Area: 1.2326.

Inner Buy Area: 1.2297.

Original Support: 1.2285.

Strong Support: 1.2273.

Breakout SELL Level: 1.2266.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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

Technical analysis of USD/JPY for Feb 23, 2018

USDJPY.jpg

In Asia, Japan will release the SPPI y/y and National Core CPI y/y while the US will unveil the Fed Monetary Policy Report. So there is a probability the USD/JPY will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance. 3: 107.41.

Resistance. 2: 107.20.

Resistance. 1: 106.99.

Support. 1: 106.74.

Support. 2: 106.53.

Support. 3: 106.32.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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

USD/CAD has broken out beautifully, watch for a further rise

The price has made a bullish breakout and we're looking to buy on dips above 1.2629 support (Fibonacci retracement, horizontal overlap support) for a bounce up to at least 1.2909 resistance (Fibonacci extension, horizontal swing high resistance). We have to keep an eye on the intermediate resistance at 1.2750 which the price has already reacted off nicely once. Only a break of that level would trigger a move higher to 1.2909.

RSI (34) sees an intermediate ascending support, holding up its bullish momentum really nicely, but we're also seeing the major resistance at 61% which needs to be broken to trigger a stronger upside move.

Buy above 1.2629. Set stop loss at 1.2561 and take profit at 1.2909.

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USD/JPY dropping perfectly, remain bearish

The price has reacted perfectly from our major resistance at 107.60 (Fibonacci retracement, horizontal pullback resistance, Fibonacci extension) and is dropping nicely towards our profit target. We tighten our stop loss to 108.02 to protect our profits and remain bearish looking for the price to make a push down to 105.74 support (Fibonacci extension, horizontal swing low support) once again.

RSI (89) sees a long term descending resistance line, providing downside pressure really well.

Sell below 107.60. Stop loss is at 108.02. Take profit lies at 105.74.

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Daily analysis of USDX for February 23, 2018

The index had a bearish session on Thursday and it's expected to test the 200 SMA anytime soon. The support zone of 89.36 still holds across the board and we forecast a possible breakout below that area in order that USDX plummets toward the 87.88 level. MACD indicator is supporting the aforementioned bearish idea, as it stays in the negative territory.

USDXH1.png

H1 chart's resistance levels: 90.63 / 91.75

H1 chart's support levels: 89.36 / 87.88

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USD Index breaks with a bearish candlestick; the support level is at 89.36, take profit is at 87.88 and stop loss is at 90.81.

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Daily analysis of GBP/USD for February 23, 2018

GBP/USD didn't manage to consolidate below the support zone of 1.3939 following a false breakout on February 22. The 200 SMA is still offering dynamic resistance and if it manages to break above this indicator, the next target will lie at 1.4078. MACD indicator still supports the bullish scenario in the short term.

GBPUSDH1.png

H1 chart's resistance levels: 1.4078 / 1.4209

H1 chart's support levels: 1.3939 / 1.3753

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the GBP/USD pair breaks a bearish candlestick; the resistance level is at 1.3939, take profit is at 1.3753 and stop loss is at 1.4130.

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

BITCOIN Analysis for February 22, 2018

Bitcoin is currently residing at the edge of the $10,000 price area from where the price is expected to proceed much lower in the coming days. The price has been residing at the zero point recently after bouncing off near the $12,000 price area from where the impulsive bearish pressure took place. The fall of bitcoin is linked to the lack of fundamental news in the cryptocurrency market a nd this might push the price much lower in the coming days. The market is low on liquidity; and because of the doubts over its security, bitcoin has been struggling to maintain its gains. As of the current scenario, a daily close below $10,000 is projected to push the price much lower towards $7,500 in the future. Though the price is still struggling to break below the level, a daily close above $10,000 is anticipated to push the price higher towards $12,000 again.

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Fundamental Analysis of AUDJPY for February 22, 2018

After days of struggle at the edge of the 84.50 price area, AUD/JPY has dropped impulsively lower recently, which is expected to move much lower in the coming days. Recently, AUD has been struggling with mixed economic reports, while JPY has the background of positive economic results. Recently, AUD Construction Work Done is expected to show a decrease of 19.4% from the previous 16.6%, which was a significant tumble in Housing Development. Additionally, the latest Monetary Policy Meeting did not provide any positive hint for the further gain on the AUD side, whereas the RBA is expecting higher inflation in the future, which might have no immediate impact on the growth of AUD. On the JPY side, the Trade Balance report was published with a significant increase to 0.37T from the previous figure of 0.09T, which was anticipated to be at 0.14T. The positive Trade Balance supported JPY against AUD, whereas further gains are expected in the coming days. Tomorrow's JPY National CPI report is forecasted to show to a decline to 0.8% from the previous value of 0.9% and SPPI is expected to be unchanged at 0.8%. As of the current scenario, the upcoming economic reports are projected to be quite neutral whereas any better result may lead to further impulsive gain on the JPY side in the coming days.

Now let us look at the technical view. The price is currently residing below the 84.50 price area from where the price is expected to go lower towards the 82.00 support area in the coming days. The price is expected to correct along the way, but the bears are currently quite strong, which might lead to further bearish pressure in the coming days. As the price remains below 84.50, the bearish bias is expected to continue further.

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Fundamental Analysis of NZD/USD for February 22, 2018

NZD/USD found support at the dynamic level of 20 EMA today which is expected to push the price higher in the coming days. New Zealand published mixed economic reports whereas the market sentiment favours USD ahead of the possible rate hike in March. Recently, New Zealand's PPI Input report was published with better than expected value of 0.9% but with a decrease from 1.1% and PPI Output was published with unchanged value of 1.0% which was expected to decrease to 0.4%. Moreover, GDT Price Index report was published with drastic deficit of -0.5% from the previous value of 5.9%. Besides, the Credit Card Spending report was published with a decrease to 4.6% from the previous value of 6.2%. On the other hand, today the US Unemployment Claims report was published with better outcome at 222k decreasing from the previous figure of 229k which was expected to increase to 230k. The positive economic report with a decrease in Unemployment Claims indicates the positive changes in the US jobs market. Moreover, today USD CB Leading Index report is going to be published which is expected to increase to 0.7% from the previous value of 0.6%, Natural Gas Storage is expected to show less deficit at -121B from the previous figure of 194B, Crude Oil Inventories is expected to increase to 2.2M from the previous figure of 1.8M and FOMC Member Dudley is going to speak today about upcoming changes in the monetary policy and interest rate decision which is expected to be hawkish. As of the current scenario, the market seems quite indecisive and corrective. NZD is gaining momentum despite mixed economic reports whereas USD has the positive sentiment. Until impulsive pressure appears in the market due to positive economic reports from the US, USD is expected to have an upper hand in the future though NZD might gain for a certain period.

Now let us look at the technical view. The price has recently bounced off the dynamic level of 20 EMA and support level of 0.7250 price area. The impulsive bullish gain today has already engulfed the recent bearish pressure which is expected to lead to certain bullish pressure resulting to a push towards 0.7450 area. On the other hand, a daily close below 0.7250 will negate the bullish bias and force the price lower towards 0.7150 area. As the price remains above 0.7250 and dynamic level of 20 EMA with a daily close, the bullish bias is expected to continue further.

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Fundamental analysis of AUD/USD for February 22, 2018

AUD/USD has been quite impulsive with the bearish pressure which is currently proceeding towards the support area of 0.7750. AUD has been struggling with the worse economic reports recently which affected its gains against USD. Recently, the Australian Construction showed an increase to 19.4% from the previous reading of 16.6% which was a significant decrease in Housing Development. The worse economic report affected the overall growth of AUD against USD recently. Today on the USD side, Unemployment Claims report was published with better outcome at 222k decreasing from the previous figure of 229k which was expected to increase to 230k. The positive economic report with a decrease in Unemployment Claims indicates the positive changes in the US jobs market which is expected to push the currency much higher against CAD. Moreover, today USD CB Leading Index report is going to be published which is expected to increase to 0.7% from the previous value of 0.6%, Natural Gas Storage is expected to show less deficit at -121B from the previous figure of 194B. The Crude Oil Inventories is expected to increase to 2.2M from the previous figure of 1.8M. Furthemore, FOMC Member Dudley is going to speak today about upcoming changes in the monetary policy and interest rate decision which is expected to be hawkish. To sum up, USD is expected to gain more momentum in the coming days against AUD whereas certain correction may be observed before the price becomes impulsive with the bearish pressure pushing the price much lower in the future.

Now let us look at the technical view. The price has been quite impulsive with the bullish gains today after having a week of bearish pressure in the pair. The price is currently residing below the dynamic level of 20 EMA whereas certain correction is expected before it proceeds lower towards 0.7750 and later towards 0.7550 support area in the coming days. As the price remains below 0.80 price area, the bearish bias is expected to continue further.

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Fundamental Analysis of USD/CAD for February 22, 2018

USD/CAD has been quite impulsive with the bullish gains recently after breaking above 1.2620 resistance area which has also been retested as support. USD has been quite impulsive with the gains recently having Rate Hike prediction in March which is expected to inject more USD bulls in the process whereas CAD has been struggling with the worse economic reports. Today CAD Core Retail Sales report was published with a negative value of -1.8% decreasing from the previous value of 1.7% which was expected to be at 0.1%. At the same time, the Retail Sales report was published with a decrease to -0.8% from the previous value of 0.3% which was expected to be at 0.0% and Corporate Profits also decreased to -1.9% which previously was at 8.5%. The worse economic reports from Canada helped USD gain impulsive momentum today which is expected to push the price much higher in the coming days. On the USD side, today the Unemployment Claims report was published with better outcome at 222k decreasing from the previous figure of 229k which was expected to increase to 230k. The positive economic report with a decrease in Unemployment Claims indicates the positive developments in the US jobs market which is expected to push the currency much higher against CAD. Moreover, today the US CB Leading Index report is going to be published which is expected to increase to 0.7% from the previous value of 0.6%. The Natural Gas Storage is expected to show a smaller deficit at -121B from the previous figure of 194B, while the Crude Oil Inventories are expected to increase to 2.2M from the previous figure of 1.8M. Furthemore, FOMC Member Dudley is going to speak today about upcoming changes in monetary policy and interest rate decision which is expected to be hawkish in nature. As of the current scenario, USD is expected to take the lead in the coming days whereas CAD is expected to struggle for gains until any positive economic reports help to counter the impulsive pressure of USD gains.

Now let us look at the technical view. The price is quite impulsive and non-volatile with the bullish gains above 1.2620 and with certain retracement above the level, the price is expected push much higher towards 1.29 resistance area in the coming days. As the price remains above 1.2620 with a daily close, the bullish bias is expected to continue further.

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