Daily analysis of USD/JPY for March 05, 2018

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Overview

The USD/JPY pair succeeded to achieve our next waited target at 105.54 and has settled around it now. Please note that the price begins today with a bearish bias to move below the mentioned level that supports the chance of extending the bearish wave on the short-term basis. We are waiting until the pair heads towards our next target at 104.31. Therefore, our bearish overview will remain active in the upcoming period on condition of the stability below 106.60. Be aware that the EMA50 supports the suggested bearish wave. The expected trading range for today is between 104.50 support and 106.00 resistance.

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Daily analysis of Gold for March 05, 2018

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Overview

Gold price is trading higher in the pre-market today. The price is set to surpass the EMA50 and settle above it that supports the continuation of the bullish trend on the intraday basis. The way is open to visit 1,335.40 level that represents our next target. Please note that breaching this level will extend gold price gains to reach 1,365.97 as the next upward target level. Therefore, the bullish trend remains valid in the upcoming sessions unless 1,316.48 is broken and the price holds below it. The expected trading range for today is between 1,316.00 support and 1,340.00 resistance.

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Daily analysis of Silver for March 05, 2018

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Overview

Silver is now trading sideways after keeping its stability above the bullish trend line that appears on the chart. This supports the scenario of a further bullish trend on the intraday and short-term basis. This reveals a positive signal through stochastic, waiting to target 17.43 that represents our next main station. We should note that breaking 16.35 will stop the expected rise and push the price to test 15.49 areas before any new attempt to rise. The expected trading range for today is between 16.40 support and 16.80 resistance.

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Global macro overview for 05/03/2018

US President Donald Trump has threatened the European Union with import tariffs on European cars if the EU decides to retaliate for the introduction of tariffs on imports of steel and aluminum announced by him."If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!" wrote Trump on his official Twitter account. Trump at the same time accused the European Union of blocking the sales of American cars in Europe. "This is a huge inequality in trade between us" - the president stressed in the next entry on Twitter.

The DPA agency notes that this threat will primarily affect the German automotive industry. In 2017, the sale of German new cars in the US grew by 1.0% up to 1.35 million pieces. The US president announced on Thursday that he will introduce tariffs on imports of steel and aluminum next week; this is to help American companies that - according to the president - have suffered through unfair trade agreements. Steel imports are to be subject to a tax of 25%, and aluminum - 10%. Trump said he chose to impose tariffs because the United States "needs great steel and aluminum producers for defense purposes."

Trump's decision was immediately reacted by the European Union, which is considering introducing retaliation tariffs on American steel and a number of other products, including agricultural products: "We will not sit idly while our industry is being hit, which threatens thousands of European jobs," said European Commission President Jean-Claude Juncker. "We will impose duties on Harley-Davidson motorcycles, bourbon and Levi's jeans," warned Juncker and was backed-up by French Minister of Economy and Finance Bruno Le Maire who announced "a strong, coordinated and united EU response".

Let's now take a look at the USD/JPY technical picture at the H4 time frame. After a failure to rally above the key technical resistance zone at the level of 107.91 - 108.43 the market dropped towards the new local low at the level of 105.25 and currently stays around this level. The nearest technical resistance is seen at the level of 10641, but the key technical zone remains higher. The momentum indicator remains below its fifty level, so more downside pressure is being anticipated.

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Global macro overview for 05/03/2018

Italy might become a serious problem with the newly elected parliament members

The Italian political scene has been unstable for decades as it was capable to establish 65 governments in 73 years, with only Berlusconi maintained power for a full term. The Constitution does not allow for effective governance and implementation of reforms. The result of yesterday's parliamentary elections, the winner of which is the anti-hostilities Movement of Five Stars threatens a long path because at the moment the only coalition is the marriage of the center-left with the mentioned Five-Star Movement. There is definitely a positive situation, but also the course of events can hardly be described as a shocking.Yet.

The tense political situation in Italy is mitigated by reports from Germany: the majority of SPD members agreed to form a government with the Christian Democrats, which crowns the process of several-month coalition talks and will allow Angela Merkel, who has ruled for twelve years, to create a fourth cabinet. However, the policy also does not help the US Dollar, because the return to protectionist rhetoric raises concerns about trade and currency wars. There is also a British Pound in the queue, which was heavily sold last week - optimists counting on the lack of Brexit or so-called soft Brexit experienced a collision with reality and more tense relations between London and Brussels. One can not forget about the weak position of Theresa May's cabinet on the national political scene.

Let's take a look at the EUR/GBP technical picture in the H4 time frame. In the case of the euro, the market participants do not expect political factors to take over again. Indeed, there should be a minimal increase in the credit risk valuation (the yield spread of debt of Italy and Germany should slightly widen), but it will not be able to dominate the quotes. Investors will quickly move to the expectation of key events at the end of the week, which is Thursday's meeting of the European Central Bank and data from the US labor market, which we will meet on Friday. Until then, the price should move inside of the consolidation zone between the levels of 0.8688 - 0.9017.

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NZD/USD Intraday technical levels and trading recommendations for for March 5, 2018

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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 a 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 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 off the price level of 0.7390. Moreover, a double-top reversal pattern was expressed around the price zone (0.7320-0.7390).

As expected, the price zone (0.7320-0.7390) stood as a significant supply zone for the NZD/USD pair. This allowed the current bearish decline to occur towards the price zone of 0.7230 - 0.7165 (neckline of the reversal pattern).

Bearish breakdown of 0.7300 (neckline) is needed to confirm the depicted reversal pattern. Bearish projection target would be located at 0.7050 and 0.7000.

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Intraday technical levels and trading recommendations for EUR/USD for March 5, 2018

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Monthly Outlook

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2100-1.2200 (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 1.2075 was expressed on the chart. This hinders the bearish momentum allowing bullish advancement to occur towards 1.2750 provided that the bullish breakout above the price level of 1.2075 remains defended by the bulls.

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Daily Outlook

In September, a 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 was needed to confirm a recent bullish flag continuation pattern with projected targets around the price level of 1.2750. However, the EUR/USD bulls failed to fixate above 1.2470.

That's why a recent bearish pullback is being expressed below the price level of 1.2450 thus expressing a double-top reversal pattern with a projected target around 1.1990.

The current bearish pullback will probably extend towards 1.2070-1.1990 (reversal pattern projection targets) if the current bearish breakdown of the level of 1.2200 (the depicted uptrend line) is maintained on a daily basis.

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Analysis of Gold for March 05, 2018

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Recently, Gold has been trading upwards. The price tested the level of $1,327.00. Anyway, according to the 30M time – frame, I found a broken bearish pennant, which is a sign that buying looks risky. I also found a hidden bearish divergence on the moving average oscillator, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of $1,317.70 and at the price of $1.303.00.

Resistance levels:

R1: $1,326.68

R2: $1,331.20

R3: $1,336.90

Support levels:

S1: $1,316.45

S2: $1,310.75

S3: $1,306.25

Trading recommendations for today: watch for potential selling opportunities.

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GBP/USD analysis for March 05, 2018

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Recently, the GBP/USD has been trading sideways at the price of 1.3799. According to the 30M time – frame, I found that the price did successfull test of the pivot support 1 at the price level of 1.3765, which is a sign that selling looks risky. I also found oversold condition on the stochastic oscillator, which is another sign of strength. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 1.3850 and at the price of 1.3590.

Resistance levels:

R1: 1.3827

R2: 1.3850

R3: 1.3890

Support levels:

S1: 1.3765

S2: 1.3730

S3: 1.3705

Trading recommendations for today: watch for potential buying opportunities.

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Bitcoin analysis for March 05, 2018

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The Bitcoin (BTC) has been trading upwards. As I expected, the price tested the level of $11.560. Canada seems to have become the hottest destination for bitcoin miners from all over the world thanks to a combination of cheap renewable hydroelectric energy and hospitable cold weather. One miner, Bitfarms, is set to raise a small fortune to solidify its position in the region and better face the heated competition. Bitcoin looks overbought.

Trading recommendations:

According to the 30M time - frame, I found that the price rejected from the resistance at the price of 11.500 (median trendline), which is a sign that buying looks risky at this stage. I also found a hidden bearish divergence on the RSI 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 $11.161 and at the price of $11.035.

Support/Resistance

$11.500 – Intraday resistance

$11.330– Intraday support

$11.160 – Objective target 1

$11.032 – Objective target 2

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Bitcoin analysis for 03/05/2018

Survey results show that people want Amazon cryptocurrencies. One of the world's largest online stores, this week received feedback that its hypothetical creation of Amazon Coin will be positively received. In addition, Starbucks, another large traditional consumer company, talks about plans to use Blockchain on the Starbucks application, also giving the understanding to create their own currency to use the application.

Not only Amazon Coin is very desirable among shop users, but also a bank account created by Amazon. The LendEDU survey shows that as many as 44.5% of clients would choose such an account as their basic one. Answering the general question whether respondents trust Amazon, enough to service their finances more than a traditional bank, about 61% of respondents said yes. While Amazon has not announced any plans to create its own digital currency, it has ventured into Blockchain technologies that are behind the majority of cryptocurrencies. In December last year, Amazon Web Services (AWS), signed a contract with R3 to use their Corda platform based on Blockchain. This week, Starbucks chairman Howard Schultz said in an interview with Fox Business that he sees Blockchain technologies as something that Starbucks will use for action: "I think Blockchain is probably the place where the integrated application in Starbucks will be at the top". Schultz, whom the interviewer pointed out as someone who is not a Bitcoin fan, added that in connection with Starbucks testing a non-cash shop, the company can create its own digital currency, which will be used in an integrated application. "It's not Bitcoin, but I believe that given the framework and platform we have in our digital mobile application, we can potentially be one of the first companies to have a digital currency built into our application".

Last week, Stratstrat strategist Tom Lee suggested in the report that both Amazon and Starbucks would probably apply Blockchain technology and announce a cryptographic strategy this year.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. Slowly, but surely the price of Bitcoin rose again toward the key technical resistance at the level of $11,714 - $11, 937 and currently trades just below it. The market might be consolidating the recent gains in order to get strong enough to break out above the mentioned technical resistance. This scenario is valid as long as the price will trade above the weekly pivot at the level of $10,856. Any breakout below this level, will open the road towards the next technical support at the level of $10,000.

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Trading plan for 05/03/2018

On Monday, 5th of March, the most important item on the event calendar will be ISM data release for the service sector in the USA, which will be the second tip by Friday's data from the US labor market. Earlier, the PMI indexes for the service sector from France, Italy, Germany, the United Kingdom, the Eurozone and retail sales from the Eurozone will be published. Quarles from the Fed will speak in the evening.

EUR/USD analysis for 05/03/2018:

The estimated outcome of the Italian parliamentary election suggests that none of the factions will form a government. It is also difficult to imagine a stable coalition. The best result was achieved by the Populist Movement of the Five Stars (according to RAI 195-235 in the 630-member Chamber of Lower Lords). The coalition of center-right parties branded by Silvio Berlusconi will, however, be the biggest force, because according to preliminary estimates, it can count on 225-265 votes. The biggest losers are the center-left parties centered around the Democratic Party, which may introduce only 115-155 deputies to the Lower House. The Euro currency has therefore been supported by information from the German political scene (opening above 1.2350) and quickly plunged by reports from Italy (morning descent at 1.23).

Let's take a look at the EUR/USD technical picture at the H4 time frame in a more detail. The key technical support level is the zone of 1.2165-1.2206 tested last week and from the top, the road to 1.25 is closed several times by the defended zone of highs around 1.2350 - 1.2366. The market looks undecided which way it should go as the price has returned to the 1.2257 support level just after the results were published.The momentum is still above its fifty level, but the market starts to become a slightly overbought now. Only a clear sustained breakout above the level of 1.2366 opens the road towards the next technical resistance at the level of 1.2537 - 1.2555. Otherwise the horizontal trend will continue.

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Technical analysis of GBP/USD for March 05, 2018

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Overview:

  • The GBP/USD pair opened below the daily pivot point (1.3813). It continued to move downwards from the level of 1.3813 to the bottom around 1.3765. Today, the first resistance level is seen at 1.3813 followed by 1.3876, while the daily support 1 is seen at 1.3711. Furthermore, the moving average (100) starts signaling a downward trend; for that the market is indicating a bearish opportunity below the area of 1.3813/1.3760. So it will be good to sell at 1.3813 or 1.3760 with the first target of 1.3711. It will also call for a downtrend in order to continue towards 1.3650. The strong daily support is seen at the 1.3650 level, which represents the double bottom on the H1 chart. According to the previous events, we expect the GBP/USD pair to trade between 1.3813 and 1.3650 in coming days. The price spot of 1.3813 remains a significant resistance zone. Thus, the trend is still bearish as long as the level of 1.3813 is not broken. On the contrary, in case a reversal takes place and the GBP/USD pair breaks through the resistance level of 1.3776, then a stop loss should be placed at 1.3803.
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Technical analysis of EUR/USD for March 05, 2018

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Overview:

  • The EUR/USD pair.
  • The market showed signs of instability because it was trading in a narrow sideways channel a week ago. Amid the previous events, the price is still moving between the levels of 1.2259 and 1.2373. Also, the daily resistance and support are seen at the levels of 1.2408 and 1.2442, respectively. Therefore, it is recommended to be cautious while placing orders in this area. So, we need to wait until the sideways channel has completed. Last week, the market moved from its bottom at 1.2260 and continued to rise towards the top of 1.2352. Today, in the one-hour chart, the current rise will remain within a framework of correction. However, if the pair fails to pass through the level of 1.2404, the market will indicate a bearish opportunity below the strong resistance level of 1.2404. Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 1.2404 with the first target at 1.2295. If the trend breaks the support level of 1.2295, the pair is likely to move downwards continuing the development of a bearish trend to the level of 1.2260 in order to test the double bottom again.
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Ichimoku cloud indicator analysis of USDX for March 5, 2018

The Dollar index is trading above the 4-hour Ichimoku cloud. Price reached the cloud support and bounced. Support is being respected. Short-term trend remains bullish.

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Black rectangle - resistance

The Dollar index is above the Ichimoku cloud in the 4-hour chart but below both the tenkan- and the kijun-sen indicators. Support is at 89.80. Resistance is at 90.30. A 4-hour close above 90.30 will increase the chances of a move above the black rectangular resistance area.

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Blue line - resistance

On a daily basis the Dollar index got rejected last week at the Ichimoku cloud. Price is above the daily kijun-sen support at 89.60. A daily close below it will be a sign of weakness. On the other hand if bulls manage to break above 90.35 on a daily closing basis, trend will change to neutral and the chances for a move towards 91.30 will increase.

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Ichimoku cloud indicator analysis of gold for March 5, 2018

The Gold price is still trading below the Ichimoku cloud in the 4hour chart. The trend remains bearish. Important short-term resistance is just above $1,330. Bulls need to break it in order to continue to the bounce higher.

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The Gold price is trading above both the tenkan- and the kijun-sen. Support is at $1,320. Resistance is at $1,330-33. A 4 hour close below $1,320 will increase chances of a new leg lower starting towards $1,280. A break above $1,340 will increase the chances that the double top will break and Gold price will move towards $1,400.

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Magenta line - long-term resistance

The Gold price in the Daily chart remains inside the Kumo. The trend is neutral. Resistance is at the upper cloud boundary at $1,330-31. Support is at $1,300. As long as the price is above $1,300 and below $1,331 I prefer to be neutral or sell near resistance or buy near support. A break of either level will turn me bearish or bullish respectively.

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Fundamental Analysis of EUR/USD for March 5, 2018

EUR/USD has been quite bearish today after rejecting off the 1.2350 price area after the recent impulsive bullish pressure off the 1.2150 area. Ahead of the Rate Hike by the US Fed this month, EUR/USD has been quite indecisive whereas EUR is recognized to be the leading currency for the moment. Today, Spanish Services PMI report is going to be published which is expected to have a slight decrease to 56.5 from the previous figure of 56.9, Italian Services PMI is expected to decrease to 57.3 from the previous figure of 57.7, French Final Services PMI is expected to be unchanged at 57.9, and German Final Services PMI is also expected to be unchanged at 55.3. Moreover, eurozone's Final Services PMI is expected to be unchanged at 56.7, Sentix Investor Confidence is expected to decrease to 31.1 from the previous figure of 31.9, and Retail Sales are expected to increase to 0.3% from the previous negative value of -1.1%. On the other hand, today US Final Services PMI report is expected to be unchanged at 55.9, ISM Non-Manufacturing PMI is expected to decrease to 58.9 from the previous figure of 59.9, and FOMC Member Quarles is going to speak today about the US funds rate which is likely to increase this month. As for the current scenario, ahead of the upcoming Non-Farm Employment Change, Average Hourly Earnings and Interest Rate hike, USD is expected to gain further momentum against EUR whereas EUR is expected to struggle for gains amid soft economic reports in the coming days.

Now let us look at the technical view. The price is set to breach below 1.23 price area with a daily close which may lead to further bearish pressure towards 1.2000-50 support area in the coming days. The bears are still quite strong in the market. So, the bearish pressure may continue further until the price remains below 1.2350 with a daily close.

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Currency wars are a new threat

The previous week ended with another wave of selling in stock markets, and although the collapse has not yet taken the form of a panic flight, all the prerequisites for that ensures that the new week will open "on a black Monday" than on February 5.

A month ago, the market showed a very nervous reaction to the prospects of accelerating the pace of rate hikes of the Fed, thus expressing its position on the pace of recovery in the US economy. The market does not believe that these rates are sufficient enough to seriously talk about the acceleration of policy tightening.

A new wave of selling was initiated by US President Donald Trump, who announced plans to impose tariffs on the import of steel at a rate of 25% and aluminum at a rate of 10%. Trump promised to present the details this week, which means that it is unlikely to expect a positive opening of the week.

As soon as Trump announced his intention, the head of the Federal Reserve Bank of New York Robert Dudley made a comment. Speaking in Brazil, Dudley said that the increase in tariffs would lead to higher prices for goods made from these metals, which will raise price pressure, meaning the Fed would have to increase the rate of tightening of monetary policy.

The dry residue of these words mean that the likelihood of four rate hikes this year has increased. The market understood that, starting out from risky assets, the dynamics of the fall of stock indices in many ways is similar to the one that was seen in the beginning of February.

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The main US trading partners reacted immediately. The deputy chairman of the Chinese Association of Metallurgical and Steel Industry called the US decision to introduce a fee "stupid," the Japanese economy minister said on Friday that imports of steel and aluminum do not affect the national security of the United States, Canada called the tariffs unacceptable, Australia's trade minister was disappointed, while the head of the European Commission Juncker promised full-scale counter measures.

Fed Chairman Jerome Powell also expressed his opinion on the rates in his second speech in Congress, saying that the US economy does not face overheating, and therefore it is necessary to adhere to the gradual pace of tightening monetary policy.

Nevertheless, the move has been made, and the foreign exchange markets are obliged to react. The hardest hit is the Canadian dollar, which could drop to 1.3050 in the short term and to 1.38 in the long term. The reason is that Canada is the largest steel supplier in the US, and Trump's statement points to an attempt to revise, first of all, the NAFTA agreement.

The threat of a full-scale trade war has once again become more than real, and against this background, the special demand for the Japanese yen as the most obvious defensive asset, the usdjpy rate may fall to 103.50, since the yen also has an internal driver - which the head of the Bank of Japan promised in 2019. A consideration of the completion of the incentive program is certainly a bullish promise for the Japanese currency.

This week, the US will report on employment for February. The number of new jobs is projected to be slightly lower than 200 thousand in January, which in itself is a very good indicator, but the focus will be on the growth rate of average wages - a key factor in the acceleration of inflation. The last two months showed that growth was quite strong, however, the US economy can not maintain such a pace for a long time, and therefore the data for February can be disappointing.

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The dollar finished the previous week under pressure, and until the situation around the tariffs is approved, selling in the markets will continue, and the dollar will not be able to resume growth.

Attention will also be directed to the comments of FOMC members, among whom Robert Dudley stands out, who, after the resignation of Stanley Fisher, becomes the most influential member of the current Cabinet. It is to Dudley's words that the market will be guided to the greatest extent in order to assess the risks of four rate hikes this year.

In general, the situation for the dollar is still unfavorable. On Monday, the demand for defensive assets will increase, the risk of a selloff will continue, we should also pay attention to the publication of the ISM PMI index for February, and the main events should unfold on Tuesday and Wednesday, when both Trump and Dudley will offer new benchmarks to the market.

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Euro can resume growth

Eurozone

The unemployment rate in the eurozone fell to a minimum for more than 9 years, resulting to 8.6%. Meanwhile, the December result was reduced from 8.7% to 8.6%, which indicates a steady growth in the economy. At the same time, the overall level remains quite high due to the strong segregation by countries. In particular, the Czech Republic unemployment rate is only 2.4 %%, while in Italy it's 11.1%, and in Greece it's at 20.9%.

At the same time, retail sales in Germany declined by 0.7% for the month of January while producer prices in the eurozone as a whole rose by just 1.5% over the year, which does not add optimism to attempts to raise consumer inflation.

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On Thursday, the ECB will hold a meeting on monetary policy. The results do not cause any particular concern, since the chances for some cardinal changes, according to the market, are small. The dull opposition between the hawks and doves will continue. Its results will take the form of another compromise by "doing nothing". With this, Draghi can provide some clarity regarding the pace of exit from the procurement program but the ECB's position will not change with regard to rates.

Another thing is politics. On Sunday, two major events will take place at once, which can bring about significant changes in the current alignment of forces. In Italy, there will be parliamentary elections with a probable the emergence of an opposition parliament. This will raise the level of spending and as a result, a budget deficit may occur which can negatively affect the quotations of the euro. In Germany, the results of the coalition vote will be announced, which, most likely, will allow to maintain the current political configuration although it does not like all the participants.

The euro was ready to continue the decline but the fall in markets and the likely weakening of the dollar could once again return interest to purchases. Going beyond the consolidation zone of 1.2150 / 2550 is unlikely and the quotes will gravitate to the upper boundary of the range.

United Kingdom

The British pound continues to remain under pressure amid escalation of contradictions in the negotiations on the issue of Britain's withdrawal from the European Union. On Friday, Prime Minister Theresa May announced that she will adhere to five principles that will regulate new trade relations with the EU. These are obligations to ensure fair competition, an independent arbitration mechanism, an ongoing dialogue, and a data protection agreement. All the items are feasible and do not contain any ultimatum requirements and so, the tension in the negotiations can gradually go away, which will lead to an increase in demand for the pound.

At the same time, macroeconomic indicators continue to remain weak. The PMI IHS Markit / CIPS index fell in January to 55.2p against 55.3p a month earlier, the lowest for the last 8 months. Frankly, this indicates a weak economic growth.

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On Monday, the most important release of the week will be held - PMI Markit index in the services sector. The forecast is moderately positive. This publication along with the news around the negotiation process will determine the internal drivers for the pound, which so far remain negative. The pound could not take advantage of the dollar sale at the end of the week, which indicates its fundamental weakening.

The pound may approach the lower border of the channel at 1.3520 by the end of the week if it does not find a new driver to resume growth.

Oil

Quotations of oil are largely influenced by news from the US. The growth of stocks and increased production have a deterrent effect on players. Also, purchases have declined because of the threat of a global slowdown, which inevitably follows a large-scale drop in markets if Trump implements a threat to raise duties on steel and aluminum.

The equilibrium price for the emerging wedge is at the level of $ 65 / bbl. To exit, you need a reassessment of risks, which may well occur next week.

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