Technical analysis of USD/JPY for May 16, 2018

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All our upside targets which we predicted in our previous analysis have been hit. The pair keeps trading on the upside targeting the overhead resistance at 110.45 (around the high of yesterday, May 15). Intraday bullishness is maintained by those well-directed technical indicators, including the 20-period, 50-period moving averages and the relative strength index. Upon crossing 110.45, the next upside target at 110.70 would come into sight. The trailing key support has been raised to the psychologically significant level of 109.80, losing which would call for a further decline toward 109.60.

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: BUY, stop loss at 109.80, take profit at 110.45.

Resistance levels: 110.45, 110.70, and 111.00

Support levels: 109.60, 109.40, and 109.00.

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

Daily analysis of EUR/JPY for May 16, 2018

EUR/JPY

As it was forecasted earlier this week, and reiterated on Tuesday, the EUR/JPY cross has generated a bearish signal, which has cancelled the recent bullish effort in the market (for the bullish effort simply proffered opportunity to go long). The demand zone at 129.50 is now being tested.

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There is a Bearish Confirmation Pattern in the market. The EMA 11 is below the EMA 56, and the RSI period 14 is below the level 50. Further bearish movement is anticipated, which would propel price towards the demand zones at 129.00 and 128.50.

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Daily analysis of USD/JPY for May 16, 2018

USD/JPY

The bias on this pair is bullish – and the trend is now in a strong position. The demand level at 110.00 has been breached to the upside, and while there is a currently a shallow bearish retracement in the market, price is now aiming at the demand level at 110.50.

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There is currently a Bullish Confirmation Pattern in the market, which has become stronger as a result of the surge in the bullish movement. For this rally to be sustained, there is a need for continuous buying pressure in the market.

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Daily analysis of USD/CHF for May 16, 2018

USD/CHF

This currency trading instrument has not done much this week, and price itself has nearly gone below the support level at 1.0000, which is an important level. Once the first target at 1.0050 is breached, another resistance level at 1.0100 would be aimed at; and this is something that requires a rise in volatility.

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A rise in volatility is expected today or tomorrow. There is a Bullish Confirmation Pattern in the 4-hour chart. Price would rise again, possibly reaching the resistance level at 1.0050 and breaching it to the upside.

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The PRC and the DPRK kept the yen's decline

The growth of the Japanese economy for the first time in the last nine quarters has slowed down. The GDP growth indicator collapsed into the negative area, reaching -0.2%. In addition, data on economic growth for the last quarter of last year were also significantly revised downward (from 1.6% to 0.6%). Such disappointing results indicate that the Central Bank of Japan will maintain a soft monetary policy for a long time, and the likely actions of the regulator will be aimed at expanding incentives.

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In general, the experts did not expect any economic breakthrough. By all accounts, GDP in the first quarter should have reached zero, primarily due to a decrease in corporate spending due to an abnormally cold winter. But the release did not even reach such a weak prognosis, for the first time in a long time, having fallen into the negative area. On Friday, another important indicator will be published, the consumer price index. According to general expectations, the Japanese inflation will also show negative dynamics, first slowing down for four months.

However, judging by today's reaction of the market, traders do not care about the problems of the Japanese economy. The pair USD / JPY completely ignored the release of GDP, despite the negative consequences of the published figures. Moreover, the price is now gradually sliding down from the level of the local maximum. Therefore, with a high degree of probability, we can say that Friday's inflation data may also be left without investors' attention. The yen is now entirely subject to the dynamics of the US dollar and the external fundamental background.

After a temporary lull, greenback again showed character and yesterday dominated all dollar pairs. The yield of 10-year US government bonds has overcome not only the 3% barrier, but also the next resistance level (3.05%), thus renewing the 7-year maximum. The reason for the next impulse of growth was the release of data on the volume of retail trade in the United States. The indicator though turned out to be worse than forecasts, but still showed positive dynamics. In addition, the data for the previous month (from 0.6% to 0.8%) were revised upwards. The growth of consumer activity of Americans was very positively received by the markets. The probability of a fourfold increase in the rate increased to 55%, the yield of treasuries went up, and the dollar index renewed the annual maximum (93.4 points).

This morning, the US currency slowed its growth across the market. First, traders record profits, fearing too aggressive dynamics of the dollar, followed by a price pullback. Secondly, the geopolitical situation in the world has changed a little. North Korea issued a sharp statement, jeopardizing the nuclear disarmament deal, and China at the WTO accused Washington of the absurdity of requirements in the sphere of foreign trade.

These circumstances provoked a certain demand for protective tools. Pay attention to the dynamics of gold and franc. The yen also takes advantage of this situation. The external fundamental background serves as a kind of "anchor" for the pair USD / JPY. Bulls of the pair have already overcome and fixed above the key resistance level of 110, but for the development of the northern trend, appropriate conditions are necessary, primarily in the context of international political stability.

In other words, the dollar / yen pair was between the hammer and the anvil. On the one hand, the US currency is strengthening throughout the market. On the other hand, the demand for "quiet harbor" currencies is growing, and on the yen as well.

It is worth recalling that the dollar began to strengthen actively a month ago after news of the denuclearization of the DPRK. Then Greenback began to enjoy support from China, whose representatives agreed to sit down at the negotiating table with colleagues from the United States. Such tectonic shifts in the reduction of geopolitical tensions (especially after the heat at the beginning of the year) allowed the market to focus on the successes of the American housekeeper, on the expectations of the Fed's actions and on the growth of the Treasury yield.

But recent developments can shift the focus of the market to the previous fundamental factors. Kim Jong-Eun refused the planned talks with South Korea today, threatening to even disrupt the historic meeting with Trump, due in June. A formal occasion for such a statement is the joint military exercises of the United States and South Korea. Now, this issue remains in limbo, and, apparently, there are appropriate negotiations on closed communication channels.

US-China talks also "stalled". The first round of the dialogue ended in failure, and yesterday's speech by the representative of China to the WTO indicates that Beijing is still far from resolving trade disputes with Washington. Also, here it is worth remembering about Iran, with which China conducts active trade. This factor complicates and so a difficult equation.

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Thus, China and the DPRK (and, in part, Iran) will determine the fate of the pair USD / JPY. If the demand for defensive assets grows, the yen will return to the price niche 108-109. Strong resistance level is the level of 110.60. This is the upper line of the Bollinger Bands indicator on the daily chart. If bulls USD / JPY can not overcome it impulsively, one can consider sales with the first price target of 109.50 (Tenkan-sen line on D1).

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Overview of the USD / CAD for the week of May 16 via simplified wave analysis

Wave picture of the chart D1:

The unfinished wave design of the major of the Canadian dollar started in September of last year. In the wave structure of a larger TF, the site takes the place of correction. A preliminary calculation of the upside potential indicates a probability of growth of the rate by 4 figures.

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The wave pattern of the graph H1:

The last wave counts since March 19. The structure traces the first 2 parts of the wave zigzag (AB).

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The wave pattern of the M15 chart:

The bearish wave of May 8 has a reversal potential. Counter correction can reach the level of the beginning of the wave.

Recommended trading strategy:

If you hold long trades to traders, you can add positions at the end of the current correction. Intraday supporters can search for entrances in the resistance area for the sale of a pair.

Resistance zones:

- 1.2920 / 1.2970

Support zones:

- 1.2670 / 1.2620

Explanations to the figures: Simplified wave analysis uses a simple waveform, in the form of a 3-part zigzag (ABC). At each TF the last incomplete wave is analyzed. Zones show the calculated areas with the greatest probability of a turn.

Arrows indicate the wave counting according to the technique used by the author. The solid background shows the generated structure, dotted - the expected wave motion.

Attention: The wave algorithm does not take into account the duration of the tool movements in time. To conduct a trade transaction, you need confirmation signals from your trading systems!

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

Overview of AUD / USD for the week of May 16 via simplified wave analysis

Wave picture of the chart D1:

Since January 2016, the main vector of the price movement of the major pair has been the upward movement. In a larger wave formation, the site occupies the place of correction. In the structure of the wave since September last year, the middle part (B) is formed.

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The wave pattern of the graph H1:

The bearish wave sets the main direction since the end of January. The reduction potential is not exhausted for today. Estimated support shows the upper boundary of the target reduction zone.

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The wave pattern of the M15 chart:

The direction of the daily flow is set by the bullish wave of May 9. The final part has not been completed in the zigzag structure.

Recommended trading strategy:

Purchases are premature, you must wait for the current wave to end. In short-term trading in the resistance zone, you should look for signals for the sale of the pair.

Resistance zones:

- 0.7580 / 0.7630

Support zones:

- 0.7320 / 0.7270

Explanations to the figures: Simplified wave analysis uses a simple waveform, in the form of a 3-part zigzag (ABC). At each TF the last incomplete wave is analyzed. Zones show the calculated areas with the greatest probability of a turn.

Arrows indicate the wave counting according to the technique used by the author. The solid background shows the generated structure, dotted - the expected wave motion.

Attention: The wave algorithm does not take into account the duration of the tool movements in time. To conduct a trade transaction, you need confirmation signals from your trading systems!

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

Indicator analysis. The daily review of the currency pair of GBP / USD for May 16, 2018

Trend analysis (Figure 1).

On Tuesday, the price worked in the side channel. On Wednesday, the market with a high probability can continue to move up, with the first target of 1.3584, a pullback level of 14.6% (yellow dotted line). The complex analysis will more accurately tell where the price will go.

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Fig. 2 (daily chart).

Complex analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - upwards;

- Candlestick analysis - up;

- Trend analysis - down;

- Bollinger lines - up;

- Weekly schedule - up.

General conclusion:

On Wednesday, the GBP / USD currency pair may have an upward movement with the first target of 1.3584, a retracement level of 14.6% (yellow dotted line).

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

Indicator analysis. The daily review of the EUR / USD currency pair for May 16, 2018

On Wednesday, the following strong calendar news comes out:

- 10.00 London time. EUR, consumer price index (CPI) (y / y) (Apr), waiting for 1.2%, the previous value was 1.2%;

- 13.00 London time. EUR, speech by the head of the ECB Draghi;

- 13.30 London time. USD, the number of issued construction permits (Apr), waiting for 1.350M, the previous value was 1. 379M;

- 15.30 London time. USD, stocks of crude oil, are waiting for -1.467M, the previous value was -2.197M.

Trend analysis (Figure 1).

On Tuesday, traders decided that a rollback of 23.6% would be enough, and they started working together unanimously (although the news also helped). On Wednesday, the market with a high probability can continue to move up. The complex analysis will more accurately tell where the price will go.

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Fig. 2 (daily chart).

Complex analysis:

- Indicator analysis - up;

- Fibonacci levels - down;

- Volumes - down;

- Candle analysis - neutral;

- Trend analysis - down;

- Bollinger lines - up;

- Weekly schedule - up.

General conclusion.

On Wednesday, the market will move up, with the first goal of 1.1930, a pullback level of 14.6% (yellow dotted line).

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

Wave analysis of the USD / JPY currency pair for May 16, 2018

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Analysis of wave counting:

Having started the yesterday's trading with the upward movement, the currency pair USD / JPY was able to add about 80 percentage points in price and confidently gain a foothold above the level of the 110th figure at the end of the day. The resulting wave pattern suggests that the currency pair significantly complicated the wave 4, C, C, (B), in which its internal wave a took the form of a five-wave structure. If this is so, then before the completion of this wave a, 4, C, C, (B), the currency pair can work out a mark of 110.85 or even a level of 111.00.

The objectives for the option with purchases:

111.85 - 76.4% of Fibonacci

The objectives for the option with sales:

109.18 - 50.0% of Fibonacci

108.10 - 38.2% of Fibonacci

General conclusions and trading recommendations:

The upward wave 4, C, C, (B) complicated its internal wave structure, which led to the refinement of the whole wave marking. Thus, I recommend buying a pair with targets near the estimated level of 111.85, which is equivalent to 76.4% of Fibonacci. I recommend to go back to sales after the completion of wave 4, which may more than once become more complicated, since the dollar is now in high demand.

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

The daily review of the currency pair GBP / JPY for May 16, 2018. Ichimoku Indicator

GBP / JPY

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Senior timeframes

The situation, since the last analysis, has not undergone any significant changes. The pair continues to remain in the zone of influence and attraction of the resistances encountered (Senkou Span A of the day cloud 149 + monthly levels of 148.95). The conclusions and expectations remain the same. The players on the downgrade desirably complete the climb on current positions and return to the interaction with support for the upper boundary of the weekly cloud (147.66). The main task for the continuation of the decline is the entry and consolidation in the weekly Ichimoku cloud. In the event that players on the increase can achieve in the near future deepening of the upward correction, the key resistance level is now still the area of 150.77 (weekly cross + day Kijun + Senkou Span B days).

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H4-H1

At the lower timeframes, the main resistance is now within the boundaries of the cloud H4. Accordingly, the breakdown of the cloud and reliable fastening above will allow to consider new upward reference points, among which there will be a target for breakdown of the H4 cloud and resistance levels of the older time intervals (149.40-60). The nearest reinforced support zone is currently at 148.30-15 (the final boundaries of the cross H4 + the lower boundaries of clouds H4 and H1), then 147.66 (weekly Senkou Span A) and the update of the minimum correction extremum (147. 03).

Indicator parameters:

All time intervals 9 - 26 - 52

The color of indicator lines:

Tenkan (short-term trend) - red,

Kijun (medium-term trend) - green,

Fibo Kijun is a green dotted line,

Chinkou is gray,

Clouds: Senkou Span B (SSB, long-term trend) - blue,

Senkou Span A (SSA) - pink.

The color of additional lines:

Support and resistance MN - blue, W1 - green, D1 - red, H4 - pink, H1 - gray,

Horizontal levels (not Ichimoku) - brown,

Trend lines - purple.

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

Wave analysis of the USD / CHF currency pair for May 16, 2018

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Analysis of wave counting:

During the yesterday's trading, the currency pair USD / CHF was unable to determine the direction of the movement, remaining until the end of the day near the level of price parity. It can be assumed that the currency pair tried to complete the formation of the wave 2 and denote the beginning of the wave 3, 1, C, (2), A, (B). At the same time, the overall strengthening of the dollar in the currency markets can allow the currency pair to further complicate the internal wave structure of the wave c, c, B, (2), A, (B) and resume the growth of quotations, at least to the level of 1.0100.

The objectives for the option with purchases:

1.0064 - 76.4% of Fibonacci

1.0100 - 1.0150

The objectives for the option with sales:

0.9896 - 61.8% of Fibonacci

0.9761 - 50.0% of Fibonacci

General conclusions and trading recommendations:

The currency pair supposedly completed the construction of the wave c, c, B, (2), A, (B). Thus, I recommend now to sell the pair with targets near the estimated mark of 0.9896, which is equivalent to 61.8% of Fibonacci, within the first wave of the future wave 1, C, (2), A, (B). I recommend to start buying the pair in the case of a successful attempt to break through the mark of 1.0064, which corresponds to 76.4% of Fibonacci, with targets in the range of 1.0100 - 1.0150, which will complicate the internal structure of wave B, (2 ), A, (B).

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Wave analysis of the GBP / USD currency pair for May 16, 2018

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Analysis of wave counting:

Having failed to execute the turn, in the course of yesterday's trading, the currency pair GBP / USD resumed the downward movement, having updated the minimum reached on May 10 (1.3460) and fell to the level of 1.3450 in the afternoon. Thus, it can be assumed that the currency pair nevertheless returned to the process of forming the wave c, b, B, C, C, (A), in the form of a full five-wave structure. If this is the case, then the currency pair may have prospects for lowering quotes up to the level of 1.3175.

The objectives for the option with purchases:

1.3647 - 76.4% of Fibonacci

1.3700

The objectives for the option with sales:

1.3459 - 100.0% of Fibonacci

1.3334 - 127.2% of Fibonacci

General conclusions and trading recommendations:

The tool continues to complicate the wave structure of the wave c, b, B, C, C, (A). Now, I recommend to remain in sales with targets that are near the estimated marks of 1.3459 and 1.3334, which corresponds to 100.0% and 127.2% of Fibonacci. An unsuccessful attempt to reach the 1.3334 mark will warn of the instrument's readiness to build a wave with the first targets located around 37 figures.

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

Wave analysis of the EUR / USD currency pair for May 16, 2018

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Analysis of wave counting:

Yesterday's EUR / USD pair trades began with a downward movement, breaking through the minimum reached on May 9 and was able to work out the mark of 1.1820. The wave pattern that formed at the end of yesterday's American session looked like a more complex form of the five-wave structure of the wave c, c, B, (C). If this is the case, the currency pair may complete a strongly prolonged decline, or after testing the level of the 18th figure, or after the quotes fall down to the level of 1.1650.

The objectives for the option with sales:

1.1807 - 685.4% of Fibonacci

1.1700

The objectives for the option with purchases:

1.2000 - 1.2200

General conclusions and trading recommendations:

The assumed wave c, B, (C) resumed its construction, but still approaches its completion. So, now I recommend buying a pair as part of working off a wave d, B, (C) with targets located about 20 and 21 figures. I recommend selling the pair after a successful attempt to break through the calculated level of 1,1807, which corresponds to 685.4% of Fibonacci, since this will mean an even more complicated wave c, B, (C), with targets that are about 17 figures.

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

Trading plan for the European session on May 16 EUR / USD

To open long positions for EUR / USD, you need:

I do not recommend rushing to buy euros. Only the formation of a false breakout in the support area of 1.1818 with the confirmation of the divergence on the MACD indicator will serve as a signal for the opening of long positions with the expectation of returning and renewing the resistance levels of 1.1857 and 1.1894. Otherwise, you can count on purchases only after testing the new support levels in the area of 1.1792 and 1.1765.

To open short positions for EUR / USD, you need:

Failure to consolidate and return to the level of 1.1857 will be a good signal for the opening of new short positions in the euro with the expectation of a decline and a test of the low of the month at 1.1818. The breakthrough of which will lead to a bigger sale of the euro with the renewal of the area of 1.1792 and 1.1765, where I recommend fixing the profits. In the case of growth above the level of 1.1857 in the morning, sales can be returned to a rebound of 1.1894.

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Description of indicators

MA (average sliding) 50 days - yellow

MA (average sliding) 30 days - green

MACD: fast EMA 12, slow EMA 26, SMA 9

Bollinger Bands 20

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

Trading plan for the European session on May 16 GBP / USD

To open long positions for GBP / USD, you need:

While the trade is conducted above the middle of the channel 1.3500, demand for the pound will remain, which may lead to an upgrade of the upper limit of 1.3550. Only consolidation at this level will lead to a larger uptrend with a return to 1.3599, where I recommend fixing the profits. In the case of GBP / USD decline in the first half of the day, purchases can be sought after a false breakout at 1.3454 or at a rebound of 1.3410.

To open short positions for GBP / USD, you need:

Fixing below the middle of the lateral channel 1.3500 will lead to a new wave of pressure on the British pound, which will allow us to count on the renewal of support for 1.3454 and for its breakthrough, which will lead to a larger sellout of GBP / USD with a yield to the lows around 1.3410 and 1.3366, where I recommend fixing the profit. In the case of GBP / USD growth in the first half of the day, sales can again be returned after a false breakout in the resistance area of 1.3550 or on a rebound from a larger level of 1.3599.

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Description of indicators

MA (average sliding) 50 days - yellow

MA (average sliding) 30 days - green

MACD: fast EMA 12, slow EMA 26, SMA 9

Bollinger Bands 20

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

Technical analysis of NZD/USD for May 16, 2018

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NZD/USD is expected to trade with a bullish outlook. Although the pair posted a pullback from 0.6850, it is still trading above the rising 50-period moving average, The relative strength index is above its neutrality level at 50 and lacks downward momentum. To conclude, as long as 0.6850 is not broken, look for the continuation of a rebound with targets at 0.6925 and 0.6955 in extension.

Chart Explanation: 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: 0.6925, 0.6955, and 0.7010

Support levels: 0.6820, 0.6800, and 0.6750

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

Technical analysis of GBP/JPY for May 16, 2018

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GBP/JPY is under pressure and expected to trade in a lower range. Although the pair posted a rebound from 147.55, it is still capped by a declining 50-day moving average. The relative strength index is mixed to bearish. The key resistance level at 149.05 should maintain the selling pressure. Hence, as long as this key level is not surpassed, look for a return with targets at 147.90 and 147.55 in extension.

Chart Explanation: 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: 149.25,149.60, and 150.05

Support levels: 147.90, 147.55, and 147.00

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

BITCOIN Analysis for May 16, 2018

Bitcoin has been ranging between the support area of $8,000 to $8,500 for a while now where the bullish bias still exists in the market. After the recent rejection of the bears off the $8,500 area, there were certain possibilities that the price will be proceeding higher towards $10,000, but at the next day, the price collapsed below it with a daily close. As there was no major fundamental to accelerate the bullish gains in Bitcoin, NASDAQ took interest in Bitcoin which is expected to strengthen the gains in the coming days. As of the current scenario, the price is still being held by the Kumo Cloud quite well above the $8,000 area which is expected to push higher once it clears above $9,000 with a daily close. As the price remains above the $8,000 area, further bullish pressure is expected in Bitcoin in future.

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

Global macro overview for 16/05/2018

The global investors are increasingly worried about the state of the 17th economy in the world. On Wednesday morning the Turks had to pay nearly 4.50 lira for one dollar, which is more than 1% more than the day before. At the beginning of the year, the American currency was less than 3.80 lira. This means that in 2018, the lira lost over 15% of its value against the US dollar. The euro rate rose to 5.31 lira and also set a historical maximum.

At noon, the Central Bank of the Republic of Turkey (CBRT) issued a short statement with the following content: "The CBRT closely monitors the unhealthy price movements in the markets. Necessary actions will be taken, also in relation to the impact of these events on inflation prospects." The market could interpret this as a signal that CBTR is ready to make an emergency interest rate increase if it seems appropriate. As a result, the dollar exchange rate fell from 4.50 to approx. 4.42 lira within a dozen or so minutes.

The "depreciation spiral" in which the Turkish currency has fallen is largely the result of the terrible economic policy pursued on the Bosphorus. The Turkish central bank cannot (or does not want) tame the galloping, exceeding 10% per annum, price inflation. A rapidly growing imbalance in the current account, which already exceeds the equivalent of 6% of GDP, is now another problem for the Turkish economy. Under such conditions, a professional and independent central bank definitely raises interest rates to stop a dangerous credit boom. But the monetary authorities of Turkey cannot do it, because the president who exercises almost the Sultan's rule is a sworn enemy of high-interest rates. Recep Tayyip Erdogan has a somewhat bizarre view that high rates are driving inflation.

On Tuesday, Erdogan announced that after winning the elections scheduled for June 24 (in the fact that they will win, probably no one doubts), he will still expand its influence on economic policy, which may deprive the central bank of the remaining freedom in shaping interest rates at all.

Let's now take a look at the USD/TRY technical picture at the H1 time frame after the CBRT verbal intervention was made. The price fell sharply from the level of 4.5011 to the lows around the level of 4.4043 but did not break below the technical support at the level of 4.3732. This level is a short-term key for further depreciation of the US dollar. The next important technical support is seen at the level of 4.2189. Obviously, the market conditions are extremely overbought and there is a clear bearish divergence between the price and the momentum oscillator, which additionally support the bearish short-term outlook.

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

Global macro overview for 16/05/2018

The main topic of discussion among investors is the sale of US bonds, which again drives the dollar higher and brings a breach of important technical levels. Yesterday's report on retail sales from the US was not impressive, but it was enough for the pretext to buy the dollar. Today in the morning, the yield on 10-year Treasury bonds stabilizes at 3.06%, but an important barrier is 3.03-3.05% has already been broken and the highs unsaw since 2011 are being corrected. The entire US yield curve has been trading at levels unseen for 7 or even 10 years. The difference in market interest rates is currently the main driver of changes for the currency market and the US is victorious out of the rest of the world. The sentiment failed to spoil a report from North Korea, which is dissatisfied with the ongoing military maneuvers of South Korea and the US, and therefore canceled today's talks with its southern neighbor. North Korea is haunted that it will never establish economic relations with the US in exchange for a complete disruption of the nuclear program and threatens that the June 12th summit of Kim Jong Una with Donald Trump may not be implemented. The fact that the financial markets noiselessly absorbed this information shows the general lack of interest in the situation and is another proof that geopolitical tensions have become for unimportant investors.

Increase in profitability will affect some pairs more strongly than others. The USD/JPY pair is the obvious choice for the global investors, so let's now take a look at the USD/JPY technical picture at the H4 time frame. The market has neglected the Double Top technical formation as it broke through the highs at the level of 110.03. The price remains inside of the uprising parallel channel, which indicates another high on the horizon. The latest one was made at the level of 110.43 and that might not be the end as there is no divergence between the price and the momentum oscillator. The higher the 10-year US Treasury bonds move, the higher the USD/JPY will follow, so the outlook remains bullish.

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NZD/USD Intraday technical levels and trading recommendations for for May 16, 2018

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The price zone of 0.7320-0.7390 stood as a significant supply zone during recent bullish pullback. The bulls failed to execute a successful Bullish breakout above 0.7400 during the previous week's consolidations.

The NZD/USD pair had been trapped between the price levels of 0.7170 and 0.7350 until bearish breakdown of 0.7200 occurred Yesterday.

Since April 13, significant bearish pressure has been applied. This probably turns the short-term outlook for the NZD/USD pair into bearish giving considerable significance to the multiple-top reversal pattern.

That's why, bearish breakdown of 0.7220-0.7170 (neckline zone) was needed to confirm the depicted reversal pattern. Bearish target levels around 0.7050 and 0.7000 have been achieved already.

The bearish scenario needs obvious bearish persistence below 0.7050 to maintain significant bearish momentum towards 0.6860 and 0.6820. That's why, the price level of 0.7050 is currently considered a key-level for the NZD/USD bears.

Any bullish breakout above the price level of 0.7050 hinders further bearish decline allowing bullish pullback to occur towards 0.7170-0.7220.

This will probably allow conservative trend traders to wait for a bullish pullback towards the price zone of 0.7220-0.7170 (neckline zone) (significant supply zone) for a valid SELL entry. S/L should be placed above 0.7260.

On the other hand, If bearish momentum persists, the price zone of 0.6820-0.6780 should be watched for bullish rejection and a valid BUY entry.

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Intraday technical levels and trading recommendations for EUR/USD for May 16, 2018

Daily Outlook

The EUR/USD pair had been trapped between the price levels of 1.2200 and 1.2500 until bearish breakout occured recently.

Significant signs of bearish reversal were manifested around the price levels of 1.2400.This was manifested in the bearish engulfing daily candlestick of April 20.

The short-term outlook turns to become bearish as long as the EUR/USD pair keeps trading below the broken uptrend as well as the lower limit of the depicted consolidation range remains broken.

Bearish persistence below the price level of 1.2200 allowed further bearish decline towards the price levels of 1.1990 and 1.1880.

As mentioned, the price zone (1.1850-1.1750) offered significant bullish rejection and a short-term bullish pullback for intraday traders. Target levels should be located around 1.2100 and 1.2160.

Conservative traders should wait for a bullish pullback towards 1.2190-1.2200 for a valid low-risk SELL entry.

However, If bearish momentum dominates, bearish persistence below 1.1700-1.1750 (zone of previous daily lows) will be needed to enhance further bearish decline towards 1.1400 (the previously mentioned monthly key-level).

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Trading Plan for Dow Jones for May 16, 2018

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Technical outlook:

A daily chart view has been presented here to have a bigger picture. The Dow Jones index looks to be consolidating at the moment broadly between 23,300 and 25,000 levels and is most likely expected to break below 23,000 levels eventually. Dow has hit resistance at 25,000 levels day before yesterday and reversed sharply lower since then. Please also note that the indice has produced an evening star bearish pattern as well indicating that another meaningful lower top might have already formed. Looking into the wave count, the first drop from sub 26,700 through 23,000 levels is a clear impulse (5 waves) hence it has been labelled as wave 1 or A. The subsequent rally through 25750 levels can be labelled as wave 2 or B or wave a within a more complex wave 2 or B. In both scenarios, the Dow Jones looks to be ready to be unfolding into wave 3 or C as labelled expectation. Selling on rallies is preferred trading strategy for now.

Trading plan:

Remain short for now, stop above 25,750, target 20,000/21,000

Fundamental outlook:

Watch out for ECB president Draghi's speech in Frankfurt at 08:00 AM EST.

Good luck!

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USD/JPY analysis for May 16, 2018

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Recently, the USD/JPY pair has been trading upwards. As I expected, the price tested the level of 110.48. According to the H1 time – frame, I found a broken resistance trendline and bullish flag in creation, which is a sign that selling looks risky. My advice is to watch for potential buying opportunities if you see a valid breakout of the bullish flag. The upward target is set at the price of 111.40.

Resistance levels:

R1: 110.62

R2: 110.93

R3: 111.41

Support levels:

S1: 109.83

S2: 109.35

S3: 109.05

Trading recommendations for today: watch for potential buying opportunities.

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Analysis of SIlver for May 16, 2018

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Recently, Silver has been trading downwards. The price tested the level of $16.15. Anyway, I found the bearish flag in progress, which is ф sign that buying looks risky. I also found a broken upward trendline in the background, which is another sign of weakness. My advice is to watch for a potential breakout of the bearish flag to confirm further downward continuation. The downward target is set at the price of $16.02.

Resistance levels:

R1: $16.49

R2: $16.71

R3: $16.85

Support levels:

S1: $16.13

S2: $15.99

S3: $15.77

Trading recommendations for today: watch for potential selling opportunities.

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Bitcoin analysis for May 16, 2018

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The Bitcoin (BTC) has been trading downwards. As I expected, the price tested the level of $8.239 and met my yesterday's targets. Japanese internet giant GMO has updated its plans to manufacture and sell its 7nm bitcoin mining chips as well as for its own mining operations. Interested customers will soon be able to reserve some of these chips. The technical picture on Bitcoin looks neutral to bearish.

Trading recommendations:

According to the H1 time - frame, I found that price broke consolidation zone in the background, which is a sign that sellers are in control. I also found a potential intraday bearish flag in creation, which is another sign of weakness. My advice is to watch for potential selling opportunities if you see a valid breakout of bearish flag. The downward targets are set at the price of $7.810 and at the price of $7.156.

Support/Resistance

$8.260 – Intraday resistance

$8.045– Intraday support

$7.810 – Objective target 1

$7.156 – 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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GBP / USD pair for the week of May 16 via simplified wave analysis

Wave picture of the D1 chart:

The daily scale of the instrument from October 2016 points to the priority of the bullish course. The potential for increase is very large since in a larger ascending wave structure this section of the graph gives rise to the final part (C).

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The wave pattern of the H1 graph:

The price rate is set by a bearish wave of April 17. It takes the place of the last part (C) in the wave structure of the bearish wave of H4 scale. The target zone has been reached and the proportions of the wave are met. There are no signals of reversal.

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The wave pattern of the M15 chart:

Currently, in recent weeks, the lateral flat quotations is formed at the end of a wave of a larger scale, within the zone of a potential reversal.

Recommended trading strategy:

There are no prospects for sales. For all styles of trading, it is recommended to purchase the instrument.

Resistance zones:

- 1.3700 / 1.3750

Support zones:

- 1.3490 / 1.3440

Explanations to the figures:

A simplified wave analysis uses a simple waveform, in the form of a 3-part zigzag (ABC). The last incomplete wave for every time frame is analyzed. Zones show the calculated areas with the greatest probability of a turn.

Arrows indicate the counting of wave according to the technique used by the author. The solid background shows the generated structure and the dotted exhibits the expected wave motion.

Attention: The wave algorithm does not take into account the duration of the tool movements in time. To conduct a trade transaction, you need to confirm the signals used by your trading systems.

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Bitcoin analysis for 16/05/2018

According to anonymous sources, Facebook reportedly is considering creating its own cryptocurrency. People "familiar with Facebook's plans" inform, that the social media giant is very serious about the implementation plans of the virtual coin for the application.

Anecdotal evidence comes from the same week in which the platform announced that David Marcus, head of the Messenger application, will switch to a special research group dealing in Blockchain technology. Marcus' choice for Blockchain activities was immediately visible, earlier the executive director worked in the field of finance in the PayPal system, and then, in December 2017, he joined the Coinbase cryptocurrency stock exchange commission. At that time, CEO Brian Armstrong, Coinbase, praised Marcus' international experience in the field of payments and mobile communications.

This movement presents a peculiar juxtaposition for Facebook - the platform blocked advertising related to cryptocurrencies in January. Also referring to "misleading or deceptive promotional practices", the ban was soon copied by Google and Twitter. Good move before the start of an advertising campaign of its own cryptocurrency.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market has made another lower low at the level of $8,100, so the downward correction is still developing. The next target is seen at the level of 61% Fibo at $7,712 as the waves ABC of the zigzag pattern unfolds. The target zone for the wave (2) is seen between the levels of $7,442 - $7,7712.

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More and more statements from representatives of the Fed, related to the interest rate

The speeches of a number of representatives of the Federal Reserve System, as well as good fundamental data, supported the US dollar, which continued its strengthening against the euro and the British pound on Tuesday, May 15.

Recently, many representatives of the Federal Reserve focused their attention on the need to further raise interest rates in view of good economic performance.

For example, yesterday, Robert Kaplan said that US GDP will grow by 2.5% -2.75% this year, as the short-term outlook for the economy remains very good. In his opinion, it would be correct to continue raising interest rates.

Data on the growth of confidence of American builders also contributed in part to the growth of the market. According to the report of the National Association of Housing Builders, the calculated housing market index in May 2018 increased by two points, to 70 points. The April index was revised downward, to 68 points. Economists had expected the index in May to be at 69 points.

A report from the US Department of Commerce on the growth of retail sales has increased demand for the US dollar.

According to the data, retail sales in April this year rose by 0.3%, which fully coincided with the forecasts of economists. Increase in sales growth will certainly contribute to the economic growth of the United States. Excluding cars, retail sales also grew by 0.3%.

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The speech of economist and deputy chairman of the Federal Reserve Richard Clarida in the US Senate influenced the mood of investors. Clarida said that it will focus not only on the level of unemployment, but also on other indicators of the labor market, as the growth of wages is important for economic growth, productivity, and technology. According to Clarida, apart from the desire for full employment, the Fed needs to concentrate on increasing wages.

Another representative of the Fed, Williams also spoke about interest rates in his speech.

FRB of San Francisco President Williams said that three or four rate increases this year is correct for the Fed in the current situation, since the neutral rate level is still near the historical minimum of 2.5%. Williams, like his colleagues, expects the US economy to grow by 2.5% in 2018 and 2019.

As for the technical picture of the EURUSD pair, the bears clearly aimed at fresh lows around 1.1700, but for this to happen, it is necessary to overcome support in the area of 1.1820. The breakthrough of this level will lead to further sale of risk assets with the test of levels at 1.1770 and 1.1740.

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Trading plan for 16/05/2018

Today's currency market sentiment brings a bit of rebound yesterday's US dollar so far. Data from Australia and Japan disappointed, but without damage to AUD and JPY. The stock market is balancing at the level of yesterday's close. The trade session in Asia is calm, where the attempts to further strengthen USD were put down during the session. The yield on 10-year US bonds is about 1 bp lower at 3.066 percent, which also hampers the dollar a bit: EUR/USD stopped at 1.1840. The stock market is not willing to give direction and fluctuates around closing levels from the previous session. Japanese Nikkei225 drops 0.4%, but Hang Seng gains 0.1%.

On Wednesday 16th of May, the event calendar is busy in important data releases: Gross Domestic Product data from Japan, Wage Price Index data from Australia, CPI data from Germany and the Eurozone, Manufacturing Sales data from Canada and Building Permits and Housing Starts data from the US. In the meantime, there is a scheduled speech from ECB President Mario Draghi, FOMC Member Raphael W. Bostic, SNB Chairman Thomas Jordan and BOC Deputy Governor Lawrence Schembri.

AUD/JPY analysis for 16/05/2018:

The initial estimate of Japan's GDP for the first quarter was -0.2% against expected 0.0%. The annualized rate was 0.6%, and the data for the previous quarter was revised down to 0.6% from 1.6%. These negative dynamics are the first case since 2015. USD/JPY did not react to the data and currently sits at 110.25.The Westpac consumer confidence index from Australia fell in May by 0.6% after the same drop a month earlier. The wage index disappointed by a 0.5% q/q against expected 0.6% AUD/USD fell after data to 0.7447, but managed to rebound at 0.7480.

Let's now take a look at the AUD/JPY technical picture at the H4 time frame. The price has been capped just below the 61% Fibo retracement at the level of 82.80 and currently is testing the technical resistance at the level of 82.73. The key technical support is seen at the level of 82.11 and the price has bounced twice from this level. Momentum is still above its fifty level, so another move higher is still on the table. In a case of a further breakout above the level of 82.80, the next target is seen at the level of 83.02 ( next technical resistance level).

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USD / CHF pair review for a week from May 16 on simplified wave analysis

Wave picture of the D1 chart:

The upward trend, which was actual for this scale of the chart, was launched on February 16. In a larger bullish wave model, the site began testing the final part (C). The preliminary recovery potential is estimated at about 3 price figures.

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The wave pattern of the graph H1:

The bullish wave has a pronounced impulsive character of motion. The level of intermediate resistance has been reached. The last weeks are forming a counter-rollback.

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The wave pattern of the M15 chart:

Bearish wave counts from May 7. Its wave level, like the reduction potential, is small.

Recommended trading strategy:

Mid-term to continue to hold long positions, with the possibility of "topping" at the end of the correction. For intraday trading, it makes sense to refrain from selling and wait for signals to buy.

Resistance zones:

- 1.0050 / 1.0100

Support zones:

- 0.9940 / 0.9890

Explanations to the figures:

A simplified wave analysis uses a simple waveform, in the form of a 3-part zigzag (ABC). The last incomplete wave for every timeframe is analyzed. Zones show the calculated areas with the greatest probability of a turn.n.

Arrows indicate the counting of wave according to the technique used by the author. The solid background shows the generated structure and the dotted exhibits the expected wave motion.

Attention: The wave algorithm does not take into account the duration of the tool movements in time. To conduct a trade transaction, you need to confirm the signals used by your trading systems.

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Trading Plan for US Dollar Index for May 16, 2018

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Technical outlook:

The structure remains more or less unchanged except for a small intraday high yesterday at 93.45 levels, from what we discussed on May 14, 2018. The US Dollar Index might have completed its recent rally and is about to see a correction lower towards 91.80 levels at least as projected here. Please note that both fibonacci retracement levels (38.2%) and the Elliott channel support is coinciding around 91.80 levels either late today or tomorrow. So please do not be surprised to see a quick drop lower, terminating into wave 4 of a lesser degree, before proceeding/resuming its rally towards 95.00 levels going forward. A safe trading strategy from here is to look to buy on dips through 91.80 levels, though an aggressive counter trend trade can also be taken. The wave count also suggests that US Dollar Index is proceeding well into its wave (3) and should be looking to rally through 95.00 levels.

Trading plan:

Aggressive traders might want to sell with stop above 93.50 and target 91.80. Conservative traders might want to remain flat for now and look to buy again on dips.

Fundamental Outlook:

Watch out for ECB president Draghii's speech in Frankfurt at 0800 AM EST.

Good luck!

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Burning forecast 05/16/2018

Burning forecast 05/16/2018

EURUSD: Selling is more likely.

On Tuesday, May 15, the euro rate fell sharply and updated an important minimum of 1.1820

There were no strong news.

The main reason is the growth of yield on US government bonds above 3%. The largest bond fund PIMCO predicts that the yield of 10-year US dollars will be in the range of 3-3.5%

Potentially looks like a new decline of the euro.

Sell from 1.1814, stop at 1.1860, the profit is 1.1700.

Alternative: Buy from 1.2000.

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The US intensifies the economic gap from Europe

EUR / USD

Yesterday's events in the market went according to the expected and obvious scenario. Weak German GDP against the backdrop of crisis-low ZEW indexes and good retail sales figures in the US sent the euro to its peak.

Expectations on Germany's GDP for the first quarter were 0.4% versus 0.6% in the fourth quarter, but the economy showed an increase of only 0.3%. The German business sentiment index ZEW for May remained at the previous April level of -8.2 against the expectation of a slight increase to -8.0. Industrial production of the eurozone as a whole in the March estimate added 0.5% against expectations of 0.6%, and the previous figure in February was revised down to -0.9% from -0.8%. Against this background, the second estimate of the euro area's GDP of 0.4%, which came at the expectation level (against 0.6% in the fourth quarter), was already perceived as good news. As well as the growth of the index of sentiment in the business circles of the eurozone ZEW for May from 1.9 to 2.4.

Retail sales in the US for the month of April increased by 0.3% against expectations of 0.4%, but the March growth was revised to increase from 0.6% to 0.8%. Basic Retail Sales added 0.3% against the forecast of 0.5% but here, the previous indicator was increased from 0.2% to 0.4%. At the same time, the sales in large stores increased from 4.2% y / y to 4.9% y / y, which demonstrates the obvious desire of consumers to spend more without significant savings in online stores. The index of business activity in the manufacturing sector of New York for the current month rose to 20.1 from 15.8 in April. The forecast assumed a decrease to 15.1. Business activity in the housing market from the NAHB in May rose to the expected 70 points.

The dollar-linked commodity assets also fell significantly: gold -2.23%, copper -1.26%, silver -2.28%, oil -0.07%, and wheat -0.50%. The breakthrough of the dollar, therefore, took place. And the shift in investor sentiment can be called "tectonic", as the yield on 10-year US government bonds reached 3.09%, and the market expectation of the rate for December of this year was 2.23%, which means almost 100% confidence in a 3-fold rate increase and a 52% expectation of a 4-fold increase. In this light, it is logical that the stock market decline (S & P500 -0.68%) is a closing of long positions at the burst of expectations of the strengthening of the rate of monetary policy tightening.

In Italy, President S. Mattarella postponed the issue of forming a government for the next week, increasing the parliamentary factions time to think over the situation.

Today, the final estimates of the euro area CPI for April are the same with the forecast without changes: 0.7% y / y for core inflation and 1.2% y / y for the total. For the United States, we again expect positive indicators. The volume of industrial production for April is projected to grow by 0.5%. The capacity utilization factor is expected to increase from 78.0% to 78.4%. The number of housing permits for new homes in April is expected to be 1.33 million y / y against 1.32 million y / y a month earlier. The number of issued permits for the construction of a new house is expected at the previous level of 1.35 million.

We are waiting for the euro in the range 1.1710 / 20.

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Technical analysis on USD/JPY for May 16, 2018

The USD/JPY pair made a new higher high yesterday but the Daily RSI does not confirm it. This is a first sign of a bearish divergence in the Daily chart. Price remains in a bullish uptrend, but any break below 109.40 will confirm a trend change to bearish.

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Red lines - bearish divergence

Blue line - support trend line

The USD/JPY pair continues to make higher highs and higher lows. Daily support is found at 109.55-109.40. So any pull back that holds above this area is considered a buying opportunity for a move towards 111. The bearish divergence provides us a warning but not a reversal signal. This signal will come with the break below 109.40. If and when this support fails to hold, we should expect USD/JPY to fall at least towards the Daily cloud support currently at 107.40.

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Pound falls under the onslaught of the dollar

GBP / USD

On Tuesday, the UK employment indicators came mixed, which already supported the pessimistic mood of investors regarding the future prospects of work. The number of applications for unemployment benefits for April was 31.2 thousand against the forecast of 13.3 thousand. The previous indicator for March was revised for decline from 11.6 thousand to 15.7 thousand. Nevertheless, the number of jobs for the last 3 months increased by 197 thousand against expectations of 129 thousand. There is weakening and wage growth, taking into account premiums, growth slowed to 2.6% y / y against expectations of 2.7% y / y and 2.8% y / y in February .

The release of US retail sales data strengthened the pound's decline. Base sales (excluding cars) added 0.3% in April, the March volume was revised up to 0.4% from 0.2%. Total sales increased by 0.3%, with the revision of the previous indicator to 0.8% from 0.6%. As a result, the British pound declined by 51 points.

Today, data on the UK will not come out, investors will wait for US indicators for construction and industrial production. The volume of industrial production (Industrial Production) for April is expected to grow by 0.5%, the capacity utilization factor may increase from 78.0% to 78.4%. The number of housing permits for new homes in April is projected at 1.33 million versus 1.32 million in March.

In the coming days, we are waiting for the pound sterling at 1.3330.

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Technical analysis of AUD/USD for May 16, 2018

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If we look at the 4-hour chart, the AUD/USD pair is already in the bearish bias. Now after the Stochastic Oscillator reached the oversold level and is back upward again, this pair is forming an harmonic pattern by points X,A,B,C. Now they want to try to make a D point level, as long point A is not violated by this pair in a few days. The AUD/USD pair is going to reach the upward target between 0.7568-0.7610.

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Technical analysis of Gold for May 16, 2018

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At the 4-hour chart Gold is now trading in a bearish bias. As We can see the Stochastic Oscillator is already at the oversold level and is going upward. This will indicate that the price will test the resistance level at 1,305.75 or the upper channel before the gold price will go down again.

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Trading Plan for GBP/USD for May 16, 2018

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Technical outlook:

We have been vouching for a potential larger degree top in place in GBP/USD since mid April 2018 when 1.4376 highs were formed. Since then the pair has unfolded into 5 waves seen on smaller timeframes, breaking below the trend line support as seen here. Please note that GBP/USD is trading well below its critical past support at 1.3700 levels. The above criteria confirms that medium term trend for GBP/USD has reversed lower already and bears should remain in control going forward. Selling on rallies will remain a safe trading strategy going forward. Looking into the wave counts, a larger degree wave (4) seems to be terminated at 1.4375 levels and subsequent drop through sub 1.3460 levels has unfolded into 5 waves (impulse) forming wave 1 of the resumed downtrend. If this count holds to be true, GBP/USD is now expected to produce a counter trend corrective rally that may push prices at least towards 1.3800 levels or upto 1.4000 levels going forward.

Trading plan:

Aggressive traders might want to go long with tight stop below the 1.3450 levels. Conservative traders may look to sell again on rallies through 1.4000 levels.

Fundamental outlook:

Watch out for ECB president Draghi's speech in Frankfurt at 08:00 AM EST.

Good luck!

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Обзор EUR/USD от 16.05.2018

Despite all the forecasts and expectations, the dollar continued to strengthen. In the first half of the day, the single European currency remained relatively stable, although the statistics came out somewhat worse than expected. Second, the GDP estimate for the first quarter confirmed the slowdown in economic growth from 2.8% to 2.5%, but this has long been taken into account by the market, so it could not affect the mood of investors. The growth rate of industrial production accelerated from 2.6% to 3.0%, while 3.7% was expected. Moreover, the previous value was revised to the lower figures, from 2.9%. So the market participants had doubts about buying the euro. But the US data has already finally affected the mood of market participants. Of course, the growth rate of retail sales slowed from 4.9% to 4.7%. However, the previous figures were revised from 4.5%, and a slowdown to 4.1% is expected. In other words, despite the decline in retail sales, given the revision of the data, growth is more likely. Equally important is the fact that commercial inventories remained unchanged, although they feared their further growth.

Today, the final data on inflation in Europe are coming out, and most likely they will coincide with the preliminary estimate, which showed its slowdown from 1.3% to 1.2%. In general, the market has already taken into account the possibility of extending the ECB's quantitative easing program precisely because of the reduction in inflation. So this data will not have a special effect. At a minimum, the single European currency will not have much cause for growth. Meanwhile, the data in the US is expected to show a reduction both the number of issued construction permits, and the construction projects started at 2.3% and 1.1% respectively. But the negative impact will be offset by data on industrial production, the growth rate of which should accelerate from 4.3% to 4.5%.

Most likely, the euro/dollar pair will hover around 1.1850.

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Technical analysis on Gold for May 16, 2018

Gold price did not continue the bounce as we expected but reached our target of $1,288 once $1,301 was broken. We warned that Gold price could fall towards $1,295-$1,285 if $1,301 was broken. Trend is bearish. Gold price has reached important medium-term trend support trend line.

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Red line - long-term resistance

Blue upward sloping line - medium-term support

Green upward sloping line - long-term support

Gold price is challenging important trend line support. If this trend line is broken we should expect price to fall further towards the green trend line support around $1,250. As long as price is below $1,320 trend will remain bearish. There are many chances we see a bounce from this area but we have to be patient to see a more constructive price move higher before turning bullish again.

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The new RLA ideology is to hope and believe

AUD / USD

Under the strong onslaught of allied markets, which occurred yesterday under the pressure of the US dollar, the Australian currency could only decline. The dollar index added 0.62%, gold fell by 1.7%, iron ore lost 2.4%, and copper declined by 0.82%.

Yesterday, the Reserve Bank of Australia published the minutes from the last meeting on monetary policy. An interesting phrase was inserted in the text of the document: "It would be expedient to maintain a stable money exchange and make the Reserve Bank a source of stability and trust." Apparently, the RBA management is either aware of the upcoming world economic cataclysms or intends to maintain the current rate unchanged for a long time for other reasons. However, the Australian Central Bank does not abandon an ambitious forecast for economic growth of 3% (the current 2.4%). For today, we see a growth in wages for the 1st quarter by 0.5% against the forecast of 0.6% and a revision of the growth of wages for the previous period from 0.6% to 0.5%.

We are waiting for the decline of the "Aussie" in the range of 0.7375 / 85 after the release of US data on construction and industrial production.

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Fractal analysis for major currency pairs as of May 16

Dear colleagues.

For a pair of EUR / USD pair, we follow the formation of the downward structure of May 14. For the GBP / USD pair, the price formalized the local structure for the bottom of May 14. For the USD / CHF pair, the situation is in an equilibrium state. We expect the cancellation of the downward structure after the breakdown at 1.0042. For the USD / JPY pair, the continuation of the upward movement is expected after the breakdown of 110.66. For the EUR / JPY pair, we follow the formation of the upward structure from May 8. We expect the continuation of the movement after the breakdown of 131.00. For the GBP / JPY pair, the development of the upward potential of May 8 is expected after the breakdown of the level of 149.30.

The forecast for May 16:

Analytical review of currency pairs in the scale of H1:

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For the EUR / USD pair, the key levels on the scale of H1 are: 1.1995, 1.1928, 1.1889, 1.1862, 1.1807, 1.1751 and 1.1684. Here, the price canceled the development of the upward structure and at the current moment, it has designed a local structure for the downward movement of May 14. The continuation of the downward movement is expected after the breakdown of 1.1807. In this case, the target is 1.1751. Near this level is the consolidation of the price. The potential value for the bottom is the level of 1.1684. Upon reaching this level, we expect a rollback to the top.

Short-term upward movement is possible in the area of 1.1862 - 1.1889. The breakdown of the last value will lead to in-depth correction. Here, the target is 1.1928. This level is the key support for the downward structure from May 14.

The main trend is the local structure for the bottom of May 14.

Trading recommendations:

Buy: 1.1862 Take profit: 1.1887

Buy 1.1892 Take profit: 1.1925

Sell: 1.1805 Take profit: 1.1755

Sell: 1.1748 Take profit: 1.1688

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For the GBP / USD pair, the key levels on the H1 scale are 1.3608, 1.3564, 1.3529, 1.3445, 1.3412, 1.3388, 1.3326 and 1.3285. Here, the price forms the potential for continuing the downward movement from May 14. The continuation of the development of the downward structure is expected after the breakdown of 1.3445. In this case, the target is 1.3412. Near this level is the consolidation of the price. Passing the price of the noise range at 1.3412 - 1.3388 should be accompanied by a pronounced movement towards the level of 1.3326. The potential value for the bottom is the level of 1.3285. After this level, we expect consolidation as well as a rollback to the top.

Short-term upward movement is possible in the area of 1.3529 - 1.3564. The breakdown of the last value will lead to the formation of an upward structure. Here, the potential target is 1.3608.

The main trend is the formation of a local structure for the downward movement of May 14.

Trading recommendations:

Buy: 1.3530 Take profit: 1.3562

Buy: 1.3565 Take profit: 1.3607

Sell: 1.3445 Take profit: 1.3412

Sell: 1.3386 Take profit: 1.3328

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For the USD / CHF pair, the key levels on the scale of H1 are: 1.0083, 1.0067, 1.0042, 1.0022, 0.9993, 0.9979, 0.9955, 0.9933 and 0.9910. Here, the price is in an equilibrium state: the downward structure of May 10 and the formation of the potential for the top of May 14. The continuation of the development of the upward structure is expected after the breakdown of 1.0022. In this case, the target is 1.0042. Near this level is the consolidation of the price. The breakdown of the level of 1.0042 will lead to the cancellation of the downward structure from May 10. In this case, the target is 1.0067. The potential value for the top is the level of 1.0083. After this level, we expect a pullback downwards.

Short-term downward movement is possible in the area of 0.9993 - 0.9979. The breakdown of the last value will lead to the development of the downward structure from May 10. In this case, the first target is 0.9955.

The main trend is in the equilibrium state.

Trading recommendations:

Buy: 1.0022 Take profit: 1.0040

Buy: 1.0044 Take profit: 1.0065

Sell: 0.9991 Take profit: 0.9980

Sell: 0.9977 Take profit: 0.9960

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For the USD / JPY pair, the key levels on a scale are: 111.38, 110.96, 110.66, 110.09, 109.87 and 109.55. Here, we follow the development of the upward structure of May 4. The continuation of the upward movement is expected after the breakdown of 110.66. In this case, the first target is 110.96. Near this level is the consolidation of the price. The potential value for the top is the level of 111.38. Upon reaching this level, we expect a pullback downwards.

Short-term downward movement is possible in the area of 110.09 - 109.87. The breakdown of the last value will lead to in-depth correction. Here, the target is 109.55. This level is the key support for the top.

The main trend is the upward structure of May 4.

Trading recommendations:

Buy: 110.66 Take profit: 110.94

Buy: 110.98 Take profit: 111.36

Sell: 110.09 Take profit: 109.90

Sell: 109.85 Take profit: 109.60

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For the CAD / USD pair, the key H1 scale levels are: 1.3070, 1.2994, 1.2971, 1.2934, 1.2889, 1.2839, 1.2801, 1.2776 and 1.2726. Here, after the end of the downward initial conditions, we follow the formation of the upward structure of May 11. The continuation of the upward movement is expected after the breakdown of 1.2890. In this case, the target is 1.2934. Near this level is the consolidation of the price. The breakdown at the level of 1.2936 will allow us to count on the movement towards 1.2971. Near this level, we expect the consolidation of the price. Passing the price of the noise range at 1.2971 - 1.2994 should be accompanied by a pronounced upward movement. Here, the target is 1.3070.

We expect the correction to continue after the breakdown at 1.2839. Here, the target is 1.2801. The range of 1.2801 - 1.2776 is the key support for the upward structure of May 11. Passing the price will lead to the development of the downward structure. In this case, the target is 1.2726.

The main trend is the formation of the upward structure of May 11.

Trading recommendations:

Buy: 1.2890 Take profit: 1.2832

Buy: 1.2836 Take profit: 1.2970

Sell: 1.2837 Take profit: 1.2801

Sell: 1.2774 Take profit: 1.2728

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For the AUD / USD pair, the key H1 scale levels are: 0.7563, 0.7537, 0.7508, 0.7486, 0.7441, 0.7408, 0.7359 and 0.7330. Here, after the lifting of the upward potential formation, we follow the formation of the downward structure from May 14. Short-term downward movement is expected in the area of 0.7441 - 0.7408. The breakdown of the latter value will lead to the development of a pronounced movement. Here, the target is 0.7359. The potential value for the top is the level of 0.7330. Upon reaching this level, we expect a rollback to the top.

Short-term upward movement is possible in the area of 0.7486 - 0.7508. The breakdown of the last value will lead to in-depth correction. Here, the target is 0.7537. This level is the key support for the downward structure. Its breakdown will lead to the formation of the initial conditions for the upward cycle.

The main trend is the formation of a downward structure from May 14.

Trading recommendations:

Buy: 0.7486 Take profit: 0.7506

Buy: 0.7510 Take profit: 0.7535

Sell: 0.7440 Take profit: 0.7410

Sell: 0.7406 Take profit: 0.7360

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For the EUR / JPY pair, the key levels on the scale of H1 are: 132.26, 131.78, 131.40, 130.98, 130.35, 130.02, 129.61 and 129.18. Here, we follow the formation of the upward structure of May 8. The continuation of the upward movement is expected after the breakdown of 130.98. In this case, the target is 131.40. In the area of 131.40 - 131.78 is short-term upward movement and also the consolidation of the price. The potential value for the top is the level of 132.26. From this level, we expect a pullback downwards.

Short-term downward movement is possible in the area of 130.35 - 130.02. The breakdown of the last value will lead to in-depth correction. Here, the target is 129.61. This level is the key support for the upward structure. Its breakdown will lead to a downward structure. Here, the potential target is 129.18.

The main trend is the formation of the upward structure of May 8.

Trading recommendations:

Buy: 131.00 Take profit: 131.40

Buy: 131.42 Take profit: 131.75

Sell: 130.35 Take profit: 130.07

Sell: 130.00 Take profit: 129.65

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For the GBP / JPY pair, the key levels on the scale of H1 are: 151.36, 150.81, 150.01, 149.29, 148.35, 147.84, 147.00, 145.75 and 145.12. Here, we follow the formation of the upward structure from May 8 in correction from the downward structure. The continuation of the upward movement is expected after the breakdown at 149.30. In this case, the target is 150.01. Near this level is the consolidation of the price. The breakdown at the level of 150.01 should be accompanied by a pronounced upward movement. Here, the target is 150.81. In the area of 150.81 - 151.36 is the consolidation of the price.

Short-term downward movement is possible in the area of 148.35 - 147.84. The breakdown of the last value will lead to the development of the a downward structure. In this case, the target is 147.00. Near this level is the consolidation of the price. The breakdown of 147.00 should be accompanied by a pronounced movement towards the potential target of 145.75.

The main trend is the formation of the potential for the top of May 8.

Trading recommendations:

Buy: 149.30 Take profit: 150.00

Buy: 150.05 Take profit: 150.80

Sell: 148.35 Take profit: 147.85

Sell: 147.80 Take profit: 147.00

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