Elliott wave analysis of EUR/NZD for May 21, 2018

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EUR/NZD has followed the expected path lower in wave C. Ideally this decline will complete near 1.6922 and set the stage for the next impulsive rally to above minor resistance at 1.7049 and more importantly above resistance at 1.7166 that confirms wave iii/ towards at least 1.7474 is developing.

R3: 1.7103

R2: 1.7049

R1: 1.7000

Pivot: 1.6967

S1: 1.6955

S2: 1.6922

S3: 1.6881

Trading recommendation:

We took profit on our short position from 1.7100 at 1.6965 and book a nice little profit of 135 pips. We will buy EUR at 1.6930 or upon a break above 1.7055.

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Trading plan of the currency pair USD / CAD for May 21, 2018

Throughout May, a medium-term accumulation zone is formed. This becomes possible due to the fact that at the deviation levels demand and supply increase. Last week, the decline was stopped at the level of 1.25% (1.2738), which resulted in growth. The last week's compilation zone is below the current price, which indicates the target deviation level of 1.25% (1.2937). The achievement of this mark obliges you to close part of the position, and the rest is transferred to a breakeven. For those who do not have a deal from the Central Bank compilation zone, it is necessary to consider purchases when forming any pattern. An important factor is the favorable risk-to-profit ratio, which should be at least 1: 3.

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The test at the price of level 1.2937, can become decisive for further movement. If the bindings above it do not occur, then the downward movement will again acquire priority status. Looking for a pattern to sell at the specified resistance level is the optimal strategy. It should be noted that further growth may require a reduction to the banking compilation area, which implies obtaining the most favorable prices for the purchase. It is important that this happens before the next environment, which will bring a new range of termination.

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The trade war is canceled and the US dollar resumes growth

Today, many of the world's trading floors are closed. Europe celebrates Holy Ghost Day, and Canada celebrates Victoria Day. However, this circumstance absolutely does not prevent the US currency from actively growing its positions in all dollar pairs, provoking quite a strong volatility in the foreign exchange market.

The dollar reacts to the main event of the past weekend. The preliminary conclusion of a commercial "truce" between the US and China. And although it is too early to talk about a full-fledged deal, the markets were inspired by the optimism of the representatives of the American side. US Treasury Secretary Steven Mnuchin and US presidential adviser Larry Kudlow made unexpected statements. They said that the countries had come to a mutual agreement that they would not introduce new tariffs on goods. The trade war is at least postponed indefinitely, and the fragile, but long-awaited stability returns to the market.

Despite the importance of the topic, the Americans did not go into details of the agreements reached. At the moment, it is known that Beijing can significantly increase the export of agricultural products from the US and increase purchases in the energy sector. In addition, China promised to "eliminate the factors that prevented fair competition in the PRC market for American products." What exactly is going on is still unknown, but the very fact of this intention speaks volumes.

It is worth noting that this breakthrough was preceded by difficult negotiations. The first round of dialogue ended in failure, after which the market began talking about a full-fledged trade war. Then the Chinese denied the rumor that Beijing offered the Americans concessions in trade to reduce the trade deficit for a total of up to two hundred billion dollars. Trump and Xi Jinping were "over the fight" and did not comment on the negotiation process. The market was forced to settle for rumors and stingy comments from officials, and this fact exerted indirect pressure on the dollar.

But the Sunday speech of the US Treasury Secretary gave the dollar bulls optimism. After all, do not forget that the uncertainty surrounding US-China relations has had an impact on the members of the Fed. Now, this barrier has actually been eliminated, so the market can still count on a fourfold increase in the rate within this year. Against this background, the dollar index jumped to multi-month highs (currently - 93.84), and the yield of 10-year US bonds holds above three percent.

However, the external fundamental background can not be called calm. Another focus of tension is the DPRK. In this case, we are talking about two extremes. One scenario presupposes a meeting between Trump and Un, followed by nuclear disarmament, but even an armed conflict allows an alternative. In particular, yesterday the senator from the Republican Party (representative of the state of South Carolina) Lindsey Graham said, in case of disruption of the dialogue, the military solution of this problem will be the only option. And although this is not the official position of the White House, such statements indicate the mood among the Republicans.

At the moment, Washington is still preparing for the historic meeting of the leaders of the United States and North Korea, which is to be held on June 12 in Singapore. Other information sources say that Trump doubts the political expediency of this meeting, given the unpredictability of the North Korean side. According to some reports, the US president doubts that the DPRK will fulfill its obligations, and the "disarmament mission" initiated by Trump will turn into political embarrassment.

But as of today, the White House is still preparing for an immediate dialogue with North Korea, so traders ignore the potential geopolitical risk.

The existing fundamental background resumed the rally of the US currency, and also significantly reduced the demand for defensive assets. Gold updates the annual lows, and the dollar / yen pair is rapidly developing the northern trend. Own support for the Japanese currency is not, slowing inflation and GDP growth in Japan determined the "dovish" mood of the national Central Bank. A soft monetary policy will remain in effect for a long time, at least until stable recovery of inflation indicators.

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Therefore, the dynamics of USD / JPY is still determined by two factors. The behavior of the dollar and the external fundamental background. Today, these factors play in favor of the US currency, which means that the pair's price may soon reach the first resistance level of 112.0, which coincides with the lower boundary of the Kumo cloud of the Ichimoku Kinko Hyo indicator on the weekly chart. In general, the bulls of the pair USD / JPY were able to overcome two main marks (110 and 111), so reaching the border of the next figure will not be a serious test for them. The only thing that can prevent this scenario is the failure of Donald Trump's historic meeting with Kim Jong-un.

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Elliott wave analysis of EUR/JPY for May 21, 2018

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EUR/JPY failed to move above the peal at 131.13 this failure now favors the triangle consolidation taking place. In this case, we should see another dip closer to 130.05 to complete wave d and set the stage for a final mini rally towards 130.65 in wave e. This should complete the triangle consolidation and set the stage for the final decline towards the ideal target at 125.32, with a possibility for an extension lower to 123.33.

R3:131.37

R2: 131.13

R1: 130.87

Pivot: 130.75

S1: 130.46

S2: 130.19

S3: 130.05

Trading recommendation:

We will sell EUR here at 130.73 and place our stop at 131.20.

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Weekly review of the currency pair EUR / USD for May 21, 2018

The single European currency did not manage to reverse the trend, and it continued to lose its positions with new force. If we consider macroeconomic statistics, then to some extent, the reason for growth was, as the growth rate of industrial production accelerated from 2.6% to 3.0%, although they expected more. Also, the growth rate of the construction industry accelerated from 0.2% to 0.8%. However, the second GDP estimate for the first quarter confirmed the slowdown in economic growth from 2.8% to 2.5%. Much more importantly, the final data on inflation coincided with a preliminary estimate, and inflation slowed from 1.4% to 1.2%. This alone indicates that the ECB will extend the quantitative easing program. In principle, all representatives of the ECB spoke about this in the past week. Of course, there were no specific phrases, but there were many reservations that if the situation did not improve, the program would be extended. Statistics indicate that the situation is deteriorating.

At the same time, the US statistics was not unambiguous. On the one hand, there were many reasons for concern, as the growth rate of retail sales slowed from 4.9% to 4.7%. The number of construction projects started decreased by 3.7%, and construction permits issued by 1.8%. And the growth rate of industrial production slowed from 3.7% to 3.5%. However, commercial stocks stopped growing, and the number of applications for unemployment benefits decreased by 76 thousand. And of course, the general mood about the policy of the ECB gave the dollar the strength.

Nevertheless, the market continues to wait for a reason for correction, and unfortunately, this week may disappoint us. Preliminary data on business activity indices in Europe are expected to be extremely negative. The business index in the service sector should decrease from 54.7 to 54.6, and the production index from 56.2 to 56.0. Thus, the composite index can be reduced from 55.1 to 54.9. Similar data in the US can show a slightly different picture of the picture. So, the index in the service sector should grow from 54.6 to 54.9, and the production index may decrease from 56.5 to 56.3. However, the weight of the index in the service sector is much larger, so the composite index should increase from 54.9 to 55.0. Also, housing prices can increase by 0.5%, and home sales in the secondary market by 0.3%. The data on applications for unemployment benefits, as their number should increase by 56 thousand, can also be negative. Also, orders for durable goods can be attributed to bad news, as their volume should be reduced by 1.4%. But all the negative will be smoothened with the content of the text of the minutes of the meeting of the Federal Commission for open market operations, as it hopes to find instructions on the timing of the next increase in the refinancing rate. At the moment, everyone believes that this will happen during the next meeting.

Despite a number of negative data that may be released this week in the US, in Europe the picture is much worse. Similarly, unlike the ECB, the Fed intends to further raise the refinancing rate, so there are no grounds for correction. Most likely, the dollar will strengthen, though at a much slower pace, and the week will end at 1.1650.

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Fundamental Analysis of USD/JPY for May 21, 2018

USD/JPY has been quite impulsive with the bullish gains without any signs of a strong pullback against the trend since it broke above 110.50 recently. JPY has been struggling with the BOJ's long-term plans to develop the economy whereas USD momentum has increased impulsively.

Today Japan's Trade Balance report was published with an increase to 0.55T from the previous figure of 0.17T which was expected to decrease to 0.11T. The positive economic report did not quite help the currency to gain a bit of momentum against USD which lead the market to more indecision and insecurity trading on the JPY side. Though there are several economic reports to be published this week in Japan, the upcoming gains against USD are quite uncertain due to the mixed forecasts of those reports.

On the USD side, ahead of the FOMC Meeting on Thursday, FED Chair Powell will speak about the upcoming economic developments, interest rates and monetary policies.USD is quite strong and is expected to extend its gains further against JPY in the coming days. Today FOMC Member Bostic is going to speak about the upcoming decisions on the interest rates and Monetary Policies which is expected to be quite neutral in nature.

As of the current scenario, USD is expected to extend gains against JPY whereas any negative outcome on the FOMC Meeting and FED Chair Powell's speech can lead to certain gains on the JPY side. Otherwise, USD is expected to dominate over JPY further in the coming days.

Now let us look at the technical view. The price is currently quite impulsive with the gains which was expected to have certain retracement towards 110.50 area before surging up higher towards 112.00 area. The dynamic level of 20 EMA is still quite far away from the current price and expected to pull the price down for certain retracement before pushing it higher again. As of the current market momentum, the certain bearish pressure may be observed in the pair after 112.00 is rejected with a daily close. As the price remains above 110.50, further bullish pressure is expected in the coming days.

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The daily review of the currency pair EUR / USD for May 21, 2018. Ichimoku Indicator

EUR / USD

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Now, the strength and benefits are still on the players' side to downgrade. The pair continues to decline, limiting itself to its path with only minimal adjustments. At the moment, we are seeing an approach to support, joining forces at the boundaries of 1.1700 (monthly Fibo Kijun 62 1.1708 + month Senkou Span A 1.1670 + week Senkou Span A 1.1696). As noted earlier, this area is the main target of the current decline, so it is possible to break, as well as the development of a full-scale upward correction. The initial stage of the correction may be a rise to the resistance of the Tenkan N4 + Kijuna N1, now it is the area of 1.1770, further interest will be the breakdown of the H1 cloud and the dead cross N4, the target benchmark of the full correction is the daytime Tenkan (current value 1,1856) and the performance of the upward targets for the breakdown of the cloud H1.

Resistance: 1.1770 - 101808 - 101856.

Supports: 1.1700 - 1.1670.

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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.

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BITCOIN Analysis for May 21, 2018

Bitcoin has been quite bearish recently which lead the price to reside at the edge of $8,000 support area. The price is currently showing some bearish rejection in the process which is expected to push higher towards $8,500 and later towards $9000 in the coming days. Though there have not been any negative fundamental on the cryptomarket and Bitcoin, such bearish momentum is viewed as a result of investors' insecurity or just a hoax created for sweeping amateur traders away from the market. As for the current scenario, the price is expected to push higher towards $9,000 with a slower pace. Later if the price breaks above $9,000 with a daily close, further impulsive momentum is expected with a target towards $10,000 in the future. As the price remains above $8,000 support area with a daily close, the bullish bias is expected to continue further.

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The dollar does not give the odds of the euro and pound

Eurozone

At the opening of the week, the euro was expected to resume its decline, as economic reasons for the resumption of growth are not visible, and the geopolitical background for the European currency remains tense.

In Italy, probably the emergence of a coalition agreement "5 stars" and "League of the North", which can give a start to Italy's exit from the euro area and the rejection of the euro. Today, as expected, the name of the new prime minister will be announced, and if the fears of the market are confirmed, the euro may fall even more.

On Friday, the European Commission announced a series of protective measures against US sanctions in connection with the withdrawal of the latter from the Iranian deal. European companies are forbidden to carry out extraterritorial sanctions of the US, the market is expected to react with a decline in the euro.

On Monday in a number of European countries a day off, the euro can experience increased volatility in a thin market, but the general direction is not in question. On Wednesday preliminary data of PMI Markit will appear, the forecast is unfavorable, further growth slowdown is expected. On Thursday, the protocol of the ECB's April meeting will be published, most likely, it will not contain any positive for the bulls for the euro.

The euro may well drop to 1.1640 in the next 24 hours before trying to find a support for correction, in the slightly longer term the level of 1.1550 is quite achievable by the end of the week.

The United Kingdom

The external background for the pound looks calm at the beginning of the week, but already from Wednesday the intensity of macroeconomic publications will increase. The publication of inflation data for April could have a significant impact on the assessment of the future prospects for the pound. More recently, the Bank of England was forced to abandon the rate hike that the markets had expected for almost half a year, and one of the main reasons for this decision was the slowing of inflation at a more rapid pace in recent months.

The effect of the weak dollar is disappearing, since it has been almost two years since the referendum, and the main drop of the pound has already been won, and inflation slows to 2%, which reduces the grounds for tightening monetary policy.

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On Thursday, a report on retail sales will be released in February, which will partly answer the question of the causes of weak inflation, and also the speech of BoE head Mark Carney is expected.

On Friday, the second estimate on GDP in the first quarter will be published, which, according to forecasts, can be revised upward. Also on Friday, there will be data on the dynamics of commercial investment, the market will be able to understand how strong the position of the UK in the negotiations for withdrawal from the EU.

In general, the pound is at the opening of the week under strong pressure, there is no reason to wait for its growth. A decrease to 1.3300 may occur in the coming days.

Oil and ruble

Futures for Brent tested the level of 80 dollars per barrel, and, apparently, this is far from the limit.

The US withdrawal from the nuclear deal with Iran is directed, first of all, to the European governments, which, according to Washington, must show the Atlantic Atlantic solidarity and put their own interests below the interests of the United States. This position has not been understood by European politicians. Iran and the European Union set up a working group on oil trade and are determined to keep the agreement even without Washington's participation.

Oil prices are pushing upward and the political crisis in Venezuela, Nicols Maduro does not recognize the presidents as a result of the elections, neither opposition, nor, it seems, Washington, and hence the risk of sanctions pressure on the oil industry of the country.

Oil has every chance to reach this resistance zone at 81.40 / 90 this week.

The ruble has not yet been able to play a positive role in the growth of oil prices, as geopolitical risks have increased. The US dollar is in the growth phase, besides, the likelihood of new sanctions against Russia has increased again, while the Ministry of Finance continues to purchase currency, which eventually allowed the ruble to fall to 62.6 rubles / dollar. At the same time, there are also positive factors - the beginning of the tax period (payments for MET and VAT), and, of course, the price of oil.

Most likely, the positive factors will still outweigh, and so the ruble will move to 61.60, this scenario is more likely to be realized that the rise to the upper boundary of the narrowing trading range of 63.40.

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The daily review of the currency pair AUD / USD for May 21, 2018. Ichimoku Indicator

AUD / USD

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At the moment, we are seeing braking, which was seen as a result of the pair performing a downward target on the daylight cloud break (0.7499) and reaching for the final support of the monthly gold cross (0.7523). Now, the players on the increase have support for the daily short-term trend (0.7490) and insist on deepening the upward correction. The main upward trend at the moment is the retest of the punched week cloud (Senkou Span B 0.7641). This area is also strengthened by some other important levels (the monthly Kijun + closing lines of the day's dead cross + week Tenkan), so the result of interaction with this resistance zone (0.7610-50) can determine the future fate of the situation for a longer period. Junior time intervals now support players to increase. Reliable anchoring in the bull zone relative to the clouds will allow us to consider as targets the targets for breakdown of H4 and H1. Change the existing balance of power in the current situation can return under cloudiness of lower tenses and daylight Tenkan (0.7490).

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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

Global macro overview for 21/05/2018

At the beginning of the trading week, the situation in the world theoretically favored bulls. We finished the last week without significant macro reports in the calendar and without the publication of significant quarterly results of US companies, so global investors waited for new impulses and they appeared.

After a Thursday's statement by Donald Trump, in which skepticism about the possibility of getting along with China prevailed, on Friday the financial media announced that China has proposed to reduce the surplus in trade with the US by 200 billion dollars a year. This suggested something quite contrary to Trump's suggestion. This information could be support for the bull camp on Friday. The problem is that the foreign minister of China denied that such an offer would be made.

Wall Street did not know in which direction the indexes should be pushed. The situation on the China-American negotiations was ambiguous, which could have been slightly worrying. However, in the debt market, there was a desire to realize some of the profits from short positions, thanks to which bond prices increased (profitability decreased). It helped the bull camp on the stock market. The indexes stained red, but kept a short distance from the neutral level.

During the weekend Steven Mnuchin, US Treasury secretary, said that the United States "suspend the trade war" because talks with China are going in the right direction, so in the morning contracts for the US indices grew strongly. If this trend will sustain until tomorrow, then it can help to raise the other markets as well.

Le'ts now take a look at the SP500 technical picture at the H4 time frame. The market is hovering around the level of 271.47 in overbought conditions. The golden trend line had been violated and tested, but the no follow through occurred. If the US-China trade war suspension will prevail, there is a chance for another optimistic rally towards the level of 274.15. If this level is clearly violated, then the next target for bulls is seen at the level of 278.85. The immediate support is seen at the level of 269.90.

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NZD/USD Intraday technical levels and trading recommendations for for May 21, 2018

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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.

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 will be the next destination for the NZD/USD pair. It should be watched for bullish rejection and a possible valid BUY entry.

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

Intraday technical levels and trading recommendations for EUR/USD for May 21, 2018

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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) once offered significant bullish rejection and a short-term bullish pullback for intraday traders.

However, a recent descending high was established around the price level of 1.1990 as the EUR/USD bulls failed to pursue towards higher bullish targets. This enhances the bearish scenario of the market.

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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Global macro overview for 21/05/2018

US long-term yield of the 10-year bonds reached its highs at the end of last week, but the dollar is still being supported, so it continues to appreciate. However, Monday's decisions may be deceptive, because in Germany the Pentecost is celebrated and the macroeconomic calendar of the main economies is empty.

The rising yield of the 10-year US bonds and the situation on the British political scene with the fatal position of Theresa May's ruling cabinet do not help GBP. It is likely that it will be in vain to seek help in the inflation data (due on Wednesday), when the extinguishing effects of the GBP uptrend depreciation will push underlying inflation lower. Higher hopes are for the April retail sales ( due on Thursday), where a strong rebound is expected after terrible data for March. In addition, the buzz associated with the Brexit negotiations increases the volatility of GBP and in both directions, so it would be smart for global investors to leave GBP in peace temporarily until the data provide a basis for a more stable appreciation.

Nevertheless, let's take a look at the GBP/USD technical picture at the daily time frame. The pound needs strong data release if it is to stop the ongoing downward price spiral. GBP/USD is the lowest this year at the start of this trading week. At 1.34, the average 55-week rating is being tested, but the fact that the rate has not made any rebound from the previous 1.35 lows and continues to drop is certainly not a sign of the strength of high demand for the pound . The next weekly target for the market might even be at the level of 1.3181 (50% Fibo).

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Wave analysis of GBP / USD for May 18. Pound sterling woke up and rushed down

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Analysis of wave counting:

For several weeks, the British pound consolidated along the 200.0% mark on the junior Fibonacci grid and 127.2% on the senior grid. On Friday trading, the instrument resumed lowering of quotations, according to the construction of the first wave of a new and strong downward set of waves. Presumably, the instrument is in the stage of building wave a, in the future 1. The news background and the popularity of the American currency in the last month do not provide an opportunity for constructing a correctional wave b.

The objectives for the option with purchases:

1.3528 - 127.2% of the Fibonacci of the highest order

1.3555 - 200.0% of Fibonacci

The objectives for the option with sales:

1.3300 - 161.8% of the Fibonacci of the highest order

1.3300 - 261.8% of Fibonacci

General conclusions and trading recommendations:

The tool continues to complicate the internal wave structure of the assumed wave a, 1 downward trend section. I recommend selling the pair with a target located near the estimated mark of 1.3300, which corresponds to 161.8% and 261.8% of Fibonacci. An unsuccessful attempt to break this strong level will warn about the readiness of the instrument to build an upward correction wave b and will serve as a good signal for closing sales and forming small purchases with the targets of 1.3528 and 1.3555.

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Wave analysis of EUR / USD for May 18. The US dollar remains the leader

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Analysis of wave counting:

The five-wave structure in the composition of wave c, 2, looks quite complete. Based on the size of wave 4, c, 2, 5, the downward pulse can continue its construction to Fibonacci levels of 161.8% and 200.0%. Also practicing the proportionality of 1.618 between waves b, c, 2, the tool can continue the decline to the level of 1.1636. At the moment, 1.1636 looks like an extreme minimum point for the entire downward trend segment, which starts on March 27. Only high demand for the US dollar can lead to an even more complicated and lengthening of the wave 5, c, 2.

The objectives for the option with sales:

1.1715 - 161.8% of Fibonacci

1.1649 - 200.0% of Fibonacci

1.1636 - 261.8% of the Fibonacci of the highest order

The objectives for the option with purchases:

1.1835 - 200.0% of the Fibonacci of the highest order

General conclusions and trading recommendations:

The proposed wave 5, c, 2 continues its construction. Therefore, it is recommended to sell the pair with targets located near the calculated marks of 1.1715 and 1.1649. Given the strength of the downtrend, wave 5 can take a more complex look, and the tool continues to fall below the 1.1636 mark, which equates to 261.8%. An unsuccessful attempt to break the zone of 1.1649 - 1.1636 will allow the completion of the construction of the wave c, 2 and begin to form purchases.

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The Japanese yen is selected to large levels

The Japanese yen continued to decline steadily against the US dollar for the seventh consecutive day. Talks about further interest rates in the US are also putting pressure on risky assets, such as the European currency and the British pound.

Despite good figures for export growth in Japan, traders are in no hurry to buy the yen after statements made at the end of last week related to US trade duties.

According to the report of the Ministry of Finance of Japan, exports in April this year increased by 7.8% compared to the same period last year. It happened because of good demand from the US for cars. The data practically coincided with forecasts of economists, who expected export growth by 8%.

As noted in the report, exports of iron ore and steel from Japan to the US increased by 14%, and this is subject to a 25% duty, which was recently introduced.

The positive balance of Japan's trade balance in April was 626 billion yen against 797 billion yen. It is noteworthy that the positive balance of trade between Japan and the US in April rose by 4.7%, to 616 billion yen.

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As I noted above, at the end of last week, the Japanese government announced the right to respond to US import duties in accordance with WTO rules. Let me remind you that in March of this year, the United States imposed import duties on steel at a rate of 25% for a number of countries, including Japan.

In the government, Japan reported that it had not yet decided whether to take retaliatory measures against the US on the basis of WTO rules, since for this it is necessary to reassess US measures and their influence on Japanese companies.

As for the technical picture of the pair USD / JPY, then the nearest targets for buyers are located in the region of 111.50 and 111.90, where a good profit taking and a temporary pause in the upward movement, which has been going on for quite some time, may occur. It is too early to talk about any downward correction. New customers will be noticeable in the support area of 110.60 and 110.05.

On Friday it also became known that the IMF began official negotiations with Argentina on the issue of financial support. Let me remind you that most recently the Argentine government appealed to the IMF for financial assistance due to the difficult situation that has developed in the country and is associated with a huge national debt.

IMF Managing Director Christine Lagarde said that the IMF program will allow for a steady decline in public debt, and its main goal is strong and sustained economic growth.

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Bitcoin analysis for 21/05/2018

Another cryptocurrency project in China was interrupted by law enforcement agencies. According to financial media, the police in Shenzhen arrested six people who allegedly robbed 3,000 Chinese investors of $ 47 million, selling a cryptocurrency, which they claimed to be backed by commodities.

Six suspects formed a company based in Shenzhen called PEB, which from January 2017 issued a token powered by Blockchain, named Pu'er Coin. The website of the project says that the buyer of the token is entitled to have a contract owned by a certain amount of Tibetan Pu'er tea, which the company has in stores, and which it considers worth billions of dollars. While the token can then be exchanged in the aftermarket called Jubi.com, another website claims that the contract may yield an annual return of 12 percent if investors choose to block their funds for 12 months. The police investigation showed that despite the fact that the company had only a "very limited amount of tea in stock", it promised high short-term profits to investors in promotional campaigns on social media and traveling advertising campaigns in luxury hotels. The police also say that the project has managed to attract a significant number of investors by manipulating the secondary market using its own means to raise the price of tokens twenty times during 2017. At the end of last month, the company received a warning and a fine from the Chinese state administration for market regulation, whose task is to ensure fair and fair market competition. The authorities imposed a fine of $ 20 million on the company for spreading false information in the ad that touted allegedly large Tibetan tea stocks that supported the token.

The arrest is another notable sanction regarding alleged cryptocurrency fraud in China, as the authorities in this country have increased their efforts to combat illegal fundraising.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market has managed to break out above the golden trend line and made a local high at the level of $8,505, just above the weekly pivot at the level of $8,446. The corrective cycle in wave 2/B might have been completed as well, but as long as the price will not break through the high of the wave X at the level of $8,900, the recent upward development might be still treated as the alt:b wave. The situation is still not 100% clear who is in control of the market, so it is better to wait for the important levels to be tested first.

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Daily analysis of USD/JPY for May 21, 2018

USD/JPY

The bias on the pair is still bullish. The bullish movement that was witnessed last week has saved the ongoing bullish bias in the market. The bullish movement started in March 2018 and it has held out till now. The supply level at 111.00 was tested before price closed below it on Friday. The JPY may be weakened further this week.

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There is a Bullish Confirmation Pattern in the market, which makes short trades not yet advisable. This week, there is a high probability that the market would continue going upwards, reaching the supply levels at 111.00, 111.50 and 112.00.

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Daily analysis of USD/CHF for May 21, 2018

The USD/CHF pair is bullish in the long term, but neutral in the short term. Price has been consolidating in the past two weeks; whereas that is not strong enough to render the recent bullish bias useless. There is going to be a breakout at last, but the movement to the upside will no longer be a serious thing.

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While USD/CHF is supposed to go upwards, there would be a challenge to the upwards move, because CHF is expected to gain serious stamina this week (major currencies will drop versus it). This means that the coming strength in CHF may hinder USD/CHF from getting seriously pushed further northwards.

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Fractal analysis: GOLD on May 21

Forecast for May 21:

Analytical review on the scale of H1:analytics5b0239e9436bb.png

For Gold, the key levels on the scale of H1 are: 1304.79, 1302.97, 1298.88, 1295.70, 1285.30, 1279.32 and 1274.05. Here, the price has entered a horizontal movement in the adjustment area, which increases the likelihood of continuing the development of a downward trend. The continuation of the movement downwards is expected after the breakdown of 1285.30. In this case, the target is 1279.32. The potential value for the bottom is still the level of 1274.05, near which we expect consolidation.

The short-term upward movement is possible in the corridor of 1295.70 - 1298.88 and the breakdown of the last value will lead to an in-depth movement. Here, the target is 1302.97 and the range of 1302.97 - 1304.79. Before it, we expect the initial conditions for the upward cycle to be formalized.

The main trend is a local structure for the bottom of May 11.

Trading recommendations:

Buy: 1297.70 Take profit: 1298.80

Buy 1296.00 Take profit: 1298.00

Sell: 1285.10 Take profit: 1279.60

Sell: 1279.30 Take profit: 1274.25

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Trading plan 05/21/2018

Trading plan 05/21/2018

The picture: The dollar is growing again.

There is no "big news". There is news on the "trade war" of the United States - China. China said that it is ready to make concessions to the US and increase purchases of goods from the US to the amount of $ 200 billion (per year), in order to balance the trade deficits of the United States. US Finance Ministry Mnuchin said that the introduction of new duties on goods from China "paused." Negotiations on new duties on steel / aluminum for Europe are still difficult.

On a new week, the news background is sluggish, but on Wednesday the Fed reports. On Friday, orders for durable goods in the US and the speech of the head of the Federal Reserve Powell.

GBP / USD: Punched the lows, waiting for the pound to fall. We keep sales from 1.3450.

But: We buy in case of a reversal from 1.3630.

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Analysis of gold for May 21, 2018

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Recently, gold has been trading downwards. The price tested the level of $1,281.66. According to the H1 time frame, I found a broken support trendline in the background, which is a sign that sellers are in control. My advice is to watch for potential selling opportunities on the rallies. The downward target is set at the price of $1,262.50.

Resistance levels:

R1: $1,291.50

R2: $1,292.00

R3: $1,292.80

Support levels:

S1: $1,289.90

S2: $1,289.40

S3: $1,288.60

Trading recommendations for today: watch for potential selling opportunities.

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Fractal analysis of the main currency pairs for May 21

Dear colleagues.

For the pair Euro / Dollar, we follow the downward structure from May 14 and we consider the movement upward as a correction. For the Pound / Dollar pair, we follow the downward structure from May 14. The main trend development is expected after the breakdown of 1.3388. On the Dollar / Franc pair, as the main trend, we consider the formation of initial conditions for the downward cycle from May 10. For the pair Dollar / Yen, we expect the move to the level of 111.38. For a pair of Euro / Yen, the continuation of the upward movement on the scale of H1 is expected after the breakdown of 131.00. For the pair Pound / Yen, the development of the upward trend of May 8 is expected after the breakdown of 150.01.

Forecast for May 21:

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: 1.1928, 1.1884, 1.1835, 1.1807, 1.1751, 1.1684, 1.1640 and 1.1575. Here, we continue to follow the downward structure of May 14. The continued downward movement is expected after the breakdown of 1.1750. In this case, the target is 1.1684 and in the corridor of 1.1684 - 1.1640 is the short-term downward movement, as well as consolidation. We consider the level of 1.1575 to be a potential value for the downstream structure, after which we expect a rollback to the top.

The short-term upward movement is possible in the corridor of 1.1807-1.1835 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 1.1884 and this level is the key support for the downward structure from May 14. Its breakdown will have to form the initial conditions for the upward cycle. In this case, the potential target is 1.1928.

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

Trading recommendations:

Buy: 1.1807 Take profit: 1.1833

Buy 1.1837 Take profit: 1.1884

Sell: 1.1748 Take profit: 1.1686

Sell: 1.1682 Take profit: 1.1642

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For the Pound / Dollar 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, we continue to follow the downward structure of May 14. The continued development of the downward structure is expected after the breakdown of 1.3445. In this case, the target is 1.3412 and near this level is the consolidation. The passage at the price of the noise range of 1.3412 - 1.3388 should be accompanied by a pronounced movement to the level of 1.3326. The potential value for the bottom is the level of 1.3285, after which we expect consolidation, as well as a rollback to the top.

The consolidated movement is possible in the corridor of 1.3529 - 1.3564 and the breakdown of the last value will have to form 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: Take profit:

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 Dollar / Franc pair, the key levels on the scale of H1 are: 1.0055, 1.0027, 1.0007, 0.9955, 0.9933, 0.9918, 0.9881 and 0.9854. Here, the price forms the expressed initial conditions for the downward movement from May 10, which is inconsistent with the main trend for the Euro / Dollar pair. The continuation of the movement downwards is expected after the breakdown of 0.9955. In this case, the target is 0.9933 and the pass at the price of the noise range of 0.9933 - 0.9918 should be accompanied by a pronounced downward movement. Here, the target is 0.9881. The potential value for the bottom is the level of 0.9854, from which we expect a rollback to correction.

The short-term upward movement is possible in the corridor of 1.0007 - 1.0027 and the breakdown of the last value will have to form an upward structure. Here, the first target is 1.0055.

The main trend is the downward structure of May 10.

Trading recommendations:

Buy: 1.0007 Take profit: 1.0025

Buy: 1.0029 Take profit: 1.0055

Sell: 0.9955 Take profit: 0.9933

Sell: 0.9918 Take profit: 0.9881

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For the pair Dollar / Yen, the key levels on the scale of H1 are: 112.12, 111.82, 111.38, 110.96, 110.54, 110.31 and 110.02. Here, we follow the development of the upward structure of May 4. At the moment, we expect the move to the level of 111.38, near which the consolidation. The potential value for the top is the level of 111.82, upon reaching which we expect consolidation in the corridor of 111.82 - 112.12, as well as a pullback downwards.

The short-term downward movement is possible in the corridor of 110.54 - 110.31 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 110.02 and this level is the key support for the top.

The main trend is the upward structure of May 4.

Trading recommendations:

Buy: 110.98 Take profit: 111.36

Buy: 111.40 Take profit: 111.80

Sell: 110.52 Take profit: 110.33

Sell: 110.28 Take profit: 110.04

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For the Canadian Dollar / Dollar pair, the key levels on the H1 scale are: 1.3133, 1.3074, 1.3032, 1.2970, 1.2922, 1.2853, 1.2807, 1.2748 and 1.2685. Here, the price forms the initial conditions for the upward trend of May 17. The continued upward movement is expected after the breakdown of 1.2922. In this case, the target is 1.2970 and near this level is the consolidation. The passage at the level of 1.2970 should be accompanied by a pronounced upward movement. Here, the target is 1.3032 and in the corridor of 1.3032 - 1.3074 is the consolidation of the price. The potential value for the top is the level of 1.3133.

The short-term downward movement is possible in the range of 1.2853 - 1.2807, hence the high probability of turning up. The breakdown level of 1.2805 will favor the development of a downward movement. The goal here is 1.2748.

The main trend is the formation of the upward potential of May 17.

Trading recommendations:

Buy: 1.2922 Take profit: 1.2970

Buy: 1.2972 Take profit: 1.3030

Sell: 1.2850 Take profit: 1.2810

Sell: 1.2805 Take profit: 1.2750

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For the pair AUD / USD, the key levels on the scale of H1 are: 0.7679, 0.7622, 0.7599, 0.7563, 0.7503, 0.7480, 0.7445, 0.7408 and 0.7359. Here, the resumption of the upward trend is expected after the breakdown of 0.7563. In this case, the first target is 0.7599 and in the corridor of 0.7599 - 0.7622 is the consolidation. The potential value for the top is the level of 0.7679, upon which we expect the consolidated movement, as well as a possible pullback downwards.

The short-term downward movement is possible in the hallway of 0.7503 - 0.7480 and the breakout of the last reading will favor the development of the downward trend. The goal here is 0.7445 in the corridor of 0.7445 - 0.7408, also expect a short-term move to the bottom. The potential value for the downward movement is the level of 0.7359, from which we expect a pullback to the top.

The main trend is the upward structure of May 9.

Trading recommendations:

Buy: 0.7563 Take profit: 0.7598

Buy: 0.7624 Take profit: 0.7676

Sell: 0.7503 Take profit: 0.7481

Sell: 0.7478 Take profit: 0.7447

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For the pair of Euro / Yen, the key levels on the scale of H1 are: 132.26, 131.78, 131.40, 130.98, 129.61, 129.18, 128.85 and 128.15. Here, the price entered the equilibrium situation. The continuation of traffic to the top is possible after the breakdown of 130.98. In this case, the first target is 131.40 and in the corridor of 131.40 - 131.78 is the consolidation. The potential value for the ascending structure is, for the time being, the level of 132.26.

The development of the downward movement from May 14, we expect after the breakdown of 129.61. Here, the first target is 129.18 and in the corridor of 129.18 - 128.85 is the consolidation. The potential value for the bottom is the level of 128.15, from which we expect the departure to correction.

The main trend is the equilibrium situation. The formation of the potential for the bottom of May 14.

Trading recommendations:

Buy: 131.00 Take profit: 131.40

Buy: 131.42 Take profit: 131.75

Sell: 129.60 Take profit: 129.20

Sell: 128.85 Take profit: 128.20

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For the Pound / Yen pair, the key levels on the scale of H1 are: 152.16, 151.36, 150.81, 150.01, 149.00, 148.35, 147.84, 147.00, 145.75 and 145.12. Here, we follow the upward structure of May 8. The continued upward movement is expected after the breakdown of 150.01. In this case, the target is 150.81 and in the corridor of 150.81 - 151.36 is the consolidation of the price. The potential value for the top is the level of 152.16, upon reaching which we expect a departure to correction.

We expect the departure to the correction zone after the breakdown at 149.00. In this case, the target is 148.35. The short-term downward movement is possible in the corridor of 148.35 - 147.84 and the breakdown of the last value will have to develop a downward structure. In this case, the target is 147.00 and near this level is the consolidation.

The main trend is the upward structure of May 8.

Trading recommendations:

Buy: 150.05 Take profit: 150.80

Buy: 150.84 Take profit: 151.30

Sell: 149.00 Take profit: 148.40

Sell: 147.80 Take profit: 147.00

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Daily analysis of EUR/JPY for May 21, 2018

EUR/JPY

The EUR/JPY pair has failed to go seriously upwards like its USD/JPY counterpart. The bias on this cross is bearish, but it is a precarious bias. What the market did last week was a zigzag movement without a clear directional propensity (although the general outlook still remains bearish).

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The price moved upwards, downwards, and upwards again, within the supply zone at 131.50 and the demand zone at 129.50. A 200 –pip movement to the upside or to the downside would easily change the bias to bullish or bearish, and that is exactly what is expected this week.

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Weekly review of GBP / USD pair as of 05/21/2018

The pound continues to lose its positions, though not at the same pace as the single European currency. In part, this is due to the fact that absolutely negative data on the UK did not appear. Data on the labor market were published, which were rather multi-directional. On one hand, the unemployment rate remained unchanged, and the growth rate of wages accelerated from 2.8% to 2.9%. However, these are salaries without premiums, whereas taking into account premiums, their growth rates have slowed from 2.8% to 2.6%, which investors never like. Also, an alarming call sounded data on the number of applications for unemployment benefits, which increased by 31.2 thousand.

At the same time, the US statistics was not unambiguous. On the one hand, there were many reasons for concern, as the growth rate of retail sales slowed from 4.9% to 4.7%. The number of construction projects started decreased by 3.7%, and construction permits issued by 1.8%. The growth rate of industrial production slowed from 3.7% to 3.5%. However, commercial stocks stopped growing, and the number of applications for unemployment benefits decreased by 76 thousand.

As uncool as it is, but special reasons for the growth of the pound this week is not expected. The fact is, the amount of government borrowing can increase by 7.0 billion pounds, which is usually poorly perceived by investors. The worst thing for the pound is that inflation should slow from 2.5% to 2.3%, which puts an end to the prospects for raising the refinancing rate of the Bank of England. At least until the end of this year. Only retail sales, whose growth rates should accelerate from 1.1% to 1.4%, will somewhat brighten up the picture, and will not allow the pound to lose its positions with redoubled force.

In turn, the United States is expected to have mixed statistics. So, the index in the service sector should grow from 54.6 to 54.9, and the production index may decrease from 56.5 to 56.3. However, the weight of the index in the service sector is much larger, so the composite index should increase from 54.9 to 55.0. Also, housing prices can increase by 0.5%, and home sales in the secondary market by 0.3%. The data on applications for unemployment benefits, as their number should increase by 56 thousand, can also be negative. Also, orders for durable goods can be attributed to bad news, as their volume should be reduced by 1.4%. But all the negative will be smoothed out with the content of the text of the minutes of the meeting of the Federal Commission for open market operations, as it hopes to find instructions on the timing of the next increase in the refinancing rate.

Given the completely different expectations about the policy of the Fed and the Bank of England, the overall positive situation for the dollar will continue. By the end of the week, the pound has all chances to fall in price to 1.3350.

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Trading signals for today - May 21

At the moment, we are witnessing a confirmation of a tertiary signal in the purchase of Caterpillar shares. The preliminary signal was at the moment of the intersection from the oscillator line of the Marlin indicator over the zero line (May 7). The second time, it was the price exit over the blue resistance line of the price indicator of the MACD line. The green arrow on the chart indicates the third signal, confirming the second where the price rebounds from the MACD line up. You can also see that the price has reversed from the red line on the chart - this is a balanced price line. When the price is higher than this line, the points for purchases are selected, when the price under it is on sale.

So, we buy #CAT with a target of 175.26, which is the line of 161.8% Fibonacci reaction of the first growth line in April.

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Trading signals for today - May 21

AUD / CAD pair

Today, a signal was generated in the purchase at the cross rate of AUD / CAD pair with the target of 0.9807.

The signal was formed when the Marlin oscillator emerged above the zero line. This indicator is leading and for such patterns as convergence/divergence and the intersection of the zero line creates primary signals for the opening of the position. In this case, the time of the line transition above zero coincided with the price turn from the level of 0.9597, which became support after the price exit the support zone 0.9550 / 97. The very level of 0.9597 is the minimum from May 2. The goal of the growth is the blue line of the digital MACD indicator at about 0.9807, the maximum from April 13 and stop-loss below .9645. If the price fixes above the MACD line, new rising targets will open up.

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Trading plan AUD / USD pair 05/21/18

The movement of the pair in the current month indicates the formation of a medium-term accumulation zone. This can be determined by the location of the compilation zones of the Central Bank. Last week, the growth rate reached the level of 1.5% (0.7550), which led to its decline. Last week, the movement was once again rising from the compilation zone of the bank, which indicates a possible growth target with the rate level of 1.5% (0.7589). Reaching this level will require fixing purchases and finding a pattern for sale. The ascending model will remain the priority until the course trades above the compilation zone of the Bank of Australia.

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When making purchases, it is necessary to take into account the risk-to-profit ratio, since it will not be profitable at the last week's high. This suggests the need to find more favorable prices for the purchase of the instrument. Reduction to the compilation zone of the bank will give an opportunity to buy at the most favorable prices. To disrupt the upstream structure, one of the important trading sessions (Asian and American) requires closing down of the compilation zone. This will allow us to consider a new top-down priority in the future. It is important to note that It is important to note that next Wednesday, there will be regular operations on the open market, which will allow us to determine the new compilation zone of the Bank of Australia and can shift the support level higher.

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On current marks, it is necessary to track the formation of the pattern, since it can enable and sell to the compilation area and buy to the interest rate level. Within the intraday movement, both ranges give a good risk-to-profit ratio, so it can be ignored.

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Weekly review from May 21 to May 26, 2018 on the GBP / USD pair

Trend analysis (Figure 1).

Last week, the price moved down in the side channel. A strong candlestick figure of the reversal was formed (paired with a pullback level of 38.2%, which is a very strong "barrier" and the price could roll back up. How much the probability of this scenario is likely to be shown by a comprehensive analysis.

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Fig. 2 (weekly chart).

Complex analysis:

- indicator analysis - down;

- Fibonacci levels - up;

- volumes - upwards;

- candlestick analysis - up;

- trend analysis - up;

- Bollinger lines - down;

- monthly chart - down.

Conclusion on the complex analysis is an upward movement.

The total result of the GBP / USD currency pair candlestick calculation according to the weekly chart: the price for the week is likely to have an upward trend with the absence of the first lower shadow of the weekly white candle and the presence of the second upper shadow.

The first top target is 1.3675 - the rolling level is 23.6% (yellow dotted line).

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GBP/USD analysis for May 21, 2018

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Recently, the GBP/USD pair has been trading downwards. As I expected, the price tested the level of 1.3394. According to the H1 time – frame, I found a successful breakout of the strong support trendline in the background, which is a sign that sellers are under control. I also found a hidden bearish divergence on the MACD oscillator, which is another sign of weakness. My advice is to watch for potential selling opportunities on the rallies. The downward target is set at the price of 1.3355 (Fibonacci expansion 161.8%)

Resistance levels:

R1: 1.3485

R2: 1.3495

R3: 1.3505

Support levels:

S1: 1.3465

S2: 1.3454

S3: 1.3445

Trading recommendations for today: watch for potential selling opportunities.

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Fundamental Analysis of EUR/USD for May 21, 2018

EUR/USD has been quite impulsive and non-volatile with the bearish gains recently which lead the price to reside at the edge of the 1.1700-20 support area today. USD has been the dominant currency in the pair for a certain period of time where EUR was struggling with the weak economic reports in the process.

Today, due to observance of Whit Monday, there is no impactful EUR economic report or event to be held, but this week, on Thursday, ECB Monetary Policy Meeting Accounts will be held which is expected to inject some volatility in the market in favor of EUR gains in the coming days.

On the other hand, this week, Fed Chair Powell is going to speak about the upcoming interest rate and inflation rate decision which is expected to favor USD in the coming days. Since 2015, there has been 6 times rate hikes in the US where the trend is expected to continue throughout 2018 as well. Today, FOMC Member Bostic is going to speak about the interest rates and monetary policy which is expected to be quite neutral with the impact on USD gains in the coming days.

As of the current scenario, ahead of the upcoming high impact economic report of EUR of this week, certain volatility is expected in the market, whereas EUR might gain against USD for a certain period before the price continues with its bearish trend in future.

Now let us look at the technical view. The price is currently residing at the edge of the 1.1700-20 area from where it is expected to push higher towards the 1.1950-1.20 resistance area in the coming days. After such an impulsive bearish pressure, current bullish pressure is expected to be backed by the Bullish Continuous Divergence along the way. As the price remains above 1.1700 with a daily close, certain bullish intervention is expected in this pair.

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Bitcoin analysis for May 21, 2018

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The Bitcoin (BTC) has been trading dupwards.The price tested the level of $8.553. On May 19, a group of Bitcoin Cash (BCH) miners met after the Coingeek Conference in Hong Kong to discuss a new proposal which would fund BCH development and professional programmers who worked on the protocol. The funding would stem from a portion of the miners block reward, and attendees discussed donating between 1-5 percent of rewards to fund developers. Technical picture on Bitcoin looks neutral to bearish.

Trading recommendations:

According to the H1 time - frame, I found that the price rejected from the upper diagonal of the channel, which is a sign that buying at this stage looks risky. I also found possible bearish flag in creation, which is a sign of weakness. My advice is to watch for a potential breakout of the bearis flag to confirm further downward price and potential re-test of $8.355 (lower diagonal).

Support/Resistance

$8.522 – Intraday resistance

$8.398– Intraday support

$8.355 – Objective target 1

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

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Weekly review from 21 to 26 May 2018 on the EUR / USD pair

Trend analysis (Figure 1).

The price moving downwards closed very near to the support line, and there is no doubt that the market will reach this level of 1.703 next week. The probability of beating off the fourth touch point of the support line is 70% to 30% to work up.

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Fig. 2 (weekly chart).

Complex analysis:

- indicator analysis - down;

- Fibonacci levels - down (yellow dotted line);

- volumes - down;

- candlestick analysis - up;

- trend analysis - down;

- Bollinger lines - down;

- monthly chart - down.

Conclusion on complex analysis - down.

The total result of calculating the candle of EUR / USD currency pair on a weekly chart: the price of the week is likely to have a downward trend with the absence of the first upper shadow of the weekly black candle and the absence of the second lower shadow.

The first lower target is 1.1703 at the support lines (white thick line), after which the upper movement is possible.

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Burning forecast 05/21/2018

Burning forecast 05/21/2018

EURUSD: Keep selling, but be ready for a turn.

The euro exchange rate in the morning updated the lows last week.

We keep selling from 1.1760 with the target of 1.1660, but we minimize the risk - stops in break-even.

In the case of a reversal, prepare to buy from 1.1850.

So: Selling from 1.1760 or higher.

Buying from 1.1850, stop 1.1805, the target is 1.2000.

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Trading plan for the European session on May 21 for the EUR/USD

To open long positions on EURUSD it is required:

To consider buying the euro today is best after the return and consolidation at 1.1742 resistance level, which will lead to an upward correction to the area 1.1786 and 1.1820, where it is recommended fixing the profit. In the case of a further decline in the euro, it is recommended to open long positions in the formation of a false breakout in the support area 1.1710 or on a rebound from 1.1683.

To open short positions on EURUSD it is required:

While the trade is below 1.1742, the pressure on the euro will continue, and the main target of the sellers to date will be large support levels in the area of 1.1710 and 1.1683, where it is recommended fixing profits. In the event of a EUR/USD returning to 1.1742 in the morning, return to selling is best on a rebound from resistance at 1.1786.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 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

The trade war is cancelled and the US dollar resumes growth

The US dollar resumed its growth on Monday amid the completion of the next stage of trade negotiations between the US and China. It is announced that the parties agreed not to go into the phase of the trade war and moved towards each other, canceling the conditions imposed in recent weeks on trade restrictions.

According to the reached preliminary agreement, China agreed to increase purchases of goods and services in the US to reduce trade imbalances between countries, but no exact figures are reported. China will increase purchases not only to agricultural products and energy, but also in the technological sphere, since the United States has nothing to offer.

Also, China obviously should save or increase investments in US government bonds, because at the current stage of reforms, increasing the government's debt is the only way to finance the federal budget.

The policy of the Federal Reserve led to an increase in Treasury yields, which are significantly higher than in any other currency. If the yield of 10-year bonds was lower than that of New Zealand and Australia in January, then American bonds in May came in first place and the gap continues to grow.

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This process reflects the confidence of investors in at least two factors. First, the US economy is growing faster than others and second, the Fed will continue the normalization policy at the planned rate. The dollar rises in price quite objectively, but to what extent do these factors correspond to reality?

It's obvious that the confidence in the growth of the US economy follows directly from the recent tax reform. Reducing the fiscal burden on both business and consumers has led to an increase in the business activity. But in order for this process to be considered a sign of economic growth, it is necessary to achieve growth in budget revenues. In this case, it will be possible to assert that the decrease in wages as a result of reforms is compensated by the raise in incomes due to the economic growth.

While the budget continues to crawl towards an ever-growing deficit, it is impossible to say anything definite about the growth of the economy because there is a simultaneous tightening of financial conditions, which goes immediately in several directions.

Firstly, it is a growing dollar and the People's Bank of China will reduce the financial conditions after April 17, and reduced by 1% of the norms of mandatory reserve for banks. Then, the dollar index began a sharp increase, out of range.

Secondly, the Fed continues to reduce its balance as it reduces the global dollar offer, against the background of the growth of the dollar index, that leads to an even stronger tightening of financial conditions around the world.

And thirdly, oil sharply increases along with the growth of the dollar due to the US withdrawal from the nuclear deal on Iran and the resulting surge in geopolitical tensions. The dollar rises in price quite objectively, and the Fed policy and the Trump administration seems to be coordinated up to smallest details.

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The most important day for the week is Wednesday. Markit will report preliminary PMI data in May, most likely the figures will be positive and will support the dollar, as the latest regional reports indicate an increase in activity. Also on Wednesday, the FOMC minutes of meeting dated May 2 will be published, which will be important in terms of the reasons for changing the final statement on inflation. It is expected that the speech will be slightly more dovish than in March, which could provoke a slowdown in the growth of the dollar.

On Friday, the report on durable good orders in April, which is an indicator of both demand and industrial growth, will be published. At the same day, Fed Chairman Jerome Powell will speak, and the University of Michigan's consumer confidence index will be published in May.

The most affected in the current situation are the countries that are importers of raw materials, since they have to pay both a high price for raw materials and buy dollars in conditions of a lower supply at a higher price. The euro, the franc, and the Japanese yen lose in value, and there is no reason to expect that this process will stop.

* The presented market analysis is informative and does not constitute a guide to the transaction

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

Trading plan for the European session on May 21 for the GBP/USD

To open long positions on GBP/USD it is required:

The first buyers of the pound return after upgrading the level of 1.3410, however, to confirm the signal to buy, it is best to wait for the formation of a false breakdown in this range. In the case of a further decline of the pound below the level of 1.3410, it is recommended to return to buying on the support test 1.3366 and 1.3335.

To open short positions on GBP/USD it is required:

While the trade is below 1.3448, the pressure on the pound will be maintained, and the breakthrough of support at 1.3410 will be an additional signal to increase the short positions in GBP/USD in order to update the new lows in the 1.3366 and 1.3335 areas, where it is recommend locking in the profit.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 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

Political tensions together with the dollar does not weaken

EUR / USD

In Italy, the political parties "Five star" and "League of the North" finally wrung out the coalition agreement, and now it is necessary to choose the prime minister which is a positive news for the euro. But at the same time, US President Donald Trump announced an ultimatum to the DPRK that if Pyongyang does not abandon the full and externally controlled denuclearization, the DPRK will wait for a power scenario to overthrow the government. And to begin with, Kim Jong-un should not abandon the previously scheduled meeting with Trump in Singapore. Now, investors are confused. While on Friday, the single European currency fell by 21 points.

The trade balance of the eurozone in March increased from 20.9 billion euros to 21.2 billion. But the balance of payments, on the contrary, decreased to - 32.0 billion euros against 36.8 in February. According to the US, there was no data.

Today is a holiday in Switzerland, France, Germany, Canada.

Since the opening of the Asian session, the euro is losing over 20 points and the expected correction is breaking. No macroeconomic data is published both on the euro area and the US. In the evening, Fed members Raphael Bostic and Patrick Harker will have their speeches but the topics have not been announced, which indicates their secondary importance. On Wednesday, the European and American Manufacturing PMI and Services PMI and sales of new homes in the US will be published. The overall attention was focused to political news. We are expecting for the euro in the range 1.1710 / 20. In case of occurrence of new negative events in Europe, a decrease to 1.1670 is possible.

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* The presented market analysis is informative and does not constitute a guide to the transaction.

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

Trading plan for 21/05/2018

The most influential event on the balance of power on the currency market at the beginning of the week is a suspension in a trade dispute between China and the US. In the result, the global investors can observe weakening of the yen, increases in equity and futures markets on indices as well as strong increases in commodity prices, including agricultural products with soy at the forefront.

This week's macro calendar does not contain many important publications, which should support the maintenance of the current trends. The minutes from the FOMC meeting will confirm the bank's optimism and readiness for another interest rate increase already in June. PMIs from Euroland will be analyzed in terms of signals of a rebound in the weak first quarter. The pound may respond to inflation and retail sales data from the United Kingdom.

On Monday, May 21, the event calendar is not full of the important data releases, but overnight, the Retail Sales from New Zealand, Rightmove House Prices from the UK, and Trade Balance data from Japan were published. Later during the day, there are some speeches scheduled form the FOMC members: Raphael Bostic, Patrick Harker, and Neel Kashkari.

NZD/USD analysis for 21/05/2018:

The Retail Sales data from New Zealand was very disappointing as they were released at the level of 0.1% while the market participants expected 1.0 % after the last month's increase of 1.4%. Unfortunately, this kind of data fits with other signs that the New Zealand economy is slowing and will have a significant impact on the downside risk to the nearest gross domestic product forecast. Moreover, the global investors should expect that household spending growth will remain modest over the coming year as the housing market cools in response to the government policy changes. In this economic situation, the interest rate hike by RBNZ will be postponed again and it can make NZD weaker in the mid-term across the board.

Let's now take a look at the NZD/USD technical picture at the H4 time frame. NZD was pushed lower immediately on the data release and sold a little further down. The technical resistance at the level of 0.6946 still hasn't been violated and the momentum stays below its fifty level as well. The continuation of drops is very likely and the next technical support is seen at the level of 0.6815.

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