The daily review of the currency pair GBP / JPY for May 23, 2018. Ichimoku Indicator

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GBP / JPY

As expected, the bears' offensive held back support for short-term trends (daytime Tenkan 148.71 + monthly Tenkan 148.88), their passage led to an active decline. At the lower timeframes, the passed levels formed today a strengthened zone of resistance (148.70-95), joining forces with clouds H4 and H1. The aim and main goal of the reduction is still the breakdown of the upper boundary of the weekly cloud (Senkou Span A 147.66) and the recovery of the downtrend (maximum extremum 147.03). In addition, a downward target was formed for the breakdown of the H4 cloud (146.42-77). The passage of these landmarks and reliable anchoring below will open the prospect of descent to the lower boundary of the weekly cloud (Senkou Span B 144.48), strengthened by the monthly medium-term trend (144.34).

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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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Trump is not ready to fully reconcile with China

Yesterday's speech by US Treasury Secretary Mnuchin and statements made by US President Donald Trump led to a new wave of strengthening the US dollar against a number of world currencies. Also, many investors are now waiting for the publication of the minutes from the last meeting of the Federal Reserve System, where special attention will be paid to the further terms of raising interest rates, as well as their number. The basic calculation is still at least two more increases this year. A number of representatives of the Fed also this week also spoke for three increases this year, manipulating good inflation data and a labor market that has reached historical levels.analytics5b052579cbc25.png

As I noted above, the US Treasury Secretary said yesterday that the White House will impose primary and secondary sanctions against Iran. However, the main issue concerned trade duties and relations with China.

According to Mnuchin, as for the Chinese company ZTE, the goal was not to dislodge this company from the business, but only to subject it to sanctions. It should be noted that, despite the preliminary agreement in part of this company, duties on the import of steel and aluminum will remain in force for China.

Mnuchin also said that the US president has a very strong position with regard to trade and national security, and deficits are something that requires special attention, along with economic growth.

Following the speech of the Minister of Finance, the US President made a number of statements, which, as a rule, were of an uncertain nature, but were interpreted by traders in favor of the US dollar.

Trump said that there was no final agreement with ZTE, and that he was not satisfied with the trade negotiations with China, adding that this was only the beginning. The US President also put forward demands that the company ZTE should change its leader and buy more American goods. Also, Trump is ready to impose a very large fine in respect of ZTE in the amount of 1-1.3 billion dollars.

Yesterday, there were also rumors that the US president plans to reduce the export of steel and aluminum from the EU to the US by 10%, which is good news for the European Union.

The results of the Fed's poll, according to which most Americans see stable improvements in their financial situation in the future, were also positive in the market. Many people are also optimistic about the labor market and their employment prospects.

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Wave analysis of GBP / USD for May 23. UK problems continue to put pressure on the pound

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Analysis of wave counting:

During the Monday's trading, the GBP / USD currency pair attempted to design a corrective wave, but very quickly returned to the decline, having lost about 80 percentage points from the high of the day and continues to build a bearish wave a, 1. The fundamental data from the UK continue to put pressure on the pound sterling, thus giving the chance to sell the currency pair again and again, which leads to an even greater complication of the wave a, 1, whose goals are still near the calculated mark of 1.3300. If the flow of the negative from Britain weakens slightly, then from the 33 figures, a correction set of waves can start.

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. Therefore, 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 reach the 1.3300 mark will warn of the instrument's readiness to build an upward wave (or set of waves) and will allow to form purchases with the first targets located around 1.3528 and 1.3555, which is equivalent to 127.2% and 200.0% of Fibonacci.

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Wave analysis of EUR / USD for May 23. Optimism against the dollar persists

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Analysis of wave counting:

The five-wave structure in wave c, 2, still looks fully staffed. However, given the continued optimism of the markets against the dollar, it is possible that the internal wave structure of the wave c, 2 will be even more complicated. A successful attempt to break through 161.8% of Fibonacci of wave 4. Otherwise, the pair can go to the construction of a horizontal triangle, since there is not enough force to build a more convincing upward set of waves.

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:

Almost perfectly worked out the calculated mark of 1.1835, which corresponds to 200.0% of the Fibonacci, the currency pair began to decline again. It is unequivocal to note the resumption of the construction of the downward trend section is now impossible, so I recommend considering the formation of purchases with targets near the mark of 1.1835. The breakthrough of 1.1715 will warn of the readiness to complicate the wave 5, c. In this case, I recommend returning to the sales of the pair with targets located near the marks of 1.1649 and 1.1636.

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Indicator analysis. The daily review of the currency pair GBP / USD for May 23, 2018

On Wednesday, the following strong calendar news comes out:

- 09.30 London time. GBP, consumer price index (CPI) (y / y) (Apr), waiting for 2.5%, the previous value was 2.5%;

- 15.00 London time. USD, sales of new housing (Apr), waiting for 680K, the previous value was 694K;

- 15.30 London time. USD, stocks of crude oil, are waiting for -1.567M, the previous value was -1.404M;

- 19.00 London time. USD, the publication of the FOMC protocols.

Trend analysis (Figure 1).

On Tuesday, the price worked in the side channel. On Wednesday, the market can continue to move down, with the first goal of 1.3299, the bottom fractal (red 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 - down;

- Fibonacci levels - down;

- Volumes - down;

- Candle analysis - neutral;

- Trend analysis - down;

- Bollinger lines - up;

- Weekly schedule - down.

General conclusion:

On Wednesday, on the GBP / USD pair, the downward movement with the first target of 1.3299 is the bottom fractal (red dotted line).

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Indicator analysis. The daily review of the currency pair EUR / USD for May 23, 2018

On Wednesday, the following strong calendar news comes out:

- 08.30 London time. EUR, PMI in Germany (May), are waiting for 57.9, the previous value was 58.1;

- 15.00 London time. USD, sales of new housing (Apr), waiting for 680K, the previous value was 694K;

- 15.30 London time. USD, stocks of crude oil, are waiting for -1.567M, the previous value was -1.404M;

- 19.00 London time. USD, the publication of the FOMC protocols.

Trend analysis (Figure 1).

On Tuesday, the price worked a small bottom in the side channel. On Wednesday, the market with a high probability can re-test the support line of the rising channel for its penetration. The line of support of the ascending channel (1.700) and the market will aspire there. 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 - upwards;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger lines - up;

- Weekly schedule - down.

General conclusion.

On Wednesday, the market will move down, to the first target of 1.1700, the support line (white line), after which it is possible to go up. Strong news can contribute.

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Analysis of Gold for May 23, 2018

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Recently, the Gold has been trading upwards. As I expected, the price tested the level of $1,298.00. According to the H1 time – frame, I found a broken ending diagonal in the background, which is a sign that buyers are in control. I also found a broken intraday bullish flag, which is another sign of strength. On the MACD oscillator, I found a hidden bullish divergence. My advice is to watch for potential buying opportunities. The upward targets are set at the price of $1,302.70 and at the price of $1,311.00.

Resistance levels:

R1: $1,293.00

R2: $1,294.00

R3: $1,296.00

Support levels:

S1: $1,289.50

S2: $1,288.40

S3: $1,286.60

Trading recommendations for today: watch for potential buying opportunities.

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GBP/USD analysis for May 23, 2018

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Recently, the GBP/USD has been trading downwards. As I expected, the price tested the level of 1.3346. According to the H1 time – frame, I found a breakout of 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. I have placed Fibonacci expansion to find potential downward targets. I got Fibonacci expansion 100% at the price of 1.3315 and Fibonacci expansion 161.8% at the price of 1.3210.

Resistance levels: R1: 1.3483R2: 1.3526R3: 1.3560 Support levels: S1: 1.3405S2: 1.3370S3: 1.3327

Trading recommendations for today: watch for potential selling opportunities.

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Bitcoin analysis for May 23, 2018

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The Bitcoin (BTC) has been trading downwards. As I expected, the price tested the level of $7.772 and met my yesterday's target. The Chilean president, Mario Marcel, has made comment seemingly in favor of developing a regulatory apparatus for virtual currencies. The apparent openness to regulating cryptocurrencies contrasts significantly from the recent banking embargo targeting virtual currency, recently witnessed in Chile. The technical picture on Bitcoin looks bearish.

Trading recommendations:

According to the H1 time - frame, I found that the price broke support trendline in the background. I also found a breakout of intraday bearish flag, which is another sign of weakness. The MACD oscillator is showing weakness. My advice is to watch for potential selling opportuinties. The downward targets are set at the price of $7.566 and at the price of $6.962.

Support/Resistance

$7.920 – Intraday resistance

$7.770– Intraday support

$7.565 – Objective target 1

$6.962 – 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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Trading plan for the European session of GBP / USD pair on May 23

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

Only the formation of a false breakout in the area of 1.3391 will be a signal to buy the pound. In a different scenario, the new long positions of GBP / USD pair are best seen after the update of the next lows around 1.3366 and 1.3335. However, the entire calculation in the morning will be on good inflation data, which can return the pound to the resistance levels of 1.3418 and 1.3446.

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

A break and consolidation below 1.3391 will be a good signal to sell the pound in expectation of renewing new lows in the area of 1.3366 and 1.3335, where fixing profits are recommended. In case of GBP / USD growth in the first half of the day, you can search for sales on a false breakout from 1.3418, or on a rebound from 1.3446.

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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
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Daily analysis of EUR/JPY for May 23, 2018

EUR/JPY

The situation on this market is quite similar to what is happening on the USD/JPY pair. The strong pullback in the market (the current bearish breakout) has already put an end to the recent ranging situation on the market. About 300 pips have been shed from the high of this week, and this is simply the beginning.

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There is now a Bearish Confirmation Pattern in the market. The EMA 11 has crossed the EMA 56 to the downside and the RSI period 14 is already below the level 50. Further bearish movement is really anticipated.

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Daily analysis of USD/JPY for May 23, 2018

USD/JPY

The market got corrected lower on Monday, and that has now become something significant. From the high of Monday, the market has experienced about a 180-pip pullback, and that has resulted in serious threat to the recent bullish bias on the market. If the market goes further downwards by another 100 pips, the outlook on the market would turn completely bearish.

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There will soon be a Bearish Confirmation Pattern in the market, which makes long trades not yet advisable. The EMA 11 would soon cross the EMA 56 to the downside and the RSI period 14 is already below the level 50.

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Fundamental Analysis of EUR/JPY for May 23, 2018

EUR/JPY has been quite impulsive with the bearish gains recently inside the corrective range between the 129.50 to 132.00 area. Despite the worse economic reports today, certain gain on the JPY side does indicate the weakness of EUR in the process ahead of the ECB Monetary Policy Meeting Accounts tomorrow.

Today, JPY Flash Manufacturing PMI report was published with a decrease to 52.5 from the previous figure of 53.8 which was expected to be at 53.6 and All Industry Activity report was also published with a decrease to 0.0% from the previous value of 0.4% which was expected to be at 0.1%.

On the EUR side, today French Flash Manufacturing PMI report increased to 55.1 from the previous figure of 53.8, French Flash Services PMI decreased to 54.3 from the previous figure of 57.4, German Flash Manufacturing PMI decreased to 56.8 from the previous figure of 58.1, and German Flash Services PMI decreased to 52.1 from the previous figure of 53.0. Moreover, today EUR Flash Manufacturing PMI decreased to 55.5 from the previous figure of 56.2 and Flash Services PMI decreased to 53.9 which was expected to be unchanged at 54.7.

As of the current scenario, EUR economic reports have mostly negative results today, whereas JPY has already been gaining. Until EUR comes up with better economic development outcomes and better monetary policies tomorrow at ECB Monetary Policy Meeting Accounts, JPY is expected to dominate EUR further.

Now let us look at the technical view. The price is currently residing below 129.50 with recent bearish impulsive pressure which is expected to continue further in the coming days. Though the bearish pressure is still quite strong which might lead to continuation of the pressure, but certain pullback towards 129.50 is expected before the price continues to move lower towards the 128.00 support area in the coming days. As the price remains below 132.00, the bearish bias is expected to continue.

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Daily analysis of USD/CHF for May 23, 2018

USD/CHF

The bearish signal that was generated on the USD/CHF pair yesterday, resulted in a medium-term bearish bias on the market. The market is below the resistance levels at 0.9950, now very close to the support level at 0.9900, which is the first target. Once the support level is breached to the downside, the next target will be the support level at 0.9850.

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There is a Bearish Confirmation Pattern on the 4-hour chart, and that has brought about a bearish signal. The EMA 11 is below the EMA 56, and the Williams' % Range period 20 is in the oversold region. Further bearish movement is a strong possibility.

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Fundamental Analysis of USD/CAD for May 23, 2018

USD/CAD has been correcting itself below the 1.2950 area, from where it is expected to push lower in the coming days. The market is currently quite volatile and indecisive, whereas both currencies in the pair are struggling with the mixed economic reports recently.

Ahead of the FOMC Meeting today, USD is currently showing some impulsive gains over CAD which is expected to get definiteness after the Fed Chair Powell speaks about the upcoming interest rate decisions and monetary policies this Friday. Though there are certain chances of USD to increase its interest rates in the coming months which might lead to further gain on the USD side in future. Today, ahead of the FOMC Meeting Minutes, USD New Home Sales report is going to be published which is expected to decrease to 680k from the previous figure of 694k and Crude Oil Inventories report is expected to decrease to -2.5M from the previous figure of -1.4M.

On the other hand, today there are no impactful economic reports or events to be published on the CAD side, but tomorrow Corporate Profits report is going to be published which is expected to increase from the previous value of -1.9%.

As of the current scenario, USD high impact economic reports to be published today is expected to inject some volatility in the market which might lead to certain definiteness in the pair. This week, CAD do not have any impactful economic reports to support its gains against USD, whereas upcoming momentum in this pair is fully depended upon the upcoming high impact economic events of USD to be published. To sum up, USD is expected to gain momentum over CAD in the coming days, if the upcoming high impact economic events turns out to have better outcomes.

Now let us look at the technical view. The price is currently residing just below the 1.2900-50 area, if it is broken above in the coming days with a daily close, further bullish pressure is expected with target towards the 1.3120 area in the future. Though the price is still correcting below the 1.29 area along with certain bearish volumes as per MACD histograms, there are certain chances of bearish pressure in the pair. As the price remains below 1.29 with a daily close, certain bearish pressure is expected in this pair in the future.

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Technical analysis of EUR/USD for May 23, 2018

analytics5b05424c077a0.pngThe EUR/USD pair continues to move downwards from the areas of 1.1880 and 1.1797. This week, the pair dropped from the level of 1.1880 to 1.1715. Today, resistance is seen at the levels of 1.1797 and 1.1880. So, we expect the price to set below the strong resistance at the levels of 1.1797 and 1.1880; because the price is in a bearish channel now. Amid the previous events, the price is still moving between the levels of 1.1797 and 1.1629. In overall, we still prefer the bearish scenario as long as the price is below the level of 1.1797. Furthermore, if the EUR/USD pair is able to break out the bottom at 1.1715, the market will decline further to 1.1629 (daily support 2). Hence, the price will fall into a bearish trend in order to go further towards the strong support at 1.1540. On the other hand, if the price closes above the strong resistance of 1.1880, the best location for a stop loss order is seen above 1.1900.

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Technical analysis of USD/CAD for May 23, 2018

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Overview:

The USD/CAD pair rose from the level of 1.2728 towards 1.2867 for a long term. The current price is set at 1.2870. On the H1 chart, the resistance is seen at the levels of 1.2894 and 1.2939. Besides, the weekly support 1 is seen at the level of 1.2791. Today, the USD/CAD pair is continuing to move in a bullish trend from the new support level of 1.2830, to form a bullish channel. Amid the previous events, we expect the pair to move between 1.2830 and 1.2939. Therefore, buy above the level of 1.2830 with the first target at 1.2894 in order to test the second resistance and further to 1.2939. Nevertheless, if the pair fails to pass through the level of 1.2939, the market will indicate a bearish opportunity below the level of 1.2939. The market will decline further to 1.2862 in order to return to the weekly pivot point. Additionally, a breakout of that target will move the pair further downwards to 1.2728 with a view to test the double bottom on the H1 chart. Comment: The weekly pivot is seen at the level of 1.2862. The market is still in an uptrend. We still prefer the bullish scenario as long as the price of 1.2830 is not breached.

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Intraday technical levels and trading recommendations for NZD/USD for May 23, 2018

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The price zone of 0.7320-0.7390 stood as a significant supply zone during the recent bullish pullback. 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 a bearish breakdown of 0.7200 occurred.

Since April 13, the 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.

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Intraday technical levels and trading recommendations for EUR/USD for May 23, 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 level 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.

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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Review of USD / CAD pair for the week of May 23 on simplified wave analysis

The wave pattern of the D1 graph:

Since the decline of the pair on January 2016 on the chart, a downward wave of a larger all-inclusive scale of the chart is forming. The middle part of the wave (B) has an irregular view, with an elongation toward the main direction of the trend. Started in September last year, the final part of the correction is approaching the target zone.

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The wave pattern of the H1 graph:

The last wave is upward, counting from April 17. By now, the correctional part of the structure is being formed within its framework.

The wave pattern of the M15 chart:

The wave of May 8 is in the process of formation at the time of analysis. The nature of the movement is flat and price fluctuations can occur mainly on the side price boundary.

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Recommended trading strategy:

For all styles of trading, the most promising signals for purchase can be found in the area of the support zone. Proponents of the inter-trading style can attempt for short sales, with an upward potential to the turnaround zone.

Resistance zones:

- 1.2940 / 1.2990

Support zones:

- 1.2660 / 1.2610

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.

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 05/23/2018

Trading plan 05/23/2018

The overall picture: The growth of the dollar meets resistance.

There is no important news right now. The effect of the growth of yields on Treasuries of the US to 3% per annum continues.

On the other hand, the strengthening of the dollar was too fast and requires some correction. The euro and the pound are still trying to continue the decline, but other currencies such as the franc, the yen, especially, and gold show readiness for a strong rebound.

Perhaps, the turn will be today at 21.00 Moscow time on "minutes" since the last meeting of the Fed.

Perhaps today, the turn will be on the "minutes" since the last meeting of the Fed, at 18.00 London time.

GBP / USD pair: We are buying for a breakthrough at 1.3500.

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The dollar continues its game

EUR / USD pair

On Tuesday, the euro showed only a symbolic decline in the expectation of today's publication of the protocol since the last meeting of the Fed. The main volatility of yesterday came from the British pound, which reacted sharply to the statement of the Central Bank head, Mark Carney, on raising the rate "in a few months", subject to normalization of economic indicators.

Today, the business activity indicators for the euro area for May are scheduled to be released at 8.00 London time. Services PMI is expected to remain unchanged at 54.7 points, while Manufacturing PMI may fall from 56.2 to 56.1. In fairness, German Manufacturing PMI is projected at 57.9 against 58.1 in April. According to the US Manufacturing PMI for the same month is projected to grow from 56.5 to 56.6, and Services PMI is also projected to grow from 54.6 to 54.9. Sales of new homes in the US in April are expected at 680,000 compared to 694,000 in March. At 18.00 London time, the protocol FOMC FRS will be published. A positive tonality of the document is expected.

We are waiting for the decline of the euro to the level of 1.1670.

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Expectations pound is not full

GBP / USD pair

Yesterday, the British pound rose to 63 points due to words of Mark Carney in a speech with a report on inflation in parliament. He said that rates could be raised in a few months if the recent weak economic indicators proved to be temporary. But since the fact that the growth occurred only on Karni's speech without any new promises, the price returned to its initial position to the inflation data and the publication of the FOMC protocol.

The base consumer price index in the UK for April is expected to decrease from 2.3% y/y to 2.2% y/y while the total CPI is projected without a change of 2.5% y/y. The producer price index (PPI) at the beginning of the previous month is expected to grow by 1.0% against -0.1% in March (5.8% y/y vs 4.2% y/y). The PPI output may add 0.3%. The index of residential property prices from Halifax is expected without a change in 4.4% y/y. The balance of retail sales from CBI can increase from -2 to 4 in May.

Based on the volume, the data can be considered weakly positive, and then the decisive factor will be the reaction of investors to the "minutes" of the FOMC FRS. At the moment, market participants are laying 3.5 rate hikes by the end of the year and a 100% chance of an increase in June. From these positions, the movement of the pound is likely to reach 1.3330.

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The yen lost support, but not for long

USD / JPY pair

The Japanese yen lost its main support yesterday amid the growth of the stock market. On statements by the U.S. president Donald Trump about the difficulties in negotiating with China to expand trade and disrupt the meeting with Kim Jong-no on June 12, as well as the US president's intention of imposing fine to the Chinese telecommunications equipment maker ZTE by $ 1.3 billion, the US stock index S & P500 lost a day 0.31%. The yen declined 15 points yesterday and Nikkei 225 slid down by 1.15%, which is another down of 40 points. The Chinese Shanghai Composite under all circumstances looks more stable with a decrease of 0.55%.

Nevertheless, we expect the recovery of markets after this confusion. Today, relatively good economic data for the USA is expected including the Manufacturing PMI for May 56.6 against 56.5 in April, as well as, services PMI 54.9 against 54.6 and sales of new homes for April at 680K after 694K in March. We are waiting for the price to return to the range of 110.85-111.10, after which the growth continues to 111.70.

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Global macro overview for 23/05/2018

Eurozone PMI data disappoints the global investors, Euro slides further

After disappointing data from Eurozone economies, the common currency is again under the pressure. The PMI data for Germany was worse both than the consensus and previous readings: PMI Services were at the level of 52.1 (versus 53.2 expected and 53.0 prior) and PMI Manufacturing was released at the level of 56.8 (versus 57.9 expected, 58.1 prior). The Composite PMI is, as a result, the lowest since September last year and is 53.1 pts or more than 6 pts below the January peak. The analogy for France is even worse, which fell the lowest since the beginning of last year (54.5 versus 56.6 expected and 56.7 prior).

The PMI data for the whole Eurozone were as well worse than expected. The PMI Manufacturing was released at the level of 55.5, while the global investors expected 56.1 points after 56.2 points a month ago. The PMI Services was worse too, as it was released at the level of 53.9 (versus expected 54.5 and 54.6 prior). Overall the Composite PMI for the Eurozone was lowered to the level of 54.1 points.

A series of weak data from Eurozone is worryingly prolonging, which is increasingly affecting the expectations of the ECB policy and, as a result, the common currency is becoming more and more pressure, so the EUR will likely be depreciating again across the board. Nevertheless, there is no reason to panic as the PMI indices are still above their fifty level which separates the economic expansion from contraction, so the worse than expected data might be just a part of the temporary correction.

Let's now take a look at the EUR/USD technical picture at the H4 time frame after the PMI data were published. The pair dropped towards the technical support at the level of 1.1717 and broke through it. The new local low was made at the level of 1.1698 in oversold market conditions. The nearest resistance is seen at the level of 1.1742 and 1.1749. Please notice the downtrend is now mature and corrective pull-back might occur anytime.

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Technical analysis of GBP/JPY for May 23, 2018

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On the 4 hour chart of GBP/JPY we've spotted the Broadening Up Channel. This is a sign of the weak bullish momentum. Furthermore, the up channel was easily broken, especially after the price touched the Exponential Moving Average 200 at the day's close. Besides, the price has already gone below the Dynamic Resistance, so for a few days ahead there is a possibility the GBP/JPY will try to test the resistance level at the 149.11 or maybe the Exponential Moving Average 200 by close again. But as long this pair cannot breakout and close above these levels, the GBP/JPY will go down to test the next support level zone between the 147.03-147.56 levels.

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Technical analysis on EUR/USD for May 23, 2018

The EUR/USD pair is making fresh new lows, but the RSI continues to diverge. I do not believe we should chase short position, on the contrary, I remain bullish on this pair even more with this new bullish divergence.

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Red lines - bullish divergence

EUR/USD is still technically in a bearish trend. Price continues to make lower lows and lower highs. As long as the price is below, the 1.1830 trend will remain bearish. I remain a contrarian to this trend as I believe we should see a reversal this week. Support is now at 1.1690 and resistance is at 1.1770. Bulls need to see at least a move above 1.1770 in order to cancel this new downward move. Bears remain in control of this trend, but I do not expect this to last much longer.

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Technical analysis on USD/JPY for May 23, 2018

We warned that USD/JPY would be vulnerable in case 110.80 is broken. We also warned that the bearish divergence signs were there and bulls should have been cautious. USD/JPY has made a strong reversal and has also broken below the critical support of 110.

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Red line - short-term support

Blue line - medium-term support

The USD/JPY pair has broken below both the support trend lines. Price is now challenging the Ichimoku cloud. Support is next at 109.55. A break below this level will confirm the bearish reversal and we should expect USD/JPY to move at least towards 108-107.50 if not lower. I remain bearish on USD/JPY.

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Technical analysis on Gold for May 23, 2018

Gold price has broken above the short-term resistance trend line and is now trading back and forth above and below it. I expect Gold price to continue higher towards $1,300 this week. I remain bullish.

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Blue line - bullish divergence

Red line - short-term resistance

Yellow line - medium-term resistance

Green lines - targets

Gold price has short-term support at $1,288 and next at $1,282. Resistance is at $1,302-304 and next at $1,310-13. I expect Gold price to continue higher towards at least the yellow trend line resistance. I believe that the most probable scenario will be to break above it and at least reach $1,325 where we find the 50% Fibonacci retracement. I remain bullish about Gold.

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Trading plan for 23/05/2018

The Trump - Kim summit is still uncertain, so the dollar is slightly stronger in an environment of heightened risk aversion. USA 10Y debt yield is 3.05% on Wall Street and Asian floors, the sellers clearly dominate. The dollar restores appreciation as the EUR/USD returns to 1.1750, GBP/USD drops to 1.3400. Commodity currencies, which in the last few days have been the leader in the major's space, are now again under stronger pressure, and at least they have shown the best chance of breaking the negative tendencies: AUD/USD goes back under 0.7550. USD/JPY is not able to use the new impulse and due to the deterioration of investment sentiment falls to 110.50 slowly questioning the direct growth scenario.

The Wall Street drops about 0.5%, but futures on the SP500 at the Asian session additionally deepen the decline and are already under 2720 points. Nikkei 225, Shanghai Composite and Hang Seng are currently slashing jointly about 1.0%.

The WTI oil price drops today at USD 72 per barrel as the API report pointed to a drop in inventories by 1.3 million barrels while gasoline inventories increased. Copper and most precious metals are cheaper, but gold is stable and its ounce costs USD 1291.

On Wednesday 23rd of May, the main event of the day is the FOMC Meeting Minutes release in the late evening, but there is plenty of data to be released before that. The series of PMI Manufacturing and Services data from the Eurozone will catch the global investors attention, together with Consumer Price Index and House Price Index data from the UK. Despite the FOMC Minutes release, the US will post Crude Oil Inventories data, ISM Manufacturing data, Final Services PMI and Composite PMI data and New Home Sales data.

EUR/USD analysis for 23/05/2018:

Today's morning will be marked by data from the Eurozone. The global investors will get to know the PMI values in industry and services for EU countries. The most important will be readings from France and Germany (at 7:00 and 7:30 am GMT respectively). Economists expect slightly weaker data than before. At 11:00 am GMT data will be published for the entire euro area. In the previous months, the sentiment in the Eurozone has been very positive due to a stable economic growth across the Eurozone, but the recent macroeconomic data has cast a shadow regarding the future outlook. Soon the market participants will find out whether there is something to worry about.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market has managed to retrace 38% of the previous swing down and established a local top at the level of 1.2829 before falling again towards the recent swing lows at the level of 1.1755. The short-term golden trend line resistance has been violated, so the next target for bears is the key support at the level of 1.1716. Only a sustained breakout through the level of 1.1829 would change the bias from bearish to bullish, but even then, there is still the key resistance zone waiting for bulls at the level of 1.1889 - 1.1897.

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Bitcoin analysis for 23/05/2018

Some countries have sanctions imposed by the US and many European nations. Several experts believe that there are countries that can bypass international sanctions through decentralized cryptocurrencies. Russia and Iran are two countries that are currently under severe sanctions that may soon use cryptocurrencies to circumvent them.

Politicians in Russia and Iran are discussing the possibility of using digital currencies to circumvent such sanctions. Decentralization is one of the biggest advantages of cryptocurrencies. Unlike traditional fiat currencies, cryptocurrency transactions cannot be stopped by a central office or body. In the latest press release of PressTV, Iranian MEP Mohammad-Reza Pourebrahimi discussed during the meeting in Moscow the possibility of using cryptocurrencies for international payments. The meeting was also attended by Dmitry Mezentsev, chairman of the Federation Council's Economic Policy Committee. According to reports, Pourebrahimi stated that Iran and Russia can use digital currencies to avoid US dollar transactions and potentially even replace the SWIFT interbank payment system. In addition, the Iranian Parliament has instructed the Central Bank of Iran (CBI) to start creating potential cases of the use of digital currencies. Pourebrahimi stated: "Russia shares our opinion. We said that if we can move forward with this work, we will be the first countries that use cryptocurrencies to exchange goods. Russia and Iran are considering using the crypto to circumvent sanctions". Mezentsev noted Pourebrahimi's statement regarding the use of cryptocurrencies and replied: "Inter-bank relations between our countries are very important. Many sanctioned countries may perceive cryptocurrencies as potential replacements for traditional international banking systems such as SWIFT. International bank transfers are not the only problem facing sanctioned countries. Centralized payment services, such as Paypal or Venmo, are also not allowed in some countries. These payment services can also be replaced by decentralized cryptocurrencies".

Iran is again facing serious sanctions after President Trump pulled the United States out of its agreement on the nuclear weapons program. Russia noted increased US sanctions for allegedly meddling in the presidential election in 2016.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. As anticipated yesterday the breakout above the old golden trend line was a fake one and currently the price has made a local low at the level of $7,890 on its way to the 61% Fibo at the level of $7,712. If the impulsive scenario is correct, it would be the last wave down labeled on the chart as the wave c, which can terminate in the area between the levels of $,7712 - $7,442.

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Technical analysis of USDX for May 23, 2018

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As we can see on the 4 hour chart, the USD Index is in a trending bullish condition. We can see the price is already moving in a 45 degree up slope. For now, as long the price does not break out and close below the 93.18 level, the USDX will likely go up to test the previous resistance at the 94.06 level.

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Technical analysis: intraday levels for EUR/USD for May 23, 2018

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When the European market opens, some economic data will be released such as the Consumer Confidence, Flash Services PMI, Flash Manufacturing PMI, German Flash Services PMI, German Flash Manufacturing PMI, French Flash Services PMI, and French Flash Manufacturing PMI. The US will release the economic data too such as the Crude Oil Inventories, New Home Sales, Flash Services PMI, and Flash Manufacturing PMI. So, amid the reports EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1844.

Strong Resistance:1.1837.

Original Resistance: 1.1826.

Inner Sell Area: 1.1815.

Target Inner Area: 1.1787.

Inner Buy Area: 1.1759.

Original Support: 1.1748.

Strong Support: 1.1737.

Breakout SELL Level: 1.1730.

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

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Technical analysis: Intraday levels for USD/JPY, May 23, 2018

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In Asia, Japan will release the All Industries Activity m/m and Flash Manufacturing PMI. The US will release a series of economic reports such as Crude Oil Inventories, New Home Sales, Flash Services PMI, and Flash Manufacturing PMI. So there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance. 3: 111.21.

Resistance. 2: 110.99.

Resistance. 1: 110.77.

Support. 1: 110.51.

Support. 2: 110.30.

Support. 3: 110.08.

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

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

Technical analysis of USD/JPY for May 22, 2018

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USD/JPY is under pressure. The continues its retreat from a high of 111.39 seen yesterday (May 21). Currently it remains capped by the descending 20-period moving average, which has just crossed below the 50-period one. The intraday configuration has turned bearish, and the pair is expected to test the support at 110.80 before declining further to 110.60.

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: SELL, stop loss at 111.20, take profit at 110.80.

Resistance levels: 111.45, 111.60, and 111.90

Support levels: 110.80, 110.60, and 110.30.

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Technical analysis of USD/CHF for May 22, 2018

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USD/CHF is under pressure expected to trade in lower range. The pair retreated from 1.0000 (the high of May 21) and broke below both 20-period and 50-period moving averages. Besides, the death cross between 20-period and 50-period moving averages has been identified. The relative strength index shows downside momentum. To sum up, as long as 0.9985 holds on the upside, look for a drop with targets at 0.9900 and 0.9875 in extension.

Chart Explanation: The black line shows the pivot point. The present price above the pivot point indicates a bullish position, and the price below the pivot point indicates a short position. The red lines show the support levels, and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

Strategy: SELL, stop loss at 0.9985, take profit at 0.9900.

Resistance levels: 1.0005, 1.0030, and 1.0085

Support levels: 0.9900, 0.9875, and 0.9840

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