Fractal analysis for major currency pairs as of August 31

Dear colleagues.

For the currency pair Euro / Dollar, we continue to monitor the upward structure from August 23 and the upward movement is expected after the passage at the price of the noise range of 1.1719 - 1.1746. For a Pound / Dollar currency pair, the continuation of the upward movement is possible after passing through the noise range of 1.3045 - 1.3068. For the currency pair Dollar / Franc, we continue to move downwards after the passage of the range of 0.9683 - 0.9667 and we consider the movement upward as a correction. For the currency pair Dollar / Yen, the price is in correction and forms the potential for the downward movement from August 29. For the currency pair Euro / Yen, the price is in the correction area from the upward structure and forms the potential for the bottom of August 29. For the Pound / Yen currency pair, the price is in the correction zone from the upward trend and the continuation of the upward movement is expected after the breakdown of 145.71.

Forecast for August 31:

Analytical review of currency pairs in the scale of H1:

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For the EUR / USD currency pair, the key levels on the scale of H1 are: 1.1817, 1.1794, 1.1746, 1.1719, 1.1660, 1.1630, 1.1582 and 1.1528. Here, we continue to follow the local upward structure of August 23. At the moment, the price is in correction. The short-term upward movement is expected in the corridor of 1.1719 - 1.1746 and the breakdown of the last value should be accompanied by a pronounced movement to the level of 1.1794. The potential value for the top is the level of 1.1817, after which we expect consolidation.

The short-term downward movement is possible in the corridor of 1.1660-1.1630 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 1.1582 and this level is the support for the top.

The main trend is the local structure of August 23.

Trading recommendations:

Buy 1.1720 Take profit: 1.1744

Buy 1.1747 Take profit: 1.1792

Sell: 1.1660 Take profit: 1.1632

Sell: 1.1628 Take profit: 1.1585

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For the Pound / Dollar currency pair, the key levels on the H1 scale are: 1.3115, 1.3068, 1.3045, 1.3006, 1.2981 and 1.2941. Here, we follow the local upward structure of August 24. The continued upward movement is expected after passing through the noise range of 1.3045 - 1.3068. In this case, the target is 1.3115, from this level we expect a pullback downwards.

The short-term downward movement is possible in the corridor of 1.3006 - 1.2981 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 1.2941 and this level is the key support for the top.

The main trend is a local structure for the top of August 24.

Trading recommendations:

Buy: 1.3068 Take profit: 1.3113

Buy: Take profit:

Sell: 1.3005 Take profit: 1.2982

Sell: 1.2979 Take profit: 1.2941

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For the currency pair Dollar / Franc, the key levels on the scale of H1 are: 0.9774, 0.9748, 0.9729, 0.9713, 0.9683, 0.9667 and 0.9643. Here, we continue to follow the local top-down cycle of August 23. The short-term downtrend is possible in the range of 0.9683 - 0.9667 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 0.9643, from this level we expect the movement to correction.

The short-term upward movement is possible in the corridor of 0.9713 - 0.9729 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 0.9748 and the breakdown of which will in turn allow to count on the formation of the potential for the top. Here, the target is 0.9774.

The main trend is the local structure for the bottom of August 23.

Trading recommendations:

Buy: 0.9713 Take profit: 0.9726

Buy: 0.9731 Take profit: 0.9748

Sell: 0.9665 Take profit: 0.9645

Sell: Take profit:

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For the Dollar / Yen currency pair, the key levels on a scale of H1 are: 112.42, 112.13, 111.80, 111.60, 111.01, 110.82 and 110.47. Here, the price forms the potential for the bottom of August 29 in the correction of the ascending structure. The short-term upward movement is expected in the corridor of 111.60 - 111.80 and the breakdown of the last value will lead to a pronounced movement. In this case, the target is 112.13. We consider the level of 112.42 to be a potential value for the top, after which we expect consolidation, as well as a pullback to the bottom.

The short-term downward movement is possible in the corridor of 111.01 - 110.82 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 110.47 and this level is the key support for the upward structure.

The main trend: the upward structure of August 21, the correction stage.

Trading recommendations:

Buy: 111.60 Take profit: 111.80

Buy: 111.83 Take profit: 112.12

Sell: 111.00 Take profit: 110.83

Sell: 110.80 Take profit: 110.50

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For the Canadian Dollar / Dollar currency pair, the key levels on the H1 scale are: 1.3097, 1.3071, 1.3034, 1.3004, 1.2974, 1.2948 and 1.2884. Here, we follow the formation of the upward potential of August 30. The short-term ascendant is expected in the corridor of 1.3004 - 1.3034 and the breakdown of the last value should be accompanied by a pronounced upward movement. Here, the target is 1.3071. The potential value for the top is the level of 1.3097, after which we expect consolidation, as well as a pullback to the bottom.

The short-term downward movement is possible in the corridor of 1.2974 - 1.2948 and the breakdown of the last value will have to the development of a downward movement. Here, the target is 1.2884.

The main trend is the formation of the upward structure of August 30.

Trading recommendations:

Buy: 1.3004 Take profit: 1.3032

Buy: 1.3036 Take profit: 1.3070

Sell: 1.2973 Take profit: 1.2950

Sell: 1.2945 Take profit: 1.2895

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For the Australian Dollar / Dollar currency pair, the key levels on the scale of H1 are: 0.7318, 0.7295, 0.7275, 0.7238, 0.7208 and 0.7185. Here, we follow the formation of the potential for the bottom of August 28. The continued downward movement is expected after the breakdown of 0.7238. In this case, the target is 0.7208, while the potential value for the downward movement is still the level of 0.7185, after which we expect consolidation.

The main trend is the formation of a downward structure from August 28.

Trading recommendations:

Buy: 0.7275 Take profit: 0.7293

Buy: 0.7297 Take profit: 0.7316

Sell: 0.7236 Take profit: 0.7210

Sell: 0.7206 Take profit: 0.7186

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For the currency pair Euro / Yen, the key levels on the scale of H1 are: 131.32, 130.92, 130.50, 130.06, 129.66, 129.19, 128.66, 128.06 and 127.64. Here, the price is in correction from the upward structure and forms the potential for the bottom of August 29. The continuation of the movement downwards is expected after the breakdown of 129.19. In this case, the target is 128.66 and near this level is the consolidation. The breakdown level of 128.64 should be accompanied by a pronounced downward movement. Here, the target is 128.06. The potential value for the bottom is the level of 127.64, near which we expect the consolidated movement.

The short-term upward movement is possible in the corridor of 129.66 - 130.06 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 130.50 and this level is the key resistance for the subsequent development of the upward trend.

The main trend is the correction and capacity building for the bottom of August 29.

Trading recommendations:

Buy: 129.66 Take profit: 130.00

Buy: 130.08 Take profit: 130.50

Sell: 129.17 Take profit: 128.70

Sell: 128.62 Take profit: 128.09

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For the Pound / Yen currency pair, the key levels on the scale of H1 are: 147.61, 146.92, 146.35, 145.71, 144.74, 144.31, 143.70 and 143.30. Here, we follow the development of the upward structure of August 15, the current price is in correction. The continuation of the upward movement is expected after the breakdown of 145.71. Here, the target is 146.35 and the breakdown of which will lead to a short-term upward movement in the range of 146.35 - 146.92. Hence, the probability of a turn downwards is high. The potential value for the top is the level of 147.61, upon reaching which we expect a pullback downwards.

The consolidated traffic is possible in the corridor of 144.74 - 144.31 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 143.70 and the range of 143.70 - 143.30 is the key support for the top.

The main trend is the medium-term ascending structure from August 15, the correction stage.

Trading recommendations:

Buy: 145.71 Take profit: 146.35

Buy: 146.39 Take profit: 146.90

Sell: Take profit:

Sell: 144.26 Take profit: 143.80

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Euro: you can not build happiness on someone else's mountain

In the international currency market, the lack of positive is not a cause for frustration. To grow yourself without any internal drivers, you need to make the opponent feel bad. The dynamics of core inflation in the euro area still leaves much to be desired, consumers are worried about the possible loss of jobs, and the approach of the date of submission by the eurosceptic government in Italy of the draft budget retains political risks. Still, EUR / USD closes in the green zone for the third week in a row, and Commerzbank expects the continuation of the rally in the direction of 1.26. ABN Amro claims that the level of $ 1.15 is the bottom for the euro.

On another's hump in paradise you will not enter, but at the uniform European currency while it turns out. Fears about the slowdown of US GDP in the second half of the year and because of a possible slowdown in the rate of normalization of monetary policy by the Fed force speculators to get rid of the US dollar. Theoretically, they should not be frightened by the statement of Donald Trump that the Central Bank puts the sticks in the wheels of the US administration. First, the Federal Reserve is independent, and no one Jerome Powell before 4 years from office will not remove. Secondly, everyone should do his job. The president - to deduce the economy on the promised + 3%, the Fed - to fulfill a double mandate.

In this regard, the first inflation rate in the face of the basic PCE for the last 6 years to target at 2%, the minimum unemployment rates in half a century and the acceleration of GDP to 4% and higher are weighty arguments in favor of continuing the cycle of normalizing monetary policy. Another thing is that the fiscal stimulus is most likely to have a temporary effect, so investors are not in a hurry to throw off 10-year Treasury bonds. The rates on them are stable, while the growth of rates for 2-year bonds pushes the yield curve to the red zone. And inversions, as is known, for the last 50 years were a fairly accurate signal of a recession.

The dynamics of American inflation

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Thus, the more the Fed will tighten monetary policy, the higher the chances of an economic downturn. The only way out is to stop. But the futures market is 72% sure that we are waiting for a couple more rate increases on federal funds (in September and in December). And what if this does not happen? Suffice it to recall the events of 2016. Then in early January, investors counted on three acts of monetary restriction, but in fact, they got one, and if it were not for Trump's victory in the presidential election, the dollar would have finished the year in the status of an absolute outsider.

The problem is that the divergence in monetary policy is not the only trump card of the US currency. Protectionism and panic in the markets of developing countries support it no worse than raising the rates of the Fed. So it's too early to talk about the recovery of the long-term "bullish" trend for EUR / USD. Business smells of consolidation.

Technically, the break of the upper limit of the trading range 1.15-1.179 and the activation of the pattern "Shark" will increase the risks of implementing its target by 88.6%.

EUR / USD, the daily chart

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Wave analysis of EUR / USD for August 31. Expected to decline within the wave 2

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Analysis of wave counting:

During the trades on Thursday, the currency pair EUR / USD lost about 40 percentage points. Thus, there are still grounds for assuming the completion of the construction of wave 1, a. If this is indeed the case, then from the current position, the pair will continue to decline in the framework of the construction of wave 2, a. Confuses while the weakness of the current departure from the achieved highs and the level of inefficiency is 100.0%. Nevertheless, the working variant assumes the construction of a corrective wave right now or from the 100.0% mark.

The objectives for the option with sales:

1.1301 - 0.0% of Fibonacci

The objectives for the option with purchases:

1.1747 - 100.0% of Fibonacci

1.1868 - 127.2% of Fibonacci

General conclusions and trading recommendations:

The currency pair remains in the stage of completion of wave 1, a. Thus, today I still recommend fixing the profit on purchases, as I expect the construction of a corrective wave 2, a, and with the goals, which are about 1.1550. I do not recommend selling a pair within wave 2. Near the lows of the proposed wave 2, I recommend buying again the pair counting on the construction of wave 3, a, and with the targets near the calculated marks of 1.1747 and 1.1868, which corresponds to 100.0% and 127.2% of Fibonacci.

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Forecast for GBP / USD as of August 31, 2018

GBP / USD

After an upbeat pound on Wednesday, the British currency slid by 18 points yesterday, both due to the overall strengthening of the dollar, and due to the absence of any specifics on some "outstanding" terms from the EU in the proposed trade agreement. Also, the net volume of new loans granted to individuals in July amounted to only 4.0 billion pounds sterling against the expectation of 5.5 billion. And this is the lowest monthly volume of lending in the last two years.

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On the daily chart, the price quickly returned to the balance line, at H4 price with the oscillator Marlin formed a divergence. Moreover, the price unfolded exactly from the upper limit of the rising microchannel. Perhaps this is the end of the correction. But to create a bearish trend, the price has yet to be made. The first task is to gain a foothold under the descending trend line of the price channel on a daily scale (1.2956). Then the price should be left from the microchannel to H4 approximately in the place where the Kruzenshtern line is located (1.2896), then to overcome the last line of defense of the "bears" - support of the Krusenstern trend line at the daily scale - 1.2845.

But while the downward trend is not formed, the risk of breaking through the level of 1.3102 remains, which will become a sign of further growth to 1.3304.

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USD / JPY: Do not open deals on the eve of the weekend

The Japanese currency paired with the dollar strengthened during the Asian session by almost a hundred points, despite the release of weak data on the volume of industrial production in Japan. The indicator shows negative dynamics for the third month in a row due to a decrease in the level of exports of cars and steel. In addition, Japan still feels the consequences of the massive flood that occurred in mid-July.

However, the market completely ignored the internal Japanese statistics, focusing on the external fundamental background. The world is balancing on the brink of new economic conflicts, and the foreign exchange market, in turn, reacts quite sharply to the news flow. Yesterday's interview of Donald Trump to one of the American news agencies made a lot of noise because of the loud statements of the odious politician. Traders still can not get used to the attacks of the American president, especially since Trump does not get tired of surprising the "versatility" of his criticism.

For example, yesterday the owner of the Oval Office took up arms against the WTO, threatening to withdraw from this organization. In his opinion, the World Trade Organization "very badly" refers to the US, so if this state of affairs does not change, he will have to take this step. By and large, Trump is not the first to criticize the WTO. In particular, in early August, he called the organization a "general disaster," especially after China joined it. It is obvious that the US president will not abandon attempts to change the rules of trade in the world, therefore such threats will continue to sound, and it is possible that Trump will not subsequently pass from words to deeds.

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A new source of uncertainty (for the time being a hypothetical nature) has supported defensive assets, not only the Japanese currency, but also the Swiss franc, as well as gold, has grown in price. Moreover, the criticism of Trump concerned not only the WTO. The US president once again reported on problems in relations with Turkey, saying that he was "disappointed" in Recep Erdogan. Against the background of these words, the lyre continued to weaken against the dollar, thereby confirming the growing economic crisis in the country.

Another factor of nervousness, which affects the southern dynamics of the pair USD / JPY, is NAFTA. US-Canada talks on the renegotiation of the North American Free Trade Agreement ended yesterday with nothing, although the markets are eagerly waiting for a "reset" of relations between these countries. Moreover, both the American president and the Canadian prime minister actually announced a deal that should be concluded today.

But the absence yesterday of any breakthrough in the negotiations reduced the likelihood of such a quick resolution of the sore point. The possible failure of negotiations again provoked the growth of defensive assets (whereas the Canadian dollar, naturally, is weakening). After all, it's not just the "local" interest of the three countries: if NAFTA re-contracts, it will signal a possible potential of geopolitical and trade conflicts. The deal between the US and Mexico was a kind of "rehearsal" for larger agreements (for example, with China).

Thus, interest in the Japanese currency has now increased due to the growth of anti-risk sentiment. Protective assets are in demand, but here it is necessary to take into account two factors. First, today is Friday, and secondly, negotiations on NAFTA can end today with a positive result. This option cannot be ruled out, moreover, in my opinion, such a scenario is basic. Trump's and Trudeau's rhetoric has changed dramatically with regard to the prospects of this agreement. Therefore, leaving open positions for the pair USD / JPY until Monday is risky, because the US-Canada dialogue can be continued at the weekend.

From a technical point of view, there is also no confidence in the continuation of a downtrend. On the daily chart, the price is in the Kumo cloud, on the middle line of the BB indicator and on the Tenkan-sen line. In other words, there are no clear signals to decline, the pair is at a crossroads, and the reverse price pullback is not at all ruled out.

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Talk about the development of the southern trend will be possible when USD / CAD consolidates below the lower boundary of the cloud Kumo, that is, under the mark of 110.60. In this case, the indicator Ichimoku Kinko Hyo will form a bearish signal "Line Parade", and the price itself will be located between the middle and bottom lines of the indicator Bollinger Bands on the daily chart. In this case, the price is likely to fall to the next support level, which is at the bottom of the 110th figure and corresponds to the bottom line of the Bollinger Bands indicator.

But at the moment the situation is ambiguous, so I would recommend postponing the decision on the pair until Monday. The fundamental background can change literally in a matter of hours, changing the direction of the price movement.

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NZD/USD Intraday technical levels and trading recommendations for August 31, 2018

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In April, bearish breakdown of 0.7220-0.7170 (lower limit of the consolidation range) allowed quick bearish decline towards 0.6700-0.6800 where narrow ranged consolidation range was established.

On July 7, evident bullish rejection pushed the NZD/USD pair above 0.6820 temporarily.

However, lack of bullish momentum made the bulls fail to maintain enough bullish momentum above 0.6700.

On August 9, bearish breakout below the depicted consolidation range (0.6700-0.6840) was executed. This allowed the recent bearish decline to occur towards 0.6600-0.6570.

The NZD/USD pair outlook turned to be bearish. Bearish targets are projected towards the price levels of 0.6520 and 0.6480.

Recently, early signs of bullish recovery were manifested around the recent low around 0.6550. This allowed the recent bullish pullback towards 0.6700 to be demonstrated.

Trade Recommendations:

Conservative traders should wait for a deeper bullish pullback towards 0.6750 for a low-risk SELL entry. S/L should be placed above 0.6850 while T/P levels should be located at 0.6620 and 0.6550.

On the other hand, bearish decline below 0.6600 will probably indicate a high-risk SELL entry. Initial T/P should be placed around 0.6560.

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GBP / USD. August 31. The trading system "Regression channels". No news, no movements

4-hour timeframe

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Technical data:

The senior channel of linear regression: direction - down.

The younger channel of linear regression: the direction is up.

The moving average (20; flattened) is up.

CCI: 98.3854

The GBP / USD currency pair spent the last day in a very narrow price range and could not continue the upward movement that had begun the day before. Strong overbought indicator CCI warns and possible correction, but for yesterday and it did not start. Traders are hiding and waiting for new reasons for opening those or other positions. Unfortunately, there are no important macroeconomic publications on the last trading day of the week either in the UK or in the States. Thus, today volatility can remain at a rather low level, and traders, without having new interesting information, may not risk in vain on the eve of the weekend. Proceeding from this, the hope today is only for unplanned and unexpected speeches of the main persons of Britain and the USA. Only, in this case, it will be possible to count on the growth or fall of the pair, otherwise, the lateral correction may continue. From the technical point of view, the last bars of Heikin Ashi have turned purple, so there is a formal signal for purchases. However, all three of the last purple bars are extremely small, and therefore the signal is very weak. At the beginning of the European trading session, it is recommended to observe the pair for the possible strengthening of the movement and, accordingly, to strengthen the signal for purchase.

Nearest support levels:

S1 = 1.2939

S2 = 1.2817

S3 - 1.2695

Nearest resistance levels:

R1 = 1.3062

R2 = 1.3184

R3 = 1.3306

Trading recommendations:

The GBP / USD pair began a lateral correction. Updating the high of the previous day can be regarded as a signal to new purchases with a target of 1.3062. Overcoming this level will make the current goal for Long 1.3184.

It is recommended to open a sell order not earlier than fixing the price below the moving average line with the target of 1.2817. However, at the moment the price is far enough from the Moving, so today this condition is unlikely to be met.

In addition to the technical picture, one should also take into account the fundamental data and the time of their release.

Explanations for illustrations:

The upper channel of linear regression is the blue lines of unidirectional motion.

The junior channel is linear-violet lines of unidirectional motion.

CCI - the blue line in the regression window of the indicator.

Moving average (20; smoothed) - the blue line on the price chart.

Levels of Murray - multi-colored horizontal stripes.

Heikin Ashi is an indicator that color bars in blue or purple.

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Review of the foreign exchange market as of August 31, 2018

Investors froze in anticipation of specifics about the statements of representatives of the European Union on their willingness to offer the UK such terms of cooperation that no one else has. But both the representatives of the EU and the United Kingdom remain silent. There is nothing else to explain yesterday's stagnation in the market, especially since the statistical data unambiguously indicated a weakening of the pound, as the data on the credit market turned out to be extremely weak. In particular, the volume of consumer lending declined from 5.4 billion pounds to 4.0 billion pounds, and the number of approved applications for mortgages decreased from 65,374 to 64,768. Yes, and the single European currency should have fallen in price, as the US statistics turned out to be quite good. The data on personal incomes and expenses coincided with the forecasts, and they increased by 0.3% and 0.4% respectively, which indicates a low probability of a decrease in consumer activity. Data on applications for unemployment benefits were even better than forecasts. Although the number of initial applications for unemployment benefits and increased by 3 thousand, with the expectation of growth of 4 thousand, the number of repeated applications for unemployment benefits decreased by 20 thousand, while expected a reduction of 3 thousand.

If today there are no comments on the surprising proposal that the European Union is ready to make to the United Kingdom, then the dollar may begin to strengthen. Especially because the reason may be European statistics. Of course, the unemployment rate should decrease from 8.3% to 8.2%, but here preliminary data on inflation can alert market participants. The fact is that after several months of growth, inflation may stabilize at around 2.1%. Cessation of inflation growth will be perceived as a risk of resumption of its decline, and given that the ECB has not given firm guarantees that after December will not extend the program of quantitative easing, investors may begin to get nervous.

Thus, the probability of the reduction of the single European currency to 1.1600 is high.

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The pound will depend on the state of affairs for the single European currency, so it will have to decrease to 1.2950.

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Markets are afraid of the spread of the Turkish debt crisis

On Thursday, the world markets were again plunged into a state of shock. The news that the head of the Central Bank of Turkey is resigning, indicates that problems in the financial system of this country could not be avoided and the risk of spreading the crisis to Europe is greater than ever.

On Thursday, all the market's attention was drawn to the outcome of the negotiations on the North American Free Trade (NAFTA) between the US and Canada. This supported the positive mood in the markets, as its participants hoped for the conclusion of this treaty and the resolution of the problem of trade confrontation throughout the North American continent. But news on this account did not come, but the news from Turkey reminded market players that the risk of a financial market collapse in Europe is very large.

On this wave, and also due to weak data on the business climate in the euro area, which fell to 1.22 points from 1.30 points in August and strong values of the basic index of personal consumption expenditure (RFE) in the US, which grew year-on-year to 2.0% , which is the target level, and in monthly terms by 0.2% in July against growth in June by 0.1%, investor sentiment deteriorated significantly, which led to a drop in stock indices and a noticeable demand for defensive assets, including, of course, the US dollar.

The yield of the benchmark of 10-year Treasuries dropped sharply on the wave of purchases of US Treasury bonds from the opening level of 2.880% to 2.859% at the close of trading on Thursday. The Swiss franc continued to strengthen against the euro and the US dollar, and the Japanese yen also began to grow. In general, we can say that the markets once again remembered the fragility of the current situation in the world economy, which is exacerbated by the destructive position of the United States.

Assessing the high probability of continuing the unwinding of the Turkish topic, one can say that it is necessary for this situation to pay attention to defensive assets such as the Swiss franc paired with the euro and the dollar, the Japanese yen against the dollar and the US dollar itself against other major currencies, and especially to the currencies of emerging economies.

Forecast of the day:

The currency pair AUD / USD is trading above the level of 0.7245, breaking out of the triangle. It continues to be pressured by a drop in investors' interest in emerging market currencies, as well as a reduction in the overall demand for the purchase of risky assets. If such sentiments remain today, then the pair after overcoming the level of 0.7245 may fall to the local mid-August low of 0.7200.

The currency pair EUR / USD is trading above 1.1650. Its growth is hampered by concerns about the spread of the Turkish debt crisis to Europe. Maintaining these sentiments will lead to a downward turn of the pair, and after falling below the level of 1.1650 it may fall to 1.1600 with the prospect of further local decline towards 1.1530.

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Analysis of EUR / USD Divergences as of August 31. Euro continues to fall in price after the bearish divergence

4h

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The currency pair EUR / USD on the 4-hour chart executed a turn in favor of the US currency and consolidation under the correction level of 76.4% - 1.1675. As a result, August 31, the process of falling quotations can be continued in the direction of the next level Fibo 61.8% - 1.1605. There are no maturing divergences of the shining for any indicator. Fixing the pair above the correction level of 76.4% can be interpreted as a turn in favor of the euro and expect a certain increase in the direction of the corrective level of 100.0% - 1.1791.

The Fibo grid is built on extremes from July 9, 2018 and August 15, 2018.

Daily

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On the 24-hour chart, the pair continues the growth process towards the correctional level of 76.4% - 1.1789. There was a bearish divergence in the CCI indicator, which now allows traders to count on a spread in favor of the US currency and a slight drop in the direction of the correction level of 100.0% - 1.1553. Passing a pair of the last divergence peak will work in favor of the EU currency and the resumption of growth towards the Fibo level of 76.4%. Fixing quotations above the correction level of 76.4% will increase the chances of the pair to continue growing.

The Fibo grid is built on extremes from November 7, 2017 and February 16, 2018.

Recommendations for traders:

Purchases of the EUR / USD pair will be possible with the target of 1.1791 with a stop loss order under the Fibo level of 76.4% if the pair completes the closing above the correction level of 1.1675.

Sales of the EUR / USD pair can now be carried out with the target of 1.1605, as the pair completed the closing at the Fibo level of 76.4%, with the Stop Loss order above the level of 1.1675.

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Trading plan for the European session on August 31 EUR / USD

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

Yesterday, euro buyers failed to gain a foothold above the level of 1.1708, which remains their priority for today. Breakdown of this area will lead to a new monthly maximum in the area of 1.1753 and 1.1792, where I recommend fixing profits. If the euro falls below support level 1.1654, you can go back to purchases after testing a minimum of 1.1607 or on a rebound from the level of 1.1538.

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

Bears will be eager to return to support level 1.1654, which will lead to a larger sale with the renewal of lows 1.1607 and 1.1538, where I recommend fixing profits. If EUR / USD rises in the morning, forming a false breakout at 1.708 would be a good signal for sales. Otherwise, to open short positions is best for a rebound from 1.1753 or 1.1792.

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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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GBP/USD analysis for August 31, 2018

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Recently, the GBP/USD pair has been trading sideways at the price of 1.3000. According to the Daily time – frame, I found a bearish harami candlestick pattern in the background, which is a sign that buying looks risky and that selling might be the right play. The price is trading below the cloud, which is a sign that trend is downward. Watch for selling opportunities. The downward target is set at the price of 1.2918 (kijun-sen + tankan-sen).

Key resistance – 1.3042

Support and downward target – 1.2918 (Kijun sen + Tenkan sen)

Trading recommendations for today: watch for potential selling opportunities.

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Forecast for EUR / USD as of August 31, 2018

EUR / USD

The euro continues to keep intrigue, keeping at the high of August. But against the background of a general fall in related currencies, especially Australian, New Zealand dollars, not to mention less stable currencies, such an undertaking is already losing its meaning. You can, of course, go to the range 1.1750-1.1822, since not everything is lost, but you will have to fall faster after that.

Macroeconomic data looked good for dollar buyers. Personal incomes of consumers in June increased by the expected 0.3%, expenses also increased by 0.4%.

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Technically, on the daily chart, the price is held by the indicator line of the balance sheet, and also on a four-hour scale. At the same time, on H4, the signal line of the oscillator Marlin moved downwards, into a zone of negative values. The euro again grows against the fundamental factors, which is reflected in the different interpretations of technical indicators. However, yesterday, there were also external conditions, the stock market fell (S & P500 -0.44%).

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If the movement of the last two days is a correction from the growth of the second half of the month, then it can continue to support the indicator trend line at H4, to 1.1607, and then with new forces will go on storming the range 1.1750-1.1822.

The fastening under the trend line will allow the price to go down to the support of the price line of the highest scale, to 1.1530. Leaving the price under the trend line of Kruzenshtern 1.1457 on daily will allow talking about a further medium-term decline.

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Intraday technical levels and trading recommendations for EUR/USD for August 31, 2018

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In April 2018, the EUR/USD pair outlook turned to become bearish when the pair pursued trading below the lower limit of the depicted consolidation range (1.2200).

The price level of 1.1500 offered temporary bullish recovery towards 1.1830. The EUR/USD bulls failed to pursue towards higher bullish targets. Instead, a descending high was established around 1.1800.

On the weekly chart, the EUR/USD pair tested the price zone of 1.1400-1.1300 where the depicted trend lines were located on the chart.

On August 10, temporary bearish closure below 1.1400 was achieved. This allowed further bearish decline towards 1.1300 where evident bullish recovery was demonstrated.

This week, the current bullish pullback is persisting above 1.1520, the bearish scenario would be hindered for the short-term. Further advance should be expected towards 1.1750.

Conservative traders should be watching the next price zone (1.1750-1.1850) for evident bearish rejection and a valid SELL entry. Initial Bearish targets would be located at 1.1550 and 1.1420.

On the other hand, for the weekly Head & Shoulders reversal pattern to be confirmed, the EUR/USD pair needs obvious bearish persistence below 1.1400.

Trade Recommendations:

The price zone of 1.1750-1.1850 should be watched for a valid SELL entry. S/L should be located above 1.1880. T/P levels to be located at 1.1550 and 1.1420.

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Wave analysis of GBP / USD pair for August 31. The pair is preparing for a new long fall

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Analysis of wave counting:

During the trading session on August 30, the GBP / USD pair lost several points and fulfilled the level of 200.0% on the higher Fibonacci grid. An unsuccessful attempt to break this mark signals the readiness of the instrument to build a new downward wave and according to the current wave counting, it should be a wave of the 5th downward trend section. If this assumption is correct, the decline will start from current rates or after the second test of 200.0%, or 50.0% on a small Fibonacci grid.

Goals for shopping:

1.3068 - 50.0% Fibonacci retracement

1.3164 - 61.8% Fibonacci retracement

Goals for sales:

1.2636 - 261.8% by Fibonacci (the oldest Fibonacci grid)

1.2312 - 423.6% Fibonacci retracement

General conclusions and trading recommendations:

The GBP / USD pair remains within the framework of the 4th wave. Hence, I still recommend preparing the pair for sales and closing purchases. For a more confident opening of sales, recommend waiting for confirmation of the pair's transition to the construction of a downward 5th wave. Another option is to open small sales volumes in a protective order above the 200.0% Fibonacci level, of which its breakout attempt failed.

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Bitcoin analysis for August 31, 2018

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Support/Resistance

Tenkan-sen (yellow line) - $6.679- Downward target – support

Kijun – sen (purple line) - $7.072 - Resistance

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

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Euro could not beat off sellers

If in the first half of the day, the euro tried to hold positions in tandem with the US dollar in the 1.1710 area, the weak data on sentiment in the eurozone economy and a good report on spending by the Americans resumed a downward correction in risky assets.

According to the report of the Federal Employment Bureau of Germany, the number of applications for unemployment benefits in August this year decreased by 8,000 compared with July. The data fully coincided with the forecast of economists. The unemployment rate in Germany was 5.2%, as in July. The Bureau noted that the situation in the labor market continues to develop in a positive direction.

The index of consumer confidence in the euro area in August this year dropped to -1.9 points against -0.5 points in July. The main pressure was created by trade wars waged by the United States, and also because of the uncertainty associated with Brexit and the political situation in Italy.

The index of sentiment in the eurozone economy in August dropped to 111.6 points against 112.1 points in July, while it was forecasted that the index will be at 112 points.

The decline in confidence was noted both in the service sector, where the index fell to 14.7 points against 15.3 points in July, and in the eurozone industry, where the index was 5.5 points against 5.8 points in July.

Data on the US labor market were ignored by the market. Despite the fact that the number of Americans who applied for benefits for the first time last week increased slightly, the US dollar continued to gradually strengthen against risky assets.

According to the report of the US Department of Labor, the number of initial applications for unemployment benefits for the week from August 19 to 25 increased by 3000 and amounted to 213,000. Economists had expected the number of applications to be 215,000.

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Good support for the American currency was provided by a report in which it was reported that the growth of spending by Americans in the past month outpaced the growth of their incomes. This suggests that households believe in the strength of the economy and are optimistic about the future without fear of falling income levels.

So, personal spending in the US in July rose by 0.4%, which fully coincided with the forecasts of economists. Personal incomes of Americans in July increased by 0.3% compared to the previous month, which also coincided with expectations.

As for the technical picture of the EUR / USD currency pair, it remained unchanged compared with the morning forecast. Buyers were unable to return to the resistance level 1.1710, and now the market is dominated by sellers who will try to poke the pair into the support area 1.1650 and 1.1600.

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The Canadian dollar will continue to strengthen

Despite the good data on the economic growth of Canada, as well as the strengthening of oil quotations, the Canadian dollar fell against the US dollar on the back of a lack of results on trade negotiations between the US and Canada.

Today, NAFTA should be signed, which will establish trade relations between the countries. It was the expectation of this event that allowed strengthening of the Canadian dollar during the week.

As I noted above, traders ignored a good report, which indicated that Canada's GDP grew in the second quarter of this year. The economic recovery was due to a significant increase in exports, as well as because of rising consumer spending.

According to the Bureau of Statistics of Canada, GDP in the second quarter rose to 1.878 trillion Canadian dollars by 2.9% year on year. Let me remind you that the 1st quarter the growth was 1.4%. Economists expected the economic recovery of 2.8%.

Given the current growth rate. Investors can continue to rely on tightening monetary policy from the Bank of Canada, which raised its key interest rate to 1.5% last month.

As for the technical picture of the USD/CAD pair, the strengthening of the Canadian dollar may continue further after the current upward correction in the pair. The return to resistance level 1.2985, which coincides with the 200-day moving average, will lead to a new wave of sales of the US dollar with the release to the lows of the month in the area of 1.2900. The breakthrough of this range opens a direct road to areas of 1.2835 and 1.2770. The upside potential of the pair will be limited by the large resistance levels of 1.2080 and 1.3180.

The Japanese yen declined against the US dollar amid weak data on industrial production in the country, but then quickly returned to its positions.

Japan's industrial production declined again in July this year, according to the Ministry of Economy, Trade, and Industry of Japan. The fall of 0.1% compared to the previous month is the third in a row, which could affect the prospects for economic growth. Let me remind you that the industrial production fell by 1.8% in June of this year. Economists had expected an increase of 0.3% in July production.

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According to the forecast, the growth of industrial production is expected to be only 5.6% in August of this year.

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EUR/USD analysis for August 31, 2018

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Recently, the EUR/USD pair has been trading sideways at the price of 1.1660. According to the M15 time – frame, I found the breakout of the bearish flag pattern (bearish pattern), which is a sign that sellers are in control and that buying looks risky. I also found a hidden bearish divergence on the stochastic oscillator, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.1642 and at the price of 1.1600.

Resistance levels:

R1: 1.1710

R2: 1.1752

R3: 1.1786

Support levels:

S1: 1.1634

S2: 1.1600

S3: 1.1558

Trading recommendations for today: watch for potential selling opportunities.

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Fundamental Analysis of CHF/JPY for August 31, 2018

CHF/JPY has been quite impulsive and non-volatile amid recent bullish momentum which led the price to break above 113.00 area with a daily close. CHF has been the dominant currency in the pair recently, whereas JPY is currently pushing forward for regaining certain momentum in the process.

JPY has been quite positive in light of recent economic reports like Retail Sales which was published with better than expected result at 1.5% which was expected to decrease to 1.3% from the previous value of 1.7%. Today Tokyo Core CPI report was published with a slight increase to 0.9% which was expected to be unchanged at 0.8% but Unemployment Rate report was published with an increase to 2.5% which was also expected to be unchanged at 2.4%. Moreover, today Japan's Prelim Industrial Production performed worse than expected at -0.1% which was expected to increase to 0.3% from the previous value of -1.8%.

On the other hand, this week Credit Suisse Economic Expectations report was published with a decrease to -14.3 from the previous figure of -4.0 and KOF Economic Barometer report was also published with a decrease to 100.3 from the previous figure of 101.7 which was expected to be at 101.2. The disappointing economic report stopped the impulsive pressure in the process, but it is expected to be short-lived.

As for the current scenario, CHF is expected to weaken for a certain period of time before pushing high again with impulsive pressure it had recently, whereas JPY amid better economic reports is expected regain certain grounds in the process leading to short-term bearish momentum in the pair for the coming days.

Now let us look at the technical view. The price is currently residing below 115.00 area after an impulsive bullish rejection off the area with a daily close. As the price is also residing quite far from the mean average of 20 EMA, it is expected to retrace towards 113.00 again to retest it as support before pushing higher with an aim of breaking above 115.00 area in the future. As the price remains above 113.00 area with a daily close, the bullish bias is expected to continue further.

SUPPORT: 110.50, 113.00.

RESISTANCE: 115.00, 116.50

BIAS: BULLISH

MOMENTUM: VOLATILE

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BITCOIN Analysis for August 31, 2018

Bitcoin has been quite volatile and corrective with the recent price action which lead the price to reside below $7,000 area with a daily close. The bullish momentum which started after breaking above $6,500 area with a daily close has come to a pause after the price hit the Kumo Cloud resistance recently. The dynamic levels of 20 EMA, Tenkan, and Kijun line is expected work as support to hold the price higher in the process. As for the current scenario, a daily close above $7,000 which will also clear the Kumo Cloud resistance as well, is expected to push the price higher towards $8,000 in the coming days. As the price remains above $6,000 area, the bullish bias is expected to continue.

SUPPORT: 6000, 6500

RESISTANCE: 7500, 8000, 10000

BIAS: BULLISH

MOMENTUM: VOLATILE

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Technical analysis of USD/CHF for August 31, 2018

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Overview:

The market opened below the weekly pivot point (0.9689). It continued to move downwards from the level of 0.9689 to the bottom around 0.9651. Today, the first resistance level is seen at 0.9728 followed by 0.9776, while daily support 1 is seen at 0.9651.

The USD/CHF pair broke support which turned to strong resistance at 0.9776. Right now, the pair is trading below this level. It is likely to trade in a lower range as long as it remains below the support (0.9698) which is expected to act as major support today.

This would suggest a bearish market because the moving average (100) is still in a negative area and does not show any signs of a trend reversal at the moment. Amid the previous events, the USD/CHF pair is still moving between the levels of 0.9689 and 0.9600, so we expect a range of 89 pips in coming hours. Therefore, the major resistance can be found at 0.9728 providing a clear signal to sell with a target seen at 0.9651. If the trend breaks the minor support at 0.9651, the pair will move downwards continuing the bearish trend development to the level of 0.9600 in order to test the daily support 2. Overall, we still prefer the bearish scenario which suggests that the pair will stay below the zone of 0.9689/0.9728 today.

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Technical analysis of GBP/USD for August 31, 2018

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Overview:

On the one-hour chart, the GBP/USD pair bullish trend from the support levels of 1.2826 and 1.2929. Currently, the price is in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. As the price is still above the moving average (100), immediate support is seen at 1.2929, which coincides with a golden ratio (38.2% of Fibonacci). Consequently, the first support is set at the level of 1.2929. So, the market is likely to show signs of a bullish trend around the spot of 1.2826/1.2929. In other words, buy orders are recommended above the major support of (1.2929) with the first target at the level of 1.3094. Furthermore, if the trend is able to breakout through the first resistance level of 1.3094. We should see the pair climbing towards the double top (1.3212) to test it. It would also be wise to consider where to place a stop loss; this should be set below the second support of 1.2826.

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Technical analysis of AUD/USD for August 31, 2018

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Overview:

The AUD/USD pair continued to move upwards from the level of 0.7263. Since yesterday, the pair has risen from the level of 0.7263 (the level of 0.7263 coincides with the ratio of 23.6% Fibonacci Expansion). In consequence, the AUD/USD pair broke resistance at 0.7263, which turned into strong support at the level of 0.7329. In the H1 time frame, the level of 0.7263 is expected to act as major support today. Currently, the price is moving in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish market. The price is still above the moving average (100) and (50). From this point, we expect the AUD/USD pair to continue moving in the bullish trend from the support level of 0.7263 towards the target level of 0.7299. If the pair succeeds in passing through the level of 0.7299, the market will indicate the bullish opportunity above the level of 0.7299 so as to reach the second target at 0.7359 (pivot point). On the other hand, if the AUD/USD pair is able to break out the level of 0.7234, the market will decline further to 0.7204 (double bottom).

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Technical analysis of USD/CAD for August 31, 2018

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Overview:

The USD/CAD pair continues to move downwards from the levels of 1.3094 and 1.3048. The pair dropped from the level of 1.3094 to the bottom around 1.2893 then set around the spot of 1.3011. Today, the first resistance level is seen at 1.3094 followed by 1.3132, while daily support 1 is seen at 1.2974. According to the previous events, the USD/CAD pair is still moving between the levels of 1.3094 and 1.2974; for that, we expect a range of 120 pips (1.3094 - 1.2974). If the USD/CAD pair fails to break through the minor resistance level of 1.3094 , the market will decline further to 1.3048. This would suggest a bearish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.2974 with a view to testing the daily major support. However, if a breakout takes place at the resistance level of 1.3132, then this scenario may become invalidated.

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Fundamental Analysis of USD/CHF for August 31, 2018

USD/CHF has been quite impulsive and non-volatile with the recent bearish gains which has lead the price below 0.9700 area with a daily close recently. As USD has been trading under pressure due to negative political developments, CHF maintained its momentum of gains leading to certain impulsive pressure in the pair.

On the other hand, economic reports from Switzerland do not reveal great figures, but they did not hamper CHF gains in the process which explains the current sentiment in the market. This week Credit Suisse Economic Expectations report was published with a decrease to -14.3 from the previous figure of -4.0 and KOF Economic Barometer report was also published with a decrease to 100.3 from the previous figure of 101.7 which was expected to be at 101.2.

On the USD side, recently US Core PCE Price Index was published with an increase as expected to 0.2% from the previous value of 0.1%, Personal Spending was published unchanged as expected at 0.4%, Personal Income was decreased as expected to 0.3% from the previous value of 0.4% and Unemployment Claims increased to 213k from the previous figure of 210k which did not quite meet the forecast for 214k. Today US Chicago PMI report is going to be published which is expected to decrease to 63.0 from the previous figure of 65.5 and Revised UoM Consumer Sentiment report is expected to increase to 95.5 from the previous figure of 95.3.

Meanhwile, USD has not been able to win back earlier losses amid mixed results that led to further weakness of the US currency against CHF. Despite some downbeat economic reports from Switzerland, certain gains indicate the current market sentiment in favor of CHF which is expected to continue pushing the price lower until the US comes up with strong economic reports to co-op up with.

Now let us look at the technical view. The price has breached below 0.9700 area with a daily close recently which indicates further bearish momentum in this pair with a target towards 0.9550 support area in the coming days. As no Bullish Divergence is observed in MACD in the process, the bearish pressure is expected to push the price lower in the coming days. As the price remains below 0.9850 with a daily close, the bearish bias is expected to continue.

SUPPORT: 0.9550

RESISTANCE: 0.9700, 0.9850

BIAS: BEARISH

MOMENTUM: IMPULSIVE

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Fundamental Analysis of NZD/JPY for August 31, 2018

NZD/JPY has been quite impulsive inside the bearish trajectory recently which engulfed a series of previous bullish price action with ease. In light of downbeat economic reports from New Zealand, NZD has weakened notably against JPY in the process.

Recently, New Zealand Building Approvals report was published with a decrease to -10.3% from the previous value of -8.2% and ANZ Business Confidence also decreased to -50.3 from the previous figure of -44.9. As ANZ Business Confidence report is one of the leading indicator of the economic health on which future economic activities are based, the significant decrease in these meaningful reports was quite a blow for NZD in the process. Though there is no impactful news on the NZD side to be published today, NZD weakness is expected to continue further.

On the other hand, JPY has been quite positive amid the recent economic reports like Retail Sales which was published with better than expected result at 1.5% which was expected to decrease to 1.3% from the previous value of 1.7%. Today Tokyo Core CPI report was published with a slight increase to 0.9% which was expected to be unchanged at 0.8% but Unemployment Rate report was published with an increase to 2.5% which was also expected to be unchanged at 2.4%. Moreover, today Japan's Prelim Industrial Production performed worse than expected at -0.1% which was expected to increase to 0.3% from the previous value of -1.8%.

Meanwhile, despite the mixed economic reports from Japan today, the currency has maintained certain momentum of gains over NZD which indicates further bearish pressure to be observed in this pair in the coming days. Until New Zealand comes up with a strong figure or value in pending economic reports, JPY is expected to dominate in the pair for a while.

Now let us look at the technical view. The price has recently breached below 74.00 area and dynamic level of 20 EMA as well while continuing with the prevailing bearish trend in process. As there are no signs of any Bullish Divergence in MACD, the bearish momentum is expected to continue to push the price lower with target towards 72.50 support area in the coming days. As the price remains below 75.50 area, the bearish bias is expected to continue further.

SUPPORT: 72.50

RESISTANCE: 74.00, 75.50

BIAS: BEARISH

MOMENTUM: IMPULSIVE

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Technical analysis of EUR/USD for August 31, 2018

EUR/USD broke out of the bullish channel and pulled back towards short-term support of 1.1650. Price moved below support but did not stay there and reversed to the upside. Price is now below 1.17 and bulls need to break above 1.1715 in order to see new highs towards 1.1750-1.1770.

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Green lines - bullish channel

EUR/USD bulls are stepping up here at 1.1650 supporting the pair. Support is at 1.1660. A 4-hour close below it will open the way for a move towards 1.16 and lower. If bulls manage to move back above 1.17 we could see more strength towards 1.1750 or higher. However the RSI is showing bearish divergence signs. Bulls need to be very cautious. My most probable scenario is to see prices break below 1.1650 and move towards 1.16-1.1550.

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Technical analysis of Gold for August 31, 2018

Gold price broke below short-term support of $1,200 yesterday and saw as low as $1,196. Price is now making lower lows and lower highs and as long as we are below $1,208 we should expect Gold to reach lower levels towards $1,190-$1,180.

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Red line - trend line support

Green rectangle - support area

Red rectangle - resistance area

Gold price should move towards $1,190-$1,180 today and next week. This scenario will wold as long as price is below $1,208. A break above $1,208 will make me believe that the $1,220-$1,230 target is still alive. Short-term support is at yesterday's lows at $1,196. A break below this level will push Gold price towards $1,190-$1,180.

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Global macro overview for 31/08/2018

Yesterday, the leaders of the USA and Canada expressed optimism in relation to the completion of NAFTA negotiations until Friday. However, USD / CAD after these reports hardly moved. First of all, we only received confirmation of Monday's words of the president of Mexico. Secondly, it is not known in what location Canada is now. Does the bilateral agreement between Mexico and the US do not put pressure on a rapid tripartite agreement, as a result of which Canada will be forced to make bigger concessions than it would originally want? On the other hand, it is unlikely that the US would now play a curled ball and blackmail Canada with harsh conditions. It looks like, it is more likely that Canadian concessions will not outweigh the general decline in uncertainty about the future of trade relations. Eventually, CAD should react positively, but the recent GDP data for the second quarter have made this events unlikely (0.0% versus 0.1% expected, 0.5% prior). This weak reading on the yearly basis (2.4% versus 2.3% expected;2.7% prior) did not shake the market, so no serious speculation regarding the interest rate hike at the September 5 meeting was awakened yet. In recent days, the market has exceeded expectations for October (82% of chances vs. 21% for September), but the combination of the conclusion of NAFTA negotiations and strong data may encourage the Bank of Canada to make an earlier decision.

Let's now take a look at the USD/CAD technical picture after the H4 time frame the data were published. The market retraced 61% of the previous swing down and was capped at the level of 1.3020 so far. Nevertheless, the momentum remains strong and solid, so another spike up is still on the table. The target for bulls is seen at the level of 1.3068 and then at 1.3100. On the other hand, the nearest technical support is seen at the level of 1.3000.

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Trading plan for 31/08/2018

During the night, China's PMI data was released. The readings turned out to be better than expected, which may surprise us after reports of the slowing economy and trade problems. Data from Japan did not surprise us at all, they were mostly in line with forecasts. Trump threatened that the US would withdraw from the World Trade Organization if it was still not treated fairly.

On Friday, the 31st of August, the event calendar is quite busy with important data releases. The most important will be German Retail Sales data, Italian GDP data, French CPI data and Eurozone CPI data. During the US session the market participants attention will focus on Canadian Raw Materials Price Index data and some data from the US: Chicago Purchasing Managers Index data and UoM Consumer Sentiment data. No speech is scheduled for today.

USD/CNY analysis for 31/08/2018:

Overnight China published data on PMI. Both in terms of industry and trade, there was a positive surprise for the country. PMI Manufacturing is at the level of 51.3 pts (versus expected 51.0) as compared to 51.2 pts a month ago. PMI for services was 54.2 points against the forecasted 53.8 points (previously 54 points).

After a two-month delay, growth in the Chinese industrial manufacturing sector is not a huge shock. It is a certain cushioning for the sluggish economy in the current climate, when the United States is rapidly increasing tariffs on Chinese goods. Breath of breath, however, may be short. Export orders have contracted for the third month in a row, which suggests that US sanctions are starting to operate more and more.

Let's now take a look at the USD/CNY technical picture at the daily time frame chart. The market has made a local swing high at the level of 6.93, but there is a clear and visible bearish divergence between the price and the momentum oscillator, so the corrective pull-back might be in progress. The next technical support is seen at the level of 6.71, but first, there is 23.6% Fibo retracement level at 7.76. Larger time frame trend remains bullish.

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Global macro overview for 31/08/2018

President Donald Trump said he would withdraw from the World Trade Organization if he would not treat the United States better by hitting the foundations of the international trading system. "If there is no change, I will withdraw from the WTO," Trump said on Thursday in an interview with Bloomberg News. He stated that the contract establishing the body "was the worst trade agreement ever concluded".

The withdrawal of the US from the WTO could have much more significance for the global economy than even the intensifying trade war with China, undermining the post-war system that the United States has helped to build.

According to Trump, the US problem is that for many years they have been "very badly" treated by the WTO and that the authority in Geneva must "change its behavior". US Trade Representative Robert Lighthizer said China's admission to the WTO in 2001 was a mistake. It has long been calling on the United States to adopt a more aggressive approach to the organization, arguing that it can not cope with a non-market economy such as China.

Lighthizer accused the WTO dispute settlement system of interfering in US sovereignty, in particular in anti-dumping cases. The United States is blocking the appointment of judges to the WTO's review body, which creates the possibility that it will cease to function in the coming years.

Let's now take a look at the SP500 technical picture at the H4 time frame. The market has made a new all-time high at the level of 291.70 and currently is consolidating the gains. The bears might soon try to fill the gape as the market conditions are now overbought, so a corrective pull-back would be welcomed. The nearest technical supports are located at 289.37, 288.62 and 287.63. The higher time frame trend is still up.

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

Bitcoin analysis for 31/08/2018

According to the financial media portals, the European Union's ministers of economy and finance will hold an informal meeting on the challenges posed by digital assets and the possibility of tightening the rules. It is possible, that during a meeting in Vienna on September 7, participants will discuss the general lack of transparency of cryptocurrencies and the possibility of using them to evade taxes, finance terrorism and money laundering.

The European Securities and Markets Authority (ESMA) has previously warned clients against preliminary monetary offers (ICO), citing the lack of sufficient understanding of this type of financing by investors and problems with unregulated financial activities. ESMA also noted that unregulated exchanges are unprotected due to the fact that they exist outside global financial regulations - which means that customer losses caused by, for example, cyber attacks, will not be covered by EU law.

Contrary to earlier warnings from the European Union's financial regulators, the document obtained by Bloomberg says that ICOs are an effective and efficient way to raise capital. It also states that ICOs could help in the integration of capital markets in the EU.

The 5th EU Anti-Money Laundering Directive entered into force on 9 July. The measures under this Directive set a new legal framework for European financial supervisors in the regulation of digital currencies. The new rules introduce stricter transparency requirements targeting "anonymous pre-paid payments" and "virtual currency exchange platforms" to address money laundering and terrorist financing.

In March, ESMA strengthened the requirements for cryptocurrency CFDs. According to the rules, investors must have enough funds to cover at least half of the contract value at the opening, which has changed the leverage limit for cryptocurrencies CFD from 5: 1 to 2: 1 at the time of opening.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market has bounced from the level of $6,755, which is just below the technical support at the level of $6,782. Currently, the market is trading below the weekly pivot resistance at the level of $6,989 in overbought conditions. The next target for bulls is the local swing high at $7,087. Please notice, that the market is still trading inside of the channel, so there is still a chance for another rally higher.

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

Elliott wave analysis of EUR/NZD for August 31, 2018

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After a break above short-term important resistance at 1.7484 we have seen some consolidation, which is pretty common after an important break-out.

The break above 1.7484 has finally opened up the upside for much higher levels to come in the weeks and months ahead. The next upside target to look for is seen at 1.7820 as this cross works it's way higher towards 1.8369 and ultimately above here too.

Short-term, the former resistance at 1.7484 now will act as support. Only an unexpected break below minor support at 1.7416 will question this rally.

R3: 1.7714

R2: 1.7668

R1: 1.7597

Pivot: 1.7484

S1: 1.7416

S2: 1.7384

S3: 1.7339

Trading recommendation:

We are long EUR from 1.7330 with our stop placed at 1.7410. If you are not long EUR yet, then buy near 1.7484 and use the same stop at 1.7410.

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

Elliott wave analysis of EUR/JPY for August 31, 2018

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We have seen the expected decline from 130.87 to below the ending point of red wave (A), which is what is expected for an expanded flat correction. This means, that all requirements already has been fulfilled and by definition red wave (2) now could be complete. That said, we do expect red wave (C) to move a little lower into the 128.78 - 129.00 area to complete red wave (C) and maybe completing red wave (2) too.

Now is, when all the complex corrective combination may start to develop. However, from the 128.78 - 129.00 area a rally towards at least 129.90 should be seen and if red wave (2) has completed, a much lager rally to above 130.87 will be seen.

R3: 130.40

R2: 129.93

R1: 129.65

Pivot: 129.30

S1: 129.00

S2: 128.78

S3: 128.65

Trading recommendation:

We sold EUR at 129.68 and we will lower our stop to 130.50. We will take profit and buy EUR at 129.10.

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

Global macro overview for 30/08/2018

In the second quarter of 2018, the annualized growth rate of US gross domestic product was 4.2% - results from the revised BEA data. A preliminary reading published a month ago, talked about an increase of 4.1%. In turn, the median estimates of economists were 4.0%.

For the last time, the American economy grew at a rate of over 4.0% in the third quarter of 2014, almost four years ago. At the same time, Americans publish GDP growth on an annualized basis - i.e. multiplying by four increase from the previous quarter. In Europe, the change in GDP in relation to the previous quarter and relative to the corresponding quarter of the previous year is generally reported. Thus, counting "in Europe", the real dynamics of American GDP in the second quarter amounted to 2.9% YoY against 2.6% YoY a quarter earlier.

The main factor driving the growth of US GDP was consumption, which added 2.55 percent points to the annualized dynamics of this indicator. Investments brought 1.07 percentage points, net export 1.17 percentage points, and public expenditure 0.41 percent points. The change in inventories removed from the annualized GDP dynamics as much as 0.97 percent points.

From an investment point of view, these are already very historical data - we are entering the last month of the third quarter. Forecasts for the current quarter are, however, optimistic. The forecast model of the Fed from Atlanta calculates the annualized dynamics of US GDP in the third quarter at 4.6%. If so, then the US Dollar should be appreciated across the board soon.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market has found a support at the level of 94.42 and currently is trying to bounce higher towards the technical resistance at the level of 94.93 - 94.98 zone. Please notice the oversold market conditions that support the short-term bullish bias.

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