Fundamental Analysis of GBP/USD for September 4, 2018

GBP/USD has been quite impulsive with the bearish pressure recently which has pushed the price lower below 1.2850 area. Ahead of the high impact US economic data, GBP has been struggling with the recent economic reports and Brexit tensions which are expected to be wrapped up by the first quarter of 2019.

Ahead of the UK Services PMI report, which is expected to increase to 53.9 from the previous figure of 53.5, today the Construction PMI report was published with a decrease to 52.9 from the previous figure of 55.8 which was expected to decline to 54.9. Moreover, today the Inflation Report Hearings will be held which is expected to inject superior volatility in the market leading to certain spikes in the price action.

On the other hand, today the ISM Manufacturing PMI Report is going to be published which is expected to decrease to 57.6 from the previous figure of 58.1. The Construction Spending is expected to increase to 0.5% from the previous negative value of -1.1%, ISM Manufacturing Prices is expected to increase to 74.0 from the previous figure of 73.2, IBP/TIPP Economic Optimism is expected to decrease to 57.2 from the previous figure of 58.0 and Total Vehicle Sales is expected to have slight decrease to 16.7M from the previous figure of 16.8M.

As of the current scenario, the pair is expected to be quite volatility throughout the week as high impact events and reports on the both currencies of the pair are going to be published this week which may lead to certain indecisions and spikes in the market. Though USD is expected to lead its way against GBP but any worse result on the USD may lead to certain weakness in the process.

Now let us look at the technical view. The price is currently residing below 1.2850 with a daily close below the dynamic level of 20 EMA. The pair having a gap on the Monday open this week which was not recovered, the price is expected to push lower if a daily close below 1.2850 is found today. As the price remains below 1.3050 area, the bearish bias is expected to continue with target towards 1.2550 area in the future.

SUPPORT: 1.2550

RESISTANCE: 1.2850, 1.3050

BIAS: BEARISH

MOMENTUM: IMPULSIVE AND NON-VOLATILE

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Fundamental analysis of USD/JPY for September 4, 2018

USD/JPY has been quite corrective and volatile recently after breaking above 110.50 area with a daily close. Currently the price is heading higher with an impulsive momentum which is expected to lead the price higher towards 112.00 and later towards 113.00 area in the future.

Ahead of the high impact economic reports on the USD side this week, certain volatility is expected in this pair whereas USD is expected to lead the way against JPY. After celebration of Labor Day, today USD ISM Manufacturing PMI Report is going to be published which is expected to decrease to 57.6 from the previous figure of 58.1. At the same time, the Construction Spending is expected to increase to 0.5% from the previous negative value of -1.1%. The ISM Manufacturing Prices index is expected to increase to 74.0 from the previous figure of 73.2, IBP/TIPP Economic Optimism is expected to decrease to 57.2 from the previous figure of 58.0 and Total Vehicle Sales is expected to have slight decrease to 16.7M from the previous figure of 16.8M.

On the JPY side, today the Monetary Base report was published better than the expected value of 6.9% while slightly decreasing from the previous value of 7.0% which was expected to decrease to 6.3%. Moreover, on Friday Japan's Household Spending report is going to be published which is expected to increase to -0.8% from the previous value of -1.2% and the Average Cash Earnings is expected to decrease to 2.4% from the previous value of 3.3%.

As of the current scenario, ahead of the high impact economic reports like NFP this week, USD is forecasted to have mixed economic reports whereas JPY is expected to have dovish outcomes as well. Though JPY has been quite successful holding USD gains in the process, but any positive outcome of the upcoming high impact economic reports is expected to inject further gains for the USD side in the process leading to more upward momentum.

Now let us look at the technical view. The price is currently residing above the dynamic level of 20 EMA while also residing above 110.50 area with a daily close. After the recent false breakouts below 110.50 area, the current bullish momentum is expected to push towards 112.00 area and later towards 113.00 area in the coming days. As the price remains above 110.50 area with a daily close, the bullish bias is expected to continue.

SUPPORT: 110.50, 109.20, 108.50

RESISTANCE: 112.00, 113.00

BIAS: BULLISH

MOMENTUM: VOLATILE

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Analysis of EUR / USD Divergences for September 4. Euro keeps high chances of falling

H4

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The EUR / USD pair fixed over the correction level of 61.8% at 1.1605 on the 4-hour chart. As a result on September 4, the process of growth of quotations can be continued in the direction of the next correction level of 76.4% at 1.1675. Brewing divergences are not observed in any indicator today. The consolidation of the pair below the Fibo level of 61.8% will work in favor of the US currency and the resumption of the decline in the direction of the correction level of 50.0% at 1.1546.

The Fibo grid was established on the boundaries from July 9, 2018 and August 15, 2018.

Daily

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The pair continues the fall process in the direction of the correction level of 100.0% at 1.1553 on the 24-hour chart. The decline of the pair from the Fibo level of 100.0% will allow us to count on a turn in favor of the EU currency and some growth towards the correctional level of 76.4% at 1.1789. There are no maturing divergences today. Fixing the quotes below the Fibo level of 100.0% will increase the likelihood of a further decline in the direction of the next correction level of 127.2% at 1.1285.

The Fibo grid was established on the boundaries from November 7, 2017 and February 16, 2018.

Recommendations for traders:

Purchases of the EUR / USD pair will be possible with the target of 1.1675 with a Stop Loss order under the Fibo level of 61.8%, if the pair completes the closing above the correction level of 1.1605.

Sales of the EUR / USD pair can now be carried out with the target of 1.1546 with the Stop Loss order above the level of 1.1605, if the pair completes the closing at the Fibo level of 61.8%.

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Trading plan for the US session on September 4 EUR / USD

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

The buyers continue to give way to the market. For long positions in the afternoon, I recommend paying attention after updating the support level of 1.1535. The main goal will be to return and consolidate above the resistance level of 1.1587, which will lead to the demolition of a number of stop orders and a stronger strengthening of the European currency in the area of 1.1633, where I recommend fixing the profits. In the absence of growth from the level of 1.1535, long positions can be returned to a rebound from 1.1493.

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

While the trade is below 1.1587, the pressure on the euro will continue, and the main goal of the sellers will remain support in the area of 1.1535, where I recommend fixing the profits. In the case of EUR / USD growth in the second half of the day, you can return to new sales after an unsuccessful attempt to consolidate to 1.1587 or to rebound from 1.1633.

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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

Bollinger Bands 20

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The daily review of the GBP / USD as of September 4, 2018. Ichimoku Indicator

GBP / USD

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The pair failed to reliably overcome the consolidation of the support of the monthly Fibo Kijun (1.2904) and the historical level (1.2820). The braking in this area provoked an upward correction to the weekly Tenkan (1.3012) and now, the pound continues to remain in the zone of attraction of the supported supports. Recovering the downtrend (the minimum extremum of 1.2661) will allow considering the possibility of executing a downward target on the breakdown of a weekly cloud (1.2302 - 1.2072). The long-term presence in the zone of correction and attraction of levels can lead to the continuation of corrective lifting. The following upward guidance, in this case, can be noted in the areas of 1.3179 - 1.3225 (day cloud + weekly Senkou Span B + monthly Kijun) and 1.3457 - 1.3523.

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The support for the target for the breakdown of the H1 cloud has been left behind. The main interest now is the lower boundary of the cloud H4 (1.2812), reinforced by the historical level (1.2820). The formation of a breakdown at this site will form a downside target for the breakdown of the H4 cloud. Among the resistance today, we can note the most significant zones of 1.2860-80 and 1.2900-20. The strengthening above will change the current balance of power and will require a new assessment of the situation.

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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The trading plan as of 04/09/2018

Although the United States celebrated Labor Day yesterday, which implies a break from the work of the righteous, the pound labored to glory. Its rapid decline was due to an imprudent opening of the mouth of Theresa May. The Prime Minister of Great Britain proudly declared that the United Kingdom will adhere to a tough stance and will not make any concessions to the European Union. But while no one has heard the details of this mythical proposal, which Europe is ready to go to Foggy Albion. So it's completely unclear how to interpret the words of Theresa May. Whether in London they already know some details, and they are not so wonderful, or the British are ready with the obstinacy of the ram to move along the planned path, not paying attention to the fact that the necessary turn has long been missed. In any case, neither one nor the other option promise anything good.

Do not forget about the macroeconomic data, which, of course, did not have such a value against the background of the statements of Theresa May, but over time they will be remembered. So, the British index of business activity in the manufacturing sector declined from 53.8 to 52.8. In Europe, it also declined, from 55.1 to 54.6.

Today, there are data on producer prices in Europe, whose growth rates should accelerate from 3.6% to 3.9%. Earlier, it was assumed that they would accelerate to 4.3%, but after preliminary data on inflation showed a slowdown in consumer price growth, the forecasts were immediately revised. In any case, the acceleration of producer price growth gives hope that inflation will not slow down much and the ECB will not have any reasons for another extension of the quantitative easing program. In the US, also expected to decline in the index of business activity in the manufacturing sector, from 55.3 to 54.5. Along with this, we expect an increase in construction costs by 0.5%, which, in the face of the continuing decline in home sales, looks like the light at the end of the tunnel, and we will soon see a rise in sales. The total sales of vehicles may remain unchanged.

The euro/dollar currency pair, after a slight rollback, regained a downward movement, breaking at least August 31, with an attempt to lock below 1.1583. It is possible to assume a further decline, where the range level is 1.1510 / 1.1550 under the quotation.

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The pound/dollar currency pair, without reducing the speed, continued the downward movement, leaving behind the impulse candles. It is possible to assume a further decline towards 1.2800, but it is worthwhile to understand that there is already a premise of overselling.

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Bitcoin analysis for September 04, 2018

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Trading recommendations:

According to the 30M time - frame, I found that price made a double bottom formation in the background, which is a sign that selling looks risky. Price is also trading above the daily pivot ($7.238), which is another sign that buyers are in control. Watch for buying opportunities. The upward targets are set at the price of $7.324 (Resistance 1) and at the price of $7.381 (Resistance 2).

Support/Resistance

$7.296 – Intraday resistance

$7.238– Intraday support

$7.324 – Objective target 1

$7.381 – 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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NZD/USD Intraday technical levels and trading recommendations for September 4, 2018

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In April, bearish breakdown of 0.7220-0.7170 (lower limit of the consolidation range) allowed a quick 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:

Risky traders can wait for a decline below 0.6550 (key-level).

This offers a high-risk SELL position. Initial T/P should be placed around 0.6420 (Fibonacci Expansion 100%). S/L would be located above 0.6600.

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Intraday technical levels and trading recommendations for EUR/USD for September 4, 2018

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The price zone of 1.1420 stands as a prominent demand zone to be watched for bullish rejection and possible bullish pullbacks.

The EUR/USD pair is currently trapped between the depicted technical levels (1.1750 - 1.1500). Breakout movement should be anticipated.

Bearish breakdown of 1.1520 will probably allow a further decline towards 1.1420. The next bearish target would be located around 1.1275.

For the major reversal pattern to be confirmed, bearish breakdown below 1.1275 is necessary to gain enough bearish momentum.

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GBP / USD. 3rd of September. Results of the day. Negotiations between Britain and the EU did not advance one iota

4-hour timeframe

wIQTWZyenQZb9qovpHJ5dov4FrAUsU0R1EY_ds2nAmplitude of the last 5 days (high-low): 72p - 70p - 188p - 58p - 84p.

The average amplitude for the last 5 days is 94p (94p).

Well, Theresa May said that the UK will take a tough stance in the next round of negotiations, Michel Barnier said that it will not allow May to choose what she needs from EU rules, without assuming any responsibilities at all. He rejected all of May's key proposals for Brexit, and the British Prime Minister herself later noted that she would not make any concessions in the negotiations with the European Union. Thus, the likelihood that there will be no deal between the EU and Britain at all is growing. Also, there is a growing likelihood that the negotiations will drag on at least until November. And this does not mean that the parties will agree. In general, many people have a question, but was this Brexit in general? Whatever it was, and the political conflict in the UK is in full swing. Most MPs also do not support May's plan and are going to vote against him. Thus, Theresa May clearly does not experience excessive support within the country. Accordingly, its political ratings are falling. Against the background of all this, the pound sterling will be very difficult to rise in price. At the same time, Trump intends to withdraw from the WTO, which means even greater heat in trade relations with all US trading partners. Thus, Washington does not go backward, and the demand for the US dollar may begin to grow again. What do we have in total? There are no grounds for strengthening the pound, there are plenty of reasons for the growth of the US dollar. If Trump does not begin to deliberately lower the dollar rate in the near future, then the probability of a pair down is at least 90%.

Trading recommendations:

The currency pair GBP / USD continues to move down. Thus, today and tomorrow morning, it is recommended to be in sales with the targets of 1.2843 and 1.2784. Turning the MACD indicator up will indicate the beginning of the upward correction, the shorts can be closed.

The buy-positions are recommended to be reconsidered only after traders overcome the Kijun-sen line. In this case, the uptrend may resume with the target of 1.3057, but there are very few fundamental reasons for such an option.

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

Explanations to the illustration:

Ichimoku Indicator:

Tenkan-sen is a red line.

Kijun-sen is a blue line.

Senkou Span A is a light brown dotted line.

Senkou Span B - a light purple dotted line.

Chinkou Span is a green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and histogram with white bars in the indicator window.

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Trading plan for the US session on September 3 EUR / USD

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

The situation in the first half of the day has not changed. We consider buying best after forming a false breakout at 1.1591, which could lead to the growth and renewal of the resistance levels of 1.1647 and 1.1686, where I recommend fixing the profits. In the event of a further decline in EUR / USD, long positions in the afternoon can be opened immediately to a rebound from 1.1538.

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

The short positions in the European currency are best considered after the formation of a false breakdown at 1.1647, or immediately at a rebound from 1.1686. The main task of sellers for the second half of the day will be consolidation below the support of 1.1591, which will lead to a new wave of sales with a test of a minimum of 1.1538, where I recommend fixing the profits.

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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

Bollinger Bands 20

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

Fractal analysis of Gold on September 3

The forecast for September 3:

Analytical review on the scale of H1:

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According to Gold, the key levels on the scale of H1 are: 1234.21, 1227.61, 1217.47, 1210.20, 1202.25, 1198.34, 1192.44 and 1182.79. Here, to continue the movement to the top, it is necessary to create local initial conditions. The short-term upward movement is possible in the corridor of 1210.20 -1217.47. Hence, the probability of movement into correction is high. The breakthrough of level 1217.47 should be accompanied by a pronounced upward movement to the level of 1227.61. The potential value for the top is the level of 1234.21, from which we expect a pullback downwards.

The short-term downward movement is possible in the corridor of 1202.25 - 1198.34 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 1192.44 and this level is the key support for the top.

The main trend is the local ascending structure of August 24.

Trading recommendations:

Buy: 1210.00 Take profit: 1217.00

Buy: 1218.00 Take profit: 1227.00

Sell: 1198.00 Take profit: 1193.00

Sell: 1192.00 Take profit: 1183.00

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Fractal analysis of the main currency pairs on September 3

Dear colleagues.

For the currency pair Euro / Dollar, we follow the downward structure of August 28. For the Pound / Dollar currency pair, the price forms a downward potential from August 30. For the Dollar / Franc currency pair, we expect a correction movement. For the currency pair Dollar / Yen, we are monitoring the formation of the potential for the bottom of August 29. For the currency pair of Euro / Yen, the price forms the potential for the bottom of August 29. For the Pound / Yen currency pair, we follow the development of the downward structure from August 30.

The forecast for September 3:

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: 1.1680, 1.1651, 1.1630, 1.1586, 1.1568, 1.1538 and 1.1517. Here, we follow the development of the downward cycle of August 28. The short-term downward movement is possible in the corridor of 1.1586 - 1.1568 and the breakdown of the last value should be accompanied by a pronounced downward movement. Here, the target is 1.1538. The potential value for the downward movement is the level of 1.1517, from which we expect a pullback upward.

The short-term upward movement is possible in the corridor of 1.1630-1.1651 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 1.1680 and this level is the key support for the downward cycle.

The main trend is the downward cycle from August 28.

Trading recommendations:

Buy 1.1630 Take profit: 1.1650

Buy 1.1655 Take profit: 1.1680

Sell: 1.1566 Take profit: 1.1540

Sell: 1.1536 Take profit: 1.1517analytics5b8cfc890a65e.png

For the Pound / Dollar currency pair, the key levels on the scale of H1 are: 1.2991, 1.2964, 1.2941, 1.2904, 1.2872, 1.2846 and 1.2809. Here, we follow the formation of a downward structure from August 30. The continued downward movement is expected after the breakdown of 1.2904. In this case, the target is 1.2872 and in the corridor of 1.2872 - 1.2846 is the short-term downward movement, as well as consolidation. The potential value for the downward trend is the level of 1.2809, the movement towards which we expect after the breakdown of 1.2844.

The short-term upward movement is possible in the corridor of 1.2941 - 1.2964 and the breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.2991 and this level is the key support for the bottom.

The main trend is the formation of a downward structure from August 30.

Trading recommendations:

Buy: 1.2941 Take profit: 1.2962

Buy: 1.2965 Take profit: 1.2990

Sell: 1.2872 Take profit: 1.2848

Sell: 1.2844 Take profit: 1.2810

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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 expect a correction in the downward structure on 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 in turn will allow to count on the formation of the potential for the top. Here, the target is 0.9774.

The main trend is a local structure for the bottom of August 23, we expect a correction.

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 the 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 is 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: 1.3152, 1.3133, 1.3097, 1.3071, 1.3034, 1.3019 and 1.2997. Here, we follow the downward cycle from August 30th. The continued upward movement is expected after the breakdown of 1.3071. In this case, the target is 1.3097 and near this level is the consolidation. The break of level 1.3097 should be accompanied by a pronounced upward movement. In this case, the target is 1.3133. The potential value for the top is the level of 1.3152, upon reaching of which we expect consolidated movement in the corridor 1.3133 - 1.3152, as well as a pullback.

The short-term downward movement is possible in the corridor of 1.3034 - 1.3019 and the breakdown of the last value will lead to an in-depth correction. In this case, the target is 1.2997.

The main trend is the ascending structure of August 30.

Trading recommendations:

Buy: 1.3072 Take profit: 1.3095

Buy: 1.3100 Take profit: 1.3133

Sell: 1.3033 Take profit: 1.3020

Sell: 1.3017 Take profit: 1.3000

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For the Australian Dollar / Dollar currency pair, the key levels on the scale of H1 are: 0.7273, 0.7241, 0.7221, 0.7185, 0.7152, 0.7131 and 0.7094. Here, we follow the downward structure of August 28. The continued downward movement is expected after the breakdown of 0.7185. In this case, the target is 0.7152 and in the corridor of 0.7152 - 0.7131 is the consolidation of the price. The potential value for the bottom is the level of 0.7094, from which we expect a rollback to the top.

The short-term upward movement is possible in the corridor of 0.7221 - 0.7241 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 0.7273 and this level is the key support for the bottom.

The main trend is the downward structure of August 28.

Trading recommendations:

Buy: 0.7221 Take profit: 0.7240

Buy: 0.7243 Take profit: 0.7270

Sell: 0.7182 Take profit: 0.7152

Sell: 0.7130 Take profit: 0.7095analytics5b8cfcdf8e6e5.png

For the EUR / JPY currency pair, the key levels on the scale of H1 are: 130.06, 129.55, 129.19, 128.43, 127.98, 127.47 and 127.18. Here, we follow the formation of a downward structure from August 29. The short-term downward movement is possible in the corridor of 128.43 - 127.98 and the breakdown of the last value will lead to a movement to the level of 127.47. In the corridor of 127.47 - 127.18 is the consolidation.

The short-term upward movement is possible in the corridor of 129.19 - 129.55 and the breakdown of the latter value will lead to an in-depth correction. Here, the target is 130.06 and this level is the key resistance for the subsequent development of the upward trend.

The main trend is the formation of the potential for the bottom of August 29.

Trading recommendations:

Buy: 129.19 Take profit: 129.54

Buy: 129.57 Take profit: 130.04

Sell: 128.40 Take profit: 128.00

Sell: 127.95 Take profit: 127.50

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For the Pound / Yen currency pair, the key levels on the scale of H1 are: 144.74, 144.15, 143.70, 143.15, 142.79, 142.31, 141.99 and 141.38. Here, we follow the development of the downward structure of August 30. The continued downward movement is expected after the passage at the price of the noise range of 143.15 - 142.79. In this case, the target is 142.31 and in the corridor of 142.31 - 141.99 is the consolidation. The potential value for the downward trend is the level of 141.38, from which we expect a rollback to the top.

The short-term upward movement is possible in the corridor of 143.70 - 144.15 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 144.74 and this level is the key support for the downward structure from August 30.

The main trend is the downward structure of August 30.

Trading recommendations:

Buy: 143.70 Take profit: 144.10

Buy: 144.20 Take profit: 144.70

Sell: 142.75 Take profit: 142.31

Sell: 141.99 Take profit: 141.40

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EUR / USD pair for September 3. Results of the day. Quiet and calm Monday

4-hour timeframe

JozYV8CRL3qe5fYjNStutajA9CrTEvGIdXmWKU34

Amplitude of the last 5 days (high-low): 99p - 71p - 58p - 76p - 105p.

The average amplitude for the last 5 days is 82n (82p).

On the first trading day of the week, the EUR / USD currency pair was trading very restrained and without a definite direction of movement. No important macroeconomic reports were published on this day, perhaps, except the index of business activity in the EU production sector. The value of which fully corresponded to the forecast but did not cause any reaction. There have also been no new reports from Donald Trump or his trading partners against whom the odious US leader has already managed to introduce trade duties. However, something interesting is still there. And as often happens in the last year, it has something to do with Trump. This time, the US president said that the WTO (World Trade Organization) is also unfair and ill-treated with the United States, and if the organization does not improve substantially its work, then the US will leave it. What does it really mean? Since the EU, Russia and China filed lawsuits in the WTO on Trump's antics and his introduction of duties, the US withdrawal from the WTO will free the country from implementing the regulations of this organization and accordingly, its decisions in response to suits of dissatisfied countries. Thus, such a step for the States will be very logical in the light of the unleashing of a full-scale trade war. In general, the bluff of Trump's actions cannot be called exactly.

The US is clearly intended to renegotiate trade agreements with all its partners, making it clear that either they agree to Washington's terms or they will not be with us. However, the main issue still lies in China, which does not make concessions and has its own means of pressure on the US economy.

Trading recommendations:

For the EUR/USD pair continues to move downward rather restrained. At the moment, shorts are still relevant for small lots, since the "dead cross" is weak with the targets of 1,1547 and 1.1527.

Buy-positions can be opened only before the Bulls overcome the critical Kijun-sen line. In this case, the initiative on the instrument will once again pass into the hands of bulls, and the target for the upward movement will be the level of 1.1696.

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

Explanations to the illustration:

Ichimoku Indicator:

Tenkan-sen is a red line.

Kijun-sen is a blue line.

Senkou Span A is a light brown dotted line.

Senkou Span B - a light purple dotted line.

Chikou Span is a green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and histogram with white bars in the indicator window.The material has been provided by InstaForex Company - www.instaforex.com

Wave analysis of GBP / USD for September 3. Pound sterling is ready for a long fall

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Analysis of wave counting:

In the course of trading on August 31, the GBP / USD currency pair declined by 70 percentage points, while the trades in the new week opened with a break of another 20 percentage points. Thus, there are reasons to suppose the completion of the construction of wave 4, a. If this is the case, then the pair is ready to build a wave of 5, a, with targets located under the 26 figure. The very wave 5, a, can take a very extended form, since waves 3 and 4 are also quite long.

The objectives for the option with purchases:

1.3068 - 50.0% of Fibonacci retracement

1.3164 - 61.8% of Fibonacci retracement

The objectives for the option with sales:

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

1.2312 - 423.6% of Fibonacci retracement

General conclusions and trading recommendations:

The currency pair GBP / USD has supposedly completed the construction of wave 4. Thus, I recommend resuming sales of the pair with the first targets near the calculated mark of 1.2636, which equates to 261.8% of Fibonacci. A successful attempt to break this mark will indicate the pair's full readiness for further decline with targets located around 1.2312, which corresponds to 423.6% of Fibonacci.

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

USD/JPY analysis for September 04, 2018

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Recently, the USD/JPY pair has been trading upwards. The price tested the level of 111.52. According to the H1 time - frame I found potential bearish bar pattern in creation, which represents that you should watch for selling opportunities. Anyway, the sell zone is set around the price of 111.70 (Fibonacci retracement 88.6%). Watch for potential rejection of the sell zone to enter sell position. The downward targets are set at the price of 111.20 and at the price of 110.85.

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

Technical analysis of NZD/USD for September 04, 2018

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Overview:

The GBP/USD pair bullish trend from the support level of 1.2826 on the one-hour chart. 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 1.2826, which coincides with a major ratio (23.6% of Fibonacci). Consequently, the first support is set at the level of 1.2826. So, the market is likely to show signs of a bullish trend around the spot of 1.2826. In other words, buy orders are recommended above the major support of (1.2826) 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.

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

Technical analysis of NZD/USD for September 04, 2018

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Overview:

The USD/CHF pair faced strong resistances at the levels of 0.6612 because support became resistance yesterday. So, the strong resistance has been already formed at the level of 0.6612 and the pair is likely to try to approach it in order to test it again. However, if the pair fails to pass through the level of 0.6612, the market will indicate a bearish opportunity below the new strong resistance level of 0.6612 (the level of 0.6612 coincides with a ratio of 23.6% Fibonacci). Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength above the moving average (100) and (50). Thus, the market is indicating a bearish opportunity below 0.6612 so it will be good to sell at 0.6612 with the first target of 0.6537. It will also call for a downtrend in order to continue towards the levels of 0.6495 and 0.6455. The daily strong support is seen at 0.6455. However, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 0.6659.

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

Analysis of Gold for September 04, 2018

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Recently, Gold has been trading downwards. The price tested the level of of $1,193.20. According to the H1 time - frame I found a broken upward channel in the background, which is a sign that buying looks risky. I also found that price is trading below the Ichimoku cloud and that support level at the price of $1,195.00 was broken. Watch for selling opportunities. The downward targets are set at the price of $1,182.80 and at the price of $1,160.70.

Resistance levels:

Kijun- sen - $1,198.35

Tenkan-sen - $1,197.40

Resistance cluster - $1,195.00

Target levels:

$1,182.80

$1,160.70

Trading recommendations for today: watch for selling opportunities.

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

Technical analysis of EUR/USD for September 4, 2018

EUR/USD reversed back below 1.16 breaking below short-term support at 1.1590. Trend remains bearish as we expected and as long as we are inside the Kumo (cloud) prices are vulnerable to the downside.

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EUR/USD is approaching the 38% Fibonacci retracement support. The entire correction could stop there. Bears should be very cautious in case support holds here. If not we should then focus on the next Fibonacci level at 1.1515 (50% Fibo not shown above). As long as price is below 1.1630 trend is bearish at least for the short-term. The rejection at 1.17 confirms the importance of the resistance in that area. If this level is broken upwards a bigger bounce maybe towards 1.19-1.20 will come. Until then trend is bearish.

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

Technical analysis of Gold for September 4, 2018

Gold price has broken below short-term support of $1,200. Price is challenging last week's lows and it looks like they are going to be broken as well with Gold price heading towards $1,180. Gold bulls should step in around $1,180 otherwise we are in danger of continuing lower towards $1,140.

analytics5b8e2fe07e7a1.png

Black lines - broken wedge pattern

Blue line - broken support trend line

Red line - resistance

Gold price is now below the short-term support trend line. Gold price is going to back test the upper wedge boundary around $1,180. That level could be a nice risk reward bullish opportunity. For now trend is again bearish in the short-term as long as price is below $1,210. Inability to hold above $1,200 is bearish. Resistance at $1,210 remains. We now look for a continued move lower before higher to $1,220-30. Bears will regain full control of the trend on a weekly close below $1,180.

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

Trading plan for the European session on September 4 EUR/ USD

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

The situation of the European currency has not changed since yesterday. It is best to consider new euro purchases after the formation of a false breakout at the 1.1594 level, which can lead to growth and renewal of resistance 1.1633, and consolidation above which will open a direct course to the maximum in the 1.1686 area, where it is recommended to fix profits. In the event of a further decline in the EUR/USD, long positions can be opened immediately for a rebound from 1.1538 support.

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

Short positions in the European currency are best seen after the formation of a false breakdown at 1.1633, or immediately at a rebound from resistance 1.1686. The main task of sellers for the first half of the day will be consolidation below the 1.1594 support. This will lead to a new wave of selling of the European currency with a test of a minimum of 1.1538, where it is recommended to fix profits.

analytics5b8e1de37116b.png

Indicator Description:

  • MA (average sliding) 50 days - yellow
  • MA (average sliding) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20

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

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

Global macro overview for 04/09/2018

In the middle of last week, the market was dominated by optimism associated with the change in President Trump's rhetoric regarding negotiations with Canada. It was extrapolated also to the approach to other trading partners. A few days passed and nothing was left of the enthusiasm of the markets. In the currency markets, with moods changing very rapidly, investors will probably prefer a game to extinguish larger movements within the ranges of fluctuations.

This week there will be key data in the discussion surrounding the future of trade wars. The new round of tariffs imposed by the US on Chinese goods may worsen sentiment in the markets. In addition, PMI / ISM indicators will be used to assess the condition of the global economy. Traditionally, at the beginning of the month, we have a report on the US labor market. Meetings will be held by central banks in Australia, Poland, Canada and Sweden.

The US markets are starting the week with a delay due to Labor Day on Monday. In the foreground, there may be a discussion about the chances of implementing new import duties for goods from China. The list of goods will serve as a card at the negotiating table rather quickly, although the risk of its implementation may be a factor spoiling the market sentiment and pushing the capital towards USD and other safe havens (JPY, CHF). From the data side, the global investors will get familiar with the ISM and NFP data. ISM indicators may indicate deterioration in relation to the previous month, but readings at 56-57 still inform about the strong condition of the economy. The labor market should again show strong values with high employment growth (180 000 thresholds) and a decline in the unemployment rate to 3.8%. The wage increase close to the trend is 0.2-0.3%. will seal the Fed's interest rate hike in September. In the Eurozone, the revision of PMI will rather go unnoticed, confirming that the period of a slowdown has already passed, but there are no strong signs of rebound. As business activity research translates into hard data, you can say more in German industrial production data is scheduled for Friday. Good data seems to be a prerequisite for breaking EUR higher, otherwise we will continue to observe boring consolidation.

Let's now take a look at the S&P500 technical picture at the H4 time frame before the market is open and the data released. The price has tested the technical support at the level of 289.37 and bounced higher, but no new all-time high was made yet. Nevertheless, there is still an unfilled gap between the levels of 287.63 - 288.62, so the market might try to fill it if the data will be worse than expected. The nearest resistance for the price is seen at the level of 291.70, which is the all-time high at this market. The longer-term trend remains bullish.

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

Trading plan for 04/09/2018

Tuesday's session in Asia is quite calm with a mixed overtone of the stock market. On the currency market, the changes are small, but AUD gains ground because the RBA refrained from dovish mentions. The US dollar is generally stronger with concerns that the US-China trade dispute will show its ugly face. Even so, EUR / USD is trying to keep just above 1.16; GBP / USD stabilizes at 1.12860; USD / JPY is at 111.15. On the stock market, the Japanese Nikkei trades around Monday's closing, while Shanghai Composite in China reversed the 0.3% decline into the 0.8% increase during the last hour of trading. On the commodity market, WTI crude oil drifts near $70, remaining around 1-month highs, and support is reported by the hurricane in the Gulf of Mexico, which forces to stop the drilling work on the platforms located there.

On Tuesday, the 4th of September, the event calendar is busy with important data releases. Switzerland will post CPI data, the UK will present the Construction PMI only, but during the day there is scheduled the Inflation Report Hearing, so all of the MPC members will be testifying in form of the parliament, including the Bank of England Governor Mark Carney. During the US session, Canada will post RBC Manufacturing data and the US will post ISM Manufacturing report.

AUD/USD analysis for 04/09/2018:

The Reserve Bank of Australia maintained the main interest rate at 1.50% as expected. The message remained largely unchanged from that of the month before. There was more optimistic language about wages and economic growth. After the AUD/USD decision, it increased from 0.7190 to 0.7230, as the market expected dovish mentions in response to the increase in mortgage rates by one of the leading commercial banks.

Let's now take a look at the AUD/USD technical picture at the H4 time frame. The market is trading below the blue trend line, but the new local high was made at the level of 0.7237. The technical support is seen at the level of 0.7222. The momentum is getting stronger and it is above its fifty level already, so there is a possibility of another wave up towards the level of 0.7246 or even higher. Moreover, this would mean the blue trend line violation, which is also a strong bullish signal.

analytics5b8e21ff088e3.jpg

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

Bitcoin analysis for 04/09/2018

As reported by the financial media, the Russian Federal Financial Monitoring Service ordered an analytical tool to track cryptographic transactions, especially those in Bitcoin. By the end of 2018, a new application will be included in the organization's monitoring system, whose main target is to face fraud and prevent the financing of terrorism. It is expected that the tool will combine fragmentary information and will find connections between different cases of fraud.

The winner of the government contract for the development of such a monitoring program was the Moscow Institute for Security and Information Analyzes (SPI). SPI has previously developed iRule software, which has been widely used by themselves, as well as by Russian security forces and insurance companies, BBC reports.

According to public documents, the contract is worth 195.5 million rubles (about 2.9 million dollars) and describes technology that would allow users to track digital wallet users. The tool has the ability to find the name of a specific person, its bank account number, credit card number, mobile phone number as well as the e-wallet number. It will also contain data on cryptocurrency and Bitcoin transactions.

The Federal Financial Monitoring Service has long held a critical position towards cryptocurrencies. In a press release from 2014, the regulatory authority stated that the mere use of digital money could be the basis for considering the transaction illegal.

A former adviser to Vladimir Putin on the Internet, German Klimenko, who is known for his tough approach to blocking the Telegram application in Russia, explained to the media the government's position on the cryptocurrency:

"Due to anonymity and the inability to find sources of transactions, cryptocurrencies are used in the gray area. For example, in Darkweb, to buy weapons, drugs or violent videos. Legislators in many countries are afraid of this phenomenon, which was confirmed by the analysis we carried out on behalf of the president [Vladimir Putin] "- he says.

In May, the legislative committee of the Russian State Duma announced that in the first reading it would support an initiative that would set standards for the digital economy, specifying, inter alia, how citizens can interact with cryptography.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market is trading just below the technical resistance at the level of $7,300 and it looks the price is getting ready to break through it. In that case, the next target is seen at the level of $7,500 or even at $7,589 which is the weekly pivot resistance level 1. On the other hand, the nearest support can be seen at the weekly pivot at the level of $7,100 and at the level of $7,087.

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

Elliott wave analysis of EUR/JPY for September 4, 2018

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EUR/JPY is currently correcting the impulse rally from 124.89 to 130.28. The minimum corrective target is 23.6% of red wave (1) seen at 128.88, and it has already been reached. However, the second wave correction tend can be deeper than this, so we continue to expect more downside pressure towards at least 38.2% corrective target at 128.22. A more normal second wave correction would correct between 50% - 78.6% of the first wave. However, in this case we have already seen impatience as an expanded flat is developing. Under this correction wave B moves above the starting point of wave A and wave C moves below the ending point of wave C.

The red wave (c) of the red wave (2) has already extended to 300% of the red wave (a), which is unusual, so the if the red wave (2) needs to take up more time, it will likely be in the form of a corrective combination of some kind. Indicating a spike close to 129.85 in an (x)-wave before the final dip towards 128.22 to complete red wave (2) and setting the stage for the next impulsive rally towards 137.51 and above.

R3: 130.40

R2: 129.93

R1: 129.65

Pivot: 129.30

S1: 129.14

S2: 128.60

S3: 128.29

Trading recommendation:

We are long on EUR from 129.10 with our stop placed at 128.10. Upon a break above 129.14 we will move our stop higher to 128.60.

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

USD/CAD Testing Resistance, Prepare For Reversal

USD/CAD is testing its resistance at 1.3115 (100% Fibonacci extension, 78.6% Fibonacci retracement, horizontal overlap resistance) where a reversal to its support at 1.3064 (23.6% Fibonacci retracement, horizontal overlap support) is expected.

Stochastic (55, 5, 3) has reversed off its resistance at 96% where a corresponding drop is expected.

USD/CAD is testing its resistance where we expect to see a reversal.

Sell below 1.3115. Stop loss at 1.3143. Take profit at 1.3064.

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

NZD/USD Testing Support, Prepare For Bounce

NZD/USD is approaching its support at 0.6590 (61.8% Fibonacci extension, 76.4% Fibonacci retracement, horizontal overlap support) where the price is expected to bounce up to its resistance at 0.6637 (38.2% Fibonacci retracement, horizontal pullback resistance).

Stochastic (89, 5, 3) is testing its support at 2.5% where a corresponding bounce is expected.

NZD/USD is testing its support where we expect to see a bounce.

Buy above 0.6590. Stop loss at 0.6570. Take profit at 0.6637.

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

Technical analysis: Intraday level for USD/JPY, Sept 04, 2018

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In Asia, Japan will release the Monetary Base y/y and the US will release some Economic Data such as Total Vehicle Sales, IBD/TIPP Economic Optimism, ISM Manufacturing Prices, Construction Spending m/m, ISM Manufacturing PMI, and Final Manufacturing PMI. So there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL: Resistance. 3: 111.66. Resistance. 2: 111.44. Resistance. 1: 111.22. Support. 1: 110.96. Support. 2: 110.74. Support. 3: 110.52.

Disclaimer: Trading Forex (foreign exchange) on margin carries a highlevel 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 carefullyconsider your investment objectives, level of experience, and riskappetite. The possibility exists that you could sustain a loss of someor all of your initial investment and therefore you should not investmoney that you cannot afford to lose. You should be aware of all therisks associated with foreign exchange trading, and seek advice froman independent financial advisor if you have any doubts.

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

Elliott wave analysis of EUR/NZD for September 4, 2018

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EUR/NZD is set to break higher anytime now. The next impulsive rally should break above the base-channel resistance line, which currently sits near 1.7669 for acceleration towards 1.7820 on the way higher to 1.8369 and above in the longer term.

Support remains seen at 1.7538 and 1.7506. Ideally, the later will be able to protect the downside for the expected acceleration higher.

R3: 1.7714

R2: 1.7669

R1: 1.7597

Pivot: 1.7538

S1: 1.7505

S2: 1.7484

S3: 1.7459

Trading recommendation:

We are long EUR from 1.7330 with our stop placed at 1.7410. If you are not long EUR yet, buy near 1.7505 or upon a break above 1.7597 and use the same stop at 1.7410.

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

Technical analysis: Intraday Level For EUR/USD, Sept 04, 2018

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When the European market opens, some Economic Data will be released such as PPI m/m, and Spanish Unemployment Change. The US will release the Economic Data too such as Total Vehicle Sales, IBD/TIPP Economic Optimism, ISM Manufacturing Prices, Construction Spending m/m, ISM Manufacturing PMI, and Final Manufacturing PMI, so amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL: Breakout BUY Level: 1.1670. Strong Resistance:1.1663. Original Resistance: 1.1652. Inner Sell Area: 1.1641. Target Inner Area: 1.1613. Inner Buy Area: 1.1585. Original Support: 1.1574. Strong Support: 1.1563. Breakout SELL Level: 1.1556.

Disclaimer: Trading Forex (foreign exchange) on margin carries a highlevel 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 carefullyconsider your investment objectives, level of experience, and riskappetite. The possibility exists that you could sustain a loss of someor all of your initial investment and therefore you should not investmoney that you cannot afford to lose. You should be aware of all therisks associated with foreign exchange trading, and seek advice froman independent financial advisor if you have any doubts.

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

Weekly review of GBP / USD pair from 3 to 8 September 2018

On the weekly chart, the price moved up, almost reached the recession level of 23.6% (yellow dotted line). There is a strong down on the candlestick analysis (three consecutive white candles growing along the body). So there is a strong potential in the downward movement.

Trend analysis (Figure 1).

Volumes give the probability of top movement. This week, the price of technical analysis will possibly move up with the first top target of 1.3065 and a recoil rate of 23.6% (yellow dotted line). How much the probability of this scenario will be determined by a comprehensive analysis.

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Fig. 2 (weekly chart).

Complex analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- volumes - upwards;

- candle analysis - down;

- trend analysis - up;

- Bollinger lines - up;

- monthly chart - down.

Conclusion on the complex analysis is an upward movement.

The total result of calculating the candle of the GBP / USD currency pair on a weekly chart shows the price for the week is likely to have an upward trend with the absence of the first lower shadow of a weekly white candle and the absence of a second upper shadow.

The first top target is 1.3065 with the recoil level of 23.6% (yellow dotted line).

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

Trading plan for the European session on September 3 GBP/USD

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

The formation of a false breakout and a return to the 1.2913 level will be the first signal to buy the pound in order to close the morning gap in the 1.2953 region, where it is recommended to fix profits. In case of a decline below the support area of 1.2913, it is best to return to long positions for a rebound from 1.2868.

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

Breakdown and consolidation below the 1.2913 support will indicate selling of the pound in order to reach a minimum in the 1.2868 area, where it is recommended to fix profits. In case that the GBP/USD will grow in the first half of the day, traders can sell on a false breakout from 1.2953 or on a rebound from 1.3004.

analytics5b8cda6f66da4.png

Indicator Description:

MA (average sliding) 50 days - yellow

MA (average sliding) 30 days - green

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

Bollinger Bands 20

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

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

Pound: we only dream of peace

Political risks throw the British pound into the heat, then in the cold. The statement of the chief negotiator from the EU Michel Barnier that Brussels is ready to offer London an unprecedented deal, allowed quotes of the GBP/USD to soar above the psychologically important mark of 1.3. Alas, a few hours later Barnier declared a categorical disagreement with Theresa May's plan. At the same time, former Brexit Secretary David Davis said that he would vote against the Prime Minister's program, which involves significantly worse conditions than there were.

Theresa May will have a daunting task - first to find a compromise within the country, and then to reach an agreement with the EU. The situation is aggravated by the Congress of the Conservative party in September. And if in June the prime minister managed to maintain her leadership, now she will have to undergo a new test. As a result of the aggravation of political risks, the volatility of the sterling may come out of the trading range and go up, which will negatively affect the positions of the bulls on the GBP/USD. Britain has the highest ratio of the negative current account to GDP in the G20 countries, its financing requires an inflow of investments, and it is difficult to lure non-residents to the local market in conditions of increased volatility of the pound.

The dynamics of the volatility of the pound

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The pressure on sterling is exerted by disappointing macroeconomic statistics. The index of purchasing managers in the manufacturing sector in August was marked by the worst dynamics in the last two years. Export orders fell below the critical level of 50 for the first time since April 2016. As Bloomberg research shows, British companies preferred to save money instead of taking advantage of the devaluation and increase investment. Now, in the face of fears about the slowdown of the world economy, the decline in external demand creates serious problems for them.

It should be recognized that the fall of the GBP/USD contributed to the gradual recovery of the US dollar. Difficulties in negotiations between the United States and Canada lead investors to the idea that the settlement of the dispute between Washington and Beijing may take even longer, and the truce between the US and the EU will end very soon. As a result, the risks of escalation of trade conflicts have increased, which provides support to the US dollar.

The pound will have a rather difficult week, because after the release of data on business activity in the manufacturing sector, the indices of purchasing managers in the construction sector and in the service sector will be published. The last indicator is very important, as the non-production sector accounts for around 80% of British GDP. Add to this the continuing political risks, and it will become clear that the purchase of sterling should be treated very carefully. The aggravation of tensions between the EU and the UK and Theresa May's problems with retaining leadership in the Conservative party and with the vote in Parliament will become a catalyst for GBP/USD sales.

Technically, a breakthrough of support at 1,2835 and 1,2775 will increase the risks of implementing the target by 88.6% and 113% for the "Shark" pattern.

GBP/USD daily chart

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GBP/USD. The pound is waiting for parliamentary hearings on inflation

On Monday, US trading platforms are closed (Labor Day is being celebrated in the United States), so the dollar pairs are left to "themselves", subject to the general mood of the foreign exchange market. Among traders, pessimism prevails again, which pushes the dollar towards growth against a basket of major currencies.

Speaking directly about the GBP/USD, then the downward movement is also caused by Brexit, the saga around which resembles the long-running Brazilian TV series. The storyline of this "series" is so twisted and unpredictable that traders for two and a half years and could not get used to its new twists and turns.

Let me remind you that just last week the British currency rose to the middle of the 30th figure in response to the hopes for a deal between Brussels and London. The representative of the European side made a rather unexpected statement about the "exclusive conditions" that will be offered to Britain. He also noted that the draft of the future agreement is ready for 85%, although the most controversial issues remained unresolved (most notably the issue of the Irish border). Traders who missed the positive news were encouraged to accept such rhetoric, and in my opinion – with excessive enthusiasm. Because by the end of last week, all optimism had faded away due to the absence of any breakthrough in the negotiations.

The situation worsened over the weekend, when the European Union criticized the plan of British Prime Minister Theresa May on further relations between the Alliance and London. The EU chief negotiator on issues Michel Barnier said that Brussels strongly disagrees with the key positions of the "White Paper". For example, he reiterated that if Britain leaves the Customs Union, barriers to trade in goods and services will be inevitable. Theresa May, in turn, intends, on the one hand, to withdraw from the CU, but on the other hand – to maintain access to the single market, and with the ability to enter into transactions with third countries. Brussels, of course, refused. Other points of the road map for the future agreement also caused discontent among Europeans, not to mention the unresolved conflict around the Irish border.

In other words, the situation returned to normal, and the pound reacted accordingly: the GBP/USD pair opened the trading week with the downward gap, returning to the 28th figure. Oil was added to the fire and the extremely weak PMI index in the manufacturing sector of Britain was released. The indicator came out worse than expected today and reached the lowest level for the entire current year (52.8 points). This suggests a slowdown in production in the UK, which may ultimately affect the dynamics of the country's GDP. Moreover, the PMI index in this area has been declining for the second month in a row, therefore it is already possible to talk about the formation of a certain trend.

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On Tuesday, the pound will again be in the zone of price turbulence. The fact is that the British regulator reports to the country's Parliament three times during the calendar year. The agenda includes not only the prospects for inflation growth, but also the issue of monetary policy. The importance of this event is emphasized by the fact that it is attended not only by the head of the Bank of England, but also by other members of the regulator who determine the monetary policy in the country.

In total, in addition to Mark Carney, tomorrow there will be three more officials of the Bank of England – Andy Haldane, Silvana Tenreiro and Michael Saunders. Thus, traders can literally at "first-hand" learn the general mood of the regulator's members regarding the prospects for monetary policy. For example, the recent speeches of the head of the Bank of England were extremely mild: Mark Carney actually linked the Brexit process with the actions of the English regulator. He also admitted that in case of a chaotic exit of Britain from the EU, the central bank could mitigate monetary policy by lowering the rate. If on Tuesday he repeats this thesis before the parliamentarians, the pound will be under additional pressure.

In turn, the inflation report also carries a block of important information. The English regulator will give an overview of the current situation in the country's economy, assessing the prospects for the development of the situation in the medium and long term. Pessimistic theses of this report will undoubtedly affect the mood of the market, especially against the background of other fundamental factors.

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From a technical point of view, the GBP/USD is at a kind of crossroads. On the daily chart, the price is located on the middle line of the Bollinger Bands indicator, which indicates the absence of a pronounced trend movement. But if the pair is fixed below 1.2840, then, firstly, the price will be between the average and the lower lines of the above indicator, and, secondly, the Ichimoku Kinko Hyo indicator will form a bearish signal "Parade of lines". The combination of these signals will open the way for the pair to a strong support level of 1.2670 (the lower Bollinger Bands line on the daily chart). If representatives of the Bank of England tomorrow voiced optimistic theses of future prospects, the GBP/USD can "close the gap", that is, will return to the level of 1.2960.

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