Bitcoin analysis for September 06, 2018

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Trading recommendations:

According to the H4 time - frame, I found that Bitcoin rejected from the very strong resistance zone in the background at the price of $7.445, which is a big sign of weakness. I also found the fast cross on the Stochastic and MACD oscillator, which is a sign that sellers are agressive. The short-term trend is downawrd and my advice is to watch for selling opportunities. The first downward target is set at the price of $5.860.

Support/Resistance

$7.370 – Agreement zone (strong resistance)

$5.860 – Objective target 1

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GBP/USD analysis for September 06, 2018

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Recently, the GBP/USD pair has been trading upwards. The price tested the level of 1.2982. According to the H4 time – frame, I found that price rejected from the Fibonacci retracement 61.8% (1.2810) in the background, which is a sign of further strength. I also found that MACD and Stochastic oscillator showing the bullish trend and the price is trading above the 3DMA, which is a sign that buyers are in control. I placed Fibonacci expansion tool to find potential upward targets. Profit targets are set at the price of 1.3020 (FE 61.8%) and at the price of 1.3160.

Trading recommendations for today: watch for buying opportunities.

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Analysis of Gold for September 06, 2018

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Recently, Gold has been trading upwards. As I expected, the price tested the level of $1,206.20. According to the H1 time – frame, I found that price rejected from the strong support Fibonacci confluence level at $1,194.50, which is a sign of further strength. I also found a broken downward channel in the background, which indicates that potential downward correction is over. To find upward targets I have placed Fibonacci expansion tool. I have found take profit levels at $1,213.10, $1,221.70 and at the price of $1,242.00.

Trading recommendations for today: watch for buying opportunities.

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GBP / USD. 6th of September. The trading system "Regression channels". The effect of rumors and crowds sent the pound sterling

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.

Moving average (20; flattened) - sideways.

CCI: -5.3233

The currency pair GBP / USD on Wednesday, September 5, surprised for the second time in a few weeks it's absolutely illogical reaction to rumors and speculation. Recall that a week ago, there was unconfirmed information that the EU was preparing "unprecedented" conditions for Brexit for Britain. What is the essence of this super-proposal? No one knows until now. But then, the pound sterling has strongly strengthened. However, the very next day, traders began to get rid of the British currency, as there was no confirmation of this super-offer in the media. What happened yesterday, strongly recalls the events with Michel Barnier. Information that Germany and the UK agreed on the terms of Brexit, looks, to put it mildly, questionable. But even if this is true, until the official information is received, which clearly specifies what concessions the parties have made, how the key issues will eventually be resolved, the expediency of buying pound can be justified only by the rule "Buy on the rumors". We believe that today, the pound can again rush down, like a week ago, unless, of course, this information is officially confirmed. Theresa May, by the way, yesterday said that the second referendum will not be exactly, and she herself is preparing a new version of the "Brexit plan", which will work for the benefit of Great Britain.

Nearest support levels:

S1 = 1.2817

S2 - 1.2695

S3 - 1,2573

Nearest resistance levels:

R1 = 1.2939

R2 = 1.3062

R3 = 1.3184

Trading recommendations:

The currency pair GBP / USD fulfilled the level of 1.2939 and could not overcome it. Thus, if the bulls manage to gain a foothold above this level, then it will be possible to open the buy-positions with the target of 1.3062.

Orders for sale can be considered only after fixing the price back below the removals for Murray's level "1/8" - 1,2817, which has already been worked out. In this case, the initiative will return to the hands of the bears.

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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Wave analysis of EUR / USD for September 6. Wave 2 is complete. Growth to 1.1733?

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Analysis of wave counting:

During the trades on Wednesday, the EUR / USD currency pair gained about 50 percentage points. Thus, there is more and more reason to assume completion of the construction of wave 2, a. If this is the case, then the increase in quotations will continue with targets located well above the 17th figure. For this, fundamental grounds would also be needed. Yesterday, the euro was helped by information on the Brexit agreement between Britain and Germany. But it will not be every day. Thus, for the development of the growth of the euro in the coming days will need economic factors. Otherwise, the decline in the pair may resume, but the wave counting will not be supplemented before the breakthrough of the minimum expected wave 2.

The objectives for the option with sales:

1.1517 - 50.0% of Fibonacci retracement

1.1465 - 61.8% of Fibonacci retracement

The objectives for the option with purchases:

1.1733 - 0.0% of Fibonacci retracement

General conclusions and trading recommendations:

The pair supposedly completed the construction of wave 2, a. Thus, now, we expect an increase in quotations within wave 3 with the first targets located near the mark of 1.1733, which corresponds to 0.0% of Fibonacci. I recommend, therefore, to buy a pair for this purpose. Breaking the minimum of wave 2 suggests that the pair is not ready for further growth and will require additions to the current wave counting.

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Trading plan for September 6, 2018

After the representatives of the European Union announced their readiness to offer the UK some amazing trade agreement, Theresa May sharply stated that the United Kingdom would not make any concessions in the negotiations with Europe. And nobody has ever seen any concrete proposals from Europe. And yesterday, in a number of mass agitation and misinformation, rumors arose that Britain and Germany are ready to give up a number of mutual demands in order to reach an agreement on the withdrawal of the United Kingdom from the European Union. This news led to the instant growth of the pound and the single European currency. At the same time, the pound itself had a reason for growth due to an increase in the business activity index in the services sector from 53.5 to 54.3. But the European currency did not have such reasons. The growth rate of retail sales slowed from 1.5% to 1.1%, which, however, was somewhat smoothed by the growth of the index of business activity in the services sector from 54.2 to 54.4. Due to the growth of the index of business activity in the service sector, the composite business activity index also increased from 54.3 to 54.5. But the value of retail sales is much greater. So it's no wonder that already at the very end of the day there were signs of a rebound, at least over a single European currency.

Today, all attention is focused on US statistics, which will precede tomorrow's publication of the report of the US Department of Labor. ADP data on employment growth may show a slowdown in the rate of its growth from 219 thousand to 190 thousand, which is quite good, since, given the demographic composition of the population, employment should grow by about 200 thousand per month. The number of applications for unemployment benefits should increase by 3 thousand. It is expected that the number of initial applications for unemployment benefits will increase by 1,000, and the number of applications for another 2,000. But the changes are not significant, so they will slightly affect the value of the dollar. The index of business activity in the service sector should be reduced from 56.0 to 55.2, and the composite index from 55.7 to 55.0. And this is not so happy, especially as production orders can be reduced by 0.6%. In general, the forecasts for US statistics are quite sad, but the market will wait for specifics about the arrangements between Britain and Germany. If there is no explanation, most likely, the dollar will be strengthened, despite relatively weak statistics.

The euro / dollar currency pair rebounded from the range of 1.1510 / 1.1550, returning the quotation to the periodic value of 1.1650. Probably assume a rollback from 1.1650 towards 1.1600 - 1.1590.

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The pound / dollar currency pair, showing high volatility, shot at 1.2981, but could not resist quickly dropping to 1.2900. At the moment, there is a stagnation, where, probably, we will see a further pullback towards 1.2870 - 1.2860.

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What should the dollar rely on?

The US trade deficit grew by 9.5% in July to $ 50.1 billion, which is the maximum for 5 months, the deficit growth exceeded forecasts and indicates the difficulties with filling the budget, despite the trade war unleashed by Trump with most US trading partners.

As can be clearly seen from the chart compiled by the Federal Reserve Bank of Richmond, some stabilization of the deficit was achieved mainly through a reduction in oil and gas imports. Since 2009, oil production in the USA has been steadily growing, which has reduced imports and corrected the trade balance, but without taking into account the oil component, the trade balance continues to fall into the abyss.

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Accordingly, the danger of a full-fledged budget crisis is growing at a high rate. Reduction of tax pressure has led to a decrease in budget revenues, but there is no evidence of an increase in budget revenues for other items.

In fact, the US is confidently moving towards another recession, as indicated by many indirect indicators, the main one being the approaching inversion of the yield curve, which characterizes long-term investor sentiment. Under normal circumstances, when the economy grows, long-term interest rates are higher than short-term ones, because in the long run, income generation is perceived as more risky, and the yield curve goes up. But if short-term debt becomes more risky for some reason, the yield curve turns down and at some point crosses the zero line, becoming inverse.

This behavior of the yield curve is typical for a year and a half before the start of another recession. Now the yield curve is confidently down, and there is confidence that the zero line will be crossed before the end of 2018. This means that the next recession may come by the end of 2019, just when the Fed plans to complete the cycle of normalizing interest rates.

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The publication of the employment report on Friday is becoming increasingly important. Inflation stopped growth, and to justify the growth of rates fear of overheating the economy will not work. The GDP growth rate will slow down in the coming months, in 2019 the forecast from the Fed looks unconvincing. If tomorrow the labor market shows difficulties with growth, the dollar will start to be sold out massively, as negative moods will increase significantly, and the probability that the Fed will be able to withstand the announced rate of growth rates in 2019 will fall.

Also today, we need to pay attention to the ADP report on employment in the private sector, which can set the direction for the next day, as well as the ISM index for the services sector.

The currency pair EUR / USD today will continue to trade in the sideways range in anticipation of new data. Above, the range is limited by the resistance level of 1.1660, from below, by the trend line at the level of 1.1570.

The currency pair GBP / USD is unlikely to be able to update the range of the September 5 range, as no important macroeconomic news from the UK is expected during the day. The pound will be supported by 1.2850, from above growth is limited by resistance 1.2960.

Oil and ruble

Oil on Thursday is slightly corrected after the rapid growth the day before. The Gordon Storm in the Gulf of Mexico led to a 9.53% drop in oil production, and more signs that Iran, in an attempt to maintain the current production level, will face significant difficulties due to fears from its major buyers to fall under American pressure. At the same time, OPEC Secretary General Mohammed Barkindo said that oil consumption could reach a world level of 100 million barrels. a day much earlier than expected, thereby creating prerequisites for a deficit and further price increases.

The ruble is stable after the CBR meeting, at which the interest rate, as expected, remained unchanged. Comments of officials are neutral, Russia's economy feels confident, but growing political pressure limits growth.

Before the release of data from the US on the labor market, the ruble and oil will be traded in a narrow range near current levels.

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Sterling strengthen, for how long?

While all the focus of the markets was focused on the events surrounding the trade wars, Germany and the United Kingdom have made some progress in the negotiations on the EU's exit from the last.

The British pound rose sharply on the Forex market amid news that Germany and Britain in the negotiation process made some concessions. The news that the FRG is ready "to accept a less detailed agreement on future economic and trade relations between the UK and the EU in order to be able to conclude a deal on Brexit" had a noticeable and unexpected support for the sterling rate. The British currency rose briskly to all major currencies, though in the black, it remained only in relation to the US dollar, losing a noticeable increase in profit-taking by speculators.

It seems that both Britain and Continental Europe as a whole are already tired of confrontation and are ready to compromise in the process of trade disputes, but whether this adds to the positive for sterling remains questionable. Stagnation in the negotiation process about the prospects of withdrawal from the EU had a previously strong negative impact on the British currency, and now the question arises, but does it have the prospect of further growth?

In our opinion, it is still too early to talk about this. The very fact of progress in the talks does not yet speak about anything serious. Speculators reacted to the news and nothing more. In order for the currency appreciation to be truly sustainable, it is necessary that the picture of the prospects for economic growth in the country radically change. For now, investors are afraid of the lack of such prospects, which is unlikely to again support the British currency.

As it seems to us, the lack of such prospects will lead to wide sales of sterling on Forex after its noticeable local growth.

Forecast of the day:

The AUD / USD currency pair is trading above the level of 0.7165. Pressure on it continues to slow the growth of China's economy, with which Australia is highly economically connected. The continuation of this process and the risk of deepening trade contradictions between the US and China will exert pressure on the pair. A break at the price of 0.7165 could lead to a drop to 0.7100.

The GBP / USD currency pair is trading below the level of 1.2930. From a technical point of view, the pair has few prospects for continuing the upward trend. The inability to grow higher can lead to its reversal and a decrease again to 1.2800.

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Forecast for GBP / USD as of September 6, 2018

GBP / USD

The British pound yesterday surprised the market by an increase of 140 points at the moment. The reason for this was the information that Germany is ready to make some concessions to the UK in terms of trade agreement. But a little later, the news agencies surprised the second time, it turns out, Germany did not put forward any initiatives on this issue. On such a joke, the price closed the gap. The index of business activity in the service sector in the UK increased to 54.3 from 53.5 in August. This helped the pound not fall very much back. As a result, the growth was 51 points.

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At the moment, the price is under the descending line of the price channel and under the balance line on the daily chart. The price outflow over these resistance is quite probable, since the signal line of the Marlin oscillator grows after a turn from the border with the zone of negative numbers. After fixing the price above 1.2950, it is possible to consider target 1.3102 - the maximum of July 13 and June 21.

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But even with the formation of initial conditions for growth on a daily scale, this growth may have difficulties. On the four-hour chart, the price is below the red balance line. This means that growth will occur on the concessions of the "bears", which can then go on the offensive. Also on the daily chart, the price, having passed the level of 1.2950, may still remain under the balance line. To change the price, it is necessary to break up sharply, but this potential was already used yesterday.

The situation on the next day is uncertain. Turning prices down from the indicator lines on both timeframes can also be. Before the US data on employment there was one day, investors can wait. We expect to trade in the range of 1.2844-1.2950.

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The daily review of the currency pair EUR / USD as of September 5, 2018. Ichimoku Indicator

EUR / USD

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The zone of accumulation of important supports (1.1545-72 the lower boundary of the weekly cloud + the weekly Tenkan + day cross) contributed to inhibition. The players on the rise yesterday formed a long lower shadow on the day's candle, as a result, you can expect that the levels encountered can provide enough attraction, due to which the braking will be prolonged.

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The wide zone of support for the high-tier levels coincides now with the support of the H4 cloud. The breakdown will form the downside target of H4. The execution of the goal will return a couple to the monthly Kijun (1.1447), overcoming this level will open up new benchmarks for players to fall. At the present moment, despite the bearish sentiments of recent days, the width of the support zone and the concentration of levels in it can contribute to a prolonged braking and development of the upward movement. In this case, the value for restoring the bullish advantage will have resistance of 1.1625-35 - 1.1680 - 1.1708 - 1.1750.

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 euro has the last chance to resume an uptrend

The European currency fell against the backdrop of good data on the US economy, where the manufacturing sector continued to show growth at a faster pace than expected. But the British pound remained to bargain in the side channel, even after the head of the Bank of England, Mark Carney, said at an inflation hearing in the UK Parliament that he wants to remain in office.

According to the report of the Institute of supply management ISM, the index of supply managers PMI in the manufacturing sector in August this year rose to 61.3 points against 58.1 points in July. Let me remind you that the index values above 50 indicate an increase in production activity. Economists had expected the index in August to be 57.5 points.

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As noted in the ISM, the growth of the index occurred due to new orders, increase in production rates, as well as employment.

But the indicator of manufacturing activity in the US according to IHS Markit showed a slight decrease.

According to the report, PMI purchasing managers' index fell to 54.7 points in August against the July value of 55.3 points. Despite this, the drop in the index only indicates that the conditions in the manufacturing sector have improved, just at a slower pace than before.

The speech of the President of the Federal Reserve Bank of St. Louis James Bullard could lead to a slight decline in the US dollar against risky assets by the end of the North American session on Tuesday, although this is unlikely, since he has no voting rights in the Federal Open Market Committee on open market operations.

Bullard urged his colleagues to abandon the next increase in interest rates. In his opinion, an earlier tightening of monetary policy will negatively affect the pace of economic growth. Bullard also said that the September increase in interest rates is a resolved issue. The representative of the Federal Reserve also drew attention to the need for closer monitoring of economic data, which is now being received.

As I noted above, the British pound remained to bargain in the side channel, after the Bank of England Governor Mark Carney signaled that he wanted to manage the Central Bank longer than previously planned.

The lack of demand for the pound in the background of this news is a bad signal for its buyers.

The head of the Bank of England said he was ready to do everything possible to support the economy during the Brexit period, since failure to reach an agreement could lead to real pressure on the population's incomes.

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Forecast for EUR / USD as of September 5, 2018

EUR / USD

On Tuesday, for the US dollar, there were all the conditions for strengthening, but investors were focused on emerging markets. The yield on Argentinean 4-year government bonds soared from 26.97% to 31.24% in one day, the peso rate fell from 38.07 to $ 38.97 peso for a dollar. In Brazil, the yield on 5-year securities increased from 11.55% to 11.67%, in Venezuela for 5-year government bonds, yield increased from 74.95% to 76.69%, in Egyptian similar securities, the yield is 18.43% . In the Greek 10-year period, it increased from 4.43% to 4.56%, according to Indian 10-years from 7.99% to 8.06%, from Indonesian from 8.21% to 8.34%, according to Russian 8.69% to 8.80%. This all happened, as you can see, with the release of American investors to the market after the holiday on Monday.

And in the US, the index of business activity in the manufacturing sector from ISM increased from 58.1 to 61.3 in August, while the decrease was expected to reach 57.6. In Spain, the number of unemployed increased by 47 thousand against the forecast of 35 thousand.

Euro fell in the moment by 92 points, exactly worked out the support of the trend line of the price channel and jumped from it. At the moment, the price is on the balance line of the daily timeframe. At H4, the price is still under the indicator lines of the balance and the trend Kruzenshtern, but the signal line of the oscillator Marlin came out of the descending channel and shows the intention to go to the positive zone.

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We do not think that the mismatch of the dollar (through its consideration of the euro) with panic in emerging markets will be somehow long. Probably, now there are major changes in the positions of investors, but they are not very fast. Technically, however, the price has worked out the support and can return to the range of 1.1750-1.1822. If, of course, it can overcome the resistance of the Krusenstern trend line on the four-hour chart (1.1652).

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If this does not happen, an attempt may be made to fix the price at yesterday's low. In general, the market remains completely uncertain about the near future. Yesterday's events warn that the market (euro) can be bought back even against strong Friday labor data in the US.

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Control zones of USD / CAD as of September 5, 2018

The upward movement remains a strong medium-term momentum, which determines the direction of trade for the current week. Any drop should be considered from the point of view of obtaining favorable prices for the purchase.

Yesterday, a test of the important target zone NCP 1/2 1.3209-1.3198, which led to the appearance of the proposal. The first support is the NCP 1/4 1.3158-1.3153, the test of which will allow considering the purchases that will be aimed at a weekly extremum. The defining support is the NCP 1/2 1.3108-1.3098. While the pair is trading above this zone, the upward movement will remain a medium-term pulse, and the test of the zone itself will allow obtaining the most favorable prices for the purchase of the instrument.analytics5b8f4eacf344e.png

Yesterday's movement exceeded the average daily turn, which increases the probability of retesting a maximum to 90%. This should be taken into account when building an intraday trading plan.

To cancel the upward movement, yesterday's upturn is required and the closing of the American session is lower than the NCP 1/2 1.3108-1.3098. This will close the balances of the long position and begin to consider sales in the medium term. The probability of forming this model is 30%, which makes it auxiliary in the event of a large supply. Sales from current marks are not profitable, as the medium-term phase of a bullish pulse indicates a high probability of a September peak update.

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The daily short-term fault is the daytime control zone. The zone formed by important data from the futures market, which change several times a year.

The weekly short-term fault is the weekly control zone. The zone formed by important futures market marks, which change several times a year.

The monthly short-term fault is the monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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Fractal analysis of the main currency pairs on September 5

Dear colleagues.

For the currency pair EUR / USD, we continue the movement downwards after the breakdown of 1.1538 and we consider the movement upward as a correction. For the Pound / Dollar currency pair, we continue the downward trend and we expect after the breakdown of 1.2809. For the currency pair Dollar / Franc, the price forms the initial conditions for the top of August 31. For the Dollar / Yen currency pair, we follow the design of the local structure for the top of August 31. For the currency pair Euro / Yen, the downward structure of August 29 is no longer relevant, and for the subsequent downward movement we expect new initial conditions. For the Pound / Yen currency pair, we follow the development of the downward structure from August 30, continuing downwards after the breakdown of 142.75, the level of 143.70 is the key support.

Forecast for September 5:

Analytical review of currency pairs in the scale of H1:analytics5b8f26e34991d.png

For the EUR / USD currency pair, the key levels on the scale of H1 are: 1.1651, 1.1615, 1.1590, 1.1538, 1.1517 and 1.1485. Here, we follow the development of the downward cycle of August 28. At the moment, we expect the move to the level of 1.1538 and in the corridor of 1.1538 - 1.1517 is the consolidation. The potential value for the bottom is the level of 1.1485 and the movement toward which we expect after the breakdown of 1.1517.

The short-term upward movement is possible in the corridor of 1.1590 - 1.1615 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 1.1651 and this level is the key support for the downward cycle.

The main trend is the downward cycle from August 28.

Trading recommendations:

Buy 1.1590 Take profit: 1.1613

Buy 1.1617 Take profit: 1.1650

Sell: 1.1536 Take profit: 1.1517

Sell: 1.1515 Take profit: 1.1485

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For the Pound / Dollar currency pair, the key levels on the H1 scale are 1.2907, 1.2872, 1.2846, 1.2809, 1.2786 and 1.2744. Here, we follow the downward structure of August 30. The short-term downward movement is possible in the corridor of 1.2809 - 1.2786 and the breakdown of the last value will lead to a movement to the potential target of 1.2744, upon reaching this level, we expect a rollback upward.

The short-term upward movement is possible in the corridor of 1.2846 - 1.2872 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 1.2907 and this level is the key support for the bottom.

The main trend is the downward structure of August 30.

Trading recommendations:

Buy: 1.2846 Take profit: 1.2870

Buy: 1.2873 Take profit: 1.2905

Sell: 1.2809 Take profit: 1.2787

Sell: 1.2784 Take profit: 1.2745

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For the currency pair Dollar / Franc, the key levels on the scale of H1 are: 0.9876, 0.9847, 0.9831, 0.9804, 0.9771, 0.9724, 0.9708 and 0.9654. Here, we follow the formation of the initial conditions for the top of August 31. The continued development of the upward trend is expected after the breakdown of 0.9771. In this case, the target is 0.9804 and near this level is the consolidation. The breakdown at the level of 0.9805 should be accompanied by a pronounced upward movement. Here, the target is 0.9831 and in the corridor of 0.9831 - 0.9847 is the consolidation of the price. The potential value for the top is the level of 0.9876, upon reaching which we expect a pullback downwards.

The short-term downward movement is possible in the corridor of 0.9724 - 0.9708 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 0.9681 and this level is the key support for the top.

The main trend is the formation of the ascending structure of August 31.

Trading recommendations:

Buy: 0.9771 Take profit: 0.9802

Buy: 0.9806 Take profit: 0.9830

Sell: 0.9724 Take profit: 0.9710

Sell: 0.9706 Take profit: 0.9685

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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, we follow the formation of local initial conditions for the top of August 21. 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, we expect the design of the local structure for the top on August 31.

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: 1.3271, 1.3235, 1.3200, 1.3156, 1.3133 and 1.3097. Here, we follow the upward cycle of August 30. The continuation of the main trend is expected after the breakdown of the level of 1.3200. In this case, the target is 1.3235, from this level the probability of leaving for correction is high. As a potential move for the top, consider the level of 1.3271, upon reaching which we expect a pullback downwards.

The short-term downward movement is possible in the corridor of 1.3156 - 1.3133 and the breakdown of the last value will lead to an in-depth correction. In this case, the target is 1.3097 and this level is the key support for the upward structure.

The main trend is the ascending structure of August 30.

Trading recommendations:

Buy: 1.3200 Take profit: 1.3233

Buy: 1.3237 Take profit: 1.3270

Sell: 1.3155 Take profit: 1.3135

Sell: 1.3130 Take profit: 1.3097analytics5b8f2728e52e3.png

For the Australian Dollar / Dollar currency pair, the key levels on the scale of H1 are: 0.7273, 0.7241, 0.7216, 0.7152, 0.7131, 0.7094 and 0.7062. Here, we follow the downward structure of August 28. The continued downward movement is expected after the passage at the price of the noise range of 0.7152 - 0.7131. In this case, the target is 0.7094. The potential value for the bottom is the level of 0.7062, after which we expect the consolidated movement in the range 0.7062 - 0.7094.

The short-term upward movement is possible in the corridor of 0.7216 - 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: 0.7216 Take profit: 0.7240

Buy: 0.7243 Take profit: 0.7273

Sell: 0.7130 Take profit: 0.7095

Sell: 0.7092 Take profit: 0.7062

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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, the descending structure of August 29 is no longer relevant, for the subsequent movement downward, we expect new initial conditions. 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: 144.15, 143.70, 143.38, 142.75, 142.31, 141.99 and 141.32. Here, we follow the development of the downward structure of August 30. The continued downward movement is expected after the breakdown of the level of 142.75. 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 bottom is the level of 141.32, the movement to which we expect after the breakdown of 141.95.

The short-term uptrend is possible in the corridor of 143.38 - 143.70 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 144.15 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: 143.40 Take profit: 143.65

Buy: 143.75 Take profit: 144.10

Sell: 142.70 Take profit: 142.35

Sell: 142.30 Take profit: 142.00

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Fundamental Analysis of AUD/USD for September 6, 2018

AUD/USD has been quite volatile and corrective at the support area of 0.7150 to 0.7200 area from where it is expected to push higher for a certain period before pushing lower with the trend. USD has been dominating the pair while AUD is currently trying to recover with better than expected economic results.

This week AUD has been quite mixed with the economic reports. Australia's Retail Sales decreased to 0.0% from the previous value of 0.4% which was expected to be at 0.3%, Company Operating Profits also dropped to 2.0% from the previous value of 5.9% but it performed better than expected with the value of 1.4%, and GDP slowed down to 0.9% from the previous value of 1.1% which also performed better than expected with the value of 0.7%. Besides, the Reserve Bank of Australia left the cash rate unchanged at the record low of 1.50%. Today Australia's Trade Balance report was published with a decrease to 1.55B from the previous figure of 1.94B, the fresh figure was beyond expectations for 1.46B.

On the USD side, ahead of the NFP reports to be published tomorrow, today US ISM Non-Manufacturing PMI report is expected to increase to 56.8 from the previous figure of 55.7, Unemployment Claims are expected to increase to 214k from the previous figure of 213k, Factory Orders are expected to decrease to -0.5% from the previous value of 0.7%, and FOMC Member Williams is going to speak about the upcoming interest rates decisions and future monetary policies that is expected to express neutral stance.

Meanwhile, AUD has been quite positive with the economic reports recently which helped the currency to gain certain momentum and stop the impulsive bearish USD gains in the process. Unless the USD presents macroeconomic data with better than expected results, AUD is likely to gain certain momentum in the process for the coming days.

Now let us look at the technical view. The price is currently residing at the edge of 0.7200 area which if broken with a daily close, further bullish momentum is expected in the pair with a target towards the dynamic level of 20 EMA and 0.7300 area from where the price is going to push lower again, following the bearish trend in the coming days. As the price remains below 0.75 area with a daily close, the bearish bias is expected to continue.

SUPPORT: 0.7150, 0.7200

RESISTANCE: 0.7300, 0.7500

BIAS: BEARISH

MOMENTUM: VOLATILE

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Technical analysis of NZD/USD for September 06, 2018

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Overview:

The NZD/USD pair faced strong resistances at the levels of 0.6612 because support became resistance thisweek. 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.

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Technical analysis of USD/CHF for September 06, 2018

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Overview:

The market opened around 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 spot of 0.9728 today.

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EUR/USD short-term technical levels and trading recommendations for September 6, 2018

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The EUR/USD pair has been trending-up for the past few weeks. This bullish movement ceased to be dominant since August 28.

Lack of enough bullish momentum is demonstrated on the chart so that recent movement has turned into sideways consolidations.

A recent bearish Head and Shoulders pattern is being demonstrated on the H1 chart. A valid SELL opportunity can be offered around 1.1640 (the upper limit of the depicted channel).

For the bearish reversal pattern to be confirmed, bearish breakout below 1.1600 (the neckline of the H&S pattern) is needed to pursue towards bearish targets.

This would enhance the short-term bearish scenario for the EUR/USD pair. Intraday bearish target levels would be located around 1.1600 and 1.1560.

On the other hand, bullish persistence above 1.1650 invalidates the bearish scenario for the short-term. Instead, the EUR/USD pair would keep moving within the depicted blue linear regression channels (1.1690-1.1750).

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NZD/USD Intraday technical levels and trading recommendations for September 6, 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 (0.6840-0.6700) 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, signs of bullish recovery were manifested around the previous weekly/monthly low around 0.6550. This allowed the recent bullish pullback towards 0.6700 to be demonstrated.

Evident bearish rejection was demonstrated around 0.6700 (broken demand-zone and backside of the broken-trend) where the current decline was initiated. Currently, the price level of 0.6550 stands as a prominent demand-level before a further decline can occur towards 0.6420.

Trade Recommendations:Risky traders can wait for bearish 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%).

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Intraday technical levels and trading recommendations for EUR/USD for September 6, 2018

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

The price zone of 1.1520-1.1420 stands as a prominent demand zone to be watched for bullish rejection and possible bullish pullbacks.

Bearish breakdown of 1.1520 is needed 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, a quick bearish breakdown below 1.1420 will be needed to gain enough bearish momentum.

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Technical analysis on EUR/USD for September 6, 2018

EUR/USD bounced off short-term support at 1.15 as expected. However bulls will only feel comfortable on a break above 1.17-1.1730. Until then there is still danger for another leg down towards 1.1450-1.14.

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Orange rectangle - resistance

Blue lines - expected price path

EUR/USD has retraced almost 50% of the rise and is most probably forming a Head and Shoulders pattern and is now at the top of the right shoulder. A rejection at the orange resistance area of 1.1660-1.1680 will open the way for a move towards the 61.8% Fibonacci retracement support and why not lower if we consider the Head and shoulder pattern. This could mean even a double bottom around 1.13. However I expect this decline not to last long and prices to reverse back to the upside. Any break above 1.17-1.1730 should be seen as a very bullish sign for the pair and we should expect to see upside targets between 1.19-1.22.

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Ichimoku cloud indicator analysis of Gold for September 6, 2018

Gold price remains below $1,200. Gold price is in a corrective phase and will most probably exhaust any upside move towards $1,220-$1,230. This upward move could start from current levels but could start from $1,180 area. Key to confirm the start of this upward bounce is the break above the short-term resistance of $1,202. As long as Gold is below this level we should expect price to continue lower.

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Blue lines - expected price path

Gold is expected to bounce towards the Kumo (cloud) resistance around $1,220-$1,230. A rejection at the cloud will most probably mean that Gold's downtrend is not over and we should expect a new lower low towards $1,140-$1,110. Gold is now struggling around the kijun- and tenkan-sen indicators confirming the indecisiveness and corrective nature of current price action. The only confirmed stop for bulls should be the August lows, while bears should wait for price to reach resistance in order to short it.

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Trading plan for 06/09/2018

Thursday is the yet another day when AUD increases are put out as the rest of the currency market is watching the mix of buying and selling USD. The stock market remains in the red. Oil is losing concerns about demand from emerging markets. On the rest of the market, we saw attempts to sell USD, but the effect was short-lived. EUR / USD approached 1.1660 and USD / JPY fell to 111.20, but at the start of trade in Europe, the rates returned to 1.1620 and 111.30 respectively.

From Germany, the global investors received poor data on industrial orders - in July orders fell by 0.9% m / m, while it was expected to increase by 1.8%. In annual terms, orders slept 0.9% - this is the first drop since July 2016.

The downward trend continues in the stock market, as investors still can not get rid of the unrest related to trade disputes and the situation in emerging economies. The Japanese Nikkei is losing 0.4%today, and the Chinese Shanghai Composite is down 0.4%.

On Thursday, the 6th of September, the event calendar quite rich in macroeconomic publications. During the European session, there will not be much going on, but in the afternoon we expect a series of data from across the ocean. The most important will be the publication of the change in non-agricultural employment of ADP. The other important data from the US scheduled for release are ISM Non-Manufacturing PMI, Services PMI, Composite PM, Unemployment Claims and Crude Oil inventories data.

AUD/USD analysis for 06/09/2018:

In Australia, more commercial banks raise mortgage rates - this time ANZ and Commonwealth Bank. The decision is not a surprise after last week's Westpac move, but information is a reminder that the pressure on the RBA is dropping to change attitudes. AUD / USD reacted with a decline from 0.72 to 0.7170 - the rate returns from this ceiling for the third day in a row.

Let's now take a look at the AUD/USD technical picture at the H4 time frame. The market tried to break through the blue trend line, but it failed and the breakout looks fake. The price returned to the level of support at 0.7165 and currently is trading around this level. The next support is seen at the level of 0.7157 and in a case of a sell-off extension - 0.7144. Please notice, the market conditions are quite overbought and the momentum is still negative and pointing to the downside. This might suggest the short-term downward bias is being supported.

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Global macro overview for 06/09/2018

After a long weekend, Wall Street returned to work on Tuesday. In a situation where the situation did not improve in developing markets. Argentina's plans to reduce the deficit or rumors about raising rates in Turkey have not helped the currencies of these countries. He was also losing the South African Rand. Indexes in Germany and France have dropped by losing more than one percent.

But of course, the Americans, as usual, could not take it easy. They were more likely to be interested in the fate of the NAFTA treaty after Donald Trump's weekend verbal assault on Canada. The president's threats to Russia, Syria and Iran could also be alarming in the event of an attack on the Idlib province, where the survivors of anti-government forces sought shelter.

On Tuesday in the USA, the PMI (final read) and ISM indexes for the industrial sector were published. PMI index in August amounted to 54.7 pts (expected from a drop from 55.3 to 54.5 pts), and ISM index in August amounted to 61.3 pts (expected from a drop from 58.1 pts to 57.7 pts) .). Expenditures for construction investments in July increased by 0.1% MoM (0.5% expected). Wall Street still showed that he did not see any threats. It can be said that investors believe that the US is a paradise whose atmosphere nothing and nobody will disturb. Nevertheless, there is an evident increase in risk aversion across the world, and the deteriorating situation in emerging markets also hits developed markets. For now, fortunately, this does not translate into a serious strengthening of the dollar (the EURUSD rate returned even today above 1.16), but it may be a matter of time. This pessimistic approach was supported by the fact that during today's session in the US, it will be much harder for the SP500 to return to zero. The NASDAQ, who is harmed by the Congress meeting on Internet social platforms and their sensitivity to hacker attacks or other problems that may lead to the loss of sensitive data, is seriously retracted. Dow Jones remains almost neutral, but he will probably be the fourth consecutive successive consecutive one. When we look at how incredibly strong Wall Street has remained against the world in recent times, the correction may be very close.

Let's now take a look at the SP500 technical picture at the H4 time frame. Indeed, the indexes started the session from declines, but they were small and immediately demand increased. After the creation of the session double bottom, the SP500 index moved north and it was only guessing whether the end of the session would be the victory of bears or bulls. Nevertheless, the gap between the levels of 287.63 - 288.62 was almost filled and a bounce from this zone occured. The neraest important resistance is seen at the level of 289.37.

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Bitcoin analysis for 06/09/2018

At the beginning of August, information appeared suggesting that Goldman Sachs is considering offering cryptocurrency trusts to its clients and launching trading desks dedicated to Bitcoin and other cryptographic tokens. However, as reported by the Business Insider website, citing people closely associated with the case, the institution abandoned its digital plans.

In recent weeks, the bank's management team has come to the conclusion that many more steps should be taken, most of them beyond the bank's control, before the regulated institution can trade cryptocurrencies.

Goldman planned to settle Bitcoin futures for some clients. Staff movements such as the appointment of Justin Schmidt as the head of the digital asset department, or David Salomon as the general director of the company suggested that the bank would be more interested in the cryptocurrency market.

It is worth noting that Solomon is not a standard investment banker. In her spare time, she works as a DJ (under the name D.J. D-sol), specializing in electronic dance music. According to Solomon, Goldman Sachs is already offering clients derivative instruments related to bitcoin, but in an interview with the financial newspaper, he said that the bank must evolve, change its operations and adapt to the environment.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. Information provided financial media caused a dynamic depreciation on the cryptocurrency market. In just two hours, BTC fell from $ 7,375 to $ 6,900. But that was just the initial reaction, later on, the market continued to plummet towards the level of $6,179. The price bounced from this level, but is still trading below the technical resistance at the level of $6,514. Obviously, the price has fallen out of the channel and this event has even accelerated the sell-off.

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Ethereum analysis for 06/09/2018

This week, EU finance ministers will be called on to set clear and uniform guidelines on cryptography in the EU Member States, Reuters reports.

The Brussels think-tank, Bruegel, has prepared a new report on the cryptographic industry. It was created for EU finance ministers who are to meet on this Friday and Saturday in Vienna, Austria. The report pays particular attention to initial monetary offers (ICO) as well as to cryptocurrency exchanges, whose number in the Union is to increase this year.

According to the Bruegel report, Binance based in Hong Kong, following repression in Asia, is working on moving its headquarters to Malta. The Beijing crypto-exchange Huobi, also intends to enter the European market.

The team of experts says that while the new EU money laundering legislation will ultimately tighten controls on cryptographic exchanges by 2020, regulatory oversight is in practice left to the national authorities. Bruegel suggests that this fact "may suggest that there is a field for regulatory arbitrage," which may be tolerated in order to temporarily widen opportunities for all parties "in order to experiment and learn the best approaches to this fast-growing technology."

The group notes that virtual assets such as Bitcoin are inherent challenges for regulatory authorities in the cash markets. Nevertheless, entities that oversee production, exchange and trade through related speculative instruments may be subject to stricter rules and may even be banned. Such entities also include mining farms, which, as stated in the Bruegel document, are prohibited in countries such as China.

Think-tank suggested the need for more transparent rules for ICOs, especially considering the advantage of entities that use the model of raising funds for issuing utility tokens - which, as they are not securities, are largely unregulated by EU financial rules.

Let's now take a look at the Ethereum technical picture at the H4 time frame. The market has broken out of the triangle formation and made a lower low at the level of 206.54 after violating the technical support at the level of 246.61. The nearest resistance is now seen at the level of 235.17. Please notice the oversold market conditions and strong, negative momentum that is supporting the downward bias. The next technical support is seen at the level of 170.45.

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Elliott wave analysis of EUR/JPY for September 6, 2018

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Whilst holding support at 128.60, we should see EUR/JPY continue higher towards 130.87 and 131.99 as the next minor targets on the way higher to 137.50.

If support at 128.60 unexpectedly gives away, that will extend the corrective decline in red wave (2) from 130.28 for a dip towards 127.60 before moving higher in red wave (3). This option is not our preferred outlook, but at this time, it's an option that we can not lay to rest yet.

R3: 130.87

R2: 130.22

R1: 129.85

Pivot: 129.50

S1: 129.14

S2: 128.91

S3: 128.55

Trading recommendation:

We are long EUR from 129.10 and we will move our stop higher to 128.50. If you are not long EUR yet, then buy near 129.14 and use the same stop at 128.50.

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NZD/USD Testing Resistance, Prepare For Reversal

NZD/USD is testing its resistance at 0.6620 (38.2% & 23.6% Fibonacci retracement, overlap resistance) where a reversal to its support at 0.6561 (61.8% Fibonacci retracement, horizontal pullback support) is expected.

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

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

Sell below 0.6620. Stop loss at 0.6645. Take profit at 0.6561.

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CAD/JPY Testing Support, Prepare For Bounce

CAD/JPY is approaching its support at 84.34 (61.8% Fibonacci extension, 50%, 76.4% Fibonacci retracement, horizontal overlap support) where the price is expected to bounce up to its resistance at 85.34 (50% Fibonacci retracement, horizontal overlap resistance).

Stochastic (55, 5, 3) is testing its support at 3.6% where a corresponding bounce is expected.

CAD/JPY is testing its support where we expect to see a bounce.

Buy above 84.34. Stop loss at 83.77. Take profit at 85.34.

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Technical analysis: Intraday Level For EUR/USD, Sept 07, 2018

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When the European market opens, some Economic Data will be released such as French 10-y Bond Auction, Spanish 10-y Bond Auction, and German Factory Orders m/m. The US will release the Economic Data too such as Crude Oil Inventories, Natural Gas Storage, Factory Orders m/m, ISM Non-Manufacturing PMI, Final Services PMI, Unemployment Claims, Revised Unit Labor Costs q/q, Revised Non-farm Productivity q/q, ADP Non-Farm Employment Change, and Challenger Job Cuts y/y, so amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL: Breakout BUY Level: 1.1691. Strong Resistance:1.1684. Original Resistance: 1.1673. Inner Sell Area: 1.1662. Target Inner Area: 1.1634. Inner Buy Area: 1.1606. Original Support: 1.1595. Strong Support: 1.1584. Breakout SELL Level: 1.1577.

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

Technical analysis: Intraday level for USD/JPY, Sept 07, 2018

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In Asia, today, Japan will not release any Economic Data, but the US will release some Economic Data such as Crude Oil Inventories, Natural Gas Storage, Factory Orders m/m, ISM Non-Manufacturing PMI, Final Services PMI, Unemployment Claims, Revised Unit Labor Costs q/q, Revised Non-farm Productivity q/q, ADP Non-Farm Employment Change, and Challenger Job Cuts y/y. 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: 111.82. Resistance. 2: 111.60. Resistance. 1: 111.38. Support. 1: 111.12. Support. 2: 110.90. Support. 3: 110.68.

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 6, 2018

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We continue to look for more upside towards 1.7820 as the next upside target. This target will only be a sub-target as much more upside remains expected for this cross. Ultimatel,y EUR/NZD should continue moving higher towards 1.8364 and 1.9844 as the more important upside targets.

Support at 1.7484 will ideally continue to protect the downside for the next rally higher.

R3: 1.7820

R2: 1.7750

R1: 1.7714

Pivot: 1.7679

S1: 1.7647

S2: 1.7597

S3: 1.7538

Trading recommendation:

We are long EUR from 1.7330 with our stop placed at 1.7565. If you are not long EUR yet, buy near 1.7606 and use the same stop at 1.7565.

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Germany and the UK refuse the key requirements for Brexit

The British pound and the euro rose sharply against the US dollar after news came that Germany and the United Kingdom abandoned the major requirements for Brexit. The source of the message is Bloomberg. If this information is reliable, rejection of the major requirements will help achieve the EU-UK trade agreement and prevent serious consequences of Brexit. It should be noted that the UK's withdrawal from the EU is scheduled for March 2019.

The data released in the first half of the day did not support the European currency, although they were quite positive.

According to the report of the research company IHS Markit, the index of supply managers PMI for the German services sector in August this year was 55 points against the preliminary estimate of 55.2 points. The Compound PMI in August came in at 55.6 points.

The index of supply managers PMI for the euro area services sector in August reached 54.4 points against 54.2 points in July this year. The Compound PMI of the eurozone in August rose to 54.5 points against 54.3 points in July, while economists expected growth to 54.4 points.

The data on the US foreign trade deficit in July this year demonstrated again its most significant monthly growth, and exerted pressure on the US dollar. Evaluating the report, the blockade measures on the part of the White House failed to bring significant change in the deficit.

According to experts, the main reason for the growth of the deficit was the slowdown in the growth of other countries' economies, which showed a negative impact on the export of American goods.

The US Commerce Department said that the trade deficit in goods and services in July rose by 9.5% compared to June and amounted to 50.08 billion US dollars. As noted above, the growth was due to exports, which decreased by 1% compared to the previous month. While imports grew by 0.9%. Economists predicted that the deficit would be $ 50.3 billion.

As for the technical picture of the EUR/USD pair, the buyers coped with the task and returned to the 1.1600 resistance level which was lost yesterday, maintaining the upside potential in the risky assets which was mentioned in the morning review. This situation may lead to the trend resumption, a correction on which has been observed since August 28. The main task for the near future will be the breakthrough of resistance 1.1650, which will lead to the demolition of a number of stop orders and a test of 1.1690 level.

The services data released in the first half of the day in Great Britain had supported the British pound. According to the report, PMI's supply managers index for the UK services sector increased to 54.3 points in August this year, while this index was at the level of 53.5 points in July. Economists had expected PMI for the UK service sector to be 53.9 in August.

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

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

Trading plan for the US session of GBP / USD pair on September 5

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

Buyers returned to the market from the level of 1.2781, which I paid attention to in my morning forecast. The next target is the resistance area of 1.2827, the consolidation above which will lead to a return to the area of the high of the day at 1.2867, where fixing profits are recommended. In case of a pound drop in the afternoon, the area of 1.2782 will also all be a good support.

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

Only the formation of a false breakout and a return to the level of 1.2827 in the second half of the day will allow sellers of the British pound to count on the renewal of the support level of 1.2782, where fixing profits are recommended. In case of growth above 1.2827, selling the pair can be considered when it returns immediately to the rebound from 1.2867.

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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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Beware, Brexit: the pound is growing on rumors of a possible deal

Even in the morning, the pound lazily slipped against the dollar to the base of the 28th figure, with permanent attempts to test the two-week lows. Parliamentary hearings on inflation could not support the British currency, and the strengthening dollar weighed on the GBP/USD, determining the downward trend.

The situation today on Wednesday has changed dramatically in the second half of the day. Blame – the notorious Brexit, or rather rumors around the negotiation process. Here it is worth recalling that exactly a week ago, the pound suddenly jumped almost to the middle of the 30th figure under similar circumstances. However, then the upward impulse of the pair provoked by Michel Barnier, who intrigued the market with a possible breakthrough in the negotiations. In other words, the market received first-hand information from the EU's chief negotiator. Today, the situation is somewhat different: the voiced information is in the nature of insider information, while official confirmation is not yet available.

Despite such circumstances, the pound not only covered all the losses of the recent days, but also pulled the European currency, which was able to return to the 16th figure. The fact is that the published rumors are so optimistic that if they receive official confirmation, they will completely redraw the fundamental picture for the GBP/USD pair and other cross-pairs with the participation of the pound.

So, according to one of the US news agencies, Britain and Germany were able to reach a compromise on key issues, creating favorable conditions for the final deal on Brexit. American journalists refer to anonymous officials who are directly involved in the negotiation process. According to them, the parties mutually refused "some of their demands" (from which it is not specified), after which the probability of a "civilized divorce" has increased in many respects. Also, insider sources specified that the Germans mainly made concessions, although it is not known exactly which issues.

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It is worth noting here that Germany has a great influence on European politics, therefore, by and large, we can talk about reaching an agreement in principle between London and Brussels - if, of course, the published information corresponds to reality.

In general, such "bells" about reaching a compromise appear more often – and this fact cannot but rejoice. The scenario of Britain's chaotic exit from the EU looks so apocalyptic that experts differ in their assessments of the possible consequences. But they are all convinced that not only the British but also the European economy will suffer. Therefore, traders react very sharply to optimistic signals regarding divorce proceedings.

By the way, in the first half of the day the market actually ignored another signal, which was voiced by a member of the British Parliament Lidington. He said that the deal between London and Brussels is ready by 85%, and the parties have only to settle the most difficult issue that concerns the status of the Irish border. The pound remained indifferent to this rhetoric - perhaps because the 85 percent agreement was discussed last week, and maybe because even the remaining 1 percent is able to disrupt the entire deal.

And yet on the market more and more often there is information that the dialogue between Brussels and London comes to the finish line. For example, last week, the British press reported that French President Macron at the September EU summit will make a statement in which he will ask European colleagues to show "maximum flexibility" in negotiations with London, so that the divorce process ended with the conclusion of the transaction. And this is by no means a complete list of positive signals that appear recently in the information field.

Today's situation should once again serve as a warning for those who play on the weakening of the pound. Any more or less significant hint of a deal has a strong impact on the pound. And such price spikes appear more often - today is the second case in the last week and a half. And it's just rumors and preliminary comments that are only harbingers of the "big deal." As soon as the parties really come to the final stretch of the agreement, the British currency will show a confident and almost recoilless growth throughout the market, regardless of other fundamental factors.

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From the technical point of view, the GBP/USD pair broke through the middle line of the Bollinger Bands indicator, as well as the intersected lines Tenkan-sen and Kijun-sen on the daily chart. If on Wednesday or the next day the pair fixates above 1.2905, the indicator Ichimoku Kinko Hyo will form a "Golden Cross" signal, which warns about a possible trend change. In this case, the next price target will be 1.3035 (the top line of the Bollinger Bands indicator on D1). This level of resistance of the pair could not break a week ago, and this week also everything will depend on the further news background. If the pair still overcome this barrier, then the next price benchmark will be the price of 1.3130 (the lower boundary of the Kumo cloud). However, it is too early to talk about this: the "maximum program" for GBP/USD is more concise on Wednesday: go and gain a foothold in the area of the 30th figure.

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