The White House introduces new trade duties on goods from China

The news about the introduction of new trade duties by the US against China led to the fall of the US dollar against other world currencies in trading on Monday.

Despite the fact that the risks posed by the trade war can spread to the European Union at any time, investors prefer the euro and the British pound, which can please at least some positive news.

Let me remind you that yesterday, there were rumors that the EU was discussing the possibility to allow representatives of the UK to control the goods supplied to Northern Ireland from the UK after Brexit. It should be noted that prior to these rumors, the control of the goods had to be assigned to the inspectors of the block.

Trump and new duties against China

Yesterday in the afternoon, US presidential adviser Larry Kudlow spoke, who stated that there is no reason to believe that current economic growth will not be sustainable. Kudlow also noted that he does not see any reasons that would indicate that Trump's actions in the sphere of trade harm the economy, as there are no signs that duties are a problem for the US economy.

The presidential adviser also drew attention to the fact that the growth of the US budget deficit is not a consequence of tax cuts, advocating Trump policy and tax reform.

Closer to the closure of the North American session, news appeared that the administration of the US president announced a new duty of 10% on imports from China worth $ 200 billion. New duties in the US will come into force on September 24 and by the end of the year will be raised to 25%.

The Chinese authorities immediately announced their intention to introduce reciprocal tariffs on American goods.

No matter how funny it looked, but following the White House's announcement of trade duties, the Ministry of Finance issued an appeal stating that the US still wants to hold another round of trade talks with China.

US President Donald Trump also appealed to the Chinese authorities, saying that he wants to reach an agreement.

Of the fundamental data that came out yesterday afternoon, you should pay attention to the report on production activity in the area of responsibility of the Federal Reserve Bank of New York, which grew in September at a slower pace than in August.

According to the data, the production index of the Fed of New York in September of this year was at the level of 19.0 points against 25.6 points in August. Economists had expected that in September the index would be 22 points.

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Turkey is not enough for Turkey

Yesterday, the depreciation of the Turkish lira was noted, even in spite of the fact that the Central Bank of Turkey raised interest rates higher than inflationary levels. This was done in order to try to stabilize the national currency as soon as possible, as well as to limit the growth of inflation in the country that has been observed since the beginning of the conflict with the United States.

However, one rate increase is clearly not enough. For a real impact on inflation growth and maintaining the rate of the Turkish lira, statements from the Central Bank are required in which it will be clearly indicated on the increase in interest rates in the future. And these measures will go against the position of Turkish President Recep Tayyip Erdogan, who has repeatedly stated that he is against high stakes.

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EUR / USD. 18th of September. The trading system "Regression channels". Seven unsuccessful attempts to escape above 1.1720

4-hour timeframe

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Technical data:

The senior channel of linear regression: direction - down.

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

The moving average (20; flattened) is up.

–°CI: 106.2290

The EUR / USD currency pair resumed the upward movement on September 18, failing to overcome the moving average line, and for the fourth time, fulfilled the level of Murray "8/8". It is not worthwhile forgetting about the fundamental data. The topic of the trade war between the US and China, as well as new details of the scandal with Trump and his possible ties with the Russian Federation, can radically change the mood of traders. However, the key to determining the current trend is technical analysis, which very eloquently points to an uptrend. Of the macroeconomic reports, there is really nothing to highlight today. More precisely, absolutely nothing. Neither in the States, nor in the EU, there is no important news for today. Thus, we are now watching the key level of 1.1719. Another rebound of the price from this target will again send the pair down. Recall that before the current four unsuccessful attempts to go above this level, there were four more unsuccessful attempts to overcome the level of 1.1750. Thus, the main question remains, will the pair, together with the eighth attempt, overcome the zone of 1.1720 - 1.1750?

Nearest support levels:

S1 = 1.1658

S2 - 1,1597

S3 - 1.1536

Nearest resistance levels:

R1 = 1.1719

R2 = 1,1780

R3 = 1.1841

Trading recommendations:

The EUR / USD currency pair has once again fulfilled the level of 1.1719. If, with the eighth attempt, this target can be overcome, then the upward movement will continue with the target of 1.1780 and it is recommended that it be worked before the turn of the indicator of Heikin Ashi down.

Orders for sale will become relevant after fixing the price below the removals. In this case, the tendency for the instrument to change to a descending one, and the target for the downward movement will be Murray's level "6/8" - 1.1597.

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 lowest linear regression channel is the violet lines of unidirectional motion.

CCI - the blue line in the indicator window.

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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Euro and pound initiative will not be given

The US introduces a new package of duties on imported goods from China, the volume of goods is $ 200 billion, duties are introduced at 10% and will begin to operate from September 24. Thus, Donald Trump fulfilled his promise, but at the same time, made an attempt to leave a window of opportunity for new negotiations, since the amount of fees is significantly lower than previously announced 25%.

China, however, did not appreciate such gesture. Earlier, it was announced that China's retaliatory move would concern the working conditions of American companies in the Middle Kingdom. In particular, they will increase procurement prices for raw materials and components, which will increase production costs and make US companies' products uncompetitive.

The development of events in the declared direction is capable of bringing down global stock markets and leading to a sharp increase in demand for protective assets.

Eurozone

The level of inflation in the eurozone in August was 2%, the result fully coincided with the forecasts of experts and supported the growth of the euro. Despite the fact that the indicator slightly decreased relative to July, in general, the price dynamics in the eurozone is positive and fundamental changes are based.

The main contributor to the growth of inflation in the coming months will be the growth of labor costs. In 2018, the average wage growth was 2.3%, this is the highest level in 10 years, the growth affected most of the euro area countries, it is expected that tightening in the labor market will lead, among other things, to productivity growth. That, in turn, will also affect prices in the direction of their growth.

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On Monday, ECB board member Benoit Kere announced that the regulator could begin to provide additional information on interest rate changes in the future in order to obtain an additional instrument of influencing market interest rates. Currently, the markets expect that the ECB will make the first increase in the second half of 2019, approximately six months or slightly after the end of the asset buy-back program. This time, lag is needed in order to better understand the consequences of the mitigation policy that lasted for several years. However, the ECB does not give any exact benchmarks yet, and this is exactly the moment he proposes to fix.

In fact, his proposal means that investors can, at any time, receive official confirmation of the ECB's plans, which can provide strong support for the euro. The forecast for EUR / USD on Tuesday remains bullish, the euro has closely climbed to the resistance level of 1.1720 and with a high probability will overcome it, the target is 1.1790.

The United Kingdom

Brexit remains the central theme in the UK. On Monday, Theresa May warned "dissenters" in the Conservative Party that the alternative to her scenario is the absence of a deal, which, in turn, is even worse. EU negotiator Michel Barnier has already largely softened the position of the European Union, but now the key factor is the inner-party split in the ruling party.

The situation is so complicated that the IMF also had to express its concern. In his opinion, the preparatory works will not be completed before March 29, 2019, so some "transitional agreement" is necessary, in this case, GDP growth may reach 1.5% in 2019 and 2020. Of course, this is not enough for positive expectations on the rate, since there is no reason to believe that the economy of Britain is threatened with overheating, there will be no effect of the weak pound, which will be reflected in the lowering of the output.

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On Wednesday and Thursday, an informal EU summit will take place in Austria, where, possibly, Bernie's action plan will be amended to facilitate the agreement by the end of the year.

As for macroeconomic data, the most important release will be the publication of the August inflation report on Wednesday, the likely slowdown in price growth will put pressure on the pound and stop corrective growth.

On Tuesday, the pound has the opportunity to continue its growth, GBP / USD will be aiming for 1.3270, however, in the coming days to reach this level of chances is not very much.

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Analysis of GBP / USD Divergences on September 18. The bearish divergence is brewing: it is possible to fall

4h

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The bullish divergence formed by the CCI indicator on the 4-hour chart allowed the GBP / USD currency pair to turn in favor of the British currency and resume the growth process in the direction of the correction level of 38.2% - 1.3316. September 18 is maturing bearish divergence in the MACD indicator. Its education will allow you to count on a turn in favor of the US currency and a return to the Fibo level of 23.6% - 1.3067. The consolidation of the pair's rate under the correction level of 23.6% will increase the probability of continuing the fall of quotations towards the next Fibo level of 0.0%.

The Fibo grid is built on extremes from April 17, 2018, and August 15, 2018.

1h

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On the hourly chart, the pair performed a fixation above the Fibo level of 127.2% - 1.3112. Thus, the growth process continues in the direction of the next correction level of 161.8% - 1.3202. Brewing divergences on the current chart are not observed. The end of the quotations from the correction level of 161.8% will work in favor of the US currency and the beginning of the fall towards the corrective level of 127.2%.

The Fibo grid is built on extremes from August 30, 2018, and September 5, 2018.

Recommendations for traders:

The purchases of the GBP / USD currency pair can now be carried out with a target of 1.3202 and a Stop Loss order under the correction level of 127.2%, as there was a close above the Fibo level of 1.3112 (hourly chart), and hold until the bearish divergence formed on the 4-hour graphics.

The new sales of the GBP / USD currency pair will be possible with the target of 1.3112 and Stop Loss order above the correction level of 161.8% if the pair retreats from the Fibo level of 1.3202 or after the formation of the bearish divergence on the 4-hour chart with the Stop Loss order above the peak of this divergence.

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The "Australian" has more chances to decline than to grow

The minutes of the last meeting of the Reserve Bank of Australia (RBA), published today morning, did not bring anything new concerning the regulator to monetary policy, which had virtually no noticeable effect on the Australian dollar rate.

The main thing that investors themselves were interested in was the phrase that "raising interest rates is more likely than dropping them" and that "there are no arguments for raising rates in the short term." The position of the regulator is understandable. He does not risk taking any action against the background of too high uncertainty, which was formed around the trade war between the US and China. Risks are indeed very high, not only, according to general opinion, the expert community, for the growth of the world economy, but also directly for the Australian economy.

It is not a secret that a significant part of Australia's raw exports come from China, so a slowdown in the economy of China will also have a negative impact on the growth prospects of the Australian economy, which makes the RBA take a wait-and-see attitude, trying to balance in the current unsettled conditions. And although the local currency rate has stabilized, its decline may resume if, as D. Trump promises, new customs duties on Chinese imports worth 200 billion dollars will be introduced next week.

It can be assumed that if such a decision is implemented, and while all this indicates, the exchange rate of the Australian currency may again be under pressure and resume its decline, as in the situation of increasing tension in trade relations between Washington and Beijing, it is likely to begin to contract with a high probability. Chinese imports, primarily iron ore from Australia, which could become an indirect blow to the Australian economy and will put pressure on the RBA, which in turn will not risk increasing interest rates. In this situation, the US dollar will already win against the "Australian", as the probability of an increase in interest rates of the Fed following the September meeting is very high and is measured, in accordance with the dynamics of futures for the Federal funds in the USA, at 94.4%. The key interest rate is expected to increase by 0.25% to 2.25%.

In this situation, it will be easy to notice that the discrepancy in the rates between the Fed and the RBA will increase, which will not be in favor of the latter, and this may provoke the fall of the currency pair AUD / USD.

Forecast of the day:

The currency pair EUR / USD is trading above the level of 1.1665. On the one hand, expectations of Draghi's speech, and on the other, the expansion of the US-China trade war, which is now the main risk factor in the markets. Probably, the pair will still try to grow to 1.1750, but it seems that it will remain in the range of 1.1530-1.1750. We consider it possible to sell it on growth from 1.1750 or after a decline below the level of 1.1665 with a probable target of 1.1530.

The AUD / USD currency pair is trading above the level of 0.7170. We also consider it possible to sell it on growth from 0.7235 or after overcoming the mark of 0.7170 with a probable target of 0.7100.

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

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On the weekly chart, the EUR/USD pair is demonstrating a Head and Shoulders pattern where the right shoulder is currently in progress.

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

For the bearish side of the market to be dominant, the pair needs quick bearish decline below 1.1500. Otherwise, the bearish scenario would be hindered for the short-term.

The resulting candlestick of the previous week is obviously bearish "Shooting-Star candlestick". This enhances the bearish side of the market for this week's consolidations.

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

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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 further bearish decline towards 1.1420. 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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Forecast for EUR / USD as of September 18, 2018

EUR / USD

As a result of Monday, the euro grew by 60 points due to the uncertainty of the immediate results of the tariff war between the US and China. China is ready to abandon further trade negotiations, if President Trump will raise tariffs for the forthcoming volume of $ 200 billion. But the US decided to lower the bar of duties from 25% to 10%. Against this background, the decline in the index of business activity in the manufacturing sector of New York in September from 25.6 to 19.0 was perceived by investors more sensitively. The US stock index S & P500 fell by 0.56%.

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Technically, there was a turn from the balance line on the chart of the daytime timeframe. On H4, the price was fixed above all indicator lines. Now, they serve as a strong support, as they currently converge to one point.

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At 08:15 London time, the head of the ECB Mario Draghi on the prevention of the development of crisis processes in the banking sector. Perhaps in this section, a bit will be said about the ECB's monetary policy, but it is unlikely that something new will be added to the well-known monetary policy. The index of business activity in the US housing market from NAHB for September is expected to decrease from 67 to 66. It is likely that investors will take advantage of further uncertainty and will continue buying the euro. Objectives: 1.1750, 1.1832 (the Fibonacci level is 123.6%). Overcoming 1.1830 will allow the price to move to 1.1900 (Fibonacci level of 138.2%).

In general, price development occurs in a wide range of 1.1512-1.1750, the upper limit of which has a strong resistance. Significant news should come in order for investors to decide the upper limit to attack.

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GBP/USD analysis for September 18, 2018

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Recently, the GBP/USD pair has been trading upwards. The price tested the level of 1.3170. Anyway, according to the H1 time frame, I found rejection of the yesterday's high at the price of 1.3164, which is a sign that buying looks risky. I also found the hidden bearish divergence on the 3/10 oscillator and bearish outside bar (BEOB) in the background, which is another sign of weakness. Watch for selling opportunities. The downward targets are set at 1.3095, 1.3070 and 1.3034.

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EUR/USD analysis for September 18, 2018

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Recently, the EUR/USD pair has been trading upwards. The price tested the level of 1.1717. Anyway, according to the M30 time – frame, I found rejection of resistance 1 at the price of 1.1713, which is a sign that buying looks risky. Besides, the price rejected from the upper Keltner band (resistance) and there is a hidden bearish divergence on the 3/10 oscillator, which is another sign of weakness. Watch for selling opportunities. The downward targets are set at the price of 1.1665 and at the price of 1.1633.

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EUR/USD short-term technical levels and trading recommendations for for September 18, 2018

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The recent bullish movement of the EUR/USD pair 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.

Earlier today, obvious bearish rejection was demonstrated around 1.1717. This allowed the current double-top reversal pattern to be demonstrated on the H1 chart.

This would enhance the short-term bearish scenario for the EUR/USD pair. Intraday bearish target levels would be located around 1.1670, 1.1640 and eventually 1.1615 ( lower limit of the channel ).

However, conservative traders should wait for bearish closure below 1.1670 (channel's mid-range and neckline of the reversal pattern) as a valid SELL signal. T/P levels should be located around 1.1640 and 1.1615.

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EUR / USD pair: plan for the European session on September 18. All attention to the speech of the President of the ECB

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

Buyers gave a good rebuff to sellers yesterday, which led in returning the pair to the area of large resistance levels today. Long positions in the euro can be considered after the formation of a false breakdown at the support level of 1.1698 or immediately to a rebound from 1.1670. The main task for the first half of the day will be the renewal of the large resistance in the area of 1.1732, where fixing profits are recommended. In the event of a negative market reaction to the speech of European Central Bank President Mario Draghi, it is the best to consider buying the euro from the lows of 1.1646 and 1.1620.

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

Sellers of the European currency urgently need to return to the level of support 1.1698, and you can do it already at the ECB president's speech. A decrease under the above-mentioned area will lead to the closure of a number of long positions in euros and a decrease to the middle of the channel at 1.1670 and 1.1646. The main goal is to update the low at 1.1620, where fixing profits are recommended. In the case of a breakdown and consolidation scenario above the resistance of 1.1732, from which it will also be possible to watch sales in the first half of the day. It is recommended to open short positions of EUR / USD pair only after a test of a maximum of 1.1732 and 1.1759.

Indicator signals:

The 30-day moving average is on par with the 50-day average, which indicates the lateral nature of the market.

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Description of indicators

  • MA (average sliding) 50 days - yellow
  • MA (average sliding) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
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Intraday technical levels and trading recommendations for GBP/USD for September 18, 2018

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The recent bearish momentum of the GBP/USD has shown signs of weakness since September 5 when an ascending bottom was established around 1.2800

The GBP/USD pair was recently testing the depicted downtrend line which came to meet the pair around 1.3025-1.3090. This week, the pair has been demonstrating a successful bullish breakout so far.

This price zone (1.3025-1.3090) also corresponds to 50% and 61.8% Fibonacci levels. These levels failed to offer enough bearish pressure.

Instead, the GBP/USD pair continues to demonstrate its uptrend within the depicted bullish channel on H4 chart.

As long as the current bullish breakout above 1.3090 (Demand level-1 and the lower limit of the H4 channel) is maintained, further bullish advancement should be expected towards 1.3200, 1.3250 and 1.3315.

On the other hand, any bearish decline below 1.3090 (Demand level-1) will probably invalidate the bullish scenario for the short-term. Hence, the pair would have lower targets around 1.3010 (Demand level-2).

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Intraday technical levels and trading recommendations for EUR/USD for September 18, 2018

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On the weekly chart, the EUR/USD pair is demonstrating a high-probability Head and Shoulders reversal pattern where the right shoulder is currently in progress.

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

On the daily chart, the EUR/USD pair is currently trapped between the depicted technical levels (1.1750 - 1.1500). As for the bearish side of the market to be dominant, the pair needs a quick bearish breakdown below 1.1500.

However, the price level of 1.1520 is still standing as a prominent demand level where the current bullish pullback was initiated.

As long as the price level of 1.1520 holds price above, another Bullish movement should expected towards the upper limit of the price range (1.1750) where bearish rejection should be anticipated.

On the other hand, any bullish breakout above 1.1750 will allow further bullish advance towards 1.1850.

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Fundamental Analysis of GBP/USD for September 18, 2018

GBP/USD has been quite impulsive with recent bullish gains. The pair has been trading in a non-volatile manner with the bullish momentum after the recent bounce off the 1.2850 area with a daily close. Ahead of the high impact economic reports from the UK this week, USD has been quite weak in comparison that is expected to encourage further upward momentum in the pair.

Recently UK CB Leading Index report was published unchanged at -0.2% which did not quite affect GBP gains in the process. Though today the economic calendar contains no economic reports from the UK, tomorrow UK CPI report is going to be published which is expected to decrease to 2.4% from the previous value of 2.5%. On Thursday GBP Retail Sales report is going to be published which is also expected to decrease to -0.1% from the previous value of 0.7%.

On the other hand, today US NAHB Housing Market Index report is going to be published which is expected to decrease to 66 from the previous figure of 67. Moreover, tomorrow US Building Permits report is going to be published which is expected to be unchanged at 1.31M and Housing Starts is expected to increase to 1.24M from the previous figure of 1.17M

Meanwhile, the upcoming economic reports are likely to dent GBP strength, whereas reports from the US are also expected to have mixed results. Though GBP has been the dominant currency in the pair, certain negative outcome on the upcoming reports will inject volatility and certain USD gains against the bullish pressure in the process.

Now let us look at the technical view. The price is currently heading towards 1.3200 area. If broken above with a daily close, further upward momentum is expected with a target towards 1.3350. The price has been quite impulsive with recent bullish gains which successfully countered the previous bearish momentum. As the price remains above 1.3050 area, the bullish bias is expected to continue further.

SUPPORT: 1.3050

RESISTANCE: 1.3200, 1.3350

BIAS: BULLISH

MOMENTUM: IMPULSIVE and NON-VOLATILE

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Technical analysis of EUR/USD for September 18, 2018

EUR/USD has managed to push above 1.17 as expected. We have been calling this pull back to 1.1620 as a back test of the break out and the bounce back to 1.17 confirms this bullish view. Now EUR/USD faces big medium-term resistance ahead, critical for an extended rise to 1.19-1.20 or a full-scale reversal to 1.14.

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Blue line - short-term support

Light blue dots - medium strength support

Dark blue dots -maximum strength support

Green line - major support

EUR/USD is back at its highs and I see a bullish pattern about to break to the upside. Major resistance as we said in previous analysis is found at 1.1720-1.1730 area. A break and close above this area will open the way for a move towards 1.19. A rejection at current levels and a break below 1.1640-1.1620 will open the way for a test of the 1.1520 major support. As I have been saying before, I remain bullish about EUR/USD as long as we trade above 1.16.

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Technical analysis of Gold for September 18, 2018

Gold price tried to push move higher but price only managed to make a lower high at $1,206. A break above this level will be a bullish signal that will most probably bring price to the short-term resistance of $1,210-11. A break above this level will push Gold towards $1,220.

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Green upward sloping trend line - support

Light green lines - bearish channel

Red line - short-term resistance

Gold price continues to respect the green upward sloping support trend line. As long as we are above $1,190 I expect prices to continue higher towards $1,220. Short-term key resistance at $1,206-10 area if broken will give the bullish signal. A break below $1,190 will most probably push price towards $1,170 and lower.

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Another rumor associated with Brexit, supports the British pound and the euro

The euro and the pound rose on Monday against the US dollar, offsetting a significant portion of the losses that were made in risky assets on Friday last week in the afternoon.

Brexit and the next hearing

One of the news, or rather rumors that could support the pound and the euro today, were new conversations that representatives of the UK and the European Union may soon move to an agreement on Brexit.

The rumor is that the EU is discussing the possibility to allow UK representatives to exercise control of goods supplied to Northern Ireland from Britain after Brexit, this has led to the growth of the pound to the area of the highs of this month. It should be noted that prior to these rumors, the control of goods should have been entrusted to the inspectors of the bloc.

The statements made today by the International Monetary Fund could also support the pound, as they saw a call for action against Brexit.

The IMF said that a disorderly and abrupt exit from the European Union could cause serious damage to the UK economy. The scale of preparation for Brexit makes the transition period necessary, as the rejection of it will damage both the British and the EU economy.

Inflation in the Eurozone

The data on inflation in the euro area, which came out in the first half of the day, did not lead to a significant change in market forces, as it completely coincided with the forecasts of economists.

According to the report, the consumer price index CPI of the eurozone in August this year increased by 0.2% compared to July, while in relation to the same period of 2017, inflation increased by 2.0%, which fully coincided with the forecasts of economists.

The growth was due to the rise in energy prices, while food and other volatile categories of goods slightly changed in price.

As for the core inflation, to which the European Central Bank places some emphasis, it should be noted that the price increase in August is also 0.2%, while compared to the same period in 2017, inflation increased by 1.0%. Let me remind you that the target level for the ECB is 2%.

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The technical picture for the EUR/USD pair

As for the technical picture of the EUR/USD pair, the level of 1.1680 will be important today, consolidation above which will lead to the formation of a new lower limit of the upward channel from the low of today and the formation of a large upward momentum aimed at the highs of this month in the region of 1.1725 and 1.1790. Also, a good signal for buying the euro will be the return of the trading instrument to the 50-day moving average.

Under the scenario, if buyers fail to climb above 1.1680 for today, and at the end of the day trading will end below the 50-day average (at 1.1665), bears will quickly return to the market, which will lead to the formation of a larger downward trend before the meeting of the Federal Reserve, which is scheduled for next week.

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BITCOIN Analysis for September 17, 2018

Bitcoin has been quite impulsive with the bearish momentum today after retesting and being rejected off the $6,500 area for a few days. Today the price has engulfed the previous 4 days of price action. Having confluence from the dynamic level of 20 EMA, the bearish pressure has gained good momentum in the process as well. Though the bias is still slightly bullish depsite today's bearish dominance in the market, the price is expected to head towards $6,000 area for another retest of the support. If the price manages to remain above $6,000 in the coming days, the bullish bias is expected to set the tone.

SUPPORT: 6000

RESISTANCE: 6500

BIAS: BEARISH

MOMENTUM: IMPULSIVE

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Trading plan for 18/09/2018

On Tuesday, the 18th of September, the event calendar is light in important events, so today's session promises to be not very exciting. Apart from Mario Draghi's speech at 08:15 am GMT, not much will happen. But the night was interesting as Donald Trump announced a 10% duty on Chinese goods with a total value of USD 200 billion. As a result, the USD remains in defensive with EUR / USD going above 1.17. AUD / USD is bouncing from 0.7143 to 0.7215. The stock market at the end of the session in Asia is dominated by a positive sentiment. Japanese Nikkei225 grows 1.5% and Chinese Shanghai Composite gains 0.8%. WTI crude oil returned under USD 69 / b, as worries about trade disputes are fueling speculation about losses to demand. Gold is consolidated at USD 1200 / oz. Moreover, in Australia, there were minutes from the last meeting of the Australian Reserve Bank.

AUD/USD analysis for 18/09/2018:

The minutes of the September meeting of the Reserve Bank of Australia has been released overnight. The management of the institution agrees that there is no reason to change interest rates in the near future. The next move will probably be a rise if the economy develops in the current direction. Trade tension is currently the largest global risk for the country's economy. In addition, the management discussed the possibility of a crisis in developing countries, with particular emphasis on Turkey and Argentina. The last significant drop in the value of the Australian dollar proved to be very helpful. In the next few years, the Australian economy should grow above the long-term average. Conditions on the labor market are positive, the Bank noted a significant decline in unemployment among young people. In the next few quarters, there should be a visible increase in wages.

Let's now take a look at the AUD/USD technical picture at the H4 time frame. The market has bounced sharply from the level of 0.7140 after the RBA Minutes were published and currently is trading just below the technical resistance at the level of 0.7222. Above this level, there are another two more technical resistance levels at 0.7229 and 0.7235, so it might be tough for bulls to break through at once, but it is still possible. The nearest technical support is seen at the level of 0.7195. The momentum is strong and positive and this supports the short-term bullish outlook.

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Bitcoin analysis for 18/09/2018

According to the local IT Web magazine, the new finance minister Zimbabwe said that the country should adopt Bitcoin at the state level in a similar way to Switzerland. Referring to the "investment and understanding" of Bitcoin by the Swiss central bank, Mthuli Ncube said he would call the Reserve Bank of Zimbabwe (RBZ) to follow suit: "|Zimbabwe should invest in understanding innovation, and central banks often invest too slowly in these technologies. But there are other countries that are moving faster. If you look at the Swiss Central Bank, they invest in Bitcoin and understand it" - he said.

Zimbabwe is still struggling with financial hardship after the political turmoil due to years of economic turbulence. Meanwhile, RBZ has been taking an increasingly cautious position in the matter of cryptocurrencies for some time. In May this year, the bank banned all domestic banking institutions from handling cryptocurrency companies in a similar way to India and Iran. Ncube suggested that turning a blind eye to Bitcoin would close the door to the benefits that would emerge later:"[...] If these countries notice the value and direction in which this is going, we should also watch carefully. [...] The idea should not be to stop this and say, do not do it, but rather regulators should invest in catching up and find a way to understand this. Then you regulate it because now you understand it "- he said.

In July, the RBZ revealed that it is investigating ways to apply Blockchain technology in its internal processes.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market is consolidating slightly around the level of $6,179 after breaking below the trend line support. The nearest technical resistance is seen at the level of $6,317 and this might be the target for bulls. On the other hand, if the level of $6,179 is broken, then the next technical support is seen at the level of $6,076 - $6,054.

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Elliott wave analysis of EUR/NZD for September 18 - 2018

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Red wave iv is likely evolving into a triangle consolidation using up time instead of points. If a triangle is developing, then we should expected the completion of red wave iv soon and the start of red wave v higher towards 1.8030.

A break above 1.7804 will confirm that red wave iv has completed and red wave v is developing. That said, under the triangle count support at 1.7712 should be able to protect the downside. A break below minor support at 1.7712 will re-open the possibility for a final dip to 1.7594 before completing red wave iv.

R3: 1.7954

R2: 1.7900

R1: 1.7825

Pivot: 1.7804

S1: 1.7755

S2: 1.7712

S3: 1.7683

Trading recommendation:

We will buy EUR at 1.7615 or upon a break above 1.7804

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Elliott wave analysis of EUR/JPY for September 18, 2018

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There was no time for a final dip to 130.02 and short-term important resistance at 131.11 was re-tested yesterday. We expect support at 130.29 now will be able to protect the downside for the next test and likely break, this time, above the 131.11 for a continuation towards 131.99 as the next sub-target on the way higher to 136.50.

Only an unexpected break below support at 130.29 will delay the expected break above 131.11 for a dip to 130.02 from where the next impulsive rally should begin.

R3: 131.99

R2: 131.45

R1: 131.11

Pivot: 130.72

S1: 130.58

S2: 130.29

S3: 130.02

Trading recommendation:

We are long EUR from 129.11 with our stop placed at 129.40. Upon a break above resistance at 131.11 we will move our stop higher to 130.25.

If you are not long EUR yet, then buy EUR near 130.29 or upon a break above 131.11 and use the same stop at 129.40.

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EUR/CAD Testing Resistance, Prepare For Reversal

EUR/CAD is testing its resistance at 1.5245(61.8% Fibonacci extension, 50% & 76.4% Fibonacci retracement, horizontal overlap resistance) where a reversal to its support at 1.5153 (61.8% Fibonacci retracement, horizontal swing low support) is expected.

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

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

Sell below 1.5245. Stop loss at 1.5296. Take profit at 1.5153.

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GBP/USD Reversed Off Resistance, Prepare For Further Drop

GBP/USD reversed off its resistance at 1.3164 (100% Fibonacci extension, 61.8% Fibonacci retracement, horizontal swing high resistance) where it is expected to drop further to its support at 1.3065 (horizontal swing low support).

Stochastic (55, 5, 3) reversed off its resistance at 97% where a corresponding drop is expected.

GBP/USD reversed off its resistance where we expect to see a further drop.

Sell below 1.3164. Stop loss at 1.3221. Take profit at 1.3065.

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Technical analysis: Intraday levels for EUR/USD, Sept 18, 2018

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When the European market opens, the economic calendar contains no economic data from the eurozone. However, the US is due to release a few economic reports such as TIC Long-Term Purchases and NAHB Housing Market Index. So, amid the reports, EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1725

Strong Resistance: 1.1718

Original Resistance: 1.1707

Inner Sell Area: 1.1696

Target Inner Area: 1.1668

Inner Buy Area: 1.1640

Original Support: 1.1629

Strong Support: 1.1618

Breakout SELL Level: 1.1611.

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

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Technical analysis: Intraday levels for USD/JPY, Sept 18, 2018

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In Asia, Japan today will not release any economic data. However, the US will release some economic reports such as TIC Long-Term Purchases and NAHB Housing Market Index. So there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance. 3: 112.41

Resistance. 2: 112.21

Resistance. 1: 112.01

Support. 1: 111.67

Support. 2: 111.47

Support. 3: 111.27

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

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

EUR/USD: Trump can break the upward impulse today

The information picture of Monday is quite diverse. On the one hand, Trump, who threatens to introduce new tariffs on Chinese imports, and on the other hand, the ECB, whose representatives continue to demonstrate an optimistic attitude.

Despite the inconsistency of the fundamental background of the EUR/USD, traders still prefer the European currency, which allowed the pair to recover its lost positions on Friday. But further growth remains questionable: the bulls of the EUR/USD need to consolidate above 1.1650 and keep this height as long as possible – otherwise the price may finally slide to the base of the 16th figure. Therefore, the dynamics of the next few days will allow us to understand whether the pair has the potential to enter the 17th figure or we are waiting for a sluggish flat at the border of 1.15 and 1.16.

First of all, you should understand why the dollar so rapidly rose throughout the market on the final day of last week. The reason, by and large, one – the notorious American-Chinese trade war. According to the American press, Donald Trump can already announce the introduction of new tariffs on imported goods from China on Monday. As journalists have specified, it is about a 10-percentage duties on goods with a total cost of $200 billion.

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This is not official, but rather insider information with reference to anonymous high-ranking sources in the White House. Last night in the American press there was one more message which confirmed intention of the USA to aggravate the trade war. However, this publication carried a slightly different message: China will abandon the planned negotiations if Washington approves the introduction of new tariffs. Let me remind you that the next round of new talks should begin this week, so the information about the intentions of the White House looks somewhat premature.

However, based on the above publications, today you must take caution to open positions in the dollar pairs, including the EUR/USD. In my opinion, the information on the approval of new tariffs will not be confirmed (at least until the completion of the next negotiations), but if Trump for any reason decides to take this step, the dollar will be in strong demand, as the greenback will once again be used as a defensive asset.

Judging by the current dynamics of the EUR/USD pair, the market does not believe in the escalation of the trade war, at least within the framework of today. Friday's emotions subsided, and the price was able to recover to the middle of the 16th figure. Moreover, the upward dynamics was due to several fundamental factors.

So, quite optimistic report of the Bundesbank was released today. This document is published monthly, but very rarely affects price fluctuations. But today, firstly, an almost empty economic calendar, and secondly, the optimism of the Germans coincided with the "hawkish" attitude of the ECB, which was demonstrated just last week. The main theses of the report of the German central bank are that in autumn the country's economy is expected to grow significantly, and it's summer slowdown is due to temporary factors.

In particular, the members of the regulator explain the decline in production activity in the automotive industry by the transition to new environmental standards. According to experts, in the near future the situation in this sector of the economy will be leveled. In addition, the Bundesbank noted that domestic demand remains at a high level, and the main economic indicators will show positive dynamics this year. It is worth noting that the German economy is called the "locomotive" of the EU economy, so such forecasts supported the growth of the European currency.

Comments of representatives of the ECB is also fuelling the growth of the EUR/USD pair. For example, the Head of the Bank of Lithuania, a member of the European regulator Vitas Vasiliauskas, said at the weekend that the issue of extending the stimulus program is not on the agenda and generally "not worthy of discussion". In addition, he noted that the slowdown of the European economy was an expected event, and by the end of the year the key indicators should show growth.

By the way, this position echoes the above-mentioned report of the Bundesbank, the effect of which has increased due to the final assessment of the growth of European inflation published today. Contrary to some concerns, the indicator was not revised downward and remained at the initial levels (CPI growth at 2%, core inflation – 1%). Despite the relative insignificance of these fundamental factors, they created an overall favorable atmosphere for the growth of the European currency. In the context of the EUR/USD, this allows the pair's bulls to hold the price above 1.1650 and demonstrate their dominance.

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And, nevertheless, it is necessary to refrain from long positions so far – at least until the end of the current day. The US trading session may give the EUR/USD bulls an unpleasant surprise in the form of Trump's comments on the new tariffs. Even if his statements are not specific without time reference points, the pair will still be under considerable pressure, returning to the base of the 16th figure. But if the market understands that the US president has decided to take a break until the completion of the next US-Chinese negotiations, the euro will continue its growth to the resistance level of 1.1715 – this is the upper line of the Bollinger Bands indicator on the daily chart.

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USD/JPY. The sword of Damocles for the Japanese Yen

The Japanese currency on the first trading day continues to test the 112th figure, demonstrating its ambitions for the development of a larger upward movement. This week plays a big role for the yen: on Wednesday the Bank of Japan will hold a meeting, on Friday the data on the growth of Japanese inflation will be published, and on the weekend the US-Japanese trade talks will be held. If these puzzles develop into a uniquely negative picture for the yen, the USD/JPY pair can not only update the annual highs, but also get close to the upper line of the Bollinger Bands indicator on the monthly chart, reaching the area of the 115th figure.

It is worth noting that the bulls of the USD/JPY pair have a hard time: the yen is forced to react not only to the internal fundamental background, but also to the external one. As a rule, these factors have the opposite meaning for the yen, so the price dynamics follows the "one step forward – two steps back" principle. The complexity of the situation is due to the fact that the upward impulse of the pair ends abruptly and often unexpectedly: for this, for example, it is enough that rumors about the escalation of the US-China trade conflict appear on the market. The topic of Brexit, the Turkish crisis, NAFTA - this is not a complete list of factors, the aggravation of which leads to a rise in the price of the yen. Even Trump's statement about a possible exit from the WTO influenced the dynamics of the Japanese currency. Therefore, it is not appreciative to make any predictions for a pair based solely on fundamental factors, as the development of many events is almost impossible to predict.

But if we talk about the events of this week, the attention of traders will be largely focused on the events of the "inner kitchen". Although the market does not expect any decisions from the Bank of Japan, the tone of its rhetoric can provoke strong volatility. Let me remind you that two months ago, the Japanese regulator changed the marginal limits of long-term interest rates, thus expanding the expected range. Given the dynamics of inflation, many experts said that the focus should be on the lower limit, not the top (there is no question of raising the rate). Therefore, the actions of the Japanese Central Bank are precautionary: Haruhiko Kuroda made it clear that further easing of monetary policy is one of the working options of the central bank. He never denied this fact, but earlier such a scenario was hidden under the veiled phrase that the regulator is "ready to respond to the current circumstances."

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Now the possible reaction has quite real outlines: the rate can be reduced to -0.2%. At least, the Bank of Japan has prepared the market for such an event. Much depends on the further dynamics of economic growth and inflation. Japan's GDP in the second quarter increased by 3%, thus recovering from a decline in the first quarter. This decline had a negative impact on the yen, as up to this point the Japanese economy showed a positive trend for a record amount of time (8 consecutive quarters) – such a "sprint" was last recorded only in the 80s.

Therefore, the third quarter indicator will play a big role in this context. Experts in the majority are pessimistic – primarily because of the weather conditions. In the summer, Japan had heat waves and equally heavy rains, which were also marred by natural disasters: the most powerful typhoon in the last 30 years, severe flooding and an earthquake in Osaka. All these sad events of "hot" in every sense of the summer brought huge losses, and the influx of tourists fell to a five-year low. For the same reasons, inflation may also slow down: the core inflation rate, which includes petroleum products but excludes volatile food prices, rose by only 0.8% in July, as in June.

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Thus, this indicator remains significantly below the target level of the Japanese regulator - and this fact will certainly affect the tone of Kuroda's rhetoric. Here it is worth recalling that the central bank at its last meeting said that inflation will be below the target for a long time – according to preliminary estimates, until the beginning of 2021. After that, most foreign exchange strategists shifted their forecasts for the end of the stimulus program until the end of 2020 with a possible prolongation.

Thus, the issue of normalizing monetary policy will not be included in the agenda of the Bank of Japan for a long time. This is not news for the market, so the usual rhetoric about maintaining the parameters of monetary policy at the current level will not cause unrest. But the probability of interest rate reduction further into the negative area will have a strong pressure on the yen. If Haruhiko Kuroda hints at such a probability (even without time reference points), then the growth of the pair can take an impulsive character. By and large, this is the only intrigue of the September meeting – but its resolution can significantly strengthen the position of USD/JPY bulls.

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From the technical point of view, the pair on all the "higher" time frames (from H4 and above) is located between the middle and upper lines of the Bollinger Bands indicator, which indicates the priority of the upward direction. On D1 and W1 the Ichimoku indicator formed a bullish "Parade of lines" signal. The strongest resistance is at the level of 112.50 is the top line of the Bollinger Bands on the weekly chart. If the pair is consolidated above it, the probability of growth to the upper line of the Bollinger Bands on the monthly chart (that is, to the price of 114.90) will increase in many ways.

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The pound is waiting for a signal to attack

The meeting of the Bank of England was held without noise and dust, and sterling is preparing to release important statistics on inflation and retail sales, observing the development of the situation in the field of trade wars. According to the regulator, the consequences of the conflict between the US and China for the world economy may be slightly worse than initially expected. The concern of MPC is evoked by developments in emerging markets. The committee unanimously voted to maintain the repo rate at 0.75% and said that by the end of 2019 excess demand could lead to further tightening of monetary policy.

In general, the meeting was held in line with expectations, and the increase in estimates of GDP growth of the UK from 0.4% to 0.5% q/q in the third quarter provided little support to the sterling. Markets were expecting a more positive result amid the acceleration of the average wage to 2.9% y/y and the economy to 0.6% in May-July, however, the central bank cooled the offensive ardor of the bulls with the statement that these figures came in line with the forecast. According to the regulator, inflation is moving in the direction of 2%, which suggests the possibility of using the "let's sit and see" approach.

The pound continues to show increased sensitivity to politics. Rumors that Brussels and London failed to achieve progress on the Irish border, has pushed prices higher, but a statement by the Labour Party that the opposition would vote against Theresa May's plan returned the bulls from heaven to earth. The correlation between the headlines about Brexit and the volatility of the sterling reached a record 70%, which is conclusive evidence that the growth of the GBP/USD is hampered primarily by politics.

Dynamics of correlation between Brexit headlines and sterling volatility

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Unlike the volatility of the pound, the volatility of the euro fell to a 5-month low. The ECB's plans to phase out QE and hold rates until at least September 2019 make the monetary policy transparent. Given the fact that the timing of the continuation of the normalization of BoE may shift from the end of 2019 to a later or, conversely, an earlier period, investors have a great opportunity to win back macroeconomic statistics on Britain in the EUR/GBP pair. According to Nomura, the release of retail sales data for August (September 20) looks particularly attractive. A pleasant surprise will contribute to the decline of the euro in the direction of £0.85. It should be noted that the consensus forecast of Bloomberg experts for the end of 2018 is £0.89.

As for the GBP/USD pair, much will depend on the development of the situation in the field of trade wars. Donald Trump threatens to impose additional tariffs of $200 billion on Chinese imports and invites to negotiations. The Chinese media claim that Beijing will not conduct a dialogue at gunpoint. The escalation of the conflict will increase the demand for reliable assets, including the US dollar.

Technically, if the bulls on the GBP/USD pair manage to hold the quotes above the support at 1.3035 and take the resistance by 1.313, the risks of implementing the target by 88.6% on the Shark pattern will increase.

GBP/USD, daily chart

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Forecast for USD / JPY pair as of September 17, 2018

USD / JPY pair

In the past two trading days, the yen added more than 80 points and almost reached the MACD trend line on the daily chart. Today is a holiday in Japan and investors completed the week on an optimistic note. But the situation on the stock market and the overall political situation in the world give little scope for continued growth.

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At the moment, there has been a correction from the resistance of the trend line on daily, we expect a decrease to support the balance line to the level of 111.56, which coincides with the MACD line on H4. The fastening under the line will mean the further intention of the price to decrease and the target will be 110.30, which is the support of the trend line of the falling price channel on the daily chart.

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Simplified Wave Analysis. EUR / USD pair for the week of September 14

The wave pattern of the H4 chart:

The price of the pair since June 21 moves according to the algorithm of the rising wave. In the daily chart, it formed an incorrect correction type.

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The wave pattern of the H1 chart:

The last hour wave from August 15 completes a larger upward construction. The price has reached the target zone.

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The wave pattern of the M15 chart:

The bearish wave of August 28 continues to create a reversal model of the movement. After the price rise last week, conditions were created for a change in the price movement.

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Recommended trading strategy:

There are no conditions for purchases. In the area of calculated resistance, it is recommended to monitor the reversal signals for the sale of the instrument.

Resistance zones:

- 1.1710 / 1.1760

Support zones:

- 1.1470 / 1.1420

Explanations to the figures:

A simplified wave analysis uses a simple waveform, in the form of a 3-part zigzag (ABC). The last incomplete wave for every timeframe is analyzed. Zones show the calculated areas with the greatest probability of a turn.

Arrows indicate the counting of wave according to the technique used by the author. The solid background shows the generated structure and the dotted exhibits the expected wave motion.

Attention: The wave algorithm does not take into account the duration of the tool movements in time. To conduct a trade transaction, you need to confirm the signals used by your trading systems.

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Simplified Wave Analysis. Review of USD / JPY pair for the week of September 14

The wave pattern of the H4 chart:

The last section of this scale from May 29 enters the structure of the dominant trend wave. The price is at the bottom edge of a wide zone of resistance.

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The wave pattern of the H1 chart:

Since July 19, a bearish wave zigzag is forming downward. In the daytime wave, it will become a correction (B).

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The wave pattern of the M15 chart:

The rising wave of August 21 overcame the level of minimum elongation. The next level is within the target zone.

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Recommended trading strategy:

Purchases are risky, possible within the framework of intraday trading. In the area of the settlement resistance zone, traders are encouraged to keep track of reversal signals for the sale of the pair.

Resistance zones:

- 112.50 / 113.00

Support zones:

- 111.00 / 110.50

Explanations to the figures:

A simplified wave analysis uses a simple waveform, in the form of a 3-part zigzag (ABC). The last incomplete wave for every timeframe is analyzed. Zones show the calculated areas with the greatest probability of a turn.

Arrows indicate the counting of wave according to the technique used by the author. The solid background shows the generated structure and the dotted exhibits the expected wave motion.

Attention: The wave algorithm does not take into account the duration of the tool movements in time. To conduct a trade transaction, you need to confirm the signals used by your trading systems.

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

Trading plan 17.09.2018

Trading plan 17.09.2018

The overall picture: The market turned to the US.

Last week, European currencies tried to organize growth against the dollar, but the decisions of the ECB and the Bank of England did not provide fuel for growth - there were no hints of tightening monetary policy.

The US authorities once again promised to introduce new tariffs on $200 billion of Chinese goods "in the coming days" - we remember that this exact statement took place more than a week ago - but then the US paused and invited the delegation of China to new trade negotiations. As we can see, China has not shown a strong desire to negotiate - and now new tariffs for $200 billion dollars worth of Chinese goods are likely to be introduced.

The second topic is the approach of the Fed meeting on rates. There is intrigue: the latest data on the US economy showed some slowdown in growth - and there is a question - will the Fed miss the rate hike at the meeting on September 26? Especially since Trump persistently asked not to raise the rate.

Pound: Growth looks outstanding. Range.

We are ready to buy at the breakout to the top of 1.3145.

Alternative: Sell below 1.2780.

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