Fundamental Analysis of AUD/USD for September 20, 2018

AUD/USD has been quite impulsive with recent gains which are leading the price towards 0.7310 resistance area. AUD has been quite solid amid the recent economic reports and events, whereas USD is still struggling to gain certain momentum in light of downbeat economic reports followed.

As Australian Cash Rate was unchanged at 1.5% with the view of stabilizing the economy further and encouraging development, AUD has gained good momentum to counter the preivous bearish trend. Recently the minutes of the lateat policy meeting of the Reserve Bankof Australia were released which revealed quite hawkish stance, leading to further gains on the AUD side. Moreover, economic reports like HPI was unchanged as expected at -0.7% and MI Leading Index report was published with an increase to 0.1% from the previous value of 0.0%. Today RBA Bulletin covered certain issues like The Effect of Minimum Wage, Access to Small Business Finance, and The New Payments Platform which had positive outcome in the process.

On the other hand, today US Philly Fed Manufacturing Index report was published with a jump to 22.9 from the previous figure of 11.9 which was expected to be at 17.5 and Unemployment Claims had a positive result decreasing to 201k from the previous figure of 204k which was expected to increase to 210k. However, CB Leading Index was decreased to 0.4% from the previous value of 0.7% which was expected to be at 0.5%. Additionally, Existing Home Sales report was also published unchanged at 5.34M which was expected to increase to 5.36M.

Meanwhile, USD is still found struggling amid the mixed economic reports, whereas Australia's consistent positive economic reports helped AUD to sustain the bullish momentum it had. This week the economic calendar contains no economic reports from the US, AUD is expected to continue gaining ground against USD in the process leading to a higher price in the coming days.

Now let us look at the technical view. The price has breached above the dynamic levels of 20 EMA, Tenkan and Kijun line with a daily close and heading towards 0.7310 area. The current momentum indicates the target area of 0.7310 is easily attainable but as of the preceding bearish trend and having strong Kumo resistance at 0.7310 area, the price is expected to push lower with target towards 0.7150-0.7200 area again in the coming days. As the price remains below 0.7450 area with a daily close, the bearish bias is expected to continue.

SUPPORT: 0.7150, 0.7200

RESISTANCE: 0.7310, 0.7450

BIAS: BULLISH

MOMENTUM: IMPULSIVE

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Bitcoin analysis for September 20, 2018

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Trading recommendations:

According to the H1 time - frame, I found that price rejected from the supply trendline in the background, which is a sign that buying looks risky around the level of $6.450. I also found an intraday support trendline and my advice is to watch for a breakout fo confirm a further downward movement. The downawrd target is set at the price of $6.084.

Support/Resistance

Major resistance - $6.450

Major support - $6.084.

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GBP/USD analysis for September 20, 2018

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Recently, the GBP/USD pair has been trading upwards. The price tested the level of 1.3287. According to the H4 time – frame, I found a rising channel and the price is respecting the lower diagonal of the channel. The macd is showing us strong upward momentum. It is very risky to watch for any selling opportunities. My advice is to watch for buying opportunities on the dips. The upward targets are set at the price of 1.3359 and at the price of 1.3470.

Trading recommendations for today: watch for potential buying opportunities.

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Analysis of Gold for August 20, 2018

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Recently, Gold has been trading upwards. The price tested the level of $1,207.39. According to the H4 time – frame, I found a rising upward trendline and a broken bullish flag in the background, which is a sign that selling looks risky. I also found a hidden bullish divergence in the background, which is another sign of strength. The upward target is set at the price of $1,221.00.

Trading recommendations for today: watch for potential buying opportunities.

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A sign of a recession: US debt is transformed into an internal

The new tariffs, which the Trump administration introduced against imports from China for goods totaling $ 200 billion, will come into effect on 24 September. The increase in duties by 10% is a milder measure than previously announced 25%, however, the markets did not perceive the decline in the expected threshold as a readiness of the US to negotiate, but as an indication of the weakness of its position.

China did not appreciate Trump's "peaceableness" and intends to deliver a full answer. This step is just as inevitable as the tightening of US trade policy, which has no room for maneuver. Trump intends to force US companies "to carouse and stick" to transfer their capital and, if possible, production capacity in the US, and until this task is implemented, there is no change in the tariff policy.

According to the US Department of Commerce, in the second quarter, 169.5 billion corporate funds were repatriated against 34.9 billion a year earlier, almost 5-fold growth could be considered a success, if not for a slowdown in 1Q, when the return on capital was $ 294.9 billion.

At the same time, one can observe quite a significant dynamics in the movement of foreign capital to the US securities market. After Trump was elected president, the influx into Treasury and the stock market sharply increased, but after the introduction of the tax reform from January 2018, the reverse process began.

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Foreign capital withdraws from the stock markets, but the indices do not decrease, the outflow is compensated by the buy-back operations, the US companies send the bulk of the repatriated capital to purchase their own shares and increase capitalization in order to improve financial reporting.

Similarly, in the debt market, the share of foreign creditors of the government decreases simultaneously with the termination of reinvestment in Treasury by the Fed, but there is no collapse of the public debt pyramid, someone buys government bonds with the same intensity.

These "someone", not only the primary dealers, the reduction of the remnants of commercial banks on the Fed's correspondent accounts indicates that they are partly bought by the state, and in part by large corporations. Thus, the US public debt market is becoming more and more internal. This is a sign of a decline in the global status of the dollar and a sign of the approaching recession, which, along with the approaching inversion of the yield curve, forces investors to reconsider the prospects for the dollar index in the direction of decline.

EUR / USD

The main news from the eurozone is expected from Vienna, where the leaders of the EU countries gathered for an informal summit to discuss issues related to Brexit. An attempt will be made to mitigate the conditions put forward not so long ago by the chief negotiator from the EU Barnier, if successful, European currencies will receive an incentive to grow. The publication on Friday of preliminary business activity data from Markit will have a limited impact on the euro.

The euro today can make another attempt to break through the downward trend line formed by the two highs of June and August, and go higher. If successful, the nearest target is 1.1733.

GBP / USD

Inflation in the UK increased by 2.7% in August against the 2.5% growth a month earlier, the result exceeded the forecast of experts. The base index instead of the expected decline increased from 1.9% to 2.1%, the direction to the more stringent position of the Bank of England is supported by statistics.

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Today, there will be data on retail sales in August, possibly exceeding forecasts, the pound may receive additional support as a result. At the same time, one must proceed from the premise that, before the end of the talks at the EU summit, no external factors can bring the pound out of the horizontal range.

The attempt of the bulls to update the July high of 1.3213 was unsuccessful, however, a second attempt is quite likely, in case of success and the appearance of positive news from Vienna, the pound will try to rise to 1.3292.

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A decline in the dollar may stop

On Wednesday, the US dollar continued a gradual decline against commodity and commodity currencies, as well as the currencies of emerging economies: Russia, Turkey, India, and South Africa.

In our opinion, the main reason for this dynamic is the reduction in the tension in the trade war between the United States and China, which, truth be told, has not disappeared anywhere, as well as fixing profits on the previously open long position on the dollar before the Fed decision on monetary policy, which will It is known already on the following Wednesday following the results of the two-day meeting. And the positive moods were inspired by the decision of D. Trump to raise customs duties on imported products from China, amounting to $ 200 billion, while only 10%, rather than 25%, as previously thought. And although they will operate only until the end of this year, and then, if the US-sponsored trade agreement is not reached, they are expected to increase to 25%, the markets are now inspired, which has weakened the US dollar as a safe haven and increased demand for risky assets.

So, is it worth hoping that the dollar will continue to decline relative to major currencies?

In our opinion, it's weakening still has a local character. The fact that the Fed will raise interest rates next week for the next 0.25%, no one doubts. This probability, according to the dynamics of futures on the rates for Federal funds, is estimated at 94.4%. We believe that, despite the local positive, by the end of the week, the dollar's decline will stop and it will start buying already. Keeping in mind exactly the factor of raising interest rates in the US, which will be positively evaluated by investors against the backdrop of the actions of other world central banks. In any case, they clearly are not in a hurry to resume the process of raising interest rates. And first of all, this is precisely because of the trade conflict between Beijing and Washington, which is still very far from the solution.

Forecast of the day:

The currency pair USD / CAD is trading above the level of 1.2900. It still has the potential to continue to decline, if oil prices also overcome local highs, and optimism in the market will continue. Against this background, there is a probability of falling to 1.2800-10 after crossing the mark of 1.2900. But if this does not happen on the wave of risk appetite reduction, then it can turn up and rush to 1.2985.

The currency pair NZD / USD is trading above the level of 0.6630 against the backdrop of strong data from New Zealand's GDP. The pair has the potential to grow to 0.6700, but for this, it should hold above the level of 0.6630.

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Intraday technical levels and trading recommendations for GBP/USD for September 20, 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 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, this price zone turned to become a prominent demand zone to be watched for price action.

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 advance should be expected towards 1.3250 and 1.3340.

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 20, 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 towards the price level of 1.1700 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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Fractal analysis for major currency pairs on September 20

Dear colleagues.

For the currency pair Euro / Dollar, we continue to monitor the local structure for the top of September 17 and the development of this structure is expected after the breakdown of 1.1728. For the Pound / Dollar currency pair, the price is still in the consolidated zone. For the currency pair Dollar / Franc, the price forms the initial conditions for the upward cycle of September 18. For the currency pair Dollar / Yen, the continuation of the upward movement is possible after the passage at the price range of 112.46 - 112.64. For the currency pair Euro / Yen, the continuation of the upward movement is expected after the breakdown of 131.86. For the Pound / Yen currency pair, the subsequent development of the upward movement is expected after the breakdown of 148.43 and the level of 146.82 is the key support.

Forecast for September 20:

Analytical review of currency pairs in the scale of H1:

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For the EUR / USD currency pair, the key levels on the scale of H1 are: 1.1783, 1.1761, 1.1728, 1.1704, 1.1657, 1.1640, 1.1613 and 1.1576. Here, we continue to follow the local upward structure of September 17. The short-term upward movement is expected in the range of 1.1704 - 1.1728 and the breakdown of the last value should be accompanied by a pronounced upward movement. Here, the target is 1.1761. The potential value for the top is the level of 1.1783, upon reaching which we expect a pullback downwards.

The short-term downward movement is possible in the range of 1.1657 - 1.1640 and the breakdown of the last value will have to the development of a downward movement. Here, the target is 1.1613. As a potential value for the bottom, we are considering the level of 1.1576.

The main trend is a local structure for the top of September 17.

Trading recommendations:

Buy 1.1704 Take profit: 1.1725

Buy 1.1730 Take profit: 1.1760

Sell: 1.1655 Take profit: 1.1642

Sell: 1.1638 Take profit: 1.1615

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For the Pound / Dollar currency pair, the key levels on the scale of H1 are: 1.3346, 1.3263, 1.3229, 1.3167, 1.3111, 1.3078 and 1.3040. Here, we continue to follow the upward cycle of September 5. The continued upward movement is expected after the breakdown of 1.3167. In this case, the first target is 1.3229 and in the range of 1.3229 - 1.3263 is the consolidation of the price. The potential value for the top is the level of 1.3346, upon reaching which we expect a pullback downwards.

The short-term downward movement is possible in the range of 1.3111 - 1.3078 and the breakdown of the last value will lead to an in-depth correction. Here, the potential target is 1.3040.

The main trend is the upward cycle of September 5.

Trading recommendations:

Buy: 1.3167 Take profit: 1.3229

Buy: 1.3264 Take profit: 1.3344

Sell: 1.3111 Take profit: 1.3080

Sell: 1.3076 Take profit: 1.3040

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For the currency pair Dollar / Franc, the key levels on the scale of H1 are: 0.9776, 0.9738, 0.9723, 0.9704, 0.9658, 0.9640 and 0.9621. Here, the price forms the potential for the top of September 18. The continued development of the upward trend is expected after the breakdown of 0.9704. In this case, the target is 0.9723 and the pass at the price range of 0.9723 - 0.9738 should be accompanied by a pronounced movement towards the potential target of 0.9776.

The short-term downward movement is possible in the range of 0.9658 - 0.9640 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 0.9621 and this level is the key support for the top.

The main trend is the formation of the potential for the top of September 18.

Trading recommendations:

Buy: 0.9704 Take profit: 0.9720

Buy: 0.9740 Take profit: 0.9774

Sell: 0.9656 Take profit: 0.9640

Sell: 0.9638 Take profit: 0.9622analytics5ba2efc9351d1.png

For the Dollar / Yen currency pair, the key levels on the scale of H1 are: 113.34, 113.01, 112.64, 112.46, 112.16, 111.96 and 111.58. Here, we continue to follow the upward structure of September 7. The short-term upward movement is possible in the range of 112.46 - 112.64 and the breakdown of the last value will allow to expect movement to the level of 113.01, near this consolidation value. The potential value for the top is the level of 113.34, upon reaching which we expect a pullback downwards.

The short-term downward movement is possible in the range of 112.16 - 111.96 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 111.58 and this level is the key support for the top.

The main trend is the upward structure of September 7.

Trading recommendations:

Buy: 112.46 Take profit: 112.62

Buy: 112.66 Take profit: 113.00

Sell: 112.16 Take profit: 111.97

Sell: 111.94 Take profit: 111.60

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For the Canadian Dollar / Dollar currency pair, the key levels on the scale of H1 are: 1.3065, 1.3003, 1.2968, 1.2945, 1.2888, 1.2837 and 1.2804. Here, we determined the subsequent goals for the downward movement from the local structure on September 18. The continued downward movement is expected after the breakdown of 1.2888. In this case, the target is 1.2837. We consider the level of 1.2804 to be a potential value for the downward structure, after which we expect consolidation, and also a rollback to the top.

The short-term upward movement is possible in the range of 1.2945 - 1.2968 and the breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3003 and this level is the key support for the downward structure from September 18.

The main trend is a local downward structure from September 18.

Trading recommendations:

Buy: 1.2945 Take profit: 1.2966

Buy: 1.2970 Take profit: 1.3000

Sell: 1.2888 Take profit: 1.2840

Sell: 1.2835 Take profit: 1.2805

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For the Australian Dollar / Dollar currency pair, the key levels on the scale of H1 are: 0.7390, 0.7362, 0.7320, 0.7287, 0.7241, 0.7212 and 0.7166. Here, we follow the upward cycle of September 11. The short-term upward movement is expected in the range of 0.7287 - 0.7320 and the breakdown of the last value will lead to a movement to the level of 0.7362. The potential value for the top is the level of 0.7390, after which we expect consolidation.

The short-term downward movement is expected in the range of 0.7241 - 0.7212, from this range, there is a high probability of a turn up. The breakdown of the level of 0.7212 will have a long correction. Here, the target is 0.7166.

The main trend is the ascending structure of September 11.

Trading recommendations:

Buy: 0.7287 Take profit: 0.7320

Buy: 0.7322 Take profit: 0.7360

Sell: 0.7241 Take profit: 0.7212

Sell: 0.7210 Take profit: 0.7168

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For the currency pair Euro / Yen, the key levels on the scale of H1 are: 132.96, 132.52, 131.86, 131.02, 130.70, 130.21 and 129.71. Here, we continue to follow the development of the upward cycle of September 10. The continued upward movement is expected after the breakdown of 131.86. In this case, the target is 132.52. The potential value for the upward trend is the level of 132.96, upon reaching which we expect a pullback downwards.

The short-term downward movement is possible in the range of 131.02 - 130.70 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 130.21 and this level is the key support for the top. Its passage by the price will have to develop the downward movement. In this case, the target is 129.71.

The main trend is the upward cycle of September 10.

Trading recommendations:

Buy: 131.88 Take profit: 132.50

Buy: 132.55 Take profit: 132.90

Sell: 131.02 Take profit: 130.72

Sell: 130.68 Take profit: 130.25

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For the Pound / Yen currency pair, the key levels on the scale of H1 are: 150.53, 149.31, 148.43, 147.40, 146.82 and 145.89. Here, we continue to follow the upward structure of September 7. The continuation of the upward movement is expected after the breakdown of 148.43. In this case, the target is 149.31. The consolidation is near this level, and hence, there is a high probability of pullback downwards. The potential value for the top is 150.53, from which we expect a correction.

The short-term downward movement is possible in the range of 147.40 - 146.82 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 145.89 and this level is the key support for the upward structure of September 7.

The main trend is the upward structure of September 7.

Trading recommendations:

Buy: 148.45 Take profit: 149.20

Buy: 149.35 Take profit: 150.50

Sell: 147.40 Take profit: 146.88

Sell: 146.78 Take profit: 146.00

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USD / JPY pair for September 19 - Preservation of what has been achieved

USD / JPY pair

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The breakthrough happened, which was expected and prepared long enough. However, the situation now is such that such an action and in order to become a reliable result, requires confirmation, consolidation, and development. The main task of the players is to keep up the height and continue to rise to the height of extremism (113.19), overcoming of which will allow the departure of the zone of the weekly correction. The return to the resistance of 111,90 (the upper limit of the monthly cloud), and even more so for the key support now in the area of 111.34-13 (week-old Tenkan + day cross and cloud), will count the current breakdown.

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On the lower timeframes, it is clear that the current overcoming of the resistances of the N4 target and the monthly Senkou Span A (111,90) was given in the course of a long struggle and confrontation. Therefore, it is very important to keep the passed levels as supports for players to rise and consolidation below can ruin their plans. An upward reference point in the prevailing conditions is the resistance zone of 113.00-19 (historical level + maximum extremum).

Indicator parameters:

all time intervals 9 - 26 - 52

Color of indicator lines:

Tenkan (short-term trend) - red,

Kijun (medium-term trend) - green,

Fibo Kijun is a green dotted line,

Chikou is gray,

clouds: Senkou Span B (SSB, long-term trend) - blue,

Senkou Span A (SSA) - pink.

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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GBP / USD. 19th of September. Results of the day. Theresa May wants the EU to make concessions

4-hour timeframe

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Amplitude of the last 5 days (high-low): 102p - 98p - 87p - 97p - 54p.

The average amplitude for the last 5 days is 88p (101p).

The British pound sterling on Wednesday, September 19, made a fairly powerful breakthrough, followed by an even stronger pullback down. It was connected, first of all, with the publication of the report on inflation for August, which unexpectedly showed the acceleration of the consumer price index to 2.7% y / y. It seems that traders did not expect this and first began to continue buying the pound sterling, and then they realized and started fixing long positions, which led to a significant drop in the British currency intraday. It is also worth noting that Theresa May in her interview reported that the EU should make certain concessions in the negotiations on Brexit, after the Kingdom provided a new version of the "divorce" from the EU, which also made some concessions. Thus, the negotiations, albeit with a creak, are moving. The parties still have about a month to "divorce" amicably, although, in fact, the November deadline has a very conditional value. The parties do not need to shift it to December or January. One way or another, the chances that the parties will still manage to agree are increasing. This can not help but rejoice at Mark Carney, who in the last year, never tires of warning that leaving the EU without a "deal" will be a powerful blow to the UK economy. From a technical point of view, an upward trend is maintained, the price was adjusted to the Kijun-Sen line, which at the moment could not be overcome. Thus, the price rebound from this line may provoke the resumption of the appreciation of the pound sterling.

Trading recommendations:

The currency pair GBP / USD began to be corrected. The price rebound from the Kijun-Sen line will signal the opening of new purchase orders with a target of 1.3224. Leaving the price below the critical line will make long positions not relevant.

It is recommended to open short positions not earlier than overcoming the Kijun-Sen line with a target of 1.3049. In this case, a change in the downward trend may occur on the instrument.

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

Explanations to the illustration:

Ichimoku Indicator:

Tenkan-sen is a red line.

Kijun-sen is a blue line.

Senkou Span A is a light brown dotted line.

Senkou Span B - a light purple dotted line.

Chinkou Span is a green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

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

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

EUR / USD. 19th of September. Results of the day. Speech by Mario Draghi can move a pair from the "dead point"

4-hour timeframe

o8xU_0roXYYBiIvscJVHjKW2W4NlWGQtQIlcBfkzAmplitude of the last 5 days (high-low): 80p - 92p - 101p - 80p - 73p.

The average amplitude in the last 5 days is 85n (86p).

Almost the entire third trading day of the week, the currency pair EUR / USD is traded in different directions, generally remaining in one place. There are no new interesting reports, Mario Draghi has not yet spoken, no macroeconomic reports have been published in the States or the EU today. Thus, the lack of initiative among traders is easy to explain and logical. By the way, we note one more unsuccessful attempt to overcome the level of 1.1720. However, this time, the bulls did not even manage to work it out. If the price today is able to go below the critical line, then the bears will have a real opportunity to form a new downward trend, but now much will depend on the nature of the news from the White House. As we have already noted, traders ignored first Trump's introduction of new duties against China for $ 200 billion, and then the introduction of trade restrictions by China for $ 60 billion. Thus, perhaps, this topic has ceased to influence the preferences of traders, at least temporarily. Nevertheless, one should not overlook the theme of the trade war. Technically, now it's even possible flat for a while, as evidenced by the Bollinger bands, turning sideways. Thus, it is now possible to move to the lower Bollinger band, which also coincides with the pivot level of 1.1586. Today, we should pay attention to the performance of Mario Draghi. Perhaps, questions of monetary policy will be touched upon, and this will be able to move a couple from one place.

Trading recommendations:

A downward correction began on the EUR / USD currency pair. It is not recommended to work it out, since there is a high probability of lateral movement now. For short positions, it is recommended to proceed below the cloud of Ichimoku.

Buy-positions are recommended to open after the completion of the current round of correction and when the price is located above the critical line. However, it is worth remembering the strong resistance in the area of 1.17-20 - 1.1750, which the bulls again can not overcome.

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

Explanations to the illustration:

Ichimoku Indicator:

Tenkan-sen is a red line.

Kijun-sen is a blue line.

Senkou Span A is a light brown dotted line.

Senkou Span B - a light purple dotted line.

Chinkou Span is a green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

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

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

GBP / USD: the main event of the day for the pound is yet to come

Today, for traders, the pound / dollar pair, however, like for other currency pairs involving the pound, is an indicative day. Market participants were reminded again that Brexit has an absolute advantage over all fundamental factors without exception even if it concerns such key indicators as the consumer price index. Today's rally of GBP / USD pair eloquently demonstrated the insignificance of macroeconomic statistics in comparison with the "divorce process" of Britain and the EU.

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The trading day began for the British currency with positive and promising news. Inflation figures in the UK exceeded forecasts, contrary to the modest expectations of most experts. On an annualized basis, the consumer price index rose to a six-month high, reaching 2.7%, the last time such growth was recorded in February this year. In monthly terms, the index jumped to 0.7%, thus renewing the one and a half year maximum (since March 2017). The core inflation index (net of volatile prices for electricity and food), as well as the retail price index. All these indicators came out in the "green zone", exceeding analysts' expectations. The reaction of the pound was not long in coming. In pairing with the dollar, he updated two-month highs and tested the 32nd figure.

However, the bulls did not celebrate success for long. In the second half of the day, the British press reported that Theresa May could reject Brussels' proposed plan for the settlement of the Irish border problem. Let me remind you that the other day, the representative of the main negotiator from the EU, Michel Barnier, announced that on October 3, a new draft proposal will be submitted that can resolve one of the most difficult issues of the "divorce proceedings".

Officially, this project has not yet been made public, but journalists have learned some details of this document. The essence of all innovations is reduced to minimizing checks at the border, maximally preserving the principle of a single market. As a compromise, Europeans propose to London to introduce customs control, which will be carried out in a very peculiar way. For example, Barnier suggests using the post-codes on containers and goods boxes to reduce customs checks and bureaucratic procedures. The market was optimistic about this idea, as Brussels for the first time showed such flexibility on such a difficult issue.

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Therefore, today, when one of the British influential newspapers reported that Theresa May would reject the sounded proposals, the pound lost the conquered positions and sank to the bottom of the 31st figure. In addition, today, the main theses of the premiere article for one of the German newspapers were delighted. In her publication, May demanded that Brussels make real concessions in the negotiations, because, in her opinion, London "has significantly improved its position", and now, it expects a similar step from its European counterparts. In particular, the prime minister believes that in the forthcoming negotiations on the establishment of a free trade zone, the members of the European Union should treat Britain in the same way as they do to third countries. Whereas now, according to May, Brussels is making demands for London that are not available in similar trade negotiations with other states.

In other words, the British prime minister's position remains quite demanding for Europeans, despite her renewed "pro-European" scenario of subsequent relationships. Last week, May, in an ultimatum, defended her plan in the British Parliament: "Either you accept my plan or Britain will generally remain without any deal," she told the deputies. I believe that with the same uncompromisingness, she will defend her intentions in Salzburg, where the informal EU summit will begin tomorrow. Certainly, the British have certainly reserved some "gaps" for compromise maneuvers, but May is unlikely to agree on key positions. Therefore, if the insider information on the non-acceptance of the European project on the settlement of the Irish border problem is confirmed, the pound will significantly fall in price throughout the market. After all, in this case, the whole negotiating process can collapse like a house of cards.

Thus, the encouraging statements of the main negotiator from the EU Michel Barnier and the optimistic comments of his British counterpart Dominic Raab can be leveled by the categorical position of the head of the British government. In this connection, the question arises: why is the southern dynamics of the pound / dollar currency pair so modest in the background of such events?

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In my opinion, the market simply awaits confirmation of the information published in the press. The matter is that Theresa May's performance in the Austria Salzburg is expected tonight, where she will voice her arguments on the eve of the most important for the UK summit of the EU. If the prime minister confirms a negative reaction about the European plan for the Irish border, the GBP / USD currency pair will not only fall into the area of the 29th figure, but will also return to a large-scale and prolonged decline. In such conditions, the technical side of the issue is inappropriate to analyze. Today, everything depends on the position of the British prime minister.

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Technical analysis of AUD/USD for September 20, 2018

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Overview:

The AUD/USD pair will be probably continue to rise from the level of 0.7233 in the long term. It should be noted that the support is established at the level of 0.7233 which represents the 508% Fibonacci retracement level on the H4 chart. The price is likely to form a double bottom in the same time frame. Accordingly, the AUD/USD pair is showing signs of strength following a breakout of the highest level of 0.7260. So, buy above the level of 0.7260 with the first target at 0.7309 in order to test the daily resistance 1 and further to 0.7346. Also, it might be noted that the level of 0.7379 is a good place to take profit because it will form a double top. On the other hand, in case a reversal takes place and the AUD/USD pair breaks through the support level of 0.7233, a further decline to 0.7153 can occur which would indicate a bearish market.

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Wave analysis of GBP / USD for September 19. The rising wave is nearing completion

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Analysis of wave counting:

During the trades on September 18, the GBP / USD currency pair lost just a few points and as a whole, remains in the stage of constructing the supposed third wave of the new upward trend section. The completion of the construction of this wave is still expected, and the section of the trend, which starts on August 15, can take a complex and non-standard form. The breakthrough of the lower generatrix, the rising corridor of the line, will indicate the pair's readiness to build a downward wave. An unsuccessful attempt to break through the level of 161.8% on a small Fibonacci grid may lead to the withdrawal of quotations from the peaks reached.

The objectives for the option with purchases:

1.3181 - 161.8% of Fibonacci

1.3275 - 200.0% of Fibonacci

The objectives for the option with sales:

1.2636 - 261.8% of Fibonacci (the highest grid)

General conclusions and trading recommendations:

The GBP / USD currency pair continues to be in a stage of some uncertainty. The third wave continues its construction with targets located near the calculated marks of 1.3181 and 1.3275, which corresponds to 161.8% and 200.0% of Fibonacci. I recommend staying in the stores with these goals. However, this wave can complete its construction near the designated marks, so new purchases are risky.

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Wave analysis of EUR / USD for September 19. The wave pattern does not clear up

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Analysis of wave counting:

During the trades on Tuesday, the currency pair EUR / USD lost about 20 percentage points. The wave pattern on the instrument has not changed at all in recent days. Attempts to break through the level of 0.0% on Fibonacci was not, thus, doubts about further increases in quotations are available. Although proceeding from the current wave counting, it is precisely the increase within wave 3, a. The reserve option remains the complication of the trend section, which starts on August 28, with the pair falling to figure 15.

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 currency pair presumably remains in the stage of constructing wave 3, a, but the wave pattern continues to get entangled. The rise in quotations may continue within wave 3 with targets near the estimated mark of 1.1733, which corresponds to 0.0% of Fibonacci. A successful attempt to break this mark will confirm the pair's readiness for further growth and the correctness of the current wave counting.

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Technical analysis of USD/CAD for September 20, 2018

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Overview:

The USD/CAD pair has faced strong resistances at the levels of 1.2969 because support had become resistance on September 17, 2018. So, the strong resistance had already formed at the level of 1.2969 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 1.2969, the market will indicate a bearish opportunity below the new strong resistance level of 1.2969 (the level of 1.2969 coincides with the daily pivot point). Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength above the moving average (50). Thus, the market is indicating a bearish opportunity below 1.2969 so it will be good to sell at 1.2969 with the first target of 0.9965. It will also call for a downtrend in order to continue towards 1.2796. The daily strong support is seen at 1.2796. On the other hand, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.3057.

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GBP / USD. 19th of September. The trading system "Regression channels". Inflation in the UK may remain without attention

4-hour timeframe

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Technical data:

The senior channel of linear regression: direction - down.

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

The moving average (20; flattened) is up.

CCI: 89.9687

The currency pair GBP / USD on Wednesday, September 19, suspended the upward movement, but no significant reaction to the introduction of new duties against China, nor the introduction of duties against America was not followed. Today in the UK, a report on inflation in August will be published. It is expected that, in annual terms, the consumer price index will slow to 2.4%. This slightly reduces the pressure on the Bank of England, which, most recently, in the face of political crisis and uncertainty with Brexit, was forced to raise the key rate to contain inflation. Thus, while inflation keeps below 3%, the English regulator does not have much sense in the new tightening of monetary policy. The very slowdown of inflation can be interpreted in different ways, and traders are now much more interested in the topic of Brexit. Even there is no information about the trade war between China and the United States of America. Thus, the inflation report can cause a surge in volatility only if the actual value is very different from the forecast value. From a technical point of view, the upward movement may continue today, since with the opening of the European trading session, the indicator of Heikin Ashi has already turned upward. Well, before fixing the price below the removals about the descending movement, it's quite difficult to talk.

Nearest support levels:

S1 = 1.3123

S2 - 1.3062

S3 - 1,3000

Nearest resistance levels:

R1 = 1.3184

R2 = 1.3245

R3 = 1.3306

Trading recommendations:

The currency pair GBP / USD resumed its upward movement, as evidenced by Heikin Ashi. Thus, now it is recommended to open long lines with the targets of 1.3184 and 1.3245. The signal for manual closing of positions will turn Heikin Ashi turn down.

Sell-positions will become relevant only after fixing the price below the moving average line. In this case, bears can intensify and start active sales with the first goal level of Murray "5/8" - 1,3000.

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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Technical analysis of USD/CHF for September 20, 2018

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Overview:

The market is still trading above the 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.

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EUR / USD. 19th of September. The trading system "Regression channels". Reinforced concrete level of 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: 45.9036

The currency pair EUR / USD on September 19 for the eighth time failed to overcome the zone of 1.1720 - 1.1750. Again, there was a rebound from the level of 1.1720 and the price dropped to the moving average line. At the same time, below the movers, traders were also unable to gain a foothold. Meanwhile, it became known that China is imposing retaliatory sanctions against America in the amount of about $ 60 billion. Thus, now all imports from the States fall under duties. Now, the next step is for Trump. He promised to introduce new duties totaling $ 267 billion, if Beijing continues to "heat up the situation." Beijing responded. Given the reinforced concrete level of 1.1719 and the escalation of the trade conflict between Washington and Beijing, the downward movement is preferable. However, as we already wrote in yesterday's reviews, it seems that traders have ceased to believe that the trade war will benefit the US. Thus, the market is now at a crossroads. On the one hand, there is no one who wants to buy the dollar yet. On the other hand, the upside does not allow the level of 1.1720. Today in Europe, ECB President Mario Draghi will deliver a speech. Theoretically, he can touch on the topic of monetary policy, which can affect the movement of the currency pair. In addition, we continue to monitor any messages from Trump, since now, logically, he must announce the introduction of new duties against China.

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 currency pair EUR / USD once again worked at 1.1719 level and again rebounded from it. The correction has already ended, so now, the relevance of the long lines with a target of 1.1719. The color of 1-2 bars with the indicator of Heikin Ashi in purple will confirm the intention of the pair to return to 1.1719.

Short positions will become relevant after fixing the price below the moving average. In this case, the tendency for the instrument to change to a descending one, and the target for the downward movement will be the level of Murray "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.

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

Analysis of EUR / USD Divergences for September 19. Bearish divergence again helps the dollar

4h

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The EUR / USD currency pair on the 4-hour chart reversed in favor of the US currency, after the bearish divergence of the MACD indicator was formed, and the fixation under the correction level of 76.4% was 1.1675. As a result, on September 19, the process of falling quotations can be continued in the direction of the next correctional level of 61.8% - 1.1605. The consolidation of the pair's rate above the Fibo level of 76.4% can be interpreted as a turn of the pair in favor of the EU currency and expect some growth in the direction of the corrective level of 100.0% - 1.1791.

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

Daily

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On the 24-hour chart, after the rebound from the correction level of 100.0% - 1.1553, the growth of quotations can be continued in the direction of the Fibo level of 76.4% - 1.1789. Brewing divergences are still not observed. The pair's retracement from the correction level of 76.4% will allow traders to count on a reversal in favor of the US currency and a slight drop towards the Fibo level of 100.0%. Fixing the quotes under the correction level of 100.0% will increase the probability of further falling in the direction of the next Fibo level of 127.2% - 1.1285.

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

Recommendations for traders:

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

The EUR / USD currency pair can now be traded with a target of 1.1605 with a Stop Loss order above the Fibo level of 76.4%, since the pair completed the closing at the level of 1.1675 with the formation of a bearish divergence.

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

Technical analysis of EUR/USD for September 20, 2018

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Overview:

The EUR/USD pair broke resistance which turned to strong support at the level of 1.1681 yesterday. The level of 1.1681 coincides with a golden ratio (61.8% of Fibonacci), which is expected to act as major support today. The Relative Strength Index (RSI) is considered overbought because it is above 70. The RSI is still signaling that the trend is upward as it is still strong above the moving average (100). This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend. In other words, buy orders are recommended above 1.1681 with the first target at the level of 1.1740. From this point, the pair is likely to begin an ascending movement to the point of 1.1740 and further to the level of 1.1767. The level of 1.1767 will act as strong resistance on the H1 chart. On the other hand, if a breakout happens at the support level of 1.1657, then this scenario may become invalidated.

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Technical analysis of EUR/USD for September 20, 2018

EUR/USD is below very important long-term resistance. If EUR/USD manages to break and hold above 1.17-1.1730 area, we should expect a big upward move to unfold over the coming weeks towards 1.19-1.21. A rejection however and a break below 1.1620 will be a very bearish sign.

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Red line - long-term resistance

Blue line - long-term support

Green line - short-term support

EUR/USD has managed to reach the red trend line resistance more than once but each time prices got rejected. This is a bearish sign. However all pull backs have managed to stay above the short-term support green trend line at 1.1660. A break below this level will most probably open the way for a move towards the blue trend line support at 1.1520. If that level is lost as well we should expect EUR/USD to move towards 1.13-1.14. On the other hand, if the price breaks and stays above the red trend line, I expect a move towards at least 1.19.

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

Technical analysis of Gold for September 20, 2018

Gold prices remains below resistance at $1,210 and inside the bearish channel. I believe the most probable outcome will be a break below $1,200-$1,195 short-term support for a move to new lows. Gold's bounce from August lows looks more corrective than impulsive.

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Green lines - bearish channel

Red line - short-term resistance

Dark green line - short-term support

Short-term resistance is at $1,210 and short-term support at $1,200-$1,198. Price has bounced off August lows but is mainly moving sideways after topping at the end of August. A break above $1,210 will be a very positive sign and could push prices higher towards $1,220-30 area where the next longer-term resistance is found. On the other hand if prices break below the short-term support, we should expect to test $1,180. If this level is broken, I expect Gold to move lower towards $1,140.

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

Technical analysis: Intraday levels for EUR/USD, Sept 20, 2018

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When the European market opens, some economic data will be released such as Consumer Confidence and Spanish 10-y Bond Auction. The US is also due to release a series of economic data too such as Natural Gas Storage, Existing Home Sales, CB Leading Index m/m, Unemployment Claims, and Philly Fed Manufacturing Index. So amid the reports, EUR/USD will trade with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1730.

Strong Resistance:1.1723.

Original Resistance: 1.1712.

Inner Sell Area: 1.1701.

Target Inner Area: 1.1673.

Inner Buy Area: 1.1645.

Original Support: 1.1634.

Strong Support: 1.1623.

Breakout SELL Level: 1.1616.

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

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

Technical analysis: Intraday levels for USD/JPY, Sept 20, 2018

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In Asia, Japan today will not release any economic data. However, the US will provide some economic reports such as Natural Gas Storage, Existing Home Sales, CB Leading Index m/m, Unemployment Claims, and Philly Fed Manufacturing Index. So there is a probability the USD/JPY pair will trade with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance. 3: 112.79.

Resistance. 2: 112.57.

Resistance. 1: 112.35.

Support. 1: 112.07.

Support. 2: 111.85.

Support. 3: 111.63.

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

Trading plan for 20/09/2018

Markets remain on edge amid escalating trade tensions on the US-China line, although at night in the major currency group there are no major changes. EUR / USD stopped near 1.1680, USD / JPY dropped to 112.20, and GBP / USD fluctuated around 1.3140. The most violate currency of the night session is the New Zealand dollar, which spiked up after the excellent GDP results, although it was not without a small scandal.

On the stock market, traders observed minimal increases, and the last rally lost momentum. Japanese Nikkei225 grows 0.2%, and the Chinese Shanghai Composite is barely above the line. WTI oil is growing today by 0.7% up to 71.6 USD / b, while Brent gains 0.4% up to 79.7 USD / b., continuing increases from Wednesday after good data from US inventories, which showed a fall in crude oil and gasoline inventories.

On Thursday, the 20th of September, the main event of the day is the Swiss National Bank Libor Rate decision, together with 3-Month Libor Upper Target Range, 3-Month Libor Lower Target Range and SNB Monetary Policy Assessment. The other important data scheduled for release are Retail Sales from the UK, ADP Non-Farm Employment Change from Canada and Philadelphia Fed Manufacturing Index from the US.

NZD/USD analysis for 20/09/2018:

After midnight, the New Zealand's GDP for the second quarter was published. The market participants expected an increase of around 0.8% q / q, which would still be a great result after the first quarter of this year (+ 0.5%). The result, however, took everyone by surprise as the New Zealand economy rose by 1.0% in the second quarter. On the yearly basis, the GDP growth in New Zealand in the second quarter fell above forecasts at 2.8% y / y vs 2.5% in the forecast. Strong reading removes the probability of OCR reduction by the RBNZ in November.

However, controversy arose around the publication of the reading. People gathered in the New Zealand statistical office got to know the GDP result a minute earlier than the rest of the market. This means that some financial media, economists and banks could benefit from the acquired knowledge and enter positions. The phone was blamed on the office member's phone, which was allegedly badly synchronized with the main system computer. You could earn a lot from this error because the New Zealand dollar was more expensive than the American one by about 50 pips. This currency is a definite winner of the Asian session.

Let's now take a look at the NZD/USD technical picture at the H4 time frame. The market has broken through the 61% Fibo retracement of the previous swing down at the level of 0.6638 and currently is heading higher towards the next technical resistance at the level of 0.6681. The key technical resistance is still located at the level of 0.6724 and only a clear, impulsive breakout through this level would have changed the current bias from bearish to bullish. The immediate support is seen at the level of 0.6631 and 0.6620.

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Bitcoin analysis for 20/09/2018

During the "civil dialogue" in the German-Dutch Army Corps in Munster Scholz said: " I doubt if they currently have a perspective as a currency model". He compared cryptocurrencies to tulipomania in the Netherlands in the seventeenth century, saying that "there is a great danger that it will be such a tulip inflation". Scholz said that the necessary computer processes for the mass implementation of cryptocurrencies are so expensive and energy-intensive that they effectively prevent this process. However, he does not say that the same situation will take place in 20 to 30 years. According to Scholz, cryptocurrencies should be closely monitored by regulators because they can be used to finance terrorism, money laundering or other criminal activities. "We do not believe that they currently have significant economic significance" - he added at the end of his speech.

European legislators have met in the past few weeks to discuss their concerns about cryptocurrencies and potential remedies for problems related to digital assets. On September 4, MEPs met to discuss regulations on initial monetary offers (ICO) that they said were very interesting and promising to raise capital, but they require more regulatory control in the eyes of many European legislators. At the last meeting of the Economic and Financial Affairs Council in Vienna, the Vice-President of the European Commission, Valdis Dombrovskis, stated that cryptography requires further regulation. While he noticed that the crypto "will stay with us permanently," Dombrovsksis emphasized that the European Union will focus on the development of the classification of cryptographic resources and regulatory mapping.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. Very interesting candle appeared recently at the market, that looks like an attempt of the market to break to the downside and to the upside at the same time. Nevertheless, the price stayed at the virtually the same level as it was before, that is around $6,350. The price is still below the weekly pivot at the level of $6,401 and below the black internal trend line resistance as well. The key technical support is still unbroken at the level of $6,067.

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Elliott wave analysis of EUR/NZD for September 20, 2018

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The sudden acceleration lower is a bit of a concern, but as long as support at 1.7550 is able to protect the downside, we will continue to look for more upside pressure towards 1.8030 and higher.

If, however support at 1.7550 is broken then we might need to reconsider our short- to medium count, as it opens for the possibility of the rally from 1.6534 as being part of a larger and more complex correction. We really do not likely this option, but can not reject this possibility just yet.

R3: 1.7680

R2: 1.7628

R1: 1.7596

Pivot: 1.7550

S1: 1.7497

S2: 1.7443

S3: 1.7371

Trading recommendation:

We bought EUR at 1.7615 and we will place our stop at 1.7515. If you are not long EUR yet, then buy a break above minor resistance at 1.7679 and start by using the same stop at 1.7515.

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

Elliott wave analysis of EUR/JPY for September 20, 2018

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The rally higher towards 131.99 and above has stalled for now. We expect that a short-term consolidation is needed before the next push higher towards 131.99. That said, we do see a second option, which calls for a slightly deeper correction towards 130.09 before the next push higher sets in.

We do prefer the first option for a direct rally after a minor sideways consolidation, but we will remain open minded if the second option proves itself to the correction scenario.

R3: 131.99

R2: 131.50

R1: 131.11

Pivot: 130.85

S1: 130.66

S2: 130.28

S3: 130.02

Trading recommendation:

We are long EUR from 129.11 with our stop placed at 130.25. If you are not long EUR yet. then consider buying EUR near 130.09 or upon a break above 131.68 and use the same stop at 130.25.

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EUR/CAD Bounced Off Support, Prepare For A Further Rise

EUR/CAD bounced nicely off its support at 1.5085 (100% & 61.8% Fibonacci extension, 50% Fibonacci retracement, horizontal swing low support) where it could potentially bounce to its resistance at 1.5211 (50% Fibonacci retracement, horizontal overlap resistance).

Stochastic (55, 5, 3) is bounced off its support at 2.38% where a corresponding rise could occur.

EUR/CAD bounced nicely off its support where we expect to see a further rise.

Buy above 1.5085. Stop loss at 1.5008. Take profit at 1.5211.

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AUD/USD Reversed Off Resistance, Prepare For Further Drop

AUD/USD reversed off its resistance at 0.7284 (100% Fibonacci extension, 61.8%, 50%, 23.6% Fibonacci retracement, horizontal overlap resistance) where it is expected to drop further to its support at 0.7231 (23.6% Fibonacci retracement, horizontal swing low support).

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

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

Sell below 0.7284. Stop loss at 0.7315. Take profit at 0.7231.analytics5ba30cff6e486.png

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EUR / USD plan for the US session on September 18. Euro remained bargaining in the channel

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

The trade remained in the side channel, and the breakthrough of the resistance level at 1.1690 in the morning has again not helped the buyers. Now, we can count on retaining the support at 1.1656. It is best to open long positions in euros from this level after the formation of a false breakdown on it. In the other scenario for purchases, it is best to count after the weekly minimum test in the area of 1.1620. The main task by the end of the day will be a return and consolidation on the resistance of 1.1689, after which, it will be possible to talk about the continuation of the EUR/USD upward trend.

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

The sellers returned to the level of 1.1689, and its repeated test on the volume which is already from below to top will serve as a signal for the opening of new short positions with a decrease and update of the low of yesterday at 1.1656. Only a breakthrough of 1.1656 will lead to a reversal of the upward trend, which is still in euro that will allow us to expect a descent to the lows in the area of 1.1620 and 1.1591, where fixing profits are recommended. If EURUSD rises above 1.1689 and in the afternoon, sales can also be expected from resistance at 1.1721.

Indicator signals:

Moving Averages

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

Bollinger Bands

The sellers fulfilled the upper limit of the indicator 1.1709, which led to a fall in the euro in the morning.

For purchases, you can return to the rebound from the lower boundary of Bollinger Bands, located in the area of 1.1648.

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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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Dollar drops before the Fed meeting

The Bank of Japan expectedly kept the key interest rate unchanged, which is quite logical in the current economic conditions of the country, as well as the general situation in the world where the US-inspired trade wars play the main "violin".

According to the data provided, the key interest rate was retained at 0.1%, and the volume of asset purchase under the incentive program, or the so-called quantitative easing, at 80 trillion yen.

The decision of the Japanese regulator was expected and did not lead to any changes in the dynamics of the yen. In general, the local Central Bank faces difficult tasks after the Japanese economy got into the deflationary "hole" in the nineties. It consists mainly in balancing between stimulating economic growth and uncertainties, such as the prospects for internal inflation and external challenges that are formed, first of all, by the trade war between the USA and the PRC.

On Monday, the US announced an increase in trade duties on Chinese imports to 10% for $ 200 billion and threatens to raise them to 25% by the end of this year with the prospect of expanding these measures by another $ 267 billion. The Chinese responded yesterday by imposing duties on 5% and 10% on US imports of $ 60 billion.

Financial markets did not react particularly to these headlines, as expected and the reaction to them was already earlier. In the foreign exchange market, the US dollar is under pressure. It is clearly sold before the Fed meeting on monetary policy, which will be held next week. It is assumed that the regulator will raise the key interest rate for the next 0.25%, to 2.25% for the third time this year.

We estimate this local weakening of the dollar as temporary and reflecting the fixation of profit, and nothing more. We believe that the dollar has prospects for strengthening after its weakening. Although in general, it is likely to continue receiving assistance in the near future for the continuation of the Fed.

Forecast of the day:

The EUR/USD pair is trading in the range of 1.1620-1.1730 on the wave of expectations of the outcome of the Fed meeting, negotiations on Brexit and expansion of the trade war between China and the United States. Probably, the pair will remain in this range today. Selling can be considered possible for growth from about 1.1730 with a probable target of 1.1620.

The USD/CAD pair is trading below the level of 1.2970. It declines amid rising crude oil prices, as well as, investors' expectations of a positive outcome of the Canada-US free trade talks. If the price is kept below this mark, there is a probability of a decline to 1.2900.

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GBPUSD: inflation in the UK will force the Bank of England to raise rates

The European currency has made another unsuccessful attempt today to break above the highs of this month, which again led only to a sharp fall in the area of yesterday's lows.

Such sharp fluctuations are taking place against the backdrop of the tightening of the trade war between the US and China, which makes investors even more nervous.

Let me remind you that today it became known that China is introducing new duties on imports of goods from the United States in the amount of $60 billion in response to tariffs from the United States. China's new duties apply to 5,200 U.S. goods, including agricultural products, machinery and equipment, and chemical products.

Inflation in the UK

Meanwhile, the British pound still managed to break through to the monthly highs after the release of more than a positive report on inflation in the UK, which could lead to further tightening of monetary policy by the Bank of England, which does not want to do so in a period of uncertainty that is associated with Brexit.

The Bank of England has repeatedly said that inflation should return to its target level, while the main cause of risks remains the agreement on Brexit, which has not been achieved, despite all the rumors that have fueled the market in the last few weeks.

According to the report, the annual inflation rate in the UK accelerated in August. It happened because of the sharp increase in prices for clothing and air tickets.

According to the National Bureau of Statistics, in August this year, compared to the same period of 2017, consumer prices rose by 2.7%, while in July the annual inflation rate was 2.5%.

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Economists had forecast inflation to decline to 2.4 percent.

The strengthening of inflationary pressure in the British economy is regarded by experts in two ways. The British central bank has repeatedly said that it can raise the cost of borrowing twice or more times in the next two or three years to return the annual inflation rate to the target level of 2%..

As for the monthly growth, in August this year, compared to July, the consumer price index rose by 0.7%, while economists had expected an increase of 0.5%. It is important to note that in July inflation did not show any increase compared to June.

The technical picture of the GBPUSD

As for the technical picture, the buyers of the British pound have long lacked a major downward correction, which is now being formed in the market. The breakthrough in the support of 1.3110, in which the pound's sellers have rested on, will lead to the demolition of a number of stop orders, and a more significant movement of the trading instrument down to the lows of 1.3050 and 1.2990.

The Bank of Japan left monetary policy unchanged

Today it became known that the Bank of Japan left monetary policy unchanged. Rate on deposits remained at a negative level of -0.1% and the target rate of return of 10-year bonds - near 0%.

The regulator said that it intends to maintain a very low level of interest rates for a long time and is still ready to buy government bonds at an annual rate of 80 trillion yen.

During the speech of the governor of the Bank of Japan, the yen also traded without changes in the pair with the US dollar. Kuroda said he expects Japan's economy to continue a moderate recovery and prices will gradually move towards the 2% inflation target. The central bank governor also noted that he would maintain extremely low rates for a long period of time.

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Data on the growth of Japan's foreign trade deficit, which doubled in August this year compared to the previous month, were also ignored by the market.

According to the report, Japan's foreign trade deficit for the reporting period amounted to 444.6 billion Japanese yen with a forecast of 447.7 billion yen, while the surplus of foreign trade with the United States decreased by 14.5%. The increase in the deficit was due to an increase in imports of oil and liquefied gas from the United States. Japan's annual export growth in August was 6.6%, while economists had expected growth of 5.3%.

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