Forecast for USD / JPY as of September 25, 2018

USD / JPY

The yen was able to overcome the resistance of the trend line of the downward price channel on the daily chart. Despite the fact that yesterday in Japan was a holiday. The double divergence of the price and the oscillator on the four-hour chart did not take place. Instead, there was a rising corridor, the price tends to its upper limit. On the price chart, the target is the resistance of the green rising price channel in the area of 114.45.

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On the four-hour chart, the price also increases in the price channel.

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Fractal analysis of the main currency pairs for September 25

Dear colleagues.

For the currency pair Euro / Dollar, the continuation of the upward movement is expected after the passage at the price range of 1.1809 - 1.1829. For the Pound / Dollar currency pair, we follow the formation of the downward structure from September 20 and at the current moment, the price is in the correction zone. For the currency pair Dollar / Franc, the price forms the potential for the top of September 21. For the Dollar / Yen currency pair, we follow the local upward structure of September 13, continuing the upward movement forward after the breakdown of 113.01. For the currency pair Euro / Yen, we expect the continuation of the upward movement after the breakdown of 133.16. For the Pound / Yen currency pair, the price is in the correction zone from the descending structure on September 21.

Forecast for September 25:

Analytical review of currency pairs in the scale of H1:

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For the currency pair Euro / Dollar, the key levels on the scale of H1 are: 1.1864, 1.1829, 1.1809, 1.1748, 1.1728 and 1.1701. Here, we continue to follow the local upward structure of September 17. The short-term upward movement is expected in the range of 1.1809 - 1.1829 and the breakdown of the last value will lead to a movement to the potential target of 1.1864, upon reaching this level, we expect a rollback into correction.

The short-term downward movement is possible in the range of 1.1748 - 1.1728 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 1.1701 and this level is the key support for the top.

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

Trading recommendations:

Buy 1.1810 Take profit: 1.1827

Buy 1.1830 Take profit: 1.1860

Sell: 1.1746 Take profit: 1.1730

Sell: 1.1726 Take profit: 1.1705

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For the Pound / Dollar currency pair, the key levels on the scale of H1 are: 1.3204, 1.3144, 1.3111, 1.3040, 1.2995, 1.2957, 1.2867 and 1.2803. Here, we follow the formation of a downward structure from September 20. The continuation of the movement downwards is expected after the breakdown of 1.3040. In this case, the target is 1.2995, up to this level we expect the formation of pronounced initial conditions for the bottom. The passage at the price of the range of 1.2995 - 1.2957 will lead to the development of a pronounced downward movement. Here, the target is 1.2867. The potential value for the bottom is the level of 1.2803, upon reaching which we expect a rollback to the top.

The short-term upward movement is possible in the range of 1.3111 - 1.3144 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 1.3204 and this level is the key support for the downward structure.

The main trend is the formation of a downward structure from September 20.

Trading recommendations:

Buy: 1.3111 Take profit: 1.3142

Buy: 1.3146 Take profit: 1.3202

Sell: 1.3040 Take profit: 1.2995

Sell: 1.2955 Take profit: 1.2870

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For the currency pair Dollar / Franc, the key levels in the scale of H1 are: 0.9729, 0.9689, 0.9675, 0.9657, 0.9624, 0.9608 and 0.9583. Here, we follow the formation of the potential for the top of September 21. The continuation of the upward movement is expected after the breakdown of 0.9657. In this case, the target is 0.9675, near this level is the price consolidation, and also before it, we expect the formulation of the expressed initial conditions for the upward cycle. The passage at the price range of 0.9675 - 0.9689 will lead to the development of a pronounced movement. Here, the target is 0.9729, from which we expect a pullback downwards.

The short-term downward movement is possible in the range of 0.9624 - 0.9608 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 0.9583 and this level is the key support for the top.

The main trend is the formation of the upward structure of September 21.

Trading recommendations:

Buy: 0.9658 Take profit: 0.9675

Buy: 0.9690 Take profit: 0.9725

Sell: 0.9622 Take profit: 0.9610

Sell: 0.9606 Take profit: 0.9588

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For the currency pair Dollar / Yen, the key levels on the scale of H1 are: 113.95, 113.53, 113.34, 113.01, 112.64, 112.41, 112.13 and 111.96. Here, we follow the local upward structure of September 13. The continued upward movement is expected after the breakdown of 113.01. In this case, the target is 113.34 and in the range of 113.34 - 113.53 is the consolidation. The potential value for the top is the level of 113.95, upon reaching which we expect a pullback downwards.

The short-term downward movement is possible in the range of 112.64 - 112.41 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 112.13 and the range of 112.13 - 111.96 is the key support for the top.

The main trend: the local upward structure of September 13.

Trading recommendations:

Buy: 113.01 Take profit: 113.34

Buy: 113.55 Take profit: 113.95

Sell: 112.62 Take profit: 112.45

Sell: 112.38 Take profit: 112.15

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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 follow the downward structure of 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, 0.7252, 0.7224 and 0.7186. 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 0.7252 - 0.7224 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 0.7186 and this level is the key support.

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: 0.7252 Take profit: 0.7226

Sell: 0.7222 Take profit: 0.7188

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For the Euro / Yen currency pair, the key levels on the scale of H1 are: 134.55, 133.85, 133.16, 132.29, 131.86, 131.32 and 131.02. Here, we continue to follow the development of the upward cycle of September 10 and at the moment, the price is in correction. The continuation of the upward movement is expected after the breakdown of 133.16. In this case, the target is 133.85, near this level is the consolidation. The potential value for the upward trend is the level of 134.55, upon reaching which we expect a pullback downwards.

The short-term downward movement is possible in the range of 132.29 - 131.86 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 131.32 and the range of 131.32 - 131.02 is the key support for the top.

The main trend is the upward cycle of September 10.

Trading recommendations:

Buy: 133.16 Take profit: 133.80

Buy: 133.90 Take profit: 134.50

Sell: 132.27 Take profit: 131.88

Sell: 131.80 Take profit: 131.36

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For the Pound / Yen currency pair, the key levels on the scale of H1 are: 148.69, 148.10, 147.66, 146.84, 145.89, 144.86 and 144.11. Here, we follow the formation of a downward structure from September 21. Currently, the price is in the correction zone of the potential initial conditions. The continuation of the movement downwards is expected after the breakdown of 146.84. In this case, the target is 145.89 and near this level is the consolidation. The breakdown of 145.89 will lead to the development of a pronounced movement. Here, the target is 144.86. We consider the level of 144.11 to be a potential value for the bottom, after which we expect a rollback to the top.

The consolidated movement is possible in the range of 147.66 - 148.10 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 148.69 and this level is the key support for the downward structure from September 21.

The main trend is the formation of a downward structure from September 21.

Trading recommendations:

Buy: 148.15 Take profit: 148.65

Buy: 148.90 Take profit: 149.60

Sell: 146.80 Take profit: 146.05

Sell: 145.85 Take profit: 144.20

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EUR / USD pair - plan for the European session on September 25. Euro rose on statements of Mario Draghi, but did not hold

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

Buyers are again required to return to the resistance level of 1.1767, which is the middle of the side channel. The breakthrough of this range, which took place yesterday after the ECB President Mario Draghi's speech, will once again bring the euro back to the market, which will lead to the renewal of the upper boundary of the lateral channel 1.1801. Tt is likely to test the new monthly highs around 1.1830 and 1.1866, where fixing profits are recommended. In the case of a decline in the euro in the morning, you can go back to purchases on testing the support test of1.1726 or on a rebound from the 1.1687 low.

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

As for the sellers of the euro, they need a false breakdown from the resistance level of 1.1767, which will lead to a new wave of decline and update the support level of 1.1726 with a test of a minimum of 1.1687, where fixing profits are recommended. In the case of a decline in the euro in the morning, you can go back to purchases on testing the support level of 1.1726 or on a rebound from the 1.1687 low.

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. Considering the resumption of the upward trend will only be possible after the return of the price above the moving average.

Bollinger Bands

Support for euro buyers will be the lower bound of the bands around 1.1726, and the upper limit of the bands near 1.1785 will act as an intermediate resistance.

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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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Fundamental Analysis of EUR/JPY for September 25, 2018

EUR/JPY has been quite impulsive with the recent bullish gains which led the price to reside above 132.00 area with a daily close. JPY has lost footing against EUR despite mixed economic reports from the eurozone.

BOJ is currently keeping its monetary policy without any notable changes or rate hikes that is expected to lead to long-term weakness against EUR in the process. Today Bank of Japan Monetary Policy Meeting Minutes were released which did not have much impact on the JPY gains, leaving things neutral enough to affect the market sentiment. SPPI report was published with an increase to 1.3% which was expected to be unchanged at 1.1%. Additionally, BOJ Governor Kuroda spoke today about the nation's key interest rate and future monetary policy which did not change market sentiment, leading to further weakness of the currency.

Today German WPI report was published with an increase to 0.3% from the previous value of 0.1% which was expected to be at 0.2%. The positive reading helped EUR to gain certain momentum in the process ahead of a series of high impact economic reports yet to be published this week.

Meanwhile, EUR is still the stronger currency in the pair while JPY has been struggling to gain momentum amid the stable rhetoric taken by BOJ without any signals for monetary tightening. As EUR manages to provide better than expected results, the price is expected to proceed higher against JPY in the process.

Now let us look at the technical view. The price has formed Bearish Continuous Divergence after breaking above 132.00 area with a daily close while the dynamic levels are held below the 131.00 area which is expected to attract the price lower with certain retrace before it starts to push higher again. As the price remains above 131.00 area with a daily close, the bullish bias is expected to continue despite any strong bearish pressure or pullbacks in the process.

SUPPORT: 132.00, 131.00

RESISTANCE: 133.00, 135.50

BIAS: BULLISH

MOMENTUM: VOLATILE

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Bitcoin analysis for September 25, 2018

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Trading recommendations:

According to the H1 time - frame, I found potential end of the 20-day upward correction (expanded flat), which is a sign that buying looks risky. I also found that prrice rejected from the Fibonacci expansion 161.8% at the level of $6.783. My advice is to watch for selling opportunties on the rallies. The downward target is set at the price of $6.062.

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

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Fundamental Analysis of GBP/USD for September 25, 2018

GBP/USD has been quite indecisive and volatile recently while residing above 1.3050 area with a daily close. GBP has been holding the upper hand in the pair, while USD gained certain impulsive momentum recently just ahead of the federal funds rate hike this week.

Today on the GBP side, MPC Member Vlieghe spoke about the nation's key interest rates and future monetary policies which influenced the currency quite positively. However, lack of a clear statement about further development did not provide much impulsive pressure as expected. This week the economic calendar includes the UK Current Account report which is expected to decrease to -19.4B from the previous figure of -17.7B and Final GDP which is expected to remain unchanged at 0.4%. Thus, GBP is expected to be quite slow with the development if market sentiment follows the economic results of the week.

On the USD side, FOMC Economic Projections, FOMC Statement, and Federal Funds Rate are going to be published on Wednesday. The benchmark funds rate is expected to be lifted to 2.25% from the previous value of 2.00%. Though the rate hike is quite imminent, certain volatility may be observed on the USD side throughout the week. Moreover, today US CB Consumer Confidence report is going to be published which is expected to show a slight decrease to 132.2 from the previous figure of 133.4, Richmond Manufacturing Index is expected to decrease to 22 from the previous figure of 24, and HPI is expected to be unchanged at 0.2%.

As of the current scenario, a good amount of volatility is expected throughout this week in this pair as high impact economic events and reports on the both currencies are going to be published in the coming days. Though GBP is currently quite positive in comparison to USD, the USD rate hike may lead to certain weakness on the GBP side in the process.

Now let us look at the technical view. The price is currently residing above 1.3050 area with a daily close after certain impulsive pressure on Friday. The price has successfully breached above the Kumo Cloud resistance while also being held by the dynamic levels 20 EMA, Tenkan and Kijun line as support which is expected to lead to further upward movement in this pair with target towards 1.32 and later towards 1.3350 resistance area in the future. As the price remains above 1.3050 with a daily close, the bullish bias is expected to continue.

SUPPORT: 1.3050, 1.2850

RESISTANCE: 1.3200, 1.3350

BIAS: BULLISH

MOMENTUM: VOLATILE

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Analysis of Gold for September 25, 2018

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Recently, Gold has been trading sideways at the price of $1,199.75. According to the H1 time – frame, I found the potential end of the upward correction (abc flat-zig zag), which is a sign that buying at this stage looks risky. I also found that the most recent upward correction is just a potential part of the larger downward correction and wave C. My advice is to watch to watch for a potential breakout of the support trendline to confirm a further downward movement. The downward targets are set at the price of $1,191.65 and at the price of $1,187.45.

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GBP/USD analysis for September 25, 2018

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Recently, the GBP/USD pair has been trading upwards. The price tested the level of 1.3160. Anyway, according to the M15 time – frame, I found a breakout of the intraday support trendline, which is a sign that buying looks risky. I also found a hidden bearish divergence on the LBR 3/10 oscillator, which is another sign of weakness. My advice is to watch for selling opportunities. The downward targets are set at the price of 1.3115 (daily pivot) and at the price of 1.3095 (current daily low).

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Technical analysis of USD/CAD for September 25, 2018

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Overview:

The USD/CAD pair will continue rising from the level of 1.2927 in the long term. It should be noted that the support is established at the level of 1.2927 which represents the daily pivot point on the H1 chart. The price is likely to form a double bottom in the same time frame. Accordingly, the USD/CAD pair is showing signs of strength following a breakout of the highest level of 1.2927. So, buy above the level of 1.2927 with the first target at 1.2995 in order to test the daily resistance 1. The level of 1.3028 is a good place to take profits. Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). This suggests that the pair will probably go up in coming hours. If the trend is able to break the level of 1.3028, then the market will call for a strong bullish market towards the objective of 1.3063 ion coming hours. On the other hand, in case a reversal takes place and the USD/CAD pair breaks through the support level of 1.2927, a further decline to 1.2884 can occur. It would indicate a bearish market.

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Technical analysis of USD/CHF for September 25, 2018

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Overview:

The market is still trading above the major support of 0.9651. 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 0.9730.

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Intraday technical levels and trading recommendations for EUR/USD for September 25, 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 1.1750. The EUR/USD bulls failed to pursue towards higher bullish targets. Instead, a descending high was established around 1.1800.

However, the price level of 1.1520 stood as a prominent demand level where the current bullish pullback towards the price level of 1.1700 was initiated.

Last week, another bullish movement was demonstrated towards the upper limit of the price range (1.1750) which resulted in a daily shooting-star bearish candlestick reflecting early signs of bearish rejection.

On the daily chart, The EUR/USD pair remains trapped below the depicted technical levels (1.1750 - 1.1850). As for the bearish side of the market to be dominant, the pair should keep trading below 1.1750.

On the other hand, conservative traders should be expecting further bullish advancement towards 1.1850 if the EUR/USD pair resumes its movement above 1.1750.

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Intraday technical levels and trading recommendations for GBP/USD for September 25, 2018

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On September 13, The GBP/USD pair was testing the depicted downtrend line which came to meet the pair around 1.3025-1.3090. 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. Currently, this price zone turned to become a prominent demand zone to offer bullish support for the GBP/USD pair.

However, on H4 chart, the market failed to maintain its uptrend within the depicted bullish channel on H4 chart. The lower limit of the depicted channel (which came to meet the GBP/USD pair around 1.3190) failed to offer sufficient bullish demand.

As long as the recent bullish breakout above 1.3090 (Demand level-1) is maintained on a daily basis, further bullish advancement should be expected towards 1.3300 and 1.3390 (reversal pattern final target).

On the other hand, the price level of 1.3190 now constitutes a short-term supply level (the backside of the broken bullish channel) where some bearish rejection can be anticipated.

Moreover, 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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Technical analysis of Gold for September 25, 2018

Gold price continues to trade around $1,200. Price bounced off the $1,192 low towards $1,203 as a back test of the broken resistance and got rejected. Gold bulls need to break above $1,211 for a move higher. As long as price is below that level, they are in danger of seeing another sell off.

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Red line - resistance

Blue line - support (broken)

Green lines - bearish channel

Gold price has short-term resistance at $1,205. Channel resistance is at $1,207 and the trend line resistance touching previous highs is also at $1,210. So the area between $1,205-$1,210 is an important resistance area and as long as price is below it, I expect another strong sell off that will eventually break $1,180. Support is at recent lows of $1,192. Breaking it of course would be a sign of weakness.

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Technical analysis of EUR/USD for September 25, 2018

EUR/USD remains in a bullish trend. Price pulled back yesterday towards 1.1730 for a back test of the break out area that is now support. Prices moved higher towards 1.18 as expected but ended the day back below 1.1760. EUR/USD bulls need to break yesterday highs.

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Red line - neck line support

Blue line - short-term support trend line

Light blue dots - medium strength support

Dark blue dots - maximum strength support

Green line - horizontal support

EUR/USD came back towards the broken resistance now support for another back test. Price remains above the critical support of 1.17-1.1720. Bulls need to break above 1.1815 for this up move to continue towards 1.19. A break below 1.17 will be a bearish sign.

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Trading plan for 25/09/2018

On Tuesday, the 25th of September, the event calendar is light in important data releases. During the London session, Germany will post Wholesale Price Index data and during the US session, the US will present Consumer Confidence and Richmond Fed Manufacturing Index data. There is a speech from Member of the Executive Board of the ECB Benoit Coeure scheduled for 12:00 pm GMT

USD/JPY analysis for 25/09/2018:

At 11:50 pm GMT, a summary of the last meeting of the Bank of Japan was published. The minutes usually come out late, at least a month after the meeting, but give detailed insight into the Bank of Japan's monetary policy decision-making process. The global investors did not learn much new, the importance of the minutes dropped slightly when Kuroda started publishing a summary of the bank members' opinions a few days after each meeting.

Several BOJ members stated that further guidance for the future should be established and their commitment to achieving the price target should be strengthened. Some bankers are of the opinion that flexible control over long-term bond yields will improve the functioning of the market. One member is in favor of raising this profitability because it can increase the sustainability of the current policy.

Let's now take a look at the USD/JPY technical picture at the H4 time frame. The marker is still moving inside of the channel and made a new local high at the level of 112.97 overnight. The next target for bulls is seen at the level of 113.17. The immediate support is seen at the level of 112.40-112.50. Strong momentum is supporting the bullish bias.

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Bitcoin analysis for 25/09/2018

The economic crisis in Argentina prompts investors to buy Bitcoins to protect their wealth. At the same time, to meet the growing demand, the first of the 12 BTC ATMs has already begun operating in a shopping center in Buenos Aires. The number of shops that accept Bitcoin is also growing steadily. As the domestic currency decreases, Argentine investors and ordinary people exchange their peso for Bitcoins. Economist and mathematician, D.H. Taylor, writes: "Argentines are moving in large quantities from the pesos, which makes Bitcoin an increasingly stable currency (...) The stability offered by the digital currency is much larger than the pesos and the Argentineans are happy to purchase Bitcoin".

As regards supporting evidence, Taylor refers to a table showing the weekly volume of Bitcoin purchases in Argentina: "One of the richest countries in Latin America, Argentina, is again undergoing a serious economic crisis. In April 2018, the peso began to fall sharply in relation to the dollar".

Most economists agree that the peso devaluation stems from investors' doubts about the government's ability to stop the inexorable inflation and to minimize the effects of Fed rate hikes that have strengthened the dollar around the world. Currently, the inflation rate in Argentina, year-on-year, reaches over 34%.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market has retraced almost 61% of the previous swing up as it bounced from the level of $6,539. The zone between the levels of $6,251 - $6,550 will now act as a resistance for the price again. The next technical support is seen at the level of $6,297.

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Simplified Wave Analysis: Review of USD / JPY pair for the week of September 24.

The wave pattern of the H4 graph:

Since March 23, we can state a change in trends on Japanese yen major pair on the chart. The wave has a very high level and will eventually become the first part of the larger-scale upward movement of the pair.

The wave pattern of the H1 graph:

The bearish wave of July 19 forms the middle part of the movement in the highest wave. Quotations of the pair approach the beginning of the final phase of the movement (C).

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The wave pattern of the M15 chart:

The ascending section of August 21 is nearing completion. In a larger watch model, it takes the place of correction. The price has reached the lower boundary of the resistance zone of large scale.

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Recommended trading strategy:

In the coming weeks, a more promising direction will be a price move down. It is recommended to track the sell signals of the instrument. Investors wisely wait out the corrective phase of the market.

Resistance zones:

- 112.80 / 113.30

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 time frame 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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Elliott wave analysis of EUR/NZD for September 25, 2018

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EUR/NZD is showing signs of re-entering the uptrend towards 1.8030 and above it towards 1.8369. In the short term, a break above minor resistance at 1.7732 will be the first solid indication that the correction in red wave iv has completed and red wave v towards at least 1.8030 is developing.

Only an unexpected break back below minor support at 1.7536 will prolong the correction in red wave iv, but the potential downside should remain very limited.

R3: 1.7823

R2: 1.7783

R1: 1.7732

Pivot: 1.7651

S1: 1.7626

S2: 1.7585

S3: 1.7536

Trading recommendation:

We are long EUR from 1.7615 with our stop placed at 1.7515. If you are not long EUR yet, then buy upon a break above 1.7732 and use 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 25, 2018

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EUR/JPY is consolidating in a 131.88 - 131.13 range. Once the consolidation is completed, more upside pressure is expected for continuation higher towards 134.07 on the way towards 136.50.

The short-term support is seen at 132.20 and if this support is broken, then a further decline closer to 131.88 should be seen before the next impulsive rally towards 134.07 and above.

R3: 134.07

R2: 133.13

R1: 132.79

Pivot: 131.88

S1: 131.53

S2: 131.03

S3: 130.54

Trading recommendation:

We are long EUR from 129.11 with our stop placed at 130.85. If you are not long EUR yet, then buy near 132.00 or upon a break above 132.79 and use the same stop at 130.85.

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

Technical analysis: intraday levels For EUR/USD, Sept 25, 2018

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When the European market opens, some economic data will be released such as German WPI m/m. The US will also deliver some economic news such as the Richmond Manufacturing Index, CB Consumer Confidence, S&P/CSComposite-20 HPI y/y, and HPI m/m. So, amid the reports EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1811

Strong Resistance:1.1804

Original Resistance: 1.1793

Inner Sell Area: 1.1782

Target Inner Area: 1.1754

Inner Buy Area: 1.1726

Original Support: 1.1715

Strong Support: 1.1704

Breakout SELL Level: 1.1697

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

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

Technical analysis: intraday levels for USD/JPY, Sept 25, 2018

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In Asia, Japan will release the SPPI y/y, and the monetary policy meeting minutes. At the same time, the US will also deliver some economic news such as the Richmond Manufacturing Index, CB Consumer Confidence, S&P/CS Composite-20 HPIy/y, and HPI m/m. 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: 113.46

Resistance. 2: 113.24

Resistance. 1: 113.02

Support. 1: 112.75

Support. 2: 112.53

Support. 3: 112.31

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

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

NZD/USD approaching support, prepare for a bounce

NZDUSD is approaching its support at 0.6624 (61.8% Fibonacci extension, 38.2% Fibonacci retracement, horizontal overlap support) where it could potentially bounce to the resistance at 0.6669 (61.8% Fibonacci retracement, horizontal overlap resistance).

Stochastic (55, 5, 3) is approaching its support at 2.4% where a corresponding bounce could occur.

NZDUSD is approaching its support where we expect to see a bounce.

Buy above 0.6624. Set stop loss at 0.6598 and take profit at 0.6669.

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

AUD/USD approaching support, prepare for a bounce

AUDUSD is approaching its support at 0.7242 (61.8% Fibonacci extension, 23.6% Fibonacci retracement, horizontal overlap support) where it could potentially bounce to the resistance at 0.7296 (horizontal swing high resistance).

Stochastic (55, 5, 3) is approaching its support at 2.5% where a corresponding bounce could occur.

AUDUSD is approaching its support where we expect to see a bounce.

Buy above 0.7242. Set stop loss at 0.7213 and take profit at 0.7296.

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

Week review of GBP / USD pair - the Sterling pound collapsed, which may be the beginning of a new protracted fall.

24-hour timeframe

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Last week's review, we wrote that for a pair of GBP / USD and now, almost everything depends on the progress of negotiations on Brexit. Over the past week, traders first received a very dubious signal that Brexit talks are moving forward, and there is a high probability that they will end in success. However, the next day, market participants realized that in fact there is no official information on this issue, and the parties have not yet been able to agree on key issues. Moreover, the new proposal by Theresa May on the terms of the "deal" was rejected by the EU. She herself later delivered an ultimatum to Parliament, whereas either politicians will accept her Brexit variant, or in general, there will be no deal with the EU. Representatives of the Conservative Party are preparing the proposal of Theresa May about resignation in April 2019, that is, after the official withdrawal of the country from the EU. Thus, it is the fall of the pound sterling in the last trading day of the past week that looks quite logical, and not the previous growth.

Only on Friday, the report on GDP for the second quarter will be published. However, we draw attention to a sufficient number of reports in the States, and it is also recommended not to forget to track any news related to Brexit or the situation around Theresa May. This news can have a strong impact on the movement of the currency pair. For this week in the UK, there will be practically no plan for macroeconomic reports.

Trading recommendations:

The GBP / USD currency pair begins to be adjusted against the "golden cross". Thus, it is recommended to wait until the correction is completed in order to resume trading on the rise. The first target for Longs is the second resistance level of 1.3403.

It is recommended to open short positions in the long term only after fixing the price below the critical line (1.3010), which will mean a change in the direction of the trend. In this case, the first target for the sell orders will be the support level of 1.2698.

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

Explanations to the illustration:

Ichimoku Indicator:

Tenkan-sen is a red line.

Kijun-sen is a blue line.

Senkou Span A is a light brown dotted line.

Senkou Span B - a light purple dotted line.

Chikou Span is a green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

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

Weekly review of EUR / USD pair - The key event of the week is the Fed meeting.

24-hour timeframe

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For four days out of five last week, the EUR / USD currency pair stood still. Only on Thursday trading ended with a very solid growth of the European currency amid a new wave of rumors that the EU and Britain will still manage to agree on Brexit. As we have already noted, these are just rumors and market expectations. In fact, there has been no information confirming such optimistic expectations. One way or another, the euro is still growing and in the daytime timeframe the first target was 1.1790 and rebounded from it. Thus, at the beginning of the new trading week, we can observe a downward correction. Important macroeconomic data will begin to come at the disposal of traders on Wednesday. On this day, the results of the Fed meeting will be announced, the comments of the Fed representatives on monetary policy and the speech of the Fed chief, Jerome Powell. In general, there will be something to pay attention to. Moreover, there is a possibility of raising the key rate which in turn, can provide significant support to the US currency.

On Thursday, the annual data on GDP from the United States will be released. Also, on Friday, there will be reports on the change in spending and income of America's population. In the European Union, it will be possible to pay attention only to the consumer price index during the whole week and it will be possible to pay attention only to the consumer price index, which is expected to be published on Friday, even this is only a preliminary value for September. Thus, the main package of information will come from the United States. Also, do not forget to track Trump's speeches and messages, which this week may again start criticizing the Fed for too tight monetary tightening. It can provide significant support to the US currency.

Trading recommendations:

For this week's trading, the EUR / USD pair, it is recommended to consider long positions with the target of 1.1979, if traders manage to overcome the first target of 1.1790. Otherwise, a downward correction to the Kijun-Sen line is expected.

It is recommended to consider to sell positions for the long term if traders return lower to the Kijun-Sen line area (1.1590). In this case, the pair can proceed to the formation of a new downtrend with the first goal at the support level of 1.1357.

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

Explanations to the illustration:

Ichimoku Indicator:

Tenkan-sen is a red line.

Kijun-sen is a blue line.

Senkou Span A is a light brown dotted line.

Senkou Span B - a light purple dotted line.

Chikou Span is a green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

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

Ethereum analysis for 24/09/2018

Weiss Ratings, a provider of market research and stock market analyzes of ETFs, investment funds, cryptocurrencies, banks, and insurance companies, dared to say that Ethereum would overtake 50% of the Bitcoin market share in the next 5 years. What's more, the research provider referred to the first and most important cryptocurrency in the world as a "unanimous pony", arguing that Ethereum has better Blockchain technology, and the limit of its use is "the sky itself."

ETH currently has a market value slightly above $25 billion. In January 2018, it lost over 82% of its value. On the other hand, Bitcoin reaches a ceiling of USD 116 billion, or about 61% less than in January. What's more, Bitcoin dominates the market alone, which is more than half of its total capitalization. The dominance of BTC is now 51%, according to data from CoinMarketCap.

Let's now take a look at the ETH/USD technical picture at the H4 time frame. The market is still trading above the trend line support since its bounce from the level of USD 163. The local swing high was made at the level of USD 251 and now the short-term pull-back is in progress. The immediate support is seen at the level of USD 223.

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

Global macro overview for 24/09/2018

This week's main focus will be on the Fed's decision, where the interest rate hike seems to be decided, but the future tightening path may be a source of surprise. The aggressive attitude of the central bank should revive the dollar's appreciation. In New Zealand, the meeting of the RBNZ should bring a neutral message. In Europe, HICP inflation readings and the Ifo index readings will be important. In addition, PMI from China and GDP from Canada may be the source of market reaction.

The decision at the end of the FOMC meeting (Tue-Wed) will be the main event of the week. The market is generally expecting a rate hike by 25 bps (to 1.75-2.00%) and 75% for the next move in December. A more lively discussion revolves around the pace of increases in 2019. The starting point is the June projection with three successive increases in 2019 and one in 2020 (together to 3.50%). Emphasizing the risk advantage for steepening the path or raising the forecast of the long-term balance (currently 2.9%) will be a hawkish signal. At a press conference, the position of President Powell will be important in the context of pressure from President Trump, the impact of the Fed's policy on emerging markets and the assessment of trade wars. We expect words of assurance about the independence of the Fed and signals that the FOMC sees external risks as not jeopardizing the adopted strategy. The Fed, which is unequaled in its hawkishness, should restore confidence in USD.

GDP reading for the second quarter is the only significant publication from Great Britain scheduled for release on Friday, although due to the fact that this is the second revision, market sensitivity should be limited. For GBP, Brexit counts the most, and the growing chances of agreeing to the conditions of a soft-Brexit make investors bolder leave short positions.

In Japan, the unemployment rate and industrial production scheduled for release on Friday will traditionally go unnoticed. It is intriguing how JPY lost its sensitivity to signals sent by the stock and debt market. Despite the Nikkei225 increases and the break-up of US bond yields on 4-month peaks, there is no sign of enthusiasm for USD / JPY increases. We think that the currency market may finally catch up.

In New Zealand, the RBNZ will almost certainly keep the main interest rate unchanged (avg). The central bank remains in the mode of observing data coming from the economy and for the time being, it is trying to leave all the options open. A strong GDP reading for the second quarter has cut the market speculation about a possible interest rate cut in the near future, but if the RBNZ maintains a prudent tone, it may strike at NZD. The calendar from Australia is empty, which for AUD means tracking the general sentiment, which for now favors, although it may end after the hawkish overtones of the FOMC. A disappointing reading of PMI from the Chinese industry (Fri) may also be a risk for risk appetite.

Let's now take a look at the GBP/USD technical picture at the H4 time frame before the GDP data are published. After the high at the level of 1.3292 the market fell towards the technical support at the level of 1.3072 and currently is trading around this level. The market conditions are overbought and the momentum is weak, so the deeper pull-back is now expected. The next target for bulls is seen at the level of 1.2956.

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

BITCOIN Analysis for September 24, 2018

Bitcoin has been quite indecisive and slightly bearish recently after breaking above $6,500 area with daily close. The price is currently residing at the edge of dynamic level of 20 EMA, from where certain bearish pressure towards $6,500 is expected as retracement before pushing higher with target towards $7,500 and later towards $8,000 in the coming days. As of the current scenario, the indecision and retracement is calculated as pullbacks for further upward momentum. As the price remains above $6,000 area with a daily close, the bullish bias is expected to continue.

SUPPORT: 6,500, 6,000

RESISTANCE: 7,500, 8,000

BIAS: BEARISH

MOMENTUM: VOLATILE

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

Fundamental Analysis of USD/JPY for September 24, 2018

USD/JPY has been quite impulsive with the recent bullish gains which lead the price to reside above 112.00 area with a daily close. Despite USD struggling against most of the currency pair recently, JPY failed to sustain the momentum it had earlier in the pair.

This week is expected to be quite volatile for the pair as both currencies have high impact economic events to affect the market momentum in the process. Tomorrow JPY SPPI report is going to be published which is expected to be unchanged at 1.1%, Monetary Policy Meeting Minutes will also be issued, and BOJ Governor Kuroda is going to speak on the upcoming policies for the Japan's economy which is expected to inject certain volatility in the pair as well.

On the USD side, this week FOMC Economic Projections, FOMC Statement and Federal Funds Rate data is going to be published. The rate is expected to increase to 2.25% from the previous value of 2.00%. As of the expectation, the rate hike is quite possible, and it might weaken USD immediately after the release. Though today there was no impactful economic reports to affect the market momentum but tomorrow USD CB Consumer Confidence report is going to be published which is expected to have a slight decrease to 132.2 from the previous figure of 133.4.

As of the current scenario, USD is quite strong in comparison to JPY ahead of the JPY's high impact economic event tomorrow whereas any positive outcome may lead to impulsive JPY gains over USD for a certain period. The pair is expected to be extremely volatile this week as of Federal Funds Rate and FOMC Statements to be published on Wednesday which is expected to impact the upcoming definite market momentum in this pair.

Now let us look at the technical view. The price has been slightly bullish with certain indecision with the definite momentum today which is expected to lead to certain retracement towards 112.00 area before it starts to push higher with target towards 113.00 resistance area in the future. The dynamic level is skewed upward which is expected to hold the price as support during any retracement in the process. As the price remains above 112.00 area with a daily close, the impulsive bullish pressure is expected to continue.

SUPPORT: 112.00, 110.50

RESISTANCE: 113.00, 114.50

BIAS: BULLISH

MOMENTUM: NON-VOLATILE and IMPULSIVE

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

EUR/USD. September 24. Results of the day. Donald Trump killed two birds with one stone

4-hour timeframe

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The amplitude of the last 5 days (high-low): 80P – 73p – 65p – 116p – 70p.

The average amplitude over the last 5 days: 81p (87p).

The first trading day of the week was quite active. The euro updated Friday's high, intending to continue the uptrend. On this day, trade duties totalling $200 billion against China came into effect. And a similar duty against the US in the amount of $60 billion. The markets reacted by selling the dollar. Thus, we can once again state that Trump killed two birds with one stone at the same time. The dollar is declining, tariffs against China are being introduced. And this is not the limit. It is expected that the US leader will introduce a third package of duties on the remaining share of imports from China, which is about 267 billion dollars. If a month ago it was possible to expect the strengthening of the US currency on such news, now the dollar is more likely to fall. One way or another, as technical indicators continue to signal upward movement. Therefore, there are no compelling reasons to open short positions at the moment. Even if the market reacts to this or that news with purchases of the US dollar, it will be no more than a correction. Macroeconomic reports were not published on Monday. By the way, the price also bounced off the critical Kijun-sen line, which is a buy signal. This week there will be a meeting of the Federal Reserve, and the main issue of this event is the question of raising the key rate. Recall that Trump has already criticized Powell for too rapid tightening of monetary policy. However, the Fed is beyond Trump's control, so the question is, will Powell meet the US President?

Trading recommendations:

For the EUR/USD, the correction ended near the Kijun-sen line. Thus, it is now recommended to trade on the increase with the first target of 1.1829, and then – to 1.1874.

It is recommended to consider sell orders only below the critical line. In this case, the "golden cross" will be weakened, and the trend will be able to change to a downward one. The first target for the downward movement is 1.1644.

In addition to the technical picture, fundamental data and the timing of their release should also be taken into account.

Explanation of illustration:

Ichimoku Indicator:

Tenkan-sen – red line.

Kijun-sen – blue line.

Senkou span a – light brown dotted line.

Senkou span B – light purple dotted line.

Chikou span – green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD:

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

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

Simplified Wave Analysis. EUR/USD for the week of September 24

Wave pattern of the H4 chart:

The main direction of the trend since February this year moves the quotations of the euro major downwards. The price has reached a large-scale support zone.

Wave pattern of the H1 chart:

Since mid-August, the direction vector indicates an upward section. The first part of the wave zigzag of the older TF was formed. The price has reached the target zone.

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Wave pattern of the M15 chart:

Since September 21, the price has moved down. A high wave level of decline allows you to wait for the continuation of the pair, up to the calculated zone.

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Recommended trading strategy:

Sales are associated with a high degree of uncertainty. The risk can be justified only in the intraday trading style. Market participants are encouraged to wait for the completion of the entire downward wave and then look for buy signals.

Resistance zone:

- 1.1740/1.1790

Support zone:

- 1.1470/1.1420

Explanation of figures: the simplified wave analysis uses waves consisting of 3 parts (A-B-C). For analysis, 3 main TFs are used, the last unfinished wave is analyzed on each one. Zones show the calculated areas with the highest probability of a reversal.

Arrows indicate wave marking according to the method used by the author. With a solid background showing a structure for determining the expected movement.

Note: the wave algorithm does not take into account the duration of the tool movements over time. To conduct a trade, you need to confirm the signals of the trading systems you use!

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

EUR/USD: fear has big eyes - the dollar is getting cheaper again

Global trade and political conflicts are again the focus of the currency market. By a surprising coincidence, the situation has worsened on almost all "fronts": the US-China talks broke down, the situation on Brexit reached a deadlock, and the deal between Washington and Ottawa on NAFTA has not yet been renegotiated. As a disappointing background, these problems are hyperinflation in Argentina and Turkey, as well as the economic crisis in South Africa.

In other words, the market returned to the starting point, being in the state in which it was at the end of summer. The dollar then strengthened throughout the market, and paired with the euro even tested the 12th figure. At the moment, the fundamental background for the pair again becomes negative, but with one significant difference: the Federal Reserve the day after tomorrow can give the dollar bulls an unpleasant surprise in the form of its indecisiveness regarding further actions.

The trade war with China, which previously supported the US currency (as the market used it as a defensive asset), may subsequently "sink" it. The Fed has been focusing on the risks of foreign trade uncertainty for several months, but has not yet linked this factor with the pace of monetary policy tightening. If the regulator hints at such a relationship, it will be problematic for the dollar to show growth in the escalation of the US-China trade conflict. By the way, the last exchange of economic blows was ignored by the greenback, which suggests that the market is dominated by thinking about the negative impact of the trade war on the US economy.

At the beginning of the trading week, dollar bulls tried to develop success: at the beginning of the European session, the dollar index again tested 94 figures, and the yield of 10-year Treasuries is above 3 percent. The dollar reacted to the events of the weekend, when the Chinese refused to hold further negotiations. According to the American press, Beijing literally at the last minute cancelled the visits of two delegations to the United States, and also cancelled the visit of Vice-Premier Liu He to Washington. Moreover, the US decided to impose sanctions against the Chinese Ministry of Defense because of China's decision to purchase military aircraft and missile systems from Russia. Beijing considered such actions as interference in the internal affairs of the country, after which the Chinese Ministry of Foreign Affairs summoned the US Ambassador in Beijing to express their protest.

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In other words, relations between the two superpowers have deteriorated sharply, although a few weeks ago the Chinese delegation left Washington with a sense of "encouraging optimism". This optimism was then reflected in the quotes of major currencies, putting pressure on the dollar. Now the situation has returned to "square one". In addition, during the weekend, the British Prime Minister voiced a rather pessimistic speech that the Brexit talks reached a deadlock, as Brussels "does not hear" London and rejects the proposals without explaining any reasons. Theresa May has also come back to her recent thesis, which boils down to "the lack of a deal is better than a bad deal." The pound (as well as the euro) lost ground under its feet against this background, and the dollar received an additional reason for its growth.

But there is one "but": the approaching meeting of the Federal Reserve. The US currency can not carelessly gain momentum, ignoring the risks of "dovish" comments from Jerome Powell. That is why the growth of the dollar today has not received its large-scale continuation: the market fears that the 80-percent probability of a December rate hike is unreasonable, and on Wednesday the head of the Fed will disappoint traders with his indecisiveness. In my opinion, such fears are quite justified. Powell is unlikely to be transparent about the fourth rate hike in December amid an unexpected slowdown in inflation and a new round of US-China trade war.

In general, the fact of a fourth hike throughout the year was questionable – even the "hawks" of the Fed always talked about "three or four" increases within the current year. Therefore, the Fed in a sense "has the right" to show indecisiveness regarding the December round of tightening monetary policy. Too high expectations of the market can provide a disservice to the EUR/USD pair – both literally and figuratively: any manifestation of doubts about the actions in December will put strong pressure on the dollar.

Against the background of a half-empty economic calendar (today only the German report from the IFO and Mario Draghi's speech), these market reflections led to the growth of the euro/dollar pair, despite the ambitious rise in the price of the US currency during the Asian session. With a high degree of probability, such nervousness will put pressure on the greenback until the September meeting of the Fed. The market is forced to "pay" for its high expectations about the further actions of the US central bank.

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From the technical point of view, the situation has not changed since last week. On the daily chart, the "Line Parade" signal of the Ichimoku Kinko Hyo indicator is still active, and the pair is above the Kumo cloud and on the upper line of the Bollinger Bands indicator. The support level is the middle line of the Bollinger Bands indicator (1.1660 mark). But the resistance level is the price high of Friday - 1.1777. If the bulls overcome this price barrier, the pair will aim for the next resistance level 1.1885 - this is the upper line of the Bollinger Bands indicator on the weekly chart, coinciding with the Kijun-sen line. In any case, until the bears reduce the price below 1.1660, the bulls of the pair will have an advantage for the further development of the upward trend.

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

EUR/USD: plan for the US session on September 24. The euro rose amid a good report from the IFO

To open long positions for EURUSD, it is required:

The European currency recovered its position in the pair with the US dollar after the release of a good report on the indicator of the business environment from the IFO. Consolidation at 1.1763 maintains upward potential, and as long as trade is above this level, the demand for the euro will remain. The main daily target will be the resistance of 1.1801, where I recommend to take profit. In the event of a decrease in the EUR/USD in the second half of the day, it is best to consider long positions on the rebound from 1.1726.

To open short positions for EURUSD, it is required:

To return to the market, sellers need to decline to the level of 1.1763, which will lead to profit taking in long positions and an update of the low of the day in the area of 1.1726, where I recommend to lock in the profit. In case of a further upward trend in the EUR/USD after the speech of the President of the European Central Bank Mario Draghi, which is scheduled for the second half of the day, short positions can be considered after the update of the resistance of 1.1801, or on a rebound from the monthly high of 1.1830.

Indicator signals:

Moving averages

The 30-day moving average and 50-day average are at the same level, which limits the upward potential in the euro.

Bollinger Bands

Bollinger bands indicate a sharp decline in market volatility ahead of the important speech of Mario Draghi and do not give signals to enter the market.

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Indicator description

  • Moving Average (average sliding) 50 days - yellow
  • Moving Average (average sliding) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
The material has been provided by InstaForex Company - www.instaforex.com

The pound has reached a dead end

Can the central bank normalize monetary and credit policy, macroeconomic statistics improve, and the currency fall? Maybe if the weight is attached to its feet by politics. It would seem that the positive signals from GDP, average wages and retail sales should have given the pound an acceleration, because the timing of the next increase in the REPO rate has shifted from early 2020 to summer 2019. Before the Austrian EU summit, everything went smoothly: the GBP/USD pair rose to a two-month high, but Theresa May's speech in Salzburg confused the "bulls" with all the cards.

On the eve of the meeting of representatives of the European Union, the parties were full of optimism. Brussels was determined to provide London with preferential conditions unknown to any other country, Michel Barnier argued that he was ready to work day and night to make the deal happen, and Germany said that it would take the plan in general terms, in order to discuss the details later on. It would seem that everything is going to ensure that, as a last resort, by November, the parties will sign an agreement. However, the EU's rejection of Theresa May's plan has caused heated criticism from the British prime minister. In her opinion, the relationship reached a deadlock, and the UK is better off left without a deal than sign a bad agreement. What is the reason for May's violent aggression? It is unlikely that she was enraged by the reluctance of Brussels to approve the program. Most likely, the head of government needed to get support within the country.

As a result of the sharp speech of the British prime minister, the GBP/USD pair lost about 1.5%, which was its worst daily dynamics in the last 15 months. National Australia Bank claims that 2.5% of the rally of the trade-weighted sterling went too far, its volatility reached its highest level since February, and MUFG notes that the trading range for the analyzed pair can be very wide – from 1.15 to 1.45 – depending on the hard, soft Brexit or lack of agreement on the divorce of the UK with the EU.

The dynamics of the volatility of the pound

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The strengthening of political risks and the growth of volatility are important factors that constrain the strengthening of the pound. The higher the volatility of quotations, the less the desire of non-residents to buy British assets. London, on the other hand, needs to finance the current account deficit, so a decrease in capital inflows should be seen as a "bearish" factor for the sterling.

It should be taken into account that there are always two currencies in any pair. And the peak of the GBP/USD pair at the end of the week to September 21 is due, among other things, to a slight recovery of the US dollar. Investors expect an increase in the federal funds rate following the September FOMC meeting, China's reluctance to negotiate with the United States speaks of the escalation of the trade conflict, while the main opponent of the dollar in the face of the euro is burdened by weak statistics on business activity and political problems in Italy.

Technically, there is a struggle for an important level of 1,312. If victory is celebrated by "bears," the risk of a pullback after reaching the target of 88.6% for the the "Bat" pattern will increase. On the contrary, the victory of the bulls will create prerequisites for the continuation of the GBP/USD rally.

GBP/USD daily chart

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