FOMC does not give new guidelines

As expected, the Fed raised a 0.25% key rate at the meeting that ended on Wednesday. The updated macroeconomic forecasts completely coincided with the expectations of analysts, and the definition of the monetary policy as "accommodative" has disappeared from the text of the accompanying statement, which means a planned change in rhetoric following the policy change.

As Fed Chairman Powell said at a press conference, the current rate level is still below neutral. Forecasts on the rate have not changed. One more step this year, three in 2019 and one in 2020, so that the rate rose to 3.375%, this is the target for the markets.

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The forecast for GDP growth for 2018 was increased from 2.8% to 3.1%, and in 2019, from 2.4% to 2.5%, the unemployment rate was slightly adjusted for the current year from 3.6% to 3.7%, the remaining forecasts remained unchanged. Markets quietly reacted to the results of the meeting, the rate for 10-year US government bonds fell slightly.

The Fed actually operates on autopilot, in strict accordance with the schedule laid down a little while ago, and if the macroeconomic situation does not change decisively, there is no reason to wait for changes in monetary policy. Such an approach helps strengthen the status of the dollar across the entire spectrum of the market, this deterioration may be hampered either by a worsening of the economic situation in the US, or by the beginning of a policy of tightening by other Central Banks.

Eurozone

Some weakening of the euro as a reaction to the results of the FOMC meeting was expected, but a significant decline is unlikely. The rate of the Fed on the rate increase and the reduction of the balance sheet will support the dollar and push EUR / USD to 1.15, but the ECB feels much more confident than 3 months ago, as business activity in Europe at high levels and key macroeconomic parameters, unemployment and GDP growth, demonstrate positive dynamics. Until the end of the year, the ECB will complete the asset purchase program, but will retain the practice of reinvesting in government bonds, which will support the economies of the euro area countries.

The support for EUR / USD 1.1670, a stronger decline is unlikely. On Thursday, the euro will be under slight pressure, trade will predominantly go near current levels.

The United Kingdom

The Brexit factor remains the key to assessing the prospects of the British pound. Despite the fact that the next negotiations ended in failure, the chances of a worthy exit from the situation are still there. Earlier, the markets were oriented to October. Now, the expectations are postponed to November, the time is still enough to find a compromise solution.

The key contradiction is not at the Irish border or in the trading environment after March 2019. The key issue is political. The idea of holding a second referendum will not be realized, since the UK's course for secession from the EU was programmed long before June 2016. It should be recalled that on May 27, 2015, the Queen of Britain made a message about the need for such a referendum, which clearly indicates the existence of a political plan, rather than on uncertainty. The referendum only legitimized the earlier decision.

This decision is possible only in one case, in the expectations of political changes in Europe and the desire of London to accept the capital fleeing from Europe. If Europe looks better both politically and economically, the meaning in Brexit disappears altogether, this is the main contradiction that does not allow the transaction to be completed.

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In the middle of 2016, the United Kingdom, the United States, and the euro area had roughly the same growth rates of GDP, but then the economies of the eurozone and the US went up, which gave the Central Bank the right to begin a policy of normalization, while for the Bank of England plans to raise the rate by a quarter percent look like a clear false start.

The pound has no advantage either before the euro or before the dollar. The fall of the pound after Brexit has long been perceived as temporary, but it may happen that the low pound rate will become the norm, and not an exception, at least in the medium term, along a series of key parameters, GDP growth, inflation, labor market, the UK lags behind what will be to create additional difficulties for the Bank of England in the implementation of long-term plans.

Today, GBP / USD is likely to trade in the lateral range, limited by recent extremes of 1.3053 - 1.3297, with some gravity toward the lower border. The chances of a pronounced directional movement are small, volatility is expected to be low.

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EUR / USD: plan for the European session on September 27. The Fed raised the interest rate to 2.25%

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

An increase in the rate of the Fed led only to the strengthening of the euro in the afternoon, but it can be seen that today, buyers quickly leave the market. To consider long positions in the euro, I recommend after the formation of a false breakdown in the support area of 1.1687 or to rebound from a new low at 1.1654. It's still early to panic EUR / USD bulls. Their main task before the end of the week will be a return to the resistance level of 1.1726, which will lead to an increase in demand for the euro and the renewal of resistances 1.1763 and 1.1802, while maintaining the uptrend.

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

The sellers coped with the first task of securing below the area of 1.1726. An unsuccessful attempt to return to this level with a false break in the morning will be a good signal for the opening of short positions in EUR / USD and further decline to 1.1687 and 1.1654. The consolidation below the level of 1.1687 will indicate a complete reversal of the upward trend in the euro. In the case of growth above 1.1726 in the morning, sales can be returned immediately to a rebound of 1.1763.

Important attention today should be removed speeches of the president of the ECB and the chairman of the Federal Reserve.

Indicator signals:

Moving Averages

The 30-day moving average changes its direction down and gradually separates from the level of the 50-day average, which indicates the formation of a downward trend in the market.

Bollinger Bands

Please note that the sharp decline in the euro did not affect the Bollinger Bands indicator, which could bring EUR / USD back to the side channel 1.1726-1.1800 by the end of the day, if the situation does not change.analytics5bac78d0d2b8b.png

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

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

GBP / USD: plan for the European session on September 27. Pressure on the pound returns

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

Half a week, pound buyers tried to return to the market, but it seems that the pressure on the pound returns. It is best to consider long positions after consolidating above the resistance level of 1.3144, which will lead to a larger growth in the area of 1.3181, and a breakthrough and this resistance will allow to expect highs in the area of 1.3227 and 1.3269, where I recommend fixing the profits. In the event of a further decline in GBP / USD, support will be in the area of 1.3094, but it is best to buy immediately for a rebound from the new weekly low around 1.3036.

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

A break below the level of 1.3144 is a signal to sell the pound, and while the trade will be conducted under this range, you can expect a further decline in GBP / USD with the renewal of lows around 1.3094 and 1.3036, where I recommend fixing the profits. In the case of growth above 1.3144 in the afternoon, a good level for sales will be the area of 1.3181. In another scenario, I recommend short positions in GBP / USD only to rebound from the high of 1.3227.

Indicator signals:

Moving Averages

Trade has moved under the moving average, and the breakout of the 30-day average of the 50-day average will confirm the trend change to the downward trend.

Bollinger Bands

Despite the pound's decline, there is no surge in volatility in Bollinger Bands, which could lead to a return to the pound buyers market, provided that it is anchored above the channel's midline, which is located at 1.3168.

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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

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

The growth of instability in the world will support the dollar

The Fed meeting did not bring any surprises. As expected, the regulator raised the key interest rate by 0.25%, to 2.25%, setting the range of rates from 2.00% to 2.25%.

The decision of the Central Bank was predictable and, what was important, fully integrated into the overall current strategy, which aims to smoothly cool the economy after increasing its economic growth in recent years. In addition, the Fed, in the person of its leaders, made it clear that it was waiting for another fourth increase in interest rates this year. In this situation, it was natural to assume that the US dollar should have received at least a short-term support. But that did not happen. On the contrary, it even fell locally against major currencies, though, then it played its losses.

So, what is the reason for this behavior of the US dollar? In our opinion, the main negative that is currently pressing on the local share market, as well as the dollar, are, on the one hand, statements by D. Trump that it is not necessary to raise the interest rate, giving the national economy the opportunity to grow actively. On the other hand, the political instability of the current US president and the forthcoming midterm elections to Congress, which, if the Republicans and Trump lose, can be the reason for his impeachment. In other words, the risks of political instability in the future, as well as criticism of the president regarding the actions of the Fed, fetter the dollar and returned it to the state of affairs that was noted earlier this year, when the dollar was under severe pressure.

In general, observing the situation on the markets, we believe that the growth of negativity from trade wars, Trump's intra-party struggle in the States, as well as the multiple conflicts in the world inspired by America to achieve their economic and political goals, will probably still support in general the rate of the American dollar, and its property of a currency-refuge will prevail. The Fed's promise to further raise interest rates will also be a strong help to strengthen the dollar.

Forecast of the day:

The currency pair EUR / USD fell below the strong support level on the wave of geopolitical risks in the world, as well as the Fed's desire to further raise interest rates. We expect the price to continue falling to 1.1600-20.

The AUD / USD currency pair is trading below the level of 0.7255 against the background of the Fed's firm desire to further raise interest rates, as well as the lack of progress in trade relations between the US and China. On this wave, we expect the price to fall to 0.7200, and then to 0.7165.

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Fractal analysis of the main currency pairs for September 27

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, the price is close to canceling the downward structure from September 20, which requires a breakdown at the level of 1.3204. For the Dollar / Franc currency pair, we clarified the key objectives from the upward structure on 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, we expect the key development of the situation, the key resistance for the downward movement is the level of 147.59, the breakdown of 149.25 will have to develop an upward trend.

Forecast for September 27:

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: 1.3293, 1.3204, 1.3092, 1.3040, 1.2995, 1.2957, 1.2867 and 1.2803. Here, we monitor the formation of a downward structure from September 20 and the level of 1.3204 is the key support. Its breakdown will have to form an upward structure. In this case, the target is 1.3293. The continuation of the movement downwards is expected after the breakdown of 1.3092. In this case, the first target is 1.3040 and the breakdown of which, in turn, will allow us to count on the movement to 1.2995, up to this level we expect the formation of pronounced initial conditions for the bottom. The passage at the price 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 main trend is the formation of a downward structure from September 20, a stage of deep correction.

Trading recommendations:

Buy: 1.3206 Take profit: 1.3290

Buy: Take profit:

Sell: 1.3090 Take profit: 1.3042

Sell: 1.3040 Take profit: 1.2995

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For the currency pair Dollar / Franc, the key levels on the scale of H1 are: 0.9826, 0.9785, 0.9753, 0.9709, 0.9675, 0.9634, 0.9616 and 0.9589. Here, we clarified the objectives for the upward structure of September 21. The continued upward movement is expected after the breakdown of 0.9675. In this case, the target is 0.9709 and near this level is the consolidation. The breakdown at the level of 0.9710 should be accompanied by a pronounced upward movement. Here, the target is 0.9753 and in the range of 0.9753 - 0.9785 is the short-term upward movement, and consolidation. The potential value for the top is the level of 0.9826, upon reaching which we expect a pullback downwards.

The short-term downward movement is possible in the range of 0.9634 - 0.9616 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 0.9589 and this level is the key support for the top.

The main trend is the upward structure of September 21.

Trading recommendations:

Buy: 0.9675 Take profit: 0.9707

Buy: 0.9712 Take profit: 0.9750

Sell: 0.9634 Take profit: 0.9617

Sell: 0.9614 Take profit: 0.9590

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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 H1 scale are: 1.3088, 1.3069, 1.3058, 1.3042, 1.3015, 1.3003 and 1.2983. Here, we follow the upward cycle of September 20. The continued upward movement is expected after the breakdown of 1.3042. In this case, the target is 1.3058 and in the range of 1.3058 - 1.3069 is the consolidation of the price. The potential value for the top is the level of 1.3088, after which we expect a pullback downwards.

The short-term downward movement is possible in the range of 1.3015 - 1.3003 and the breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.2983 and this level is the key support for the upward structure of September 18.

The main trend is the upward cycle from September 20.

Trading recommendations:

Buy: 1.3042 Take profit: 1.3058

Buy: 1.3070 Take profit: 1.3085

Sell: 1.3015 Take profit: 1.3003

Sell: 1.3000 Take profit: 1.2985

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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. At the moment, the price is in correction. 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. 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 and 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: 149.69, 148.17, 147.59, 146.84, 145.89, 144.86 and 144.11. Here, the descending structure of September 21 is still relevant as potential initial conditions. The short-term downward movement is possible in the range of 148.17 - 147.59 and the breakdown of the latter value will lead to the development of a downward trend. In this case, the first target is 146.84 and its breakdown in turn will lead to a movement of 145.89, near this level is the consolidation. The breakdown of the level 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.

Regarding the upward movement, from the level of 149.69, we expect the formation of a pronounced structure of the initial conditions for the subsequent definition of goals.

The main trend is the equilibrium situation.

Trading recommendations:

Buy: Take profit:

Buy: Take profit:

Sell: 148.15 Take profit: 147.65

Sell: 147.55 Take profit: 146.90

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Results of the Fed meeting: forecasts come true and promises are fulfilled

Yesterday, it became known that the US Federal Reserve System set the range of interest rates for federal funds between 2.00% and 2.25%. The Fed also raised the discount rate to 2.75% by 0.25 percentage points. This decision by the committee on open market operations took the number of votes to 9 against 0.

Despite the fact that the Fed raised interest rates, the committee also signaled another planned increase this year, which is likely to happen in December.

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It should be noted that the Fed has left unchanged the statement concerning the economy, including the labor market and inflation, saying that the labor market situation has continued to improve and economic activity has grown at a strong pace.

The increase in the interest rate, along with the latest economic indicators, also allowed the Fed to remove from its statement the word "soft" as applied to monetary policy. This suggests that the achievement of a neutral level of interest rates is gradually approaching.

Let's talk about the forecast for the interest rate, as investors pay attention to changes in these indicators, building their future strategy:

  • Federal Reserve forecast for a key interest rate: 2.4% at the end of 2018
  • Federal Reserve forecast for the key interest rate: 3.1% at the end of 2019
  • Federal Reserve forecast for the key interest rate: 3.400% at the end of 2020

The most important point, which I drew attention in my yesterday's review, was the forecast of the Fed on the key interest rate at the end of 2021, where the rate is expected at 3.4%.

This again indicates that the committee is close to the end of the period of interest rate increase since in the long term the rate is expected to be at the level of 3%.

As for the growth of the economy, the Fed's average forecast for GDP growth has been raised to 3.1% this year and 2.5% for the year after. The Fed's average forecast for the unemployment rate at the end of 2018 was also raised to 3.7% from 3.6% in June, which indicates a slight decline in the labor market. Indicators of longer-term inflation expectations remained unchanged.

Following the publication of the Fed's decision, Chairman Jar Powell said that short-term interest rates remain low, and the disappearance of the word "soft" on the statement does not signal a change in policy.

Powell once again stressed that in the decision-making process, the Fed is not guided by political considerations, but by setting rates, only financial conditions are taken into account.

Fundamental data

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Data on the growth in sales of new homes in the US in August this year were ignored by the market.

According to the report of the US Department of Commerce, sales in the primary housing market increased by 3.5% in August 2018 compared to the previous month, amounting to 629,000 homes per year. Economists had expected growth of 0.5% compared to the same period of the previous year when sales grew by 12.7% in August.

Technical picture of EUR / USD pair:

Another unsuccessful consolidation above the resistance of 1.1800 led to profit taking by major investors, who took advantage of the volatility of the market after raising interest rates.

The breakthrough of support 1.1725 points to the problematic growth of problems among euro buyers. If you quickly fail to return to this area, then, most likely, the uptrend will be broken, which will lead to new levels of support 1.1650 and 1.1620.

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

Bitcoin analysis for September 27, 2018

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Trading recommendations:

According to the H1 time - frame, I found that price broke the bearish flag in the background, which is a sign that sellers are in control. The short term trend is bearish and my advice is to go with the trend. Watch for selling opportunities. The downward targets are set at the price of $6.288 and at the price of $6.083.

Support/Resistance

$6.500 – Intraday resistance

$6.390– Intraday support

$6.288 – Objective target 1

$6.083 – Objective target 2

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

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

Intraday technical levels and trading recommendations for GBP/USD for September 27, 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. Since then, 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 be watched for bullish price action.

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 was demonstrated as expected in previous articles.

Therefore, the GBP/USD short-term outlook remains trapped between 1.3190 (supply) and 1.3090 (demand). Breakout in either direction should 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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Intraday technical levels and trading recommendations for EUR/USD for September 27, 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. The first bearish target would be around 1.1520.

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 (Low probability).

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GBP / JPY: pound is vulnerable, but the yen is too weak

Today, it is better not to open trade positions for dollar pairs. The Fed's September meeting may present surprises, given the general market expectations and recent macroeconomic and foreign policy developments. Predicting the reaction of the US currency is extremely problematic, since everything will depend on the position of Jerome Powell, who in turn can also quite unexpectedly shift the emphasis of his rhetoric to one of the parties. Therefore, if you do not treat trade as a lottery, it is better to take a wait-and-see attitude and calmly analyze the main theses of the head of the Fed, without looking back at the spasmodic dynamics of dollar pairs.

But to some cross-pairs today, you can take a closer look. Of particular interest is the cross pound / yen, which demonstrates a pronounced northern trend. On a weekly chart, each candle from the middle of August (except one) was bullish, even despite all the contradictory news about Brexit's prospects. Such a stable dynamics makes one think about long positions in the pair, especially since the technical picture speaks of the priority of bullish sentiments and the price "gap" of 100 points, up to the level of the 150th level.

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A fundamental picture of the pair also prefers the pound, however, with sufficient weighty reservations. If Brexit was not hanging over the British like a sword of Damocles, there would be no doubt. Inflation in the UK is growing at a record pace, unemployment is low, wages are rising, as is the country's GDP. The Bank of England is ready to tighten monetary policy, and even at an accelerated pace, in response to rising price pressures. Alas, the entire list of "hawkish" factors is leveled by only one Brexit, especially after the failed summit in Salzburg.

The Brexit is the anchor that does not allow the cross-pair GBP / JPY to develop a strong northern trend but even in spite of this, the pair has been consistently growing for the second month in a row. The pound is certainly vulnerable, but while there is at least a minimal hope for a deal between London and Brussels, it will have an advantage over the yen, which is under constant pressure from the Bank of Japan. If earlier, the Japanese regulator spoke about at least some time frame in the context of the ultra-soft monetary policy, now, any time, restrictions have been lifted. During his last speech, the head of the Japanese regulator Haruhiko Kuroda said that the Central Bank is free to not limit itself to terms, although low rates will operate "not on a permanent basis."

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He also stressed that the current situation in Japan is fundamentally different from the situation in Europe and the US, so the regulator will keep interest rates in the negative area "a very long period." After these words, experts shifted their forecasts about possible changes on the part of the Bank of Japan. Now, according to analysts, before the second half of 2020, we should not expect any decisive action from the Central Bank. And here, it is necessary to remember that this year, Kuroda was re-elected for a second five-year term, and among the members of the regulator, he has practically no "opposition". At the September meeting, only two of the nine managers did not support the idea of keeping low interest rates.

Moreover, some of his colleagues are in favor of lowering rates further into the negative area and expanding the incentive program. Therefore, the Bank of Japan is unlikely to deviate from its course in the coming years except in the direction of easing monetary policy. Two months ago, the Japanese Central Bank had already made the first step in this direction, increasing the range of borders to -0.2%. After that, the regulator took a wait-and-see attitude. At its last meeting, Kuroda did not change the parameters of monetary policy, having exerted verbal pressure on the yen. He said that salaries are growing at an extremely slow pace, and inflation has not risen to even half its target of 2%, so the central bank "reserves the right" to resort to an appropriate reaction.

And although he did not elaborate on his point, the Bank of Japan has additional levers of influence (other than interest rate cuts). It is about increasing the volume of purchases of Japanese government bonds and increasing the monetary base. At which point, the Japanese regulator will move from "words to deeds", nobody knows, but from the experience of the past years, one can assume that this will happen suddenly and without any prior warning.

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Thus, the perspectives of tough Brexit do not yet frighten cross-currency traders, especially if on the other side of the scale is the long-running ultrasoft policy of the Bank of Japan with the prospect of further easing. It is likely that the situation will change dramatically if it becomes completely clear that the deal between London and Brussels will not take place. But until this happens, the GBP / JPY pair has the potential for its further growth to the mark of 150.05, this is the upper line of the Bollinger Bands indicator on the daily chart and the top line of this indicator on the weekly chart, which coincides with the upper boundary of the cloud Kumo. This is a fairly strong level of resistance, it is too early to talk about overcoming it. However, testing this target in the near future is by no means excluded.

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Analysis of Gold for September 27, 2018

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Recently, Gold has been trading downwards. The price tested the level of $1 193.95. According to the H1 time – frame, I found the breakout of the bearish flag (the end of an upward correction abc flat), which is a sign that sellers are in control. Most recently I found that a breakout of the intraday upward trendline, which is another sign of weakness. Watch for selling opportunities. The downward targets are set at the price of $1,190.40 and at the price of $1,187.50.

Trading recommendations for today: watch for potential selling opportunities.

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EUR/USD analysis for September 27, 2018

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Recently, the EUR/USD pair has been trading downwards. The price tested the level of 1.1684. According to the M30 time – frame, I found the breakout of the descending triangle (bearish pattern), which is a sign that sellers are in control. The key support at 1.1723 retained firmly for long, but it couldn't hold today. So, my advice is to watch for selling opportunities. The projected downward target is set at the price of 1.1649.

Trading recommendations for today: watch for potential selling opportunities.

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Technical analysis of USD/CHF for September 27, 2018

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

Technical analysis of GBP/USD for September 27, 2018

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Overview:

The GBP/USD pair rose from the level of 1.3100 towards 1.3211 yesterday. Now, the current price is set at 1.3119. On the H4 chart, the resistance is seen at the levels of 1.3211 and 1.3298. Besides, the weekly support 1 is seen at the level of 1.3038. Today, the GBP/USD pair is continuing to move in a bullish trend from the new support level of 1.3100 (pivot), to form a bullish channel. Amid the previous events, we expect the pair to move between 1.3100 and 1.3298 in coming hours. Therefore, buy above the level of 1.3100 with the first target at 1.3211 in order to test the daily resistance 1 and further to 1.3298 (double top). Nevertheless, if the pair fails to pass through the level of 1.3298, the market will indicate a bearish opportunity below the level of 1.3298. The market will decline further to 1.3100 in order to return to the weekly pivot point. Additionally, a breakout of that target will move the pair further downwards to 1.3038.

Comment:

- The weekly pivot is seen at the level of 1.3100.

- The market is still in an uptrend. We still prefer the bullish scenario.

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Technical analysis of EUR/USD for September 27, 2018

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Overview:

The EUR/USD pair is showing signs of strength following a breakout of the highest level of 1.1730. The level of 1.1730 coincides with 50% of Fibonacci which is expected to act as minor support today. Since the trend is above the 50% Fibonacci level, the market is still in an uptrend. But, major support is seen at the level of 1.1730. Furthermore, the trend is still showing strength above the moving average (100). Thus, the market is indicating a bullish opportunity above the above-mentioned support levels, for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside. Therefore, strong support will be found at the level of 1.1730 providing a clear signal to buy with a target seen at 1.1802. If the trend breaks the minor resistance at 1.1802, the pair will move upwards continuing the bullish trend development to the level 1.1860 in order to test the major resistance.

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BITCOIN Analysis for September 26, 2018

Bitcoin has been bearish with recent momentum which led the price below $6,500 area with a daily close, but currently the price has bounced back successfully and is residing above $6,500. The price has been impulsive with the bullish gains today. BTC is expected to climb higher with a target towards $7,500 and later towards $8,000 area. As for the current scenario, the market is still quite indecisive. However, as the price remains above $6,000 area, it is expected to extend its climb in the coming days.

SUPPORT: 6,000, 6,500

RESISTANCE: 7,500, 8,000

BIAS: BEARISH

MOMENTUM: VOLATILE

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Technical analysis of Gold for September 27, 2018

Gold price remains trapped inside the bearish channel and inside the trading range between $1,211-$1,190. Short-term trend remains neutral. Gold traders should be patient and wait for a breakout sign.

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Red lines - trading range

Green lines - bearish channel

Short-term resistance is at $1,203 and next at $1,211. Support is at $1,190 and next at $1,186. Breaking above or below the second important levels will open the way for a move to $1,220-30 or $1,150-40 respectively. So far traders better stay on the sidelines as price continues to trade within the range.

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Technical analysis of EUR/USD for September 27, 2018

EUR/USD had a volatile night as expected after the FOMC. Prices tried to move back above 1.18 but got rejected. We warned that another rejection at 1.18 would be a bearish sign. EUR/USD is now nearly 100 pips lower.

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Green line - important short-term support

Dark blue dots - maximum strength support

EUR/USD has touched the dark blue dots support area and the upward sloping trend line. Holding above these two support levels and not pushing below 1.17 is a sign that prices are supported and the bullish scenario for a move higher is still open. Risk reward favors the bullish side now at 1.17 with a tight stop at 1.1660. I'm bullish EUR/USD.

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Technical analysis: Intraday levels for EUR/USD, Sept 27, 2018

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When the European market opens, some economic data will be released such as Italian 10-y Bond Auction, Private Loans y/y, ECB Economic Bulletin, M3 Money Supply y/y, German Prelim CPI m/m, and German GfK Consumer Climate. The US will release a series of economic reports such as Natural Gas Storage, Pending Home Sales m/m, Unemployment Claims, Prelim Wholesale Inventories m/m, Goods Trade Balance, Final GDP PriceIndex q/q, Durable Goods Orders m/m, Final GDP q/q, and Core Durable Goods Orders 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: 1.1803.Strong Resistance:1.1796.Original Resistance: 1.1785.Inner Sell Area: 1.1774.Target Inner Area: 1.1746.Inner Buy Area: 1.1718.Original Support: 1.1707.Strong Support: 1.1696.Breakout SELL Level: 1.1689.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 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 27, 2018

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In Asia, Japan today will not release any economic data. However, the US will release a batch of economic data such as Natural Gas Storage, Pending Home Sales m/m, Unemployment Claims, Prelim Wholesale Inventories m/m, Goods Trade Balance, Final GDP Price Index q/q, Durable Goods Orders m/m, Final GDP q/q, and Core Durable Goods Orders 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: 113.44.Resistance. 2: 113.22.Resistance. 1: 113.00.Support. 1: 112.72.Support. 2: 112.50.Support. 3: 112.28.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 froman independent financial advisor if you have any doubts.The material has been provided by InstaForex Company - www.instaforex.com

Trading plan for27/09/2018

The Fed left mixed feelings, which makes it difficult for the currency market to take direction. Today in the morning EUR loses bad news from Italy; CAD is under pressure through prolonged NAFTA negotiations, and NZD has not received new guidelines from a neutral RBNZ.

Today in the morning EUR is losing in connection with information from Italy, where, according to press reports, the government may postpone the meeting on the next year's budget. Members of the ruling League want to join the coalition project, the 5 Stars Movement, to establish a deficit of 2.4 percent. Previously, the deficit was closer to 2 percent, so this is a negative information. EUR / USD fell to 1.1704.

CAD is losing ground because NAFTA negotiations do not see the end. US President Trump said he was "very unhappy" about the style in which Canada is negotiating. Reports indicate that the agreement will not be reached by the end of September, as previously assumed. USD / CAD was pulled to 1.3050.

On Thursday, the 27th of September, the is light in the important data releases, however, the US session will bring some interesting macroeconomic figures to the market's participants attention. The US will publish Durable Goods Orders data, GDP data, Goods Trade Balance data, Wholesale Inventories data, Unemployment Claims data and Pending Home Sales data. There are some scheduled speeches from FOMC members Jerome Powell and Rober Kaplan at the end of the trading day.

USD/JPY analysis for 27/09/2018:

The Federal Open Market Committee decided to raise interest rates and intends to tighten policy in the coming quarters, but this position was expected. In the projection for 2018-2020, nothing has changed and in the Fed's opinion, there are 5 more hikes ahead of us. Some dovish impulse gave the removal from the message of the "accommodative" fragment of politics, which at first glance suggests that the Fed is approaching a neutral attitude. However, at the conference, President Powell explained that the change in language reflects the expected path of normalization, and the removal of the phrase now "was not made because politics are not accommodative. It is still accommodative". Despite this, apart from the expected increase, the decision has no hawkish surprises and it is difficult to develop the USD rally.

Let's now take a look at the USD/JPY technical picture at the H4 time frame. The market made a new high just a few pips away from the technical resistance at the level of 113.17 and fell out of the channel. If the bearish pressure will increase, then the price might fall towards the level of 112.50 - 112.40, which will act as a technical support zone. Please notice, that in a case of a further sell-off, the next technical support zone is seen at the levels of 112.13 - 112.04. The market conditions are now overbought, which supports the short-term pull-back development.

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Global macro overview for 27/09/2018

The New Zealand Reserve Bank left the main OCR rate at 1.75%, and did not change its approach to its monetary policy. However, the global investors have learned some details about the future movements of the central bank.

RBNZ expects that the interest rate will not be changed until 2020 inclusive. Both the increase and the reduction are now just as likely. Employment is around the optimal level. Consumer inflation remains below 2% and should continue to be supported by loose monetary policy.

Forecasts regarding the interest rate path assume that the economic growth rate will increase next year, which will also support inflation. Demand for exports of domestic goods has improved due to strong global economic growth and the weak USD exchange rate of New Zealand. Trade tension is currently the greatest risk for the global economy.

On a national scale, GDP growth is to be supported by expenses and investments of both the government and households. The first signs of inflation increase are already appearing. In the near future, there may be a temporary increase in prices caused by more expensive crude oil.

Let's now take a look at the NZD/USD technical picture at the H4 time frame. Markets have interpreted the decision of the RBNZ as neutral. The reaction of NZD/USD is only negligible. Immediately after the announcement of the decision, there was an increase, but soon the price returned to the starting point. Currently, the price is approaching the technical support at the level of 0.6631. Any violation of this level would extend the drops towards the next supports seen at 0.6627 and 0.6620. The weak and negative momentum indicator supports the short-term bearish outllok.

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Global macro overview for 27/09/2018

The FOMC meeting ends with a rate hike up to 2.00-2.25$ and maintaining the current view on the prospects of the economy and the optimal shape of monetary policy. As expected, the fragment referring to the "accommodative" nature of monetary policy was removed from the statement. In that situation, the global investors expect another hike in December and uphold our expectations for the future shape of the policy, i.e. signaling the willingness to raise rates three times in 2019. Whether or not this happens is, of course, a separate issue.

The extremely transparent FOMC policy results in low volatility during press conferences, from which the market does not learn anything new or controversial. In the FOMC statement in September, information was once again given that the situation on the labor market is stable, and this represents a strong condition. The updated dot plot, ie the distribution of forecasts of individual FED members regarding the future level of interest rates shows that the vast majority believe in one more increase this year (to the range of 2.25-2.50%).

let's now take a look at the EUR/USD technical picture at the H4 time frame. The EUR / USD remained in this arrangement faithful to the current range of fluctuations around 1.1750. From the point of view of quotations, it is necessary to note just unsuccessful attempts to rally above 1.18.13, the most important technical resistance level. Currently, the price has broken below the local support at the level of 1.1720 and now is heading lower towards the level of 1.1655. The weak and negative momentum indicator supports the short-term bearish outlook.

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Bitcoin analysis for 27/09/2018

The new report published by the Bank for International Settlements (BRM) showed a strong correlation between the prices of cryptocurrencies and novelties regarding the intervention of supervisors. According to the BRM report - an organization based in Switzerland consisting of 60 central banks - cryptocurrencies have close links with news about regulatory actions in different national jurisdictions.

The BRM survey covered all published information from the beginning of 2015 until the end of June 2018. The Bank identified a total of 151 reported regulatory events, where the largest number came from China, India, Japan, the United Kingdom, and the United States, and observed a significant increase in such messages over the years. The report concluded that the markets reacted most strongly to information on the legal status of the crypto. The market reacted negatively to news that concerned bans, the possible application of securities market law to cryptographic assets and the announcement that the crypto would not be considered a currency.

Conversely, solid gains in the market took place in response to government disclosure of a new legal framework adapted to the cryptocurrencies. The report also states that announcements about anti-money laundering/counter-terrorism financing (AML / CFT) or other interventions that "limit crypto interoperability with the regulated financial system" have a strong negative impact on markets.

BRM noted that indefinite or general warnings against cryptographic risk, as well as messages regarding the possible but uncertain issuance of central bank digital currencies (CBDC), had a negligible impact on cryptocurrency prices.

In conclusion, the BRM proposed that regulations "do not have to be bad news for [cryptographic] markets - price reactions signal a clear preference for a particular legal status [...]". The bank is in favor of better coordination between regulators around the world, but suggests that its lack does not have to be an obstacle to effective intervention.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market bounced from the level of $6,289 and went higher towards the technical resistance zone at the level of $6,521, but the bulls were too weak to break through this zone and the price did not even touch it. Currently, the price is hovering around the weekly pivot at the level of $6,401 and the test of the lower levels is still possible.

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Elliott wave analysis of EUR/NZD for September 27, 2018

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Support at 1.7580 should continue to protect the downside for a break above minor resistance at 1.7732 confirming that the next impulsive rally towards 1.8030 is developing.

Short-term a break above minor resistance at 1.7680 will be the first good indication that short-term important resistance at 1.7732 soon will come under fire and a break above here should be seen this time for the expected rally towards 1.8030.

R3: 1.7823

R2: 1.7783

R1: 1.7732

Pivot: 1.7680

S1: 1.7651

S2: 1.7626

S3: 1.7580

Trading recommendation:

We are long EUR from 1.7615 with our stop placed at 1.7515. Upon a break above 1.7732 we will raise our stop to 1.7575 and we will take profit for half our position at 1.8000.

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Elliott wave analysis of EUR/JPY for September 27, 2018

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The break below minor support at 132.32 invalidated the triangle option and instead favor a flat consolidation building. That means a second decline to support 131.88 should be expected before the next impulsive rally higher to 134.07 to complete blue wave (3).

That said, it's possible that a larger and more time consuming ascending triangle consolidation is developing. In this case, we will see a new spike to 133.13 and then a final dip to just above 132.20 before the next rally towards 134.07.

Trading recommendation:

We are long EUR from 129.11 with our stop placed at 130.85. Upon a break above 113.13 we will raise our stop to 131.80 and we will take profit on half our position at 133.90.

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USD/CAD Approaching Resistance, Prepare For A Reversal

USD/CAD is approaching its resistance at 1.2977(61.8% Fibonacci extension, 61.8% & 50% Fibonacci retracement, horizontal overlap resistance) where it is expected to reverse down to its support at 1.2977 (61.8% Fibonacci retracement, horizontal overlap support).

Stochastic (89, 5, 3) is approaching its resistance at 99% where a corresponding reversal is expected.

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

Sell below 1.3097. Stop loss 1.3152. Take profit at 1.2977.

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EUR/GBP Approaching Support, Prepare For A Bounce

EUR/GBP is approaching its support at 0.8905 (100% & 61.8% Fibonacci extension, 61.8% Fibonacci retracement, horizontal overlap support) where it could potentially bounce to its resistance at 0.8945 (50% Fibonacci retracement, horizontal swing high resistance).

Stochastic (89, 5, 3) is bounced off its support at 1.7% where a corresponding bounce could occur.

EUR/GBP is approaching its support where we expect to see a bounce.

Buy above 0.8905. Stop loss at 0.8880. Take profit at 0.8945.

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What did the Fed say?

What did the Fed say?

Commentary on the decision on interest rates on September 26, 2018

The fed raised the rate by + 0.25%, from 1.875 to 2.125%, and gave a comment:

The information received since the Fed's meeting in August indicates that the labor market continued to strengthen and that economic activity increased at a strong pace. Job growth has been strong, on average in recent months, and unemployment has remained low. Household spending and business investment grew strongly. On a 12-month basis, both total inflation and inflation other than food and energy remain close to 2 percent. Indicators of long-term inflation expectations have changed little in the end.

In accordance with its statutory mandate, the Fed seeks to promote maximum employment and price stability. The Fed expects further gradual increases in the target range for the US central bank's interest rate to be consistent with sustained growth in economic activity, strong labor market conditions, and inflation around the its 2 percent target in the medium term. Risks to the economic outlook appear roughly balanced.

In view of the realized and expected conditions of the labor market and inflation, the Fed decided to raise the range of the Federal funds interest rate to 2 to 2-1/4 percent.

In determining the timing and size of future changes in the Federal funds rate, the Fed will assess the realized and expected economic conditions relative to its maximum employment target and its 2 percent inflation target. This assessment will take into account a wide range of information, including indicators of labour market conditions, indicators of inflation pressures and inflation expectations, and data on financial and international events.

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GBP/USD. 26 September. Results of the day. Pound traded with minimal volatility before the Fed meeting

4-hour timeframe

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The amplitude of the last 5 days (high-low): 117п – 163п – 222п – 104п – 99п.

The average amplitude over the past 5 days: 141p (132p).

The British pound on Wednesday, September 26, is trading with minimal volatility before the announcement of the results of the Fed meeting, unlike the EUR/USD pair. There is a minimal dollar advantage, but it is insignificant. No new information on the topic of Brexit for Wednesday at the disposal of traders has been reported. Thus, the markets are fully focused on the upcoming performance of Jerome Powell. The key rate is likely to be raised to 2.25%, but these markets can no longer be surprised. Most likely, if the rate is not raised, it will cause a wave of disappointment, and the dollar will be put under pressure. It is also very likely that the rate will be raised, but instead of strengthening the dollar, we will see a backlash, as the tightening of monetary policy can already be taken into account by the markets. Given the fact that there is a trade conflict between China and the United States, which will necessarily affect the economies of both countries, the topic of raising the rate may go to the background or be ignored altogether. This point should be taken into account when opening any positions during the outcome of the Fed meeting and the press conference. From a technical point of view, everything is ambiguous, as the price is near the critical line and can easily gain a foothold above it, which changes the trend of intraday to an ascending one.

Trading recommendations:

The GBP/USD currency pair continues to adjust against the dead cross. Overcoming traders Kijun-sen can provoke the resumption of an upward movement and in this case will become relevant longs with targets 1.32 and 1.3296.

Shorts can be opened after the current correction with a target of 1.3014. Signalling its completion can turn the MACD indicator downwards. However, until the publication of the results of the Fed meeting, it is not recommended to open any transactions.

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.

Chinkou span – green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD:

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

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EUR / USD pair: plan for the European session on September 26. Today, the Fed will raise rates

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

Today, the Fed will announce its rate decision in the afternoon. Most likely, there will be no significant changes in the market, and trade will continue around the middle of the side channel at 1.1763. After raising rates on the part of the Fed, I expect a sharp rise in the US dollar to the support level of 1.1726 or even lower to 1.1687, from which I recommend to gain long positions in the European currency. A breakthrough of resistance at 1.1802 will also be a signal for euro purchases to test the highs around 1.1830 and 1.1866, where fixing profits are recommended.

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

Euro can be sold in the morning after the growth in the resistance area of 1.1802 or on the rebound from 1.1830. The main goal for short positions will be the lower limit of the lateral channel at 1.1726, but the whole calculation will be for raising rates in the US, which will lead to a short-term growth of the US dollar and a possible renewal of the low at 1.1687, where fixing profits are recommended. In case of growth above 1.830, selling the euro is best for a rebound from 1.1866.

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 can only be after the return of the price above the moving average.

Bollinger Bands

I do not recommend paying attention to Bollinger Bands performance today.

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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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Simplified Wave Analysis. Review of GBP / USD pair for the week of September 26

The wave pattern of the H4 graph:

The descending wave of the major pound from April 17 achieved the upper limit of the powerful zone of support for a higher timeframe. The wave structure looks formed.

The wave pattern of the H1 graph:

The potential of the rising wave from August 15 allows us to classify it as a reversal structure. In the previous month, a completely hidden correction developed within the movement.

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The wave pattern of the M15 chart:

The bear plot of the schedule from September 20 completes the correctional model of the hourly timeframe, reaching the price level of the minimum possible elongation. Full completion is expected in the settlement of the support area.

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Recommended trading strategy:

Purchases of the pair remain in priority. In the coming days, the price will experience strong volatility, this period is better to avoid. Within the intraday, short sales are possible.

Resistance zones:

- 1.3180 / 1.3230

Support zones:

- 1.2970 / 1.2920

Explanations to the figures:

Explanations to the figures:

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

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

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

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The Fed will open gold eyes

Gold continues to sleep peacefully near the $1200 per ounce mark, but it is unlikely that an experienced investor will be deceived by such calmness. The market is cyclical, trends are replaced by consolidations, trading ranges give way to new trends, so the current sleepy state will probably end soon. We need a reason to wake up. And they are quite capable of becoming the events of the end of September. The Fed meeting, the publication of the draft budget of Italy and the release of data on European inflation will directly affect the USD index, and in fact its dynamics has become the main "bearish" driver for the XAU/USD. Since the beginning of the year, the precious metal has lost about 8% on expectations of an increase in the Federal funds rate and on fears of increased trade tensions.

Despite low prices, physical demand does not support gold. Stocks of the largest specialized stock exchange fund SPDR Gold Shares fell to 742 tons, the lowest level since February 2016. Since the beginning of the year, the figure has lost 11.2%. Rumors of an increase in import duties in India from the current 10% to 12-13%, and possibly up to 20%, increase the risks of reducing demand for precious metals in the country - its largest consumer. At the same time, the People's Bank of China has not purchased gold for two years in order to increase its reserves. However, the holy place is never empty: Russia has claimed the status of the largest buyer, increasing its own reserves to 64.3 million ounces (about 2000 tons). In August, they rose by 31 tons. Bloomberg reports that the official Delhi will leave tariffs at the same level, as it fears an increase in smuggling, and ETF stocks tend to follow the price, and not vice versa.

I believe that the market conditions of the physical asset will gradually improve, and to predict the further dynamics of the XAU/USD it makes sense to look at factors such as trade wars and FOMC meetings. During the current cycle of normalization of monetary policy of the Fed, gold reacted quite clearly to the increase in the Federal funds rate: on the eve of the meetings, it fell, then quickly restored the lost positions. In my opinion, this dynamics is due to the implementation of the principle of "sell on rumors, buy on facts".

Dynamics of gold and Fed rate

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The failure occurred in June, when the tightening of monetary policy did not lead to an increase in the value of the precious metal. In summer, investors were keen on buying the US dollar amid divergence in economic growth between the United States and other countries. They believed that China and the developing countries would slow down, while Washington would not feel the pain of trade wars. Currently, the world has changed. The US economy may lose momentum, while EM assets look oversold. In this respect, the former associated with the recovery of gold prices after the FOMC meetings is quite capable of playing.

Technically, the exit of the precious metal from the trading range of $1184-1214 per ounce will allow it to determine the direction of further movement. The breakout of the upper limit will increase the risks of the rally in the direction of $1240 and $1260. On the contrary, a successful storm of support for $1184 will open the way for the "bears" to the south.

Gold, daily chart

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September meeting of the Federal Reserve: a preview

By tradition, the Federal Reserve takes key decisions only at those meetings, after which a press conference of its head is provided. Next year, this pattern may go down in history: as stated by Jerome Powell, he plans to communicate more often with journalists – literally after each meeting of the central bank's members. But so far, traders can focus on the current "rule": both Powell and Yellen, and their predecessors preferred to explain their position after the Fed changed the parameters of monetary policy.

By the end of this year, there will be three more meetings of the central bank (today, November and December) – and only after two of them the Fed head will hold a press conference. This means that traders can only rely on these meetings, in the context of a possible tightening of monetary policy. In general, this fully coincides with the expectations of the market: the probability of a rate increase at today's meeting is 100%, in December – 79%. Such a high degree of expectation imposes a great responsibility on the regulator, since any deviation from this scenario will cause greater volatility in the foreign exchange market.

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There is no doubt that the Fed will raise the rate to 2.25% today. This fact is fully taken into account in prices, and is likely to be ignored by the market. The main intrigue lies in the further intentions of the regulator, and this applies not only to the issue of the December increase. If we consider the situation more generally, it is not so important – whether the rate will be increased to 2.5% at the December meeting or the event will be postponed to March 2019.

Undoubtedly, in the context of the medium-term market, this decision will cause strong volatility and a significant decline in the dollar throughout the market. But still, the bigger question is when the Fed will pause the process of normalizing monetary policy - in other words, when the interest rate reaches a neutral level – looks more ambitious. Let me remind you that the neutral level of the rate, on the one hand, does not accelerate the economic growth of the country, but it does not restrain it either.

According to some experts, the Federal Reserve will reach this target at the end of next year, so certain hints about this can be heard at the next meetings. In the first half of the year, most Fed members said that the level of the neutral rate is "about three percent". If we follow this scenario, then we expect another two or three rate hikes (not counting today's), after which the regulator will take a wait-and-see position.

But there is another opinion of experts who believe that the regulator will have to raise rates for another year and a half. This position is due, in particular, to the strong growth of the oil market (quotes have already updated the four-year high). In addition, the ongoing US-China trade conflict may lead to a significant increase in prices for a number of goods, which in turn will lead to an increase in inflation indicators. According to this scenario, the interest rate will be increased to three percent in June next year. Then everything will depend on the dynamics of inflation – if the main indicators significantly exceed the forecast levels, the regulator can raise the rate to 3.25% in the autumn of 2019 and to 3.5% in the spring of 2020.

In my opinion, the closer the rate will approach the three-percent level, the stronger the issue of a neutral rate will affect the dynamics of the market. Jerome Powell, speaking in Congress this summer, said that the members of the regulator have not yet answered the question - where is this level. If today the head of the Fed will announce certain signals in this direction, they will be of great importance for the market.

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Of course, today the market will focus primarily on the issue of short-term prospects - whether the Fed will raise the rate at the last meeting this year or not. Depending on the tone of Powell's rhetoric, the market will make its conclusions, after which the dollar will go in one direction or another. Here it is necessary to understand that the head of the Fed is unlikely to hint transparently and even more so to speak directly about the intentions of the Federal Reserve regarding the December increase. Therefore, traders will be forced to independently analyze its overall position, assessment of the economic situation and foreign trade risks. As a result of his press conference, the final conclusion will be made on this issue - the probability of a rate hike in December will either increase to 90%, or largely decrease, along with the dollar index.

Jerome Powell has arguments for both caution and optimism. The negative impact of the US-China trade war and the slowdown in August inflation could affect its position accordingly. On the other hand, Powell repeatedly "turned a blind eye" to the slowdown of certain key indicators, unless, of course, their dynamics acquired the character of a trend. Therefore, it is now difficult to talk about which line of behavior the head of the Federal Reserve will choose.

Most likely, Powell will positively assess the latest trends in the US economy, ignoring the decline in the consumer price index – but at the same time will take a cautious position in forecasting the Fed's subsequent actions. Such a dual position can be negatively perceived by the market, as the probability of a rate hike in December is too high to show indecision even of a "silent" nature.

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Technically, the bulls of the EUR/USD pair still need to hold the price above 1.1660 - in this case, the probability of the upward trend remains high, according to the signals of trend indicators. The approximate target of the upward pulse is 1.1880 (the upper line of the Bollinger Bands indicator coinciding with the Kijun-sen line on the weekly chart). If at the end of today's meeting the EUR/USD price is fixed below 1.1660, the upward trend will lose its relevance, as bears will seize the initiative on the pair.

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EUR/USD: plan for the US session on September 26. The decision of the Fed will not surprise the markets and may lead to an

To open long positions for EURUSD, it is required:

Buyers of the euro will show themselves after the decline and update of a large support level of 1.1726, for which the entire calculation is done and which further depends on the ascending trend. The breakthrough of the level of 1.1726 on the Fed's decision may be temporary, so the formation of a false breakout on it, after the announcement of the rate, will be an additional signal to buy the euro in order to return to 1.1763 and update 1.1802. The demolition of stop orders of sellers above 1.1802 will resume the upward trend in the EUR/USD pair, which will lead to an increase in the area of 1.1830 and 1.1866, where I recommend to lock in profit.

To open short positions for EURUSD, it is required:

The sellers got close to the support level of 1.1726, but it will be possible to talk about its real breakout after the publication of the Fed's decision, which will lead to a temporary growth of the US dollar and the exit to the lows of 1.1687 and 1.1654, the update of which will break the uptrend in the euro. In case the EUR/USD pair increases in the second half of the day, it is best to return to selling from the high of the week at 1.1802, on a false breakout, or a rebound from a large resistance of 1.1866.

Indicator signals:

Moving averages

The 30-day moving average is at the same level as the 50-day average, which indicates the lateral nature of the market. The trade moved below the moving averages, indicating a likely continuation of the euro's decline.

Bollinger Bands

Bollinger bands have narrowed, indicating a drop in market volatility before the release of important fundamental data.

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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
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