Intraday technical levels and trading recommendations for GBP/USD for October 4, 2018

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On September 13, the depicted daily downtrend line which came to meet the pair around 1.3025-1.3090 failed to offer enough bearish pressure on the pair. Since then, the GBP/USD pair has been demonstrating a successful bullish breakout so far.

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.

Therefore, the GBP/USD short-term outlook turned to become bearish towards 1.3010 (50% Fibonacci level) and 1.2940 (recent demand level).

As anticipated, the price level of 1.3190 (the backside of the broken bullish channel) offered significant bearish rejection where the depicted recent bearish movement was initiated.

On the other hand, regarding the price levels (1.3010-1.3090) corresponding to 50% and 61.8% Fibonacci levels. Currently, these price levels turned to become supply levels to be watched for bearish price action on retesting.

The current bearish persistence below 1.3010 (50% Fibo level) should be defended to pursue towards lower bearish targets. Otherwise, further bullish advancement towards 1.3090 would be expected.

On the other hand, the GBP/USD pair would have short-term bearish target around 1.2900-1.2940 (the backside of the broken daily downtrend and a prominent H4 demand zone) and possibly around 1.2845 if enough bearish pressure is demonstrated.

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Fundamental Analysis of AUD/JPY for October 4, 2018

AUD/JPY has been impulsive with the bearish pressure recently after rejecting the 82.00 area with a daily close. AUD has been the dominant currency in the pair earlier before JPY started the gain momentum despite AUD having positive economic results throughout this week.

AUD has been performing quite well in light of the economic reports released this week that did not help the currency to sustain its bullish momentum in the pair. This week AIG Manufacturing Index report was published with an increase to 59.0 from the previous figure of 56.7, MI Inflation Gauge increased to 0.3% from the previous value of 0.1%, and Cash Rate remaining unchanged as expected at 1.50%. Today Australia's Trade Balance report was also published with a wider trade surplus of 1.60B from the previous figure of 1.55B which was expected to decrease to 1.43B. Moreover, tomorrow Australia's Retail Sales report is going to be published which is expected to increase to 0.3% from the previous value of 0.0%.

On the JPY side, the economic figures were not quite satisfactory. Thus, it is quite a surprise how market sentiment is in favor of JPY compared to AUD. Japan's economic reports this week did not meet the expectations and revealed worse data. Today there are no reports from Japan to impact the market. But the pair managed to sustain the bearish pressure of AUD quite inevitably. Tomorrow, Japan's Household Spending report is due which is expected to decrease to 0.0% from the previous value of 0.1% and Average Cash Earnings is also expected to decrease to 1.3% from the previous value of 1.6%.

Meanhwile, AUD is fundamentally stronger than JPY, but the market sentiment is biased towards JPY. Any positive data from Japan may lead to a deeper decline. On the other hand, macroeconomic reports from Australia yet to be published may play a vital role to counter the bearish pressure and push higher with the bullish trend in the process. As per long-term trend pressure, AUD is expected to assert its strength.

Now let us look at the technical view. After the Bullish Divergence proving to be a success earlier in this pair, the price has pushed lower quite impulsively after being rejected off the 82.00 area with a daily close. The price is currently heading towards 80.50 area from where the price is expected to push higher towards 82.00 area with trend. If the price manages to break above the area with a daily close, further bullish momentum is expected which could lead the price higher towards 83.50 onwards in the future.

SUPPORT: 80.50

RESISTANCE: 82.00, 83.50, 85.00

BIAS: BULLISH

MOMENTUM: VOLATILE

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EUR/USD pair: the Italian government confirmed plans to increase the budget deficit, collapsing the European currency

Despite all the hopes of investors that the new government of Italy will still change its plan to increase the budget deficit for 2019, as well as the talk that the European Union may influence the above decision, it quickly disappeared after the statements made the night before.

Eurozone

As it became known, the Italian government confirmed yesterday that it intends to achieve a budget deficit of 2.4% of GDP in 2019. The government also noted that they intend to reduce the budget deficit to 2.1% of GDP by 2020 and up to 1.8% by 2021.

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On this news, the European currency collapsed against the US dollar to the next monthly lows, continuing its downward trend.

The speech by Fed Chairman Jarom Powell also inspired confidence in traders who bet on further strengthening of the US dollar.

Powell noted that there is no reason to think that the current cycle can continue indefinitely since risks to financial stability are moderate. He also drew attention to the fact that wage growth in the United States could spur inflation, but this will not create problems for the Fed.

As for the labor market, the share of the economically active population is high, given the aging population, and a number of indicators signal that it is approaching full employment, according to the Fed chairman. Powell also gave an estimate of interest rate , saying that he is still far from their neutral level, thereby hinting that the Central Bank is not going to move away from the path of tightening monetary policy in the near future.

Basic data

Good fundamental statistics supported the dollar buyers.

Based on the report, activity in September rose to new highs. According to the Institute for Supply Management ISM, the index of purchasing managers for the non-production sector rose to 61.6 points in September. I recall that values above 50 indicate an increase in activity. Economists had expected the index to be 58 points in September. On the other hand, the business activity, orders, and employment rose sharply in September.

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The US labor market is in order. According to Automatic Data Processing Inc. and Moody's Analytics, the job numbers in the US private sector increased by 230,000 in September of this year, which was much higher than economists forecast. Economists had forecast an increase in jobs of 185,000.

The ADP noted that conditions in the labor market continue to improve, and employment in the production of goods and services in the US grew at the highest rates in September. Employment growth was also observed in all sectors of the industry.

At the current job creation rate, unemployment is expected to fall to a lower limit of 3% by this month of next year.

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As for the technical picture of the EUR/USD pair, the downtrend continues. The inability of buyers today to return to the resistance level of 1.1500 will only exacerbate the situation in the euro, which will lead to the formation of a new wave of falling trading instrument in the area of minimums at 1.1450 and 1.1390.

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Intraday technical levels and trading recommendations for EUR/USD for October 4, 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 (recent bearish engulfing weekly candlestick).

Recently, the price level of 1.1500 offered temporary bullish recovery. Another bullish movement was demonstrated towards the upper limit of the price range (1.1750). However, the EUR/USD bulls failed to pursue towards higher bullish targets.

Instead, evident bearish rejection is being demonstrated on the daily chart. Recent bearish movement is currently taking place towards 1.1520 (the lower limit of the consolidation range).

As for the bearish side of the market to be dominant, the EUR/USD pair should be able to push below 1.1520. First bearish target would be located around 1.1420.

Otherwise, the EUR/USD pair remains trapped within the depicted consolidation range (1.1520-1.1750) if no strong bearish pressure is applied against 1.1520.

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Fundamental Analysis of AUD/USD for October 4, 2018

AUD/USD has been quite impulsive amid the bearish pressure. The pair is expected to rebound for a certain period before pushing lower again in the coming days. AUD has lost momentum against USD despite positive economic data recently that indicates the strength of USD after a rate hike ahead of the NFP reports this week.

This week AIG Manufacturing Index report was published with an increase to 59.0 from the previous figure of 56.7, MI Inflation Gauge increased to 0.3% from the previous value of 0.1% and Cash Rate remaining unchanged as expected at 1.50%. Today Australia Trade Balance report was also published with a wider surplus of 1.60B from the previous figure of 1.55B which was expected to decrease to 1.43B. Moreover, tomorrow Australia's Retail Sales report is going to be published which is expected to increase to 0.3% from the previous value of 0.0%.

On the other hand, the US is due to release economic reports, including Average Hourly Earnings which is expected to decrease to 0.3% from the previous value of 0.4%, Non-Farm Employment Change is expected to decrease to 185k from the previous figure of 201k but Unemployment Rate is expected to have positive outcome with decrease to 3.8% from the previous value of 3.9%. The expectations are quite negative for USD which might lead to certain weakness for the currency against AUD in the process. Today US Factory Orders report is going to be published which is expected to increase to 2.2% from the previous value of -0.8% and Natural Gas Storage is expected to increase to 47B from the previous figure of 46B.

Meanhwile, AUD is still quite optimistic amid the upcoming economic reports whereas expectations for the US reports are downbeat. If US economic data surpasses the expectations, further bearish pressure is expected. Otherwise, upbeat data from Australia may lead to certain counter impulsive momentum in the process.

Now let us look at the technical view. The price is currently residing below the key resistance area of 0.7150-0.7200 from where certain pullback and retest is expected before the price starts to push lower again with a target towards 0.7000 and 0.6850 area in the coming days. The dynamic level is currently quite apart from the current market price and as per mean reversion, the price is expected to push higher towards the dynamic levels before pushing further with the trend in the process. As the price remains below 0.7200 area, the bearish bias is expected to continue.

SUPPORT: 0.7000, 0.6850

RESISTANCE: 0.7150, 0.7200

BIAS: BEARISH

MOMENTUM: IMPULSIVE

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Bitcoin analysis for October 04, 2018

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Trading recommendations:

According to the H1 time - frame, I found a breakout of the bearish flag pattern in the backgorund, which is a sign of weakness. Most recently, I found that another intraday bearish flag is in creation and my advice is to watch for a potential breakout of the support trendline to confirm further downward continuation. The take profit levels are set at the price of $6.288 and at the price of $6.075.

Support/Resistance

$6.463 – Intraday resistance

$6.359– Intraday support

$6.288– Objective target 1

$6.075 – Objective target 2

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

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GBP/USD analysis for October 04, 2018

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Recently, the GBP/USD pair has been trading sideways at the price of 1.2970. According to the H1 time – frame, I found a fake breakout of the yesterday's low at the price of 1.2940, which is a sign that selling looks risky. I also found the hidden bullish divergence on the MACD oscillator, which is another sign of the strength. Watch for buying opportunities. The take profit levels are set at the price of 1.3020 and at the price of 1.3110.

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EUR / USD pair: plan for the US session on October 3. Weak retail sales in the eurozone returned to the market sellers

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

Buyers have lost their advantage in the morning and are now trying to cling to the support level of 1.1539, which I paid attention to in my morning review. Only the formation of a false breakout will signal to buy euros in order to return and update the daily maximum, above which the bears are unlikely to start up the market today. In the case of a decline below the support area of 1.1539, it is best to return to long positions in the EUR / USD pair to rebound from a new low of 1.1496.

To open short positions on EUR / USD pair you need:

A Breakthrough and consolidation below 1.1539 will be an additional signal for sellers that they are acting in the right direction. The main task for the second half of the day will be to update the weekly minimum in the area of 1.1496, where fixing profits are recommended. In the case of EUR / USD growth, short positions can return immediately to the rebound from the daily maximum around 1.1588.

Indicator signals:

Moving averages

The price has returned under the 30- and 50-day average, and if the sellers manage to hold on until the close of the day under the moving averages, the pressure on the euro will most likely increase again with a new force.

Bollinger bands

Support is provided by the lower limit of the Bollinger bands in the area of 1.1530, however, its breakthrough will be a signal to increase in short positions of the European currency.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
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EUR/USD analysis for October 04, 2018

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Recently, the EUR/USD pair has been trading downwards. The price tested the level of 1.1463. According to the M30 time – frame, I found potential end of the downward movement. The price broke the supply trendline in the background, which is a sign that buyers are in control. I also found that price rejected from the monthly support 1 at the price of 1.1480, which is another sign of potential strength. My advice is to watch for buying opportunities. Take profit levels are set at the price of 1.1558 (intraday resistance 1) and at the price of 1.1592 (yesterday's high).

Trading recommendations for today: watch for potential buying opportunities.

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Technical analysis of EUR/USD for October 04, 2018

analytics5bb5da192abd2.pngThe EUR/USD pair continues to move downwards from the zone of 1.1620 and 1.1559. Yesterday, the pair dropped from the level of 1.1620 to 1.1500 which coincides with a ratio of 38.2% Fibonacci on the daily chart. Today, resistance is seen at the levels of 1.1559 and 1.1620. So, we expect the price to set below the strong resistance at the levels of 1.1620 and 1.1559; because the price is in a bearish channel now. The RSI starts signaling a downward trend. Consequently, the market is likely to show signs of a bearish trend. So, it will be good to sell below the level of 1.1559 with the first target at 1.1422 and further to 1.1360 in order to test the daily support. If the USD/CHF pair is able to break out the daily support at 1.1559, the market will decline further to 1.1422 to approach support 2 today. However, the price spot of 1.1620 and 1.1559 remains a significant resistance zone. Thus, the trend is still bearish as long as the level of 1.1620 is not breached.

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Technical analysis of NZD/USD for October 04, 2018

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Overview:

The NZD/USD pair fell from the level of 0.6539 to bottom at 0.6483 yesterday. Today, the NZD/USD pair has faced strong support at the level of 0.6483.

So, the strong support has been already faced at the level of 0.6483 and the pair is likely to try to approach it in order to test it again and form a double bottom.

Hence, the NZD/USD pair is continuing to trade in a bullish trend from the new support level of 0.6483; to form a bullish channel. According to the previous events, we expect the pair to move between 0.6483 and 0.6390. Also, it should be noted major resistance is seen at 0.6575, while immediate resistance is found at 0.6539. Then, we may anticipate potential testing of 0.6390 to take place soon.

However, if the pair succeeds in passing through the level of 0.6539, the market will indicate a bullish opportunity above the level of 0.6539. A breakout of that target will move the pair further upwards to 0.6575.

Buy orders are recommended above the area of 0.6539 with the first target at the level of 0.6575; and continue towards 0.6604. On the other hand, if the NZD/USD pair fails to break out through the resistance level of 0.6575; the market will decline further to the level of 0.6390 (daily support 2).

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Simplified Wave Analysis. Review of EUR / CHF pair for the week of October 3

The wave pattern of the H4 graph:

The main direction of the price movement of large-scale graphics sets the bearish wave of April 20. The structure of the movement has been fully formed and the price has reached the target zone.

The wave pattern of the H1 graph:

A bullish wave was formed from September 7 but it is still incomplete.

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The wave pattern of the M15 graph:

The ascending segment of September 21 occupies the place of the final part (C) in the larger model.

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Recommended trading strategy:

In the coming days, a price increase is expected in the market of the pair, whereas short-term purchases of short lots are possible. Supporters of trade on larger parts of the schedule need to wait for clear signals from higher timeframes.

Resistance zones:

- 1.1490 / 1.1540

Support areas:

- 1.1350 / 1.1300

Explanations of the figures:

A simplified wave analysis uses a simple waveform, in the form of a 3-part zigzag (ABC). For the analysis, the 3 main timeframes are used. 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 movement.

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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Forecast for EUR / USD pair on October 3, 2018

EUR / USD pair

The main event on Wednesday was the statement by the chairman of the Italian budget parliamentary committee, Claudio Borghi, on the expediency of leaving Italy from the euro area. He said that owning Italy's own currency would allow the country to solve many problems. As a result, the euro fell by 70 points, after which there was a technical rebound in the price from the trend line and closed the day by 31 points.

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On the four-hour chart, the price converged with the Marlin oscillator. The signal line of the indicator has not yet crossed the border with a zone of positive numbers, but a sharp increase in prices allows us to expect the attack of the bulls to continue. Their goal may be the resistance of the MACD line in the area of 1.1654. We do not exclude that this resistance can be overcome, and then growth will continue to the level of 1.1734 - the maximum on August 28. If successful, the price may also be negotiated in the range 1.1734-1.1815. But in the main scenario, we do not expect such a high correction. A Breakout on yesterday's low (1.1505) will open the way to a minimum of August 15 at 1.1300.

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Fundamental Analysis of USD/CAD for October 3, 2018

USDCAD has been quite impulsive amid the bearish bias recently whereas the bearish gap is not filled by the bulls yet. This indicates the strength of bears in the process. Despite a rate hike to 2.25% from the previous value of 2.00%, USD failed to gain over CAD and also could not sustain the previous pressure it had.

A series of macroeconomic reports is due on Friday, including Non-Farm Employment Change which is expected to decrease to 185k from the previous figure of 201k, Average Hourly Earnings to decrease to 0.3% from the previous value of 0.4%, and Unemployment Rate to decrease to 3.8% from the previous value of 3.9%. Ahead of these reports, USD is still quite indecisive that might trigger higher volatility. Today US ADP Non-Farm Employment Change report was published with an increase to 230k from the previous figure of 168k which was expected to be at 185 and ISM Non-Manufacturing PMI report was also published with an increase to 61.6 from the previous figure of 58.5 which was expected to decrease to 58.0. Despite positive results even today, USD failed to gain ground against CAD.

On the CAD side, ahead of the high impact economic reports from the US on Friday, CAD is quite very optimistic with the upcoming results. There is no impactful news or event on the CAD side today but on Friday CAD Employment Change is expected to show a significant increase to 25.0k from the previous figure of -51.6k, Unemployment Rate is expected to decrease to 5.9% from the previous value of 6.0% but Trade Balance is expected to decrease to -0.5B from the previous figure of -0.1B.

Meanwhile, CAD is expected to assert its strength because of the upcoming high impact reports in comparison to USD. As CAD is the dominant currency in the pair, any positive CAD report is expected to provide a further push to the bearish pressure in the coming days. On the other hand, if USD also shows better results, the pair may get extremely volatile for the coming days without any definite pressure and increased corrective price action.

Now let us look at the technical view. The price has been quite indecisive and low on liquidity throughout this week but as per current fundamental position, CAD is expected to lead the price lower towards 1.2750 area before USD makes it move to push the price higher again. Despite the bearish gap in the price this week, CAD is expected to push lower towards 1.2750 area before bouncing up higher with target towards 1.2950 area in the future. As the price remains below 1.3050 area, the bearish bias is expected to continue.

SUPPORT: 1.2750

RESISTANCE: 1.2950, 1.3050

BIAS: BEARISH

MOMENTUM: VOLATILE

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Technical analysis of Gold for October 4, 2018

Gold price has pulled back below $1,200 again. This is not a good sign for bulls. However there is a chance we see a higher low in Gold. Key resistance remains at $1,211. Bulls need to break this obstacle in order to continue higher. This pull back could very well be a back test of broken channel resistance.

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Green lines - long-term bearish channel

Red lines - trading range

Gold price still inside the trading range trying to break above the green bearish long-term channel. Resistance is at $1,211 and only a break above will change medium-term trend. Support is at $1,190-85. Break below it and we should challenge the lower boundary of the trading range. I believe there are high probabilities of a higher low around $1,198 and then a move higher to break resistance.

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Technical analysis of EUR/USD for October 4, 2018

EUR/USD has entered a buy zone. Selling pressures are expected to soon stop and prices to reverse to the upside. Technically we remain in a bearish trend but I believe that the bullish divergence signs will play out this time. Bullish reversal confirmation will come with a break above 1.1555.

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Red lines - bullish wedge pattern

Red line RSI- Bullish divergence

EUR/USD is touching the lower wedge boundary. This is support area. With a triple bullish divergence, I expect EUR/USD to start moving higher from today. Resistance is at 1.1555. I do not expect EUR/USD to move much lower as I believe the bearish trend is exhausted. I'm bullish at current levels.

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Technical analysis: Intraday levels for EUR/USD, Oct 04/2018

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When the European market opens, some economic data will be released such as French 10-y Bond Auction, and Spanish 10-y Bond Auction. The US will release a few economic data such as Natural Gas Storage, Factory Orders m/m, Unemployment Claims, and Challenger Job Cuts y/y. So amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1534.

Strong Resistance: 1.1527

Original Resistance: 1.1516

Inner Sell Area: 1.1505

Target Inner Area: 1.1477

Inner Buy Area: 1.1450

Original Support: 1.1439

Strong Support: 1.1428

Breakout SELL Level: 1.1421

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

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Technical analysis: Intraday levels for USD/JPY, Oct 04/2018

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In Asia, Japan today will not release any economic data. However, the US will release some economic data such as Natural Gas Storage, Factory Orders m/m, Unemployment Claims, and Challenger Job Cuts y/y. So there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance 3: 114.96

Resistance 2: 114.74

Resistance 1: 114.52

Support 1: 114.22

Support 2: 114.00

Support 3: 113.78

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

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Trading plan for 04/10/2018

During the night the USD remained strong after Wednesday's rally, which was fueled by the boom of US Treasury yields. Profitability of the 10-year-old US exceeded 3.22% and it was at most until 2011. In the case of 30-year-olds, we have 4-year highs. Strong data from the US in the form of ADP and ISM on Wednesday signaled the sale of bonds, and the breaking of technical barriers dispersed the movement.

USD follows the debt market and strengthens the entire line. EUR / USD broke 1.15 and USD / JPY approached 114.30. At night, we see a bit of calm on the main pair, and the pressure switched to AUD, NZD and CAD. AUD / USD breaks the September pits and goes down to 0.7080.

The stock market shows a deterioration in sentiment, as higher US debt yields pull capital from emerging markets, threatening the balance on the current account. Hang Seng is down 1.9% today. The Japanese Nikkei225 (-0.8 percent) also loses, despite the positive impact of the growing USD / JPY.

There is more peace in the commodity market. Gold does not react to growing profitability and remains at 1197 USD / oz. Crude oil continues to discount fears about supply restrictions after Iran's sanction is restored. WTI currently costs 76.1 USD / b, and Brent 86 USD / b.

On Thursday, the 4th of October, the event calendar is light in important data releases, but global investors should keep an eye on Unemployment Claims, Continuing Claims and Challenger Job Cuts data from the US and Ivey Purchasing Managers Index data form Canada. Moreover, there are some speeches scheduled later in the day from FOMC Member Randal K. Quarles and Member of the Executive Board of the ECB Benoit Coeure.

EUR/USD analysis for 04/10/2018:

The FED president is very happy with the current state of the economy. It is particularly pleased with the achievement of the inflation target of 2.0% and the lowest unemployment for 20 years. In general, economic conditions are very positive. The task of the FED is to help maintain the current sentiment in the economy. The dynamics may continue for some time, which is why the FOMC will gradually raise rates and ensure that inflation does not escape in any direction. Wages should also gradually increase in the near future. The FED still has a long way to reach neutral rates, they are still in the accommodative phase. Powell's general message is not a surprise, the state of the American economy looks best for years.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The words of the FED president led to the strengthening of the dollar. EURUSD fell at night below 1.15 and is currently close to 1.1470. The next target for bears is seen at the level of 1.1445 - 1.1432 zones where some support is located. The market conditions are now oversold and there is a clear bullish divergence between the price and the momentum oscillator, so the price might soon bounce or initiate a horizontal move.

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Bitcoin analysis for 04/10/2018

The IBM technology conglomerate has been granted a patent for the Blockchain-based security system. The patent application has been published on the website of the United States Patent and Trademark Office (USPTO). As explained by IBM in a document filed for the first time in September 2017, this technology makes it possible to detect security breaches in the network by connecting all monitoring programs with a chain configuration that records all events in the network. This, in turn, can help prevent various types of intrusions. As detailed in IBM's explanation, the monitoring program can easily be compromised on the regular system, as "none of the devices knows about the others" and the hackers can clear past events to gain control. However, in the Blockchain security system, the hacked monitoring program can be found immediately, because in this case, the synchronized programs will have no consensus. "If the information received in relation to a specific event or transaction is different, one of the monitoring programs may have been compromised" - we can read in the application. The use of Blockchain technology in monitoring systems will, therefore, help to create a "less vulnerable" network and provide greater security.

IBM, along with the Chinese e-commerce corporation Alibaba, occupy the first place in the world in terms of the number of patent applications related to Blockchain technology. According to recent reports from IPR Daily, Alibaba registered 90 patents, while IBM 89.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market is still moving inside of the horizontal range and just bounced from the level of $6,358. The high of the bounce was established at the level of $6,570, in the middle of the resistance zone ($6,550 - $6,603). In order to continue to move higher, the price would have to break through the technical resistance at the level of $6,603 and then head towards the level of $6,738. Currently, the price is hovering around the weekly pivot at the level of $6,512.

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Elliott wave analysis of EUR/NZD for October 4, 2018

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EUR/NZD is currently testing the minor resistance-line near 1.7677 a break above this resistance-line will be the first good indication that red wave ii/ has completed at 1.7484 and red wave iii/ towards at least 1.8030 and more likely 1.8369 is developing.

We would not be surprised if the minor resistance-line is able to contain the rally from 1.7484 for a minor correction towards 1.7592 and perhaps even closer to 1.7559 before the next and likely successful attempt to break the resistance-line near 1.7677 is seen.

R3: 1.7732

R2: 1.7704

R1: 1.7677

Pivot: 1.7631

S1: 1.7592

S2: 1.7559

S3: 1.7518

Trading recommendation:

We are long EUR from 1.7500 with our stop placed at 1.7475. If you are not long EUR yet, then buy near 1.7559 or upon a break above 1.7677 and use the same stop at 1.7475.

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Elliott wave analysis of EUR/JPY for October 4, 2018

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Ideally minor support at 130.94 will be able to protect the downside for a new impulsive rally above minor resistance at 131.49 and more importantly above resistance at 131.98 that confirms blue wave (5) towards 133.96 is developing.

Should an unexpected break below support at 130.94 be seen, that would indicate a final dip to just below 130.69 however the potential downside should remain very limited.

R3: 133.13

R2: 132.49

R1: 132.00

Pivot: 131.42

S1: 131.07

S2: 130.94

S3: 130.69

Trading recommendation:

We bought EUR at 131.50 with our stop placed at 130.65. If you are not long EUR yet, then buy a break above minor resistance at 131.49 and use the same stop at 130.65.

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GBP/USD: did the market interpret May's position correctly?

The pound paired with the dollar entered the 29th figure and has every chance to fall down to its bottom, or rather to the level of 1.2905, where the support level is located, corresponding to the lower line of the Bollinger Bands indicator on D1 and the lower border of the Kumo cloud on the same timeframe.October is of crucial importance to the GBP/USD, since Brexit's fate must be decided this month. Let me remind you that the informal EU summit, which was held in September in Salzburg, Austria, disappointed traders. The market saw that London and Brussels are at different poles in assessing the future prospects of the "divorce process" contrary to the optimistic statements of the negotiators. The likelihood of a hard Brexit sharply increased in many ways with all the ensuing consequences. These consequences, as is known, are extremely negative, although objectively their scale is difficult to assess now, given the comprehensive and systemic changes.

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At the same time, representatives of the parties are trying to do a good face in a bad game: comments from politicians and/or representatives of the negotiating group regularly appear in the press, who assure journalists that the parties have made "substantial progress". It is also quite common to hear that London or Brussels are making any concessions that will help to reach a common compromise. As a rule, these informational optimistic ones either do not find their confirmation or are leveled by subsequent events of the negotiation process.

The market in this regard has already been taught by the "bitter experience": in early September, the GBP/USD rate nearly jumped to the 33rd figure solely due to encouraging estimates, which subsequently failed. The summit in Salzburg became a "cold shower" for the bulls of the pair, so now they are very wary of such news from the fields of the negotiation process. For example, literally at the beginning of this week there were rumors that Britain was ready to make concessions on the key and most difficult issue that concerned the fate of the Irish border. The pound/dollar reacted to the news with a corrective growth, which was more of a formal nature: after none of the officials confirmed such intentions, the British currency returned to the downward trend.

Therefore, it is not surprising that yesterday's performance of Theresa May did not help the pound to regain its position. Although the prime minister voiced quite a "peace-loving" premise, indicating her desire to make a deal with Brussels. For example, she said that her government wanted to preserve the principles of free trade with the EU with an additional opportunity to enter into new trade agreements with third countries. But its main message was somewhat different.

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She devoted a significant part of her speech to the escalation of the situation, describing in detail the consequences of the country's exit from the EU without a deal. These are high custom duties and red tape at customs, and a fall in investment attraction, and trade barriers, and so on and so forth. This list of possible consequences has repeatedly been voiced by various experts, but it was the first time that it came from the mouth of Theresa May in a long time. Now analysts are arguing about what goal the prime minister pursued with her speech and why she decided to take such a position in the public sphere now.

Some experts say that in this way May is preparing the ground for Britain's chaotic withdrawal from the European Union – on the one hand, demonstrating its desire to conclude a deal, but on the other hand, hinting at the intractability of Brussels, which "does not allow the British to carry out its will, voiced in the referendum." Other experts are inclined to another option. In their opinion, such a maneuver bore the opposite goal: to prepare Brexit supporters to significant concessions from London. In this context, Theresa May's phrase that if Britain would initially completely rule out the scenario without making a deal, sounds interesting enough, her position at the talks would have looked much weaker. Given the fact that she voiced this thesis at the annual conference of the Conservative party, the meaning of it can be interpreted as preparation for a "big compromise". Moreover, as May's team refused to hold early elections in November, although this scenario was only recently considered as one of the basic ones.

But the market ignored this nuance, clinging only to the phrase that "Britain is in any case ready for the absence of a deal." As a result, the pound again succumbed to the depressed mood of traders who no longer expect anything good from the Brexit negotiations. In my opinion, it is too early to draw such pessimistic conclusions, as London will not be able to "bluff" endlessly, letting the situation take its course. By the way, big business is also contributing to the negotiation process: recently, companies such as Airbus and BMW, said that they would close their factories in Britain if the country decided on a chaotic exit from the EU. For Theresa May, this is another argument in favor of a compromise with Brussels, in addition to the chaotic scenario that she voiced herself.

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Thus, the GBP/USD pair has a significant price gap for its decline – to the support level (the lower line of the Bollinger Bands indicator coinciding with the lower border of the Kumo cloud on the daily chart). Further growth is under question, given the approaching "X hour" and the changed rhetoric of Theresa May. If the parties in the next two weeks show willingness to compromise (primarily on the issue of the Irish border), the pound will rapidly regain its position throughout the market, and the GBP/USD pair will not be an exception here, despite the dynamics of the US currency.

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Gold saved by speculators

If the assets that have been marching in different directions for a long time begin to move in the same direction, there is a reason for bewilderment and search for the causes of what is happening. It turns out – you can find a good investment idea. Over the past few months, the main driver of the weakness of gold was the strong US dollar. Nevertheless, the political crisis in Italy increased the demand for safe-haven assets and contributed to selling the EUR/USD. At the same time, it played the principle of "when everyone sells, there is a great opportunity to buy." At the auction on October 2 at the beginning of the US session, the volume of operations within 10 minutes exceeded the average 100-day indicator by more than 12 times. While the crowd was selling the precious metal, sincerely hoping for a strong dollar, the big players, on the contrary, bought it. Bottoms up?

Dynamics of gold prices

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According to Commerzbank, gold will surely move upwards in the direction of $1,300 per ounce, since the external background is favorable for it. First, the increase in the scale of trade wars leads to an acceleration of inflation, which at the current rate of normalization of monetary policy of the Federal Reserve will reduce the real yield of US Treasury bonds. This factor is bullish for the XAU/USD. Secondly, Brexit and the political crisis in Italy, along with trade wars, lead to a slowdown in business activity around the world. This slows down the growth rate of the world economy and delays the central banks' plans to normalize monetary policy. The profitability of the global bond market is falling, and gold is growing. Finally, thirdly, blazing Rome increases the demand for safe-haven assets.

The eurosceptic government persuaded Finance Minister Giuseppe Tria to adopt the draft budget for 2019 with a deficit of 2.4% of GDP. Their predecessors talked about 1.6% in 2018 and 0.8% in 2019. The current plan needs to be coordinated with the EU, which is already beginning to show discontent. So, Jean-Claude Juncker said that Brussels should do everything possible to avoid a new Greece. This time in Italy. Indeed, if the European Union accepts the figures proposed by Rome, the rest of the participating countries will begin to express dissatisfaction, which will strengthen the position of eurosceptics in the eurozone. On the other hand, it is necessary to find a common language with Italy, because from the side of the League and the Five Stars from time to time there is talk that the republic would be better without the euro.

Thus, the political crisis in Europe, trade wars and growing risks of falling real bond yields amid accelerating inflation and declining growth rates of business activity have contributed to the rise of gold towards the upper limit of the medium-term trading range of $1184-1214 per ounce. Speculators did not play the least role in this process. In my opinion, the external background is favorable for the precious metal, which increases the probability of breaking the upper limit of consolidation.

Technically, the output of gold outside the trading border will increase the risks of implementing the target by 88.6% using the "Bat"pattern.

Gold, daily chart

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Trading Plan 03.10.2018

Trading Plan 03.10.2018

Overall picture: the market is waiting for momentum.

As we wrote earlier, the "Italian crisis", due to a small budget deficit, turned out to be greatly exaggerated: Italy makes concessions to the EU and reduces the target for the budget deficit.

The market is waiting for new moves in the US-China trade war: the last steps were the mutual introduction of duties - the US imposed duties on $200 billion worth of goods from China, Beijing responded with $60 billion So far - the lull. And, perhaps, the continuation will not be soon - or it will not exist at all.

Ahead of news from the US on Wednesday at 12.15 London time, the employment report from ADP will be released.

Pound: continues to consolidate.

We are ready to buy from 1.3220.

We are ready to sell from 1.2780.

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GBP/USD: plan for the US session on October 3. UK services slows growth

To open long positions for GBP/USD, it is required:

Buyers could not catch hold of the resistance level of 1.3011 after the release of a weak report on activity in the UK services sector, which led to a decrease and update of the support level of 1.2973, which I drew attention to in my morning review. At the moment, while trading is above 1.2973, buyers still have a chance to repeat the test of resistance at 1.3011 and its breakdown, which will lead to a new rising wave in the GBP/USD pair with an update of the high of 1.3046, where I recommend profit taking. In case the pound further declines, you can return long positions to a rebound from the low of the week 1.2942.

To open short positions for GBP/USD, it is required:

Sellers lacked one test of the support level of 1.2973, but it is clear that there is no activity among buyers as well. The repeated decline in the area of 1.2973 will be a good signal for opening new short positions in the GBP/USD pair in order to decrease to the lows of the week in the area of 1.2942 and update 1.2897, where I recommend to lock in the profit. In case of growth above 1.3011, short positions can be returned immediately to the rebound from the resistance of 1.3046.

Indicator signals:

Moving averages

The pair is stuck between the 30 and 50-day average, which indicates some confusion with the further direction of the market.

Bollinger Bands

The Bollinger Bands indicator continues to indicate low market volatility, which is beneficial for sellers who can resume pressure on the pound after a small correction.

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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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BITCOIN Analysis for October 3, 2018

Bitcoin sank below $6,500 area today which triggered certain volatility in the market leading to indecision and corrections along the way. The price pushed below $6,500 area with strong impulsive bearish momentum which was immediately engulfed by the bullish pressure but it failed to push higher above $6,500 area with a daily close. The dynamic levels such as 20 EMA, Tenkan and Kijun line have been serving as resistance earlier which is expected to push the price much lower as the price remains below $6,500 area with a daily close. Though currently the price is pushing lower again just below $6,500 area, the bearish pressure is expected to strengthen again to push lower towards $6,000 area in the coming days.

SUPPORT: 6,000, 5,500

RESISTANCE: 6,500, 7,500

BIAS: BEARISH

MOMENTUM: VOLATILE

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