Analysis of the divergence of EUR / USD for October 8. The bearish divergence returns the pair to the main trend

4h

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A new bearish divergence at the CCI indicator allowed the EUR / USD currency pair to make a turn in favor of the American currency and begin the process of falling in the direction of the correctional level of 61.8% - 1.1497. Fixing the pair on October 8 under the Fibo level of 61.8% will increase the likelihood of a further fall towards the next level of correction 76.4% - 1.1424. The end of the quotations from the Fibo level of 61.8% will work in favor of the EU currency and some growth in the direction of the correction level of 50.0% - 1.1558.

The Fibo grid is built on extremes from August 15, 2018, and September 24, 2018.

Daily

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On the 24-hour chart, the pair quotes were consolidated below the Fibo level of 100.0% - 1.1553. As a result, the fall in quotations can be continued in the direction of the next level of correction of 127.2% - 1.1285. Over the current chart, no indicator has maturing divergences. Fixing the pair above the Fibo level of 100.0% traders will be able to interpret as a reversal in favor of the European currency and expect some increase in the direction of the correction level of 76.4% - 1.1789.

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

Recommendations to traders:

You can make purchases of the EUR / USD currency pair with a target of 1.1558 with a Stop Loss order below the Fibo level of 61.8% if the pair bounces off of the correction level of 1.1497.

Sales of the EUR / USD currency pair can be carried out with the target of 1.1424 with a Stop Loss order above the Fibo level of 61.8% if the pair closes below the correction level of 1.1497.

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Analysis of the GBP / USD Divergences for October 8. The growth of the pound stops bear divergence

4h

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The GBP / USD currency pair consolidated above the correction level of 23.6% - 1.3067 and continues the process of growth in the direction of the Fibo level of 38.2% - 1.3316. The maturing bearish divergence at the MACD indicator allows traders to expect a reversal in favor of the American dollar and a resumption of decline in the direction of the correction level of 0.0% - 1.2662. Fixing the rate under the Fibo level of 23.6% will similarly work in favor of the US dollar.

The Fibo grid was built according to extremums of April 17, 2018, and August 15, 2018.

1h

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On the hourly chart, the quotes of the pair completed above the correction level of 38.2% - 1.3101. However, the bearish divergence allows traders to expect a reversal in favor of the US currency and a slight drop in the pair. Fixing quotes below the Fibo level of 38.2% will increase the probability of a fall beginning in the direction of the correctional level 50.0% - 1.3041. A pair of the last divergence peak will work in favor of the pound sterling and continuing growth in the direction of the next correction level of 23.6% - 1.3176.

The Fib net is built on extremums from September 5, 2018, and September 20, 2018.

Recommendations to traders:

New purchases of the GBP / USD currency pair can be made with the target of 1.3176 and a Stop Loss order under the correction level of 38.2% if the last divergence peak is passed (hourly chart).

To sell the currency pair GBP / USD it will be possible with a target of 1.3041 and a Stop Loss order above the level of 38.2% if the pair closes below the Fib level of 1.3101 (hourly chart).

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Weekly review of the euro for October 8, 2018

For almost the entire past week, the single European currency continued to lose ground. And although at the very end of the week, the dollar began to lose ground, the euro still could not recover the losses it had suffered at the very beginning of the week. What is most interesting is that the weakening of the single European currency has a very specific culprit, Italy. In the Italian Parliament, they once again discussed, or more precisely, argued, the budget deficit, which was set at 2.4%, having solemnly assured everyone present that it would soon fall to 2.0%. But Italy has a huge public debt, and while maintaining the budget deficit, only science fiction writers can hope to reduce the size of the debt. This state of affairs greatly upset a number of descendants of ancient Roman senators, and they considered it their duty to state that Italy's financial problems can be solved only by abandoning the single European currency and returning to their beloved and forgotten lira. Naturally, there immediately began to appear arguments about what would happen if Italy leaves the eurozone, and the result was the same for everyone, the disintegration of the single European currency. After all, if the third eurozone economy comes out of monetary union, the role and importance of the single European currency will greatly decrease, and it is quite possible that there will be no sense in it anymore. Moreover, many European countries have similar problems with Italy, and the experience of the Italians may seem tempting and attractive to them. Responsibilities for extinguishing the fire were imposed on the Italian Prime Minister, who urgently gathered the government, during the meeting of which, as well as ritual beating himself with a heel in the chest, were made oaths of loyalty to the single European currency, which somewhat reduced the hysterics.

If you look at the statistics, then the single European currency really had to grow due to extremely disappointing American data. Especially, if you recall the contents of the report of the US Department of Labor. In fairness, it should be noted that by the time of its publication, the panic about Italy had somewhat subsided, and market participants could read the contents of the report, which only caused tears, with peace of mind. The unemployment rate, of course, fell from 3.9% to 3.7%, but this is the only thing to be happy about. The share of labor in the total population remained unchanged, and only 134 thousand new jobs were created outside of agriculture, which is significantly less than the projected 185 thousand. Yes, and 270 thousand new jobs were created last month, so the results are extremely poor. The growth rate of the average hourly wage slowed from 2.9% to 2.8%. While other data on the labor market, which came out on the eve of the publication of the report of the Ministry of Labor, inspired optimism. In particular, according to ADP, employment increased by 230 thousand versus 163 thousand in the previous month. The total number of applications for unemployment benefits decreased by 21 thousand due to the fact that the number of initial applications decreased by 8 thousand, and repeated ones by another 13 thousand. Also, construction costs increased by 0.1% and the number of production orders by 2 3%. Moreover, sales of vehicles increased from 16.7 million to 17.4 million. The index of business activity in the manufacturing sector increased from 54.7 to 55.6, and in the services sector, it decreased from 54.8 to 53.5. As a result, the composite index of business activity fell from 54.7 to 53.9, as the service sector has a much greater weight. But all these data came out when the market was agitated by the events in the Italian parliament. And the significance of the report of the Ministry of Labor is much higher than that of all these data combined.

If we talk about European statistics, it was pretty good, as the growth rate of retail sales accelerated from 1.0% to 1.8%, and the unemployment rate fell from 8.2% to 8.1%. The business activity index in the manufacturing sector decreased from 54.6 to 53.2, but in the services sector, it rose from 54.4 to 54.7. However, the decline in the production index is so great that the composite index of business activity fell from 54.5 to 54.1. Also, the growth rate of producer prices slowed from 4.3% to 4.2%.

Although last week, extremely important data are already released, this will not let us relax, as, in the US, there are data on inflation. They will be preceded by data on producer prices, whose growth rates should remain unchanged. But inflation itself can accelerate from 2.7% to 2.8%, and such a development should finally remove all doubts about the future actions of the Fed. If inflation does not slow down, and is stable, then the Federal Commission on Open Market Operations will continue to tighten monetary policy in accordance with previously outlined plans. But stocks in the warehouses of wholesale trade can increase by 0.7%, and if the forecast is confirmed, it will mean that they have been growing for eleven months in a row. So you can safely worry about the further growth of industrial production and retail sales. The number of applications for unemployment benefits should be reduced by another 2 thousand due to a decrease in the number of initial applications for benefits. The number of repeated applications may remain unchanged.

Europe also will not let us be bored, as the minutes of the European Central Bank board of directors on monetary policy will be published. There is growing doubt in the market that the ECB will nevertheless reverse the quantitative easing program. Moreover, not only Italy is experiencing difficulties with the size of public debt, and the curtailment of the quantitative easing program calls into question the ability of many countries to solve this issue. Moreover, the risk of slowing inflation is still quite high. And all these problems to some extent may be reflected in the text of the protocol, which will have a very negative impact on the single European currency. Moreover, industrial production, which so far demonstrates a decline of 0.1%, can deepen it to 0.3%, which also does not give optimism.

Thus, the dollar can be strengthened with a new force, and the mark of 1.1350 does not seem so insane.analytics5bbb29fce24f6.png

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Wave analysis of GBP / USD for October 8. The pound counts on news help.

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Wave counting analysis:

In the course of trading on October 5, the GBP / USD currency pair added another 100 base points and thus confirmed the transition to building the expected wave 5 of the uptrend trend. If this is true, then after a short pause, the increase in quotations will continue with the first goal, located near the level of 100.0% Fibonacci. The main thing is that the news background now supports just a pound sterling. If there is an adverse background, the market may buy the dollar again, which will lead to a change in the current wave counting.

The objectives for the option with purchases:

1.3295 - 100.0% of Fibonacci

1.3397 - 127.2% of Fibonacci

The objectives for the option with sales:

1.2922 - 0.0% of Fibonacci

General conclusions and trading recommendations:

The currency pair GBP / USD has presumably shifted to building wave 5 of the uptrend trend. Thus, now I recommend buying a pair with the first targets located near the estimated marks of 1.3295 and 1.3397, which corresponds to 100.0% and 127.2% in Fibonacci. I recommend returning to sales only if the successful attempt to break through the level of 0.0% by Fibonacci, which will lead to the complication of the entire trend segment.

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Wave analysis of EUR / USD for October 8. NonFarm Payrolls did not help building wave b

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Wave counting analysis:

During the Friday's trading, the EUR / USD currency pair added just a few base points. Thus, the pair does not move far from the previously reached lows. From this, it follows that wave a can take an even longer form and continue its construction in the direction of the Fibonacci level of 161.8%. At the same time, while wave a is considered to be completed, it is expected to build an upward wave b with targets located near the Fibonacci levels of 100.0% and 76.4%

The objectives for the option with sales:

1.1446 - 161.8% of Fibonacci

1.1361 - 200.0% of Fibonacci

The objectives for the option with purchases:

1.1588 - 100.0% of Fibonacci

1.1641 - 76.4% of Fibonacci

General conclusions and trading recommendations:

The currency pair supposedly completed the construction of wave a. In general, the wave pattern is not completely unambiguous at the moment. The trend section after August 15 may take a more complex look. But now, in any case, it is expected to build an upward wave, either b of a new downtrend trend, or a, c, an upward one starting on August 15. News on NonFarm Payrolls on Friday did not contribute much to the growth of the pair, which leads to the conclusion that the fundamental component and market sentiment are now on the dollar side.

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Trading plan for October 8, 2018

Trading plan for October 8, 2018

The general picture: Uncertainty has grown.

Low volumes in the market on Monday, the USA is a day off (Columbus Day).

In China, a sharp drop in the stock market is a reaction to the actions of the Central Bank of China, lowering reserve requirements for banks (the fourth time in a year). A signal of problems in the Chinese economy, and of course, this is the result of the Trump-China trade war.

During the week on Wednesday, an important report on US inflation.

The pound has support on the expectations of a successful agreement between Britain and the EU on Brexit.

We are ready to buy a pound from 1.3220.

Alternative: Selling from 1.2920.

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Uncertainty in favor of the dollar

Markets calmly responded to a report published on Friday on the US labor market, despite the fact that some indicators differed from forecasts.

The unemployment rate in September fell to 3.7%, which is less than predicted, but does not cause much concern in the markets. According to the Fed's forecasts, next year, the unemployment rate will decrease next year to 3.5%, and therefore, any fluctuations exceeding this level will be perceived calmly.

The same effect is observed on non farm. Despite the fact that only 134 thousand new jobs were created in September, which of course came as a surprise after a strong ADP report the day before, the markets reacted calmly. First, some time ago, it was suggested that Hurricane Florence would play its role, that is, the markets were ready for weak data, and, secondly, the figures for August and July were revised upwards by 87 thousand, which compensated September weak results.

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More attention was focused on the average wage growth rate, since inflation expectations are directly dependent on this indicator. Wage growth turned out to be worse than predicted, but even here, the reaction of the markets was surprisingly calm, since a slightly faster than expected decline in unemployment indicates the approach of a shortage of skilled labor, which ultimately will contribute to the growth of average wages.

In general, the report on the labor market must be recognized as neutral. In the short term, it led to a decline in stock markets and an increase in bond yields, which was reflected in a slight decrease in the dollar index, but in the longer term, the dollar is likely to continue to strengthen. This conclusion is generally confirmed by the CFTC Friday report, which showed some deterioration in the ratio of long and short contracts for the euro, franc, and Japanese yen in favor of the dollar, while for commodity currencies, on the contrary, there is some improvement. In conjunction with the dynamics of oil and gold futures, which showed an increase in demand for raw materials and a decrease in defensive assets, we can assume that the markets still do not see the threat of large-scale collapse, despite a rather noticeable drop in stock indexes last week.

Against the background of the labor market report, the report on foreign trade for August, which showed an increase in the trade balance deficit to 53.2 billion dollars from 50 billion and in July, went to the second place, this is the worst indicator since February. Imports increased by 0.6% and reached a historical record, while exports fell by 0.8%, and the foreign trade deficit with China again increased to 38.6 billion against 36.8 billion a month earlier, which indicates the ambiguous prospects for a trade war.

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Overall, the dollar is positive for the current week. Despite the problems with the fullness of the budget. This factor is not yet regarded as alarming by the markets, but the prospects for growth rates and the implementation of the schedule of the Fed to reduce the balance will push the US currency up.

China resumed trading after a week break, the PMI Caixin index in the service sector for September was unexpectedly strong, rising to 53.1p against 51.5p indicating that the future winner in the trade war is still far from certain. Good data supports commodity currencies and reduces tensions.

EUR / USD

In the eurozone, the main focus of attention this week will be directed to negotiations on the formation of the budget of Italy. The revenue side of the budget is under question, the financing of the deficit by the ECB is hampered due to the reduction of the asset repurchase program, the budget needs to be submitted to Brussels by October 15, and fears that it will receive a negative assessment are growing. This factor will contribute to the pressure on the euro.

The euro starts the week under pressure, on Monday, the downward movement is likely to develop, the nearest support is 1.1430.

GBP / USD

In the absence of significant macroeconomic data, the pound may start playing rumors about progress in the Brexit negotiations. There is evidence that Britain is ready to remain in a customs union with the EU after March 2019, and the EU, in turn, will expand the proposal for a free trade zone.

The pound has a weak support of 1.3050, an attempt to update the opening level of the week and rise to 1.3055 looks more likely.

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Intraday technical levels and trading recommendations for GBP/USD for October 8, 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.

On September 21, the GBP/USD short-term outlook turned to become bearish towards 1.3010 (50% Fibonacci level) and 1.2940 (recent demand level) where the backside of the broken uptrend was retested.

Recently, the price level of 1.2900-1.2940 (the backside of the broken uptrend) demonstrated significant bullish recovery where the current bullish movement was initiated.

The current bearish decline shouldn't exceed the price level of 1.3010 (50% Fibo level), so that a further bullish advance can occur towards 1.3100, 1.3210 and 1.3290.

Any bearish breakdown below 1.3000 invalidates the bullish breakout scenario allowing a further decline towards 1.2910 (previous weekly low).

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GBP / USD. October 8th. The trading system "Regression Channels". Rumors are pushing pound sterling up again

4-hour timeframe

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Technical data:

The senior linear regression channel: direction - sideways.

The younger linear regression channel: direction - down.

Moving average (20; smoothed) - up.

CCI: 125.1151

The currency pair GBP / USD on October 8, completed the level of Murray "6/8" - 1.3123 and can complete the upward movement around it. In general, we can say that the pound sterling has once again grown on the purest rumors. We have seen this picture several times in recent months. As soon as there is information that there has been a breakthrough in the negotiations for Brexit, the pound immediately grows. Then this information is not confirmed or completely refuted, and the pound begins to fall. So on Friday, it was reported that the parties were again "in the final stage" of the negotiations. It seems to be how the parties agreed on the Irish border and will now negotiate with the governments of Northern Ireland and Ireland. How does this information fit in with the fact that Theresa May refused to make concessions to Brussels and, moreover, even in this case did not find much approval either in Parliament or in her Party? Also, insider information appeared that London is still preparing to cede to the European Union in some key points of the agreement. What actually happens in the negotiations is unknown. All this information may be false. The next summit on negotiations on the withdrawal of Britain from the EU is scheduled for October 17, and the parties again assured everyone that they will work both day and night to reach an agreement before November.

Nearest support levels:

S1 - 1.3092

S2 - 1.3062

S3 - 1.3031

Nearest resistance levels:

R1 - 1.3123

R2 - 1.3153

R3 - 1.3184

Trading recommendations:

The currency pair GBP / USD rebounded from the level of 1.3123. Thus, a downward correction to the moving average is now possible. Based on this, it is recommended to open new buy-positions not earlier than the completion of this correction with targets at 1.3153 and 1.3184.

It is recommended to open a sell position if the bears succeed in regaining the initiative on the instrument in their hands and overcome the moving average. In this case, the targets for the shorts will be Murray levels of 1.3000 and 1.2970.

In addition to the technical picture, you should also consider the fundamental data and the time of their release.

Explanations for illustrations:

The senior linear regression channel is the blue lines of unidirectional movement.

The lower linear channel is the purple lines of unidirectional movement.

CCI is the blue line in the indicator regression window.

The moving average (20; smoothed) is the blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heikin Ashi is an indicator that colors bars in blue or purple.

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GBP / USD: plan for the European session on October 8. The pound may start correction down

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

Today in the morning, you can consider buying a pound after updating the support level of 1.3074, where the 30 moving average is located. In the absence of demand for a pound in this range, you can immediately buy to rebound from a larger support of 1.3032. The main task of the bulls will be the return and consolidation above the resistance of 1.3115, which will lead to the continuation of the upward trend with access to the new highs of 1.3158 and 1.3212, where I recommend fixing the profit.

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

Sellers return to the market only after an unsuccessful breakdown and the formation of a false breakdown at the resistance level of 1.3115, and their main goal will be to reduce and update the support level of 1.3074, which will lead to a larger sale of the pound to the area of 1.3032, where the lower limit of the ascending channel will be formed. In the case of GBP / USD rising above 1.3115 in the first half of the day, short positions can be opened immediately to rebound from a maximum of 1.3158.

Indicator signals:

Moving Averages

The price gradually decreases to the area of the 30 moving average, which can provide support.

Bollinger bands

The lower border of the Bollinger Bands, which is located in the 1.3065 area, will support the pound in the event of its decline, while the upper limit in the 1.3145 area will act as good resistance.

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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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Intraday technical levels and trading recommendations for EUR/USD for October 8, 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).

On September 10, the price level of 1.1500 offered temporary bullish recovery. A quick 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 below 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 keep moving below 1.1520. The first bearish target would be located around 1.1420 then 1.1275 if sufficient bearish momentum is demonstrated.

On the other hand, re-closure above the price level of 1.1520 brings the EUR/USD pair back inside the depicted consolidation range (1.1520-1.1750) until breakout occurs in either direction.

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EUR / USD: plan for the European session on October 8. Low volatility due to Columbus Day in the USA

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

We are waiting for you with low market volatility due to Columbus Day in the United States. Today, in the first half of the day of the purchase, you can look after the decline and the formation of a false breakdown in the support area of 1.1498-1.1495 with the main goal of returning and fixing above the resistance level of 1.1531, which will lead to an update of a larger level of 1.1588, where I recommend fixing the profits. In the case of a decrease under the support area of 1.1498, long positions can be returned to the rebound from the minimum of the month of 1.1463.

To open short positions on EUR / USD you need:

Sellers will try to form a false breakdown in the resistance area of 1.1531-1.1535, which will lead to another wave of euro decline. However, the main goal will be the breakdown and consolidation below the support level of 1.1498, which will resume the downtrend and allow you to retest at least 1.1463 a month, where today I recommend taking profits on short positions. If the euro rises above 1.1531 in the first half of the day, you can immediately return to sales to rebound from a maximum of 1.1588.

Indicator signals:

Moving averages

The price is stuck between 30 and 50 average, which indicates the uncertainty in the market.

Bollinger bands

The Bollinger Bands indicator does not give signals when entering the market and indicates that the volatility remains low.

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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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The forecast for AUD / USD for October 8, 2018

AUD / USD

In the weekly review of the Results of the Week, we "praised" the Australian dollar for traffic stability. It did not disappoint even before the close of the Friday session, the daily decline was 23 points. It is difficult to add something to a steadily declining instrument, when all indicators consistently show only one direction. True, here on H4, the Marlin oscillator signal line has grown a bit, but we interpret this as a discharge of the indicator before further decline.

So, the immediate goal of the "Australian" is to support the nested line in the price channel in the region of 0.6992. After the line is broken, the next one opens with an approximate target of 0.6884.

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Indicator analysis. The daily review of the currency pair GBP / USD for October 8, 2018

Trend analysis (Fig. 1).

On Monday, the price will move up with the first target of 1.3251, resistance line (white thin line).

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Fig. 1 (daily schedule).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - neutral;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger lines - up;

- Weekly schedule - up.

General conclusion:

On Monday, the price will continue to move up with the first target of 1.3251, the resistance line of the ascending channel (white thin line).

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USD / CAD. Why is a Canadian cheaper?

The growth of the USD/CAD pair looks unnatural, given the current fundamental background for the Canadian. Experts are trying to "justify" the northern impulse of indirect factors of the pair that are associated with the emerging concerns about the prospects for the monetary policy of the Canadian Central Bank. In my opinion, the weakness of the "loonie" is due to a variety of reasons, starting from the slowdown in manufacturing activity in Canada and the ambiguous USMCA perspective, ending with the dominance of the US currency throughout the market.

As you know, in late September, the market was stunned by the news that Washington and Ottawa reached a compromise in trade negotiations that lasted more than two years. The surprise factor did its job, resulting for the pair to collapsed by almost 300 points in two days. Of course, such a movement was fully justified. Just a few days before Trump lashed out at his colleague Trudeau for "intractability", threatening to also impose duties on the import of cars from Canada. Therefore, when traders learned about the draft of the new USMCA agreement, the reaction was appropriate, the Canadian had significantly strengthened throughout the market but not for long. At the beginning of October, the USD/CAD pair pushed off from the lows of 1.2780 and began to gain momentum, bargaining at the moment at the borders of the 30th figure. Why did it happen?

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First, the emotional reaction was replaced by a "sober" understanding of what is happening. It turned out that the text of the proposed agreement was not seen by any of the market participants. It is believed that the agreement reached was not codified. The market was contented with only scanty statements from Canadian and US officials and insider leaks, the plausibility of which can be questioned. It is expected that the text of the transaction will be published either on the eve of the Big Twenty Summit in Argentina (November 29) or immediately after its signing.

This level of "secrecy" somewhat alerted market participants, since, according to unofficial information, many USMCA positions were agreed on the terms of the White House. Representatives of the Canadian dairy industry are already expressing their dissatisfaction with such prospects. According to the information of journalists, the new deal provides for expanding the access of American milkmen to the Canadian market. Justin Trudeau has already announced the development of countermeasures but this fact is a weak consolation for Canadians. According to their calculations, the concessions on the part of Ottawa will provoke a significant decrease in domestic milk production, which will subsequently lead to a loss of the industry for an estimated amount of 1.6 billion US dollars.

Another cause for concern is the information that the US imposed on Canada and Mexico restriction of trade with China. According to the US Secretary of Commerce, the USMCA contract includes a clause according to which its participants do not have the right to enter into trade transactions with countries "with a non-market economy." Otherwise, the other two participating countries may withdraw from the agreement (with a semi-annual time gap), while concluding a bilateral deal.

Naturally, the definition of "a country with a non-market economy" does not only fall on the PRC but given the relations between Washington and Beijing, this subtext is obvious. In other words, the information noise that has arisen around the USMCA before it is signed puts pressure on the Canadian. The market accepts the option that Trudeau will not withstand political pressure (in the run-up to parliamentary elections next year) and will try to change key points of the agreement, causing a negative reaction from the White House. Although such a scenario is unlikely, traders do not exclude it. Moreover, this fact pushes the USD/CAD pair up. Even good data on the labor market in Canada could not slow down the northern impulse of the loonie. Although unemployment fell to 5.9%, and the increase in employment in the non-agricultural sector was 63 thousand (the maximum rate since November last year). However, traders ignored this fact, focusing on related indicators.

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For example, the growth rate of average hourly wages was disappointing, raising concerns about the dynamics of consumer spending. In addition, experts drew attention to the fact that the decline in unemployment occurred mainly due to underemployment. All these factors could go unnoticed, but the market was inclined to "see" only the weaknesses of the release.

In general, the above circumstances forced traders to doubt that the Bank of Canada to raise the interest rate on October 24, despite such probability was talked about seriously right after the news of the creation of the USMCA. Low production activity, as well as the ambiguous situation in the Canadian real estate market, may affect the determination of the members of the regulator. In particular, the Debt-To-Income Ratio ratio ("debt-income") in Canada has already exceeded 160%. According to this indicator, Canadians are the leaders among all countries of the world. Therefore, the thesis that the increase in interest rates in the framework of this year did not affect the life of Canadians is not entirely objective. This factor may also be the subject of discussion at the October meeting of the Bank of Canada.

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Thus, doubts have arisen that the Canadian regulator will decide on one more rate increase before the end of this year, which will increase the pressure on the Canadian dollar despite the dynamics of the oil market. At the moment, the pair is already testing the 1.30 mark. Although the main resistance levels are slightly higher at 1.3010 (the lower boundary of the Kumo cloud on the daily chart) and 1.3090, as the upper line of the Bollinger Bands on the same timeframe. When the second resistance level with purchases is reached, one should be especially careful. A southern correction is likely to form from this level.

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USD: The probability of an increase in interest rates has increased. Columbus Day Celebrated in the USA

The data released by the end of the North American session on Friday, as well as the presentation of the representative of the US Federal Reserve Williams, did not lead to a serious change in bullish or bearish sentiment. However, the market remains on the side of dollar buyers, as a number of investors after the release of the US unemployment report expects a more rapid further increase in interest rates from the Central Bank in 2019.

According to the CME Group and the Federal Reserve Futures Market, the likelihood of a rate hike rose to 87% against 80% in December of this year at the end of last week and against 76% a week ago.

US Fundamental Data

According to the data, consumer lending in the United States increased significantly in August of this year, which will support the economy in the 3rd quarter of this year. As stated in the report of the Federal Reserve System, unsecured consumer lending increased by 6.15% or $ 20.08 billion, while economists had expected lending to grow by $ 14 billion.

Card loans for the reporting period increased by 5.60%, while non-revolving loans showed an increase of 6.35%.

Fed spokesman Williams said on Friday that the data showed strong employment growth, noting positive signs of accelerated wage growth in the United States, adding that low unemployment is not scary at all. Williams also believes that market participants have no worries about inflation, as the dynamics of markets reflect a strong economy.

The representative of the Fed reiterated the fact that the committee focuses only on economic data, and the prospects for interest rates depend on the situation in the economy. Williams also does not see a high risk that monetary tightening will undermine economic growth.

As for the technical picture of the EUR/USD pair, significant changes are unlikely to occur in the market today, as a number of US exchanges will be closed due to the celebration of Columbus Day. The main technical picture remains on the side of the euro sellers, and the breakdown of the intermediate support of 1.1500 or fixing under it will be an additional signal to the resumption of the downward trend in risky assets with a minimum of 1.1450 and 1.1400. In the case of an upward correction, which is unlikely to persist for a long time, short positions in euros can return on a rebound from the upper limit of 1.1550.

Canada

The Canadian dollar continued to decline against the US dollar, despite data on the growth of the surplus in Canada and the labor market.

According to a report from the Bureau of Statistics of Canada, foreign trade surplus amounted to 526 million Canadian dollars in August due to a sharp increase in exports and a reduction in imports. It is worth noting that the surplus was recorded for the first time since December 2016. The lack of foreign trade in July amounted to 189 million Canadian dollars against 114 million Canadian dollars.

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According to a report by the National Bureau of Statistics of Canada, the number of jobs in Canada grew by 63,300 in September of this year, while economists had expected jobs to grow by 25,000.

As for the overall unemployment rate, it fell to 5.9%, which coincided with the expectations of economists. The average hourly earnings in September rose by 2.4% compared with the same period of the previous year.

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Bitcoin analysis for October 08, 2018

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Trading recommendations:

According to the H1 time frame, I found potential end of the downward correction (expanded flat), which is a sign that selling looks risky. I also found the breakout of supply trendline, which is another sign of the strength. My advice is to watch for buying opportunities. The upward targets are set at the price of $6,660 and at the price of $6,750.

Support/Resistance

$6,564 – Intraday resistance

$6,505– Intraday support

$6,661 – Objective target 1

$6,750 – 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/JPY analysis for October 08, 2018

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Recently, the GBP/JPY pair has been trading downwards. The price tested the level of 147.70. According to the H1 time – frame, I have found the breakout of the support trendline in the background, which is a sign that sellers are in control. I also found potential creation of C wave (from ABC flat), which is another sign of weakness. My advice is to watch for selling opportunities. The downward targets are set at the price of 146.80 (Fibonacci expansion 100%) and at the price of 145.10 (Fibonacci expansion 161.8%).

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Analysis of Gold for October 08, 2018

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Recently, Gold has been trading downwards. The price tested the level of $1,193.00. According to the H1 time – frame, I have found that end of the upward correction (irregular type 2), which is sign that buying looks risky. I have also found a hidden bearish divergence on the MACD oscillator in the background, which is another sign of weakness. My advice is to watch for selling opportunities. The downward profit target is set at the price of $1,180.80.

Trading recommendations for today: watch for potential selling opportunities.

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Fundamental Analysis of USD/JPY for October 8, 2018

USD/JPY has been quite impulsive with the bearish recently after having an impulsive non-volatile bullish momentum pushing the price above 113.00 area with the daily close. Having mixed economic reports, USD is currently struggling against JPY which is expected to have short-term pullbacks along the way.

Due to observance of Health-Sports day, today JPY does not have any impactful economic reports to be published, but tomorrow JPY Current Account report is going to be published which is expected to increase to 1.52T from the previous figure of 1.48T and Economic Watchers Sentiment is expected to decrease to 47.3 from the previous figure of 48.7.

On the USD side, for the observance of Columbus Day there are no economic reports or event to be held today but throughout the week certain highly impactful economic reports are expected to influence the USD gains over EURO in the process. On Wednesday, US PPI report is going to be published which is expected to increase to 0.2% from the previous value of -0.1%, and on Thursday US CPI report is going to be published which is expected to be unchanged at 0.2%.

As of the current scenario, USD is quite optimistic with the upcoming highly impactful economic reports, while JPY having mixed expectations may lead to short-term gains but having worse than expectation may lead to further USD gains in the process.

Now let us look at the technical view. The price is currently heading towards 113.00 area after having a strong breakout above the area recently. Though certain bearish momentum can be observed, the trend is still bullish, and having the dynamic level of 20 EMA below the price to hold it as support is expected to lead to further bullish momentum with the target towards 114.50 to 115.00 area in the coming days. As the price remains above 112.00 area, the bullish bias is expected to continue.

SUPPORT: 112.00, 113.00

RESISTANCE: 114.50, 115.00

BIAS: BULLISH

MOMENTUM: VOLATILE

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Technical analysis of USD/CAD for October 08, 2018

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Overview:

The USD/CAD pair has broken resistance at the level of 1.3003, which acts as support now. So, the pair has already formed a minor support at 1.3003. The strong support is seen at the level of 1.3003, because it represents the weekly pivot. In the H1 time frame, the RSI and the moving average (100) are still pointing to the upside. Therefore, the market indicates a bullish opportunity at the level of 0.6692. Buy above the minor support of 1.3003 with a target at 1.3045 then continue towards next objective of 1.3075 (this price is coinciding with the double top). On the other hand, if the pair closes below the minor support (1.3003), the price will fall into the bearish market in order to go further towards the strong support at 1.2958. Also, the double bottom is seen at the level of 1.2884. If the trend is buoyant, then the currency pair strength will be defined as following: USD is in an uptrend and CAD is in a downtrend.

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Fundamental Analysis of EUR/USD for October 8, 2018

EUR/USD has been quite impulsive amid the bearish momentum that led the price to reside below 1.1500 currently. USD has been quite impulsive with the gains despite mixed nonfarm payrolls on Friday.

Since Friday, EUR/USD has been quite indecisive, closing the previous impulsive bearish week. However, today the bearish pressure seemed to have continued again which may push the price further downward in the coming days. EUR has been struggling amid the economic reports recently which lead to certain bearish pressure in the pair. As a result, USD has gained certain momentum. This week the economic calendar lacks macroeconomic reports from the eurozone. So EUR finds it difficult to assert its strength.

Today German Industrial Production report was published with an increase to -0.3% from the previous value of -1.3% which failed to meet the expectation of 0.4% and Sentix Investor Confidence decreased to 11.4 as expected from the previous figure of 12.0.

On the USD side, for the observance of Columbus Day there are no economic reports or events in the US today. Some economic reports will follow later this week. They are likely to make a good impact on the USD gains over EUR in the short term. On Wednesday, US PPI report is going to be published which is expected to increase to 0.2% from the previous value of -0.1% and on Thursday US CPI report is going to be published which is expected to be unchanged at 0.2%.

Meanwhile, amid the empty economic calendar of the eurozone, EUR has no reasons to extend its gains further against USD throughout the week. On the other hand, USD receives a boost from optimistic expectations for the nearest economic data. The market sentiment in favor of the US dollar may lead to further bearish pressure in the pair in the coming days.

Now let us look at the technical view. The price is currently quite impulsive inside the bearish bias which lead the price below 1.1500 area while also retesting the trend line resistance as well. As the price remains below 1.1600 and if a daily close below 1.1500 is observed, then further bearish pressure is expected in this pair with a target towards 1.1300 area in the coming days.

SUPPORT: 1.1300

RESISTANCE: 1.1500, 1.1600

BIAS: BEARISH

MOMENTUM: IMPULSIVE

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Indicator analysis. Daily review of EUR / USD pair for October 8, 2018

Trend analysis (Fig. 1).

On Monday, the market will move up with the first goal of the support level at 1.1551 (white dotted line), and it is only possible to overcome this level with the subsequent goal of the rollback level of 38.2% - 1.1599 (blue dotted line) in order to continue the upward movement.

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Fig. 1 (daily schedule).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - up;

- volumes - down;

- candlestick analysis - up;

- trend analysis - down;

- Bollinger lines - down;

- weekly chart - down.

General conclusion:

On Monday, an upward movement is expected with the first goal of the support level (white dotted line) at 1.1552 and further continuation to the top.

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Technical analysis of EUR/USD for October 08, 2018

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Overview:

The EUR/USD pair continues to trade downwards from the zone of 1.1620 and 1.1559. 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 Bitcoin for October 8, 2018

Bitcoin continues to trade inside the long-term sideways triangle pattern that has been formed since February. Traders should be patient and not try and front run the market. Traders should wait for the triangle boundaries to break before taking action.

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Red line - resistance trend line

Green rectangle - support

Bitcoin has reached more than 5 times the support area between 6,000$ and 5,700$. Each time support was respected but the following bounce was weaker. This resulted in a series of lower highs and the creation of the red downward sloping resistance trend line. Resistance is now at 6,850$. If Bitcoin breaks the triangle to the upside we should expect a move to reach 10,000-12,000$. If price breaks support we should expect Bitcoin to move towards 500$.

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Technical analysis of Gold for October 8, 2018

Gold price remains inside the trading range below the important resistance of $1,207-11. As long as we are below this level there is still danger of moving back towards $1,180. A break above this level will open the way for a push higher towards $1,220-40.

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Red lines - trading range

Green lines - long-term bearish channel

Gold price is above the long-term bearish channel but this cannot be counted as a break out as long as price remains inside the trading range. Traders should be patient. A higher low if formed around $1,190-95 could unfold into a bullish break out. I prefer to be a buyer around $1,190-05 looking for a break out over the coming weeks towards $1,220-$1,240. Stop for longs at $1,178.

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Technical analysis of EUR/USD for October 8, 2018

EUR/USD bounced towards resistance area of 1.1530-1.1545 but got rejected once again. Bulls now try to hold prices above short-term support at 1.1480-1.15. Losing this area will open the way for a move lower towards 1.14-1.1420.

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Red lines - bearish channel

Blue line - short-term support

Organge dots - medium strength resistance

Red dots - maximum strength resistance

EUR/USD remains inside the bearish channel since mid September. Short-term support is being challenged now at 1.1480-1.15. Break below this area and we are most probably going to see lower lows towards 1.1420-1.14. If bulls manage to hold support and break above 1.1550 we could see a bigger bounce unfold towards 1.1650 which the medium-strength resistance on a daily basis.

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Bitcoin analysis for 08/10/2018

According to a press release, the largest state-owned bank in Russia, Sberbank, has signed a partnership agreement with the state energy giant, Rosseti, to promote new technologies.

The latest step of Sberbank will make the bank together with Rosseti cooperate on many projects, including accelerators, education, research and exchange of expertise. Sberbank will also send a consultant to Rosseti to increase the efficiency of its current operations and performance. The energy company will also gain access to innovative laboratory solutions and products from the Sberbank ecosystem.

"The strategic partnership between Sberbank and Rosseti in the field of innovative growth allows both companies to use the latest technologies to transform their business and customer satisfaction," said the president of Sberbank, Herman Gref.

While the legal landscape of cryptocurrencies - its use, extraction, and other activities - remains an uncertain area in Russia, the government has promised full support for Blockchain. Since the first implementation of technology at the government level in December 2017, various initiatives have continued to flow from the most influential entities in the country. For its part, Sberbank was one of the two entities that in July initiated the first Russian cryptocurrency investment fund.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. Not much has changed over the weekend as the market is still hovering around the weekly pivot at the level of $6,487 in a tight, horizontal consolidation. The nearest support is seen at the level of $6,455 and the nearest resistance is seen at the level of $6,550 ( and then $6,570, $6,591 and $6,603). The larger trend remains down and so far there are no signs of any trend reversal yet.

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Trading plan for 08/10/2018

The week starts with the low volatility of the currency market. EUR/USD is at 1.1515, in the area recorded before the Friday publication of the US labor market report. USD/JPY is also exactly at the same level, 113.85. After a long break, investors have returned to Chinese exchanges and the start of the week brings painful discounts in Shanghai and Shenzhen. On commodity markets, a continuation of oil price drops started on Thursday and re-dip of gold at USD 1,200 per ounce. The pound is the strongest currency gaining on the wave of optimism which again dominates the discussions around Brexit negotiations. At the other extreme is NZD/USD which descent at 0.6440 should be associated with the collapse of the put option of a large value on Friday (and shallow market). At the Monday's session, oil-related currencies, namely NOK and CAD, are under moderate pressure.

The People's Bank of China cut the mandatory reserve for most banks by 100 bp. The releasing will take effect on October 15 and will increase liquidity in the sector by the equivalent of 0.7% of the deposit value. The movement demonstrates PBoC's determination to support sentiment and prosperity with the use of conventional tools, but it may turn out that in the face of trade wars more and more radical measures will be needed.

Friday on Wall Street ended with a discount on major stock exchanges which is continuing in the listing in Hong Kong. After the festive break, the indexes in Shanghai and Shenzen fell, in the first case by almost 3 percent. USA 10Y debt yield at the end of Friday was 3.23%.

On commodity markets, it is worth paying attention to the 0.6-percent drop in gold prices and the 1-percent silver discount. An ounce of ore is again valued at less than USD 1,200. The WTI oil price is falling by almost 1 percent, under 73.75. This means breaking the Thursday minimum and drawing a third of the next black candle on the chart.

DXY analysis for 08/10/2018:

For emerging markets, for the BOVESPA index, but also coffee and sugar, the results of the first round of the presidential election in Brazil are an important solution. A former army officer, representing the extreme right, J. Bolsonaro obtained over 46% of votes and was close to resolving the elections in the first round. In the second round, planned for 28.10, he will face F. Haddad, who is starting from the Labor Party. Of the two main candidates, Bolsonaro gives more hope for reform (or rather is a smaller threat to public finances). The increase in support for him last week was a contribution to the rally of Brazilian assets, real, coffee and sugar, but such a crushing lead is not seen in the prices.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market has bounced from the support at the level of 95.22 and currently is hovering around the old technical resistance at 95.75. The price is still below the short-term trend line resistance. The next target for bulls is seen at the level of 95.95 and if this level is violated, then the bulls might test the swing high at the level of 96.12. Please notice the positive but not that strong RSI indicator supporting the bullish outlook.

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Weekly review from October 8 to 13 2018 for the GBP/USD pair

Trend analysis (Fig. 1).

On the weekly chart, the price will move up with the first target of 1.3154-21 average EMA (black thin line). The second scenario is unlikely, but it is a move down to reach the support line of 1.2971 (white thin line) and only then upward movement.

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Fig. 2 (weekly schedule).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - neutral;

- volumes - up;

- candlestick analysis - up;

- trend analysis - up;

- Bollinger lines - down;

- monthly schedule - up.

The conclusion of the complex analysis is an upward movement.

The overall result of the calculation of the candles of the GBP/USD currency pair on the weekly chart: the price of the week is likely to have an upward trend with the absence of the first lower shadow of the weekly white candle and the absence of the second upper shadow.

The first upper target is 1.3154 – 21 average EMA (thin black line) and further upwards. The second scenario is unlikely, but this is a downward movement to reach the support line of 1.2971 (a white thin line) and only then an upward movement.

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Weekly review from October 8 to 13 2018 for the EUR/USD pair

Trend analysis (Fig. 1).

This week, the market may continue to move upwards again. The nearest target 1.1553 is a record resistance level (white dash dotted line). To continue the upward trend, the price must overcome this level. Otherwise, it will go down in the side channel to the level of 1.1478 - the support line (white dotted line) and only then an upper movement.

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Fig. 2 (weekly schedule).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - up (blue dotted line);

- volumes - down;

- candlestick analysis is neutral;

- trend analysis - up;

- Bollinger lines - down;

- monthly schedule - up.

Conclusion on complex analysis - up.

Calculation of the first shadow of the week (Monday) on the weekly chart.

The middle line EMA 1/5/8 – bottom signal.

The "three lines" indicator (the direction of the indicator lines RSI(5), RSI (5), stochastic with a period of 3/3/4) on the last run – the lower signal.

The calculation of the RSI indicator system for the first tail is down.

The result: the calculation of the weekly candlestick according to the indicator analysis showed that on Monday the price may have a downward trend, which should be confirmed by the daily chart.

Calculation of the second shadow of the week (Friday).

The calculation of the MACD linear part– gave an upward trend (100 points up).

The calculation of the MACD histogram - gave an upward trend (100 points up).

Bottom line: the calculation of the last day of the week according to technical analysis showed that on Friday the price may have an upward trend, which should be confirmed by the daily chart.

The overall result of the calculation of the candles of the EUR/USD currency pair on the weekly chart: the price of the week is likely to have an upward trend with the presence of the first lower shadow of the weekly white candle (Monday – down) and the absence of the second upper shadow (Friday – up).

The nearest upper target 1.1553 is the historical resistance level (white dash dotted line).

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Technical analysis: Intraday Level For EUR/USD, Oct 08/2018

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When the European market opens, some Economic Data will be released such as Sentix Investor Confidence, and German Industrial Production m/m.The US will not release any Economic Data today, so amid the reports, EUR/USD will move in a low to medium volatility during this day.TODAY'S TECHNICAL LEVEL: Breakout BUY Level: 1.1579. Strong Resistance:1.1572. Original Resistance: 1.1561 .Inner Sell Area: 1.1550. Target Inner Area: 1.1523. Inner Buy Area: 1.1496. Original Support: 1.1485. Strong Support: 1.1474. Breakout SELL Level: 1.1467.Disclaimer: Trading Forex (foreign exchange) on margin carries a highlevel of risk, and may not be suitable for all Traders or Investors.The high degree of leverage can work against you as well as for you.Before deciding to invest in foreign exchange you should carefullyconsider your investment objectives, level of experience, and riskappetite. The possibility exists that you could sustain a loss of someor all of your initial investment and therefore you should not investmoney that you cannot afford to lose. You should be aware of all therisks associated with foreign exchange trading, and seek advice froman independent financial advisor if you have any doubts.The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Intraday level for USD/JPY, Oct 08/2018

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In Asia, Japan and the US will not release any Economic Data. So there is a probability that the USD/JPY pair will move with a low volatility during this day.

TODAY'S TECHNICAL LEVEL: Resistance. 3: 114.48. Resistance. 2: 114.26. Resistance. 1: 114.02. Support. 1: 113.75. Support. 2: 113.53. Support. 3: 113.31.

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

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

Elliott wave analysis of EUR/NZD for October 8, 2018

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There was no time for a correction and EUR/NZD is moving directly higher towards the next target at 1.8030. Support is now seen at 1.7800 and again at 1.7758, only a break below the later support will indicate a deeper correction towards 1.7643 unfolding, before the next advance towards the 1.8369 target.

R3: 1.8100

R2: 1.8030

R1: 1.7900

Pivot: 1.7800

S1: 1 7758

S2: 1.7692

S3: 1.7642

Trading recommendation:

We are long half a position from 1.7500 and we will move our stop higher to 1.7725.

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Elliott wave analysis of EUR/JPY for October 8, 2018

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EUR/JPY once again made a new low at 130.60 for the correction from 133.13. Even though a new low was seen, the corrective decline from 133.13 should complete soon. The first good indication that the correction in blue wave (4) has completed will be seen when the minor resistance at 131.58 breaks, while a break above resistance at 131.98 will confirm, that blue wave (4) has completed and blue wave (5) is developing towards at least 133.85.

R3: 131.98

R2: 131.57

R1: 131.37

Pivot: 131.18

S1: 131.02

S2: 130.74

S3: 130.60

Trading recommendation:

Our stop at 130.65 was hit for a loss of 85 pips. We will buy EUR again at 130.70 or upon a break above 131.58.

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