How will the dollar show itself in the foreseeable future?

Since the summer of this year, volatility has been reduced in the global currency market. In the main pairs, mostly quiet, oscillations closed in a narrow range. At the same time, the currency in recent months has pretty shocked.

The currency pair EUR / USD has practically grown in the range of 1.14 - 1.17, but if you pay attention to the dollar index, the picture is clearer. Currently, the indicator is located around 95.5 points. The solid support is 94, and the critical resistance level is in the range of 96.2 - 96.3. In the event of a breakthrough of this barrier, the American dollar can dial up to 4% and fly to a value of 100 points.

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From a technical point of view, everything is clear, in general, as with the fundamental. Now, the reason for the growth of the euro in the summer is clear. The Bank of Russia could make a definite contribution here. As noted in Goldman Sachs, there are indicators of the fact that the Central Bank converted dollars from US government bonds into Euros and placed them in different papers of the eurozone countries. Perhaps, this can explain the fact that the classic carry trade from euro to dollar did not work, despite the significant difference in rates by almost 300 basis points.

Then the situation changed, after the last increase in the US refinancing rate, yields on US government bonds skyrocketed. Even the "three-year-olds" exceeded 3%. Risks in global markets have increased significantly, investors rushed to dump shares. The process can still be controlled, and market participants are trying to buy dips. The VIX has grown, but there are no transcendental heights, there is a gradual upward movement.

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However, the situation can quickly get out of control. Published on Wednesday, the minutes of the September Fed meeting showed the absolute unanimity of officials in an effort to raise the rate gradually. They also hinted at the possibility of leaving the rate above the neutral level. In December, the Fed will again tighten the policy. This is almost one hundred percent guarantee. Thus, yields on the US Treasury debt market will increase.

According to JP Morgan, when the yield on 10-year securities increases to 3.4%, large institutional investors will have no sense in shares and they will be transferred to bonds.

So, in the near future, dips will become more frequent on the stock markets, and panic may come one day. In this scenario, the dollar has all the chances to rise significantly.

It doesn't matter who treats the US currency and what forecasts give, but it remains central to the calculations for various contracts. In the days of stress in the markets, the demand for the dollar increases, the risks are to its advantage.

Euro

In 2019, the euro should rise as the ECB will begin to raise rates.

The CIBC is advised to open a short position in the EUR / SEK pair at a break below 10.28, and also in the EUR / NOK pair at a break below 9.38. As for EUR / USD, the bank has to admit that the pair will decline. Experts urge euro buyers to be patient.

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The reasons for the decline of the euro are the following:

  • Next week, Italy's draft budget is likely to be rejected. The budget, which will fit into EU regulations, is unlikely to receive approval in the Italian parliament before the end of the year.
  • Forcing the euro to "defend" can "bad result of support" of Angela Merkel and her party in the upcoming state elections in Germany.
  • The quantitative easing program of the ECB ends in January. The regulator is "concerned about the consequences of lower liquidity and the consequences for assets," according to the bank.
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The dollar will rise, the euro will fall, and China avoided the title of currency manipulator of the year

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The dollar has updated the weekly high, and the stock market fell amid signs that the Fed will continue to raise interest rates until 2019.

China's stock markets were hit hard. The stock base index fell to a four-year low. The yuan was close to a two-month low. Chinese Prime Minister warned about the risks to the economy from the escalation of the tariff war with the United States. At the same time, European markets did not succumb to provocation. London FTSE traded 0.1 percent higher, German DAX and French CAC rose 0.3 percent. The overall European stock index rose 0.4 percent.

The minutes of the last Fed meeting showed that the regulator unanimously supported the increase in interest rates last month, and that, in general, everyone agrees on the need for further increases. This reinforces the expectation that rates will rise, despite the opinion of President Donald Trump that the Fed is in too much of a hurry.

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One thing is clear, as if we are entering a period of tightening US monetary policy. The dollar looks more than confident against this background, it rebounded after the recent recession and is likely to continue its rise. Euro can not boast of such dynamics. In general, over the past three weeks, the euro has lost a little less than 3 percent of its value against the dollar. Other major currencies showed a limited reaction after the US government refused to call China a currency manipulator.

In its currency report, the US Treasury Department reported that the recent depreciation of the yuan in China is likely to exacerbate the US trade deficit, but Beijing cannot be blamed for directly affecting the value of the currency.

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US-China trade conflict could escalate into financial war

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According to Laurence Fink, the head of the world's largest investment company BlackRock Inc., it is possible that in the future, the trade conflict between the United States and China may turn into a financial war if the power of the Middle Kingdom will resort to selling American government bonds.

As reasons that may induce China to this step, the expert called the potential deterioration of the macroeconomic situation in the country and the need to attract a substantial amount of money to support the economy.

"I hope that the situation will not develop according to this scenario, however, such a course of events is quite likely," said L. Fink.

"I believe that this will be an extreme measure, since China depends on Southeast Asia, on global trade. If Beijing conducts a massive sale of US state bonds, this will cause a sharp appreciation of the yuan, and this is unprofitable for them. I think that the Celestial will try to find another way to solve the problems that arise," he added.

At the moment, China is the largest holder of US government securities. As of August of this year, the country has invested $ 1.165 trillion in these assets.

After in July, the White House announced the activation of a package of duties on Chinese imports in the amount of $ 200 billion, Beijing announced that one of the measures to support the economy of the PRC could be the sale of a portion of American treasuries.

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GBP / USD: plan for the American session on October 18. The lack of a solution for Brexit puts pressure on the pound

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

There is no news on Brexit and, accordingly, there is no large buyer either, which did not allow us to consolidate above 1.3119 in the first half of the day. At the moment, it is best to rely on pound purchases after the formation of a false breakdown at the low of the day at 1.3075 or open long positions after updating the weekly support at 1.3032. The main task for the second half of the day will be the return and consolidation above the resistance of 1.3119, from where the maximum of 1.3152 and 1.3186, where I recommend fixing the profit.

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

As long as trading is conducted below the resistance level of 1.3119, the pressure on the pound will continue. The main goal of the sellers remains at least this week 1.3075, a breakthrough of which will lead to a larger sale of GBP / USD with a minimum of 1.3032 and 1.2982, where I recommend fixing the profits. At any time, the results of the next Brexit negotiations can be published, so that we do not forget to place stop orders, since the volatility of the pound may increase significantly. In the case of an upward correction to short positions, you can again return to the false breakdown from the resistance of 1.3152 or to the rebound from 1.3186.

Indicator signals:

Moving Averages

The pair has fixed below the moving average, which indicates the formation of a downtrend.

Bollinger bands

A break of the lower limit of the Bollinger Bands indicator around 1.3078 will lead to the sale of a pound. The upper limit around 1.3134 today stands in the form of 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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EUR / USD: plan for the US session on October 18. Euro buyers are trying to return to the market

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

The breakthrough of the important support level of 1.1481, to which I drew attention in the morning review, did not occur, which allowed buyers to return to the market. New long positions are best opened after the support update of 1.1501, and the main target will be a large resistance level of 1.1540, at which the 50-day average is also located. The breakthrough will lead to a new high of 1.1573, where I recommend fixing the profits. In the case EUR / USD returns under the support level of 1.1501, it is best to return to long positions to rebound from 1.1457.

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

Sellers in the second half of the day need a quick return below the support level of 1.1501, which will lead to the continuation of the downward trend in the euro and updating the minimum in the region of 1.1457 and 1.1434, where I recommend fixing the profits. In the case of the second wave of EUR / USD growth, short positions can be returned to the rebound from the resistance of 1.1540 or from the maximum of 1.1573.

Indicator signals:

Moving Averages

Trade is conducted under the 30- and 50-day average, which indicates the formation of a downward trend in the euro.

Bollinger bands

The breakdown of the middle border of the Bollinger Bands indicator in the area of 1.1507 will come to the return to the market of sellers and a new wave of the euro fall. However, the downward potential may be limited by the lower boundary in the area of 1.1485.

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

EUR / USD: US dollar rose, as the Fed representatives expect a further increase in US rates

Yesterday, traders closely followed the minutes of the last meeting of the Federal Reserve System, the publication of which led to the strengthening of the US dollar against a number of currencies, since the main emphasis was placed on the need for further increases in interest rates.

The minutes of the meeting indicated that the managers expected a gradual increase in rates, however, some Fed representatives suggest that the rates will be moderately restrictive for a while. Several executives also spoke out against restrictive policies without obvious signs of overheating of the economy and rising inflation.

As for the economic outlook, the managers noted some acceleration in the growth of labor costs, but were concerned about the moderate increase in salaries. The economy is projected to continue to grow in line with expectations.

The focus was on risks that could seriously affect the prospects for raising interest rates in the near future.

Some executives noted possible risks to financial stability, including a strong dollar that could slow down economic growth and inflation. They also talked about emerging markets, which are now experiencing financial tensions, which creates risks for the US economy.

Fed experts have slightly raised the forecast for GDP growth for 2018.

As for the news on Brexit, then as such the results of the negotiations yet. EU representative Barnier said yesterday that the Brexit negotiations need much more time, and there is a lot of work to be done in the coming weeks.

The technical picture in the EUR / USD currency pair remains on the side of euro sellers. If, in the near future, buyers do not correct the situation and do not consolidate above the resistance level of 1.1510, pressure on risky assets will increase again, and a repeated test of support for 1.1480 will lead to another wave of sales, reaching 1.1460 and 1.1430 lows.

The Australian dollar remained traded in a narrow side channel, only slightly offsetting yesterday's fall against the US dollar after a report from the Australian Bureau of Statistics, which indicated that the country's unemployment rate fell sharply in September.

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According to the data, the unemployment rate in Australia in September 2017 fell to 5.0% from 5.3% in August, while economists had expected the figure to remain unchanged. The number of employees increased by 5,600 against the expected growth of 15,000. The share of the economically active population in September was 65.4% against 65.7% in August.

The Japanese Yen fell against the US dollar after data that exports from Japan fell due to the trade war between the US and China. The main decline was noted for Japanese cars and telecommunications equipment.

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According to the Ministry of Finance of Japan, exports from Japan in September of this year fell immediately by 1.2% compared with the same period last year, and the trade surplus fell by 79% compared with the same period last year, to 139, 6 billion yen. Economists had expected a deficit of 53 billion yen. Imports to Japan grew by 7% compared with the same period last year.

Amid the introduction of trade duties, the surplus of Japan's foreign trade with the United States in September fell by 4% compared with September 2017, to 590 billion yen.

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Wave analysis of GBP / USD for October 18. British pound remains under the working option

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Wave counting analysis:

During the October 17 trading session, the GBP / USD currency pair fell by 75 basis points, so the expected wave 2 takes the 3-wave form and continues its construction. If this is true, then the decline will continue with targets located near the calculated levels of 61.8% and 76.4% Fibonacci. An unsuccessful attempt to break through one of these levels can lead to the departure of quotes from the lows reached and the completion of wave 2. However, for further growth of the pair, within wave 3, you will need "good" information about Brexit negotiations. Otherwise, it may be necessary to make adjustments to the current wave marking.

The objectives for the option with purchases:

1.3258 - 0.0% according to Fibonacci

1.3300 - 161.8% of Fibonacci

The objectives for the option with sales:

1.3052 - 61.8% of Fibonacci

1,3003 - 76.4% of Fibonacci

General conclusions and trading recommendations:

The currency pair GBP / USD continues to build the estimated wave 5 and the internal wave 2. Thus, I recommend keeping sales open with targets around 1.3052 and 1.3003. However, opening up new sales is now quite risky. Any information from the EU summit on the Brexit negotiations can greatly affect the movement of the pair, and the working version of the current wave marking can change.

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Wave analysis of EUR / USD for October 18. The pair is ready to build a downward wave

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Wave counting analysis:

During the trading on Wednesday, the EUR / USD currency pair lost about 75 basis points. Thus, taking into account these losses, the conclusion suggests itself that the construction of the proposed wave b is completed. If this is indeed the case, the decline in quotations will continue with targets located under the 14th figure, within wave c. It should also be taken into account that the EU summit is not yet completed, which means new data may be received on negotiations between the UK and the EU. This information can greatly affect the pair and wave counting.

The objectives for the option with sales:

1.1432 - 0.0% of Fibonacci

The objectives for the option with purchases:

1.1622 - 50.0% of Fibonacci

1.1667 - 61.8% of Fibonacci

General conclusions and trading recommendations:

The currency pair supposedly completed the construction of wave b. Thus, now I recommend selling a pair with targets located near the estimated mark of 1.1432, which corresponds to 0.0% Fibonacci. I also recommend not to lose sight of any information coming from the summit, since it can greatly affect the movement of the pair, up to the need to make adjustments to the current wave counting.

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GBP / USD: plan for the European session on October 18. Traders are waiting for the results of the EU summit and news on

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

Buyers will try to form a false breakdown at the support level of 1.3083, which will lead to an upward correction in the pound with an update of the resistance level of 1.3119. However, the main goal will be the breakdown and consolidation above the level of 1.3119, which will allow us to expect a larger increase to the highs of 1.3152 and 1.3186, where I recommend fixing the profits. Any positive news on Brexit will cause a sharp rise in the pound with a break of monthly highs around 1.3223. In the case of a decline below the support level of 1.3083, you can go back to the rebound from the lows of 1.3032 and 1.2982.

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

It is necessary to sell a pound very carefully, as news on Brexit can provoke a sharp influx of buyers. Fixing below the support level of 1.3083 will increase the pressure on the pair, which will open a direct road to the weekly lows to 1.3032 and 1.2982 areas, where I recommend fixing the profits. An unsuccessful consolidation and return under the resistance level of 1.3119 in the first half of the day will also be a signal to sell the pound in order to break 1.3083. Otherwise, short positions can be opened for a rebound between 1.3152 and 1.3186. In the event of a sharp rise in positive news on Brexit, I advise you to abandon sales of the pound.

Indicator signals:

Moving Averages

Trade is conducted under the 30-and 50-day average, which indicates a further decrease in the pound. In the case of an upward correction, the 30-day average will play the role of good resistance.

Bollinger bands

A break of the lower border of the Bollinger Bands indicator around 1.3077 will be a direct signal to open short positions in the pound. The average border is at the level of 1.3115, which will limit the upward potential in pounds in case of a correction.

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

Control zones of AUD/USD pair 10/18/18

Yesterday there was a depreciation, but the reversal model has not yet begun. For this reason, testing the level of 0.7091 should be considered as an opportunity to search for a buying pattern.

Yesterday's movement allowed to form a local zone of accumulation. The a control zone with the lower limit at 0.7091 remains support, which obliges it to use its test to search for favorable purchase prices. The main goal of growth remains the weekly control zone as long as the pair is trading above the level of 0.7091.

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If there is already a long position in the market, then it is best to transfer it to break even, since the a control zone breakdown in today's American session will indicate a change in priority.

For violation of the ascending impulse, a breakdown and fixation below the a control zone will be required, the lower limit of which is at the level of 0.7091. If this happens, then tomorrow at the Asian session, sales of the instrument will come to the fore. Currently, the probability of this model being implemented is 30%, however, it must be taken into account that on other pairs traded to the dollar, reversal patterns have already occurred.

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Control zones of GBP/USD pair 10/18/18

Yesterday, a reversal pattern was formed, which indicates a change of priority to a downward one. Any increase in today's European and American sessions will be corrective.

The a control zone was broken yesterday, the lower limit of which is located at the level of 1.3126. The closure of the American session was below this mark, which allows us to consider selling the instrument in any upward movement. The level of 1.3126 will be the first resistance in the way of growth, and its test can be used to search for favorable prices for sale.

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The first goal of the downward movement will be the weekly control zone, where the lower limit of which is at the level of 1.2995. Reaching this zone requires closing a part of the position for sale, as the likelihood of demand increases. The rest can be transferred to breakeven.

To cancel the bearish impulse, it is necessary to absorb yesterday's fall and close trades at the previous day's high. The probability of the formation of this model is 30%, which makes it auxiliary. In the case of having a long position from last week or the week before last, it is better to completely eliminate it and consider selling options.

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Control zones of EUR/USD pair 10/18/18

Yesterday the reversal pattern was formed. The American session closed below the a control zone.

It has been completed. This became possible after yesterday's US session closed below the a control zone. Anyone today will be a correction for profitable valuable instruments for sale. Returning to yesterday's support will be the first resistance to growth.

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The target zone is the weekly control zone. The lower limit of which is located at the level of 1.1428. Achievement of this zone will allow fixing a part of sales and transfer the rest to breakeven.

To cancel the descending pattern, it will be necessary to take over yesterday's fall and close the American session above the level of 1.1550. This will give up a short position and consider purchases tomorrow. The best deals are sales, however, a small correctional growth is required to get better prices. The ratio of risk to profit from sales from current levels will be unprofitable.

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GBP / USD. October 18th. The trading system "Regression Channels". There is no positive news about Brexit.

4 -hour timeframe

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Technical details:

The senior linear regression channel: direction - up.

The younger linear regression channel: direction - up.

Moving average (20; smoothed) - down.

CCI: -138.9756

The GBP / USD currency pair continues its downward movement in anticipation of the announcement of the EU summit results. Meanwhile, European Parliament President Antonio Tajani told the press that Theresa May did not submit any new proposals for the Brexit terms. This can mean two things. First, Theresa May pulls time. This option is possible, as the British Premier needs to think not only about how to negotiate with the EU, but also about how to get support under the Brexit plan in the UK Parliament. Thus, it cannot make concessions, and in this case, it remains almost the only option. The second is that there are no new proposals, and there will not be, since Theresa May knows for sure that the new plan will not support Parliament. In general, the situation is still a stalemate, and the likelihood that there will be no deal between the EU and Britain is growing every day. The pound sterling responds to this data quite logically. Most of the pound's take-off periods in recent months have been associated precisely with "insider" information that the parties are close to signing an agreement. However, it was not confirmed. And now, when official negotiations are underway, and no optimistic information is being received, traders reasonably believe that the parties have again reached an impasse. Today in the UK, a report on retail sales will be published. Weak data could put even more pressure on the British currency.

Nearest support levels:

S1 - 1.3062

S2 - 1.3000

S3 - 1.2939

Nearest resistance levels:

R1 - 1.3123

R2 - 1.3184

R3 - 1.3245

Trading recommendations:

The currency pair GBP / USD continues to move down. Thus, it is now recommended to remain in short positions with targets at 1.3062 and 1.3000 until the Heikin-Ashi indicator turns to the top, which will mean a turn of corrective movement.

Buy-positions will become relevant with the aim of 1.3245 after the price is fixed back above the moving average. To do this, the pound will require very strong data on retail sales or information about the positive progress in the Brexit talks.

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

Explanations for illustrations:

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

The junior 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.

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

EUR / USD. October 18th. The trading system "Regression Channels". Eurocurrency falls amid negative expectations in the negotiations

4-hour timeframe

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Technical details:

The senior linear regression channel: direction - sideways.

The younger linear regression channel: direction - down.

Moving average (20; smoothed) - down.

CCI: -210.2490

The EUR / USD instrument on Thursday, October 18th, continues its downward movement, as indicated by the blue bars of the Heikin Ashi indicator. The pair did not manage to overcome the level of Murray "6/8". It can be said that the current fall in the pair is triggered by negative expectations of negotiations between the UK and the EU at the summit. The Brexit theme, as before, leaves too many unanswered questions, and it's extremely difficult to imagine what the new negotiations will end between London and Brussels. On the one hand, the stumbling block is the issue of the Northern Ireland border. Germany has already begun to prepare for the "tough" scenario of Brexit, Donald Tusk said that the probability of the release of the Kingdom without a "deal" is very high. On the other hand, internal political peripeteias make Theresa May work on two fronts. The British Parliament is unlikely to approve additional concessions to the European Union. At the same time, failure in negotiations will hit Theresa May's rating even more. Thus, May faces a very difficult task, to negotiate with the EU without any new concessions. Is it possible? We believe that either negotiations will be delayed for a few more months, or else they will fail. Any of these options is likely to put pressure not only on the pound sterling, but also on the euro currency.

Nearest support levels:

S1 - 1,1475

S2 - 1,1414

S3 - 1.1353

Nearest resistance levels:

R1 - 1.1536

R2 - 1.1597

R3 - 1.1658

Trading recommendations:

The EUR / USD currency pair continues to move downward, so now it is recommended to consider short positions with a target of 1.1475, and in case of overcoming this target, with a target of 1.1414. The upward reversal of Heikin Ashi will indicate the beginning of an upward correction.

Buy orders are recommended to be considered only after the price is fixed back above the moving average line. In this case, the trend in the instrument will again change to ascending, and the first target will be 1.1597.

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

Explanations for illustrations:

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

The junior linear regression channel is the purple lines of unidirectional movement.

CCI - blue line in the indicator 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.

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

Trading Plan for 10/18/2018

As expected, the dollar strengthened yesterday. True, somewhat stronger than expected, but this was facilitated by extremely weak data on inflation in the UK, as price growth slowed from 2.7% to 2.4%, while it expected growth to 2.8%. Such pitiable results perfectly complement the content of the minutes of the Bank of England meeting, which explicitly states that until the completion of the procedure for leaving the UK from the European Union, there can be no change in the parameters of the monetary policy of the regulator. European inflation data coincided with a preliminary estimate that showed an increase in inflation from 2.0% to 2.1%. Also, the results of the EU summit on the issue of Brexit generally coincided with expectations. That is, no results have been achieved. A number of unresolved issues remain between the parties, and as a result, Germany began preparations for the worst option, namely, that the UK leave the European Union without any agreement. For investors, perhaps this is the worst option, since the absence of an agreement is much worse, even than a bad agreement. So, everything that happened in Europe could not contribute to the strengthening of the single European currency and the pound.

The American construction statistics turned out to be not the most joyful, as the number of building permits issued decreased by 0.6%, while the number of construction projects started to decrease by 5.3%. A slightly different result was predicted, as the number of permits was expected to grow by 3.4%, and construction projects started by 2.5%. All this is not so important, since the content of the text of the minutes of the meeting of the Federal Commission on Open Market Operations has removed all questions regarding further actions to tighten monetary policy. Now, there is no doubt that in December, the Fed will once again raise the refinancing rate. There are also no hints that the Fed intends to revise the pace of the refinancing rate increase next year. We should not forget that inflation slowed down after the meeting of the Federal Commission on Open Market Operations, so the intrigue still remains. Especially since Donald Trump continues to express his indignation at the fact that the Fed is raising the refinancing rate too quickly.

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Today, the European Union summit is still ongoing, but nothing new is expected. In fact, the parties exchanged mutual recriminations, showing that so far, there still remain too many controversial issues. The data on retail sales in the UK, the growth rate of which can accelerate from 3.3% to 3.6%, which will support the pound. Meanwhile, in the US, it is expected that the total number of applications for unemployment benefits will increase by 3 thousand. The number of initial applications for unemployment benefits should be reduced by 2 thousand, while the number of repeat ones may be reduced by 5 thousand. The market still digests the situation around Brexit, as well as plans of central banks.

The euro / dollar currency pair, showing an active downward interest, overcame the range level of 1.1510 / 1.1550, while maintaining a bearish mood. It is likely to assume that the downward mood will continue, but under the quotation, the first periodic level of 1.1470 is already located, where, against the background of overheating, stagnation with a rollback is possible.

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The pound / dollar currency pair continued the downward movement against the general background, leaving impulse candles behind. It is likely to assume that in the area of 1.3060 - 1.3050 values, there will be a gradual slowdown, with the formation of the next.

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

Intraday technical levels and trading recommendations for EUR/USD for October 18, 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.

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 momentum was being demonstrated on the daily chart. On October 10, recent bearish decline below 1.1520 found its way towards the price level of 1.1420.

As for the bearish side of the market to remain dominant, the EUR/USD pair should keep trading below the price level of 1.1520.

However, last week, evident signs of bullish recovery were demonstrated around 1.1430 (Note the full-bullish candlestick of Thursday). This brings the EUR/USD pair again above 1.1520.

Hence, the EUR/USD pair resumes its sideway consolidations inside the depicted consolidation range (1.1520-1.1750) until a bearish breakout below 1.1500 occurs later.

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Intraday technical levels and trading recommendations for GBP/USD for October 18, 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 failed to demonstrate sufficient bullish momentum above 1.3296. The short-term outlook turned to become bearish within the depicted H4 bearish channel to test the backside of the broken uptrend.

Recently, the price level of 1.2900-1.2940 (the backside of the broken uptrend) demonstrated significant bullish recovery which led to the recent bullish breakout of the depicted H4 channel.

Evident Bullish momentum was demonstrated above 1.3010 and recently above 1.3100 (61.8% Fibo level) which led to the recent bullish movement towards 1.3200.

Bearish rejection was demonstrated around 1.3200. This hinders the bullish breakout scenario allowing further bearish decline towards 1.3090 (61.8% Fibo level) and probably 1.3010 (50% Fibonacci level) if enough bearish pressure is applied.

As for the bullish breakout scenario to remain valid, bullish persistence above 1.3200 (SELL-ZONE) is needed to maintain sufficient bullish momentum initially towards 1.3280.

On the other hand, bearish breakdown below the price level of 1.3100 (61.8% Fibo level) enhances further bearish decline towards 1.3010 and 1.2940.

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EUR / USD: plan for the European session on October 18. Fed representatives are convinced of the need to raise interest rates

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

The euro continued to decline after the publication of the Fed's protocols, which explicitly stated the need for further rate increases. In the first half of the day, it is best to return to the false breakdown from the support level of 1.1482 or to rebound from a larger area of 1.1457. The main task of the bulls will be the return and consolidation above the resistance of 1.1509, which will lead to a larger upward correction in the area of 1.1539, where I recommend fixing the profit.

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

The breakthrough and consolidation below the support level of 1.1482 will be another signal to sell the European currency in order to update the weekly lows around 1.1457 and 1.1434, where I recommend fixing the profits. In the case of EUR / USD growth in the first half of the day, the opening of short positions can be expected after the formation of a false breakdown in the resistance area of 1.1509 or a rebound from the maximum of 1.1539.

Indicator signals:

Moving Averages

Trade is conducted under the 30- and 50-day average, which indicates a further decline in the euro. In the case of an upward correction, the 30-day average will play the role of good resistance.

Bollinger bands

A break of the lower border of the Bollinger Bands indicator around 1.1482 will be a direct signal to open short positions in the euro. The average border is at the level of 1.1509, which will limit the upward potential in euros in case of a correction.

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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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Analysis of the divergence of EUR / USD for October 18. Dollar strengthening continues

4h

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The bearish divergence of the MACD indicator allowed the pair to eventually fall to the correction level of 61.8% - 1.1497. Reversing the quotations from the Fibo level of 61.8% will allow traders to count on a reversal in favor of the European currency and some growth in the direction of the correction level of 50.0% - 1.1558. There is no one indicator of the emerging divergences today. Fixing the pair below the Fibo level of 61.8% will increase the chances for a further fall in the direction of the next correction level of 76.4% - 1.1424.

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 reversed in favor of the US currency and began the process of falling in the direction of the correctional level of 127.2% - 1.1285. Over the current chart, no indicator has maturing divergences. Fixing the pair above the Fibo level of 100.0% can be interpreted as a reversal in favor of the EU currency and the resumption of growth in the direction of the correction level of 76.4% - 1.1789 is expected.

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

Recommendations to traders:

Purchases of the EUR / USD currency pair can be opened with the target of 1.1558 and a Stop Loss order under the Fibo level of 61.8% if the pair bounces off of the 1.1497 correction level.

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 GBP / USD Divergences for October 18th. The effect of the bearish divergence persists

4h

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After the formation of a bearish divergence at the CCI indicator, the GBP / USD quotes continue to fall in the direction of the correctional level of 23.6% - 1.3067. Rebounding the pair from the Fibo level of 23.6% will make it possible to expect a turn in favor of the British currency and some growth in the direction of the correction level of 38.2% - 1.3316. There are no ripening divergences on October 18th. Fixing quotations under the Fibo level of 23.6% will increase the probability of a further fall in the direction of the next correction level of 0.0% - 1.2662.

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 pair completed under the correction level of 50.0% - 1.3110. As a result, the process of falling continues in the direction of the next level of Fibo 38.2% - 1.3065. Bullish divergence is brewing at the CCI indicator, which allows you to count on a reversal in favor of the British currency and some growth of quotations. Rebounding the pair from the Fibo level of 38.2% will similarly allow to expect the beginning of the growth of the pair. Fixing below the correction level of 38.2% will work in favor of a further fall in the direction of the next Fibo level of 23.6% - 1.3010.

The Fibo grid was built according to extremums of September 20, 2018, and October 4, 2018.

Recommendations to traders:

Purchases of the GBP / USD currency pair can be made with the target of 1.3110 and a Stop Loss order under the correction level of 38.2% if the pair bounces off the level of 1.3065 (hourly chart), especially in conjunction with bullish divergence.

You can sell GBP / USD currency pair now with targets at 1.3065 and 1.3010 and a Stop Loss order above the 50.0% level, as the pair closed below the Fibo level at 1.3110 (hourly chart), and hold the deals until a bullish divergence is formed.

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The dollar remains strong, thanks to the Fed's perseverance

Following on Wednesday, the US dollar, as we expected, received support against major currencies. The main reason for this is the published minutes of the September Fed meeting.

The US currency appreciably added, primarily against the euro and the British pound. On the one hand, supported by the content of the minutes of the Fed's monetary policy meeting, which not only confirmed the regulator's desire to continue the process of raising interest rates, which in itself was already taken into account by the markets, understand that the leaders of the Central Bank are ready and consider "necessary to raise the rate on federal funds above the neutral level." This is a really strong signal, since it did not sound earlier. The bank "exaggerated" the topic of simply gradually raising the cost of borrowing to a certain neutral level. The signal of the desire to raise rates until the economy slows down. This is already something new that the markets should not ignore in any way.

On the other hand, the euro and sterling are under pressure in anticipation of a meeting of EU and UK leaders on Brexit. Here, everything is not so clear and understandable. The summit will be held today, and we can say that if the final agreement is not reached again, this will lead to a drop in the British currency in the Forex market. The single European currency is also likely to not stand aside and will be under pressure.

Another negative for sterling is the continuation of the process of slowing inflation, which, in annual terms, after reaching 3.1% in December last year, fell in September to 2.4%. It can be assumed that if this trend continues, the market's hopes that the Bank of England, after concluding an agreement on Brexit, will decide to raise rates, may collapse and the sterling will fall not only in the wake of domestic economic problems, but also eliminate expectations to increase rates of local securities.

Assessing the general sentiment that is now being formed in the markets, we believe that the dollar will receive support against all major currencies, since the factor for maintaining the trend of interest rate differences between the Fed and other major central banks remains. We should also expect today either a noticeable increase in sterling, or its precipitous fall at the end of the EU-UK summit. In our opinion, the probability of a positive result is very low.

Forecast of the day:

The currency pair EUR / USD is trading below the level of 1.1500. It can continue to fall to 1.1420, unless a clear Brexit agreement is reached between Britain and the EU. This probability is very high. If all such arrangements are reached, the pair can recover to 1.1560 and continue to grow even higher to 1.1600.

The currency pair GBP / USD is trading above the level of 1.3080. The lack of reaching an intelligible agreement on the exit of Britain from the EU will collapse the pair, and it may fall to 1.3025, and then to 1.2960. If a miracle happens and an agreement is reached, the pair can recover to 1.3240.

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The forecast for EUR / USD for October 18, 2018

EUR / USD

Political instability in Europe and the Middle East continues to expand, which favorably affects the dollar. The European Commission rejected the draft budget of Italy for 2019, Angela Merkel said that Germany is preparing for a tough Brexit, the US is considering imposing sanctions against Saudi Arabia over the murder of a journalist.

Data on construction in the US were worse than expected; the number of new housing starts in September was 1.20 million against 1.22 million, and the issued permits for the construction of a new house amounted to 1.24 million against a forecast of 1.27 million. Stock indices fell slightly.

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The euro fell by 74 points and made its way under the indicator line of the trend on a daily scale. A similar fixation under the Kruzenshtern line also occurred on the four-hour chart. Now, the price can move lower. It seems that the graphics trend line embedded in the price channel of the higher timeframe, and will not have a strong obstacle in the current situation. A stronger support is at least as of October 9, at 1.1432, since historically in the period from 2015, more price reversals have occurred near this level. Overcoming support will open the way to a further decline by 1.1300.

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Fractal analysis of Gold, Silver, and Oil for October 18

Analytical review of Gold, Silver, and Oil

According to Silver, we expect further development of the upward trend from October 11 after the breakdown of 14.73. At the moment, the price is in the zone of initial conditions. According to Gold, we are following the development of the ascending structure of September 28 and we expect further uptrend after the breakdown of 1228.50. According to oil, we continue to monitor the downward structure of October 3 and the subsequent movement downwards is expected after the breakdown of 69.50.

Forecast for October 18:

Analytical review on the scale of H1:

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According to Silver, the main key levels on the H1 scale are: 15.13, 14.98, 14.88, 14.73, 14.58, 14.49, 14.43 and 14.34. Here, we continue to monitor the ascending structure of October 11. The continuation of the movement upward is expected after the breakdown of 14.73. In this case, the target is 14.88 and the breakdown of which will allow us to count on the movement towards 14.98, consolidation is near this level. The potential value for the top is considered the level of 15.13, upon reaching which we expect a rollback to the top.

We expect a departure in the correction after the breakdown of 14.58. In this case, the target is 14.49 and the range of 14.49 - 14.43 is the key support for the top. Its price will have to form the initial conditions for the downward cycle. In this case, the target is 14.34.

The main trend is the upward structure of October 11.

Trading recommendations:

Buy: 14.74 Take profit: 14.87

Buy: 14.89 Take profit: 14.97

Sell: 14.58 Take profit: 14.50

Sell: 14.42 Take profit: 14.36

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According to Gold, the main key levels on the H1 scale are: 1245.82, 1235.96, 1228.48, 1224.37, 1213.81, 1208.96 and 1201.07. Here, we are following the development of the ascending cycle of September 28. The movement upwards is expected after the price passes the range of 1224.37 - 1228.48. In this case, the target is 1235.96 and consolidation is near this level. The potential value for the top is considered the level of 1245.82, upon reaching which we expect a rollback downwards.

The short-term downward movement is possible in the range of 1213.81 - 1208.96 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 1201.07.

The main trend is the upward cycle of September 28.

Trading recommendations:

Buy: 1228.50 Take profit: 1235.00

Buy: 1237.00 Take profit: 1245.00

Sell: 1213.50 Take profit: 1209.50

Sell: 1208.00 Take profit: 1202.00

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According to #Cl, the main key levels on the H1 scale are: 72.92, 71.84, 71.16, 70.60, 69.52, 68.66, 68.22 and 67.13. Here, we are following the downward structure of October 3rd. The downward movement is expected after breakdown of 69.52. In this case, the goal is 68.66 and in the range of 68.66 - 68.22 is the price consolidation. The potential value for the bottom is considered the level of 67.13, upon reaching which we expect a rollback to the top.

The short-term uptrend is possible in the range of 70.60 - 71.16 and the breakdown of the latter value will lead to a prolonged correction. Here, the goal is 71.84 and this level is the key support for the downward structure. Its price passage will have to form the initial conditions for the top. In this case, the potential target is 72.92.

The main trend is the downward structure of October 3, the stage of correction.

The tool serves to determine the key trend. Its confirmation or cancellation by GOLD. Often has the opposite correlation with GOLD.

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Fractal analysis of major currency pairs on October 18

Dear colleagues.

For the currency pair Euro / Dollar, the price is close to the abolition of the rising structure of October 9, for which a breakdown of 1.1478 is necessary. For the currency pair Pound / Dollar, the price has issued the expressed initial conditions for the downward movement of October 12 in a correction of the upward trend. For the currency pair Dollar / Franc, the price forms an upward structure of October 15 and the development of which is expected after the breakdown of 0.9975. For the currency pair Dollar / Yen, the price is in correction and forms potential for the top, the level of 112.72 is the key support. For the currency pair Euro / Yen, the price is in the correction and to continue the movement downward, we expect the design of the local structure. For the Pound / Yen currency pair, we follow the formation of the ascending structure from October 15 and we expect the resumption of movement upwards after the breakdown of 148.04.

Forecast for October 18:

Analytical review of H1-scale currency pairs:

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For the Euro / Dollar currency pair, the key levels on the H1 scale are: 1.1699, 1.1658, 1.1628, 1.1612, 1.1580, 1.1554, 1.1478 and 1.1431. Here, we continue to follow the development of the ascending structure from October 9. At the moment, the price is close to the cancellation of this structure, for which a breakdown of the level of 1.1478 is necessary. In this case, the first potential target for the bottom is 1.1431.

The short-term upward movement is possible in the range of 1.1554 - 1.1580 and the breakdown of the latter will lead to the development of an upward trend. Here, the goal is 1.1612. Passing through the range of 1.1612 - 1.1628 will lead to the movement to the level of 1.1658, consolidation is near this level. The potential value for the top is considered the level of 1.1699, upon reaching which we expect a rollback downwards.

The main trend is the ascending structure of October 9, the stage of deep correction.

Trading recommendations:

Buy 1.1555 Take profit: 1.1578

Buy 1.1582 Take profit: 1.1610

Sell: 1.1475 Take profit: 1.1435

Sell: Take profit:

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For the Pound / Dollar currency pair, the key levels on the H1 scale are 1.3350, 1.3292, 1.3263, 1.3211, 1.3133, 1.3081 and 1.3023. Here, we continue to monitor the upward structure of October 4. At the moment, the price is in correction and has issued the potential for the downward movement of October 12. The upward movement is expected after the breakdown of 1.3211. In this case, the target is 1.3263 and in the range of 1.3263 - 1.3292 is the price consolidation. The potential value for the top is considered the level of 1.3350, upon reaching this level we expect a rollback downwards.

The consolidated movement is possible in the range of 1.3133 - 1.3081 and the breakdown of the latter value will lead to the development of a downward movement. Here, the target is 1.3023.

The main trend is the upward cycle of October 4, the formation of potential for the bottom of October 12.

Trading recommendations:

Buy: 1.3211 Take profit: 1.3260

Buy: 1.3294 Take profit: 1.3350

Sell: 1.3080 Take profit: 1.3030

Sell: Take profit:

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For the Dollar / Franc currency pair, the key levels on the H1 scale are: 1.0030, 1.0007, 0.9975, 0.9960, 0.9934, 0.9918 and 0.9893. Here, we are following the formation of the ascending structure of October 15. The passage of the price range will begin the development of an upward trend. In this case, the goal is 1.0007. The potential value for the top is considered the level of 1.0030, after reaching which we expect consolidation, as well as a rollback to the correction.

The short-term downward movement is possible in the range of 0.9934 - 0.9918 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 0.9893 and this level is the key support for the top.

The main trend is the formation of the ascending structure of October 15.

Trading recommendations:

Buy: 0.9960 Take profit: 0.9973

Buy: 0.9977 Take profit: 1.0005

Sell: 0.9934 Take profit: 0.9920

Sell: 0.9916 Take profit: 0.9895

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For the Dollar / Yen currency pair, the key levels on the scale of H1 are: 113.31, 112.72, 112.38, 111.77, 111.48, 111.02 and 110.38. Here, we are following the downward cycle of October 3. At the moment, the price is in the correction. The short-term downward movement is expected in the range of 111.77 - 111.48. The breakdown of the level of 111.48 will lead to the movement to 111.02, near this level is the consolidation of the price. The potential value for the bottom is considered the level of 110.38, after reaching which we expect a rollback to the top.

The consolidated movement is possible in the range of 112.38 - 112.72 and the breakdown of the latter value will lead to a prolonged correction. Here, the goal is 113.31 and this level is the key support for the downward structure.

The main trend is the downward cycle of October 3, the stage of correction.

Trading recommendations:

Buy: 112.38 Take profit: 112.70

Buy: 112.75 Take profit: 113.30

Sell: 111.75 Take profit: 111.50

Sell: 111.46 Take profit: 111.04

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For the Canadian dollar / Dollar currency pair, the key levels on the H1 scale are: 1.3131, 1.3099, 1.3076, 1.3041, 1.2999, 1.2982 and 1.2959. Here, we are following the formation of the ascending structure of October 16. The upward movement is expected after the breakdown of 1.3041. In this case, the target is 1.3076 and in the range of 1.3076 - 1.3099 is the consolidation. The potential value for the top is considered the level of 1.3131, upon reaching which we expect a rollback downwards.

The short-term downward movement is possible in the range of 1.2999 - 1.2982 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 1.2959 and this level is the key support for the upward structure from October 16.

The main trend is the formation of the ascending structure of October 16.

Trading recommendations:

Buy: 1.3041 Take profit: 1.3074

Buy: 1.3078 Take profit: 1.3097

Sell: 1.2999 Take profit: 1.2983

Sell: 1.2980 Take profit: 1.2960

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For the Australian dollar / Dollar currency pair, the key levels on the H1 scale are: 0.7211, 0.7188, 0.7156, 0.7130, 0.7107, 0.7092, 0.7073. Here, the price forms the ascending structure of October 10. The short-term upward movement, as well as consolidation, is expected in the range of 0.7130 - 0.7156. The breakdown of the level of 0.7158 should be accompanied by a pronounced upward movement. Here, the target is 0.7188. The potential value for the top is considered the level of 0.7211, after reaching which we expect consolidation.

The short-term downward movement is expected in the range of 0.7107 - 0.7092 and the breakdown of the last value will lead to a prolonged correction. Here, the goal is 0.7073 and this level is the key support for the top. Its price will have the development of the downward structure. In this case, the potential goal is 0.7040.

The main trend is the formation of the ascending structure from October 10.

Trading recommendations:

Buy: 0.7135 Take profit: 0.7152

Buy: 0.7158 Take profit: 0.7185

Sell: 0.7107 Take profit: 0.7194

Sell: 0.7190 Take profit: 0.7073

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For the Euro / Yen currency pair, the key levels on the H1 scale are: 130.94, 130.34, 129.97, 129.43, 129.07 and 128.35. Here, the price is in correction from the downward structure. The short-term downward movement is possible in the range of 129.43 - 129.07, hence the probability of an upward reversal. The breakdown of the level of 129.07 will allow us to count on the movement towards a potential target of 128.35, after reaching which we expect a rollback to the correction.

The short-term upward movement is possible in the range of 129.97 - 130.34 and the breakdown of the latter value will lead to a prolonged correction. Here, the goal is 130.94 and this level is the key support for the downward structure.

The main trend is the downward structure of September 25, the stage of correction.

Trading recommendations:

Buy: 129.98 Take profit: 130.32

Buy: 130.37 Take profit: 130.90

Sell: 129.41 Take profit: 129.10

Sell: 129.03 Take profit: 128.40

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For the Pound / Yen currency pair, the key levels on the H1 scale are: 150.34, 149.84, 149.10, 148.52, 147.69, 147.39, 146.92 and 146.47. Here, we are following the formation of the ascending structure of October 15. The upward movement is expected after the breakdown of 148.52. In this case, the target is 149.10 and the consolidation is near this level. The breakdown of the level 149.10 will lead to the development of a pronounced movement. Here, the target is 149.84. The potential value for the top is considered to be the level of 150.34, upon reaching which we expect consolidation and rollback downwards.

The consolidated movement is possible in the range of 147.69 - 147.39 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 146.92 and this level is the key support for the upward structure.

The main trend is the formation of initial conditions for the upward cycle of October 15.

Trading recommendations:

Buy: 148.55 Take profit: 149.00

Buy: 149.15 Take profit: 149.80

Sell: 147.35 Take profit: 147.00

Sell: 146.90 Take profit: 146.50

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Fundamental Analysis of EUR/AUD for October 18, 2018

EUR/AUD has been quite impulsive, making bearish price swings. This dynamic is currently leading the price towards support area between 1.5900 and 1.6050. The eurozone has already provided a lot of downbeat economic reports recently that allowed AUD to gain momentum over EUR. As a result, this might continue to push the price much lower in the coming days.

EUR has been battered by the outcome of the EU Summit and recently published economic reports. Today German WPI report was published with an increase to 0.4% as expected from the previous value of 0.5%. Besides, the second day of the EU Summit may also follow the dovish path of the first day, leading the price further downward.

On the other hand, despite certain mixed economic results AUD gained momentum most of the economic reports published recently have met expectations. Today Australia's Employment Change report was published with a decrease to 5.6k from the previous figure of 44.6k which was expected to be at 15.2k and Unemployment Rate had a positive outcome with a decrease to 5.0% which was expected to be unchanged at 5.3%. Moreover, NAB Quarterly Business Confidence report was published with a decrease to 3 from the previous figure of 7.

Meanwhile, AUD is expected to gain further momentum over EUR in the coming days until the eurozone comes up with solid macroeconomic reports to counter strongly AUD strength. Otherwise, the bearish momentum is expected to continue further.

Now let us look at the technical view. The price moved lower after rejecting off the 1.6350 area with a daily close after building up Bearish Divergence. The price is currently residing below the dynamic level of 20 EMA as well which also indicates further bearish pressures. As the price remains below 1.6350 area, the bearish bias is expected to continue with a target towards 1.5900-1.6050 area from where any bullish intervention may lead to continuation of the bullish trend. On the other hand, in the future, if the price manages to break below 1.5900 with a daily close, further bearish momentum may be observed in this pair.

SUPPORT: 1.5900, 1.6050

RESISTANCE: 1.6350, 1.6500

BIAS: BEARISH

MOMENTUM: IMPULSIVE and VOLATILE

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Fundamental Analysis of AUD/USD for October 18, 2018

AUD/USD has been quite bullish with the recent momentum, reversing from the long-term bearish trend since January 2018. AUD recently gained momentum in light of mixed economic reports while USD is struggling for gains amid recent disappointing data.

AUD gained momentum as most economic reports published recently came to expectations. Today Australia's Employment Change report was published with a decrease to 5.6k from the previous figure of 44.6k which was expected to be at 15.2k and Unemployment Rate had a positive outcome with decrease to 5.0% which was expected to be unchanged at 5.3%. Moreover, NAB Quarterly Business Confidence report was published with a decrease to 3 from the previous figure of 7.

On the other hand, after the worse-than-expected CPI and Retail Sales reports from the US, USD failed to sustain the momentum it had had over AUD earlier. Though certain economic reports performed quite well on the USD side, the greenback failed to grab attention of market participants to continue with the trend against AUD. Today US Philly Fed Manufacturing Index report is going to be published which is expected to decrease to 19.7 from the previous figure of 22.9, Unemployment Claims are expected to decrease to 211k from the previous figure of 214k, CB Leading Index is expected to increase to 0.5% from the previous value of 0.4%, and Natural Gas Storage is expected to decrease to 85B from the previous figure of 90B. Though USD is struggling to gain momentum, FED has recently confirmed its intention for gradual monetary tigthening. So, the US central bank is ready for another rate hike this year, fting the official funds rate to 2.50% from the current value of 2.25%.

Thus, the US FED is currently poised to continue rate hikes. Such a fast pace of rate hikes is likely to strengthen USD but, on the minus side, may cause a slowdown in the US economy in the long term. At the same time, AUD is set to extend gains that is expected to push the pair higher against USD in the coming days.

Now let us look at the technical view. The price is currently quite impulsive with the bullish gains which makes the price hold at the edge of 0.7150-0.7200 area. Though the price is being held by the dynamic level of 20 EMA as well, there are certain chances of a bullish counter-move in the coming days. As the price breaks above 0.7200 area with a daily close, further bullish momentum is expected in this pair. On the other hand, being below the area indicates the continuation of the bearish bias with a target towards 0.7050 support area.

SUPPORT: 0.7050

RESISTANCE: 0.7150, 0.7200

BIAS: BEARISH

MOMENTUM: VOLATILE

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

Bitcoin analysis for October 18, 2018

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Trading recommendations:

According to the H4 time - frame, I found that Bitcoin is balancing at the price of $6.405. Anyway, I found that a potential ascending triangle (bullish pattern) is being in progress, which is a sign that buying is a preferable strategy. My advice is to watch for a potential breakout of resistance at $6.460 to confirm a further upward movement. If you see a breakout of resistance, take profit level will be set at the price of $6.710.

Support/Resistance

$6.460 – Intraday resistance

$6.317– Intraday support

$6.710 – Objective target

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Analysis of Gold for October 18, 2018

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Recently, Gold has been trading sideways at the price of $1,222.90. According to the H1 time – frame, I have found that Gold is in consolidation phase and that consolidation phase may end near the level of $1,218.00. I found potential end of the running flat downward correction, which is a sign that selling looks risky. I also found that there is a rejection from the support trendline, which is another sign of strength. My advice is to watch for buying opportunities. The upward take profit levels are set at the price of $1,232.65 and at the price of $1,241.85.

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Fundamental Analysis of AUD/JPY for October 18, 2018

AUD/JPY has been quite volatile and indecisive after breaking below 80.50 with a daily close. JPY failed to sustain its bearish momentum in the pair as of recent positive AUD results published with positive results.

Mixed economic data from Australia, released ealier this week, caused indecision about AUD among investors and added more volatility to the market. However, AUD is still able to extend its advance against JPY. Today Australia's Employment Change report was published with a decrease to 5.6k from the previous figure of 44.6k which was expected to be at 15.2k and Unemployment Rate dropped to 5.0%, defying expectations for the flat reading at 5.3%. Moreover, NAB Quarterly Business Confidence report was published with a decrease to 3 from the previous figure of 7.

On the other hand, JPY has been quite positive today which helped the currency to gain certain momentum for a while. Today, Japan's Trade Balance report was published with an increase to -0.24T from the previous figure of -0.19T which was expected to be at -0.34T. Though the figure decreased from the previous figure but it was not as gloomy as expected which encouraged gains for JPY today.

Meanhwile, AUD has been trading without a certain trend, whereas positive outcome of Japan's Trade Balance is expected to strengthen JPY pressure in the long run. To sum up, despite certain AUD bullish pressure being observed in this pair, the price is expected to fall deeper amid impulsive bearish pressure with the long-term bearish trend in the future.

Now let us look at the technical view. The price is currently residing just below 80.50 and dynamic resistance of 20 EMA amid the bullish pressure. Recently the price has formed Bearish Convergence as well which is expected to push the price lower towards 78.50 area in the coming days. As the price remains below 82.00 with a daily close, the bearish bias is expected to continue.

SUPPORT: 78.50

RESISTANCE: 80.50, 82.00

BIAS: BEARISH

MOMENTUM: VOLATILE

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