EUR / USD pair: plan for the European session on October 19. EU summit failed

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

All hopes for a deal between the EU and the UK during the EU summit did not bring results, which pulled the European currency down. At present, it is best to return to long positions after the formation of a false breakdown in the support area of 1.1456 or to rebound from the low of this month in the area of 1.1434. The main task of buyers is to return and consolidate above the resistance of 1.1482, where the 30-day moving average limits the upward potential.

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

Euro sellers are can return after unsuccessful fixing above the resistance of 1.1482. Otherwise, you can open short positions after the test and breakdown of support 1.1456, which will lead to another major wave of sales of the European currency with a minimum of 1.1434 and update it to 1.1397, where profits are recommended. If the EUR / USD pair rises above 1.1482 in the first half of the day, it is possible to open short positions immediately to the rebound from the resistance of 1.1516.

Indicator signals:

Moving averages

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

Bollinger bands

The lower limit of the Bollinger Bands indicator in the area of 1.1434 will limit the downward potential. The upper limit is at the level of 1.1500, 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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EUR / USD: China, Italy and the revived dollar

Various factors put pressure on the euro including the problem of the Italian budget, the slowdown of the Chinese economy and the failure of the Brexit talks. Euro weakness allows dollar bulls to the test weekly EUR/USD lows without any extra effort.

The bears of the EUR/USD pair were able to overcome the mark of 1.1460 and they are currently trying to gain a foothold below this target. The importance of this level is explained by the fact that the breakout opens the way to a decline in the area of the formation of the 14th figure and to annual minimums in the future.

Today, the macroeconomic calendar for the pair is almost empty. The interest is perhaps the statement of the Fed representative Raphael Bostic and the release of data on sales of secondary housing in the United States. However, these fundamental factors are unlikely to drastically change the mood of traders as the market is now focused on larger issues.

As mentioned, one of the problems discussed is the slowdown of the Chinese economy. In annual terms, China's GDP fell to 6.5% from the previous value of 6.7% (while experts expected a decline to 6.6%). The volume of industrial production also decreased up to 5.8% from the previous 6.1%. The published figures show the negative impact of the trade war on the Chinese economy and results affecting the growth rate of the world economy. Officials from Beijing has already commented on the published figures, recognizing the negative impact of the "external environment". Despite the Chinese are optimistic about future prospects, traders of the EUR/USD pair did not share their opinion, for the most part, while getting rid of the euro.

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The slowdown in the global economy is one of the reasons why the ECB may not be in a hurry with tightening monetary policy. Mario Draghi has repeatedly spoken about this, albeit in a very veiled form. The Chinese data is unlikely to change the intentions of the ECB members to complete a stimulating program this year. But, on the other hand, it can soften their rhetoric on the next steps.

The euro is still under pressure from the Italian budget. The European Commission rejected the draft financial document and Rome will again be forced to discuss the size of the estimated budget deficit. In addition, the market is discussing the likelihood of enforcing a deficit reduction. Let me remind you that in the European Union there is the "Pact of Stability and Growth", which sets the upper limit of the budget deficit of each country, equivalent to 3% of GDP. The Italians did not formally exceed this target, however, they violated earlier intentions to reduce this figure to 0.8%, given a large amount of external debt.

Therefore in the coming months, the European Commission may begin the procedure of forced reduction of the deficit. For Italy, they will develop an individual financial plan, which may include not only reforms but also the "extra-budgetary" economic regime. Such measures can lead to lower budget spending, reduced economic activity and increased unemployment. For example, this procedure has been valid for France and Greece (currently withdrawn), meanwhile for Spain, the procedure has been in effect for nine years now since 2009. If Italy "makes a company" to the Spaniards, then the pressure on the euro will increase due to the growth of anti-European sentiment among the country's residents and politicians (who do not have a particular love for Brussels).

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The EU summit last week only confirmed the irreconcilability of the parties to the Brussels-Rome conflict. Other countries of the Alliance, in particular, Austria supported the leadership of the European Union in the matter of the Italian budget. For example, the Austrian prime minister said that his country "is not going to pay for other people's debts." Representatives of other countries took a similar position. By the way, the outcome of the October summit did not bring any significant breakthrough on any of the issues under discussion. Brexit remained in limbo as the parties were only able to agree on a possible extension of the transition period. although this issue could be perceived "in hostility" by the British parliamentarians. If these fears are confirmed, the likelihood of a "hard" Brexit will increase again, putting pressure on both the pound and the euro.

Against the background of such prospects, the rhetoric of Mario Draghi yesterday faded into the background. Although, the head of the ECB rather positively assessed the state of the European economy. Also, traders actually ignored the words of the head of the Central Bank of Finland, who predicted an increase in interest rates in the fourth quarter of next year. Verbal factors have too little influence on the market, especially on the background of such an eventful week.

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Given this amount of pessimistic and negative circumstances, the European currency will not be able to offer any distinct resistance to the dollar. The US currency looks stronger and more confident, having received support from the hawkish Fed protocol. Although members of the regulator discussed the outlook for monetary policy, the probability of a December rate hike increased again to 80 percent based on the August statistics. In dominating the EUR/USD pair, the dollar doesn't need a stronger reason - at least for now. The euro's weakness allows dollar bulls to test weekly lows without any additional effort.

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GBP / USD pair - Trading system "Regression Channels" for October 19. Pound nothing left but to fall

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - up.

Lower linear regression channel: direction - up.

Moving average (20; smoothed) - down.

CCI: -155.0769

The GBP / USD currency pair continues to fall without any signs of the beginning of a correction. Everybody knows about the failure of the Brexit negotiations at the EU summit. In principle, Theresa May said in an interview after the summit that all the key issues remained unresolved. According to her, there are few unsolved issues, but the disagreements of the parties to these are very serious. It is clear that the topic is about the North Irish border and the trade relations between Britain and the EU after Brexit. Thus, we can say that we did not hear anything new even after the end of the summit. For the British pound sterling, the whole story can end very badly in the medium term. In recent months, the pound has grown quite a few times on rumors that the agreement is "almost signed", which every time was not confirmed by anything. Now, when the last two rounds of negotiations ended in failure, traders will be very careful about any kind of rumors concerning Brexit. Thus, we now believe that in order for the pound sterling to show growth, the fundamental factors should have a heavy impact and confirmed. Given the weakened inflation and weak retail sales, it is difficult to imagine what could be the information that will cause a new demand for the British currency.

Nearest support levels:

S1 - 1.3000

S2 - 1.2939

S3 - 1.2878

Nearest resistance levels:

R1 - 1.3062

R2 - 1.3123

R3 - 1.3184

Trading recommendations:

The GBP/USD pair continues to move down. Thus, it is now recommended to remain in short positions with targets at 1.3000 and 1.2939 until the Heiken Ashi indicator turns up, which will mark the beginning of an upward correction.

Buy positions can be opened with the target of 1.3184 after fixing the price above the moving average. However, the fundamental reasons for such a strong growth of the British currency are not expected.

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

Explanations for illustrations:

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

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

CCI is a 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.

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

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GBP / USD pair: plan for the American session on October 19. Sellers do not rush to return to the market

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

The situation with Brexit puts traders in a dead end. Long positions can only return today if the support level of 1.3002 is reached with the formation of a divergence on the MACD indicator, which will lead to a sharp increase and closure of short positions in the pound. Otherwise, it is best to open long positions after the breakdown and consolidation above the resistance level of 1.3045, from which the demand for the pound may continue until the update of the maximum level at 1.3082, where fixing profits are recommended.

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

Sellers have formed an unfortunate consolidation above the resistance of 1.3045, and as long as the trade is conducted below this range, we can count on the continuation of the downward trend. Breakdown of the support at 1.3002 will lead to the renewal of the lows of 1.2962 and 1.2926, where fixing profits are recommended. In case of growth above the resistance level of 1.3045 in the second half of the day, short positions can be opened immediately to the rebound from the high of 1.3082, where the 50-day moving average is located.

Indicator signals:

Moving Averages

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

Bollinger bands

The breakdown of the lower limit of the Bollinger Bands indicator around 1.3008 will lead to the sale of the pound. The upper limit in the 1.3045 area 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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Bitcoin analysis for October 19, 2018

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Trading recommendations:

According to the H4 time - frame, I found that price is trying to break the key support at the level of $6.319 and on that way confirms the downward movement. I also found the buying climax in the background, which is a sign that buying looks very risky at this stage. Watch for a potetnial breakout of $6.319 (key support) to confirm further downward continuation. Downward take profit levels are set at the price of $6.233 at the price of $6.036.

Support/Resistance

$6.453 – Intraday resistance

$6.319– Intraday support

$6.233 – Objective target 1

$6.036 – 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 19, 2018

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Recently, the GBP/JPY pair has been trading downwards. The price tested the level of 145.79. According to the H1 time – frame, I found that GBP/JPY in the bullish correction phase (bearish flag in creation), which is a sign that you should wait for confirmation before you sell. Watch for a potential breakout of the bearish flag pattern to confirm further downward continuation. Take profit level is set at the price of 145.83.

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Intraday technical levels and trading recommendations for GBP/USD for October 19, 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, a 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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Intraday technical levels and trading recommendations for EUR/USD for October 19, 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. 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.

However, last week, temporary bullish recovery around 1.1430 pushed the EUR/USD pair again above 1.1520 until yesterday when bearish breakdown of 1.1520 occurred again.

As for the bearish side of the market to remain dominant, the EUR/USD pair should achieve bearish breakdown below the price level of 1.1400.

The nearest demand level would be located around 1.1275.

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EUR/USD analysis for October 19, 2018

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Recently, the EUR/USD pair has been trading sideways at the price of 1.1467. According to the M30 time – frame, I have found that fake breakout of yesterday's low at the price of 1.1448, which is sign that sellers got trapped. I also found the bullish breakout of 3H balance, 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 1.1500 and (R1) and at the price of 1.1525 (yesterday's high).

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Technical analysis of USD/CHF for October 18, 2018

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Overview:

The Swissy is still calling for strong bullish outlook today. The USD/CHF pair continues to trade upwards from the level of 0.9875. The pair rose from the level of 0.9875 to a top around 0.9865. Today, the first resistance level is seen at 0.9865 followed by 0.9922, while daily support 1 is seen at 0.9743 (61.8% Fibonacci retracement). According to the previous events, the USD/CHF pair is still moving between the levels of 0.9875 and 0.9999; so we expect a range of 124 pips. Furthermore, if the trend is able to break out through the first resistance level at 0.9865, we should see the pair climbing towards the second resistance (0.9922) to test it. Therefore, buy above the level of 0.9865 with the first target at 0.9922 in order to test the daily resistance 2 and further to 0.9963. Besides, it might be noted that the level of 0.9963 is a good place to take profit because it will form a new double top. On the other hand, in case a reversal takes place and the USD/CHF pair breaks through the support level of 0.9875, a further decline to 0.9740 can occur which would indicate a bearish market.

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BITCOIN Analysis for October 19, 2018

Bitcoin has been recently broken below $6,500 after certain correction for a few days above it, poised to move higher in the coming days. Though the price broke below $6,500 area with a daily close, the break was not quite impulsive to sustain the bearish momentum. Moreover, the price has formed Bullish Divergence which is expected to lead the price higher above $6,500 area but in a volatile and corrective manner. The price may get resisted by dynamic levels like 20 EMA, Tenkan, Kijun and Kumo cloud. However, as the price is expected to climb higher, it remains above $6,000 area with a daily close.

SUPPORT: 6,000

RESISTANCE: 6,500, 7,500, 8,000

BIAS: BULLISH

MOMENTUM: VOLATILE

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Technical analysis of USD/CAD for October 18, 2018

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Overview:

The USD/CAD pair has broken resistance at the level of 1.3000, which acts as support now. So, the pair has already formed minor support at 1.3000. The strong support is seen at the level of 1.2945 because it represents the weekly support. 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 1.3000. Buy above the minor support of 1.3000 with a target at 1.3089 (this price is coinciding with the ratio of 100% Fibonacci). On the other hand, if the pair closes below the minor support (1.3000), the price will fall into the bearish market in order to go further towards the strong support at 1.2945.

Comment:

Also, the double bottom is seen at the level of 1.2865.

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 GBP/JPY for October 19, 2018

GBP/JPY has recently broken below the corrective range support area of 147.00 from where the price is expected to push lower in the coming days. As of the recent worse economic reports of GBP, in the meantime, JPY gained good momentum in the process which is expected to lead to further bearish pressure in the pair for the coming days.

This week GBP CPI report was published with a decrease to 2.4% from the previous value of 2.7% which was expected to be at 2.6%, and Retail Sales also decreased significantly to -0.8% from the previous value of 0.4% which was expected to be at -0.4%. As of the BREXIT impact and certain indecision throughout the economy, GBP is currently struggling to gain in the process. Today Bank of England's Governor Carney is going to speak about short-term interest rates and upcoming decisions for the economy which is expected to have a neutral impact on the upcoming gains of the currency in the market.

On the other hand, JPY has been quite positive with the economic report this week including the Trade Balance report not meeting the worse expected figure of -0.34T from the previous figure of -0.19T but actually resulting to -0.24T, and Bank of Japan's Governor's speech having hawkish indication for the upcoming developments in the economy and how well their plan worked to stabilize the trade and commerce in the economy. Today the JPY National Core CPI report was published with an increase to 1.0% as expected from the previous value of 0.9%, and Bank of Japan's Governor spoke about the protectionism and upcoming increase in volatility despite the expansion of the financial market. The speech was quite hawkish but with a certain warning about the upcoming volatility which might lead to uncertainty in the process.

As of the current scenario, JPY is fundamentally stronger than GBP which might lead to certain gains on the JPY side for the coming days, but certain caution should be also maintained as the price may be volatile and corrective along the way to move downward in the process. Until GBP comes up with a better economic outcome, JPY gains are expected to expand further in the future.

Now let us look at the technical view. The price breached below the 147.00 area with a strong bearish daily close recently which is expected to lead to further bearish pressure in the pair. Though certain bullish pressure can be observed currently in the pair as the price remains below the 148.00 area, the bearish bias is expected to continue and push the price lower towards 145.50 and later towards 142.50 support area in the coming days.

SUPPORT: 142.50, 145.50

RESISTANCE: 147.00, 148.00

BIAS: BEARISH

MOMENTUM: VOLATILE

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Fundamental Analysis of USD/CHF for October 19, 2018

USD/CHF has been quite impulsive with the bullish momentum recently which lead the price to reside at the edge of the 0.9980 area currently. Despite the recent struggles faced by USD due to worse economic results, CHF has been dominated quite well along the way.

USD has been struggling with the economic results this week as well with reports like Retail Sales and Building Permits. Today US Existing Home Sales report is going to be published which is expected to decrease to 5.29M from the previous figure of 5.34M, and FOMC Member Bostic is going to speak about the upcoming interest rates decisions and future monetary policies which are expected to be hawkish in nature as of recent FOMC Meeting there are possibilities of another rate hike before the year ends.

On the CHF side, this week PPI report was published with a decrease to -0.2% from the previous value of 0.0% which was expected to increase to 0.1%, and Trade Balance report showed an increase to 2.43B from the previous figure of 2.08B which failed to meet the expected figure of 2.45B. The dovish outcome of the report did weaken the CHF further in the process leading to more USD gains in the process.

As of the current scenario, ahead of the high impact economic event of FOMC Member's speech on the interest rate decision, if the outcome remains hawkish and positive then further bullish pressure against CHF could be observed in the coming days or else, any negative comment from the speech may lead to correction and perhaps counter as well.

Now let us look at the technical view. The price is currently quite bullish after bouncing off the 0.9850 support area with a retrace. The price is heading towards the resistance area of 0.9980-1.0050 from where previously impulsive bearish momentum was observed. Moreover, forming Bearish Divergence along the way also suggests the price has a greater probability to reject the bulls of the resistance area with a target to move lower in the coming days. As the price remains below the 1.0050 area, the bearish bias is expected to continue.

SUPPORT: 0.9700, 0.9850

RESISTANCE: 0.9980, 1.0050

BIAS: BULLISH

MOMENTUM: VOLATILE

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EUR / USD pair - m30. Operational traffic analysis on October 18-19, 2018. APLs & ZUP

SubMinuette (m30)

Euro vs US Dollar

Previous review from 10/15/2018 19:57 UTC + 03.

____________________

The development of the Euro major currency movement in the next two days, October 18-19, 2018, will be conditioned by working out of the levels of the equilibrium zone ( 1.1498 <-> 1.1513 <-> 1.1527 ) of the Micro forks.

The marking of the development of movement within the channel 1/2 ML of the forks of the SubMinuette operational scale is presented on an animated graph.

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The outlook of the downward movement development (sell)

The breakdown of the support level of 1.1498 (lower limit ISL 61.8 of the operational scale fork of the Micro scale ) will determine further development of the EUR / USD movement in the balance zone (1.1498 <-> 1.1473 <-> 1.1449) of the SubMinuette operational scale fork with the prospect of reaching the final FSL Micro line ( 1.1443 ) and updating the local minimum 1.1432. Details are shown on the animated graph.

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Development perspective of the upward movement (buy)

The breakdown of the resistance level of 1.1527 (upper limit of the ISL38.2 balance zone of the operational scale of the forks Micro ) -> option of the EUR/USD pair for an upward movement development to the targets -> end Shiff Line Micro ( 1.1555 ) <-> initial line SSL SubMinuette ( 1.1570 ) <-> the lower boundary of the channel 1/2 Median Line SubMinuette ( 1.1580 ). Details are shown on the animated graphics.

____________________

The review was compiled without regard to the news background, the opening of trading sessions of the main financial centers and is not a guide to action (placing orders "sell" or "buy").

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Materials for the study of analysis ZUP & APL`s.

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Technical analysis: Intraday levels for EUR/USD, Oct 19, 2018

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When the European market opens, some economic data will be released such as Current Account. The US is due to release an economic report too like Existing Home Sales. So, amid the reports, EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1512

Strong Resistance: 1.1505

Original Resistance: 1.1494

Inner Sell Area: 1.1483

Target Inner Area: 1.1455

Inner Buy Area: 1.1427

Original Support: 1.1416

Strong Support: 1.1405

Breakout SELL Level: 1.1398

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

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Technical analysis: Intraday levels for USD/JPY, Oct 19, 2018

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In Asia, Japan will release the National Core CPI y/y. The US will release an economic report: Existing Home Sales. So, there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance 3: 112.94

Resistance 2: 112.72

Resistance 1: 112.50

Support 1: 112.22

Support 2: 112.00

Support 3: 111.78

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

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Technical analysis of Gold for October 19, 2018

Gold price pulled back below $1,220 but prices moved back up again towards $1,230. Gold price is in a short-term consolidation phase. We cannot rule out a move lower towards $1,210 as long as price is below $1,233.

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Red lines - long-term bearish channel

Green rectangle - support area

Red rectangle - resistance area

Green lines - expected price path

Gold price is consolidating above the break out area of $1,207-12. Price has given us a bullish signal and the first target of $1,220 has been achieved. Now we expect prices to move sideways or lower towards $1,210 for a back test of the break out area. Resistance is at $1,232-33. Breaking above this level will decrease dramatically any chances for a pull back towards $1,210. Next target is at $1,250-60.

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Technical analysis of EUR/USD for October 19, 2018

EUR/USD has broken through the 1.15 support and is now challenging an upward sloping trend line support. Short-term trend is bearish and if we break below 1.1445 we could then see more downside towards 1.14-1.1395.

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Red rectangle - short-term resistance

Blue line - trend line support

EUR/USD is challenging the trend line support at 1.1450. There are increased chances of a bounce from current levels. If this trend line is broken we expect prices to move lower towards 1.14-1.1390. For bulls to have a chance to challenge 1.18 again, we need a break above 1.1620. Short-term resistance is also found at 1.1520 and at 1.1560.

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Trading plan for 19/10/2018

Data from China were a slight disappointment, as GDP growth in the third quarter slowed to 6.5% y / y from 6.7% against the 6.6% forecast. In the commentary to the data, it was written that pressure on growth inhibition is growing in China. September retail sales increased by 9.2% y / y and industrial production increased by 5.8%. Despite this, problems with risk appetite are not over yet. Japanese Nikkei2225 loses further 0.7%. On the currency market the USD / JPY bounced from 112 to 112.50, AUD / USD is 20 pips higher at 0.7110, similarly NZD / USD increases to 0.6565. EUR / USD remains on weekly lowes at 1.1460 with Italy quoted as the main reason for the weakness of the euro. Recent comments from Brussels have reminded the Union's dissatisfaction with the Italian budget project.

On Friday, the 19th of October, the event calendar will be busy only during the US session when Canada will publish Consumer Price Index and Retail Sales data. Moreover, the US will reveal the Existing Home Sales data as well. The are various speeches scheduled for today as well from BOJ Governor Haruhiko Kuroda, BOE Governor Mark Carney and FOMC Members Raphael W. Bostic and Robert Kaplan.

USD/CAD analysis for 19/10/2018:

Market participants expected the Canadian CPI to increase from -0.1% to 0.1% this month and the Retail Sales figures to increase as well from 0.3% to 0.4%. The CPI is the key gauge for inflation in Canada. Simply put, inflation reflects a decline in the purchasing power of the Canadian Dollar, meaning each Dollar buys fewer goods and services. CPI is the most obvious way to measure changes in purchasing power - the report tracks changes in the price of a basket of goods and services that a typical Canadian household might purchase. An increase in the index indicates that it takes more Dollars to purchase this same set of basic consumer items. As the most important indicator of inflation in Canada, Consumer Price figures are closely followed by Canada 's central bank. The Bank of Canada has a target inflation band of 1 - 3 % and uses CPI and Core CPI as its principle gauge (the Bank of Canada posts inflation targets and CPI on their homepage). A rising CPI may prompt the central bank to raise interest rates in order to manage inflation and slow economic growth. Higher interest rates make holding the Dollar more attractive to foreign investors, and this higher level of demand will place upward pressure on the value of the Dollar.

Let's now take a look at the USD/CAD technical picture at the H4 time frame before the CPI data are published. The market has recently hit the technical resistnace zone located between the levels of 1.3078 - 1. 3113 and reversed slightly towards the nearest technical support at the level of 1.3018. If the data will be better than expected, then the market might drop lower and test that support or even break below it. On the other hand, if the data will be worse than expected, the bulls will likely try to move higher and try to break through the technical resistance zone. Please notice, the strong and positive momentum supports the bullish bias despite the overbought market conditions.

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Global macro overview for 19/10/2018

Before the GDP and Industrial Production data was published, the Chinese banking and insurance regulator said the systemic risk is under control. The head of the institution asked financial companies for appropriate risk management in the stock markets and encouraged the insurance sector to invest in listed companies. The regulator will also allow insurers to create products that help solve liquidity issues related to the exposure to the stock exchange. It seems that this is an attempt to scare the falling stock market by injecting funds from the insurance sector.

The People's Bank of China has once again weakened the value of the yuan. The central reference rate was set at 6.9387 (compared to yesterday's 6.9275). This is the highest USDCNY level since the beginning of January 2017. The CEO of PBOC said that the movements on the stock market are mainly related to the sentiment prevailing among investors and their expectations. The fundamental factors of the Chinese economy remain strong, and the valuation of shares is underestimated, it does not correspond to the situation of the country. The central bank is considering introducing tools to help solve problems with financing companies. He intends to use monetary policy to increase lending to private companies. The Shanghai Composite index has already lost over 30% since the top of January 29.

The Chinese GDP growth in the third quarter of the year was 6.5% y / y with market expectations at 6.6% (previously 6.7%). This is the weakest result since the first quarter of 2009. This does not mean panic in the Chinese market, this value is in line with the goal set by China for this year. The consumer contribution has slightly disappointed, but the weakening of the value of net exports is also visible. The full effect of tariffs introduced by the United States should only be visible from next year. The growth of industrial production may be more worrying. In annual terms, it amounted to 5.8% with forecasts at 6.0% (previously 6.1%). Retail sales looked better. The median of analysts' expectations was 9.0%, and the final result was 9.2% y / y.

Let's now take a look at the USD/CNY technical picture at the daily time frame after the data were published. The market is moving inside of the upward channel and currently is very close to the last swing high made December 2016. The top is located at the level of 6.96 and any violation of this level will open the road to the round number 7.00. The momentum is strong and positive, but the market conditions look now extremely overbought, so some king od shallow pullback might occur before the final attack at the top.

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Elliott wave analysis of EUR/NZD for October 19, 2018

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The break below support at 1.7477 has forced us to review our count from the peak of red wave i/. The break below 1.7477 indicates, that red wave ii/ still is in motion, but could just have completed or be very close to completion. The first good indication of a corrective low being in place, will be a break above resistance at 1.7557 and more importantly a break above resistance at 1.7657.

As long as resistance at 1.7557 stays untouched, we must accept the possibility of red wave ii/ moving a little lower towards 1.7357, but we think the potential downside is limited to here.

R3: 1.7598

R2: 1.7557

R1: 1.7493

Pivot: 1.7476

S1: 1.7455

S2: 1.7400

S3: 1.7357

Trading recommendation:

Our stop at 1.7465 has been hit. We will only buy a break above 1.7557.

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Bitcoin analysis for 19/10/2018

Christie's auction house announced the introduction of a system of registration of artistic transactions on Blockchain. The decision is only the latest example of how technology is used in the world of art. The company plans to sell many large works of art from one of the richest private American collections from the last century. According to preliminary estimates, over USD 300 million will be spent on the auction. Richard Entrup from Christie's said the Blockchain registration system was created as a result of Artora's partnership, which is a well-known digital register for the art market.

The buyers will have access to a secure record of their purchase information, including a description, final price, and transaction verification. Christie's decision to include Blockchain in the art world seems to mean that the latest technology begins to spread in a complex, high-end industry. The idea for a legal and secure digital record of the origin of the work contains numerical data in the art world in which you can find the concept that Blockchain can be used to drastically reduce the theft or false activity.

The Geneva Institute of Fine Arts said in 2014 that more than half of all the works of art that they viewed were either falsified or not associated with the right artist. Blockchain Art Collective (BAC) works on registering works of art on scattered books by attaching manipulated seals to manipulation. Startups such as BAC hope that these certificates of authenticity will inspire confidence in the art market, especially for more expensive products.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market is still moving in a horizontal trend as the volatility has decreased. The price is still bouncing from the support at the level of $6,322, but the supply is still making pressure on the market. In a case of a breakout lower, the next technical support is seen at the level of $6,289, just above the weekly pivot at the level of $6,245. The larger time frame trend remains bearish.

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Elliott wave analysis of EUR/JPY for October 19, 2018

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EUR/JPY has continued lower and is now hovering just above important support at 127.86. This support can not be broken, if our bullish count is to remain valid.

As important support at 127.86 remains untouched we stays cautiously bullish, but we need a break above resistance at 129.73 and more importantly above resistance at at 130.29 to confirm that a new impulsive rally is developing.

If important support at 127.86 is broken, we will have to review our bullish count from 124.59 as a break below this support, will indicate that wave E still is developing and has the potential to decline all the way towards 120.29.

R3: 130.29

R2: 129.73

R1: 129.45

Pivot: 129.12

S1: 128.91

S2: 128.54

S3: 128.32

Trading recommendation:

Our stop at 129.00 has been hit. We will only buy a break above 130.29

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Ripple analysis for 19/10/2018

Moneynetint, based in London, focusing on payment services for corporate clients, revealed on Tuesday ongoing cooperation with the giant industry leader Ripple based in San Francisco. Moneynetint has integrated and implemented decentralized payments using RippleNet.

The payment platform, which provides cross-border money transfers and currency exchange services, said it completed the integration phase with Ripple, and has now fully implemented the Blockchain solution with payments received from other RippleNet members elsewhere.

RippleNet is a Ripple Blockchain network with over 100 members, including banks, payment providers and money transfer operators around the world. Account Manager Ripple Nadeem Ladki praised the addition of a company based in the United Kingdom to RippleNet due to the possibility of facilitating payments in Israeli claims. The statement says: "This is another big step in expanding the overall network. By leveraging Ripple's Blockchain technology, Moneynetint will now be able to simplify and reduce its clients' currency conversion rates, increase billing speeds and offer services in new markets that would otherwise be too difficult or too expensive to achieve in the past".

The blockchain is undoubtedly the flagship product of Ripple, enabling instant money transfers with liquidity on demand and end-to-end tracking as well as transparency on Blockchain. Being a member of the Blockchain corporate network, a financial institution could - theoretically - settle transactions and send money to any of 100 (or more) members in the international arena.

Let's now take a look at the Ripple technical picture at the H4 time frame. The market is moving in the channel established between the two black trend lines. The nearest support is seen at the level of 0.4307 and the nearest resistance is seen at the level of 0.4689. The nature of this move looks corrective, not impulsive, so it might only be another bullish attempt to resume trend that might soon fail. Please notice the overbought market conditions and rather a neutral momentum.

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The dollar again takes the initiative

The content of the FOMC minutes of the meeting for September 26, published on Wednesday evening, did not become a revelation for investors. Yet, the general tone was still slightly more aggressive than predicted. The markets reacted with a decrease in stock indices since they did not see signs of a likely decrease in the rate of growth in the text. The dollar strengthened across the whole range of currencies.

As the main risks, the Fed notes the likelihood of economic growth above the trend values, which automatically leads to the risk of overheating the economy. This rather bold statement is not so much a statement of this dubious fact, given the condition that the GDP growth rates are more than twice lagging behind the government debt growth rates making it impossible to talk about economic efficiency. Instead, there is an attempt to keep consumer optimism and business investment attractiveness high.

Another risk noted by the Fed is a high likelihood of rising inflation above the 2% target, which is another reason for the increase in interest rates above forecast values.

The text of the protocol clearly indicates the Fed's intention to maintain investor confidence that the rate will continue to rise in accordance with the plan. For the dollar, the situation is developing in a favorable wherein the bullish sentiments are increasing and weak macroeconomic statistics can change them. Since no important reports are expected by the end of the week, the dollar will realize an opportunity to strengthen.

Eurozone

The external background for the euro is negative, the decline during the day is more likely. EURUSD growth is limited by resistance 1.1530, support 1.1430.

Great Britain

The EU summit opened in Brussels has not yet brought any positive news, the parties are still far from a decision that suits everyone.

The EU summit opened in Brussels has not yet brought any positive news and the parties are still far from a decision that suits everyone.

The report on retail sales for September lead to a solid negative, there was a decrease of 0.8% on physical sales and the amount spent on purchases by -0.6%), which is weaker than expected data and worsen inflation expectations.

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The GBP/USD pair managed to hold above support 1.3077. Today, it is possible to decline to 1.3042 / 48 and the resistance will be at 1.3177. Yet, it is unlikely for this level to be reached until Friday.

Oil

Oil continues to be adjusted after the 4-year high reached on October 3. The reasons for the correction are political rather than economical since the chances of adopting the NOPEC bill in the US have increased, which is directly aimed at curbing the influence of OPEC. The adoption of this bill will allow the United States to extend its domestic legal right to international institutions in order to "punish" OPEC for price manipulation. It is obvious that the US wants to keep the right to manipulate prices exclusively for itself.

Fearing the adoption of the bill, OPEC refuses any public discussion of oil prices, which serves as a cooling factor for the bulls in the raw materials market.

There are other reasons for the correction. According to the EIA, the commercial oil reserves in the US rose to 6.5 million barrels last week but the refinery's workload did not decrease, which may indicate an overabundance of production. In September, Russia updated the post-Soviet maximum in terms of production, and Iran announced that it had found new buyers for its oil and was not worried about the possibility of reducing production.

Considering all perspectives, oil is in search of the lower limit of the price range, in connection with which we can expect Brent to decline to 76.30 around one or in the next two weeks.

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Simplified Wave Analysis. AUD / USD review for the week of October 18

Wave pattern of the H4 chart:

The last wave of this scale is directed downward, completing the bearish wave of D1.

Wave pattern of the H1 chart:

On September 21, a new downward zigzag started in the direction of the dominant trend. In recent weeks, the correctional part (B) has been formed.

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Wave pattern of the M15 chart:

The rising wave from October 5 is approaching the calculated resistance zone. In case of a breakout to the upper boundary, the wave will be elongated.

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Recommended trading strategy:

The current rise is temporary and unpredictable. Purchases can only be justified with intraday trading. The rest should wait for the completion of the correction and look for signals to enter short positions.

Resistance zones:

- 0.7170 / 0.7220

Support areas:

- 0.7060 / 0.7010

Explanations of the figures:

A simplified wave analysis uses a simple waveform, in the form of a 3-part zigzag (A-B-C). Three main timeframes are used for the analysis. The last incomplete wave for every timeframe is analyzed. Zones show the calculated areas with the greatest probability of a reversal.

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

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

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

Simplified Wave Analysis. GBP / JPY review for the week of October 18

Wave pattern of the H4 chart:

The price movement on this scale is headed south in the direction of the dominant trend of the daily timeframe. The counter movement in the previous month does not go beyond the correction.

Wave pattern of the H1 chart:

The rising wave from August 15 reached the lower limit of a wide zone of resistance on a large scale. The decline that has begun further forms the middle part of the structure (B).

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Wave pattern of the M15 chart:

The wave level of the bearish wave of September 21 is approaching the M30 chart.

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Recommended trading strategy:

Short-term reduction sales can be used when trading at lower timeframes. For longer transactions, you need to wait for the current decline to complete and track the buy signals.

Resistance zones:

- 150.00 / 150.50

Support areas:

- 145.60 / 145.10

Explanations of the figures:

A simplified wave analysis uses a simple waveform, in the form of a 3-part zigzag (A-B-C). Three main timeframes are used for the analysis. The last incomplete wave for every timeframe is analyzed. Zones show the calculated areas with the greatest probability of a reversal.

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

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

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

Forecast for GBP / USD pair on October 18, 2018

GBP / USD pair

The release of British inflation data and Angela Merkel's statement about the high probability of Brexit without a deal resulted to a decrease of sterling by 67 points. The base CPI in September was 1.9% y/y against expectations of 2.0% y/y and 2.1% y/y in August. Total CPI decreased from 2.7% y/y to 2.4% y/y but the forecast was 2.6% y/y.

The price fixed below the trend indicator line on the four-hour timeframe chart. The Marlin oscillator signal lines in negative zone on both timeframes. The immediate goal for bears is to support the balance line at daily 1.3060. Below it is the level of 1.3015, where there is a cluster of historical consolidations and turns. The third target is the minimum of October at 1.2920, and the MACD line (indicator trend line) on the daily chart also runs here.

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EUR/USD: illusive hopes and pressing problems

The euro-dollar pair has not managed to break out of the price range of 1.1460-1.1620, although today the price has approached its lower limit. But the bulls again seized the initiative and did not allow it to gain a foothold in the 14th figure. However, the upward dynamics also did not receive its continuation, so the pair was stuck in the flat in anticipation for new information impulses.

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The fundamental background of the pair is very contradictory: the events of the last day do not have an unambiguous "black and white" color, so it is difficult for traders to determine the vector of further movement. For example, the initial signals from the EU summit significantly disappointed the market, after which the pound and the euro lost their positions. But today there is information that Brussels has offered London to extend the period of the transition period - approximately one year. And the British, apparently, supported this idea - at least the rhetoric of Theresa May (which, however, allowed the prolongation "for a couple of months") eloquently testifies to this. Later, there were also unofficial comments of high-ranking officials of Britain, which also confirm such intentions.

In other words, even if the parties do not have time to agree on key positions before March 2019, Britain will remain within the single market and within the customs Union for almost three years – that is, until December 2021. Such prospects calmed the markets a bit, but it is too early to "relax" – after all, today is the second day of the summit (the most intense in the context of multilateral negotiations), so the participants of the meeting can still present surprises - both of a positive nature and vice versa.

Although the euro follows the pound in many ways (especially when the Brexit issue is discussed), the single currency is not as focused on the summit as the British. Therefore, today the bulls of the EUR/USD focused on the rhetoric of the ECB representative Olly Rehn (head of the Central Bank of Finland). He voiced his expectations about the growth of the interest rate - according to him, the European central bank will consider this issue in the fourth quarter of next year. Naturally, if the dynamics of the eurozone economy will maintain the current pace.

Despite the fact that we are talking about very long-term prospects, traders reacted with optimism to such intentions. Moreover, the position of Rehn sounded simultaneously with the rhetoric of ECB Board member Ewald Nowotny, who said that he sees Jens Weidmann, the head of the Bundesbank, as the successor of Mario Draghi. Let me remind you that Weidmann has long and consistently advocated the tightening of monetary policy. If he really will head the European Central Bank (and it is called the main candidate) next year, then the pace of the rate hike can be significantly revised.

In other words, the fundamental factors that supported the euro today relate to too distant prospects. Therefore, the reaction to them was short-term, and the pair returned to more pressing issues. In particular, the problem of the Italian budget remained in limbo. According to a number of publications, the European Commission next week will reject the draft budget with a deficit of 2.4%, and its revision will take at least a month and a half. That is, this issue may be delayed until December, thus putting background pressure on the euro.

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Another factor of uncertainty is the local elections in Germany. Let me remind you that Angela Merkel's partner in the Christian-Social Union coalition suffered a serious defeat in the elections to the Bavarian Parliament. 37% of Bavarians voted for the CSU, whereas five years ago this figure was almost 50%.

For the first time in 60 years, CSU representatives lost a single-party regional government. In addition, an impressive result was shown by the far-right party "Alternative for Germany", whose representatives took 22 seats in the local Parliament. According to some experts, the elections in Bavaria reflected the current political preferences of the Germans – that is, the growth of anti-European sentiment and the decline in the popularity of Merkel. At the end of October (28th) another regional elections will be held -in Hesse, where Angela Merkel is in charge of the "Christian Democratic Union". If the far right will press the CDU there, it will be a very alarming signal for Brussels.

Thus, the euro can not count on the support of the fundamental background, since the news "with a plus sign" are long-term, and "minus sign" is more estimated. In addition, the dollar is also not losing ground – published on Wednesday, the minutes of the last meeting of the Federal Reserve showed the "hawkish" attitude of the majority of regulator members, after which the probability of a hike in December again increased to 80%. Of course, the published opinions of officials are somewhat "overdue" in time – after all, the September meeting was held before the release of the latest inflation data (very weak) and before the events in the stock markets. But in general, the regulator kept a bullish attitude and did not disappoint market participants.

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In summary, it should be noted that EUR/USD traders should closely monitor the level of 1.1460 (the lower line of the Bollinger Bands indicator on the four – hour chart) - when it breaks, the pair can sharply gain momentum and go to the bottom of the 14th figure, where the nearest support level is located (the lower line of the above indicator on the daily chart). The technical picture has a further decline (in particular, this is evidenced by the bearish "Parade of lines" signal of the Ichimoku Kinko Hyo indicator on D1).

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Brexit: The Brexit agreement may be postponed for another year. The White House may take advantage of the EU's vulnerability

The British pound is trading in a narrow price range after the news on Brexit, which lead investors and traders to a greater impasse.

Today, the Minister of Commerce Wilbur Ross urged the EU to begin an accelerated process of negotiations on a trade agreement with the United States, saying at a press conference in Brussels that the patience of the President of the United States has almost run out. This suggests that the White House remembered about the EU and trade duties, and just at the wrong time. I don't think it's a coincidence.

Brexit and the pressure from the White House

After the appearance of such news, representatives of the European Union made a proposal to extend the transition period for Brexit for another 12 months, arguing that there is very little time left, and the problematic issues have not yet been resolved. Let me remind you that the UK's exit from the EU is scheduled for March 2019.

Donald Trump demanded faster results in trade negotiations with the EU, progress in which, in his opinion, is still unsatisfactory. European Commissioner Cecilia Malmstrom, in turn, accused Washington of not working with the EU on forming a structure of the trade agreement.

In other words, the trade conflict with China, which lasted for quite a long time and which will be discussed for more than a year, gradually moved to the background. It's time for the US presidential administration to return the pressure on the EU, which is puzzled by the problem with Brexit and is in the most vulnerable position.

Most likely, the strategy of the summer break was made precisely because of the timing, which allowed the EU to deal with two problems at the same time. Now, when an agreement on Brexit has not been reached, and is unlikely to be, it's time for the White House to remind the EU about itself.

As I noted above, now, in order to break the deadlock in the Brexit negotiations, the EU is ready to extend the transition period for the UK for one year.

But this course of things is unlikely to suit the supporters of the hard Brexit, as the extension of the terms keeps the UK trade membership for another year and forces them to obey the EU rules. British Prime Minister Theresa May also made a statement in this regard, which is considering a longer transition period.

The British pound, meanwhile, does not know how to react to all this. A slight strengthening in the first half of the day was replaced by a fall after the release of data that retail sales in the UK decreased compared to August this year. The fall was due to the fact that consumers reduced costs after the summer.

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According to a report by the National Bureau of Statistics, retail sales declined by 0.8% in September 2018. Let me remind you that consumer spending is one of the drivers of economic growth.

As noted in the Bureau, at present, the prospects for consumer spending are ambiguous, even if wage growth accelerates and inflation slows down. All this is offset by consumer confidence, which is declining against the background of Brexit uncertainty.

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GBP/USD: the first results of the EU summit

So, the October summit in the EU, apparently, ended in failure. At least, the previously announced result could not be achieved: London and Brussels were again unable to agree and even canceled the November summit, where the signing of the historic deal was to take place. The parties do not see any sense in gathering in one conference room and noting the lack of progress in the negotiations, so now the Brexit summit will be held "on demand" - that is, when both the British and European sides confirm the achievement of a final compromise.

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However, based on the rhetoric of Theresa May and the EU leadership, the positions of the parties are still at different poles - primarily in the issue of the Irish border. At the summit, there was even an idea to postpone the date of Britain's final withdrawal from the European Union. Thus, according to unconfirmed reports, Brussels suggested that London should prolong the transitional period for another year, which should now be completed in December 2020. In other words, de jure, the UK will leave the EU in a few months (in March 2019), and de facto will stay within the framework of the single European market and the EU customs union for another three years. During this period, according to the authors of the idea, the parties will still be able to solve the issue of the Irish border, and other key problems.

There is another subtext of this scenario: a possible change in the political landscape in Britain. On the sidelines of the summit, many European politicians said that the negotiation process is hampered primarily by the lack of political unity in the UK itself. Theresa May, with great difficulty, lobbied her own "Chequers" plan in Parliament, which caused a wave of criticism in Brussels and in the ranks of the Conservative Party, not to mention the Labour Party. And if the "hawks" among the British did not arrange compromise steps towards Brussels, then the Europeans, in turn, did not see even a hint of compromise there.

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Thus, the chain was closed, and Theresa May found herself in the center of the quadrangle: Brussels-Conservatives- Labour. The Democratic Unionist Party (especially with regard to the Irish border) also expresses its claims - and the prime minister is forced to reckon with them, since representatives of the DUP are coalition allies of the conservatives and their votes are needed when considering such key issues as the country's budget.

The unscheduled parliamentary elections in Britain would help unravel this tangle. In case of victory, a Parliament more loyal to the Prime Minister would allow may to expand the range of possible compromises. And this option was really discussed not so long ago - but the head of government did not dare to take this step, since there was a risk of again "stepping on the rake" in 2017, when, as a result of early elections, the conservatives lost a majority in Parliament.

Moreover, the conducted polls showed the growing popularity of Labour - who, though they do not refuse Brexit, but advocate widespread cooperation with the Alliance after the "divorce process". Over the past two years, all sorts of experts - ranging from journalists and ending with the top officials of the country - have described the negative consequences of chaotic Brexit without a deal in the brightest colors, and it is not surprising that many Britons reconsidered their attitude to complete independence "in spite of everything". In other words, elections are not an option for May (or rather, the most extreme option), so she is forced to maneuver between the opposition, the internal opposition and Brussels.

Considering the conditions created, it is clear that the deal is unlikely to be signed before the end of this year - unless one of the parties makes serious concessions (which is unlikely). In my opinion, Theresa May will nevertheless agree to extend the period of the transition period in order to prevent an economic collapse in the country. Today, she even voiced this probability, however, very carefully. According to her, the transition period can be extended "just for a few months", but the baseline scenario remains the same - December 2020. Such phrases in the mouth of an experienced politician mean one thing: the government of May agrees to the proposed option, and the one-year extension term will be agreed in stages so as not to cause a strong rebuff from the British parliamentarians. In other words, in the course of further negotiations, the parties will come to the conclusion that "a few months" will not save the situation, and, therefore, this period should be increased to a year.

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By and large, this is the only "achievement" of the October EU summit, and of a rather dubious nature in the context of the foreign exchange market. In fact, the regime of uncertainty is extended for another year, while maintaining the probability of a "hard" Brexit. However, this scenario is undoubtedly better than the chaotic option, the consequences of which are difficult to assess until the end. That is why the pound today took the words of Theresa May with some enthusiasm, returning to the 31st figure in a pair with the dollar. The possible economic apocalypse was de facto postponed for another year, and this "sedative pill" has had its effect on the market.

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GBP/USD. 18 October. Results of the day. EU leaders canceled the summit on Brexit, scheduled for November.

4-hour timeframe

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The amplitude of the last 5 days (high-low): 66 p-111 p-98 p-95 p-93 p.

The average amplitude for the last 5 days: 93 p (90 p).

The British pound on Thursday, October 18, fell to the lower limit of the Ichimoku cloud, but could not overcome it on the first attempt. However, at the moment it seems that this is only a temporary stop. By all indications, talks on Brexit failed, a new round of negotiations was canceled by EU leaders. Thus, the probability that the UK will leave the EU without any agreements is growing. But this is not the main thing now. The question is what will Theresa May do, who is at a certain crossroads. On the one hand, the lack of a "deal" with the EU is a serious blow to her image and political rating. In particular, Boris Johnson has already hinted that he is ready to accept the post of prime minister. On the other hand, to conclude a "deal" with the EU means to make new concessions, which the British Parliament will not understand and, most likely, will not support the vote. Thus, the current prospects of the pound sterling are again extremely weak. If we add to this the weak report released today on retail sales in the UK, the picture for the English currency becomes quite sad. On the technical side, further downward movement limits the Senkou Span B line, however, it seems that it will not stand under the onslaught of bears. If the price overcomes this line, the sell signal from Ichimoku will be strengthened, and the path will be open to the first support level of 1.3034.

Trading recommendations:

The GBP/USD currency pair has tested the Senkou Span B line. If the price consolidates below it, then the sell-positions can be raised with the target of 1.3034. The reversal of the MACD indicator to the top, especially with the rebound from the Senkou Span B line, will signal an upward correction round.

Buy-positions can be considered again no earlier than the price fixing above the Kijun-Sen line. In this case, the trend will change to ascending, but in current conditions it is difficult to imagine what fundamental information will be able to support the pound.

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

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen - the red line.

Kijun-sen - the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dotted line.

Chikou Span - green line.

Bollinger Bands indicator:

3 yellow lines.

MACD Indicator:

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

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

EUR/USD. 18 October. Results of the day. Negotiations on Brexit at the EU summit failed

4-hour timeframe

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The amplitude of the last 5 days (high-low): 81 p-77 p-67 p-55 p-85 p.

The average amplitude for the last 5 days: 73 p (69 p).

On Thursday, October 18, the EUR/USD pair as a whole continues to move down. The key news of the day was the cancellation by the EU leaders of the emergency summit scheduled for November. The reason is the lack of progress in negotiations with Theresa May. In fact, as we expected, this means the failure of the current round of negotiations. It is unusual but new pressure on the euro has not been established. However, it is not over yet. The euro, of course, will not react so zealously to the failure of the negotiations. As we have repeatedly noted, the UK needs a "deal" with the EU in the first place. The European Union, itself, it seems, is already preparing for the "hard" Brexit scenario. There have already been proposals to extend the period of negotiations until December inclusive, to extend the transitional period by 1 year. Some countries have publicly stated that they are preparing for the UK to leave the EU without agreements. In general, there is no progress, and against this background, the US dollar may continue to strengthen. No new reports about the trade war and in general from Donald Trump in recent days have been received, which is even somewhat unusual. Previously, the US leader did not spend a day without new threats to impose duties or without accusations of other countries in the "unfair game". Nevertheless, the failure of the Brexit negotiations was predictable, and there is no new and interesting information at the disposal of traders now. Thus, the primary focus of attention is currently on technical factors. And the technique says that the "dead cross" signal is strong, and there are no signs of the beginning of the upward correction at the moment.

Trading recommendations:

For the EUR/USD pair, the price continues a moderate movement down. Therefore, there are no grounds for closing short positions. The first target for shorts is the support level of 1.1456.

Purchase orders can only be considered after the price is fixed back above the critical line with targets at 1.1586 and 1.1635. However, there are no prerequisites for the pair to turn up.

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

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen - the red line.

Kijun-sen - the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dotted line.

Chikou Span - green line.

Bollinger Bands indicator:

3 yellow lines.

MACD Indicator:

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

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

BITCOIN Analysis for October 18, 2018

Bitcoin has been quite low on liquidity and indecisive for a few days in a row after breaking above $6,500 area amid strong bullish momentum. The price is currently being held by the Kumo Cloud as resistance whereas other dynamic levels such as 20 EMA, Tenkan and Kijun line are currently flat. As BTC price has no definite trend pressure, it is expected to trade above $6,000-6,500 area and then climb higher. The Kumo Cloud can be observed shrinking, whereas strong bullish momentum is likely to push the price towards the area from $7500 to $8000 in the coming days.

SUPPORT: 6,000, 6,500

RESISTANCE: 7,500, 8,000

BIAS: BULLISH

MOMENTUM: CORRECTIVE and VOLATILE

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