EUR/AUD Testing Resistance, Prepare For Reversal

EUR/AUD is testing its resistance at 1.5998 (61.8% Fibonacci extension, 61.8 % Fibonacci retracement, horizontal overlap resistance) where a reversal to its support at 1.5825 (61.8% Fibonacci retracement, horizontal overlap support) is expected.

Stochastic (55, 5, 3) has reversed off its resistance at 98% where a corresponding drop is expected.

EUR/AUD is testing its resistance where we expect to see a reversal.

Sell below 1.5998. Stop loss at 1.6136. Take profit at 1.5825.

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XAU/USD Approaching Support, Prepare For A Bounce

XAU/USD is approaching its support at 1233.53 (61.8% Fibonacci extension, 50% & 38.2% Fibonacci retracement, horizontal overlap support) where it could potentially bounce to its resistance at 1245.25 (50% Fibonacci retracement, horizontal pullback resistance).

Stochastic (55, 5, 3) is approaching its support at 2.3% where a corresponding bounce could occur.

XAU/USD is approaching its support where we expect to see a bounce.

Buy above 1233.53. Stop loss at 1226.09. Take profit at 1245.25.

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XAU/USD (Gold) is above our strong ascending trend line and in a bullish channel.

XAU/USD (Gold) is above our strong ascending trend line and in a bullish channel. We are buying on strong support at 1239.91 (ascending support, bullish channel, fibonacci retracement, fibonacci extension) for a bounce up to 1256.65 as our profit target. Our stop loss is at 1234.29.

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Bitcoin analysis for December 20, 2018

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Trading recommendations:

According to the H1 time - frame, I found BTC has been trading upwards. As I expected, the price tested the level of $4.045 and met my yesterday's target. Anyway, I found a potential overbought condition on the BTC since the price tested the upper diagonal of the upward channel and did found resistance at Fibonacci expansion 100% at the price of $4.045. My advice is to watch for a breakout of the 3h balance. A breakout below the $3.966 would confirm potential test of $3.882 and $3.662. Anyway, if you see the breakout of $4.083, this may confirm further upward continuation and potential test of the $4.600.

Support/Resistance

$4.083 – Intraday resistance

$3.966– Intraday support

$3.882 – Objective target 1 down

$3.662 – Objective target 2 down

$4.600 – Upward objective target

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

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GBP / USD: Bank of England in its style. Lowering the Fed forecast affects the US dollar

While traders continue to "eagerly buy" European currency in the expectation of its long and rapid growth, buyers of the pound continue to stay away from everything that happens, carefully studying the signals from the Bank of England.

Fed

Yesterday, the Federal Reserve System raised interest rates, which generally expected 99% of the market, but revised its forecasts for growth next year.

A repeated criticism of US President Donald Trump, aimed at raising interest rates, addressed to the head of the Fed, seems to have taken effect. Fed Chairman Jerome Powell said yesterday that most members of the Open Market Committee had lowered their forecasts for 2018, indicating a slightly lower rate of increase in interest rates next year than planned. Now the Fed leaders are expecting two rate hikes next year, not three.

The data, which came out today in the first half of the day on the balance of the current balance of payments in the eurozone, also supported the euro.

According to a report by the European Central Bank, the current account surplus of the eurozone balance of payments in October 2018 rose to 23 billion euros from 18 billion euros in September. For the 12 months to October, the cumulative surplus of the current account of the eurozone's balance of payments was 345 billion euros, which is about 3% of eurozone GDP. However, compared with the same period in 2017, when the balance amounted to 350 billion euros, a decrease was noted.

Bank of England

One of the most important events of the day was the decision of the Bank of England to keep its key rate unchanged.

According to the minutes of the Bank of England meeting, in December of this year, the decision to keep the key rate at the level of 0.75% was pleasant. The number of votes cast for keeping the key rate unchanged was 9 to 0.

The English regulator noted that global growth prospects are worsening, and the uncertainty around Brexit is increasing. This will in the future affect the cost of bank financing and the yield of corporate bonds.

Regarding inflation, Bank of England economists expects it to fall below the target of 2% in the coming months.

As for the further gradual increase in interest rates, it will occur only in the case of an orderly Brexit.

The data, released on retail sales in the UK, also supported the pound.

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According to a report by the National Bureau of Statistics, retail sales in the UK increased by 1.4% in November compared with October, which will support economic growth in the future. The growth is mainly due to discounts that were given to the public in connection with "Black Friday", when mass sales are being held. Compared with November of last year, sales increased by 3.6%. Economists had expected sales to increase by 0.5% compared with October.

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Intraday technical levels and trading recommendations for EUR/USD for December 20, 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 the Daily chart, the pair has been moving sideways with a slight bearish tendency. Narrow sideway consolidations have been maintained within the depicted daily movement channel since June 2018.

On November 13, the EUR/USD pair demonstrated recent bullish recovery around 1.1220-1.1250, where the lower limit of the channel as well as the depicted demand zone came to meet the pair.

Bullish fixation above 1.1420 was needed to enhance further bullish movement towards 1.1520. However, the market demonstrated significant bearish rejection around 1.1420 a few times.

The EUR/USD pair has been trapped between the price levels of 1.1420 and 1.1270 waiting for a breakout since November 5.

Today, based on the recent bullish price action, bullish persistence above 1.1420 is needed to enhance further bullish advancement towards 1.1520 and 1.1610.

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Intraday technical levels and trading recommendations for GBP/USD for December 20, 2018

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Since mid-November, successive lower highs were demonstrated below the depicted H4 downtrend line around the price levels of 1.2870 and 1.2780.

Shortly after, a quick decline was demonstrated towards the price level of 1.2500 before bullish recovery could take place on December 12.

A bullish Head & Shoulders pattern is being demonstrated on the H4 chart with neckline located around 1.2660-1.2680. Bullish persistence above 1.2660-1.2680 is mandatory for confirmation. Pattern confirmation projects a bullish target towards 1.2880 again.

Today's price action demonstrates recent bullish breakout above the depicted downtrend line. This enhances the bullish side of the market as well.

On the other hand, the current scenario may pursue as a bearish flag continuation pattern provided that bearish persistence below 1.2660 (corresponding to a prominent daily low) is maintained on a daily basis. The projected target for the bearish flag pattern is located around 1.2300

Please take into consideration that the current bullish movement towards the price zone of 1.2680-1.2700 should be watched cautiously for price action as this price zone corresponds to the backside of the broken consolidation range.

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USD/CAD analysis for December 20, 2018

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Recently, the USD/CAD pair has been trading downwards. The price tested the level of 1.3446. Anyway, according to the M30 time – frame, I have found that price rejected from the lower Keltner band (support, 2.5 standard deviations), which is a sign that USD/CAD went to the oversold zone. I also found that price stopped exactly at Fibonacci expansion 161.8% at the level of 1.3446, which is another sign that USD/CAD went into the intraday oversold zone. My advice is to watch for buying opportunities. The upward target is set at the price of 1.3500.

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GBP / USD: plan for the American session on December 20. Bank of England left the bet unchanged

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

The pound calmly reacted to the decision of the Bank of England to leave the interest rate unchanged, which is expected to limit the upward trend in the upper border of the side channel of 1.2705, which I paid attention to in my morning review. In the afternoon, the signal to buy will be the formation of a false breakdown in the middle of the channel of 1.2658. Otherwise, you can buy a pound to rebound from the lower limit of 1.2609. The main objective remains the breakthrough of resistance level of 1.2705, which will lead GBP / USD to a new high of 1.2755.

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

While trading is below the resistance level of 1.2705, the pressure on the pound will continue, and the next formation of a false breakout, there will be a direct sell signal, with the aim of returning and reducing below the middle of the channel of 1.2658, below which the GBP / USD pair can quickly fall into the area of the day minimum of 1.2609. If the pair grows in the second half of the day, it is best to consider short positions to rebound from a new high of 1.2755.

Indicator signals:

Moving Averages

Trade is conducted just above the 30-day and 50-day moving, which more indicates the formation of the lateral nature of the market.

Bollinger bands

In the case of a decrease in the pound, you can consider long positions on the rebound from the middle border of the Bollinger Bands indicator around 1.2640.

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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 December 20. Euro buyers showed strength

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

As expected, yesterday's Fed decision had a negative impact on the US dollar, which led to the continuation of the upward trend in the European currency. All resistance levels that were scheduled for the first half of the day in the morning forecast, failed to keep buyers. In the afternoon, there may be a downward correction in EUR / USD, so a more optimal area for opening long positions will be the range of 1.1450. Open long positions in euros can also rebound from the support of 1.1426. The main task for the second half of the day will be the repeated resistance test of 1.1480, a breakthrough of which will open a direct path to the highs of 1.1515 and 1.1548.

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

The bears failed to oppose the bulls. Only the formation of a false breakdown at the resistance level of 1.1480 can lead to a small downward correction in the area of 1.1450 and 1.1426, where I recommend fixing the profits. If the bull trend persists in the second half of the day, it is best to return to short positions from a maximum of 1.1515 or a rebound from 1.1548.

Indicator signals:

Moving Averages

Trade is conducted above the 30-day and 50-day average, which indicates continued growth of the euro.

Bollinger bands

If the euro declines in the second half of the day, it is best to return to purchases from the average Bollinger Bands indicator around 1.1407.

The Fed has changed the economic outlook for 2019.

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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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GOLD. December 20. The trading system. "Regression Channels". Gold rises in price as a defensive asset

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) - sideways.

CCI: 162.5807

The GOLD tool continues to rise in price against the general decline in the US currency. It should be noted that gold has been going up for a long time, and unlike the euro or the pound sterling. This is explained by the fact that in the past six months, traders have a very strong need for reserve currencies and assets, such as gold, the yen, and to some extent the franc. However, currencies of other countries are often subject to the influence of the economies of these countries and the political events taking place in them. Therefore, gold often remains one safe haven that is not tied to political or economic crises in a given country. Anyway, the results of the two-day Fed meeting supported the US dollar in the short term, but today gold has begun to rise again. This is explained by the fact that the Fed has repeatedly hinted at the imminent completion of the course on tightening monetary policy. Yesterday, it became known that next year only 2 rate increases are planned. Thus, the hegemony of the US dollar, which was observed in the last year, can finally be interrupted. If Donald Trump, who is very much hampered by the "expensive" dollar, will take the case, then the US currency may begin to fall in price on all fronts. Still, the currency can not constantly grow.

Nearest support levels:

S1 - 1253.91

S2 - 1250.00

S3 - 1246.09

Nearest resistance levels:

R1 - 1257.81

Trading recommendations:

The GOLD tool maintains a rising mood, so now buy orders with the last target of 1257.81 remain relevant. Color indicator Heikin Ashi 1-2 bars in blue color will indicate a round of downward correction.

It is recommended to open short positions in case the tool overcomes the moving average line with targets at 1238.28 and 1234.38. However, for this option now the dollar will need fundamental reasons.

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

Explanations for illustrations:

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

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

CCI is the blue line in the indicator regression window.

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

Murray levels - multi-colored horizontal stripes.

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

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Markets do not believe the Fed

Following the meeting on Wednesday, December 19, the US Federal Reserve announced the next step aimed at normalizing monetary policy, raising interest rates by a quarter percent.

Fed projections look confidently bullish. The GDP growth rates were revised for 2018 from 3.1% to 3.0%, for 2019 from 2.5% to 2.3%, which in fact looks like a small adjustment, but for 2020 the forecast is not changed, at 2.0%, and this the fact that in 2019 is expected to reverse the yield curve and the arrival of a recession. It seems that the Fed wants to inform the markets that there will be no recession, despite the clear signals.

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The same story with the other indicators. For 2019, the unemployment forecast is left unchanged at 3.5%, which means that the Fed is not expecting a deterioration next year, but an improvement in the labor market, which indirectly confirms the previous conclusion that the economy should not be cooled. Where such confidence?

The inflation forecast confirms the previous conclusion. Despite the fact that the Fed lowered its forecast for 2019 from 2.0% to 1.9%, the forecast for 2021 remains unchanged, that is, the Fed considers the current price slowdown to be a temporary phenomenon and not having a fundamental basis. In other words, the Fed believes that the slowdown in the real purchasing power of the population will not occur.

At the same time, the yield of 5-year TIPS bonds falls just as collapse, as of December 17, it fell to 1.58%, having lost 0.64% from the May peak. The decline in TIPS yields indicates a real assessment of the prospects for inflation by business, not by consumers, while the business builds its assessment primarily not on expectations, but on fundamental indicators, that is, the business is preparing to lower real incomes of citizens, and not to growth.

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And finally, the latest rate forecast. Yes, the Fed lowered the target level somewhat and informed the markets that 2 increases were planned in 2019, and one more in 2020. The revision of the forecast was expected and should not have had a strong impact on the markets, since as early as October the head of the Fed J. Powell informed about the likely decrease in the neutral level.

But if you look at the dynamics of futures at a rate on the CME, you can see the deep pessimism of the players regarding the feasibility of the presented forecasts. The probability that the rate will be raised at least once in the first half of the year is only 37%, and about 42% in December, there is no talk about a second increase. That is, the markets believe that the entire rate forecast is actually a common bluff that the Fed cannot confirm in 2019.

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So, the Fed says that the growth rate of the US economy is only slightly slowing down, and the overall trend remains confident. The markets do not react at all to the tightening of monetary conditions, as it might seem, but to the sharply increased probability of a recession and to the fact that the Fed is masking its fears rather awkwardly.

Therefore, the initial reaction of the market, expressed in the strengthening of the dollar, turned out to be short-lived, and on Thursday morning the dollar retreats in all directions. First of all, defensive assets are growing, the yen, the franc, gold, the demand for bonds is growing, the yield on treasures has decreased as a result of trading, and not increased, as one would expect if the rate was raised.

Markets are beginning to prepare for a recession, which is becoming increasingly likely.

Eurozone

The euro reacted to the outcome of the FOMC meeting in sync with the market, rolling back to support 1.2270, but the subsequent reaction put everything in its place. Having overcome two resistances of 1.1440 and 1.1470, EUR / USD came close to the level of 1.15, which can be regarded as a serious request for continued growth. Support has moved to the level of 1.1440, and if Friday reports on orders for durable goods in the United States and the price index for personal consumption are no better than expected, the markets will finally take root in the dollar reversal scenario, which will push the euro higher.

Great Britain

Today, the Bank of England holds the latest monetary policy meeting this year, and the markets do not expect any changes. The currency pair GBP / USD pulled up to the resistance of 1.27, there is a chance of continued growth, if successful, we can talk about the end of a bearish momentum in the long term.

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GBP/USD analysis for December 20, 2018

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Recently, the GBP/USD pair has been trading upwards. The price tested the level of 1.2706. Anyway, according to the M30 time – frame, I have found a fake breakout of the 2-day high and a bearish breakout of the 2H balance, which is a sign that buying looks limited. I also found price rejection from the upper Keltner band (resistance), which is another sign of weakness. My advice is to watch for selling opportunities. The downward targets are set at the price of 1.2639 and at the price of 1.2610.

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Brent fell below $ 55 a barrel for the first time since September 2017

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Brent crude oil during trading on Thursday fell to $ 54.66 a barrel, refreshing the low of September 2017. Quotes of WTI Texas oil also showed a decline to $ 46.15 a barrel.

The main driver of the fall in the oil market were the results of the meeting of the Federal Reserve System (FRS) of the USA, which provided strong support to the US dollar across the entire spectrum of the market. The regulator decided to raise the interest rate to 2.25-2.5%, despite the deterioration of the macroeconomic forecast: estimates of growth in GDP and consumer prices were lowered, and the US Central Bank now plans two increases in the rate instead of three next year.

Additional pressure on the Brent rate came from a report from the US Department of Energy, reflecting an insufficient reduction in US oil reserves (a total of 497 thousand barrels instead of an expected decrease of 3 million barrels).

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Zero investor activity and falling markets: is the Fed to blame?

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Experts believe that the actions of the Federal Reserve System (FRS) of the United States "cut the wings" to investors. Recall, the Fed has raised the rate and is preparing to raise it twice more in 2019. After the speech of Jerome Powell, the head of the department, a collapse occurred in the markets, which updated the annual minimums.

On Wednesday, December 19, the major stock indices of the United States closed in the red after Fed statements. It should be noted that the regulator increased the key interest rate by 25 basis points, to 2.25-2.50% per annum. J. Powell, head of the Fed, recalled that next year there will be two basic rate increases instead of three previously announced. The official explained the forecast by economic indicators.

Representatives of the Federal Reserve also lowered forecasts for the growth rate of the US economy from the current 3.1% to 3% for 2018 and from 2.5% to 2.3% for the next year. Experts believe that the statistics published yesterday are very ambiguous. For example, in the third quarter of this year, the current account balance amounted to $ 124.8 billion, contrary to analysts' expectations, who predicted a value of $ 124.3 billion. According to the calculations of the Energy Information Administration (EIA), during the past week oil reserves decreased by 0.497 million barrels against the expected -2.437 million barrels.

Previously, market participants had hoped that the regulator would take a pause and not raise rates in the coming year. Now, investors have to put up with the harsh reality and expect how to wrap up negative trends for the benefit.

After the Fed statements, the stock market collapsed sharply, and the quotes of the leading indices almost went to the bottom. The Dow Jones index lost almost 1 thousand points, the S & P 500 broad market index went down by 1.54% to 2506.96 points, and the Nasdaq lost 4%. The high-tech sector fell faster than others: Facebook's paper plummeted by more than 7%, Amazon shares fell 4%, and Apple lost quotes of 3%.

Experts noted an increase in panic in the credit market. Rising borrowing costs for US and European companies could trigger a recession in the near future. According to experts, the current situation resembles the events of a decade ago, which led to a global financial crisis. At the moment, the market is taking into account the rate cut by 18 basis points in 2020.MO10OCVVAvQjth-1CM61yLhLZE-269gZd_0Gv-d-The banking sector was also under attack. Shares of credit institutions updated the lows of November 2016. A number of analysts called December 2018 the worst month for the stock market since 1931. All three major indexes are in the red since the beginning of the year. The collapse was also recorded on the debt market: the yield on 10-year-old treasuries went down to 2.8%.

In recent months, there has been a large-scale decline in the oil market, but there have been no fundamental changes after the Fed statements. WTI crude oil futures for February delivery rose 3.4% to $ 48.17 a barrel. The cost of the February gold futures rose 0.2% to $ 1,256.40 per troy ounce. However, the strongest fall in prices aggravates the situation in the credit market of the energy sector and increases the risk by several times, analysts sum up.

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Technical analysis of EUR/USD for December 20, 2018

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Overview:

The USD/CHF pair continues to trade upwards from the level of 0.9951 on the H4 chart. Today, the first support level is currently seen at 0.9951, and the price is moving in a bullish channel now. There are no changes in our technical outlook. The bias remains bullish in the nearest term, testing 1.0142 or higher. Furthermore, the price has been set above the strong support at the level of 0.9951, which coincides with the daily pivot point. This support has been rejected three times confirming the veracity of an uptrend. According to the previous events, we expect the USD/CHF pair to trade between 0.9951 and 1.0058. So, the support stands at 0.9951, while daily resistance is found at 1.0058. Therefore, the market is likely to show signs of a bullish trend around the spot of 1.0058. In other words, buy orders are recommended to be placed above the spot of 1.0058/0.9951 with the first target at the level of 1.0142; and continue towards 1.0216. However, if the USD/CHF pair fails to break through the resistance level of 1.0058 today, the market will decline further to 0.9863.

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EUR / USD: a weakening dollar opened the way to the 15th figure

After the announcement of the results of the December Fed meeting, the dollar bulls tried to show good spirits, since the most dovish scenarios were not realized. The Fed has justified the forecasts of most analysts and took a double position. On the one hand, the regulator announced a further tightening of monetary policy, and on the other hand, reduced the estimated number of increases next year to two.

The first reaction of the traders was positive. On the eve of the key meeting, the market was so "screwed up" by all sorts of rumors that the expected outcome was a real gift to the dollar bulls. The dollar index went up, but after a few hours the growth stalled from the mark of 96.52, the indicator began to roll back, and in those minutes, it is at around 95.73. The first emotions subsided, and sober calculation took their place. The Fed almost managed to maintain a balance in their actions and rhetoric, but the final advantage was still not in favor of the dollar.

In addition to the publication of the above-mentioned point forecast, which reflects the double rate increase in 2019 (and not triple, as it was in September), the Fed has disappointed with other forecasts. First, the regulator lowered the average estimate of the long-term neutral rate value. Now the optimal level, which does not hold back economic growth, but does not overheat it, is at around 2.8% (instead of three percent). Secondly, the Fed lowered expectations for US economic growth. For the current year to 3% (from 3.1%), and for the next year, to 2.3% (from 2.5%). Also, inflationary expectations decreased slightly. In 2018, 1.9% instead of 2% and in 2019, 2% instead of 2.1%.

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In addition, the regulator has changed some of the wording in the accompanying statement. Thus, the phrase "further gradual increase in rates" was changed to "some further gradual increase in rates". This is a very minor adjustment, but in combination with the other factors, it definitely confirms the softening of the general attitude of the members of the regulator.

Jerome Powell at the final press conference also voiced quite "dovish" theses. He said that the interest rate reached "the lower limit of the range, which corresponds to a neutral level of rates." In the future, the Fed will focus primarily on incoming data, which should correspond to the forecasts of the regulator. At the same time, according to Powell, in 2019, the dynamics of the main indicators of the economy will be "not so favorable" to the forecasts of the regulator, as it was this year. He also noted that "unpleasant surprises" began to arrive at the end of the current year. In particular, we are talking about inflation, which turned out to be weaker than previously expected. According to the Fed, "core inflation no longer responds to changes in economic growth."

Powell also confirmed that two rounds of rate hikes are expected next year. In his opinion, the slowdown in monetary tightening should support the economy, ensuring the achievement of target levels.

In other words, the Fed is indeed slowing down, but at the same time trying to maintain a "hawkish" attitude. In particular, Powell stressed that there is no need for the regulator to pursue accommodative policies, "since it can be neutral." He also said that Fed decisions are not restrictive. In addition, Powell noted that inflation is "just below" the target level, so the regulator may not be in a hurry with subsequent decisions.

In my opinion, the main conclusion of the December meeting is that the American regulator announced the completion of the rate hike cycle. Naturally, all this will take place very smoothly and gradually. Over the next year, there will be two rounds of promotion, and in 2020, perhaps another. But, nevertheless, the Fed has already outlined the boundaries of their actions.

In the context of the EUR / USD pair, this fact plays an insignificant role so far. The European Central Bank does not even discuss the question of a rate increase (at least in practical terms). Therefore, in this context, the advantage remains for the US currency. But if the ECB at the end of next year still starts to tighten monetary policy, the euro will receive a powerful and, most importantly, long-term trump card.

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However, this is still far away. Now, we are witnessing a pulse correctional growth of EUR / USD, which is caused not only by the "dovish" Fed meeting but also by the "truce" between Italy and the EU. Yesterday, it became known that the European Commission would not apply the disciplinary procedure for Rome while approving the long-suffering draft Italian budget. The immediate goal of corrective growth is the mark of 1.1515 (the upper limit of the Kumo cloud on the daily chart). If the pair consolidates above this target, then the Ichimoku indicator will generate a bullish signal "Parade of lines", which will open the way to further price growth up to the 17th figure.

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Technical analysis of EUR/USD for December 20, 2018

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Overview:

The EUR/USD pair continues to move upwards from the level of 1.1421. Today, the first support level is currently seen at 1.1421, the price is moving in a bullish channel now. Furthermore, the price has been set above the strong support at the level of 1.1421, which coincides with the 61.8% Fibonacci retracement level. This support has been rejected three times confirming the veracity of an uptrend.

According to the previous events, we expect the EUR/USD pair to trade between 1.1421 and 1.1550. So, the support stands at 1.1421, while daily resistance is found at 1.1550. Therefore, the market is likely to show signs of a bullish trend around the spot of 1.1421. In other words, buy orders are recommended above the spot of 1.1421 with the first target at the level of 1.1550; and continue towards 1.1603. However, if the EUR/USD pair fails to break through the resistance level of 1.1550 today, the market will decline further to 1.1342.

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The dollar is still able to update the highs against the euro - Barclays

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According to experts of the investment bank Barclays, despite the fact that the US Federal Reserve System (FRS) has taken a more cautious position, it's not worthwhile to put an end to the US currency.

The day before, at the last meeting in the current year, the regulator raised the interest rate by 0.25% to 2.25-2.5%. At the same time, the Central Bank reduced the number of rate increases expected next year from three to two and signaled that it will make further decisions on monetary policy depending on the incoming data.

"However, this does not mean at all that the peak values of the dollar exchange rate are already behind us and we should expect a quick reversal from it. Prospects for a more moderate increase in rates are already taken into account by the market. Meanwhile, the factors that force the Fed to exercise caution will not go unnoticed by other central banks, including the ECB," Barclays representatives said.

"Inflation rates in the eurozone remain weak. While the Fed may raise the rate at least two more times, the ECB is still far from tightening its policy. In light of the slowdown in US GDP growth, the weakening momentum of economic growth in China, the unfinished trade war between these two countries, as well as the possibility of similar "military" actions in trade between the United States and the European Union, the prospects for a single European currency look far from positive. Here, we should also add the difficult political situation that has developed in a number of eurozone countries, including Italy. It is assumed that over the next four quarters, the EUR / USD pair will trade near the mark of 1.12 and may well update the multi-month lows," they added.

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Bank of Japan kept rates low

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The Bank of Japan concluded a two-day meeting with a decision on the base interest rate, leaving the current course of monetary policy unchanged, despite the increase in inflation risks.

The interest rate on deposits of commercial banks was kept at minus 0.1%, which is in line with analysts' forecasts. The target yield of ten-year government bonds is left at about 0%. The Central Bank plans to acquire government bonds worth 80 trillion yen annually.

Central Bank officials confirmed their previous estimates, noting that the country's economic growth will be supported by increasing exports and increasing demand in the domestic market.

The current inflation rate is about 1%, while the regulator expects a gradual increase in the indicator to 2%.

Representatives of the Bank of Japan spoke about the increasing role of external risks for the country's economy, mentioning the influence of the "hawkish" policy of the American central bank.

The Bank of Japan meeting took place a few hours after the US Federal Reserve officials raised rates for the fourth time this year, saying they would continue to follow a plan to tighten monetary policy, despite the increased uncertainty about global economic growth.

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What did the Fed decide on December 19, 2018?

What did the Fed decide on December 19, 2018?

Increasing the base interest rate by 25 basis points to the target range of 2.25% -2.50%, the Federal Open Market Committee of the US Federal Reserve commented on its decision and the current situation in the country.

The Fed notes a vigorous upturn in economic activity and a further improvement in the labor market situation due to the average growth of jobs in recent months and the remaining low unemployment rate.

The Fed states that over the period between commission meetings, family expenses continued to increase significantly, while the expansion of investments by business structures slowed compared with more forced rates earlier this year.

The Fed still assesses long-term inflation expectations as stable. At the same time, calculated on a 12-month basis, general inflation and core inflation, which do not take into account energy and food prices, remain close to 2%.

The Fed is committed, in accordance with its authority, to promote maximum employment and price stability. The Fed still expects a further gradual increase in the target interest rate range for federal funds to be in line with a steady increase in economic activity, a stronger labor market and inflation close to the symmetrical 2% target level designated by the Fed in the medium term. The Fed believes that the risks to economic prospects look fairly balanced, but it will continue to closely monitor global economic and financial processes and assess their impact on economic development trends.

Taking into account the already achieved and expected parameters of the state of the labor market and inflation, the Fed decided to raise the target interest rate range for federal funds to 2.25% -2.50%.

In determining the timing and scale of the future regulation of the target interest rate range for federal funds, the Fed will be guided by both achieved and expected economic progress in relation to its goals of maximum employment and symmetrical inflation at 2%. This approach will be based on a wide range of information, including parameters of labor market conditions, indicators of inflationary pressure and inflation expectations, financial and international events.

The current monetary policy fundamentals were adopted unanimously by 10 members of the Federal Committee on the Open Market of the US Federal Reserve.

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Fed: Bets are made, there are no more bets.

Yesterday, all market participants closely followed the Federal Reserve decision on interest rates, as well as statements that were made later during a press conference by Fed Chairman Jerome Powell.

In general, the short-term market reaction to the purchase of the US dollar after the Fed's decision was quite predictable, but demand is unlikely to continue. The fall in the stock market and the slowdown in the US economy at the end of the year will continue to put pressure on the US dollar.

As it became known, the Fed has set the range of interest rates on federal funds between 2.25% and 2.50%. This decision was made by the Fed open-end operations committee by a 10-by-0 vote. The Fed raised its rates and signaled a slightly lower rate of their future increases. However, the committee still believes that some further gradual increase in interest rates will be needed next year.

As for the discount rate, it was also increased by 0.25 percentage points, up to 3.00%.

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As I noted above, the economic outlook for growth rates was revised negatively, which is likely to put pressure on the US dollar after the short-term growth that we are seeing now.

The Fed lowered its forecast for US GDP growth in 2018 to 3%, while in September it was expected to grow by 3.1%. The Fed also lowered its forecast for US GDP growth in 2019 to 2.3% from the September forecast of 2.5%.

As for inflation, then the forecast for 2018 has been revised to 1.9% (the target value of the Fed) from the September forecast of 2.1%.

From positive statements, it should be noted that economic activity continues to grow at a strong pace, like household spending, which will support the economy in the future. The unemployment rate also remains low.

Speech by Fed Chairman Jerome Powell did not make adjustments to the statements of the committee. According to the Fed chairman, some difficulties have arisen since the September meeting, as global economic growth slowed down a bit in 2018, market volatility increased, and financial conditions became more stringent.

Powell also noted that most members of the Open Market Committee had lowered their forecasts for 2018, indicating a slightly lower rate of increase in interest rates next year than planned.

Fed officials are now expecting two rate hikes next year, not three.

The head of the Fed once again drew attention to the fact that the Fed will closely monitor the state of the economy to identify signs of the appropriateness of the policy. This will be done to support further economic growth.

As for the fundamental statistics, which was released yesterday afternoon, it was ignored by the market.

According to the data, the current account deficit of the US balance of payments in the 3rd quarter of this year once again increased and amounted to 124.82 billion US dollars against a revised figure for the 2nd quarter of 101.22 billion dollars. The US Department of Commerce expected the deficit to be $ 126.2 billion. The increase in the current account deficit of the balance of payments is largely due to the growing deficit of trade in goods by $ 23.95 billion, to $ 227.01 billion.

Sales in the secondary housing market in the US rose slightly in November.

According to the National Association of Realtors, sales in the secondary housing market in November 2018 increased by 1.9% and amounted to 5.32 million homes per year. Economists had expected sales of 5.17 million. However, compared with the same period in 2017, sales dropped immediately by 7.0%.

Problems in the housing market are increasing due to changes in monetary policy. Mortgage rates over the past year rose to 5%, which scares off potential buyers. The fixed rate for 30-year mortgage loans in November was 4.87% versus 4.03% in January.

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Fundamental Analysis of NZD/USD for December 20, 2018

NZD/USD has been impulsive with the recent bearish gains after rejecting of the 0.6850 resistance area with a daily close. USD gained momentum as per the recent rate hike decision and optimistic future policies and now it is expected to gain further against NZD in the coming days.

Recently, the New Zealand's ANZ Business Confidence report has been published with an increase to -24.1 from the previous figure of 37.1; Westpac Consumer Sentiment has increased to 109.1 from the previous figure of 103.5; and Current Account has decreased to -6.15B from the previous figure of -1.63B which was expected to be at -5.94. Today, the Credit Card Spending report has been published with a decrease to 6.1% from the previous value of 6.4% and Trade Balance has increased to -861M from the previous figure of -1317M which was estimated to be at -880M.

On the other hand, USD is currently quite impulsive with the bearish gains in the pair as per optimistic approach by the Fed about the recent and upcoming rate hike decisions. Recently, the US Federal Funds Rate report has been published with an increase to 2.50%, as expected, from the previous value of 2.25%. Though the Fed is currently thinking of short-term impacts on the economy, most of investors as well as President Trump are concerned about the interest rate hike's impact on business. The Fed signaled that the US economy would grow more slowly in 2019, while inflation being below 2 percent as per the Fed's expectation. According to the recent statement, there could be at least 2 rate hikes in 2019, which might lead the interest rate to 3.50%. The US Existing Home Sales report has been recently published with an increase to 5.32M from the previous figure of 5.22M which was expected to decrease to 5.20M. Today, Philly FED Manufacturing Index is going to be published which is anticipated to increase to 15.1 from the previous figure of 12.9; Unemployment Claims is expected to have negative result of increasing to 216k from the previous figure of 206k; and CB Leading Index is estimated to decline to 0.0% from the previous value of 0.1%. Moreover, tomorrow, the Final GDP report is going to be released which is expected to be unchanged at 3.5%.

Under the current scenario, NZD has been quite mixed with the recent economic reports, but failed to sustain the momentum due to better economic outcomes from USD published recently. USD is currently more optimistic than NZD, and market sentiment is following it precisely. If USD manages to have better economic results in the coming days, further bearish pressure in the pair is expected.

Now let us look at the technical view. The price is currently heading towards the 0.6700 support area from where certain bullish pressure can be observed in the coming days, but if the price breaks below 0.6700 with a strong daily close, the price is expected to push further down towards the 0.6500 support area in the future. As the price remains below the 0.6950-0.70 area, the bearish pressure is anticipated to continue.

SUPPORT: 0.6500, 0.6700

RESISTANCE: 0.6850, 0.6950, 0.70

BIAS: BULLISH

MOMENTUM: VOLATILE

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GBP / USD. December 20. The trading system. "Regression Channels". London is preparing for a "tough" Brexit

4-hour timeframe

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Technical details:

The senior linear regression channel: direction - down.

The junior linear regression channel: direction - down.

Moving average (20; smoothed) - sideways.

CCI: 57.9859

The GBP / USD currency pair with great difficulty is kept slightly above the moving average line. Yesterday's results of the Fed meeting had virtually no effect on the movement of the currency pair. Volatility has not increased, we also did not see any sharp reversals or amplification of the movement. The results of the meeting were obvious, and Powell's performance was neutral. Today in the UK, the results of the Bank of England will be announced. The probability of a change in the size of a key bet is zero. Mark Carney's speech is not scheduled for today. Thus, a loud, at first glance, an event can be ignored by market participants. Also in the UK today, a report on retail sales for November will be published. Growth is expected to decline, but what will be the real value? Perhaps far below the forecast. At the same time, it was reported that London had begun preparations for Brexit without agreements. The government claims that the more likely is the option with a "soft" Brexit, but recommend preparing for a "hard" version. This once again proves the fears that the parliament is unlikely to vote "for" Theresa May's "Checkers" plan. In general, as before, the uncertainty over the Brexit issue remains much more than the resolved points.

Nearest support levels:

S1 - 1.2634

S2 - 1.2573

S3 - 1.2512

Nearest resistance levels:

R1 - 1.2695

R2 - 1.2756

R3 - 1.2817

Trading recommendations:

The currency pair GBP / USD with great difficulty is held slightly above the MA. Thus, formally relevant are long-term goals with targets of 1.2695 and 1.2817. But the growth potential of the British currency is very limited, therefore, it is recommended to trade for a raise in small lots and after the Heikin Ashi indicator turns up.

Short positions are recommended to open if the pair consolidates below the moving average. In this case, the targets for the downward movement will be the levels of 1.2573 and 1.2512.

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

Explanations for illustrations:

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

The junior linear channel is the purple lines of the 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. December 20. The trading system. "Regression Channels". The Fed does not particularly surprise the markets

4-hour timeframe

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Technical details:

The senior linear regression channel: direction - down.

The junior linear regression channel: direction - sideways.

Moving average (20; smoothed) - up.

CCI: 95.6015

The EUR / USD currency pair in the evening trading on Wednesday, December 19, declined, but not too much. Thus, the market's reaction to the Fed's key rate increase of 0.25 points was very restrained. In principle, such a decision by the Fed was expected, despite Trump's appeals not to tighten monetary policy. Therefore, we did not see a strong strengthening of the American currency. This is a very good moment for both the euro and the pound sterling. Frankly "pigeon" rhetoric, we also did not hear. Jerome Powell announced two rate increases for 2019 and once again noted that the Fed has reached the lower limit of the rate range, which is considered neutral. Powell also noted that at the moment, the US economy is doing well and does not need any incentives. On the penultimate trading day of the week, neither in the States nor in Europe are there any important macroeconomic publications. In the meantime, from a technical point of view, the pair ideally worked out the zone of 1.1420 - 1.1440 and could not get higher than it. Thus, it is now possible for the pair to decline below the moving average line, which will change the trend to a downward one. At the same time, we pay attention once again that a wide flat is now possible. The lower limit of the side corridor is 1.1270.

Nearest support levels:

S1 - 1.1383

S2 - 1.1353

S3 - 1.1322

Nearest resistance levels:

R1 - 1.1414

R2 - 1.1444

R3 - 1.1475

Trading recommendations:

The EUR / USD currency pair has adjusted to the moving average. A reversal of the Heikin Ashi indicator to the top will signal the opening of new long positions with a target of 1.1440. This level will provide serious resistance to the pair.

It is recommended to open a sell position no earlier than a reverse price fixing below the moving with targets of 1.1322 and 1.1292. However, so far there are no prerequisites for overcoming the moving average line.

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

Explanations for illustrations:

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

The younger linear regression channel is the purple lines of the 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

Fundamental Analysis of USD/CAD for December 20, 2018

USD/CAD has been quite impressive with the non-volatile bullish momentum, leading the price towards 1.3500-50 resistance area. CAD has failed to regain momentum amid the recent economic reports. Thus, USD gained momentum on the back of upbeat reports.

Yesterday the US Federal Reserve increased the key interest rate to 2.50% as expected from the previous value of 2.25%. FED is currently quite hawkish about a pace of rate hikes for 2019 despite the pressures from President Trump and volatility. US Stock and Bonds hit rock bottom recently after the FED sognaled two rate hikes next year. Though FED is currently thinking of short-term impacts on the economy, most of investors as well as President Trump are concerned about too fast pace of monetary tigthening and its impact on businesses. FED signaled that the US economy will be a bit slow in 2019 while inflation is likely to be below 2 percent. In the policy statement, there are at least of 2 rate hikes on the agenda for 2019 which might lead the interest rate to 3.50%. Recently US Existing Home Sales report was published with an increase to 5.32M from the previous figure of 5.22M which was expected to decrease to 5.20M. Today Philly FED Manufacturing Index is going to be published which is expected to increase to 15.1 from the previous figure of 12.9, Unemployment Claims could have a negative result of increasing to 216k from the previous figure of 206k, and CB Leading Index is expected to decrease to 0.0% from the previous value of 0.1%. Moreover, tomorrow Final GDP report is going to be published which is expected to be unchanged at 3.5%.

On the CAD side, the loonie has been struggling amid the recent economic reports. Indeed, CPI decreased to -0.4% as expected from the previous positive value of 0.3%, Common CPI remained unchanged as expected at 1.9%, Median CPI decreased to 1.9% despite having expectation of unchanged value of 2.0%, and Trimmed CPI decreased to 1.9% which was expected to be unchanged at 2.1%. Canada has been quite silent with the fundamentals after the Trade War with the US. So Canada's downbeat economic data failed to arouse positive market sentiment. Tomorrow Canada's Core Retail Sales report is going to be published which is expected to increase to 0.2% from the previous value of 0.1%, GDP is expected to increase to 0.2% from the previous negative value of -0.1%, Retail Sales is expected to increase to 0.4% from the previous value of 0.2%, and BOC Business Outlook Survey is going to take place as well which is expected to provide the definite momentum for the CAD market for the coming days.

Meanwhile, certain volatility is expected to be seen in this pair for the coming days. USD is expected to show a mixed dynamic, but CAD is optimistic. If Canada manages to provide better than expected reports or is they meet expectations, bearish pressure is expected in the pair for the coming days.

Now let us look at the technical view. The price is currently non-volatile and impulsive with the bullish gains that is expected to lead towards 1.3550 resistance area. The price also formed Bearish Divergence which is expected to lead to certain bearish pressure off the resistance area. As the price remains below 1.3550 area, there are certain chances of short-term bearish intervention with a strong bullish counter-move in the coming days.

SUPPORT: 1.3350, 1.3450

RESISTANCE: 1.3550, 1.3650

BIAS: BULLISH

MOMENTUM: NON-VOLATILE and IMPULSIVE

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

Analysis of the divergence of EUR / USD on December 20. The pair predicts to fall to 1.13

4h

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The EUR / USD currency pair has completed growth to the correctional level of 76.4% - 1.1423 and rebound from it. Thus, a reversal was made in favor of the American currency and a fall began in the direction of the Fibo level of 100.0% - 1.1303. The ripening divergences on December 20 are not observed in any indicator. Fixing the pair over the correction level of 76.4% will work in favor of the euro currency and continuing growth in the direction of the next Fibo level of 61.8% - 1.1497.

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, performing a rebound from the correction level of 127.2% - 1.1285 retains the chances of continued growth in the direction of the correction level of 100.0% - 1.1553. Maturing divergences are not observed on the current chart for any indicator. Fixing a pair of quotations below the Fibo level of 127.2% will work in favor of the US dollar and resuming the fall in the direction of the correction level of 161.8% - 1.0941.

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

Recommendations to traders:

New purchases of the EUR / USD currency pair can be made with the target of 1.1497 and a Stop Loss order under the Fibo level of 100.0% if the pair closes above the level of 1.1423.

Sales of the EUR / USD currency pair can be carried out now with the goal of 1.1303 with a Stop Loss order above the Fibo level of 76.4% since the pair completed the rebound from the correction level of 1.1423 (hourly chart).

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

Analysis of GBP / USD Divergences for December 20th. The pound is ready for a new fall

4h

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The GBP / USD currency pair on the 4-hour chart performed a new rebound from the correction level of 100.0% - 1.2662 with a reversal in favor of the American currency. As a result, on December 20, the drop in quotations can be continued in the direction of the correctional level of 127.2% - 1.2491. Fixing the pair above the Fibo level of 100.0% can be interpreted in favor of the British currency and count on continued growth in the direction of the next correctional level of 76.4% - 1.2812.

The Fibo grid is built on extremes from August 15, 2018, and September 20, 2018.

1h

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On the hourly chart, the pair, after the end of the correction level of 100.0% - 1.2696, performed a U-turn in favor of the US currency and continues the process of falling in the direction of the correctional level of 127.2% - 1.2566. Overcoming divergences are not visible today. Quoting the quotations from the Fibo level of 127.2% will allow traders to count on a reversal in favor of the British currency and some growth in the direction of the correction level of 100.0%. Fixing the rate of the pair below the Fibo level of 127.2% will increase the chances for a further fall in the direction of the next correction level of 161.8% - 1.2400.

The Fibo grid is built on extremes from October 30, 2018, and November 7, 2018.

Recommendations to traders:

Purchases of the GBP / USD currency pair can be made with the target of 1.2696 and a Stop Loss order below the level of 127.2% if the pair bounces off of the correction level of 1.2566 (hourly chart).

Sales of the GBP / USD currency pair can be carried out now with a target of 1.2566 and a Stop Loss order above the level of 100.0%, as the pair completed the rebound from the level of 1.2696 (hourly chart) with the formation of a bearish divergence.

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

The Fed stood up under the pressure of the markets and Trump

As we expected, the Fed raised the key interest rate by 0.25%, to 2.50%, following the December meeting, while the regulator did not go in the wake of the markets and D. Trump.

The US Central Bank did not go in the wake of the markets, who passionately wanted him to pause in raising interest rates, and also did not succumb to the statements of President D. Trump that in the current economic situation it is not necessary to continue the cycle of raising interest rates. Following the meeting, it became clear that the regulator continues to assess the state and prospects of the country's economy as positive. He somewhat adjusted his forecasts for economic growth, inflation and the labor market, and also said that we should expect not three in the new year, as was expected at the September meeting, but two increases in interest rates.

The Fed lowered its projections for GDP growth this year from 3.1% to 3.0%, and in 2019, from 2.5% to 2.3%. The long-term forecast of GDP was, on the contrary, raised to 1.9% from 1.8%. In terms of employment, expectations were also reduced, from 4.5% to 4.4%, which is positive. Interestingly, at a press conference, J. Powell, head of the Federal Reserve, said that, despite some slowdown in the growth of the country's economy, as well as stabilization of inflationary pressure at the 1.9% mark, only 11 heads of the Federal Reserve Bank voted for two rate increases. He said that there are still those who consider it possible and the three increases in borrowing costs seem to perceive, in the first place, the situation with the dynamics of inflation as temporary.

The US stock market reacted ambiguously to the decision of the Fed and the performance of its head. At first, stock indices received support, hoping that the regulator would declare a pause in raising interest rates, but when it became clear that the bank had only diminished the growth rate of interest rates from the planned three to two, it became clear to everyone that the general trend towards normalizing monetary policy remained. On this wave, the indices went into a deep minus, and the dollar won back a number of losses received earlier.

Assessing the current situation, we believe that the weakening of the dollar will stop, and new negative trends in the global economy, as well as from the "fields" of trade wars, will support its course against major currencies. It is likely that this will result in the continuation of a wide trading range of major currency pairs.

Forecast of the day:

The AUD / USD currency pair is trading below the level of 0.7100 in the wake of the outcome of the Fed's monetary policy decision. Fixing the price below this mark will lead to its further fall to 0.7040 and 0.7000.

The USD / JPY currency pair breaks out of the range of 112.30-113.90 in the wake of falling demand for risky assets and increasing uncertainty in the dynamics of global economic growth. Fixing the price of 112.30 mark will lead to a further decline to 111.65.

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

Simplified wave analysis of GBP / JPY for December 20

Large-scale graphics:

In the downward wave trend of the cross lasting from February, the last 4-hour wave formed a counter correction. At least 4 figures to the upper boundary of the calculated target zone.

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Medium scale graphics:

From November 8, in the direction of the dominant course of the movement, a downward wave is formed. In its structure, a hidden correction was completed a week ago.

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Small-scale graphics:

The downward wave of December 13 gave rise to the final part of the main trend. The formation of the middle part of the wave is expected, most likely in the form of lateral motion.

Forecast and recommendations:

Against the general background of the decline in trading activity in the upcoming week, the price of the pair is expected to be flat. After the correction phase, it is recommended to track the sale signals of the instrument.

Resistance zones:

- 142.50 / 143.00

Support areas:

- 140.80 / 140.30

Explanations for the figures: The simplified wave analysis uses waves consisting of 3 parts (A – B – C). For analysis, 3 consecutive graphs are used. Each of them analyzes the last, incomplete wave. Zones show calculated areas with the highest probability of reversal. The arrows indicate the wave marking by the method used by the author. The solid background shows the formed structure, the dotted - the expected movement.

Note: The wave algorithm does not take into account the duration of tool movements over time. To conduct a trade transaction, you need confirmation signals from the trading systems you use!

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

Simplified wave analysis AUD / USD for December 20

Large-scale graphics:

The trend "Aussie" from the end of January forms a downward wave of daily scale. The movement structure does not demonstrate completeness. To the upper boundary of the nearest zone of probable completion, there are about 3 more price patterns.

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Medium scale graphics:

The last wave for 2 months moved the price of the pair up, forming a correction in the model of the older TF. The scenario of continuation of a bull wave at a higher wave level is possible.

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Small-scale graphics:

The price decline, which began on December 3, may be either an intermediate correction in the current bullish wave or the first section of the main bearish trend.

Forecast and recommendations:

In the nearest weekly period, against the background of the Christmas decline in activity on the market, a price rebound is expected from the settlement support zone. Trade transactions during this period carry a high degree of risk and are not recommended.

Resistance zones:

- 0.7170 / 0.7220

Support areas:

- 0.7070 / 0.7020

Explanations for the figures: The simplified wave analysis uses waves consisting of 3 parts (A – B – C). For analysis, 3 consecutive graphs are used. Each of them analyzes the last, incomplete wave. Zones show calculated areas with the highest probability of reversal. The arrows indicate the wave marking by the method used by the author. The solid background shows the formed structure, the dotted - the expected movement.

Note: The wave algorithm does not take into account the duration of tool movements over time. To conduct a trade transaction, you need confirmation signals from the trading systems you use!

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

Fractal analysis of major currency pairs for December 20

Dear colleagues.

For the currency pair Euro / Dollar, the price is in a correction from the downward structure on December 14. For the Pound / Dollar currency pair, we should continue moving upwards after the breakdown of 1.2680. For the currency pair Dollar / Franc, the price is in equilibrium. For the currency pair Dollar / Yen, we expect a further downward movement after the breakdown of 112.27. For the Euro / Yen currency pair, we follow the formation of the initial conditions for the downward cycle of December 13 and the development of this structure is expected after the breakdown of 127.43. For the currency pair Pound / Yen, we are following the development of the downward structure of December 13 and the main movement downwards is expected after the breakdown of 141.20.

Forecast for December 20:

Analytical review of H1-scale currency pairs:8Ak0MVb7fLPiD0LLj49fzMlmcKrxVOYz6xoLbNCHFor the Euro / Dollar currency pair, the key levels on the H1 scale are 1.1468, 1.1437, 1.1414, 1.1384, 1.1353, 1.1332 and 1.1311. Here, we continue to follow the development of the upward structure from December 14. At the moment, the price is in the correction. The continuation of the upward movement is expected after the breakdown of 1.1386. In this case, the target is 1.1414 and in the range of 1.1414 - 1.1437 is the short-term upward movement, as well as consolidation. The potential value for the top is considered the level of 1.1468, upon reaching which we expect a rollback downwards.

The short-term downward movement is possible in the range of 1.1353 - 1.1332 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 1.1311 and this level is the key support for the top.

The main trend is the upward structure of December 14, the stage of correction.

Trading recommendations:

Buy 1.1386 Take profit: 1.1414

Buy 1.1416 Take profit: 1.1435

Sell: 1.1353 Take profit: 1.1334

Sell: 1.1330 Take profit: 1.1311O9JdyuDZODD5kLpFRHwBtd97D495zNk-d17A-YIqFor the Pound / Dollar currency pair, the key levels on the H1 scale are 1.2865, 1.2813, 1.2741, 1.2679, 1.2592, 1.2552, 1.2517, 1.2475 and 1.2417. Here, we continue to follow the formation of the ascending structure of December 11. The continuation of the upward movement is expected after the breakdown of 1.2679. In this case, the goal is 1.2741 and near this level is the price consolidation. The breakdown of the level of 1.2741 should be accompanied by a pronounced upward movement. Here, the target is 1.2813. The potential value for the top is considered the level of 1.2865, upon reaching which we expect consolidation, as well as a rollback to the top.

The short-term downward movement, as well as consolidation, are possible in the range of 1.2592 - 1.2552. The breakdown of the latter value will lead to a prolonged correction. Here, the target is 1.2517 and this level is the key support for the top. Its price will have the formation of the initial conditions for the upward cycle. In this case, the target is 1.2475.

The main trend is the formation of the ascending structure of December 11, the stage of correction.

Trading recommendations:

Buy: 1.2680 Take profit: 1.2740

Buy: 1.2744 Take profit: 1.2813

Sell: 1.2591 Take profit: 1.2552

Sell: 1.2550 Take profit: 1.25177mftvItQB9abqZFn-DzbRedaTv0zt1xQU4cvV7zbFor the Dollar / Franc currency pair, the key levels on the H1 scale are 1.0093, 1.0058, 1.0042, 1.0014, 0.9995, 0.9965, 0.9920, 0.9900 and 0.9863. Here, the situation is in equilibrium. The ascending structure of December 11 and the downward potential of December 17. An upward movement is possible after a breakdown of 0.9965. In this case, the first target is 0.9995. The short-term upward movement is expected in the range of 0.9995 - 1.0014 and the breakdown of the last value should be accompanied by a pronounced upward movement. Here, the target is 1.0042 and in the range of 1.0042 - 1.0058 is the price consolidation. The potential value for the top is considered the level of 1.0093, upon reaching which we expect a rollback downwards.

The short-term downward movement is possible in the range of 0.9920 - 0.9900. The breakdown of the latter value will have to the development of a downward structure. In this case, we expect an impulsive movement to the level of 0.9863.

The main trend is the ascending structure of December 11, the formation of potential for the bottom of December 17.

Trading recommendations:

Buy: 0.9965 Take profit: 0.9990

Buy: 0.9995 Take profit: 1.0012

Sell: 0.9918 Take profit: 0.9900

Sell: 0.9898 Take profit: 0.9865FRJ7jAzPx1j_jtF5t_ncV82acF074UKBNoasHZJOFor the Dollar / Yen currency pair, the key levels on the scale are 113.17, 112.92, 112.69, 112.29, 111.92, 111.67 and 111.30. Here, we are following the downward structure of December 14th. A downward movement is expected after the breakdown of 112.27. In this case, the goal is 111.92 and in the range of 111.92 - 111.67 is the price consolidation. The potential value for the bottom is considered the level of 111.30, after reaching which we expect a rollback to the top.

The short-term upward movement is possible in the range of 112.69 - 112.92 and the breakdown of the latter value will lead to a prolonged correction. Here, the goal is 113.17 and this level is the key support for the downward structure from December 14.

The main trend: the downward structure of December 14.

Trading recommendations:

Buy: 112.70 Take profit: 112.90

Buy: 112.93 Take profit: 113.17

Sell: 112.27 Take profit: 111.94

Sell: 111.90 Take profit: 111.68

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For the Canadian dollar / Dollar currency pair, the key levels on the H1 scale are 1.3614, 1.3557, 1.3521, 1.3434, 1.3405, 1.3361 and 1.3318. Here, we are following the development of the bottom-up structure from December 7th. The short-term upward movement is expected in the range of 1.3521 - 1.3557 and the breakdown of the last value will allow expecting a movement towards a potential target of 1.3614, after reaching this level, we expect a rollback downwards.

The short-term downward movement is possible in the range of 1.3434 - 1.3405 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 1.3361 and this level is the key support for the top. Its price passage will have to form the initial conditions for the downward cycle. In this case, the target is 1.3318 .

The main trend is the local structure for the top of December 7th.

Trading recommendations:

Buy: 1.3521 Take profit: 1.3555

Buy: 1.3560 Take profit: 1.3612

Sell: 1.3434 Take profit: 1.3405

Sell: 1.3403 Take profit: 1.3363

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For the currency pair Australian dollar / Dollar, the key levels on the H1 scale are 0.7186, 0.7148, 0.7127, 0.7075, 0.7049 and 0.7015. Here, we follow the development of the downward structure of December 13. The short-term downward movement is expected in the range of 0.7075 - 0.7049 and the breakdown of the latter value will lead to a movement to the potential target of 0.7015, upon reaching which we expect a rollback to the correction.

The short-term upward movement is possible in the range of 0.7127 - 0.7148 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 0.7186 and this level is the key support for the downward structure.

The main trend is the downward structure of December 4.

Trading recommendations:

Buy: 0.7127 Take profit: 0.7146

Buy: 0.7150 Take profit: 0.7185

Sell: 0.7075 Take profit: 0.7052

Sell: 0.7047 Take profit: 0.7017

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For the Euro / Yen currency pair, the key levels on the H1 scale are 128.76, 128.46, 128.23, 127.68, 127.43, 127.00 and 126.68. Here, we are following the formation of the descending initial conditions of December 13. The short-term downward movement is possible in the range of 127.68 - 127.43 and the breakdown of the latter value should be accompanied by a pronounced downward movement. Here, the goal is 127.00. The potential value for the bottom is considered the level of 126.68, after reaching which we expect consolidation, as well as a rollback to the top.

The short-term upward movement is possible in the range of 128.23 - 128.46 and the breakdown of the latter value will lead to a prolonged correction. Here, the goal is 128.76 and this level is the key support for the downward structure.

The main trend is the formation of the initial conditions for the downward movement of December 13.

Trading recommendations:

Buy: 128.23 Take profit: 128.44

Buy: 128.48 Take profit: 128.74

Sell: 127.66 Take profit: 127.45

Sell: 127.40 Take profit: 127.00

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For the Pound / Yen currency pair, the key levels on the H1 scale are 143.14, 142.73, 142.39, 141.55, 141.22, 140.80 and 140.22. Here, we follow the development of the downward structure of December 13. The short-term downward movement is expected in the range of 141.55 - 141.22 and the breakdown of the latter value will lead to the movement to the potential target of 140.80, consolidation is near this level. We consider the level of 140.22 as a potential value for the bottom, after reaching which we expect a rollback to the top.

The short-term uptrend is possible in the range of 142.39 - 142.73 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 143.14 and this level is the key support for the bottom.

The main trend is the downward structure of December 13.

Trading recommendations:

Buy: 142.40 Take profit: 142.70

Buy: 142.77 Take profit: 143.12

Sell: 141.55 Take profit: 141.25

Sell: 141.20 Take profit: 140.80

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Wave analysis of GBP / USD for December 20. The pound seems to be preparing for a new downward wave

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Wave counting analysis:

During the trading on December 19, the GBP / USD pair lost about 30 bp, which, however, did not affect the current wave counting. A construction of at least a three-wave upward structure is still expected. However, an unsuccessful attempt to break through the 100.0% Fibonacci level already warns that the tool may return to decline and significantly complicate the downward trend. Three waves of the corrective part are already there. Therefore, there are all wave bases to assume the construction of a new downward wave.

Shopping goals:

1.2696 - 100.0% Fibonacci

1.2807 - 76.4% Fibonacci

Sales targets:

1.2564 - 127.2% Fibonacci

1.2398 - 161.8% Fibonacci

General conclusions and trading recommendations:

In conclusion, the pair GBP / USD may complete the upward set of waves in the near future. Only a successful attempt to break through the level of 100.0% will indicate a couple's willingness to grow, and I will recommend new purchases with targets located near the 1.2807 mark, which equals 76.4% Fibonacci. Otherwise, the instrument may proceed to the construction of a new downward wave with targets located around 1.2564 and 1.2398.

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

Wave analysis of EUR / USD for December 20. The pair rested against strong resistance

analytics5c1b468c906cd_source!.png

Wave counting analysis:

In the course of trading on Wednesday, the EUR / USD pair added another 15 bp despite coming close to the level of 38.2% on the senior Fibonacci grid. Thus, the estimated wave c, which is obtained rather complicated by the internal wave structure, continues its construction. A successful attempt to break through the level of 38.2% according to Fibonacci will indicate that the pair is ready for further growth. Unsuccessful - most likely, will lead to completion of construction of a wave.

Sales targets:

1.1215 - 0.0% Fibonacci

Shopping goals:

1.1471 - 100.0% Fibonacci

1.1528 - 127.2% Fibonacci

General conclusions and trading recommendations:

The pair remains within the framework of building with an upward wave. A break of 1.1266 (minimum b) will lead to a resumption of the instrument decline with targets located near the mark of 1.1215, which is equal to 0.0% Fibonacci and lower, and in this case I will recommend sales. I recommend to open purchases now after a successful attempt to break through the level of 38.2%, which confirms the readiness of the instrument to increase.

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