USD/JPY analysis for January 02, 2019

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Recently, the USD/JPY pair has been trading downwards. The price tested the level of 108.70. Inverted head and shoulders intrarday pattern in the background. I also found the broken intraday supply trendline, which is another sign of strength. My advice is to watch for buying opportunities. The upward target is set at the price of 109.90.

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Bitcoin analysis for January 02, 2019

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Trading recommendations:

According to the H1 time - frame, I found a breakout of the rising channel, which is a sign of changing in trend behaivor from bullish to bearish. I also found a confirmed double top formation and hidden bearish divergence on the MACD oscillator, which is another sign of weakness. My advice is to watch for selling opportunities. The downward targets are set at the price of $3.387 and at the price of $3.100.

Support/Resistance

$3.933 – Intraday resistance

$3.642– Intraday support

$3.383 – Objective target 1

$3.100 – 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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EUR/USD analysis for January 02, 2019

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Recently, the EUR/USD pair has been trading upwards. The price tested the level of 1.1496. According to the H1 time – frame, I found a fake breakout of resistance at the level of 1.1478, which is a sign that buyers got trapped. I also found that potential end of the upward correction (abc flat) and a hidden bearish divergence on the MACD oscillator, which is another sign of weakness. My advice is to watch for selling opportunities. The downward targets are set at the price of 1.1342 and at the price of 1.1270.

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USD / JPY: Weak China causes market panic

The year of 2019 started quite rapidly: the US currency continues to swoop down, and defensive instruments are still in significant demand. On the market, one can increasingly hear the phrase that "the era of an expensive dollar is coming to an end" and the current year will be marked by a weakening of the greenback.

In my opinion, it is still too early to draw such long-term conclusions, however, the trends of recent weeks cannot be ignored. The dollar index for December fell from 97 points to 95.46, reflecting the traders' pessimism about the prospects for the US currency. Flywheel greenback sales began to spin after the December meeting of the Fed at which members of the regulator announced a slowdown in monetary policy tightening. Dollar pairs reacted differently to this news but the main beneficiary of the situation was the Japanese currency, which paired with the dollar just today updated semi-annual minimums.

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Last week, the USD/JPY pair was getting to the rather powerful, psychologically important level 110.00. The bears approached the boundaries of this level several times but each time they bought the pair, the price returned to previous levels. Yet, on the first working day after the New Year, the southern impulse increased markedly, after which the bears not only entered the 109th figure but also pushed the price to the level of 108.70. In other words, the USD/JPY pair has a serious potential for further decline: the nearest support level is at around 106.80, which is the bottom line of the Bollinger Bands indicator on the monthly timeframe.

Such a rapid decline dynamics is explained by several fundamental factors. Firstly, it's Chinese statistics, secondly, prospects on Brexit are still in doubt. Against this background, the role of defensive assets increased substantially, after which the yen became a temporary favorite in the market. In turn, the dollar is under the yoke of its own problems, starting from a domestic political conflict that led to a shutdown and ending with a decline in yield of treasuries. This figure fell to a mark of 2.67%, that is, to an annual minimum.

Plus, the overall pressure on the dollar is exerted by the dovish position of the Fed, whose members agreed to slow down the pace of the rate hike this year. Moreover, on the horizon, a neutral rate level loomed, which may be below three percent. In other words, the American regulator is completing the cycle of tightening monetary policy amid a slowdown in the country's main indicators of the economy. Here, it is appropriate to recall that Jerome Powell in 2019 will hold press conferences after each of the eight Fed meetings. Therefore, we can find out already on January 30 the amended position of the Fed head regarding the prospects for monetary policy. If he confirms the main theses of the December meeting, the dollar will again go to the peak.

Back to the Japanese currency, today's revaluation is associated with an increased demand for protective tools as mentioned above. Here China played its role, which this week published rather weak releases. On Monday, we learned the data of the PMI index for the manufacturing fell to 49.8 points. Which is the worst result for the last year. Let me remind you that the values below the 50th mark indicate a slowdown in the relevant sector of the economy.

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Today there was another blow from the Chinese statistics: PMI Caixin / Markit manufacturing activity index was also in the reduction zone, falling below 50 which was the first time since the spring of 2017. Such figures indicate a slowdown in the growth of Chinese industry and this fact may affect the dynamics of the global economy as many experts have already warned several times. The US economy will not be an exception either, especially given the completion of the effect of tax reform and the negative impact of the US-China trade conflict. Such prospects again correspond to the prospects of the monetary policy of the Fed. I guess it's not for nothing that Jerome Powell recently warned that "US statistics in 2019 will not be so favorable to the forecasts of the regulator, as it was in 2018."

Thus, the general fundamental background for the dollar remains negative. In the context of the USD/JPY pair, the southern price trend is further enhanced by the demand for protective tools. However, it should be warned that during the American session for today, a northern price rollback is possible. Donald Trump invited the leaders of both parties of the House of Representatives and the US Senate to a meeting where he would try to convince lawmakers to allocate five billion dollars to the border wall next year. If this meeting ends in success for the American president (which is unlikely), then the dollar will slightly restore its position in the entire market.

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Otherwise, the USD/JPY pair will continue the southern route. On the technical side, there are no barriers in reducing the price down to 106.80 (the bottom line of the Bollinger Bands on MN).

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GBP / USD pair: plan for the American session on January 2. Pound returned to previous levels

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

News from Theresa May associated with Brexit has failed to support the British pound, which quickly fell today from recent highs. At the moment, you can count on purchases in the region of the middle border of the side channel 1.2659, however, larger buyers will show themselves at the lower border in the area of 1.2611. The main task of the bulls will be the return and consolidation in the second half of the day above the resistance of 1.2715, which will make it possible to speak about the continuation of the upward correction in GBP/USD pair.

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

The bears did an excellent job with the morning task and their next goal would be the breakdown and consolidation below 1.2659 support, which will lead to a further sale to the area of 1.2611 and 1.2567 minima. However, a more optimal scenario for sales today in the second half of the day will be a correction to the area of resistance 1.2715, from where you can open short positions immediately to rebound.

Indicator signals:

Moving averages

Trade is conducted in the area of 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 pound rising in the afternoon, you can open short positions from the middle border of the Bollinger Bands indicator around 1.2725.

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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 January 2. Euro buyers did not keep the market

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

Weak data on the euro area led to the return of the European currency in the area of the opening of the day. At the moment, buyers have problems with the resistance level of 1.1446, and only fixing on it will again return the pair to a maximum of 1.1486, where I recommend fixing the profits. In the event of a further decline in the euro, long positions can be considered to rebound from the support of 1.1406.

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

As long as trade is conducted below 1.1446, pressure on the euro will continue, and good fundamental data on the American economy may return sellers to the market, which will lead to a decline and a test of new support of 1.1406. However, the main purpose of the bears will be the area of 1.1369, where I recommend fixing the profits. If the euro rises above 1.1446 in the afternoon, short positions can be opened immediately to rebound from the maximum of 1.1486.

Indicator signals:

Moving Averages

Trade has moved to the area of 30-day and 50-day averages, which indicates the lateral nature of the market.

Bollinger bands

If the euro declines in the second half of the day, it is best to return to purchases from the lower limit of the Bollinger Bands indicator around 1.1415.

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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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What difficulties will the dollar face in 2019?

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After an unexpected rally, which led to the dollar falling to an 18-month low at the end of 2018, in the coming year, the currency will face new and old problems.

It is possible to single out an overestimation, a weakening boom in the stock market, a noticeable decline in the repatriation of funds by US companies and a high probability that the Fed will not raise interest rates as many times as it had planned. Given these circumstances, there is every reason to believe that the dollar will complete 2019 by about 5 percent below current levels, although this goes against the current trend when futures point to the dollar near historic highs. There is an opposite opinion: a monthly investor survey of Merrill Lynch showed that the dollar will return the crown. However, there are fewer supporters of this theory. Last year, investors experienced several powerful blows at once, large rates failed in the segment of cryptocurrency, technology, and at the end of the year, the dollar failed.

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The Chinese economy began its decline

The new year in the Forex market began with the increasing pressure of the US dollar against major currencies with the exception of "defensive", which includes the Japanese yen and the Swiss franc. You should also pay attention to the dynamics of government bonds of US Treasury, the demand for which has resumed.

In our opinion, the main reason for such behavior in the market is the preservation of the general pessimism of market participants regarding the growth prospects of the global economy, which only intensified on the first working day after the publication of data from the manufacturing business index (PMI) from China's Caixin. It was assumed that the indicator, albeit slightly, would grow, remaining above the level of 50 points, which separates the overall dynamics of the indicator's growth from its fall. But that did not happen. The business activity index in the manufacturing sector fell to 49.7 points in December against the November value of 50.2 points and the forecast of increase to 50.3 points.

Despite the fact that today Europe continues to celebrate the New Year holidays, local financial markets are working and they show a strong drop in stock indices. Futures on US stock indexes are also in deep minus, anticipating a fall at the opening of the US stock market. In the foreign exchange market, the Japanese yen is primarily in demand. Interest in the Swiss franc is present, but not so strong. The United States dollar is in demand as a safe haven currency.

The fall in the overall demand for risky assets and in the dollar appreciation that is based is explained by data from China, which show not only a slowdown in growth, as it was before, but the beginning of its decline. This is the strongest signal for the markets, which indicates that the second largest economy in the world does not just slow down growth, but begins its decline. On this wave, we should also expect a noticeable decrease in demand for raw materials and commodity assets, which will hurt oil prices and metals that have a technical demand for production.

On this wave, a decline in commodity and commodity currencies against the US dollar has already been noted today. Undoubtedly, we should expect with the start of trading in Russia and the depreciation of the ruble.

In our opinion, we should expect the continuation of the local strengthening of the dollar with the start of trading in the States.

Forecast of the day:

The AUD / USD currency pair is above the level of 0.7000. Breaking this mark in the wake of negative data from China could lead to a fall in price to 0.6915.

The USD / JPY currency pair is trading below our previous target level of 109.60. We expect the pair to decline to 108.15.

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1JRBOULpEa-mkl9E6EorTXrQ-NfUEnNgOYR7zm0cThe material has been provided by InstaForex Company - www.instaforex.com

On the first day of trading in 2019, oil fell in price

This morning, the cost of a barrel of oil declined amid growing production in America and a weak report on China.

Futures for WTI crude oil with delivery the following month sank by 2.1% to 44.84 dollars per barrel, March futures for Brent crude decreased in price by 1.9%, reaching 53.11 dollars per barrel.

Last year, WTI fell by 25%, which was the first unprofitable year since 2015. Also, "black gold" is trading at 41% below the four-year high of $ 77 per barrel, reached in early October.

Brent sagged 20% last year and lost 39% from a four-year high of almost $ 87 per barrel.

Energy Information Administration (EIA) on Monday reported that in October, oil production in the United States rose to a record high of 11.537 million barrels per day.

In addition, very pessimistic data on the state of the Chinese economy also affect the stock of the country.

The business index of Caixin / Markit for December fell to 49.7 from 50.2 in November, which was the first reduction in 19 months.

This only confirms the trend, which was noted in the official report on business activity, which on Monday reflected a reduction to 49.4 at the end of last month.

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New Year's stock and currency markets start in negative

After 2018 was recognized as the worst for global stock markets in the last 10 years. The new year began with the same fears associated with a slowdown in economic growth as heightened trade tensions and rising interest rates that held markets back for most of the second half of last year.

hNdd5xdLKCS7Qmh0tASk8156x2F-gAR5XeJ_2UTfThe first negative news of the new year was the December business reviews from around the world and the news that the manufacturing sector in China declined for the first time in 19 months. As a result, the Shanghai stock market lost more than 1 percent and the Hong Kong market lost almost 3 percent. At the same time, the Nikkei in Tokyo was marked by growth but on the contrary, further strengthening of the safe yen does not cause questions. Given that markets currently do not expect an increase in interest rates in the current cycle, the Fed has indicated at least two more approaches while the dollar has remained in the red since the end of last year. The dollar against the yen updated the annual minimum of 109 yen. The dollar index DXY also turned out to be lower and the euro rose to the level of 1.15 dollars for the first time since the beginning of November.

The US currency and stock market are under pressure from domestic political problems. Washington can not solve the issue of stopping the work of the Federal Government caused by the confrontation of the White House and Congress. If we add to this the aggressive stance of Washington's trade hawks, who are not ready to give relief to China despite the president's desire to make a deal and calm down financial markets, t the signals about economic growth remain grim.

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EUR / USD: the euro demand is unlikely to remain

The European currency rose against the US dollar at the beginning of the day amid a low after the New Year trading volume. It is not yet known whether the demand for the euro will continue in the current format, but buyers will have to make a lot of effort to do this.

Good data on the US labor market, which came out at the end of last week, helped keep the dollar from another sale.

According to a report by the US Department of Labor, the number of Americans who first applied for unemployment benefits declined. Thus, the number of initial claims for unemployment benefits for the week from December 16 to December 22 decreased by 1,000 and amounted to 216,000. Economists had expected that the number of new applications would be 217,000.

Today is expected to yield a number of statistics on production activity, which may affect the rate of the European currency if the data turn out to be worse than economists' forecasts. It is expected that the business activity index in the manufacturing sector of Germany in December will remain unchanged at the level of 51.5 points, while the similar indicator for the euro area should also remain at the level of 51.4 points. If the data comes out worse than expected, this will trigger the closure of a number of long positions in risky assets.

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As for the technical picture of the EUR / USD pair, in order to preserve the bullish nature of the market, buyers need real breakdown and consolidation above the high of December last year, which is located in the area of 1.1490. If the breakdown of this level takes place, the demand for risky assets will increase, which will open a direct path to the new resistance levels of 1.1540 and 1.1605.

If the growth of the euro, which is now observed, will not be supported by good data and new purchases, then most likely another unsuccessful fixing above the resistance of 1.1490 will lead to a new wave of sales of EUR / USD, with a return to the minimum areas of 1.1410 and 1.1330.

The British pound rose late last year after reports that Prime Minister Theresa May scheduled a cabinet meeting for January 2. This was done in order to be able to discuss plans for the case of leaving the EU without an agreement. Let me remind you that the majority of specialists and experts are confident of the failure of the Brexit agreement, which is unlikely to pass through parliament. However, it is inappropriate to talk about the further growth of the pound, without any specifics in the negotiations.

In case of return of the trading instrument under the support level of 1.2735, most likely traders will hasten to take profits in long positions, which will lead to even greater pressure on GBP / USD and decrease in the pair to the middle border of the side channel of 1.2670, where the pound has been in the last few weeks.

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Simplified wave analysis of USD / JPY for January 2

Large-scale graphics:

Starting in July, yen quotes in the main trend wave will form a corrective downward stretch. The wave structure looks complete.

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Medium scale graphics:

From the beginning of October, a downward wave structure is formed, completing a larger model. The upper limit of the preliminary target zone has been reached. Signal reversal is not observed.

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Small-scale graphics:

Beginning on December 13, the depreciation has a pronounced impulse form. In the wave of timescale, it became the final part (C).

Forecast and recommendations:

In the coming days, you should count on the completion of the price reduction of the pair and the creation of conditions for changing the price course. It is recommended to focus on finding signals to enter long trades.

Resistance zones:

- 111.80 / 112.30

Support areas:

- 109.30 / 108.80

Explanations for the figures: The simplified wave analysis uses waves consisting of 3 parts (A – B – C). The analysis uses 3 consecutive scale graph. 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.

Attention: 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 of EUR / USD for January 2

Large-scale graphics:

The trend of the tool throughout the past year drove quotes down. The wave structure is incomplete. From the support level achieved, the price forms a counter movement.

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Medium scale graphics:

Rising wave from November 12 does not have a reversal potential. If further there is no complication of the structure with an increase in the wave level, the entire current wave will become a correction of the last segment of the main trend.

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Small-scale graphics:

From December 20, a downward wave is formed on the graph, with a small stroke potential. The structure lacks the final part (C).

Forecast and recommendations:

In the next week period, the price of the pair is waiting for a flat period. Oscillations are expected in the side corridor between the nearest oncoming zones. Supporters of intersessional style can make short-term deals according to the expected movement algorithm.

Resistance zones:

- 1.1490 / 1.1540

Support areas:

- 1.1300 / 1.1250

Explanations for the figures: The simplified wave analysis uses waves consisting of 3 parts (A – B – C). The analysis uses 3 consecutive scale graph. 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.

Attention: 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

GBP / USD: plan for the European session on January 2. The pound is trying to cling to new highs

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

Pound buyers, in order to maintain a further upward trend, need to stay above the support level of 1.2734, and the formation of a false breakout on it will be a good signal to open long positions, based on the repeated test of last December's maximum around 1.2808, where I recommend fixing the profits. In the case of a return under the support of 1.2734, it is best to return to long positions to rebound from the low of 1.2677.

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

Sellers urgently need to return to the support level of 1.2734, which last year served an important role and limited the upward correction of the pound. In the case of a decline under the support of 1.2734, the bears will quickly return GBP / USD to a minimum area of 1.2677, where I recommend fixing the profits. Under the scenario of further growth of the pound, you can sell on the rebound from a maximum of 1.2808.

Indicator signals:

Moving Averages

Trade is slightly above the 30-day and 50-day moving average, with a short-term advantage of buyers of the British pound.

Bollinger bands

In the case of a decrease in the pound, support will be provided by the average Bollinger Bands indicator around 1.2734, from which you can open low positions. The upward trend may be limited by the upper limit of the channel 1.2808, from where pound sellers will return to the market.

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Description of indicators

MA (moving average) 50 days - yellow

MA (moving average) 30 days - green

MACD: fast EMA 12, slow EMA 26, SMA 9

Bollinger Bands 20

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

Exports of yellow metal from the United States increased by 23%

According to analysts, the United States shipped 418 tons of gold to other countries from January to October last year. The net exports of precious metals amounted to 244 tons, which is 23% higher than the figure for the same period in 2017.

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In October 2018, America exported 37.1 tons of yellow metal and imported 15.8 tons. From January to October of the past year, precious metals weighing 418.4 tons were exported from the United States, which is 13.3 tons more than in the same period of 2017. According to the US Geological Survey (USGS), sixty-three percent of the yellow metal was sent in purified form. The USGS noted that during the reporting period, a hefty 174.4 tons of gold were imported to America. As a result, net exports of precious metals amounted to 244 tons, which is 23% more than last year.

Turkey, in which the demand for gold is traditionally high, does not lag behind America. According to the Central Bank of Turkey, the country's international reserves showed a significant increase by the end of 2018. The gold reserves of the Asian state by the end of November last year reached 15.74 million ounces or 489.56 tons. During this month, Turkey's gold reserves increased by 577 thousand ounces or 17.94 tons. Their cost is estimated at $18,499 million. In the international reserves of Turkey, the share of the yellow metal is 21%.

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EUR / USD: plan for the European session on January 2. Euro buyers are trying to show themselves

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

Euro buyers are trying to show their active position, and from the very first minutes of the tori we reached resistance at 1.1483. The main task today will be fixing above this range, which will maintain an upward trend and will lead to an update of resistance 1.1515 and 1.1548, where I recommend fixing the profits. In the event of a decline in the euro, long positions can be viewed as a rebound from the support of 1.1445.

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

Today's data on manufacturers' activity in Germany and the Eurozone can help bears, and the formation of a false breakdown at 1.1483 will be a direct signal to euro sales in the area of the middle of the channel of 1.1445, where I recommend fixing the profits. In the case of further growth, short positions in EUR / USD are best to take a closer look at the levels of 1.1515 and 1.1548.

Indicator signals:

Moving Averages

Trade is conducted above the 30-day and 50-day moving averages, which indicates that the demand for the euro remains.

Bollinger bands

Bollinger Bands indicator volatility is very low, which does not give signals on market entry.

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Description of indicators

MA (moving average) 50 days - yellow

MA (moving average) 30 days - green

MACD: fast EMA 12, slow EMA 26, SMA 9

Bollinger Bands 20

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

GBP / USD. January 2. The trading system. "Regression Channels". The index of business activity, the first indicator in the

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) - up.

CCI: 173.6864

The GBP / USD currency pair ended 2018 with a rather tangible growth, which makes it possible to look to the new year 2019 with optimism. Perhaps it will be for the pound sterling a year to recover losses. However, this will require the completion of an epic called "Brexit" in the near future. No new data on the topic of Brexit has been expected to have been received in the past two days. Thus, the strengthening of the British currency is not associated with positive data on the main topic for the UK in recent years. Therefore, the continuation of growth for the pound can be very difficult. Even a fairly strong increase on Monday ended with a rather strong decline as well. Thus, technical factors so far speak in favor of the possible continuation of the upward movement, even if both linear regression channels are directed downwards. From a fundamental point of view, today is expected to publish an index of business activity in the UK manufacturing sector, which has a greater value and impact on the currency than a similar index in Europe or the United States. However, according to experts, this figure is expected to decline from 53.1 to 52.5. Therefore, at this event, the pound may well return to the moving average line.

Nearest support levels:

S1 - 1.2695

S2 - 1.2634

S3 - 1.2573

Nearest resistance levels:

R1 - 1.2756

R2 - 1.2817

Trading recommendations:

The currency pair GBP / USD resumed its upward movement. Therefore, at this moment, long positions are relevant, but in small lots due to the downward orientation of both channels, with targets at 1.2756 and 1.2817. It should also be remembered that there are still no fundamental reasons for the growth of the pound.

Sell positions are recommended to be considered after fixing the price below the MA with targets at 1.2634 and 1.2573. In this case, all trend indicators will signal a downward movement.

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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Gold will halt

December was the best month for gold over the past two years. Futures quotes reached 6-month highs due to the collapse of global stock indices, disabling the US government and increasing fears about a slowdown in global economic growth. First of all, this concerns Asia, where China's problems affect all countries in the region. Business activity of the Middle Kingdom fell below a critical 50, which indicates a potential recession. However, the US GDP is unlikely to boast similar success in 2018.

The loss of speed in the US economy, paired with the reluctance of inflation to move away from the target of 2%, makes it possible for the Fed to pause in the process of normalizing monetary policy. If four increases in the federal funds rate allowed the USD index to be marked by the best dynamics since 2015, then the loss of an important trump makes the dollar's prospects bearish. The inverse correlation of the "American" with the precious metal suggests that the XAU/USD rally of 1300 will not end. Fans of ETF products do not tire of increasing stocks of specialized exchange funds as they seriously count on the continuation of the northern gold campaign.

Gold dynamics and ETF stocks

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However, we are talking about medium and long-term prospects. In the short-term investment horizon, the gradual stabilization of stock indices and the successful resolution of the issue of the temporary suspension of the work of the US government increase the risks of a gold correction. Donald Trump called on the Democrats to make a deal, as he understands perfectly well what a simple executive authority for GDP can turn into. According to Standard & Poor's estimates, each week will cost $ 1.2 billion, so the longer the government does not work, the worse it will be for the economy.

It is doubtful that the statistics on the States worsened at one moment. The Financial Times believes that the fiscal stimulus will continue to support GDP in the fourth quarter by approximately 1 percentage point This means that indicators coming out in January-February, will most likely please the eye as before. Against the background of the weakness of the eurozone, this allows us to count on the return of interest in EUR/USD sales, which, in turn, will somewhat cool down the fervor of bulls on XAU/USD. However, the situation may change radically since the second half of February. Traditionally, bad weather and the fading effect of tax reform will make a whipping boy out of "American".

I do not think that the S & P 500 and other US stock indices will fall as rapidly as in December. The economy is still strong, rates are low by historical standards, and the growing likelihood of a long pause in the process of normalizing the monetary policy of the Fed will return the bulls to the stock market. The precious metal may lose key growth drivers, which increases the risk of a correction.

This is confirmed technically. On the daily chart, gold reached a target of 200% using the AB = CD pattern. As a result, the probability of a rollback towards $ 1262 and $ 1250 per ounce has increased. Rebound from important support levels makes sense to use for the formation of long positions.

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EUR / USD. January 2. The trading system. "Regression Channels". For the euro, the year began with the breakdown of important

4-hour timeframe

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Technical details:

The senior linear regression channel: direction - down.

The younger linear regression channel: direction - up.

Moving average (20; smoothed) - up.

CCI: 162.2356

The currency pair EUR / USD on Wednesday, January 2, resumed its upward movement after the weekend Tuesday. The opening of trading immediately began with the growth of the European currency, which may have already pierced an important resistance area around the level of 1.1470. Thus, the year 2019 for the euro begins quite positively. On the last trading day of last year, no important macroeconomic information was published. Thus, traders had nothing to react to, and the growth of the European currency can be attributed to technical factors or mere chance, as well as the entry of a large player with their goals into the market. One way or another, while the euro is growing, but how long will this process go on? To date, scheduled publication of reports on business activity in the sectors of the production of the Eurozone and States. This is not to say that these are important reports, however, a certain reaction may follow. In general, the situation with the instrument remains the same as at the end of last year. The technical factor is once again the main one, as the holidays are over, but there is no fundamental information yet. Thus, based on the technology, the strengthening of the European currency may continue this week. At least, its continuation is indicated by the indicator Heikin Ashi.

Nearest support levels:

S1 - 1.1475

S2 - 1.1444

S3 - 1.1414

Nearest resistance levels:

R1 - 1.1505

R2 - 1.1536

Trading recommendations:

The EUR / USD currency pair continues its upward movement. Thus, today it is recommended to trade on the increase with the objectives of 1.1505 and 1.1536. Heikin Ashi's reversal will indicate a downward correction round.

Sell orders will become relevant not earlier than overcoming the moving average line. In this case, the initiative will pass into the hands of bears, and the targets for the downward movement will be the levels of 1.1383 and 1.1353.

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.

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Analysis of EUR / USD Divergences for January 2. Euro currency starts the new year with growth.

4h

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The EUR / USD currency pair reversed in favor of the euro currency and consolidation above the correction level of 38.2% - 1.1446. Thus, the growth process can be continued on January 2 in the direction of the correction level of 50.0% - 1.1515. Maturing divergences in the current chart are not observed in any indicator. Fixing the pair under the Fibo level of 38.2% will work in favor of the American dollar and resuming the fall in the direction of the correction level of 23.6% - 1.1358.

The Fibo grid is built on extremes from September 24, 2018, and November 12, 2018.

Daily

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On the 24-hour chart, the currency pair continues the growth process in the direction of the correctional Fibo level of 100.0% - 1.1553. Resetting the pair from the correction level of 100.0% will allow traders to count on a reversal in favor of the US currency and a slight drop in the direction of the Fibo level of 127.2% - 1.1285. There are no ripening divergences today. Fixing quotes above the Fibo level of 100.0% - 1.1553 will increase the likelihood of further growth in the direction of the next correction level of 76.4% - 1.1789.

The Fib net is built on extremums from November 7, 2017, and February 16, 2018.

Recommendations to traders:

Purchases of the EUR / USD currency pair can be made with the target of 1.1515 and a Stop Loss order below the Fibo level of 38.2% since the pair completed the closure above the level of 1.1446.

Sales of the EUR / USD currency pair can be carried out with the target of 1.1446 with a Stop Loss order above the Fibo level of 50.0% if the pair bounces off the correction level of 1.1515.

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Analysis of GBP / USD Divergences for January 2. Bearish divergence + hang up = pound drop?

4h

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The currency pair GBP / USD on the 4-hour chart completed growth to the correction level of 76.4% - 1.2812. The quotes rebound from the Fibo level of 76.4% and the bearish divergence at the CCI indicator made it possible to turn in favor of the US dollar and begin to fall in the direction of the corrective level of 100.0% - 1.2662. Rebounding quotes from the Fibo level of 100.0% will make it possible to expect a reversal in favor of the British currency and a return to the correction level of 76.4%. Fixing quotes above the Fibo level of 76.4% will similarly work in favor of resuming growth.

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 quotes returned to the correction level of 38.2% -1.2743. Repeating quotes on January 2 from this level allows you to count on a reversal in favor of the pound sterling and the resumption of growth in the direction of the correction level of 50.0% - 1.2826. There are no maturing divergences on the current chart today. A close below the Fibo level of 38.2% will increase the chances of continuing falling towards the next correction level of 23.6% - 1.2641.

The Fibo grid is built on extremums from November 7, 2018, and December 12, 2018.

Recommendations to traders:

Purchases of the GBP / USD currency pair can be made with the target of 1.2826 and a Stop Loss order under the level of 38.2% since the pair has completed the rebound from the Fibo level of 1.2743 (hourly chart).

Sales of the GBP / USD currency pair can be made with the target of 1.2641 and a Stop Loss order above the level of 38.2% if the pair closes below the level of 1.2743 (hourly chart).

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Indicator analysis. Monthly review for the currency pair GBP / USD for January 2019.

Trend analysis (Fig. 1).

In January, the bulls may again try to move upwards with the first target of 1.2928, a rolling level of 23.6% (yellow dashed line).

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Fig. 2 (monthly schedule).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger lines - down;

Conclusion of the complex analysis - possible top.

The total result of calculating the candle of the GBP / USD currency pair on a monthly schedule: the price is likely to have an upward trend with the absence of the first lower shadow (the first week of the month is white) for the monthly white candle and the presence of the second upper shadow (the last week is black). The first target of 1.2928 is the rolling level of 23.6% (yellow dashed line).

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Intraday technical levels and trading recommendations for GBP/USD for January 2, 2019

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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 bearish 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 1.2650-1.2680. Bullish persistence above 1.2660-1.2680 was mandatory for pattern confirmation. Initial Bullish target is projected towards 1.2880.

Last week, recent price action demonstrated a successful bullish breakout above the depicted downtrend line.

On Thursday, early bullish breakout attempt above 1.2720 was demonstrated on the H4 chart. However, the market failed to maintain sufficient bullish momentum above 1.2800 (mid-range of the depicted consolidation range).

That's why, another bearish pullback towards 1.2600-1.2650 (pattern neckline) should be expected during today's consolidations.

Another bullish breakout above 1.2720 is mandatory to resume the bullish scenario of the market. Otherwise, the pair remains trapped within the previous consolidation range (1.2600-1.2720).

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Indicator analysis. Monthly review of the pair EUR / USD for January 2019.

Trend analysis (Fig. 1).

January will begin with an upward movement, with the first goal of 1.1509, the resistance line (red bold line). And only then will the bottom. The assumed first lower target of 1.1244 is the support line (blue bold line).

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Fig. 2 (monthly schedule).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - neutral;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger lines - down;

Conclusion of the complex analysis - most likely the top job.

The total result of the calculation of the EUR / USD currency pair candle on a monthly schedule: the price is most likely to have an upward trend with the absence of the first lower shadow (the first week of the month is the top) of the monthly white candle and the second upper shadow (the last week is black).

December will begin with an upward movement (probability 70%), with the first goal of 1.1593 - this is 21 average EMA (black thin line). Otherwise (probability 30%), a downward movement with the assumed first lower target of 1.1185 ,a recoiling level of 61.8% (yellow dashed line).

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Intraday technical levels and trading recommendations for EUR/USD for January 2, 2019

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On the weekly chart, the EUR/USD pair is demonstrating a long-term Head and Shoulders reversal pattern where the right shoulder is currently in progress.

On the Daily chart, the pair has been moving sideways with slight bearish tendency. Narrow sideway consolidations have been maintained within the depicted daily movement channel since June 2018.

On November 13, the EUR/USD 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 has demonstrated significant bearish rejection around 1.1420 few times so far.

Recently, the EUR/USD pair has been trapped below the price level of 1.1420 waiting for bullish breakout since November 5.

On Thursday, another attempt of bullish breakout above 1.1420 was being executed. Bullish persistence above 1.1420 enables further bullish advancement towards 1.1520 (the upper limit of the daily channel) and 1.1600 (October's High) as initial targets.

On the other hand, any bearish decline below the key-level of 1.1420 brings more sideway consolidations down to 1.1260 again.

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Yen strengthened as an asset to the Pacific Harbor "safe haven"; all focused on China data

During trading in the Asia-Pacific region , the Japanese currency increased in value due to the reduction in stock markets on the first trading day.

The yen went up in pairing with the dollar as traditionally an asset of a "safe haven". The USD/JPY pair fell by 0.3%, reaching 109.42 yen since most Asian indices were trading in the red zone today.

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The Hang Seng index sank by 3.1%. Fears about the pace of global economic growth , the suspension of the US government and the prospects for reducing the current tightening cycle of the US Federal Reserve System became the drivers of the sale.

Also, disappointing data on the state of the economy of China affected the pressure on the shares of China.

The business index of Caixin / Markit for the last month fell to 49.7 from 50.2 as recorded in November. It fell for the first time in 19 months.

This fact confirmed the trend noted in the official report on business activity, which on Monday reflected a reduction to 49.4 in December.

The USD / CNY pair fell by 0.3 % to 6.8557 after the release of data.

The trade conflict between Washington and Beijing still holds the attention of the market. Reports that Donald Trump noted progress towards a possible resolution of the conflict, giving some reason for optimism but the state edition of China, People's Daily, warned last Wednesday that they did not give up and does not plan to make concessions in matters related with national interests.

The dollar index, which tracks the dynamics of the US dollar exchange rate against a basket of currencies of six countries - the main US trading partners, was trading sideways at 95.703.

According to reports released the day before, Donald Trump is ready to conclude a deal and resume the work of the government.

Partly, the work of the government was suspended 11 days ago, which affected 9 of the 15 federal departments, dozens of agencies and hundreds of thousands of workers, following the reports.

Australia's national currency slipped by 0.4% and reached 0.725 against the dollar, which indicates worsening growth prospects for the economy of the People's Republic of China.

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Technical analysis of USD/CAD for January 2, 2019

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Overview:

The USD/CAD pair set above major support at the level of 1.3531, which coincides with the 61.8% Fibonacci retracement level. This support has been rejected for four times confirming uptrend veracity. Hence, major support is seen at the level of 1.3531 because the trend is still showing strength above it. Accordingly, the pair is still in the uptrend from the area of 1.3531 and 1.3600. The USD/CAD pair is trading in a bullish trend from the last support line of 1.3531 towards the first resistance level at 1.3660 in order to test it. This is confirmed by the RSI indicator signaling that we are still in the bullish trending market. Now, the pair is likely to begin an ascending movement to the point of 1.3660 and further to the level of 1.3727. The level of 1.3727 will act as second resistance and the double top is already set at the point of 1.3660. At the same time, if a breakout happens at the support levels of 1.3531 and 1.3450, then this scenario may be invalidated. But in overall, we still prefer the bullish scenario.

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Forecast for EUR / USD pair on January 2, 2019

EUR / USD pair

The euro is firmly held by the MACD line resistance on the daily chart. On the first trading day of the new year, the euro did not make another attempt to break up and is ready to consolidate under the price channel line of 1.1410, the level of which also corresponds to the MACD line on H4, which will create an initial condition for further downward movement. Long-lasting consolidation since last fall has created many strong levels that will now serve as targets. The nearest levels are 1.1355, 1.1307, 1.1270, 1.1210.

Nevertheless, the conditions for reducing prices have not yet formed. The Marlin indicator is in an upward trend on both charts. The MACD daily line is the only resistance of the price and the probability of its breakthrough. This development allows for the growth of the euro in the range of 1.1526/75. On Friday, there is the data on employment in the United States. Optimistic forecasts on the growth of jobs in the non-agricultural sector is expected to be 181 thousand in December versus 155 thousand in November. The average hourly wage is expected to increase by 0.3%. On the same day, the Services PMI is released in the final assessment for December with a revision from 53.4 to 53.5 is possible. On the basis of the characteristics of the main scenario, we accept the mid-term decline of the euro.

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Forecast for USD / JPY pair on January 2, 2019

USD / JPY pair

In the last two trading days, the yen fell to our target range of 109.38 / 79 and there was a very weak sign of a reversal this morning. This feature is the emerging price convergence with the Marlin oscillator. The situation is also fragile because the Japanese trading floors are closed until Friday. At other sites today, there is a significant decline: China A50 -1.20%, Kospi SEU -1.44%, IDX Composite -0.25% and Nifty 50 -0.17%.

A break of the current range will drop the yen to the level of 108.66, which was the minimum of May 4 last year. It will be difficult for a reversal if it takes place since before the price there will be multiple technical resistances in this growth.

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Technical analysis of NZD/USD for January 2, 2019

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Overview:

Pivot: 0.6882.

The NZD/USD pair broke resistance which had turned into strong support at the level of 0.6705 this week. The level of 0.6705 coincides with a golden ratio (61.8% of Fibonacci), which is expected to act as major support today. The Relative Strength Index (RSI) is considered to be overbought, because it is above 70. The RSI is still signaling that the trend is upward as it is still strong above the moving average (100). Besides, note that the pivot point is seen at the point of 0.6882. This suggests that the pair will probably go up in the coming hours. Accordingly, the market is likely to show signs of a bullish trend. In other words, buy orders are recommended to be placed above 0.6800 with the first target at the level of 0.6882. From this point, the pair is likely to begin an ascending movement to the point of 0.6882 and further to the level of 0.6984. The level of 0.6984 will act as strong resistance. On the other hand, if there is a breakout at the support level of 0.6705, this scenario may become invalidated.

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Forecast for USD / JPY pair on January 2, 2019

USD / JPY pair

In the last two trading days, the yen fell to our target range of 109.38 / 79 and there was a very weak sign of a reversal this morning. This feature is the emerging price convergence with the Marlin oscillator. The situation is also fragile because the Japanese trading floors are closed until Friday. At other sites today, there is a significant decline: China A50 -1.20%, Kospi SEU -1.44%, IDX Composite -0.25% and Nifty 50 -0.17%.

A break of the current range will drop the yen to the level of 108.66, which was the minimum of May 4 last year. It will be difficult for a reversal if it takes place since before the price there will be multiple technical resistances in this growth.

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Technical analysis for Gold for January 2, 2019

Gold price has reached our 61.8% Fibonacci retracement target area. Gold price remains in a bullish trend. There are some indications that price could pull back but we do not expect this pull back to create a major top.

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Gold line - RSI trend line support

Green line - major trend line support

Blue line - short-term trend line support

So far Gold price has respected all previous important lows and the support trend lines. Gold continues to make higher highs and higher lows. Gold price has reached our second target at the 61.8% Fibonacci retracement. The RSI is at overbought levels but with no divergence. This suggests that the up trend has room to run but we could soon see a pull back. Support is at $1,257 and next at $1,250. As long as we trade above $1,250 trend will remain bullish. Next target after a pull back would be the $1,300 level.

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Technical analysis for EUR/USD for January 2, 2019

EUR/USD has broken above the long-term downward sloping trend line resistance and approached 1.15. However, price is pulling back downwards without any confirmation for a breakout, remaining inside the trading range its been in for the last couple of weeks.

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Yellow rectangles - trading range

Green line - support trend line

Red line - major trend line resistance

EUR/USD is still challenging the upper boundary of the trading range. Price is holding above 1.14 and this is a positive sign. Price reached 1.15 earlier today but because it is holiday season and trading is thin, we should be cautious before calling this a break out. Price has moved above the red trend line resistance and this is another positive sign. A back test at 1.14 and a bounce would also be a positive sign. Bears on the other hand want to see price back below the red trend line and move below 1.14. Short-term support is at 1.1430. Next support is at 1.1420 and next at 1.1340. The Daily bullish RSI divergence as we noted in previous posts suggests more upside for this pair. 1.17 area is our first target.

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Wave analysis of GBP / USD for January 2. British pound sterling makes another leap up.

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Wave counting analysis:

On December 31, the GBP / USD pair added about 45 bp and, thus, resumed the construction of the proposed wave 2 or b.. The tool upturn may continue to levels of 50.0% and 61.8% Fibonacci, built on the size of the estimated wave 1 or a. Also, an unsuccessful attempt to break through the level of 50.0% may lead to the completion of wave 2 or b and the resumption of reduction of quotations and the construction of a downward trend. The news background in the first days of 2019 It's not a problem.

Shopping goals:

1.2825 - 50.0% Fibonacci

1.2908 - 61.8% Fibonacci

Sales targets:

1.2475 - 0.0% Fibonacci

1.2229 - 323.6% Fibonacci (senior grid)

General conclusions and trading recommendations:

The pair GBP / USD is unexpectedly resumed building the uptrend of the trend. Buying a tool, however, still carries increased risks, since the Brexit situation remains unresolved.The growth of the pound sterling looks groundless and the wave pattern implies the completion of the building of the rising wave in the near future. Thus, I recommend preparing for sales, if this option is not hampered by important and pound-positive Brexit information.

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Indicator analysis. Daily review on January 2, 2019 for the pair EUR / USD.

On Wednesday, the price is expected to go down, for a rollback, with the first target of 1.1424 - a rolling level of 23.6% (yellow dotted line).

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Fig. 1 (daily schedule).

Comprehensive analysis:

- indicator analysis - down;

- Fibonacci levels - down;

- volumes - down;

- candlestick analysis - down;

- trend analysis - down;

- Bollinger lines - up;

- weekly schedule - up.

General conclusion:

On Wednesday, the price is expected to go down, for a rollback, with the first target of 1.1424 - a rolling level of 23.6% (yellow dotted line).

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