BITCOIN Analysis for January 3, 2019

Bitcoin has been quite impulsive with the recent bullish momentum as expected which lead the price quite closer towards $4,000 area but that high was rejected. The price has recently broken above the dynamic level of 200 EMA having Tenkan, Kijun, 20 EMA, and Kumo cloud as support along the way. The price is currently expected to push higher towards $4,000 area. With a daily close above $4,000, the price is expected to climb impulsively higher towards $5,000 area in the future. As the price remains above $3,000 area with a daily close, the bullish bias is expected to continue.

SUPPORT: 3,000, 3,500, 3,600

RESISTANCE: 4,000, 4,250, 4,500

BIAS: BULLISH

MOMENTUM: VOLATILE

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Fundamental Analysis of AUD/USD for January 3, 2019

AUD/USD has been quite impulsive amid the recent bearish pressure, pushing the price below 0.6750 with strong momentum. The price is currently being rejected quite impulsively. Despite the lack of macroeconomic reports from Australia and the US earlier today, sudden bearish momentum ahead of US NFP indicates a surge of volatility in the market.

Amid the holiday-thinned market, AUD has been quite silent with no economic reports from Australia. USD has been dominating the pair since the price bounced off the 0.74 area with a bearish daily close. Today US ADP Non-Farm Employment Change report was published with an increase to 271k from the previous figure of 157k which was expected to be at 179k and Unemployment Claims rose to 231k in the final week of 2018 from the previous figure of 221k which was expected to be at 220k. Moreover, today ISM Manufacturing PMI is expected to decrease to 57.7 from the previous figure of 59.3 and ISM Manufacturing Prices are expected to drop to 57.9 from the previous figure of 60.7 as well. Additionally, tomorrow Average Hourly Earnings are expected to increase to 0.3% from the previous value of 0.2%, Non-Farm Employment Change is expected to increase to 178k from the previous figure of 155k, and Unemployment Rate is expected to be unchanged at 3.7%.

Meantime, USD is currently quite firm, having found support from the recent economic reports. Besides, USD is quite optimistic ahead of the upcoming economic reports and events. After the recent US Rate Hike to 2.50%, USD managed to sustain the momentum against AUD that is expected to extend further in the coming days if upcoming economic reports meet the expectations.

Now let us look at the technical view. The price has rejected the bearish pressure quite significantly today which indicates the volatility level of the overall momentum in the pair. As per recent Bullish Continuous Divergence forming in the pair, the price is expected to retrace towards 0.7000-50 resistance area where the dynamic level of 20 EMA is also expected to meet and push the price lower again towards 0.6750 support area in the coming days.

SUPPORT: 0.6750, 0.6850

RESISTANCE: 0.7000-50, 0.7150

BIAS: BEARISH

MOMENTUM: VOLATILE

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The dollar still breaks up

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The risk of weakening the dollar's position due to a slowdown in the US economy is becoming increasingly obvious. However, this is a longer-term process, and in the near future, the EUR / USD pair is unlikely to fulfill the forecast of BofA Merrill Lynch 1.25. The main currency pair is also not breaking the level of 1.185 the other day, as was previously expected. Greenback, apparently, still drink blood from rivals.

So, last year, the dollar grew due to the accelerating dynamics of the US economy over its main competitors. In the coming year, its fate will depend on who will slow down faster. The first to suffer from the recession are regions such as the eurozone and China, investors calculated, which allowed the EUR / USD "bears" to launch a quick attack. For the first time in a year and a half, business activity in the PRC went into the red zone, and the indexes of purchasing managers in Spain and France turned out to be worse than market forecasts. In addition, Apple said that the company's financial performance collapsed due to the slowdown in the Chinese economy. Of course, the United States has its own difficulties, but in the eurozone and the PRC, there may be a lot more.

The question arises if the US economy slows down more slowly than the global one, is it worth it then to get rid of the dollar? Meanwhile, looking at the fundamental factors (the fading of the fiscal stimulus, the tightening of financial conditions, the drop in oil), the US GDP should slow down faster than the global economy. Perhaps this will happen, but not in the coming days. At the very beginning of the year, greenback showed its competitors that it is not necessary to be so self-confident, perhaps this dollar trick will demonstrate once again.

At the moment, currency strategists advise sticking to the forecast of 1.125-1.165 for the EUR / USD pair.TK7UP-nfcXOi9Ss2EXwPfywPXQLi1OYTmGg3bIVm

As for the other currencies traded in a pair with the dollar, the Nordea experts are pessimistic about the greenback. They recommend in the first quarter to look at its sales against the yen, the Australian dollar, and the Norwegian krone. The currencies of Japan and New Zealand may continue to show advancing dynamics since the speculative short positioning on them is too "bearish" by historical standards.

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It is expected that by March, the US Treasury will fill the country's banking system with liquidity and the dollar will weaken. This is due to the fact that the current size of the US government debt ($ 21.9 trillion, according to USDebtClock) is significantly higher than the statutory limit of $ 20.456 trillion. A year ago, for political reasons, the Congress decided not to increase its size, but temporarily (until March 1, 2019) allowed to take new loans. It is worth noting that in March of this year, all funds raised will be added to the official state debt, and members of Congress will have to raise its limit by the appropriate amount.

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Bitcoin analysis for January 03, 2019

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Trading recommendations:

Nothing has changed relative to yesterday's forecast and the BTC is trading sidewas with a slow tempo. 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

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Sterling is actively declining, but the bottom is still ahead

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Sterling could not bear the burden of fears about the state of the global economy, and weak data from China increased the outflow of investors and the sale of currencies, which are considered riskier.

The pound, which at the end of the year struggled to move forward against the background of Britain's withdrawal from the European Union, fell to its lowest level since April 2017 in early Asian trading after a "sudden collapse", provoked by the Japanese yen, which caused massive sales. The British currency fell to 1.2409 dollars and to 91.02 pence per euro, which is a 16-month low. By the opening of European markets, the situation has somewhat stabilized, but the pound continued to fall. In relation to the dollar, it fell by 0.3 percent, to 1.2569 dollars. In relation to the euro by 0.7 percent - 90.535 pence.Y9YTWBZS73kGCuowRbGLBWpZ24g2CcJdzeMf3SO0Given external factors, it can be assumed that the fall will continue. Particular attention should be paid to the publication of a comprehensive review of the UK construction sector. Analysts expect it to be 52.9 points in December compared to 53.4 in the previous month. The decline in activity in one of the important industries for the country's economy will pull the pound down.

An additional negative factor for the currency is also the reduction in expectations of an increase in interest rates by the Bank of England in 2019 and concerns about whether British Prime Minister Theresa May can convince lawmakers to support the Brexit agreement until March. Parliamentary debates about the May deal with Brussels begin next week, and the vote is scheduled for January 14th.

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GBP / USD: plan for the US session on January 3. Pound buyers are trying to return to the market

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

Weak PMI data for the UK construction sector limited the upward correction in the pound, which could be observed at the opening of the European session. At the moment, only a breakthrough of the resistance level of 1.2582 will be a signal to buy the pound in order to update today's high near 1.2622, where I recommend fixing the profits. In the case of a decrease under the support area of 1.2536, long positions in GBP / USD is best to look at the rebound from the support of 1.2482.

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

An unfortunate consolidation above the resistance of 1.2582 and breakthrough support of 1.2536 will be a direct signal to open short positions in the pound, the goal of which will be the lows around 1.2482 and 1.2439, where I recommend fixing the profits. In the case of weak statistics on the American economy, the output of which is scheduled for the second half of the day, we can consider selling the pound to rebound from the resistance of 1.2622.

Indicator signals:

Moving Averages

Trade is conducted below the 30-day and 50-day moving, which more indicates a persisting bearish trend.

Bollinger bands

In the case of a decrease in the pound by the trend, support will be provided by the lower limit of the Bollinger Bands indicator around 1.2500.

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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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USD/JPY analysis for January 03, 2019

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Recently, the USD/JPY pair has been trading downwards. The price tested the level of 105.13. According to the M30 time – frame, I found that there is the selling climax in the background, which is a big warning for a further downside. In my opinion, the downside is limited and there can be an absorption of the climax. My advice is to watch for buying opportunities and potential upward movement. The upward targets are set at the price of 108.47 and at the price of 109.45.

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High market volatility will persist

The presence of New Year's holiday weekends has traditionally had a very noticeable chilling effect on financial markets. In the first trading session in the new year, all of our last year's fears manifested themselves, which resulted in high volatility in all segments of the world market.

As a result of yesterday's trading, the US stock market grew, although it all began very negatively with the opening of the trading session in the red zone. Crude oil prices rose, but, like the stock markets, showed high volatility.

In the foreign exchange market, the ICE dollar index added Wednesday, demonstrating the strengthening of the dollar against the currency basket, but today the US currency is declining, remaining under pressure due to the apparent unwillingness of investors to take risks in anticipation of the publication of updated data on the US economy, and primarily employment. Just as we have already indicated above, the limiting factor is the absence of a significant number of market players in the market due to their departure for the New Year holidays.

But there is one more important reason, the expectation by the markets of the outcome of the next negotiations between China and the United States on trade duties and the overall situation in trade between countries. There are some hopes here that are fueled by rumors and speculation that an agreement can be reached. It is likely that it was this factor that helped the US stock indexes to break through into positive territory yesterday.

After the release of extremely weak data on industrial production in China, there appeared hope in the markets that the Chinese would "break down" and go to the Americans for a meeting. But how it will actually, of course, time will tell, but for now, in our opinion, the overall picture of uncertainty will persist, producing high volatility. This applies not only to stock markets, but also to the foreign exchange market.

Forecast of the day:

The EUR / USD currency pair continues to be in the range of 1.1270-1.1460, consolidating on the wave of multidirectional forces that do not allow it to grow. This is a cautious position of the ECB regarding the monetary policy tightening process and the uncertainty of the real consequences of Brexit and the expected weakness of the dollar under the decision of the Fed to make a pause in raising interest rates, as well as slowing the growth of the American economy. Today, against the background of the publication of data from ADP on employment, the pair may in the future both grow to 1.1460, breaking the mark of 1.1400, and continue to decline to 1.1270 after falling below the level of 1.1350.

The USD / JPY currency pair, also on the wave of statistics from the USA, may either rise to 109.50 or fall to 106.80.

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p7YlQdNXOAmCq7xDoqlgh4yZyZJz38T37FuRKfmjThe material has been provided by InstaForex Company - www.instaforex.com

Apple does not give markets hope of growth

The strong growth in demand for defensive assets on Wednesday, when nothing foreshadowed shocks, was triggered by the first in almost 20 years decline in Apple's quarterly revenue forecast by 1 square meter. 2019 from 89-93 billion to 84 billion. At the same time, the expert forecast from Reuters exceeded Apple's estimate by 12%, which is too much to hope for a moderate market reaction.

Actually, the reason is not even at Apple, the American technology giant, in this case, is just an indicator that expectations of a recession in 2019 receive a new impetus. According to analysts at DanskeBank, the stock market was heavily oversold because investors were frightened by the threat of a global recession in 2019, so a rebound was likely even without strong macroeconomic indicators, which is exactly what happened in the past periods. For example, in 1994 and 2011, fear of recession grew for the same reasons as now, and when this threat disappeared, stock markets showed an increase of 19% and 17%, respectively.

Since in 2018 profit growth was quite strong and companies reported improved forecasts for 2019, it was possible to assume that the demand for risky assets would rise again, which would allow both stock markets and oil to recover.

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It was on this basis that predictive models were built since profit growth was expected to be stronger than wage growth, which should have led to a reduction in the threat of a global recession and a recovery in demand for assets.

However, an unexpected change in the forecast of Apple raises the question, whether other giants will follow the "apple", which ultimately does not reduce, but on the contrary, sharply increase the threat of recession. Demand for defensive assets will increase, primarily for yen and gold, at least until the threat of a decline in the global economy dominates.

Another important global factor for the first quarter is the question of the US debt ceiling, which Congress will begin to consider against the background of the lack of announcement of the budget, which has already led to the interruption of government work.

At present, the Treasury has about $ 400 billion in Fed accounts, at least half of which will be involved in the next 2 months, which will lead to a decrease in liquidity and will contribute to a stronger dollar. In any case, Nordea sees risks both for risky assets and for the currencies of developing countries from this side, low liquidity will support the dollar and defensive assets.

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Thus, the very first week of the new year carries with it the potential threat of a revision of the long-term forecasts. The growth in demand for defensive assets looks more than likely, the dollar will also be in demand, but commodity currencies will be the main victims.

Today, attention will be directed to the ADP report on employment in the private sector, the forecast is neutral, markets expect strong data at the level of December. A little later, ISM's PMI report in the manufacturing sector will be published, there is a danger of seeing a result worse than expected since the regional reports of the Federal Reserve Bank one after another reported a strong decrease in activity.

Eurozone

The currency pair EUR / USD continues to trade in the sideways, as it is not yet possible to find internal drivers to exit it. In November, the ECB's chief economist Peter Praet noted that the growth in average wages would lead to higher inflation in the eurozone in the perspective of 6-12 months, and while this forecast is not threatened, the ECB will take a neutral position and will maintain market expectations on these benchmarks.

Euro rally should not be expected, despite a decline in the Fed's forecasts in 2019, markets are waiting for two rate increases, while the ECB forecast is only 0.2% for the full year.

The forecast for tomorrow's report on the US labor market is moderately positive, so EUR / USD is likely to drift to the recent minimum of 1.1300.

Great Britain

Pound updated the year and a half minimum amid a sharp rise in panic after the Apple report, the chances for recovery in the coming days look weak as the date of the final debate in the British Parliament on Brexit is approaching, and Prime Minister May looks extremely unconvincing.

Attempts to grow in GBP / USD will be blocked at 1.2600 / 05, more likely to decline to the recent minimum of 1.2430 and sideways trading in anticipation of news.

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Intraday technical levels and trading recommendations for EUR/USD for January 3, 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.

Yesterday, another unsuccessful attempt of bullish breakout above 1.1420 was executed. The market failed to persist above 1.1420. This brings more sideway consolidations down to 1.1260 as an initial target again.

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Intraday technical levels and trading recommendations for GBP/USD for January 3, 2019

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Since Mid-November, Successive Lower Highs were demonstrated around the price levels of 1.3060, 1.2920 and 1.2800 maintaining movement within the depicted H4 bearish channel

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 was demonstrated on the H4 chart with neckline located around 1.2650-1.2680. Hence, a successful bullish breakout above the depicted bearish channel was demonstrated on December 24.

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 was executed towards 1.2500 (backside of the broken channel) where significant bullish recovery is being demonstrated 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 (1.2500-1.2720).

Bullish persistence above 1.2550 is mandatory for buyers. Any decline below 1.2500 invalidates the bullish scenario suggesting a further decline towards 1.2440 and probably 1.2360.

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EUR / USD: plan for the American session on January 3. Upward correction coming to an end

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

The upward correction in the euro is coming to an end, as the buyers failed to continue and break through above the resistance of 1.1386. Only a real breakthrough and consolidation above this level will lead to the renewal of a larger area of 1.1433, where I recommend taking profits. It is best to consider buying the euro after the formation of a false breakdown in the support area of 1.1352. Otherwise, long positions can be opened to rebound from a minimum of 1.1312.

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

In the first half of the day, the bears completed the installation and managed to form a false breakdown in the area of resistance 1.1386, which led to the formation of a new wave of euro sales. The main goal for the second half of the day will be a breakout and consolidation below 1.1352 support, which will lead to the sale of EUR / USD to the area of this week's minimum 1.1312. Further fall of the euro to 1.1272 will directly depend on the data that will be released on the American economy.

Indicator signals:

Moving averages

Trade remains below the 30- and 50-day averages, which indicates that the bearish nature of the market remains.

Bollinger bands

The break of the middle border of the Bollinger Bands indicator around 1.1352 will be a sell signal. The lower limit in the area of 1.1320 will limit the downward potential.

More in the video forecast for January 3

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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

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USD / JPY: Shutdown; Apple and Banca Carige

Yesterday's forecast for the yen came to life quite quickly - even too quickly, given the ambiguous fundamental background. I believe the dynamics of the USD/JPY pair surprised many currency strategists because in just a few hours the price impulsively collapsed to the lows of 2018, reaching the 104th figure. After that, a corrective pullback followed but the general mood for the pair still remained bearish.

What is the reason for such a powerful price impulse? According to most experts, the blame for everything is a sharp surge of anti-risk sentiment, which was caused by several factors at once. First, meeting between the American president and the leaders of both parties of the House of Representatives and the US Senate ended in failure yesterday. Trump rejected the Democrats 'plan, suggesting a fourfold decrease in the cost of the wall with Mexico instead of $ 5 billion, Democrats agreed to allocate 1.3. This means that the "Shutdown" regime continues and the political opposition is entering a protracted phase.

The second reason for risk aversion is China. This week there were published disappointing data indicating a slowdown in Chinese industry. Thus, the PMI index for the manufacturing sector dropped to 49.8 points which was the worst result last year, as well as the PMI Caixin/Markit manufacturing index, which for the first time since spring 2017 was in the contraction zone and fell below 50. The market started talking once again about slowing the global economy with all the ensuing consequences.

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In addition, the strengthening of the yen contributed to other equally important circumstances. Yesterday in particular , Apple CEO Tim Cook sharply lowered the revenue forecast for the first quarter by 8 percent at once from 91 to 84 billion dollars. It is noteworthy that Apple revised upwardly to a fairly fresh forecast and the target of 91 billion was set only two months ago. According to Tim Cook, the negative dynamics is associated with the US-China trade conflict, as well as with a decrease in the cost of smartphone batteries. In addition, he stressed that the company is under certain pressure from the Fed policy. Tightening monetary policy contributes to the inflow of foreign capital and the strengthening of the dollar.

The stock market reacted to this unexpected news accordingly: the company's quotes fell by more than seven percent. The yield on 10-year-old treasures dropped to 2.633% and the foreign exchange market did not stand aside because we are talking about the world's largest company by capitalization. Apple's problems only increased the demand for "safe haven" currencies, including the yen. Moreover, unpleasant "surprises" were not limited to American events.

Hence, the ECB yesterday took control of the tenth largest bank in Italy, Banca Carige, after most of the board members of the financial institution resigned. The European regulator has appointed three temporary administrators and a supervisory committee, thereby replacing the bank's board of directors. Banca Carige is one of the most troubled Italian banks that was already provided with assistance last fall worth 320 million euros from the Italian Interbank Fund. However, the bank failed to restructure and get rid of "bad" debts because of the inefficient management and the conflict of shareholders.

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Fitch Ratings has lowered the bank's credit rating to CCC+ with a negative outlook, while warning that Carige could go bankrupt. As a result, the Italian National Commission on Companies and Stock Exchanges ceased trading in bank shares, as the board of directors was unable to reach an agreement on raising capital. This was the last straw for the majority of the members of the Board of Carige after which the leadership passed to the temporary administrators appointed by the European Central Bank.

Against this background, the German government bonds collapsed, especially the 7-year and 8-year bonds. Although, almost all were in the "red zone". The sharp collapse supplemented a very unambiguous fundamental picture, after which the yen, in tandem with the dollar, broke through many months of support in the area of the 104th figure. This impulse attracted buyers to itself. Therefore, the pair rebounded to the current mark of 107.70, but in my opinion, the southern dynamics still have not exhausted themselves.

After all, very soon another one will be added to the above fundamental factors of Brexit. Until March 29, that is, before the date of Britain's exit from the EU, there are only a few months left, so the tension in the markets on this issue will only increase. In addition, Nonfarm may further weaken the dollar against a basket of major currencies tomorrow. Therefore, the USD/JPY pair still has the potential to continue the downward trend to the nearest support level of 106.80 (the bottom line of the Bollinger Bands on the monthly chart).

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EUR/USD analysis for January 03, 2019

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Recently, the EUR/USD pair has been trading downwards. The price tested the level of 1.1284. According to the H1 time – frame, the price is trading below the Ichimoku cloud and below the daily pivot at the 1.1387, which is a sign that sellers are in control. I also found the confirmed breakout of the triple bottom (bearish) pattern, which is another sign of the weakness. My advice is to watch for selling opportunities. The downward targets are set at the price of 1.1283 and at the price of 1.1215.

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Simplified wave analysis of GBP / JPY pair for the week of January 3

Large-scale graph:

Throughout the past year, the main vector of the short-term trend of the cross was a decline. By November, the first 2 parts of the wave (A-B) were fully formed on the graph.

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Medium-scale graph:

From November 8, the price began to form a bearish plot. It completes a larger model tool.

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Small-scale graph:

In the last wave of December 13, a long flat prepared the conditions for the final spurt down. In the coming days, you can expect to roll back up.

Forecast and recommendations:

The current downtrend shows the first signs of probable completion. In the coming weeks, the vector of price movement may change. However, while the turn signals are not observed and sales remain the main direction of trade transactions.

Resistance zones:

- 137.00 / 137.50

Support areas:

- 131.00 / 130.50

Explanations of the figures:

The simplified wave analysis uses 3 parts (A – B – C). For the analysis, three main TFs are used. On every last part, the incomplete wave is analyzed. Zones show calculated areas with the highest probability of reversal. The arrows indicate the number of wave markings used by the author. While the dotted shows the formed movement.

Note: The wave algorithm doesn't take into account the duration of tool movements over time. To trade a trade transaction, you need to use signals!

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Simplified wave analysis of USD / CHF pair for the week of January 3

Large-scale graph:

On the daily scale of the franc chart, the last incomplete construction is ascending, starting from February last year. The final part (C) started in September.

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Medium-scale graph:

The descending wave of November 13 corrects the first part (A) of the trend wave on the H4 scale. The wave has entered the final phase.

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Small-scale graph:

On December 14, a new zigzag wave started in the direction of the bearish trend dominating in recent months. In recent days, a rollback was formed.

Forecast and recommendations:

The preliminary level of completion has passed, which indicates the continuation of the current wave. Until the reversal signals appear, the main focus of short-term trading transactions remains sales.

Resistance zones:

- 0.9950 / 1.0000

Support areas:

- 0.9760 / 0.9710

Explanations of the figures:

The simplified wave analysis uses waves consisting of 3 parts (A - B - C). For the analysis, three main TFs are used. On every last part, the incomplete wave is analyzed. 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 while the dotted shows 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!

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Technical analysis of EUR/USD for January 3, 2019

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Overview:

The EUR/USD pair continues to move upwards from the level of 1.1342. Today, the first support level is currently seen at 1.1342, and the price is moving in a bullish channel now. Furthermore, the price has been set above the strong support at the level of 1.1342, which coincides with the 61.8% Fibonacci retracement level. This support has been rejected three times confirming the uptrend. According to the previous events, we expect the EUR/USD pair to trade between 1.1342 and 1.1550. So, the support stands at 1.1342, while daily resistance is found at 1.1550. Therefore, the market is likely to show signs of a bullish trend around the spot of 1.1342. In other words, buy orders are recommended to be placed above the spot of 1.1342 with the first target at the level of 1.1550; and then 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 1.1257.

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Technical analysis of GBP/USD for January 3, 2019

analytics5c2ddea49e89b.pngHowever, if the NZD/USD pair fails to break through the resistance level of 1.2612 today, the market will decline further to 1.2440.

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Technical analysis for Gold for January 3, 2019

Gold price remains in a bullish trend. Price made a shallow pullback yesterday from $1,288 to $1,278 and then continued to make a new higher high. There are some bearish divergence signs in the 4-hour chart but not on the Daily chart. Gold could soon make a deeper pullback but the uptrend has not finished yet.

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Gold line - RSI trend line support

Blue line - short-term trend line support

Green line - major trend line support

Gold price is now trading above the 61.8% Fibonacci retracement. As long as price is above yesterday's lows, we will be expecting $1,300 to be reached. If yesterday's low at $1,278 is broken I would expect Gold price to move towards the blue trend line support and towards $1,270-65 area. There is no sign of weakening the uptrend. So far all pullbacks are considered buying opportunities.

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Technical analysis for EUR/USD for January 3, 2019

EUR/USD got rejected yesterday at the upper trading range boundary and pushed towards our second support level of 1.1340 after breaking below 1.14. The inability to break above 1.15 combined with the break below 1.14 is a sign of weakness. Although support at 1.13-1.1340 has held, trend remains neutral trapped inside the trading range.

analytics5c2dd92965a87.png

Yellow rectangles - trading range

Red line - major trend line resistance

Green line - RSI major support trend line

Gold line - RSI short-term trend line support

EUR/USD got rejected at the major trend line resistance. The RSI has reached the short-term support trend line and stopped the decline. If the gold trend line RSI support fails to hold, we should expect EUR/USD to move lower or even provide a new low below 1.12 with the RSI challenging the green trend line support. If price manages to recapture 1.14-1.1430 we could see prices move towards 1.15 and higher. I prefer to be bullish at current levels with stops at 1.1260.

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Forecast for GBP / USD pair on January 3, 2019

GBP / USD pair

On a local panic about the decline in the forecast for revenue by Apple, the pound sterling lost 142 points yesterday and today during the Asian session, it collapsed by another 165 points. Earlier, we reported that investors carefully left the market before the New Year holidays, but in addition to closing current positions, bids below 1.26 were also removed due to uncertainty before the parliament's decision on the deal with the EU. As a result, the price did not reach only 36 points to our target of 1.2400. But at the same time, this is also a sign that the price will still return to this level and with an increased probability of a breakthrough and reach the next target of 1.2300. In the future, the target in the area of 1.2000 will become relevant.

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Wave analysis of EUR / USD for January 3. Euro remains within the trend correction section

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Wave counting analysis:

On Wednesday, January 2, trading ended for EUR / USD by 105 bpts. However, taking into account the specificity and ambiguity of the entire trend section, which originated as early as December 13, the proposed wave can take an even more complex form and continue its construction with targets located near the 50.0% level on the older Fibonacci grid. At the same time, the internal wave structure of this wave already looks quite complicated now, and the correctional status of the entire trend section leads to frequent correctional waves.

Sales targets:

1.1315 - 23.6% Fibonacci

1.1266 - 0.0% Fibonacci

Shopping goals:

1.1528 - 127.2% Fibonacci

1.1599 - 161.8% Fibonacci

General conclusions and trading recommendations:

The pair continues to build a wave and the entire portion of the trend, taking its beginning on November 13. Thus, now I recommend buying in small volumes (due to the ambiguity of the current wave marking) with targets located near the marks of 1.1528 and 1.1599. Yesterday's fall makes current levels attractive for purchases. At the same time, I once again pay attention to the correctional status of the trend section, which leads to frequent and strong internal correctional waves.

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Indicator analysis. Daily review for January 3, 2019 for the EUR / USD pair

On Thursday, rather by inertia, the price moved down and reached the historical support level of 1.1307 (blue dashed line). Breaking this level from the first time is unlikely, which means the price will move upwards, into a rollback, with the first target 1.1382 - a rolling level of 38.2% (yellow dotted line).

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Fig. 1 (daily schedule).

Comprehensive analysis:

- indicator analysis - down;

- Fibonacci levels - up;

- volumes - down;

- candlestick analysis - up;

- trend analysis - down;

- Bollinger lines - down;

- weekly schedule - up.

General conclusion:

On Thursday, the price will move up going into a pullback, with the first target of 1.1382 - a rolling level of 38.2% (yellow dashed line). From this level, it is possible to resume downward movement.

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Wave analysis of GBP/USD for January 3. Transition to build a new descending wave

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Wave counting analysis:

On January 2, the GBP/USD pair lost about 135 bp and thus completed the construction of the proposed wave 2 or b. If this is true, then the decline in quotations will continue in the future within a downward wave of 3 or with targets located near the levels of 127.2% and 161.8% on the Fibonacci grid, built on the size of wave 2 or b. At the same time, the news background will still have a strong impact on the movement of the instrument and, accordingly, on the wave pattern.

Buying targets:

1.2815 - 0.0% Fibonacci (formal goal)

Selling targets:

1.2385 - 127.2% Fibonacci

1.2270 - 161.8% Fibonacci

General conclusions and trading recommendations:

The GBP/USD pair has presumably completed wave 2 or b. Thus, I recommend selling the pair, but very cautious, as the current price levels are minimal for the tool, and in the coming weeks there should be clarity on the Brexit question, which can greatly affect the tool. Also, after a strong fall yesterday, today the pair may move to the construction of a correctional wave in the composition of the future 3 or s.

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GBP / USD. January 3. The trading system. "Regression Channels". Hopes for the growth of the pound persist above 1.2475

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) - down.

CCI: -167.4649

The GBP / USD currency pair of the beginning of 2019, with a massive fall by more than 350 points. However, this is not remarkable, but the fact of updating the previous local minimum. More precisely, the breakdown. For the pound, there is only one positive news now. The fact that traders failed to consolidate below the previous price low. That means there is a chance for growth, especially as the day is approaching when a vote will be taken in the British Parliament. As we have said before, for the British currency now it does not even matter which of the Brexit options will be adopted as a result. Pound needs certainty. Even if this is a "hard" option, a new fall on this information may not be, as now the British currency is falling not just like that, namely on the fears of the market that the "divorce" from the EU will not be orderly. And at the moment everything goes exactly to the fact that Brexit will be disordered. The idea of holding a second referendum in parliament is not much favored. Nobody is in a hurry to use the opportunity to cancel Brexit, in principle, based on the decision of the European Court of Justice, and Theresa May fails to win over a sufficient number of parliamentarians to pass her bill. Today in the UK, the index of business activity in the construction sector, and in the United States will be published, the index of business activity and the ISM report on the level of employment ADP.

Nearest support levels:

S1 - 1.2512

S2 - 1.2451

S3 - 1.2390

Nearest resistance levels:

R1 - 1.2573

R2 - 1.2634

R3 - 1.2695

Trading recommendations:

The currency pair GBP / USD resumed its downward movement. Therefore, short positions are relevant now, but it is too dangerous to open them at the end of the movement and without correction. Now the most likely start of the correction, since the important support level of 1.2475 could not be overcome.

Buy positions are recommended to be considered after the price is fixed above the moving average line with targets at 1.2695 and 1.2756. However, as before, it will be difficult for the bulls to stay above the MA for a long time.

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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EUR / USD. January 3. The trading system. "Regression Channels". Euro is ready for recovery after yesterday's fall

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) - down.

CCI: -83.4453

The currency pair EUR / USD on Thursday, January 3, is trying to recover slightly after a strong fall the day before. It is still difficult to say what exactly caused such a strong strengthening of the American currency or the fall of the euro and the pound. In our opinion, this is just a reaction of traders at the beginning of the new year, since at the end of 2018, there was a strengthening of the euro and the pound, which you would not call anything other than corrective. The closing of "dollar" positions could also be connected with the desire to fix part of the profit before the end of the year. Thus, on the first trading day of the new year, new purchases of the US dollar followed, which, in our opinion, will not last long. New good reasons for the growth of the US currency is not. Moreover, there is no macroeconomic information that could provoke a strong increase in the US dollar. There is no new information on Brexit, not to mention the macroeconomic reports. In the United States today, two relatively important reports are being issued, the business activity index in the ISM production sector for December and the ADP report on changes in the number of workers in the private sector. Both indicators are expected to deteriorate compared with the previous period. At the beginning of today, the Euro currency is already showing growth, if the American statistics disappoint, it may increase.

Nearest support levels:

S1 - 1.1353

S2 - 1.1322

S3 - 1.1292

Nearest resistance levels:

R1 - 1.1383

R2 - 1.1414

R3 - 1.1444

Trading recommendations:

The EUR / USD currency pair has fixed below the MA. Thus, short positions are relevant now, but Heikin Ashi dyed the last bars in purple. Therefore, it will be possible to open new sell-positions after turning this indicator down with the target of 1.1322.

Purchase orders will become again relevant not earlier than the price fixing above the moving average with the target of 1.1444. In this case, the initiative again goes into the hands of bulls.

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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GBP / USD: British pound flies into the abyss

The British pound is flying into the abyss, and Donald Trump considers what happened at the end of last year on the American stock market (we are talking about its collapse) only "failure". Such news marked yesterday's trading day in the Forex market, which strengthened the position of the US dollar against most world currencies.

The data that were released on the American economy yesterday afternoon, although they were negative, generally did not affect the balance of power in the market.

According to the report, the US manufacturing index declined last December, as did the business confidence index.

According to Markit, the PMI purchasing managers index for the manufacturing sector in December 2018 fell to 53.8 points, while in November it was still 55.3 points. The decline was due to a slowdown in the growth of new orders. Let me remind you that finding the index above 50 points indicates an increase in activity.

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As noted in Markit, a number of companies reported difficulties in attracting workers and resources.

Data on retail sales from major US networks were worse than economists' forecasts.

According to the report of The Retail Economist and Goldman Sachs, the index of sales in US retail chains fell by 1.3% in the week from December 23 to 29 compared to last week. Compared to the same period in 2017, the retail sales index in the USA increased by 4.6%.

The Redbook report was more positive. According to the data, in the first 4 weeks of December, retail sales in the United States increased by 7.7% compared with the same period in 2017. For the week from December 23 to December 29, sales increased by 9.3% year on year.

As I noted above, yesterday the US president made several statements regarding North Korea and the growth prospects of the American economy.

Donald Trump happily announced that he received an important letter from North Korean leader Kim Jong-un saying that North Korea is no longer conducting nuclear weapon tests.

Trump also spoke about the instability of the markets, drawing attention to the fact that in the current conditions intervention and assistance from the Federal Reserve System is required. Most likely, we are talking about interest rates and the rate of their further increase. The President of the United States firmly believes that the trade agreements reached will help the American economy this year.

It was interesting to hear about how the recent collapse of stock markets Donald Trump called the usual "failure", saying that the market will begin to grow again after the conclusion of new trade agreements.

Meanwhile, the British pound is falling into the abyss against the backdrop of unsuccessful attempts by British Prime Minister Theresa May to somehow change the situation associated with the conclusion of an agreement on Brexit. As it became known yesterday, May plans to meet with a number of EU leaders this week to further discuss a pre-agreed deal on UK withdrawal from the EU. This is a meeting with Angela Merkel and the Prime Minister of the Netherlands Mark Rutte, as well as the President of the European Council Donald Tusk.

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Forecast for AUD/USD for January 3, 2019

AUD/USD

This morning, the Australian dollar reacted extremely painfully to Apple's announcement from the previous day regarding a decline in revenue forecast for the first quarter from $91 billion to $84 billion - the AUD/USD quote at the time sharply fell by 328 points. The "Chinese factor" has already played its role here, as investors were afraid of the slowdown in the technological sector of China. At the same time, the market was not ready for such strong volatility after the New Year holidays - purchase orders that could contain a brief panic did not have time to accumulate.

Further behavior of the "Aussie" has only one scenario - a decline in the price to the successive support of the price channel: 0.6820, 0.6650, 0.6540.

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Forecast for EUR / USD on January 3, 2019

EUR / USD

Yesterday, what we assumed at the end of last year happened on the market. The strongest attack on counter dollar currencies took place. The only difference is that before such an attack, we allowed a price gap up at the opening of the market. But nevertheless, such an operation took place very rapidly. The reason for this was Apple's announcement of a lower forecast for the new year, in the first quarter alone from 91 billion dollars to 84 billion. The crisis again began to talk about the market, and investors began to buy the dollar. The euro lost 107 points, but the yen suffered more than other currencies, as holidays continue in Japan and market makers could not maintain liquidity. The yen collapsed 515 points in 2 days.

The euro has reached our first goal of 1.1307. Now all the indicators on both charts show only a further decline. At the moment, the price is adjusting, the growth limiter is the resistance of the Kruzenshtern line on the four-hour chart of 1.1405. The price may not reach this line, it may pierce, but on the whole, we are waiting for the price to return to 1.1307 and a further decrease in the range of 1.1270 / 85. Then we wait for the price at the levels of 1.1195 and 1.1150. Target levels are defined as zones of the largest accumulation of Fibonacci levels of different price scales from different branches of the movement.

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lJlgEmVfpM1OiJ740M-ZgDXBkLvR88ziiyUbFbIMThe material has been provided by InstaForex Company - www.instaforex.com

Analysis of the divergence of EUR / USD on January 3. An unexpected euro currency drop

4h

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The EUR / USD currency pair reversed yesterday in favor of the US dollar and consolidation immediately below two Fibo levels of 38.2% - 1.1446, and then under 23.6% - 1.1358. As a result, on January 3, the process of falling off the pair can be continued in the direction of the level of 1.1269, which is low over the last month and a half. The closing of quotations above the Fibo level of 23.6% can be interpreted as a turn in favor of the European currency and one can expect some growth in the direction of the correction level of 38.2%.

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 reversed in favor of the American currency and began the process of returning to the correction level of 127.2% - 1.1285. Rebounding quotes from the Fibo level of 127.2% will allow traders to expect a reversal in favor of the EU currency and the resumption of growth in the direction of the correction level of 100.0% - 1.1553. There are no emerging divergences today. Fixing the pair under the Fibo level will increase the likelihood of a further fall in the direction of the next 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:

You can make purchases of the EUR / USD currency pair with a target of 1.1446 and a Stop Loss order below the Fibo level of 23.6% if the pair closes above the level of 1.1358.

The EUR / USD currency pair can be sold now with the target of 1.1269 with a Stop Loss order above the Fibo level of 23.6% since the pair closed below the correction level of 1.1358.

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Analysis of GBP / USD Divergences for January 3. The pound sterling began the year with a collapse of almost 400 points

4h

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The GBP / USD currency pair on the 4-hour chart rebounded from the correction level of 76.4% - 1.2812, a reversal in favor of the US dollar and a fall to the Fibo level of 127.2% - 1.2491. Rebounding the quotations of the pair from the level of 127.2% makes it possible to count on a reversal in favor of the British currency and some growth in the direction of the correction level of 100.0% - 1.2662. There are no ripening divergences on the current chart on January 3, and a close below the Fibo level of 127.2% will work in favor of a further fall towards the next correction level of 161.8% - 1.2269.

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 performed a fall to the correctional level of 100.0% - 1.2476 on the new Fibo grid. Rebounding the pair from the correction level of 100.0% allowed a return to the Fibo level of 76.4% - 1.2556. Rebounding from this level will allow us to expect a reversal in favor of the US currency and the resumption of a fall to the Fibo level of 100.0%. Fixing quotations above the level of 76.4% will work in favor of continuing growth in the direction of the next correction level of 61.8% - 1.2606.

The Fibo grid is built on extremums from December 12, 2018, and December 31, 2018.

Recommendations to traders:

Purchases of the GBP / USD currency pair can be made with the target of 1.2606 and a Stop Loss order below the level of 76.4% if the pair closes above the Fibo level of 1.2556 (hourly chart).

Sales of the GBP / USD currency pair can be carried out with the target of 1.2476 and a Stop Loss order above the level of 76.4% if the pair bounces off the level of 1.2556 (hourly chart).

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GBP/USD: plan for the European session on January 3. Investors do not believe in the agreement on Brexit

To open long positions on GBP/USD you need:

The British pound has fallen by more than 1.5% today in the Asian session, as the probability of concluding an agreement on Brexit is moving further and further away. It is best to consider buying the pound in the current environment after the update of today's lows in the area of major support levels of 1.2482 and 1.2440. The main task of buyers will be the return and consolidation above the resistance of 1.2567, which will lead to the continuation of the upward correction in the area of resistance at 1.2611, where I recommend to take profits.

To open short positions on GBP/USD you need:

Sellers urgently need to return to the support level of 1.2525, which will lead to a new wave of sales of GBP/USD with a test of lows of 1.2482 and 1.2440, where I recommend taking profits. A failure to consolidate above the resistance of 1.2567 on the data on the UK construction sector will also be a signal to sell the pound to the daily lows. In a different scenario, short positions can be opened to rebound from 1.2611.

Indicator signals:

Moving averages

Trade is conducted below the 30-day and 50-day daily moving averages, which indicates that pressure on the pound remains.

Bollinger bands

In the event of a decrease in the pound, support will be provided by the lower limit of the Bollinger Bands indicator around 1.2490, from which you can open low positions. The upward trend may be limited by the average border of the indicator 1.2575, as well as its upper boundary in the area of 1.2659, from which 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
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Fractal analysis of major currency pairs on January 3

Dear colleagues.

For the Euro / Dollar currency pair, we are following the formation of the downward structure of January 2 and the development of which is expected after the breakdown of 1.1259. For the Pound / Dollar currency pair, we are following the development of the downward structure from December 31 and we expect further downward movement after the breakdown of 1.2490. For the currency pair Dollar / Franc, the price forms the initial conditions for the upward cycle of December 28. For the currency pair Dollar / Yen, Euro / Yen and Pound / Yen we expect the recovery of normal market volatility on the H1 scale.

Forecast for January 3:

Analytical review of H1-scale currency pairs:

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For the Euro / Dollar currency pair, the key levels on the H1 scale are 1.1430, 1.1394, 1.1367, 1.1298, 1.1259, 1.1194 and 1.1148. Here, we are following the formation of the downward structure of January 2. The short-term downward movement is expected in the range of 1.1298 - 1.1259 and the breakdown of the latter value will lead to the development of a pronounced movement. Here, the goal is 1.1194. The potential value for the bottom is considered the level of 1.1148, upon reaching which we expect a rollback to the top.

The short-term uptrend is possible in the range of 1.1367 - 1.1394 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 1.1430 and this level is the key support for the downward structure of January 2.

The main trend is the formation of potential for the bottom of January 2.

Trading recommendations:

Buy 1.1367 Take profit: 1.1392

Buy 1.1396 Take profit: 1.1428

Sell: 1.1298 Take profit: 1.1262

Sell: 1.1257 Take profit: 1.1196

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For the Pound / Dollar currency pair, the key levels on the H1 scale are 1.2699, 1.2638, 1.2592, 1.2490, 1.2402, 1.2336, 1.2254 and 1.2200. Here, we are following the development of the downward structure of December 31. The downward movement is expected after the breakdown of 1.2490. In this case, the target is 1.2402 and in the range of 1.2402 - 1.2336 is the short-term downward movement. The breakdown of the level of 1.2254 will lead to a pronounced movement to the level of 1.2254. The potential value for the bottom is considered the level of 1.2200, after reaching which we expect a departure to a correction.

The short-term upward movement is possible in the range of 1.2592 - 1.2638 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 1.2699 and this level is the key support for the bottom.

The main trend is the downward structure of December 31.

Trading recommendations:

Buy: 1.2592 Take profit: 1.2636

Buy: 1.2640 Take profit: 1.2695

Sell: 1.2490 Take profit: 1.2402

Sell: 1.2398 Take profit: 1.2340

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For the Dollar / Franc currency pair, the key levels on the H1 scale are 1.0019, 0.9970, 0.9950, 0.9926, 0.9854, 0.9836, 0.9813 and 0.9786. Here, the price forms the initial conditions for the top of December 28. The development of the ascending structure is expected after the breakdown of 0.9926. In this case, the target is 0.9950 and in the range of 0.9950 - 0.9970 is the consolidation. The potential value for the top is considered the level of 1.0019, the movement to which we expect after the breakdown of 0.9970.

The short-term downward movement is possible in the range of 0.9854 - 0.9836 and the breakdown of the latter value will lead to a prolonged correction. Here, the goal is 0.9813 and this level is the key support for the upward structure.

The main trend is the formation of the initial conditions for the top of December 28.

Trading recommendations:

Buy: 0.9926 Take profit: 0.9950

Buy: 0.9970 Take profit: 1.0010

Sell: 0.9854 Take profit: 0.9838

Sell: 0.9834 Take profit: 0.9815

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For the Dollar / Yen currency pair, we expect the quotation to be restored on the H1 scale.

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For the Canadian dollar / Dollar currency pair, the key levels on the H1 scale are 1.3741, 1.3667, 1.3621, 1.3557, 1.3516 and 1.3463. 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 1.3621 - 1.3667 and the breakdown of the last value will allow expecting a movement towards a potential target of 1.3741, upon reaching this level, we expect a rollback downwards.

The short-term downward movement is possible in the range of 1.3557 - 1.3516 and the breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3453 and this level is the key support for the top.

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

Trading recommendations:

Buy: 1.3621 Take profit: 1.3665

Buy: 1.3670 Take profit: 1.3740

Sell: 1.3555 Take profit: 1.3518

Sell: 1.3514 Take profit: 1.3465

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For the Australian Dollar / Dollar currency pair, we expect the H1 scale volatility to recover.

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For the Euro / Yen currency pair, we expect the quotation volatility to recover on the H1 scale.

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For the Pound / Yen currency pair, we expect the quotation to be restored on the H1 scale.

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