A dollar out of trend, investors have announced a fashion for Asian currencies

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The US currency in the new year will lose all previously collected positions. If last year the dollar index gained about 4%, now, due to the expected deterioration in the country's economic growth and the display of patience by Fed officials in the process of tightening policies, the indicator will be forced to show a downward trend.

According to Reuters respondents, the dominance of the dollar has been left behind. The overwhelming majority of those who still believe in the further growth of the US currency (85% of the respondents) believe that it will exhaust itself in the next six months. Only 3 out of 75 analysts expect an uptrend of the dollar for a year or more.

Recall, a year ago, a Reuters poll showed similar results, experts almost unitedly predicted a decline in the dollar. Despite erroneous estimates, analysts continue to insist on their opinion this year.

Fed Protocol

The protocol showed the willingness of financiers to completely abandon the wording on the further gradual rate increase. Stock indices increased, while the yield of US government bonds and the dollar fell. Meanwhile, in December there was a completely different reaction: shares, after a 13% drop from the end of September, lost another 1.5%. Perhaps this is due to the inattention of the market or the incorrect construction of the text of Jerome Powell's speech. Thus, the head of the Central Bank announced too early that low inflation allows the regulator to be "patient." In January, instead of this, another word appeared, "flexibility", which helped the stock indices soar. Apparently, investors need to repeat the same thing several times so that they choose the direction of movement.

The monetary inaction of the Fed is a strong argument for the gradual closing of long positions on the dollar. In the meantime, the euro has noticeably quickened, the EUR / USD pair finally went to conquer the previously set goals.

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The pigeon comments of the hawks by Charles Evans and Eric Rosengren and the reduction of unemployment in the region to 8% also helped the Euro-currency. This, together with the acceleration of wage growth, increases the chances of an increase in ECB rates in September and contributes to the strengthening of the euro.

Asian currencies

For the first time since the beginning of 2018, investors looked at Asian currencies with optimism. They called Asian assets promising. According to Reuters, the rate on the reduction of the yuan fell to its lowest level since last February. Improving the mood is due to expectations of a speedy normalization of relations in the field of trade between Washington and Beijing. Recall that on Wednesday there was some progress regarding China's purchases of American agricultural products and energy.

It sounds rather strange, but for the first time since February, market participants are betting on the growth of the Indian rupee, which last year was among the main outsiders of the foreign exchange market. Bearish rupee rates have fallen to a minimum since the beginning of 2018.

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Three drivers of growth of oil prices

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Currently, experts point out three factors pushing up oil quotes. These include positive sentiment regarding negotiations between the United States and the People's Republic of China, a decline in production by leading oil producers, as well as positive statistics on black gold reserves in America.

Brent crude oil has completed the current session growth, rising above $ 60 a barrel. On Thursday, January 10, it was trading at $ 60.79.

The growth of quotations was promoted by the next round of talks between the United States and China on trade issues held the day before. Market participants expect the head of the White House to be able to negotiate with the Chinese leader and a lengthy trade conflict will be resolved. According to analysts, this would support financial markets, sagging at the end of 2018.

A positive impact on oil quotes also had statements by the authorities of Saudi Arabia about the readiness for an additional reduction in oil production.

The data from the US Energy Information Administration (EIA) has become another key driver for black gold prices. According to the report of the department, oil reserves in the United States during the week ended January 4, 2019, decreased by 1.7 million barrels. This surpassed analysts' forecasts, expecting a decline of 1.4 million barrels. Earlier, the American Petroleum Institute (API) announced a reduction in reserves of 6.1 million barrels.

Experts believe that the potential for short-term oil price growth has not yet been exhausted. In this regard, some departments have revised the previous forecasts for black gold prices for the current year. These institutions include the largest American investment bank, Morgan Stanley. Regarding the cost of Brent crude, the bank's experts predicted that in the first quarter of 2019 it would be $ 58 per barrel, although they previously counted on $ 65 per barrel. It should be noted that many analysts are sure that the previously high level of $ 65 per barrel is quite achievable. In the second quarter of this year, the price of Brent will rise to $ 60 per barrel, according to Morgan Stanley. The forecast of the value of the reference mark for the third quarter suggests an increase to $ 62.5 per barrel, and in the fourth - to $ 65 per barrel, summarize the bank's experts.

As for the cost of WTI light oil, in the first quarter of 2019, Morgan Stanley predicts its rise to $ 49 per barrel. In the second quarter of this year, the price of WTI will be about $ 52 per barrel, and in the third, no more than $ 55 per barrel. According to the calculations of bank specialists, in the fourth quarter of 2019, the cost of WTI will reach $ 58 per barrel. In 2020, a number of experts predict the average price of Brent oil at $ 65 per barrel, and the cost of WTI, about $ 58 per barrel.

A number of experts believe that the black gold market is far from a glut. They are confident in its balance, which is expected to continue throughout the current year. Such an assessment of the situation implies a further increase in oil prices. However, the recovery of the market will be limited to the mark of $ 65 per barrel, including due to the decline in oil imports to the PRC and the reduction in the share of OPEC in the global market, experts are sure.

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In 2019, gold could rise in price to $ 1,350 per ounce

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For most of last year, the gold rate was under pressure due to the strengthening of the US currency and the increase in the interest rate of the Fed. Only in December, amid falling stock indices, investors in the precious metal could breathe a sigh of relief.

According to some data, last month, stocks of "gold" ETF-funds increased by 2.25 million ounces, which probably was one of the drivers of growth in the value of the precious metal, which has already managed to rise above $ 1,290 for 1 ounce.

"Investors in gold have hope for a recovery in the market after reaching its lowest level in November 2018. This means that the uptrend should continue. In the near future, quotes can test a mark of $ 1,300 per ounce," experts said.

"As the experience of past years shows, this mark is a very serious level of resistance for the precious metal. If quotes will be able to overcome it, then, apparently, we should expect an influx of new investors into the gold market, who will buy precious metal at a price increase," they added.

According to the forecast of the investment bank Goldman Sachs, this year gold could rise in price to $ 1,350.

"If the growth of the US economy in 2019 and the rate of an interest rate increase by the Fed slows down, then the demand for precious metals will be high," the financial institution said.

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Say a word about the poor dollar!

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The dollar was stuck near a 3-month low on expectations that the Fed could halt the monetary tightening cycle. The minutes of the Fed meeting on December 18-19 showed that a number of officials supported the need to keep rates at the current level this year. This weakened the dollar, as did the fact that investors began selling US currency amid growing optimism about the trade negotiations between the US and China.

This fall in the dollar can be called a delayed correction after an unexpectedly strong several weeks. At the same time, dollar stability can be partly explained by the fact that fears are growing over the global recession, which has led to an increase in the attractiveness of the dollar. However, after China and the United States continued trade negotiations, market sentiment began to improve. Offshore yuan reached its highest level since August, commodity currencies such as Canadian and Australian dollars show the highest rates of growth since the beginning of the year, which is also facilitated by the rebound in oil prices.

The Fed's recent warning is something that has never been said so explicitly, and the wage jump in the last month is a signal that the regulator is likely to be much less aggressive than it was last year.

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The dollar seems to be preparing for a soft landing of the US economy

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According to some experts, it will be better for the US economy and the dollar if the Fed refrains from raising interest rates at least until June 2019. Only, in this case, there can be prerequisites for strengthening the greenback.

In particular, the President of the Federal Reserve Bank of St. Louis, James Bullard believes that a too rapid increase in the interest rate of the US Federal Reserve may push the country's economy into recession.

Meanwhile, large investment banks believe that there is no reason to panic about this.

"Many market participants are concerned about the possibility of a recession, but consumer demand is high, and the growth of the US economy is expected at 2.5% this year. At the same time, we recognize that the Fed, Brexit, signals from oil prices and uncertain trade relations with the Middle Kingdom still influence investors' sentiments," said representatives of Merrill Lynch, an investment unit of Bank of America.

A similar point of view was expressed by Goldman Sachs.

"In the light of recent events, the prospects for a Fed rate increase are rather vague. At the same time, US GDP growth rates are still significantly higher than potential expectations, and consumer spending signals are encouraging enough," they said.

Thus, before the onset of a recession in the US economy, apparently, it is still far away, and so far we can only talk about a soft landing. Partial "disconnection" of the American government reinforces investors' concerns about a slowdown in the country's GDP in the first quarter.

As for the dollar, it demonstrates a rally, as a rule, when economic growth in the United States is ahead of the rate of expansion of global GDP. For example, it was in 2018, but in order to predict the further dynamics of the USD index, first of all, you should answer the question: which economy will lose momentum faster, the world or the US? According to the World Bank estimates, this year the pace of recovery of the first indicator will be reduced from 3% to 2.9%, and the second - from 2.9% to 2.5%. Despite the fact that the dollar now does not look like a clear favorite among the G10 currencies, the possible slowdown in the eurozone economy (from 1.9% to 1.6%) makes one look at the euro with caution. Therefore, even if the greenback continues to fall in relation to the single European currency, this reduction is likely to be short-term.

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There is no reason for the growth of the dollar, and the yen, pound, and euro can win

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Most likely, the rally for the dollar has ended, the decline in expectations for a rate hike reduced the advantage of the dollar over other currencies. After achieving the best results last year, the dollar lost momentum after the Fed signaled a slowdown in interest rates over the next two years and expressed caution about the US economic outlook. There is every reason to believe that the dollar will lose most of its profits in 2018 over the next 12 months. Currently, all factors contributing to growth, namely, aggressive monetary policy and stable economic growth, have come to naught, and for now, it is difficult to say what could be a kind of cyclical driver for strengthening the dollar.

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As for the euro, after losing about 4 percent against the dollar in 2018, it is likely to grow by about 5 percent and will trade at $ 1.20 by the end of the year. The fundamental factors for both currencies have deteriorated. But while the prospects for the euro in this sparring contest look more convincing. But once again we will notice that there is no big trend in favor of one or the other being especially dominant this year.

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The fate of sterling will depend on the conditions under which Britain leaves the European Union. We expect that the British pound will rise by more than 8 percent, to 1.38 dollars by the end of the year, compared with 1.27 dollars in trading on Wednesday. If last year the dollar had the status of a safe asset against the background of the exacerbation of the trade war between the United States and China, then this year it lost it, transferring powers to the yen, which grew by more than 3 percent in a few weeks. It will remain the main refuge until the end of 2019.

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GBP / USD pair: plan for the American session on January 10. Little interest from traders in the British pound

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

Buyers could not keep the price above the support of 1.2753 in the first half of the day, although there were preconditions for further growth. At the moment, only a confident return above the level of 1.2753 will return the chance to continue the upward trend, which will lead to the test of resistance 1.2798. Only after such a scenario will it be possible to count on updating the highs of 1.2868 and 1.2929, where I recommend taking profits. In the case of a decrease in the pound in the second half of the day, it is best to consider long positions to rebound from the lows of 1.2708 and 1.2658.

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

As long as trading is below 1.2753, one can count on a further decline in the pound. A breakdown of support at 1.2708 will lead to a rapid decline in GBP / USD to the lows of 1.2658 and 1.2614, where I recommend taking profits. Positive news on Brexit from the UK Parliament could lead to a sharp increase in the pound. In this scenario, short positions can be opened after the highs of 1.2868 and 1.2929 are updated.

Indicator signals:

Moving averages

Trade is conducted in the area of 30-day and 50-day moving, which indicates the lateral nature of the market.

Bollinger bands

The upside potential of the pound is limited by the upper limit of the channel indicator Bollinger Bands around 1.2815.

More in the video forecast for January 10

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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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Oil quotes depend on the dynamics of stock exchanges, and not on supply and demand

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According to a number of analysts, in the current month the cost of oil, as in December of the past year, is more tied to the dynamics of world financial markets than to the real balance of supply and demand. As a result, when the mood of market players changes, oil futures for Brent and WTI varieties may face a correction.

At the end of the last trading session, the oil quotes of the Brent reference mark increased by 4.69%, reaching $ 61.37. On Wednesday, January 9, the statements of the authorities of Saudi Arabia about a more significant reduction in oil production than provided for by the terms of the OPEC + transaction contributed to positive sentiment on the black gold market. General inspiration on the global stock exchanges, connected with the next round of trade negotiations between the United States and China, also contributed.

During the previous trading session, US stock indexes showed strong growth against the background of the publication of data from the Federal Open Market Committee of the US Federal Reserve (FOMC). The S & P 500 broad market index increased by 0.41%, closing at 2584.96 points, the Dow Jones Industrial Average gained 0.39%, and the high-tech NASDAQ added 0.87%. The yield on 10-year Treasury bonds declined by 2.719%, or 1 basis point (bp).

Last year, the American regulator, taking advantage of favorable economic conditions, raised the base interest rate four times, raising it to 2.25% -2.5% per annum. At present, the Fed leadership is leaning towards a more flexible policy that is capable of taking into account not only the internal but also the external economic situation. According to expert estimates, the main risks are still the slowdown in the growth of the world economy against the backdrop of trade wars and political and economic instability in Europe. In this regard, the regulator does not exclude two rate hikes instead of the planned three during 2019.

Experts come to the conclusion that the Fed is ready to take a short pause in a series of interest rate increases, but one should not expect any fundamental changes from the regulator. Recall that the Fed's goal is to achieve an interest rate of about 3%.

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Fundamental Analysis of AUD/JPY for January 10, 2019

AUD/JPY has been gradually developing the bullish momentum, following the bearish bias. Recently, the price bounced off the 70.00 area. AUD is struggling for gains in light of the recent economic reports. This led to certain corrections and volatility in the market while sustaining the bullish pressure in the pair.

AUD opened the new year with impulsive gains but soft fundamentals. As a result, the pair lost the momentum it had earlier. Recently Australia's Trade Balance report was published with a decrease to 1.93B from the previous figure of 2.01B which was expected to increase to 2.18B and Building Approvals slumped to -9.1% from the previous value of -1.5% which was expected to increase to -0.3%. Ahead of Retail Sales report to be published tomorrow which is expected to be unchanged at 0.3%, the Australian Economy is currently quite shaky that is confirmed by downbeat economic data.

On the other hand, JPY is unable to take advantage of AUD weakness due to consistently sour economic reports published recently. Though BOJ Governor Kuroda is still quite optimistic about the Japanese economy and recently stated that it is carrying on with moderate expansion on the back of rising household income. Despite the positive statement from Kuroda, recently Japan's Monetary Base report was published with a decrease to 4.8% from the previous value of 6.1% and Consumer Confidence index dropped to 42.7 from the previous figure of 42.9. Though Average Cash Earnings report showed an increase to 2.0% from the previous value of 1.5%, today Japan's Leading Indicators report was published with a decline to 99.3% from the previous value of 99.6%.

Meanwhile, AUD is expected to gain momentum if the pending Retail Sales report comes better than expected. Otherwise, after certain bullish pressure further bearish momentum can be observed in the pair if Japan publishes solid economic data. Amid optimistic JPY behavior, AUD may struggle to sustain the bullish momentum in the long run.

Now let us look at the technical view. The price is currently residing below 78.50 resistance area from where if a break with a daily close is observed then further bullish pressure with target towards 83.50 area is expected. On the other hand, rejecting off the 78.50 area with a daily close will lead to further bearish momentum in the pair. As per MACD cross, certain bullish pressure will persist. However, until a daily close above 78.50 is observed, the bearish bias is expected to continue.

SUPPORT: 75.00, 76.50

RESISTANCE: 78.50, 80.00

BIAS: BEARISH

MOMENTUM: VOLATILE

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Intraday technical levels and trading recommendations for GBP/USD for January 9, 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 a neckline located around 1.2650-1.2680. Hence, a successful bullish breakout above the depicted bearish channel was demonstrated on December 24.

On December 31, an 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 was demonstrated during last Thursday's consolidations.

This week, another bullish breakout above 1.2720 was attempted to resume the bullish scenario of the market towards 1.2800, 1.2880 and 1.3000. Otherwise, the pair remains trapped within the previous consolidation range (1.2500-1.2720).

Bullish persistence above 1.2720 is mandatory for buyers. Any bearish decline below 1.2600 invalidates the bullish scenario suggesting further bearish decline towards 1.2440.

On the other hand, the price level of 1.2800 stands as an intraday key-level corresponding to mid-range of the previous consolidation zone (1.2720-1.2870 which needs to be broken for further bullish advancement.

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Analysis of Gold for January 10, 2019

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Recently, Gold has been trading sideways at the price of $1,292.90. According to the H1 time – frame, I have found rejection from the upper Keltner band, which is a sign that Gold might be in the overbought condition. I also found the hidden bearish divergence on the LBR oscillator, which is another sign of weakness. My advice is to watch for selling opportunities. The downward targets are set at the price of $1,287.20 and at the price of $1,280.00.

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EUR / USD pair: plan for the US session on January 10. Euro declined before publication of the ECB report

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

The downward correction for the euro, which I paid attention to in my morning forecast, is gradually coming to an end. Buyers have already proven themselves in the support area of 1.1523, but further movement will depend on the ECB protocols. The main task for the second half of the day will be to return and consolidate above the resistance level of 1.1556, which will open a direct road to the area of maximums of 1.1605 and 1.1648, where I recommend taking profits. In the case of reduction scenarios on ECB protocols, long positions can be considered to rebound from support of 1.1495, where the 50-day moving average is also located.

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

Only the formation of a false breakdown in the area of resistance 1.1556 will allow us to count on the continuation of the downward correction in the euro. Weak protocols from the European Central Bank may also negatively affect the EUR / USD pair and the breakdown of support for 1.1523 will push the euro even lower to the minima of 1.1495 and 1.1465, where I recommend taking profits. In the case of the breakdown of the level 1.1556 and the new wave of growth, it is best to consider short positions for a rebound from the levels 1.1605 and 1.1648.

Indicator signals:

Moving averages

Trade is conducted above the 30- and 50-day average, which indicates the likely continuation of the growth of the euro after the update of the sliding.

Bollinger bands

The upper limit of the Bollinger Bands indicator around 1.1475 limits the upward potential of the euro. The lower boundary of the indicator in the area of 1.1523 will act as a support and the breakdown of which will lead to a new wave of the euro decline.

More in the video forecast for January 10

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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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Control zones of NZD/USD pair 01/10/18

The upward movement of the pair is a medium-term upward momentum that makes the downward transactions not yet profitable. The probability of updating the December maximum is 70%.

Yesterday's growth allowed the pair to overcome the important 1/2 CZ of resistance at 0.6777-0.6770, which means that growth is more likely to continue. The most favorable prices for the purchase of tools are located within the 1/2 CZ of 0.6745-0.6738. However, it is necessary to take into account the fact that the pair has already reached the monthly control zone of January. The probability that growth will continue outside its borders is close to 30%, therefore, purchases from current grades become unprofitable and a reversal pattern does not yet form for sale.

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Everything described above indicates that it is not recommended to open deals on the instrument until testing the 1/2 CZ of 0.6745-0.6738. If purchases at lower prices are already open, it is better to close them because of the increased likelihood of a strong offer.

An alternative model will be developed if today's US session closes below 0.6738. In this case, the pair will move to a new phase of the medium-term decline to the weekly short-term price of 0.6675-0.6661. An ascending model with a fixation above yesterday's maximum has a probability of 30%, which makes it unsuitable for trading.

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Daily CZ - daily control zone. The area formed by important data from the futures market that change several times a year.

Weekly CZ - weekly control zone. The area formed by marks from important futures market which change several times a year.

Monthly CZ - monthly control zone. The area is a reflection of the average volatility over the past year.

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Bitcoin analysis for January 10, 2019

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Trading recommendations:

According to the 30M time - frame, BTC has been trading downwards. As I expected, the price tested the level of $3.720 and met my yesterday's downward targets. I found strong selling pressure in the background, which is a sign that sellers are in conrtol. My advice is to wait for a potential bearish flag to confirm further downward continuation. The new downward targets are set at the price of $3.640 and at the price of $3.522 (Fibonacci expansion 100%).

Support/Resistance

$3.770 – Intraday resistance

$3.718– Intraday support

$3.640 – Objective target 1

$3.520 – 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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BITCOIN Analysis for January 10, 2019

Bitcoin's dynamic today came as a surprise to the market. With strong impulsive bearish momentum, the price sank below $4,000. The price not only break below $4,000 area with strong bearish pressure but also breached below 200 EMA, 20 EMA, Tenkan, Kijun and Kumo Cloud support. It has broken all the dynamic supports with one candle which indicates further bearish momentum. According to formation of Extreme Divergence, a bullish pullback towards $4,000 area is expected before the price continues with the bearish trend with a target towards $3,500 and later towards $3,000 area. On the other hand, a daily close above $4,000 area is going to encourage a further bullish bias again in the future.

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

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

BIAS: BULLISH

MOMENTUM: VOLATILE

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Intraday technical levels and trading recommendations for EUR/USD for January 10, 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.

That's why, the EUR/USD pair has been trapped below the price level of 1.1420 waiting for a bullish breakout since November 5.

Today, a recent attempt of a bullish breakout above 1.1520 (the upper limit of the depicted movement channel) is being executed.

Bullish persistence above 1.1520 enables a further bullish advance towards 1.1600 (October's High) and probably 1.1720 if enough bullish momentum is maintained.

On the other hand, any decline below the key-levels of 1.1520 & 1.1420 brings more sideway consolidations down to 1.1260 again.

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EUR/USD analysis for January 10, 2019

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Recently, the EUR/USD pair has been trading upwards. The price tested the level of 1.1569. Anyway, according to the H4 time frame, I found that the price rejected from the upper Keltner band (2.5 standard deviation), which is a sign that buying EUR/USD at this stage looks risky due to the potential overbought condition. I also found a hidden bearish divergence on the stochastic oscillator, which is another sign of weakness. My advice is to watch for selling opportunities. The downward targets are set at the price of 1.1485 and at the price of 1.1423.

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Control zones of GBP/USD pair 01/10/19

For three days in a row, the pair tested the weekly control zone of 1.2819-1.2781. There is no fixation above this area, which indicates a high probability of the emergence of a large supply and the formation of a correction model.

Today's movement may determine further construction of the medium-term plan. Another test of the weekly CZ of 1.2819-1.2781 led to the fact that market sellers again activated. The presence of a proposal indicates a large number of limit orders that impede the growth of the pair. There are no violations of the ascending structure but the local accumulation zone has already been formed. This gives you the opportunity to work on the sale of a weekly CZ. The first target of the fall is 1/4 CZ of 1.2707-1.2697. Achieving this zone will allow you to close a part of the short position and transfer the rest to breakeven.

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Do not forget that growth remains a medium -term impulse, therefore any transactions in the opposite direction should have a risk to profit ratio of at least 1 to 3 and sales should be recorded in parts.

An alternative fall model will be developed if the pair is able to break through the first 1/4 CZ of support at 1.2707-1.2697 and the closure of today's American session will occur below it. This will open the way for further reduction of the pair to the next target zone of the a CZ of 1.2611-1.2592, where the fate of the upward mid-term impulse will be determined.

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Daily CZ - daily control zone. The area formed by important data from the futures market that change several times a year.

Weekly CZ - weekly control zone. The area formed by marks from important futures market which change several times a year.

Monthly CZ - monthly control zone. The area is a reflection of the average volatility over the past year.

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Japan: waiting for the yen to $100 in the coming months

The Japanese yen may significantly increase in price in tandem with the US dollar in the coming months. Local financiers are predicting a mark of $ 100.In their forecasts, they referred to various factors such as the cooling of the global economy, tensions between the US and China, as well as the forced inaction of the Bank of Japan.

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As the former executive director of the regulator, Kazuo Momma noted in an interview with Bloomberg TV that this course is still acceptable for the Central Bank, which in general cannot affect the current situation even if the yen continues to climb and a deep recession begins in the country's economy.

Direct interventions in the foreign exchange market will not help either; besides, trading partners will not understand. The market will start to panic, there will be a threat of economic collapse. This was already the case during the March 2011 earthquake and tsunami.

Still, the Central Bank has several ways to deal with the recession, although there is little choice. The regulator's arsenal was exhausted in six years of extraordinary stimulus which weakened the financial system and broke the structure of markets as side effects.

There are no "political instruments with a convincing risk-benefit ratio," says Momma.

It is difficult to say whether there will be a recession or not, but Japan's difficult times are secured, the official said. In the first half of the year, volatility in the markets will remain. The Central Bank is likely to be forced at the next meeting on January 22-23 to reduce quarterly growth and inflation forecasts.

As for inflation, Japan has not advanced a single step towards 2 percent. Even 1% for the country is not yet available if we remove the prices for food and energy from the calculations.

Last week, the yen soared to peak levels in nine months, as investors still consider it a safe haven asset in difficult times.

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It is worth noting that in recent years, it was the weak yen and growing global demand that kept Japan's export-oriented economy afloat.

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Technical analysis of GBP/USD for January 10, 2019

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Overview:

Pivot: 1.2728.

The GBP/USD pair continues to move upwards from the level of 1.2728. Yesterday, the pair rose from the level of 1.2728 to a top around 1.2780. Today, the first resistance level is seen at 1.2814 followed by 1.2888, while daily support 1 is seen at 1.2728. According to the previous events, the GBP/USD pair is still moving between the levels of 1.2728 and 1.2888; so we expect a range of 160 pips. Furthermore, if the trend is able to break out through the first resistance level at 1.2814, we should see the pair climbing towards the double top (1.2888) to test it. Therefore, buy above the level of 1.2728 with the first target at 1.2814 in order to test the daily resistance 1 and further to 1.2888. Also, it might be noted that the level of 1.2888 is a good place to take profit because it will form a major resistance today. On the other hand, in case a reversal takes place and the GBP/USD pair breaks through the support level of 1.2728, a further decline to 1.2670 can occur which would indicate a bearish market.

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Fundamental Analysis of AUD/USD for January 10, 2019

AUD/USD has been quite impulsive and consistent with the recent bullish pressure after the price was rejected off the 0.6750 support area after an impulsive downward leap. Despite downbeat economic reports from Australia, AUD managed to sustain the bullish momentum over USD which generates strength of AUD in the pair.

Recently Australia's Trade Balance report was published with a decrease to 1.93B from the previous figure of 2.01B which was expected to increase to 2.18B and Building Approvals contracted to -9.1% from the previous value of -1.5% which was expected to increase to -0.3%. Ahead of Retail Sales report to be published tomorrow which is expected to be unchanged at 0.3%, the Australian economy is currently quite feeble that is confirmed by the latest economic data.

On the other hand, USD lost ground after the recent FOMC Meeting where FED policymakers stated that the rate hike mechanism is going to slow down, and the FED is not going to increase its rates rapidly this year like in 2018. Moreover, the employment reports were mixed and not as expected which nudged USD to lose momentum. Today FED Chairman Powell and FOMC Member Bullard are going to speak about the forward guidance, including short term interest rates and stance on monetary policy. The FED is currently trying to slow down the rapid global economic growth which if not controlled may lead to severe risk of a financial crisis in the future.

Meanwhile, USD is currently much softer in comparison to AUD which has already derived the market sentiment and bias against it. Though AUD has been struggling amid the recent economic reports, any positive data from Australia may encourage bullish momentum in the future.

Now let us look at the technical view. The price is currently residing above 0.7150 price area while being held by the dynamic level of 20 EMA as support. After the recent impulsive bearish rejection with a daily close below 0.70 area, the bulls have already showed their strength in the market and their further objective to push higher in the coming days. As the price remains above 0.70 area with a daily close, the bullish bias is expected to continue further with a target towards 0.7350 resistance area in the coming days.

SUPPORT: 0.7000-50, 0.7150

RESISTANCE: 0.7350, 0.7500

BIAS: BULLISH

MOMENTUM: VOLATILE

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Technical analysis of USD/CAD for January 10, 2019

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Overview:

The USD/CAD pair has dropped sharply from the level of 1.3419 towards 1.3181. Now, the price is set at 1.3297 to act as a daily pivot point. It should be noted that volatility is very high for that the USD/CAD pair is still moving between 1.3297 and 1.3181 in coming hours. Furthermore, the price has been set below the strong resistance at the levels of 1.3297 and 1.3419, which coincides with the 23.6% and 50% Fibonacci retracement level respectively. Additionally, the price is in a bearish channel now. Amid the previous events, the pair is still in a downtrend. From this point, the USD/CAD pair is continuing in a bearish trend from the new resistance of 1.3297. Thereupon, the price spot of 1.3297 remains a significant resistance zone. Therefore, a possibility that the USD/CAD pair will have downside momentum is rather convincing and the structure of a fall does not look corrective. In order to indicate a bearish opportunity below 1.3297, sell below 1.3297 with the first targets at 1.3181 and 1.3066. However, the stop loss should be located above the level of 1.3419.

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Wave analysis of EUR / USD for January 10. Euro shows readiness for further growth

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Wave counting analysis:

On Wednesday, January 9, trading went up by 100 bp for EUR / USD. Thus, the fourth attempt to break through the level of 100.0% was completed successfully, and the tool was able to continue building the expected wave from its internal wave 3. The Eurocurrency finally began to receive support from the news background, in particular, information that the Fed could stop tightening monetary policy negatively affects the dollar. Given the dimensionality of waves 1 and 2 in s, it can be assumed that the uptrend of the trend can be quite long.

Sales targets:

1.1444 - 38.2% Fibonacci (formal goal)

Shopping goals:

1.1599 - 161.8% Fibonacci

1.1677 - 200.0% Fibonacci

General conclusions and trading recommendations:

The pair continues to be in the construction stage of the proposed wave. Thus, I still recommend buying a pair with targets located near the estimated marks of 1.1599 and 1.1677, which corresponds to 161.8% and 200.0% of Fibonacci. There are no grounds for assumptions about the construction of a downward wave or trend section at the moment.

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Indicator analysis. Daily review for January 10, 2019 for the EUR / USD pair

On Wednesday, the price moved up, pushing off from the support line (the red bold line). It closed above the retreat level of 23.6% - 1.1535 (yellow dotted line). On Thursday, the price was moving up without preventing anything. The release of strong calendar news is expected at 15.30 and 20.00 Moscow time.

Trend analysis (Fig. 1).

On Thursday, the price will move up (after 13.00 Moscow time). The first upper target 1.1622 is the upper fractal.

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Fig. 1 (daily schedule).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - up;

- volumes - up;

- candlestick analysis - down;

- trend analysis - up;

- Bollinger lines - up;

- weekly schedule - up.

General conclusion:

On Thursday, the price will move up (after 13.00 Moscow time). The first upper target 1.1622 is the upper fractal.

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USD and the Fed: Fed policy has changed dramatically. The growth rate of the American economy is slowing. The demand for

The euro rose strongly against the US dollar after the Democrats and Republicans yesterday did not find a solution to the problem of harmonizing the federal budget. Additional pressure on the US currency was put on the Federal Reserve protocols from the December meeting, as well as speeches by Fed representatives.

American President Donald Trump yesterday called the border issue a dangerous issue, confirming that Democrats and Republicans are working to solve the problem of government suspension. Trump also made it clear that if Congress does not find a solution, it will go the other way.

Fed Protocols

The minutes of the December Fed meeting indicated a rather limited number of future interest rate hikes this year, and the Fed leaders expressed less confidence about the timing and scale of future rate hikes. The main factors that influence the further increase in interest rates are related to market volatility, here we are talking directly about the stock market, as well as a slowdown in global economic growth, which creates uncertainty about the Fed's policy.

In the Fed's minutes, the record that after raising the rates in December 2018 they reached the lower limit of the neutral range was very important. This once again confirms the fact that the Fed is very close to its goal and further increases will occur only with very urgent need. Many Fed leaders also said that low-key inflation allows the Fed to be patient in raising interest rates, and noted that neither the exact timing of the rate hikes or the level to which they will eventually rise is unknown. The main focus of monetary policy will continue to be on incoming economic data.

As for economic forecasts, they remained almost unchanged at the December Fed meeting. Economists forecast slightly slower US GDP growth in the 4th quarter of last year compared with growth in the 2nd and 3rd quarters.

The speech of the President of the Federal Reserve Bank of Boston in the second half of the day was similar in nature to the statements made by his colleagues on the role.

Erik Rosengren said he was ready to abandon the further increase in interest rates to clarify the prospects for the US economy. According to him, the Fed has time to wait for the situation to clear up before raising rates next time.

As for the technical picture of the EUR / USD currency pair, the bulls have rested against the next resistance level of 1.1570, and after a small downward correction, which can be formed today in the first half of the day, demand may resume. Consider long positions best after correction in the area of 1.1540 and 1.1520. The breakdown of 1.1570 will open a direct path to risky assets in the high areas of 1.1610 and 1.1650.

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The Canadian dollar "slowed down" with growth after yesterday the Bank of Canada left its key rate unchanged, at the level of 1.75%. At the same time, the Canadian regulator lowered its forecasts for GDP growth for the current year due to lower oil prices.

The head of the Bank of Canada, Poloz, noted that the trade war launched by the United States is beginning to have a negative impact, and low oil prices hinder wage growth and the economy.

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FOMC protocols: all according to plan

The publication of the hopelessly outdated FOMC protocol for the December meeting did not lead to an increase in volatility since all changes in rhetoric were already repeatedly announced in recent weeks by a number of Committee members. The market has received confirmation that the Fed is preparing to "become patient," that is, plans to raise the rate twice this year have not yet been canceled, but can be adjusted at any time.

Why exactly two enhancements? There are quite objective reasons for this.

Strictly speaking, the Fed fulfilled its task, which was not voiced directly, but at the same time was strictly carried out. In October 2008, in order to raise funds for QE, the Fed set the rate for excess reserves of commercial banks above the effective rate (or overnight). As a result, the interbank lending market has almost disappeared, but the balances of commercial banks in the Fed's accounts began to grow from almost zero and at the peak, by the end of QE3 they reached $ 2.8 trillion.

In December 2015, the Fed launched a reverse process, when the Fed's rate increase of 2.25% was accompanied by a 0.2% increase in the rate of excess reserves, which with each successive increase led to a reduction in the spread. And since the spread was falling, the additional profit was also decreasing, which began to be accompanied by the outflow of commercial banks' money from the Federal Reserve accounts.

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In December 2018, both rates finally became equal, that is, from this point on, the additional profit from the fact that commercial banks kept excess reserves in the Fed's accounts disappeared, which means that the number of excess reserves will continue to decline at a high rate.

Thus, the Fed implements two main tasks, reducing its balance due to the outflow of previously attracted funds from commercial banks in the process of QE and at the same time participating in changing the structure of holders of public debt. After all, excess reserves should return to the interbank lending market, and if they remain unclaimed due to a general slowdown in economic growth, then bankers have no choice but to buy treasuries or go to non-American markets.

It is clear that neither the Fed nor the Trump administration can accept the second scenario, otherwise who will buy American bonds if the activity of foreign investors decreases and the Fed reduces the balance? This means that it will take at least one more rate increase in order for the effective rate to be just above the level of the reserves of commercial banks and they continue to withdraw their funds from the Federal Reserve accounts.

It is also obvious that a period of stabilization and growth of risky assets is required since the Fed cannot allow tightening of financial conditions at higher rates, because the dollar will be adjusted down, and the cost of risky assets will grow to justify another increase. It also means that a recession in the United States will, by all means, pull off at least by the end of 2019, probably the recovery in oil prices and an attempt to revive world trade.

Today, 4 members of the Committee, including J. Powell, are expected to speak at once, according to the tone of comments, conclusions will be made, most likely, in favor of the scenario outlined above. On Friday, an inflation report for December, there is a threat of a strong slowdown in price growth, since just before the next rate increase in March or June, it will be necessary to correct inflation statistics. In any case, the dollar will be under pressure, since the majority of players will be satisfied with it being weakened at the current stage.

Eurozone

Today, the ECB will publish a protocol to the last meeting, but it is unlikely that it will provoke a sell-off of the euro. The currency pair EUR / USD is still set to continue to grow, attempts to get to the resistance level of 1.1620 are quite likely, support has moved to the level of recent resistance of 1.1490 / 1.1510.

Great Britain

The pound is stable in the absence of news, the markets will wait for the results of the Brexit parliamentary vote next week, so GBP / USD cannot enter the growth phase, despite favorable conditions. Nevertheless, the growth of the pound is still a little more likely, we expect an attempt to go through the resistance of 1.2813 and gain a foothold above.

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GBP / USD. January 10th. The trading system. "Regression Channels". Powell's speech may help pound

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: 88.3026

The currency pair GBP / USD on Thursday, January 10, resumed its upward movement, but the strengthening of the British pound is minimal against the US dollar, unlike the euro currency. Why did the euro rise significantly, but the pound do not? From our point of view, Brexit is the culprit and the lack of any clarity on the results of this procedure. Markets expect that everything will finally become clear and understandable on January 15. However, as it was not once, everything can change, the vote can be rescheduled again. It should be understood that for Theresa May, January 15 is no less important than for All Britain. On this day, one might say, its further political fate will be decided. If parliament refuses to vote for its Checkers plan, and everything goes exactly to this, then it will probably have to resign. Accordingly, the current prime minister has to make serious efforts and use any opportunities to collect the necessary number of votes in parliament. And therefore, if necessary, the voting will be postponed as many times as necessary until March 29. In such circumstances, it is very difficult for the pound sterling to go up, even if there are fundamental grounds that come from the States now. Jerome Powell will speak in the United States today, which may exacerbate the negative reaction of traders to the pigeon attitude of Fed members recently.

Nearest support levels:

S1 - 1.2756

S2 - 1.2695

S3 - 1.2634

Nearest resistance levels:

R1 - 1.2817

Trading recommendations:

The currency pair GBP / USD continues its upward movement, as evidenced by Heikin Ashi. Therefore, long positions are now relevant with the goal of 1.2817, which is very close and is the last in the current layout of Murray levels.

Sell positions should be considered after the price is fixed below moving. In this case, the initiative on the instrument will go into the hands of bears, and the first target for short positions will be the Murray level of "7/8" - 1.2634.

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

Explanations for illustrations:

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

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

CCI is the blue line in the indicator regression window.

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

Murray levels - multi-colored horizontal stripes.

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

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

EUR / USD. January 10th. The trading system. "Regression Channels". Unexpectedly, the euro has good growth prospects.

4-hour timeframe

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Technical details:

The senior linear regression channel: direction - sideways.

The younger linear regression channel: direction - up.

Moving average (20; smoothed) - up.

CCI: 182.6381

The currency pair EUR / USD on Thursday, January 10, continues its upward movement, which was resumed the day before. For the first time in a long time, we can say that the US dollar has collapsed. There were many reasons for this at once, and each of them individually would hardly have caused a strong fall in the dollar. We have already written about them in previous reviews. Among the new factors of the decline in the US currency, we can note the publication of the Fed's protocol, in which the pigeon rhetoric and the doubts about future increases in the key rate were highly expected. Also, several Fed members spoke at once, in particular, the head of the Federal Reserve Bank of Atlanta, Raphael Bostic, who even made a reduction in the key rate in the future. In general, it seems that the Fed in 2019 will indeed complete the course on tightening monetary policy, which means that the US dollar will lose one of the most important support factors. The beginning of 2019 remains behind the euro currency also because the "shutdown" in the States continues, and the negotiations on the trade conflict with China have so far not been completed with anything positive. In general, quite imperceptibly, the US dollar is turning from an obvious leader almost into the main outsider. The euro has all the chances to continue growth, especially since the technical picture is now also completely on the side of the euro currency.

Nearest support levels:

S1 - 1.1536

S2 - 1.1475

S3 - 1.1414

Nearest resistance levels:

R1 - 1.1597

R2 - 1.1658

R3 - 1.1719

Trading recommendations:

The currency pair EUR / USD continues to move up. Therefore, now long positions with targets 1.1597 and 1.1658 are again relevant. A signal to close the long positions manually will turn the Heikin Ashi indicator down.

It is recommended to open sell orders after traders have overcome a moving average line. In this case, the tendency for the instrument to change to descending, and the short positions will be relevant with the first goal of 1.1414.

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

Explanations for illustrations:

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

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

CCI - blue line in the indicator window.

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

Murray levels - multi-colored horizontal stripes.

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

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

EUR/AUD Approaching Resistance, Prepare For Reversal

The EUR/AUD pair is approaching its resistance at 1.6199 (61.8% Fibonacci extension, 38.2% Fibonacci retracement, horizontal pullback resistance) where it is expected to reverse down to its support at 1.6061 (61.8% Fibonacci retracement, horizontal swing low support).

Stochastic (55, 5, 3) is nearing its resistance at 97% where a corresponding reversal is anticipated.

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

Sell below 1.6199. Stop loss at 1.6333. Take profit at 1.6061.

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EUR/USD Approaching Resistance, Prepare For Reversal

The EUR/USD pair is approaching its resistance at 1.1606 (100% Fibonacci extension, 61.8% Fibonacci retracement, horizontal swing high resistance) where it is expected to reverse down to its support at 1.1493 (38.2% Fibonacci retracement, horizontal pullback support).

Stochastic (55, 5, 3) is nearing its resistance at 96% where a corresponding reversal is anticipated.

EUR/USD is approaching its resistance where we expect to see a reversal.

Sell below 1.1606. Stop loss at 1.1681. Take profit at 1.1493.

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Overview of the foreign exchange market on January 10, 2019

The dollar was quite briskly losing its position largely because of the content of the text of the minutes of the meeting of the Federal Commission on Open Market Operations. And it lost its position in relation to all currencies, and most of all to the single European currency, which could boast yesterday with data on the labor market. The unemployment rate in Europe, which is still at extremely high levels, continues to decline and fell from 8.0% to 7.9%. Of course, this could not fail to please investors, which was reflected in the more active growth of the single European currency. If we talk about the text of the minutes of the meeting of the Federal Commission on Open Market Operations, shortly before its publication, Charles Evans said that he did not rule out the possibility of a threefold increase in the refinancing rate in the current year. That is, the rate will not increase by yes to 3.0%, but to 3.25%. In his reasoning, he relied on the good macroeconomic dynamics that the American economy really demonstrates. But his words did not have the desired effect, as many decided to wait for the publication of the protocol and find confirmation of his words in it. To great disappointment, the text of the protocol does not contain any hints on such a development of the situation. On the contrary, most members of the Federal Reserve Board see systemic risks that could lead to a noticeable deterioration of the macroeconomic situation. It is for this reason that it was decided to revise plans for the rate of increase in the refinancing rate for the current year.

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In many ways, the weakening of the dollar was also related to the expectations of today's publication of the minutes of the European Central Bank board meeting. If the Federal Reserve System announced a decrease in the rate of growth of the refinancing rate, then from Mario Draghi, we are still waiting for the beginning of the tightening of monetary policy. However, there is every reason to believe that the text of the minutes of the meeting will only hint at such actions. Most likely, it will contain cautious passages about the need to closely monitor developments after the curtailment of the quantitative easing program, and at the end of spring or early summer, the European Central Bank will only discuss the possibility of raising the refinancing rate by the end of this year. That is, there is no talk about raising the refinancing rate. And this will already have a negative impact on the single European currency.

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The text of the minutes of the meeting of the European Central Bank will almost certainly disappoint investors, which will lead to a decrease in the single European currency to 1.1500.

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The pound will follow the single European currency, so it will have to decrease, however, to 1.2725.

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Analysis of the divergence of EUR / USD for January 10. The beginning of the year for Euro currency is very successful.

4h

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The EUR / USD currency pair reversed in favor of the European currency and consolidated above the correction level of 50.0% - 1.1517. Thus, the growth of quotations continues in the direction of the next correctional level of 61.8% - 1.1587. Rebounding the pair from the Fibo level of 61.8% on January 10 will allow traders to expect a reversal in favor of the US currency and a slight fall towards the level of 50.0%. Fixing quotes above Fibo level of 1.8% will increase the likelihood of further growth in the direction of the next correction level of 76.4% - 1.1675.

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 made an increase to the correctional level of 100.0% - 1.1553. Rebounding the pair from this level will allow us to expect a reversal in favor of the US dollar and a slight drop in the direction of the Fibo level of 127.2% - 1.1285. Over the current chart, no indicator has maturing divergences. Closing the pair above the correction level of 100.0% will work in favor of continuing growth towards the next Fibo level at 76.4% - 1.1789.

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

Recommendations to traders:

New purchases of the EUR / USD currency pair can be made with the target of 1.1675 and a Stop Loss order under the Fibo level of 61.8% if the pair completes above the level of 1.1587.

Sales of the EUR / USD currency pair can be carried out with the target of 1.1517 with a Stop Loss order above the Fibo level of 61.8% if the pair rebounds the correction level of 1.1587.

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

Analysis of the GBP / USD Divergences for January 10. Bearish divergence warns of a possible fall

4h

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The GBP / USD currency pair on the 4-hour chart resumed the growth process in the direction of the correctional level of 76.4% - 1.2812. However, on January 10, a new bearish divergence at the MACD indicator is brewing, which allows traders to expect a reversal in favor of the US dollar and a slight decline in the direction of the correction level of 100.0% - 1.2662. Rebounding the pair from the Fibo level of 76.4% will similarly work in favor of the US currency. Closing quotes above the level of 76.4% will increase the chances for further growth in the direction of the next Fibo level of 61.8% - 1.2905.

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

1h

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On the hourly chart, quotes rebounded from the correction level of 76.4% - 1.2725 with a turn in favor of the British currency and resumed growth in the direction of the correctional level of 100.0% - 1.2815. Rebounding the course of the pair from the Fibo level of 100.0% will make it possible to expect a reversal in favor of the American dollar and a slight drop in the direction of the level of 76.4%. Fixing the pair above the Fibo level of 100.0% will increase the chances of continued growth towards the next level of 127.2% - 1.2916.

The Fibo grid is built on extremes from December 31, 2018, and January 3, 2019.

Recommendations to traders:

Purchases of the GBP / USD currency pair can be made with a target of 1.2916 and a Stop Loss order below the level of 100.0% if the pair closes above 1.2815 (hourly chart).

Sales of the GBP / USD currency pair can be carried out with the target of 1.2725 and a Stop Loss order above the level of 100.0% if the pair bounces off of the level of 1.2815 (hourly chart).

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

Optimism in the markets will be strong, but short

Investors are becoming more and more entrenched in the thought that in the wake of the strong volatility of financial markets, as well as signals about the slowdown of the US economy, in particular, the world economy in general, the Fed will suspend the process of raising interest rates in the new year. These expectations have become the strongest driver for the growth in demand for risky assets and the weakening of the US dollar.

If there is not yet full confidence regarding the positive resolution of the trade dispute between the States and China, the Fed seems to be captivated by investors' reluctance to put up with declining dollar liquidity and the process of raising interest rates. In fact, watching what happened in December last year, we can say that the market pressure on the Fed has completely failed. Extensive sales on the stock market resembled a coordinated game, the purpose of which was to force the regulator to stop further increases in interest rates, as well as a reduction in the balance sheet, which was previously the reason for the rise in the dollar rate and the increase in the yield of US Treasury government bonds.

High volatility at the end of the year forced a number of heads of federal banks to start a discussion about the need for a further process of raising interest rates. Against this background, the head of the Federal Reserve, J. Powell, last Friday was also forced to state the need for a balanced approach to monetary policy. In general, everything indicates that the effect of the quantitative easing programs conducted by the American regulator after the acute phase of the 2008-09 crisis, as well as the tax reform carried out by D. Trump after coming to the White House, has completely dried up. The States, as well as the world economy as a whole, faced a problem that was previously actively discussed, the essence of which is that the post-crisis recovery of the US economy, as well as the world economy, will not be so long, and everything will return to the problems that as then at the end of the "zero", they thought that they overcame, but really only just poured "cheap" money.

Considering such perspectives, we believe that in the current situation even reaching a trade agreement between Washington and Beijing will not be able to resolve existing contradictions and problems. So, with a high degree of probability, stopping the process of raising interest rates will only provide temporary support to stock markets. But in this, as we see it, for a short period the dollar will remain under pressure, which will lead to its local, noticeable decline against major currencies.

Forecast of the day:

The EUR / USD currency pair broke out of the range of 1.1350-1.1475 in the wake of the weakness of the dollar and the market expectations of a halt in the Fed rate hike. For further price growth to 1.1615, it needs to stay above the level of 1.1525.

The USD / JPY currency pair is trading below 108.15. It may continue to local decline to 106.80 if held below this mark.

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Fractal analysis of major currency pairs for January 10

Dear colleagues.

For the Euro / Dollar currency pair, we have expanded the potential for upward movement and we expect the continuation of the upward movement after the breakdown of 1.1578. For the Pound / Dollar currency pair, we should continue the development of the ascending structure from January 2 after the breakdown of 1.2813. For the currency pair Dollar / Franc, we continue to develop a downward trend after the breakdown of 0.9725. For the currency pair Dollar / Yen, the price forms a pronounced potential for the downward movement of January 8 and the development of this structure is expected after the breakdown of 107.65. For the Euro / Yen currency pair, we expect a continuation of the upward movement after the breakdown of 125.15. For the currency pair Pound / Yen, we also continue to follow the development of the upward structure from January 3 and the level of 139.50 is the key resistance.

Forecast for January 10:

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 1.1660, 1.1625, 1.1578, 1.1554, 1.1516, 1.1492 and 1.1451. Here, we continue to follow the development of the ascending structure from January 2. The short-term upward movement is possible in the range of 1.1554 - 1.1578 and the breakdown of the latter value should be accompanied by a pronounced upward movement. Here, the target is 1.1625. The potential value for the top is considered the level of 1.1660, after reaching which we expect a consolidated movement, as well as a departure to a correction.

The short-term downward movement is possible in the range of 1.1516 - 1.1492 and the breakdown of the latter value will lead to a prolonged movement. Here, the target is 1.1451 and this level is the key support for the top.

The main trend is the ascending structure of January 2.

Trading recommendations:

Buy 1.1578 Take profit: 1.1625

Buy 1.1627 Take profit: 1.1660

Sell: 1.1516 Take profit: 1.1495

Sell: 1.1490 Take profit: 1.1455

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For the Pound / Dollar currency pair, the key levels on the H1 scale are 1.2960, 1.2875, 1.2813, 1.2734, 1.2695 and 1.2645. Here, we are following the ascending structure of January 2. An upward movement is expected after the breakdown of 1.2813. In this case, the target is 1.2875 and in the range of 1.2813 - 1.2875 is the price consolidation. The potential value for the top is considered the level of 1.2960, upon reaching which we expect a rollback downwards.

The short-term downward movement is possible in the range of 1.2734 - 1.2695 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 1.2645 and this level is the key support for the top.

The main trend is the ascending structure of January 2.

Trading recommendations:

Buy: 1.2815 Take profit: 1.2870

Buy: 1.2877 Take profit: 1.2940

Sell: 1.2734 Take profit: 1.2698

Sell: 1.2690 Take profit: 1.2660

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For the Dollar / Franc currency pair, the key levels on the H1 scale are 0.9816, 0.9786, 0.9767, 0.9725, 0.9692 and 0.9665. Here, we are following the development of the downward movement of January 2. The continuation of the downward movement is expected after the breakdown of 0.9725. In this case, the goal is 0.9692. The potential value for the downward structure, we consider the level of 0.9665, upon reaching which we expect a rollback to the top.

The short-term upward movement is possible in the range of 0.9767 - 0.9786 and the breakdown of the latter value will lead to a prolonged correction. Here, the goal is 0.9816 and this level is the key support for the downward structure.

The main trend is the downward cycle of January 2.

Trading recommendations:

Buy: 0.9767 Take profit: 0.9784

Buy: 0.9788 Take profit: 0.9614

Sell: 0.9725 Take profit: 0.9696

Sell: 0.9690 Take profit: 0.9667

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For the Dollar / Yen currency pair, the key levels on the scale are 108.69, 108.47, 108.29, 107.96, 107.66 and 107.25. Here, we are following the descending structure of January 8. We expect the downward movement to continue after the breakdown of 107.96. In this case, the target is 107.66 and price consolidation is near this level. A potential value for the bottom is considered to be the level of 107.25, a pronounced movement to which is expected after the breakdown of 107.65.

The short-term upward movement is possible in the range of 108.29 - 108.47 and the breakdown of the last value will lead to a prolonged correction. Here, the goal is 108.69 and this level is the key support for the downward structure of January 8.

The main trend is the downward structure of January 8, the scale of the M30.

Trading recommendations:

Buy: 108.30 Take profit: 108.45

Buy: 108.49 Take profit: 108.69

Sell: 107.96 Take profit: 107.68

Sell: 107.64 Take profit: 107.27

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For the Canadian dollar / Dollar currency pair, the key levels on the H1 scale are 1.33.95, 1.3320., 1.3271, 1.3201, 1.3150 and 1.3065. Here, we continue to monitor the downward structure of December 31 and in the range of 1.3201 - 1.3150, we expect a short-term downward movement, as well as consolidation. The potential value for the bottom is considered the level of 1.3065, after reaching which we expect a rollback to the correction.

The short-term upward movement is possible in the range of 1.3271 - 1.3320 and the breakdown of the latter value will lead to a deep correction. Here, the target is 1.3395 and this level is the key support for the downward structure.

The main trend is the downward cycle of December 31.

Trading recommendations:

Buy: 1.3271 Take profit: 1.3320

Buy: 1.3330 Take profit: 1.3395

Sell: 1.3201 Take profit: 1.3155

Sell: 1.3145 Take profit: 1.3070

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For the Australian dollar / dollar currency pair, the key levels on the H1 scale are 0.7313, 0.7270, 0.7207, 0.7131, 0.7102 and 0.7059. Here, we are following the ascending structure of January 3. The continuation of the upward movement is expected after the breakdown of 0.7207. In this case, the target is 0.7207. The potential value for the top is considered to be the level of 0.7313, after reaching which we expect a consolidated movement, as well as a departure to a correction.

The short-term downward movement is possible in the range of 0.7131 - 0.7102 and the breakdown of the latter value will lead to a prolonged correction. Here, the goal is 0.7059 and this level is the key support for the upward structure.

The main trend is the ascending structure of January 3.

Trading recommendations:

Buy: 0.7207 Take profit: 0.7270

Buy: 0.7275 Take profit: 0.7310

Sell: 0.7131 Take profit: 0.7105

Sell: 0.7100 Take profit: 0.7065

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For the Euro / Yen currency pair, the key levels on the H1 scale are 127.22, 126.70, 125.79, 125.15, 124.22, 123.74 and 123.05. Here, we continue to monitor the ascending structure of January 3. An upward movement is expected after the breakdown of 125.15. In this case, the target is 125.79 and price consolidation is near this level. The breakdown of the level of 125.80 must be accompanied by a pronounced upward movement. Here, the goal is 126.70. The potential value for the top is considered the level of 127.22, after reaching which we expect a consolidated movement, as well as a rollback to the top.

The short-term downward movement is possible in the range of 124.22 - 123.74 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 123.05 and this level is the key support for the upward structure.

The main trend is the ascending structure of January 3.

Trading recommendations:

Buy: 125.15 Take profit: 125.76

Buy: 125.82 Take profit: 126.70

Sell: 124.20 Take profit: 123.78

Sell: 123.70 Take profit: 123.10

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For the Pound / Yen currency pair, the key levels on the H1 scale are 141.90, 140.50, 139.49, 137.49, 136.81 and 135.70. Here, we are following the development of the ascending structure of January 3. The continuation of the movement upward is expected after the breakdown of 139.50. In this case, the first target is 140.50 and consolidation is near this level. The potential value for the top is considered the level of 141.90, upon reaching which, we expect a rollback downwards.

The short-term downward movement is possible in the range of 137.49 - 136.81 and the breakdown of the latter value will lead to an in-depth correction. Here, the goal is 135.70 and this level is the key support for the top.

The main trend is the ascending structure of January 3.

Trading recommendations:

Buy: 139.55 Take profit: 140.50

Buy: 140.55 Take profit: 141.60

Sell: 137.45 Take profit: 136.85

Sell: 136.75 Take profit: 136.00

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