An opportunity to buy a pound is coming

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On Tuesday, the British Parliament will have to reject or approve the proposed Brexit agreement with the EU, Theresa May. Any decision will be fateful because the future of Great Britain for years to come is at stake. It is worth noting that English politicians have repeatedly proved their unpredictability over the entire time of discussion of this issue, so you can wait for anything. Pound, of course, throwing provided.

The failure of the negotiations is likely to be the worst scenario for the country's economy. In this case, the dynamics of sterling will depend on monetary and fiscal policy. This is what experts write:

"If this happens, then the economic problems will be more important for the Bank of England than the inflation shock. Therefore, the regulator will lower the rates and possibly resume the asset purchase program. For British bonds, this will be a bullish factor."

Political events can cause the collapse of the pound paired with the dollar below $ 1.20, and this will be a good opportunity to buy it. The risk of withdrawing money from Britain as a result of Brexit is much lower than for any other state that decided to leave the European Union, strategists are sure.

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In case of failure of the vote, the British parliamentarians must provide a backup plan for the country's withdrawal from the EU within three days. Recall this initiative on Wednesday, January 9, was supported by 308 members of the House of Commons, 297 people were against it.

It is expected that the so-called "Plan B" will include three points.

Exit without a deal.

According to sources from the Times, at least two groups of parliamentarians promised to arrange a kind of "coup" if the Theresa May agreement is rejected. They plan to make changes to the rules of the House of Commons, to limit the powers of the government.

On the consequences of "hard" exit warned the head of the Bank of England, Mark Carney. Food prices in this development soar by 10%. Although the price increase, he said, will become a "one-time effect," consumers who start buying cheaper products will quickly feel it.

The seriousness of the possible consequences was described by the Minister of Health Matthew Hancock. The worst version of Brexit will result in at least an increase in funding for the NHS (national health service), whose budget depends on the pound rate. Part of the purchases falls on foreign goods and drugs, meanwhile, the sterling loses in value as the exit from the EU approaches.

In addition, the exit of Britain from the group without a deal threatens local residents with other major problems. First of all, they will have problems when traveling abroad. For example, to travel to the EU by car you will need to issue an international driver's license. The British will also have to pay for roaming when traveling to Europe. Potential problems include the risk of stopping flights between the UK and Europe.

General election.

The leader of the Labor Party, Jeremy Corbyn, recently called on the Prime Minister to announce general elections if parliament voted against the Brexit agreement. It is possible that such an idea has some support in parliament, but is not supported by the majority of Britons. A recent Sky Poll poll showed that 45% of residents are against the new general election, and 37% are for.

It is unlikely that something can be achieved with the help of new elections, "even greater chaos will begin," a parliamentary source told RIA Novosti.

New referendum.

This idea is supported by a rather serious group of parliamentarians, in its composition and conservative deputy Anna Sobri. Here is what she said about this:

"I do not know what will happen. I only know that many who voted for Brexit are now more and more worried. This is their future, the future of their children and grandchildren, and they have the right to speak now when they know more about what Brexit looks like. I think they are starting to see that the best deal is one that we already have with the EU. We need to give people the opportunity to revise the decision and change their opinion."

Preparation for a new referendum will take at least 22 weeks, calculated at University College London, University of London. The earliest time when it can take place in May.

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Fundamental Analysis of EUR/USD for January 14, 2019

EUR/USD has been quite impulsive amid the recent bearish momentum after breaking above 1.1500 earlier. This move caused a false bullish breakout. EUR has been weighed down by the recent economic reports which forced the currency to lose ground. On the other hand, this allowed USD to gain momentum.

According to the recent survey from Germany, nearly two thirds of the businesses want the ECB to raise interest rate to encourage economic developments despite the clouded growth outlook. Market expects the ECB to hike its rate not until 2020 that might derive market sentiment away from the currency. Ahead of ECB President Draghi's speech which is expected to determine the EUR's momentum in the coming days, today German WPI report was published with a decrease to -1.2% from the previous value of 0.2% which was expected to increase to 0.3% and Industrial Production also decreased to -1.7% from the previous value of 0.1% which was expected to increase to 0.3%. Moreover, the Brexit Vote on Tuesday may trigger higher volatility in the EUR/USD pair. The brexit deal suggested by Theresa May is widely expected to be rejected, thus increasing the scenario of a hard Brexit in March 2019.

On the other hand, USD has been hurt by the recent economic reports but managed to regain momentum over EUR despite the impulsive bullish momentum earlier. Today the economic calendar lacks economic reports or events in the US to effect the overall price momentum. Tomorrow US PPI report is going to be published which is expected to decrease to -0.1% from the previous value of 0.1%, Core PPI is expected to decrease to 0.2% from the previous value of 0.3%, Empire State Manufacturing Index is expected to increase to 11.6 from the previous figure of 10.9, and IBD/TIPP Economic Optimism is expected to increase to 53.1 from the previous figure of 52.6. On Thursday, Unemployment Claims report is going to be published which is expected to have a negative result of growth to 218k from the previous figure of 216k and FOMC Member Quarles is due to speak about further monetary policy. His speech is expected to be quite neutral in rhetoric. The Federal Reserve is widely expected to pause in the cycle of monetary tightening in 2019.

Meanwhile, EUR is currently struggling with the worse-than-expected economic reports while neutral USD is responsible for the bearish momentum in the pair. Amid the BREXIT vote and upcoming ECB President Draghi's speech, the pair is going to trade with higher volatility which might lead to certain spikes, but the bias is still on the USD side on the back of upbeat economic expectations.

Now let us look at the technical view. The price is currently residing inside the corrective range of 1.1450 to 1.1500 area from where a daily close below 1.1450 is expected to lead to further bearish momentum with a target towards 1.1200-50 support area in the coming days. As the price remains below 1.1500 area with a daily close, the bearish bias is expected to continue.

SUPPORT: 1.1150, 1.1200, 1.1250

RESISTANCE: 1.1500, 1.1650, 1.1700

BIAS: BEARISH

MOMENTUM: VOLATILE

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China's foreign trade declined sharply in December

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According to the General Administration of Customs of China, the indicators of China's exports and imports in December 2018 decreased at the maximum rate over the past two years. Such dynamics indicate that the economic growth of the Celestial Empire demonstrates some slowdown under the negative influence of the trade war with the United States.

Exports from China fell by 4.4% in annual terms, imports fell by 7.6%. Both of these indicators have been minimal since 2016. China's trade surplus at the end of 2018 was $ 57.1 billion.

Weak data on China's foreign trade volumes indicate a further attenuation of the economic impulse, despite the many incentive measures taken by the Central Bank of the country (from the increase in infrastructure spending to tax cuts).

At the end of the year, Chinese exports increased by 9.9% (to $ 2.48 trillion), while imports jumped 15.8%. The trade surplus was $ 351.8 billion.

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GBP / USD: what will happen to the pound after Brexit?

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The pound is still in the grip of politics. Meanwhile, the so-called "Day X" is gradually approaching. What will happen to the British currency when the United Kingdom leaves the European Union? Will it reach new local maximums, or will it update annual minimums?

According to a consensus forecast by analysts recently surveyed by Bloomberg, after rising to $ 1.30 by the end of March, the GBP / USD pair will reach $ 1.32 before the start of the second half of the year.

Meanwhile, Westpac experts expect that by the end of March, the pound will fall in price to $ 1.24, since even if the most favorable Brexit scenario is implemented, the country's economy will still weaken.

"After the decline to $ 1.24, the pound will remain here until the middle of the year, and only short bounces can cause potentially positive news," they said.

According to representatives of Credit Agricole, the pound will begin to catch up with the losses incurred as a result of Brexit, approximately in the middle of this year and eventually rise in price to $ 1.40.

"It is possible that the British currency will drop in price before it goes to full recovery of lost positions amid the extinction of fears associated with the release of the United Kingdom from the EU," they noted.

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Brexit: Scenarios of the movement of the British pound. May, Tusk and Juncker exchanged courtesies

The euro fell in the first half of the day to the area of a minimum amid weak industrial production data, indicating the likelihood of a slowdown in economic growth in 2018. A further bearish trend in the EUR/USD pair gets more real.

Eurozone

According to the report, industrial production in the eurozone in November last year declined more significantly than expected. As noted in Eurostat, industrial production in the euro area fell by 1.7% in November compared with October. This is the biggest drop since February 2016. Economists had expected a decline in production of 1.3%. Germany, where production fell by 1.9%, and Spain, where the decline was marked by 1.6%, were among the leaders in countries where production was falling the fastest.

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Thus, the decline in industrial production in many European countries only confirms the weakening of the global economy.

This was noted in today's report of the Organization for Economic Cooperation and Development, which states that the growth rates of the United States and many other developed countries will continue to slow down this year. The only exception may be the Chinese economy, which shows signs of stabilization. But even here, a lot will depend on the trade agreement with the United States.

According to the data, the leading indicator for the US fell for the third month in a row, being at the level of 99.6 points. China's indicator rose to 98.9 points, indicating a less active slowdown in economic growth. The leading indicator of the eurozone is below the level of 100 points, indicating a continued slowdown in the pace of activity.

As for the technical picture of the EUR/USD pair, it remained unchanged compared with the morning forecast. Buyers of risky assets need to go back to the resistance level of 1.1490 since the future direction will depend on it. If this fails to be done, then it is likely that the bears will continue to push the euro down to the support of 1.1425 and 1.1370.

UK and Brexit

The British pound continues its growth, which, apparently, is still more speculative. Traders positively perceived the information that the Prime Minister of Great Britain today sent a letter to Tusk and Juncker, in which she confirmed her intentions to carry out the decision made during the referendum. However, despite this, May is concerned about the fate of the Brexit deal, which is under threat due to concerns over Northern Ireland. The Prime Minister of Great Britain assured that the EU's concerns about the threat of a rigid border are groundless and negotiations will continue immediately after the vote in the UK. The focus of these negotiations will be on technology that will give up the guarantee of the absence of a rigid border.

In turn, Juncker and Tusk responded to May in the same style, sending her a letter with assurances regarding the Brexit deal, but adding that they would not agree to anything that changes the agreement or does not correspond to it. Juncker also noted that the EU will quickly work on a trade agreement in order to avoid applying the guarantee of the absence of a rigid border in Ireland.

All of these suggest that if the deal with the EU in the framework of a vote does not receive the support of parliamentarians tomorrow, the British pound may remain in the side channel until a final decision is reached since there are a lot of future development scenarios. Starting from the postponement of the exit of the UK from the EU, ending with indiscriminate exit without the adoption and approval of the basic laws.

The prospect of complete abolition of Brexit also has a place to be that will support the British pound when information appears about the next referendum on this matter.

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Weekly review of the foreign exchange market from 01/14/2019

Last week, the Federal Reserve made a lot of effort to weaken the dollar, and, judging by the results, quite successfully. The whole point is that the text of the minutes of the meeting of the Federal Commission on Open Market Operations was published on Wednesday. It is worth recalling that it was during the December meeting that it was decided to lower the rate of increase in the refinancing rate for 2019, and instead of three increases it would be only two. So, literally the day before the publication of the text of the protocol, the Fed representatives stated that they see all the prerequisites for the three increases in the refinancing rate. Ostensibly macroeconomic dynamics is quite favorable. And these words have somewhat encouraged investors, who immediately began to prepare for the publication of the text. But to their great regret, the text of the protocol reflects a completely different situation, since members of the Federal Reserve Board see just systemic risks, and they fear that a too rapid increase in the refinancing rate can be destructive. Also, the Fed's board has expressed concerns about stability in the financial markets, which may be violated by tightening monetary policy. And this is not unreasonable, since the stock indices, which have been falling since September, after the ECB's decision to curtail the quantitative easing program, began to fall at double speed. As a result, it became clear to everyone that there would be no question of any three raises, and disappointed investors once again continued to get rid of dollars. The minutes of the meeting of the European Central Bank Board, which was published the next day, greatly pleased market participants, as they found confirmation of the intentions of the European monetary authorities to start considering the possibility of raising the refinancing rate in late spring.

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True, at the very end of the week, the single European currency rapidly began to lose its position, although the dollar did not manage to win back the losses of the previous days. The reason for such a sharp change in sentiment is in the letters that the US ambassador to Germany sent to major German companies. In these letters, the direct text states that the participation of German companies in the implementation of "Nord Stream - 2" will entail sanctions against these same companies. Since this project violates US economic interests. This incident has already caused a scandal, and the German Foreign Minister said that the US ambassador imagines himself "viceroy of the emperor of Washington." If we translate this whole situation into human language, then the picture is simply comic. Imagine that you came to the market for potatoes and go to the seller who has been buying them for many years. You have already known each other for so long that he even cleans these potatoes for you and brings them home. And here a new seller comes up to you, offers potatoes much more expensive, and he insists that you clean it and drag it yourself. And after you refuse, he beats you up and threatens that this will happen every time you buy potatoes from someone else. The situation with the sanctions around the "Nord Stream - 2" looks like this. But the most important thing is that the fact of sending such letters indicates Europe's dependence on the United States, which does not add confidence to the single European currency. By the way, on the accusations that the United States used threats and blackmail, the US ambassador to Germany said that he did not threaten anyone, but only signified American national interests.

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If, however, move away from the central banks with their plans and the political twisting of their hands and look at the macroeconomic statistics, the picture is drawn as follows. Thus, the number of open vacancies in the United States decreased from 7,131 thousand to 6,888 thousand, while inflation decreased from 2.2% to 1.9%. So, indeed, without the help of the Fed, the dollar had no particular reason for growth. Although European statistics were not so optimistic, as the growth rate of retail sales decreased from 2.3% to 1.1%, but this was offset by a decrease in the unemployment rate from 8.0% to 7.9%. In the UK, where the rate of decline in industrial production accelerated from 0.9% to 1.5%, unexpectedly good GDP data came out, showing an acceleration in economic growth from 1.4% to 1.5%. So, as you can see, just one reduction in US inflation was enough to lower the dollar.

Practically no significant data is released in the US this week. You can, of course, pay attention to data on industrial production and retail sales, which are likely to show a slowdown in growth. Well, that's it. However, the American political class can bring a lot of surprises, especially since everyone will be waiting for some concrete facts about the threat of sanctions against European companies. Although this situation is more likely to adversely affect the ruble, but more on that later.

Europe, the situation around the Nord Stream - 2 also affects, however, not so much. Although the fact that Washington may indicate with whom and how European companies can work is not something new, earlier it was expressed much less. It's one thing to impose not just restrictions, but a ban on working with Iran. And a completely different thing, with Russia, which is among the ten largest economies in the world. Naturally, there are questions about the reliability of investments, as you invest, and the next day the next "signpost" from across the ocean derails all dreams and hopes. The situation is aggravated by the fact that data on industrial production have already been released, which only recently showed an increase of 1.2%, and now it is already falling by as much as 3.3%. And the final inflation data, which will be published on Friday, should only confirm the fact of its reduction from 1.9% to 1.6%. So how not to twist, but the single European currency will most likely have to go down to 1.1400.

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But almost certainly all the world's attention will be riveted to the UK, where a vote on the "divorce" agreement with the European Union will take place on Tuesday. Naturally, it is not much different from the one that quite recently almost provoked a vote on the issue of confidence in the Prime Minister. More precisely, in general, is no different. That is, in it as there was, so there is no economic part. And this is natural since there was simply no time to agree on the inclusion of this issue in the text of the agreement. Moreover, the Europeans themselves do not really need this, and not only because Europe has already adopted the current version of the agreement. After all, the absence of the economic part is just beneficial to many European countries, which thereby intend to oust British companies from their national markets. The matter has reached the point that Theresa May no longer excludes the inclusion of reverse gear. This means that there is a possibility that the UK will remain in the European Union. Of course, the political consequences of such a step are as difficult to predict as the results of tomorrow's voting in parliament. But it is obvious that you will not be bored. However, one should not forget about the macroeconomic dynamics, the general tone of which almost always coincides with the moods caused by the actions of politicians. Thus, inflation should slow down from 2.3% to 2.2%, which will be aggravated by a slowdown in retail sales growth from 3.6% to 3.5%. I would also draw attention to the rather rapid growth of the pound in recent days. After such a collapse almost certainly occurs, and most likely it will have to fall to 1.2700.

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As noted earlier, the ruble will depend on developments around the Nord Stream - 2. If no specifics follow, then the ruble will follow the general logic of developments in the foreign exchange market, which so far implies a strengthening of the dollar. Specificity implies exactly what punitive measures Washington can take in respect of European companies that have disobeyed its will. Moreover, even if the United States clarifies this issue, the effect will be clearly negative, since all of Washington's actions are aimed at making Russia as "toxic" as possible for European business. Only a complete refusal of the United States from such actions is able to please market participants. But it is simply impossible. So the dollar is quite realistic to grow to 67.75 rubles.

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GBP / USD pair: plan for the American session on January 14. Pound buyers expect to maintain an upward trend after the decision

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

Pound buyers managed to stay above the support level of 1.2813, which led to the return of demand and the update of the maximum of the day. The main task for the second half of the day will be to break through the resistance of 1.2868, which will open a direct path to the area of 1.2929, where I recommend taking profits. In the case of a repeated decline of the pound to the minimum of the day, it is best to consider a long position to rebound from the support of 1.2758.

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

An unsuccessful consolidation above the resistance of 1.2868 will be the first signal to open short positions in the pound but the main task will be the breakdown and consolidation under the support of 1.2813, which will collapse GBP / USD to minima in the area of 1.2758 and 1.2708, where I recommend fixing the profit. In the case of a further uptrend and a break of 1.2868 high, it is best to consider short positions from levels of 1.2929 and 1.2990.

Indicator signals:

Moving averages

Buyers kept the pair above the 30- and 50-day moving, which indicates the preservation of the bullish nature of the market.

Bollinger bands

Volatility remains low, which does not give signals to enter the market.

More in the video forecast for January 14

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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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The fate of financial markets still depends on the dynamics of the dollar

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Last year, the dollar index rose by more than 7%. What to expect from the US currency in the coming year?

According to some experts, the greenback is overvalued, which means that it may become cheaper in the foreseeable future.

According to them, the nature of the fall of the dollar will determine the dynamics of financial markets in the new year.

It is assumed that the following factors will contribute to the turnaround of the American currency. A pause in the cycle of raising the Fed's interest rates, the conclusion of a trade deal between the US and China and the revival of the growth of the European economy.

At the same time, they admit that even despite the fact that the Fed is ready to take a wait-and-see attitude, interest rates in the United States are still higher than in Japan or the Eurozone, and investing in the dollar is still profitable.

"The way in which the US currency will go in pairs with the currencies of the G10 countries depends on the scale of the slowdown in US GDP growth rates. If this process is abrupt and sudden, then the dollar will become cheaper against the yen. In the case of the gradual extinction of economic growth, the "American" may weaken in tandem with the euro," said Societe Generale experts.

"For investors who are not eager to sell risky assets, we recommend buying yen, franc, and gold, which are more likely to rise in price if the situation in the world deteriorates sharply," said JP Morgan currency strategists.

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Australian and New Zealand dollars are falling amid weak trade data in China

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The Australian dollar and kiwi significantly decreased against the dollar, as investor sentiment was spoiled by trade data in the PRC, which raised fears that China might face a sharp slowdown in the economy.

Market sentiment became negative after data showed that China's December exports unexpectedly fell by 4.4 percent year-on-year, which was the largest monthly decline in two years and indicates a further weakening of the world's second-largest economy. The data had a negative impact on the Australian and New Zealand dollars, which lost more than 0.4 percent. China is Australia's largest trading partner, and the recession does not bode well for the Australian dollar.

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Recall that last week both Australian and Kiwi rose by about 1.5 percent against the dollar amid hopes for a trade deal between the US and China, as well as more aggressive stimulation from the Chinese authorities to support the economy. And although the dollar rose slightly on Monday compared to the offshore yuan, there is still a forecast for the strengthening of the yuan against the dollar in the medium term, as markets have overestimated China's slowdown in economic growth. We did not see a significant weakening of the currency even after Beijing announced measures to ease monetary policy.

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EUR / USD pair: plan for the US session on January 14. Euro trades on the channel in the absence of news

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

Buyers returned to the market after updating the support level of 1.1449, which I paid attention to in my morning review. At the moment, the main task is to break through and consolidate above the resistance of 1.1490, which will lead to a test of the maximum at 1.1531, where I recommend taking profits. In the case of a second euro decline in the afternoon to the support area of 1.1449, it is best to return to long positions only after updating the larger levels of 1.1428 and 1.1407.

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

The bears will continue to put pressure on the euro, and the main task to break through to the support remains at 1.1449, which was not possible in the first half of the day. Only the breakdown of 1.1449 will lead to a larger downward correction in the area of 1.1428 and 1.1407, where the lower limit of the downward channel passes. In the case of EUR / USD growth in the second half of the day, you can look at short positions on the false breakdown of the level of 1.1490 and in the absence of a rapid decline from the above range, you can sell for a rebound from the maximum of 1.1531.

Indicator signals:

Moving averages

Trade is conducted below the 30- and 50-moving averages, which indicates that the downward trend in the market continues.

Bollinger bands

The volatility of the Bollinger Bands indicator has dropped, which does not give signals to enter the market.

More in the video forecast for January 14

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Description of indicators

MA (moving average) 50 days - yellow

MA (moving average) 30 days - green

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

Bollinger Bands 20

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

Pound plays on the weakness of the enemy

The British pound, which soared to 7-week highs against the US dollar, deservedly claims to be the most interesting currency of the week by January 18. Not only is the economic calendar full of important indicators in the face of inflation and retail sales, but the parliament is also going to vote on the draft agreement with the EU proposed by Theresa May. This event was previously regarded as a pendulum of a kind, capable of swinging the sterling to either $ 1.1 or $ 1.45. Times change. Now, it becomes clear that a single verdict of legislators is not enough to provoke serious fluctuations in GBP / USD.

From a fundamental point of view, the slowdown of the economy of Foggy Albion from 0.7% in the summer to 0.3% q / q in the fall, paired with a slowdown in consumer price growth and sluggish business activity of special dividends to the pound, should not bring. On the other hand, due to the unfavorable political landscape, it lost more than 5% of its value to the US dollar in 2017, that is, it can be considered an undervalued currency. Paired with unemployment near the minimum level since the 1970s and the accelerated growth of average wages, this circumstance allows us to justify the purchase of GBP / USD. Clarification of the political situation can push up the indexes of purchasing managers and draw a picture of a bright future for Britain.

UK GDP Dynamics

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Dynamics of British Inflation

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The problem is when exactly the fog of uncertainty over the United Kingdom will dissipate. Currently, sterling is gaining whists against the US dollar due to hopes for the extension of Article 50 of the European Union Code and because of the weakness of its main competitor. Rumors that the government is considering this issue are growing by leaps and bounds. In this scenario, the likelihood of a repeated referendum and preservation of EU membership increases, which is a bullish factor for GBP / USD.

The vulnerability of the US currency is due to growing investor confidence at the end of the Fed's monetary policy normalization cycle. The derivatives market gives only a 12% chance that the federal funds rate in 2019 will be raised from 2.5% to 2.75%. Many FOMC members, including such "hawks" like Eric Rosengren and Charles Evans, are not averse to sit and see how the economy will develop. Jerome Powell speaks about the Central Bank's flexibility in making decisions in connection with a slowly growing inflation. Taking into account the fact that consumer prices for the first time since August have fallen below the target of 2%, it can be assumed that at least until June one should not rely on the monetary restriction of the Fed. But over the States hangs the sword of Damocles slowdown in GDP due to the temporary suspension of the government. Legislative power has been out of business for the longest time in history, and there is no end in sight.

Technically, the breakthrough of resistance at 1.2825 and the activation of the Shark pattern allows the "bulls" at GBP / USD to count on the continuation of the rally in the direction of its target by 113%. It corresponds to the mark of 1.327. The implementation of the "Wolfe Waves" model is also in favor of the northern march.

GBP / USD, the daily graph

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Why is it not a time to buy a dollar?

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The US stock market rebounded, volatility declined, and a falling dollar began to show signs of life. The week as a whole was calm, the suspension of the work of the American government did not bring a negative to the financial markets, but only limited the publication of macro-statistics on the country.

Earlier, Fed officials, including Jerome Powell, announced the exhaustion of the economy. At the same time, weak markets and uncertainty in the world require the regulator to be patient in raising rates, at least until summer.

It was also said that the Fed will continue to reduce its own balance, and investors have made this comment the main thing for themselves. The main point is to slow down the economy and soften the position of the regulator. The latest data showed that consumer prices went down for the first time since March, against this background the annual consumer price index for the first time since August 2017 fell below 2%. After a sharp fall in oil and gas prices at the end of last year, this was quite expected. The deterioration of the situation is fixed in the sector of production and services. Even if the statistics on retail sales will be strong after the successful holiday season, a negative outlook for the economy as a whole means that now is not the time to buy a dollar.

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As for the euro, it is one of the few currencies that has fallen in price against the dollar since the beginning of the year. Investors, as we see it, sell dollars, but they don't invest in the euro, as the growth of the regional economy slows down and political risks increase. France was seized by a wave of protests that did not subside. The report on orders for industrial goods in industrial production in Germany showed the negative impact of tension in world trade on the economy.

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The force was demonstrated by the British pound, which received support from reports of a possible postponement of withdrawal from the European Union. You need to be careful here because the chance that Prime Minister Theresa May will lose the main Brexit vote in the short term remains high. Most parliamentarians are likely to vote against the draft on a deal not agreed with the EU. The only reason this is perceived as positive is that many assume the need to waive the deadline if the British authorities reject the project.

The subsequent development of events is extremely difficult to predict. In theory, the failure of the vote should lead to a sharp drop in the GBPUSD pair by 1% or 2%. Recovery will depend on the speed at which the backup plan is published. If the Brexit date remains the same, the sterling may increase losses, and if you postpone the deadline, you should expect a pound rally.

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A backup plan of action would look something like this, May organizes a second vote. Perhaps, supporters of the EU are initiating a new referendum or the UK will begin the process of a "hard" exit from the union.

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Sterling falls, investors are preparing to vote on Brexit

The pound has left a seven-week high and apparently, it will continue to decline. Investors are preparing for the next round of voting on Brexit, where the plan proposed by Prime Minister Theresa May will be discussed. It is expected that it will not be adopted.

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Sterling will be under attack in the short term until the parties determine the conditions for Britain's exit from the European Union. Possible options include a deal in the last minutes, an exit without any arrangement and a new referendum or a further stay in the block to name a few. Each of these can have radically different implications for the currency.

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Lately, the pound has grown amid expectations that the UK will seek to postpone the withdrawal from the European Union. The key question for sterling is whether this vote on the May deal signifies that Britain will not leave the EU on March 29. We expect that after the failure of the vote, May will return with an expanded version of the Brexit agreement to attempt in getting more guarantees from the EU.

At the same time, despite the uncertainty, the risk that the pound will fall against the dollar is the lowest in the last four months, according to indicators of changes in risk. Expectations of fluctuations in the value of the sterling pound also decreased in the last few sessions. Not all analysts agree that a Brexit delay will benefit the UK. An additional negative factor is the reduction of consumer and business confidence, which means that extra time in a state of uncertainty is very expensive.

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GBP / USD. The pound froze in anticipation: Theresa May will speak at the Parliament in the evening

The first trading day began quite actively. The main currency pairs showed atypical for Monday volatility, reflecting the general nervousness in the market. This behavior is understandable because traders are worried about at least two factors. First, the slowdown of the Chinese economy and second, the historical vote on Brexit to be held tomorrow. And if the news from China only confirmed the trend of the last few quarters, the prospects for the "divorce process" are extremely uncertain, unnerving traders.

First of all, it is worth noting that the Friday dynamics of growth of the American currency did not receive its continuation, at least at the start of trading on Monday. The dollar index behaves no longer as confidently as at the end of last week, and dollar pairs show contradictory dynamics. All this confirms the assumption that market participants only fixed profits at the end of the five-day trading period, while there was no talk of large-scale restoration of the greenback. This version is consistent with the general fundamental background regarding the US currency. The Fed representatives continue to voice the "pigeon" position, the shutdown beats the historical record for its duration, and inflation continues to slow. Therefore, the dollar so far can only rely on temporary bursts of interest, while the overall fundamental picture for this currency remains negative.

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In the context of the pound/dollar pair, the behavior of the American currency does play a secondary role. Here, Brexit is still in the first place, especially on the eve of tomorrow's vote. However, it is impossible to speak about the voting on January 15 with confidence. Firstly, all previous events in the British Parliament suggest that May cannot count on the absolute support of her party members. Secondly, the European Union has not yet given clear signals about the provision of legal guarantees regarding the terms of the special regime on the Northern Irish border. Thirdly, Theresa May will give a "special address" at the parliament this evening (at about 4:30 pm London time). All that is known is that she will speak on the subject of Brexit, but it is not known in what particular direction. She will either try again to convince the deputies of the need to implement the "soft" scenario on the achieved conditions or will postpone the voting date again.

Literally today, there were rumors in the British press that Brussels would approve the postponement of Brexit from March 29 to a later date, if only the corresponding offer comes from London. For this, an extraordinary EU summit will be convened, where the parties will agree on a new "deadline", approximately this will be either July or September. Let me remind you that the European Court at the end of last year legally substantiated such a scenario, allowing the British to withdraw the "application for withdrawal". In other words, now everything is in the hands of the deputies of the House of Commons. If they vote to postpone the exit of the country from the EU, no one will interfere with this.

It should be noted here that such a scenario can be beneficial for both the government and the opposition, above all, laborites. The latter has been carrying out the idea of extraordinary elections for more than one month in order to realize Brexit on their own terms. So, yesterday, the head of the Laborites, Jeremy Corbyn, said that they are preparing to vote on the question of confidence in the government of May. According to him, it will take place "very soon." He also said that in the event of early elections, the timing of negotiations between London and Brussels will need to be extended. With regard to the holding of a second referendum, Corbyn noted that his party does not exclude such a scenario, but only in the case when "all other options are not viable."

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Thus, the Brexit postponement is a very real chance for GBP / USD traders to avoid a volatility storm with a disastrous vote on this issue. However, May can take the lead in advance and independently declare the initiation of the transfer of the "X-hour". Although earlier she categorically rejected such an idea.

I note that earlier, GBP / USD traders had a negative attitude to the idea of postponing Brexit since in this case, the period of uncertainty is actually extended. But in this case, you have to choose "of two evils", so this scenario will positively affect the positions of the pound. However, trading a pair of pound/dollar is still risky, as traders will be extremely emotional to respond to the speech of May and the subsequent possible decisions of the British Parliament. It is almost impossible to predict the price direction due to the unpredictability of the situation as a whole. Therefore, a pair of GBP / USD remains a "dark horse", which should be treated with extreme caution.

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Simplified wave analysis of USD / JPY pair for the week of January 14

Large-scale graph:

The general direction of the major yen movement since March of last year is set by the rising wave. The counter-correctional part of the model started in July, which ended at the beginning of the current month.

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Medium scale graph:

The plot of the schedule of December 13 completes the bearish design of a larger scale. The preliminary goals have been achieved, the structure looks complete.

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Small-scale graph:

Since January 3, a potentially reversal bullish pattern has formed, which will give rise to a new short-term trend. In recent days, there is a rollback to the correction (B).

Forecast and recommendations:

In the coming days, the yen is supposed to be flat. Active movements are not expected until the completion of the preparatory parts (AB). In the area of calculated support, it is recommended to start tracking the signals of entry into long positions.

Resistance zones:

- 108.80 / 109.30

Support areas:

- 106.80 / 106.30

Explanations of the figures:

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

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

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

Intraday technical levels and trading recommendations for EUR/USD for January 14, 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 a slight bearish tendency. Narrow sideway consolidations have been maintained within the depicted daily movement channel since June 2018.

On November 13, the EUR/USD 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.

Last week, a recent attempt of bullish breakout above 1.1520 (upper limit of the depicted movement channel) was executed. However, early signs of bearish rejection are being expressed on the H4 and daily charts.

Bullish persistence above 1.1520 enables further bullish advancement 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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Intraday technical levels and trading recommendations for GBP/USD for January 14, 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 two weeks ago.

Last week, another bullish breakout above 1.2720 was attempted to resume the bullish scenario of the market aiming towards 1.2800, 1.2880 and 1.3000.

Bullish persistence above 1.2800 (Mid-Range) is mandatory for buyers. Any decline below 1.2800 invalidates the bullish scenario bringing the GBP/USD pair again into sideway consolidations that may extend down towards 1.2720 (Lower limit of the depicted consolidation range).

On the other hand, the price level of 1.2880 stands as an intraday key-resistance corresponding to the upper limit of the previous consolidation zone (1.2720-1.2880).

A strong bullish breakout above 1.2880 is mandatory for Buyers as a valid BUY signal to look for further bullish advancement towards 1.3000 initially.

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Simplified wave analysis of EUR / USD pair for the week of January 14

Large-scale graph:

The vector of the main trend in the euro major pair since January last year is directed downward. The first 2 parts are completed in the wave structure and the final phase (C) has started since the end of September.

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Medium-scale graph:

The ascending section of the chart on November 12 had a flat character of the movement. In a larger wave, it takes the place of correction (B).

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Small-scale graph:

The rising wave of January 3 is at the end of a bullish corrective pattern. The price has reached the minimum level necessary to end but the wave structure does not show completeness.

Forecast and recommendations:

The probability of extending the current wave to the next calculated resistance zone is high. Until a clear reversal signal is received, sales can be very risky. Short-term purchases are possible as part of the Intraday.

Resistance zones:

- 1.1570 / 1.1620

- 1.1720 / 1.1770

Support areas:

- 1.1460 / 1.1410

Explanations of the figures:

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

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

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

Analysis of Gold for January 14, 2019

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Recently, the Gold has been trading sideways at the price of $1,295.00. Anyway, according to the H4 time frame, I have found that there is a potential end of the contracting flat correction, which is a sign that Gold may resume the upward trend very soon. I have also found that there is the positive reading on the LBR oscillator, which is another sign that buyers are in control. My advice is to watch for buying opportunities if you see the breakout of the supply trendline. The projected upward target is set at the price of $1,316.00.

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EUR/USD analysis for January 14, 2019

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Recently, the EUR/USD pair has been trading downwards. The price tested the level of 1.1450. Anyway, according to the M30 time – frame, I have found that there is a fake breakout of the support cluster at the price of 1.1455, which is a sign that selling looks very risky at this stage. I also found hidden bullish divergence on the stochastic oscillator, which is another sign of potential strength. My advice is to watch for buying opportunities. The upward target is set at the price of 1.1534.

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Control zones of GBP / USD pair 01/14/19

Last week, the upward movement continued the bullish medium-term impetus and allowed us to get closer to the upper monthly short-circuit of January. This suggests the appearance of a major proposal in the near future.

The price movement on Friday had a correction to 1/4 CZ of 1.2707-1.2698 allowed to enter the purchases, the purpose of which was the monthly CZ of January. The implementation of the impulse bullish pattern occurred over two sessions, indicating the strength of market buyers. The test of the monthly fault has not yet occurred, however, the update of last week's maximum may lead to this event. When implementing this model, you will need to close all long positions and search for a pattern to sell an instrument.

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Friday's closure of trading occurred above the weekly CZ of 1.2819-1.2781, which indicates a high probability of continued growth to the next significant resistance of the 1/2 CZ at 1.3031-1.3012.

A continuous growth will require retention of the pair above the decisive support, which is the 1/2 CZ 1/2 1.2673-1.2654. As long as the zone remains unreachable, the probability of updating the January maximum is 70%. This should be considered when building daily trading plans. Working in the opposite direction will begin no sooner than the pair can break through and gain a foothold in one of the US sessions below one of the lower control zones.

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

Weekly fault - weekly control zone. The area formed by the important marks of the futures market, which changes several times a year.

Monthly fault - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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Bitcoin analysis for January 14, 2019

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Trading recommendations:

According to the 30M time - frame, I found that BTC has been trading downwards. The price tested the level of $3.439. I have also found the breakout of the bearish flag in the background, which is a sign that sellers are in control. Most recently, there is the intraday bearish flag in creation, which is another sign of weakness. My advice is to watch for a breakout of the flag to confirm further downward continuation. A downward target is set at the price of $3.327. The short-long term trend is bearish.

Support/Resistance

$3.550 – Intraday resistance

$3.445– Intraday support

$3.327 – Objective target

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

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Forecast for GBP / USD pair on January 14, 2019

GBP / USD pair

On Friday, the pound sterling added 90 points and was retained in the MACD line of the daily timeframe. Tomorrow, there will be a vote in the English Parliament by agreement of Prime Minister May with the EU. Despite all the efforts of the Prime Minister, the parliament is against it but this is far from the finale of the English epic on leaving the European Union. To some extent, the failure of tomorrow's vote can be beneficial for England, as it will allow additional preferences to be beaten out of Europe. The first such attempt will be the adoption of amendments to the draft on January 21. The EU is still against the additions to the Agreement, but the second stage of mutual "arm-twisting" will begin on Tuesday. Also, the UK will need to enlist the EU's readiness to postpone the date of withdrawal from the EU, which now falls on March 29.

Meanwhile, we are waiting for tomorrow's vote. After breaking through the support line of MACD on H4 chart at 1.2755, we are waiting for the price on the support line of the price channel older TF 1.2680. Overcoming the support opens the way to 1.2460. The price increase to 1.2921 (minimum of 4 October) or even the output to 1.3045 is possible on the basis of the current technical situation and the alignment of the votes of parliamentarians directly during the voting. Even if the project is not accepted but with a minimal majority, such speculative movements in the market are quite possible.

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Technical analysis of AUD/USD for January 14, 2019

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Overview:

Pivot: 0.7112.

The AUD/USD pair is set above strong support at the level of 0.7046, which coincides with the 23.6% Fibonacci retracement level. This support has been rejected four times confirming the veracity of the uptrend. Hence, major support is seen at the level of 0.7046, because the trend is still showing strength above it. Accordingly, the pair is still in the uptrend from the area of 0.7046 and 0.7168. The AUD/USD pair is trading in a bullish trend from the last support line of 0.7112 towards the first resistance level at 0.7168 in order to test it. This is confirmed by the RSI indicator signaling that we are still in the bullish trending market. Now, the pair is likely to begin an ascending movement to the point of 0.7168 and further to the level of 0.7219. The level of 0.7389 will act as major resistance and the double top is already set at the point of 0.7389. At the same time, if there is a breakout at the support levels of 0.7112 and 0.7046, this scenario may be invalidated. But overall, we still prefer the bullish scenario.

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Technical analysis of EUR/USD for January 14, 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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The global oil market will hit bottom in 2019 - experts

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According to forecasts of leading experts of the world market of black gold, this year a significant drop in global oil prices is expected.

According to Mohammed Al-Rumhi, the Minister of Oil of Oman, the December agreement on the reduction of oil production concluded between OPEC, Russia and other oil producers stabilizes oil prices of at least $ 60 per barrel. According to the calculations of the official, in 2019 the average price of black gold will not rise above $ 70 per barrel.

Claudio Descalzi, chief executive officer of the leading Italian oil and gas company Eni S.p. A. He expects oil price fluctuations in the range of $ 60 to $ 62 per barrel. At the moment, according to K. Descalzi, the demand for hydrocarbons is actively growing, and this trend will continue in the near future.

At the end of last year, the price of Brent crude for the first time in 17 months for some time was below $ 50 a barrel. However, to date, oil quotes have risen by more than 20%. The reasons for this were the fulfillment of obligations to reduce oil production by OPEC +, as well as some progress in trade relations between the United States and China. According to experts, these factors have pushed quotes above $ 60 per barrel. According to C. Descalzi, the price of black gold will be able to consolidate above this mark if consumers see a narrowing of the gap between supply and demand.

The current situation in the global oil market is not very positive. On Monday, January 14, world prices for black gold continue to decline after falling on Friday evening, when they lost 2%. According to experts, oil quotes almost did not respond to data on the number of drilling rigs in the United States. Recall, this figure for the week decreased by four, to 873 drilling, operating in the United States.

According to Mohammed Al-Rumhi, the issue of balance in the oil market will be discussed in the second quarter of this year. The official stressed that during this period, the demand for black gold usually increases. In 2019, the growth in demand coincides with the end of the term of US sanctions against Iran, because of which a number of buyers cannot buy oil from the Islamic Republic. According to specialists, due to American restrictions, Iranian oil exports fell from 2.7 million to 1 million barrels per day.

Iranian Oil Minister stressed that the purpose of the cartel and its allies is to maintain a reasonable balance in the black gold market. In the event of damage to the oil market due to US sanctions, OPEC + representatives will immediately respond. Cartel members and independent oil producers will seek equilibrium and mutually beneficial cooperation in the global black gold market, said Mohammed Al-Rumhi.

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Brexit: the British pound may fall at any time

The British pound is descending from its monthly highs, which were reached last Friday after the appearance of talk about a possible postponement of the UK exit from March 29 to a later date.

Problems in a number of laws that have not been adopted, along with the parliamentary vote on the Brexit agreement, which is scheduled for Tuesday, will most likely force you to really consider the option of postponing the UK exit date. Tomorrow, lawmakers are not expected to support the Brexit agreement when voting, which could seriously affect the political situation in the country and the position of British Prime Minister Theresa May.

The data that came out on the UK economy on Friday, not very pleased investors.

According to the report, industrial production in the UK continued to decline in November 2018. The decline marked the fifth consecutive month. According to the National Bureau of Statistics, in November 2018, compared with October, industrial production decreased by 0.4%.

The report on the same bureau on UK GDP reassured traders a little. According to the data, in the period from September to November 2018, compared with previous months, the UK GDP grew by 0.3%, year-on-year by 1%.

However, despite the growth, it is clear that the UK economy is losing momentum against the background of problems associated with Brexit.

The US dollar regained a number of positions against the euro, despite the fact that US consumer price data coincided with economists' forecast, thereby further reducing the likelihood of further increases in US interest rates in the first half of this year.

According to a report by the US Department of Labor, CPI in December 2018 fell by 0.1% compared with the previous month. Core inflation, not taking into account volatile categories, showed an increase of 0.2% compared with the previous month. The data fully coincided with the expectations of economists. The annual growth of the CPI index was 1.9%, while the base CPI index rose by 2.2% compared with the same period of the previous year.

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As for the technical picture of the EUR / USD currency pair, today buyers of risky assets need to go back to the resistance level of 1.1490, since the future direction of movement will depend on it. If this fails to be done, then it is likely that the bears will continue to push the euro down to support of 1.1425 and 1.1370.

Data on China's exports, which came out today during the Asian session, pointed to the impact of barrage tariffs from the United States. According to the report of the General Administration of Customs of China, China's exports in December decreased by 4.4% compared with the same period of the previous year, after rising 5.4% in November. Economists had expected a 2.5% rise in exports. Imports fell by 7.6% after rising by 3.0% in November, and the trade surplus in December was $ 57.06 billion.

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Weekly review for the currency pair GBP / USD from January 14 to 19, 2018

Trend analysis (Fig. 1).

This week, the price will move up with the first goal of 1.2887, a rolling level of 50% (yellow dotted line).

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Fig. 2 (weekly schedule).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger lines - up;

- Monthly schedule - up.

The conclusion of the complex analysis - upward movement.

The total sum of the calculation of the GBP / USD currency pair candle on a weekly schedule: the price of the week is likely to have an upward trend with the absence of the first lower shadow for the weekly white candle (Monday is up) and the absence of the second upper shadow (Friday is up).

This week, the price will move up with the first goal of 1.2887, a rolling level of 50% (yellow dotted line).

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Weekly review for the currency pair EUR / USD from January 14 to 19, 2018

Trend analysis (Fig. 1).

When moving up, the first upper target is 1.1514, the level of 50% (the yellow dotted line).

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Fig. 2 (weekly schedule).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - down;

- Candlestick analysis is neutral;

- Trend analysis - up;

- Bollinger lines - down;

- Monthly schedule - up.

The conclusion of the complex analysis - upward movement.

The total result of the calculation of the EUR / USD currency pair candle on the weekly chart: the price of the week is likely to have an upward trend with the presence of the first lower shadow of the weekly white candle (Monday is down) and the absence of the second upper shadow (Friday is up).

When moving up, the first upper target is 1.1514, the rollback level of 50% (yellow dotted line).

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GBP / USD. January 14th. The trading system. "Regression Channels". Theresa May already admits the option of refusing Brexit

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: 161.2133

The currency pair GBP / USD on Monday, January 14, continues its upward movement, despite the upcoming vote in the British parliament, which is not known how to complete it. On Friday, the pair pushed away from the moving average line, which provoked a resumption of the upward movement. To say that macroeconomic reports contributed to this is quite difficult. If the UK GDP for November was slightly higher than the forecast, + 0.2%, then industrial production failed miserably. In general, we consider the Friday strengthening of the pound sterling, perhaps even an accident. However, one way or another, for the British currency comes the hour X. Unless, of course, Theresa May again transfers the vote to another date. In the meantime, about 100 deputies of the European Parliament turned to British citizens with a proposal to rethink Brexit and cancel it. Theresa May, on the other hand, noticed that the rejection of her plan by "Checkers" would be a "catastrophic undermining of trust in democracy". Also in May's rhetoric, the words "or remain in the EU" appeared. That is, now Theresa May admits even the option of the country's refusal to withdraw from the EU if the parliament blocks its initiatives. The prime minister notes that parliamentarians cannot do this to citizens who voted "for" withdrawal from the EU, probably "forgetting" that there were about the same number of opponents of leaving the EU.

Nearest support levels:

S1 - 1.2817

S2 - 1.2756

S3 - 1.2695

Nearest resistance levels:

R1 - 1.2878

R2 - 1.2939

R3 - 1.3000

Trading recommendations:

The currency pair GBP / USD resumed its upward movement. Thus, purchase orders with targets of 1.2878 and 1.2939 are still relevant. Turning the Heikin Ashi indicator down will signal a manual reduction of long positions.

Sell positions are recommended to be considered after fixing the price below the MA. 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 level of 1.2695.

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 14th. The trading system. "Regression Channels". "Shutdown" in the United States continues, Trump ratings

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) - sideways.

CCI: -17.0108

The currency pair EUR / USD on Monday, January 14, in the context of the continuing "shutdown" in America and the upcoming vote on the Brexit in the British parliament, adjusted to the moving average line. The consumer price index in the United States has slowed, but exactly in line with the forecast. Therefore, the decline in the pair, respectively, the growth of the dollar, was hardly due to the publication of macroeconomic statistics in the States. Moreover, a study was conducted the other day, which shows that 56% of respondents blame Trump for such a long-term "shutdown" and his rating drops. It is unlikely, of course, that Trump will be greatly upset, but in itself a remarkable fact. For the currency pair, the key area today is around the MA. If the pair fails to consolidate below it, the uptrend will continue and we can expect a resumption of the upward movement with the first target of 1.1536. From macroeconomic publications today, only the report on industrial production for November in the European Union can be noted. In America, no important report has been scheduled for today. In the coming days, the attention of markets will be focused on the UK. Recall that tomorrow there should be a vote on the project of Theresa May on the country's withdrawal from the EU. The results of this vote or any other important information on this topic may affect the EUR / USD pair.

Nearest support levels:

S1 - 1.1475

S2 - 1.1414

S3 - 1.1353

Nearest resistance levels:

R1 - 1.1536

R2 - 1.1597

R3 - 1.1658

Trading recommendations:

The EUR / USD currency pair has resumed a downward correction and has worked the MA. It is recommended to open new long positions in case of a Heikin Ashi upward indicator with a target of 1.1536, with the price positioning above the moving average.

Short positions will become relevant after the pair is fixed below the moving average line. In this case, the trend for the pair to change to a downward, and the first goal will be the Murray level of "3/8" - 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

Decisive week for the pound

Consumer prices in the US declined by 0.1% in December, this is the first price reduction in 9 months, year-on-year price growth slowed to 1.9%, which was especially noticeable against the + 2.9% background last summer.

The slowdown in price growth did not come as a surprise to the market, so the dollar almost did not respond to the deterioration in statistics, the markets have long been ready for the Fed to adjust its plans for 2019.

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Shutdown in the United States has already broken the record for the duration, more than 800 thousand civil servants did not receive a salary, scenarios for resuming the government's work are exotic. For example, declaring a state of emergency that can bring the dispute between Democrats and Republicans to a judicial plane, but at the same time, the government's performance will be restored.

The internal political struggle prevents the dollar from playing back part of the losses, especially since the Fitch agency announced a decrease in the US investment rating if the national debt ceiling is not raised and the lockdown is not completed. Against the background of a slowdown in the growth of oil prices and the return of risk aversion on Monday morning, the dollar may strengthen slightly during the day, even in spite of the internal political crisis.

Eurozone

Euro today in the background due to the lack of serious factors that can increase volatility. Most likely some decline in EUR / USD, the nearest support of 1.1420. The publication by Eurostat of the report on industrial production in November will not lead to a pronounced market reaction since the slowdown has already been taken into account in the quotes.

Great Britain

The volume of industrial production declined in November by 0.4%, the year-on-year decline is already 1.5%, processing decreased by 0.3% and 1.1%, respectively, while stability is observed only in the service sector and construction.

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At the same time, the volume of industrial exports slowed to almost zero, which is the worst result since February 2016.

Markets on Monday will be fully focused on the upcoming parliamentary vote on Brexit. At the moment, the chances of a positive outcome are small, and there are at least two reasons for this. First, parliament needs to have time to pass at least six key bills on migration, finance, health, trade, agriculture, and fisheries. And secondly, the EU on Monday will provide guarantees of the temporary nature of the open border with Ireland, but only in the form of a letter signed by Tusk, and not in a legally binding form, as the British side insists. It is the reaction to the EU letter that will give an answer to how many votes against in the end there will be, which will allow assessing the alignment of the re-voting, which in case of failure on Tuesday will be held on January 21.

Scenarios for the pound are diametrically opposed. If the agreement is unexpectedly supported already on January 15, GBP / USD may shoot to the highs of the year 1.40 - 1.45, but the chances of such an outcome are small. If the vote on January 21 turns out to be successful, the amendments in the form of a compromise may prevent the pound from growing as high, but in any case, there will be growth. Here, the determining factor will be the reaction of EU leaders to the January 15 voting results.

The most likely scenario is that in which the effect of Article 50 will be prolonged at a later date, which will create a positive background for the pound and will also be a bullish factor.

It is also impossible to exclude the possibility of a repeated referendum, especially if the opportunity for the UK to remain in the EU is taken into account. It is obvious that Brexit is not going at all as it was intended, a change in the geopolitical situation can create conditions for such a scenario, which was officially considered quite recently impossible.

GBP / USD does not decline even against the background of increasing risks, which indicates a potential for growth. Players will wait for an insider until it is there, the pound will remain in the range of 1.2805 - 1.2880, a movement to the north is slightly more likely.

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