British authorities hold power, Nomura sells EUR / GBP

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There is a possibility that British Prime Minister Theresa May will resign within a few days after a devastating vote. Still, Nomura does not believe in tough Brexit, waiting for the stabilization of the political situation in the country and the growth rate of sterling. Thus, currency strategists explained the opening of a short position in EUR / GBP pair from 0.8880.

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London representatives of the bank reported that the position of British Prime Minister Theresa May looks quite constructive. Her desire to lengthen the term of Article 50 of the Lisbon Treaty and the intention to begin inter-party negotiations on the country's withdrawal from the group will most likely allow the British government to retain power.

If a vote of no confidence is announced to the government, the pound may drop by 3%.

The bank estimates that next week traders will focus on what Ms. May can offer as a backup plan.

Many political analysts believe that the British Prime Minister will once again "stand on his feet." May lost in the House of Commons, but "there is no immediate threat to her position." Theresa May will remain in power, as the Democratic Unionist Party and the Conservatives, who voted against her unpopular EU exit deal, will support her.

Note that Ms. May herself contacted, saying that the British government is already busy searching for an acceptable Brexit plan, which would receive the support of parliamentarians.

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BITCOIN Analysis for January 16, 2019

Bitcoin has been struggling at the edge of $3,500-600 area for a few days in a row. The price is expected climb higher if it can breach above the dynamic resistance of 200 EMA. The price has managed to create higher lows while consolidating at the edge of $3,500-600 area. The price is being held by the Kumo cloud resistance as well as 200 EMA as resistance. If not breached, the price may move much lower in the coming days. The Chikou Span is currently facing the price line resistance whereas a break above it is expected to lead to strong bullish pressure resulting in the upward push towards $4,000 area in the coming days. As the price remains above $3,000 area with a daily close, the bullish bias is expected to continue.

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

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

BIAS: BEARISH

MOMENTUM: VOLATILE

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Gold should benefit from a weak dollar

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After reaching the maximum values recorded for the first time since mid-June, the course of the yellow precious metal is stuck in a limited range. The gold rally stalled on the outskirts of the mark at $ 1,300.

"The longer the bulls remain idle, the more active the talk that the XAU / USD pair has already formed a local peak will become more active," analysts said.

"Today, this hypothesis can be confirmed if the economic report published by the Federal Reserve System (FRS) of the USA," Beige Book ", turns out to be quite optimistic. This may give impetus to the dollar. At the same time, gold will be forced to retreat from its cherished goal of $ 1,300. However, in the long run, the precious metal can still make a breakthrough," they added.

It is assumed that the main driver of growth of quotations will be the slowdown in the process of raising interest rates by the Fed.

If relatively recently, investors had expected the regulator to raise the rate three times this year, now even one increase is being questioned.

In addition, it is possible that in the summer of 2019 a recession will occur in the US economy.

The first hints of this may appear in the spring. Then the reduction in the balance of the Fed may be suspended. Instead, another quantitative easing program will be launched. In this case, the dollar will decline, which will be a supporting factor for the value of gold, which, as a rule, acts as a protective asset during economic and political instability.

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Intraday technical levels and trading recommendations for GBP/USD for January 16, 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 (The Blue one).

Shortly after, a quick bearish decline was demonstrated towards the price level of 1.2500 where bullish recovery (Bullish Head & Shoulders pattern) could take place on December 12.

Hence, a successful bullish breakout above the depicted bearish channel was demonstrated on December 24.

On December 31, 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).

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).

Strong bullish breakout above 1.2880 is mandatory for Buyers as a valid BUY signal to look for further bullish advance towards 1.3020 where the depicted downtrend (in Blue) comes to meet the GBP/USD pair.

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GBP / USD pair: plan for the American session on January 16. Traders don't know what to do after Brexit fails

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

As I think you all already know, the British Parliament voted against the Brexit agreement, which was quite expected. Today's inflation data in the UK, which coincided with the forecasts of economists, also did not allow to determine the future direction of the pound. It is best to purchase GBP/USD after the formation of a false breakdown in the area of 1.2812 or rebound from support 1.2743. The main objective remains a breakthrough above the resistance of 1.2883, which will resume the upward trend and will allow reaching the highs of 1.2964 and 1.3016.

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

An unsuccessful consolidation above the resistance of 1.2883 will be the first signal in opening short positions in a pound. Yet, the main task will be the breakdown and consolidation under the support of 1.2812, which will collapse GBP/USD to the minimums of 1.2743 and 1.2672, where I recommend to fix profits. In the case of a further uptrend after the release of bad data on the US economy in the afternoon, it is best to consider short positions from the new highs of 1.2964 and 1.3016.

Indicator signals:

Moving averages

Trade returned to the area of 30- and 50-day moving, which indicates the lateral 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 16

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Description of indicators

MA (moving average) 50 days - yellow

MA (moving average) 30 days - green

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

Bollinger Bands 20

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EUR and GBP: What does the pound need for further growth? Inflation in Germany is a cause for concern

The euro continued to decline after inflation data in Germany coincided with economists' forecasts, demonstrating a slowdown in growth to almost zero.

According to the report, which was published today by the Federal Bureau of Statistics Destatis, the final CPI of Germany in December last year grew by only 0.1%, and the annual growth was 1.7%. The data completely coincided with the forecast of economists.

Despite the fact that in 2018 inflation in Germany was almost 2.0% and reached its target level, a sharp slowdown in the 4th quarter is an alarming signal for the European Central Bank, which is going to start raising interest rates this summer.

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The EU-harmonized index rose by 0.3% last month compared with the previous month and by 1.7% compared with the same period of the previous year. As before, the main monthly growth driver was energy prices, which increased by 4.9%. Food prices rose 2.5%.

Today, a report from the European Association of Automakers was also published, which said that the number of registrations of new cars in the EU in December continued to decline, and this suggests probable deeper problems in the European economy.

According to the data, the number of registrations in December decreased by 8.4% compared with the same period of 2017 and amounted to 998,503. The reduction is directly related to the low demand in key EU markets.

As for the technical picture of the EUR / USD pair, there is currently a slowdown in the downward movement, which may lead to the formation of an upward correction in the euro. If the level of 1.1375 is able to keep the pressure of sellers, you can count on a larger increase in risky assets with a return to the resistance of 1.1440, which opens up the prospect of further growth in the maximum area of 1.1480. If the bears can push the support of 1.1375, then it is best to consider new long positions in the trading instrument after updating the minimum of 1.1340 and 1.1310.

Great Britain

The British pound continued to bargain in the side channel after the political fiasco of Theresa May, which was never able to get the approval of the Brexit agreement in the UK Parliament.

The inflation data, which came out in the first half of the day, was ignored by the market, as it completely coincided with economists' forecasts.

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According to the report, the annual inflation rate in the UK has slowed down due to a sharp decline in gasoline and energy prices. Thus, the CPI UK consumer price index in December 2018 increased by 2.1% compared with December 2017, after rising by 2.3% in November. The return of inflation to a target level of 2.0% by the end of the year is good news for the Bank of England, which, in the face of uncertainty with Brexit, does not have to worry about further raising interest rates.

The speech of the head of the Bank of England also did not allow setting the market direction for the British pound.

Mark Carney, in the course of his speech, said that the slowdown of economic growth in China should continue, and the indicative forecast is 6%. In his opinion, the situation in China is one of the factors behind the slowdown in overall global economic growth, but there is no direct UK vulnerability in the face of the problems of the Chinese economy.

As for the technical picture of the GBP / USD pair, for the new powerful impulse growth, a breakthrough of the resistance area of 1.2890-1.2900 is required, which will lead to the formation of a new trend with the updating of monthly highs of 1.3020 and 1.3130. If in the near future the bulls fail to get above the 1.2890-1.2900 range, a downward correction in the trading instrument is likely, which will return the pair to the lows of 1.2750 and 1. 2620.

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EUR / USD pair: plan for the US session on January 16. Inflation data in Germany did not change the market

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

Trade remained in a narrow side channel, after the report on inflation in Germany, which coincided with the forecasts of economists. Moreover, t is rather difficult to determine the future direction of the euro. You can take a closer look at the euro when forming a false breakout at the level of 1.1375 with confirmation of divergence on the MACD indicator or open long positions to rebound from support 1.1343. The main task of buyers is to return to the resistance level of 1.1430, which will lead to a larger upward correction to a maximum of 1.1481, where I recommend taking profits. The Weak US data may help bulls with correction.

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

Sellers have shown themselves, not allowing the pair to get above the resistance of 1.1430, to which I paid attention in my morning review. In this scenario, the pressure on the euro will remain but the main task will be a breakthrough of support for 1.1375, which will lead to a larger sale of EUR/USD with access to 1.1343 and 1.1312 lows, where I recommend taking profits. If after testing the minimum of 1.1375 and rapid downward movement is not formed, I recommend closing short positions, since a large upward correction in euro can be formed from this level.

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

Growth is limited by the upper limit of the Bollinger Bands indicator in the area of 1.1430, while the lower limit in the area of 1.1380 can support European currency buyers.

More in the video forecast for January 16

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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

Gold has chosen a trend

Taking off at 10% of the levels of the 18-month lows that occurred in August, gold held its horses. The current January could be the worst for it in the last 6 years, and a natural question arises for investors, will the precious metal be able to continue the rally? It has traditionally been used as a safe-haven and a hedge against inflation, but the slow dynamics of the latter and the increasing likelihood of ending the trade war between the United States and China force the bulls on XAU / USD to be cautious.

The impressive spurt of gold at the end of 2018 was due to the favorable environment for it. The US dollar, the yield of Treasury bonds and stock indices fell, the demand for reliable assets grew. At the same time, market rumors were spreading about the end of the economic cycle. The Wall Street Journal experts have increased the likelihood of a recession in the US economy by up to 25%, the maximum mark since 2011, and weak statistics from China and Germany suggest serious problems with global GDP. As a rule, in such conditions, interest in precious metals grows, as evidenced by the increase in reserves of specialized exchange-traded funds to 71.9 million ounces, which is slightly less than the record high of 72 million ounces that occurred in May 2018.

Dynamics of the yield of US bonds and gold

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Gold ETF Stock Trends

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Currently, despite a sluggish start, gold has no shortage of bullish forecasts. For example, Goldman Sachs expects to see it at around $ 1,425 per ounce for 12 months. The main arguments buyers say are the potential weakening of the US dollar and the fall in the US debt market rates. If the Fed makes a long pause in the process of normalizing monetary policy or terminates it (the forward market assesses the odds of a single increase in the federal funds rate in 2019 to a modest 17%), bond yields and the USD index are unlikely to be able to restore the uptrend. Pressure on them has the longest in the history of a government shutdown in the States. Fitch Ratings warns that delaying the process may lead to a downgrade of the country's credit rating.

Standard Chartered notes an increase in the activity of central banks in the area of buying precious metals. At the end of 2018, their gold reserves increased by 500 tons. The shift occurred even in the Middle Kingdom (+10 tons), which for the past two years showed passivity. The protectionism policy pursued by Donald Trump forces affected countries to move away from the US dollar, and gold is a good alternative. At the same time, the weakening of the USD index and the growth of the Chinese yuan and the Indian rupee can increase the demand for physical assets in Asian countries, the largest precious metal consumers in the world.

Technically, consolidating in the $ 1275-1300 per ounce area near the target by 200% using the AB = CD pattern looks logical. The Bulls reached the target and made a halt. A breakthrough of the psychologically important level of $ 1,300 will most likely lead to the continuation of the northern gold trek.

Gold, the daily chart

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Intraday technical levels and trading recommendations for EUR/USD for January 16, 2019

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Since June 2018, the EUR/USD pair has been moving sideways with a slight bearish tendency. Narrow sideway consolidations have been maintained within the depicted daily movement channel.

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

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

Last week, a recent attempt of a bullish breakout above 1.1520 (upper border of the depicted movement channel) was executed. However, early signs of a bearish rejection are being expressed below 1.1520 and 1.1420 on the daily charts.

This renders the recent bullish breakout above 1.1420 and 1.1520 as a false breakout. Hence, any bullish pullback towards 1.1420 can be considered as a valid SELL entry for intraday traders.

The current bearish decline below the key level of 1.1400 brings more sideway downward consolidations to 1.1250 again where bullish rejection may be anticipated for a valid BUY entry.

On the other hand, in case a successful bullish breakout above 1.1520 is achieved again, this enables further bullish advancement towards 1.1600 (October's High) and probably 1.1720 if enough bullish momentum is maintained.

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Brexit: execution cannot be pardoned

The British currency showed strong volatility yesterday, reacting to events in the British Parliament. Contrary to many forecasts, the pound did not collapse in response to the failed vote on the draft transaction. On the contrary, it strengthened its position and continues to gain momentum throughout the market. Such behavior of the currency suggests that trading in a pair of GBP / USD, like any other cross-pair with the participation of the British, is an extremely risky exercise since it is almost impossible to predict the scenario of developments and (especially) the reaction of traders to these events.

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According to the "standard" logic of things, yesterday the pound had to go down a few pieces. After all, only 202 deputies supported the Brexit deal, while more than four hundred were against it. In other words, the agreement was not supported either by the Labor Party or by many conservatives, including representatives of the European Study Group (the day before there were rumors about a change in their views). Such a devastating score says a lot. Firstly, the May team was unable to convince their fellow European skeptics, and secondly, the number of opponents of the premier remains consistently high. Both factors were supposed to pull a pair of GBP / USD to the 25th figure, but subsequent events changed the mood of the traders.

This is a vote of no confidence in the current government. This issue will be considered tonight within the walls of the House of Commons. This is not to say that such a scenario came as a surprise to traders. Just last Sunday, the Labor leader announced the implementation of these intentions. Therefore, when Jeremy Corbyn put this question on the agenda, the pound reacted quite calmly and without unnecessary emotions. But when preliminary political alignments in the ranks of the British parliament became known, the British currency began to rise in price, more than returning the positions lost yesterday. It turned out that it is impossible to put an equal sign between the number of those who voted "against" the transaction with the number of deputies who are ready to support a vote of no confidence in the government of Theresa May.

In other words, despite the fact that many conservatives are dissatisfied with the proposed deal, they are not ready to change power, much less to give Labor to the Labor Party "on a silver platter" the premiership. By the way, and not only conservatives, representatives of the Democratic Unionist Party, who are temporary allies of Tory in parliament (and who provide a parliamentary majority), have already declared their support for the British prime minister. Such a turn of the plot reduces the likelihood of the prime minister's resignation, and most importantly, reduces the likelihood of a "hard" Brexit.

If the parliament announces a confidence vote May by voting against the initiative of the Labor Party tonight, the government will have to present a so-called "plan B" this Friday, a new version of the deal. According to the Prime Minister, after today's vote (of which she has no doubt about the successful outcome), the Cabinet will hold consultations with parliamentarians, finding out what needs to be done to get support for the agreement. She will then travel to Brussels to voice these proposals to the European Union.

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According to the British press, the second vote could take place on January 21st. But if the deputies do not support the "updated" version of the deal (or Brussels refuses May to correct the agreement), then in this case, they will most likely postpone the Brexit date to the end of summer or early September, after which they will take the negotiation process into their own hands. Experts believe that next week, the parliament will try to take control over Brexit in order to reach a compromise agreement with Brussels. The positive aspects of this scenario are obvious. The parliamentarians do not agree to the "hard" Brexit, wanting to find a compromise with Europe. The negative side of the issue is the position of Brussels itself, whose representatives have repeatedly stated that they will not reconsider the agreement reached.

However, it is too early to talk about this. The British currency has yet to "survive" two events that can determine the vector GBP / USD in the long run. The first is the evening vote on a vote of no confidence in the government, the second is subsequent consultations with May deputies of the British parliament and representatives of the EU. The second point is key since at this stage there is still a chance of reaching a compromise. In this case, on January 21, the British can still approve the deal. In the meantime, the current situation can be described with the catchphrase "you can't pardon the execution". In our case, the decisive comma can be set in the coming days.

In general, the fundamental picture for the pair pound/dollar remains uncertain, so trading this pair is still risky. If there are negative signals coming from Brussels regarding the prospects for additional negotiations, the British currency will be under strong pressure, and GBP / USD, respectively, will return at least to the 26th figure.

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Fundamental Analysis of USD/CAD for January 16, 2019

The USD/CAD pair has been struggling at the edge of the 1.3200-50 price area after having an impulsive bearish momentum since the price rejected off the 1.3600 area with a daily close. USD expected the interest rate decision of FED which demotivated the USD bulls while CAD gained the momentum.

Recently, the US Central Bank Federal Reserves policymakers have showed patience and caution on interest rate rise to avoid the slowdown. The US economy has been performing quite well for the last few months resulting in the four-time Fed's interest rate hikes last year which were protested by many policymakers and US President Donald Trump. USD has been recently struggling with the worse economic reports including PPI which decreased to -0.2% from the previous value of 0.1% which was expected to be at -0.1% and Empire State Manufacturing Index which decreased significantly to 3.9 from the previous figure of 10.9 which was expected to increase to 11.9. As for the reports, half of the regional banks opposed the interest rate hike in December as it increases the borrowing costs which is expected to lead to an increase in business operational costs as well as affecting the inflation of the economy. The Fed seemed to be very comfortable with the interest rate hike, but the consequences for the future growth, as stated by policymakers, can be devastating for the economy. Though the Fed decided to slow down the pace of interest rate increase in 2019, but there is still a chance of the interest rate hikes at least 2 times this year. Today, US Import Prices report is going to be published which is expected to increase to -1.3% from the previous value of -1.6%, and NAHB Housing Market Index is anticipated to be unchanged at 56. Ahead of G20 meetings this week, USD is currently not quite dominating over CAD as before.

As for CAD, having Overnight Rate unchanged at 1.75% without meeting the expectation of certain policy makers of an increase to 2.00%, CAD managed to sustain the gains it had over USD in the process. The US and Canada are going through the negotiations on the Trade War that is expected to take positive turn in the G20 Meetings to be held this week. As Canada is the second largest supplier of both aluminum and steel to the United States, tariffs on such items can impact the economic development. This week, on Friday, in Canada, CPI report is going to be published which is expected to be unchanged at -0.4% which still maintains the indecisive sentiment in the market for upcoming CAD gains against USD.

As of the current scenario, USD is currently quite stable with the grounds, despite the recent worse economic results, but if there are any positive CAD reports published in the coming days, this may lead to the continuation of the bearish momentum in future. To sum up, USD is expected to struggle further while CAD continues the downward pressure in the pair.

Now let us consider the situation form the technical point of view. The price is currently pushing higher after certain correction at the edge of the 1.3200 area. The price is expected to reach the 1.3350 area before pushing lower with confluence towards the 1.2850 support area in the coming days. As the price remains below the 1.3500 area with a daily close, the bearish bias is expected to continue.

SUPPORT: 1.2850, 1.3000

RESISTANCE: 1.3350, 1.3500

BIAS: BEARISH

MOMENTUM: VOLATILE

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Weakening dollar received another blow

The fourth week already shutting down the work of the US government threatens to accelerate the arrival of the recession, as more and more workers not only in the public sector but also in a number of other sectors connected by contracts, do not receive wages, and the contracts are not executed or are not fully implemented. The White House administration expects GDP growth to decline by 0.1% per week.

These calculations may turn out to be too optimistic since the shutdown occurs during the transition of the US economy to recession. The latest data show that a number of important macroeconomic indicators have a negative trend, in particular, producer prices declined in December in both sectors.

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The index of industrial activity in the business sector of the New York Federal Reserve Bank plummeted from 10.90p to 3.90p, which was significantly below the forecast, the index of economic optimism from the NFIB at a 13-month low.

Yesterday, the head of the Kansas Fed, Esther George, said that "no one has a complete understanding" of how the Fed's bland policy affects the economy and that stopping the rate hike would be a good idea. Until recently, George was considered a confident hawk, a change in sentiment in the Fed is already visible to the naked eye, and markets create confidence that there will be no more rate increases until the summer.

Eurozone

ECB President Mario Draghi, speaking in Strasbourg, said that the pace of weakening of the eurozone economy is stronger than expected and that it still needs large-scale support from the ECB. According to him, incentives are needed to support inflation, so reinvestment of the funds released will be continued; this statement should be considered clearly pigeon a week before the ECB's meeting on January 24.

The euro fell on Tuesday against the Brexit vote, but there is no strong pressure on it due to the growing uncertainty with the dollar. Today, important macroeconomic data is not expected, a report on inflation will be released on Thursday, which will give new benchmarks, while on Wednesday, EUR / USD will try to play some of yesterday's losses, a slight increase is likely to be up to the resistance of 1.1451, support of 1.1381 is likely to stand.

Great Britain

432 votes to 202, the House of Commons of the British Parliament rejected the May Exit Bill proposed by the May Government. The scenario, which was prepared by the parties for many months, was deemed unsuitable, and the gap of 230 votes sharply increased the likelihood that Theresa May would resign in the coming days.

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May has one last chance. If the government gives her support, she will be able to present the updated exit plan to Parliament by January 21, while there will be an opportunity to demand from the EU the extension of Art. 50 for a period of two to four weeks and initiate another round of negotiations. Brussels has repeatedly stated earlier that it will not agree to the revision of the agreement and considers the current version as final.

Despite the fact that a significant part of the Conservatives opposed the agreement, the likelihood of new elections is small, since the growing popularity of Laborists will lead to the fact that some conservatives lose their seats in parliament in the new election, which is clearly not in their plans.

The pound reacted to the voting results with a fall, but then again recovered to the levels of the beginning of the week, because the failure of the vote did not, in fact, lead to clarity and did not change the main political alignment. Until January 21, volatility will remain high, but a deep failure is unlikely.

Today, the Bank of England's CEO Mark Carney is expected to speak, as well as the publication of a data package on producer prices and consumer inflation in December. A slight slowdown in price growth is expected, which is already included in the quotes; the stability of the pound indicates an unrealized bullish potential. GBP / USD today will try to test the strength of 1.2929, pronounced growth is unlikely.

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Overview of the foreign exchange market on January 16, 2019

There is nothing surprising in the fact that the parliamentarians yesterday rejected the proposed version of an agreement with the European Union because this is exactly the same document that they threatened to roll a month ago. Then Theresa May swore and swore that she could convince Europe to add additional points to it, which is a stumbling block. But things are there. The only thing that the Prime Minister was able to achieve during this time was the promise of Jean-Claude Juncker to work out the economic part of the agreement as soon as possible. British parliamentarians are well aware of what the promises are worth, since the UK itself regularly violates them, and expressed their categorical disagreement with such a scenario. In principle, everyone expected it, which was evident from the dynamics in the foreign exchange market, when both the pound and the single European currency were actively falling since the morning. As soon as the final results of the voting became known, the pound promptly returned to the position from which it began the day. Many expect that the yesterday's fiasco will be the reason for the rapid and tough negotiations and that Europe will make concessions and will include in the text of the agreement an economic component, and moreover, arranging the UK. However, this is unlikely, as representatives of the European Union have already stated that they are very disappointed with the outcome of the vote, but the current version of the agreement is the best that they can offer to the United Kingdom. That is, no one in Europe intended to include trade issues in the agreement. And this is equivalent to the fact that the UK will leave the composition of a united Europe without any agreement. And judging by the reaction of market participants, while they do not want to listen to representatives of the English political class, who predict Britain economic chaos in the event of a similar outcome.

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The single European currency behaved quite differently, which seems a bit strange. True, all questions are removed if you pay attention to the words of Richard Grenell. The United States Ambassador to Germany in recent days has become the protagonist of all news feeds. The letters he sent to German companies involved in the implementation of the Nord Stream - 2, caused a storm of criticism and outrage throughout Germany. The representative of Washington, whom the Foreign Minister of Germany jokingly called the "governor of the emperor of Washington", commented on this whole situation, once again assured that companies that are engaged in the implementation of this project, which by a strange coincidence, competes with American attempts to supply gas to Europe, at risk of being subject to US sanctions. Moreover, Mr. Grenell stated that this project is not commercial, but is being implemented in order to supply gas to Europe bypassing Ukraine. True, the US ambassador did not clarify that the American plans for the supply of LNG to Europe also do not imply unloading at Ukrainian ports. Apparently, American plans are also not commercial? But then why is their gas so expensive? So it is clear that the United States intends to use political pressure to achieve its business goals, even if these methods are contrary to the principles of fair competition, which the United States of America has appointed themselves as advocates for. Well, the bottom line is that investors' concerns about possible US actions towards Europe clearly reduce the attractiveness of the single European currency.

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Against the background of such epic events, data on producer prices in the USA turned out to be completely unnoticed. Moreover, there was nothing to look at, since their growth rates remained unchanged.

Today there are only data on inflation in the UK, which should show its decline from 2.3% to 2.1%, and this may be the reason for the return of the pound to those positions that were before yesterday's vote. After all, a decrease in inflation indicates a decline in profitability and return on investment, which will force many to think about the horrors that some British politicians diligently draw when talking about the consequences of the UK leaving the European Union, without the economic part of the agreement. By the way, the topic of Theresa May's resignation has not yet been worked out, since last night they again spoke about the fact that the Prime Minister is not doing her job and she should step aside.

The single European currency is likely to consolidate at current levels. On the one hand, it is oversold, but the situation around Brexit will exert pressure, not allowing it to correct and eliminate imbalances.

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Factors such as lower inflation and the next threat of government resignation are unlikely to please anyone, so the pound will decline to 1.2775 - 1.2800.

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The ruble, on the other hand, is trivially ignoring everything that happens, and even the US's threat against the German companies involved in the implementation of the Nord Stream 2 was not impressed. This is largely due to the fact that the share of foreign capital in the domestic financial market has declined significantly, which makes it less susceptible to external factors. Nevertheless, since the beginning of the year, the ruble has seriously strengthened and turned out to be significantly overbought, and a local correction is needed. The weak position of the single European currency and the expected decrease in the pound strengthen the dollar position, which may also affect the ruble. So the dollar is likely to grow to 67.00 rubles today.

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

Brexit: Theresa May failed the Brexit deal, and Laborites are in favor of her resignation. The decline of the euro is coming

The euro fell in the morning on Tuesday amid weak fundamental statistics and, after a slight upward correction, continued to fall against the backdrop of a speech by the European Central Bank President Mario Draghi.

Eurozone

According to the statistics agency report, the eurozone's foreign trade surplus in November of this year was only 19.0 billion euros against 23.4 billion euros in November 2017. Eurozone exports fell 1% in November, while imports fell 1.9%. As for the monthly period, the eurozone's foreign trade surplus in November was at 15.1 billion euros against 13.5 billion euros in October.

The pause taken by the White House in relation to the EU and the trade war seems to benefit the European economy, but immediately after the settlement of the trade conflict with China, I think the administration will return to the issue with the eurozone. Let me remind you that in the middle of last fall, US President Donald Trump expressed his dissatisfaction about the slow process of drawing up a trade agreement with the EU, but nothing moved.

The euro rose slightly after the release of weak fundamental statistics on producer prices in the US, but this was clearly not enough to break the downward trend.

According to the data, the producer price indicator in the US declined in December 2018, indicating weak inflation in the manufacturing sector.

As stated in the report of the US Department of Labor, PPI producer price index in December fell by 0.2% compared with the previous month. The base index of final demand, which does not take into account the volatile categories, decreased by 0.2% compared with November. Economists had forecast a decline in the index by 0.1% and a growth in the base index by 0.2% in December.

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The speech of the ECB President Mario Draghi again discouraged the bulls to open long positions on the euro, which led to a drop in the trading instrument.

Draghi said that recent economic data was weaker than expected, and uncertainty, mainly due to global factors, is still significant. This suggests that, apparently, the promised increase in interest rates from the European Central Bank this summer will remain just a promise. Mario Draghi also noted that at present it is necessary to maintain a significant degree of monetary stimulus, clearly hinting at low-interest rates.

As for the technical picture of the EUR / USD pair, there is currently a slowdown in the downward movement, which may lead to the formation of an upward correction in the euro. If the level of 1.1375 is able to keep the pressure of sellers, you can count on a larger increase in risky assets with a return to the resistance of 1.1440, which opens up the prospect of further growth in the maximum area of 1.1480. If the bears can push the support of 1.1375, then it is best to consider new long positions in the trading instrument after updating the minimum of 1.1340 and 1.1310.

UK and Brexit

Yesterday's main topic was a vote in the British Parliament on the Brexit deal, which, as expected, turned out to be a failure. British Prime Minister Theresa May suffered a defeat by a vote on the Brexit agreement in parliament, with 432 votes against and 202 votes in favor. It is noteworthy that the 118 members of the Conservative Party opposed the agreement.

Such a situation raises the political future of the head of the Conservative Party of Great Britain.

Immediately after that, Theresa May said that the vote did not tell us anything about what the parliament supports, and the citizens of Great Britain and the EU deserve clarity.

May also noted that if the House of Commons expresses confidence towards the government, it will continue to work on the Brexit plan, seeking new conditions from the EU, since only an orderly exit is the ultimate goal, and the time delay is an initially losing strategy.

Immediately after the vote, Labor Party leader Jeremy Corbyn spoke in favor of a vote of no confidence in the government.

We only need to continue to closely monitor the further development of the political situation in the UK.

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

GBP / USD: Theresa May suffered a defeat. What's next?

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The withdrawal of the United Kingdom from the European Union, which began as a surprise, can end in chaos.

On the eve of the deputies of the House of Commons by an overwhelming majority rejected the draft "divorce" agreement promoted by Prime Minister Theresa May.

According to experts, this situation may lead to the fact that Britain will withdraw from the EU without a deal or return to negotiations with the alliance. The likelihood of a re-referendum on Brexit and extraordinary parliamentary elections is also not excluded.

Now at the disposal of the head of government there are only three days to submit to the legislators a backup plan of action.

It is assumed that T. May will try again to push her version of the agreement through the parliament a few days later. During this time, it will probably manage to get a number of concessions from the EU.

As for the pound sterling, it reacted with restraint to the results of the recent vote and today is trading near the mark of $ 1.28.

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According to the ING economists, the further dynamics of the British currency will largely depend on how the current situation develops. There may be several options.

1. The UK and the EU enter into an agreement on new terms. The pound rises in price against the dollar to $ 1.38.

2. New parliamentary elections are announced. The pair GBP / USD is reduced to the level of 1.20.

3. A repeated referendum on Brexit. The pound strengthened against the dollar to $ 1.40.

4. Until March 29, Britain and the EU have not been able to reach a compromise. The pair GBP / USD drops to the level of 1.12.

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Simplified wave analysis of GBP / USD for January 16

Large-scale graphics:

Beginning in April of last year, the downward wave sets the main motion vector for the short-term trend of the pair. In the structure of the wave, it completed the first 2 parts. From the beginning of November, the price began to form the final downstream segment (C).

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Medium scale graphics:

From the support zone of large scale on December 12, the wave structure develops upwards. In the wave of TF H4, it became a correction.

Small-scale graphics:

The bullish segment of January 3 in the larger model forms the final part of the wave (C). The wave structure at the time of analysis is not complete.

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Forecast and recommendations:

In the coming days, it is worth waiting for a price pullback down. Short-term purchases of a pair are possible from settlement support. For longer deals, wait for the entire current recovery to complete.

Resistance zones:

- 1.3050 / 1.3100

Support areas:

- 1.2730 / 1.2680

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

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

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

GBP / USD. January 16th Trading system "Regression Channels". The defeat Theresa May

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: 56.3255

The currency pair GBP / USD on Wednesday, January 16, returned to the region above the moving average line, after yesterday's fall by 200 points on information that the British Parliament did not support Theresa May's Checkers plan. This was highly expected, but the gap in the number of votes is impressive: 432 deputies voted against, only 202 voted for. Thus, it is now clear that Theresa May did not have a chance to win initially since, in the month that passed when the first voting was to take place, one could hardly win over 100 deputies to her side. Now Theresa May has to submit a Plan B for three days, and the Labor Party leader Jeremy Corbyn has already introduced a vote of no confidence in the British Prime Minister. As for the pound sterling, then, as we warned, in the short term, the Brexit failure led to a sharp fall, but in the next few hours, the position of the British currency was restored. The British currency now needs certainty, and a certain amount of it was received yesterday, and in the coming days, it will become clear whether there will be early parliamentary elections and whether Theresa May will resign. Thus, the epic with the release of the United Kingdom from the European Union continues but gets a new turn.

Nearest support levels:

S1 - 1.2817

S2 - 1.2695

S3 - 1.2573

Nearest resistance levels:

R1 - 1.2939

Trading recommendations:

The currency pair GBP / USD resumed its upward movement. Thus, now long positions with the target of 1.2939 are again relevant. Today in Britain, inflation will be published in December, Mark Carney will deliver a speech, and in the evening, a vote will be held on confidence in Theresa May.

Sell positions will become relevant from a technical point of view no earlier than price fixing below the moving average line. The goal, in this case, will be the level of 1.2695, which was already worked out yesterday.

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 16th Trading system "Regression Channels". Brexit failed, euro currency has fallen in price

4-hour timeframe

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Technical details:

The senior linear regression channel: direction - up.

The younger linear regression channel: direction - up.

Moving average (20; smoothed) - down.

CCI: -125.7723

The currency pair EUR / USD on Wednesday, January 16, is below Murray's level of "3/8" - 1.1414 and is trying to recover from yesterday's fall. Unlike the pound sterling, which had been growing steadily before a key event for at least this month, the euro currency was in a downward trend throughout the day. Closer to the night, when it became known about the failure of the Theresa May initiative in the British Parliament, the situation with Euro currency, absolutely logical, has not changed. Taking into account the fact that new early parliamentary elections can now take place in Britain, and Theresa May will resign with a high degree of probability, respectively, new negotiations will have to be held with the European Union, there are few reasons for the euro to grow. As we have said, for Europe Brexit is not as important as for the Kingdom. Therefore, the reaction from traders throughout the negotiation process and the key points of the procedure was not so much. Therefore, the prospects of Eurocurrencies do not look hopeless. In his speech yesterday, Mario Draghi noted that the growth rate of the eurozone economy is lower than expected by the regulator. Thus, the ECB once again showed its unwillingness to tighten monetary policy and recognized the need to further stimulate the economy. And this is the second negative factor for the euro, which can put pressure on the euro during today.

Nearest support levels:

S1 - 1.1353

S2 - 1.1292

S3 - 1.1230

Nearest resistance levels:

R1 - 1.1414

R2 - 1.1475

R3 - 1.1536

Trading recommendations:

The currency pair EUR / USD continues to move down. Therefore, it is still recommended to trade short positions with the first goal of 1.1353. The Heikin Ashi indicator has not yet turned up, therefore there are no reasons to expect an upward correction at the moment.

Long positions can be considered no earlier than fixing the price above the moving with the target of 1.1536. In the current conditions in the next two days, this will require fundamental reasons, which are not yet available.

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

Simplified wave analysis of AUD / JPY pair for the week of January 16

Large-scale graph:

On the graph of the cross-over pair since September of the year, the trend is downward before last one. The price has reached a strong support.

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Medium-scale graph:

The bearish stretch of November 30 completes the trend wave of a larger scale. The potential of oncoming traffic allows us to expect at least a wave of a different scale.

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Small scale graph:

The rising wave of January 3 has a reversal potential. After the formation of an intermediate rollback, a further price increase will follow, with the entire movement moving to a larger scale.

Forecast and recommendations:

After the period of the upcoming price movement of the pair in the side plane, traders should focus on finding signals to enter long positions.

Resistance zones:

- 79.00 / 79.50

Support areas:

- 76.70 / 76.20

Explanations of the figures:

The simplified wave analysis uses waves consisting of 3 parts (A - B - C). For the analysis, three main TFs are used. On every last part, the incomplete wave is analyzed. Zones show calculated areas with the highest probability of reversal. The arrows indicate the wave marking by the method used by the author. The solid background shows the formed structure while the dotted shows the expected movement.

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

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

Analysis of EUR / USD Divergences for January 16. The pair is preparing at least to roll back

4h

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The currency pair EUR / USD closed below the correction level of 38.2% - 1.1446. As a result, on January 16, the fall in quotations can be continued in the direction of the next correction level of 23.6% - 1.1358. Rebounding the pair from the Fibo level of 23.6% will allow traders to expect a reversal in favor of the euro currency and some growth towards the level of 38.2%. The bullish divergence at the MACD indicator is also brewing, its formation will allow us to count on the beginning of the pair's growth.

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, after rebounding from the Fibo level of 100.0% - 1.1553, the fall in quotations continues in the direction of the correctional level of 127.2% - 1.1285. Maturing divergence in the current chart is not observed in any indicator. Rebounding the pair from the Fibo level of 127.2% will make it possible to expect a turn in favor of the EU currency and some growth in the direction of the correction level of 100.0% - 1.1553. Closing below the level of 127.2% will increase the likelihood of further decline.

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

Recommendations to traders:

You can make purchases of the EUR / USD currency pair with a target of 1.1446 and a Stop Loss order below the Fibo level of 23.6% if the pair bounces off the level of 1.1358 or a bullish divergence is formed.

New sales of the EUR / USD currency pair will be possible with the goal of 1.1269 with a Stop Loss order above the Fibo level of 23.6% if the pair consolidates below the level of 1.1358.

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

Analysis of the GBP / USD Divergences for January 16. Pound sterling remained near the peak

4h

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The currency pair GBP / USD on the 4-hour chart completed an impressive fall yesterday, after which it fully recovered all losses and returned to its original positions, to a correction level of 50.0% - 1.2869. Rebounding the quotations of the pair on January 16 from the Fibo level of 50.0% will make it possible to expect a reversal in favor of the US dollar and a fall to the correction level of 38.2% - 1.2765. Closing the pair above the Fibo level of 50.0% will increase the likelihood of continued growth in the direction of the next correction level of 61.8% - 1.2970.

The Fibo grid is built on extremes from September 20, 2018, and January 3, 2019.

1h

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On the hourly chart, the fall in quotations to the correctional level of 61.8% - 1.2672 was replaced by growth to the correction level of 100.0% - 1.2815 and closing above it. Thus, today, growth can be continued in the direction of the next Fibo level of 127.2% - 1.2916. There are no ripening divergences today. Rebounding the pair from the level of 127.2% will work in favor of the American currency and return to the correction level of 100.0%.

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 carried out now with a target of 1.2916 and a Stop Loss order below the level of 100.0%, as the pair completed closing above the level of 1.2815 (hourly chart).

Sales of the GBP / USD currency pair can be carried out with a target of 1.2815 and a Stop Loss order above the level of 127.2% if the pair bounces off of the level of 1.2916 (hourly chart).

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

The world is on the verge of a new crisis

Tuesday turned out to be rich in events that, if only for a short time but revived the "stagnant" foreign exchange market. First, under the influence of news that China, against the background of serious signals about the deceleration of the national economy, will expand incentive measures, markets have revived, and the demand for risky assets supported exchange rates against the US dollar. But then the speech of the head of the ECB cooled the fervor of market players.

The comment of the ECB Head M. Draghi was unexpected for the market. He said that the slowdown in economic growth in the eurozone countries turned out to be more substantial than he had expected, and that probably a softer monetary policy would be in demand for quite some time.

Against the background of this statement, the euro collapsed in the foreign exchange market, as investors' hopes that the end of incentive measures by the regulator last year would smoothly flow into a process of gradual increase in interest rates did not materialize. It seems that these dreams will not happen. And the main reason for this is the beginning of the general process of slowing down the growth of the world economy after a ten-year period of growth since 2009.

In our opinion, the largest world economies have fallen into the trap they created themselves when they were actively engaged in stimulating national economies, trying to protect themselves from larger economic problems, which could in future also develop into political ones. If the Fed over the past period managed, albeit slightly, but still raising interest rates and reducing its balance sheet, thereby making the groundwork for another possible reduction in rates and incentive measures in the future, the ECB approached the start of a new global recession with negative interest rates and complete lack of ability to maneuver in the impending crisis.

Given such prospects, the eurozone may face the "Japanese" effect when a country's economy falls into a "deflationary pit", that is, a vicious circle of low inflation, which does not allow the economy to grow steadily. Japan, after getting into this process in the 90s, managed to solve problems due to the export of capital abroad, which allowed companies to develop and make a profit, primarily due to cheap labor and low costs of doing business. But now the situation is different. There are practically no such opportunities.

Observing the ongoing processes, we believe that against the background of the realities of the impending recession, the demand for commodity assets, stocks of companies and high-yielding currencies will most likely be observed. It looks like the Japanese yen and the US dollar will be again in value. As for the euro and sterling, they may experience another fall in the wake of the risks associated with Brexit.

Forecast of the day:

The currency pair EUR / USD remains under pressure in the wake of the risk of a recession in the eurozone. If the pair does not grow above the level of 1.1415 against the background of the publication of data on consumer inflation in Germany, it can continue to fall to 1.1345.

The currency pair GBP / USD will retain high volatility amid the uncertainty of the consequences of Brexit. From a technical point of view, if it does not overcome the level of 1.2875, it may fall to 1.2700.

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

Forecast for EUR / USD for January 16, 2019

EUR / USD

On Tuesday, the euro was pressured by two factors: the statement by the ECB head Mario Draghi about the weakness of the European economy and, accordingly, the need for more careful attention to accommodative policies, and the decision of the British parliament to reject Theresa May's agreement with the EU on Brexit. The euro lost 55 points, staying on the trend line of the daily price scale channel. Now, yesterday's minimum at 1.1382 will be a signal level to continue the decline with the target of 1.1302, the minimum of October 21.

To resume growth, the price must overcome the range of 1.1443 / 73, formed by the Kruzenshtern lines of the daily and four-hour charts. The goal, in this case, will be the maximum on January 10, 1.1570.

In general, the situation is more bearish, as the Marlin indicator on the daily scale has moved into the negative zone.

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

Fractal analysis of major currency pairs for January 16

Dear colleagues.

For the currency pair Euro / Dollar, we are following the development of the downward structure from January 10. For the currency pair Pound / Dollar, the price has issued a local structure for the top of the January 15 and the development of which is expected after the breakdown of 1.2900. For the currency pair Dollar / Franc, we should continue the development of the upward cycle from January 10 after the breakdown of 0.9897. For the currency pair Dollar / Yen, the price is in the area of the downward structure of January 8 and we expect further downward movement after the breakdown of 107.96 and the level of 108.70 is the key support. For the currency pair Euro / Yen, the upward movement is expected after the breakdown of 125.15 and the level of 123.05 is the key support. For the currency pair Pound / Yen, the upward structure development is expected after the breakdown of 140.50.

Forecast for January 16:

Analytical review of H1-scale currency pairs:

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For the currency pair Euro / Dollar, the key levels on the H1 scale are 1.1496, 1.1428, 1.1404, 1.1376, 1.1358, 1.1321 and 1.1291. Here, we are following the development of the downward cycle of January 10. We expect the downward movement to continue after the price passes the range of 1.1376 - 1.1358. In this case, the target is 1.1321. The potential value for the bottom is considered the level of 1.1291, upon reaching which we expect a rollback to the top.

The consolidated movement is expected in the range of 1.1404 - 1.1428 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 1.1469 and this level is the key support for the downward structure.

The main trend is the downward cycle of January 10.

Trading recommendations:

Buy 1.1406 Take profit: 1.1426

Buy 1.1430 Take profit: 1.1466

Sell: 1.1358 Take profit: 1.1324

Sell: 1.1320 Take profit: 1.1294

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For the currency pair Pound / Dollar, the key levels on the H1 scale are 1.3118, 1.3057, 1.2973, 1.2900, 1.2821, 1.2779, 1.2720 and 1.2661. Here, the price has shaped the local potential for the continuation of the development of the upward trend of January 15. An upward movement is expected after the breakdown of 1.2900. In this case, the target is 1.2973 and price consolidation is near this level. The breakdown of the level of 1.2973 should be accompanied by a pronounced upward movement. Here, the target is 1.3057. The potential value for the top is considered the level of 1.3118, after reaching which we expect a rollback downwards.

The short-term downward movement is possible in the range of 1.2821 - 1.2779 and the breakdown of the last value will lead to a prolonged correction. Here, the target is 1.2720 and this level is the key support for the top. Its breakdown will have to form a downward structure. In this case, the potential target is 1.2661.

The main trend is the local structure for the top of January 15.

Trading recommendations:

Buy: 1.2900 Take profit: 1.2970

Buy: 1.2975 Take profit: 1.3055

Sell: 1.2820 Take profit: 1.2780

Sell: 1.2777 Take profit: 1.2724

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For the currency pair Dollar / Franc, the key levels on the H1 scale are 0.9984, 0.9951, 0.9930, 0.9897, 0.9857, 0.9834 and 0.9796. Here, the price continued to follow the development of the upward cycle from January 10. An upward movement is expected after the breakdown of 0.9897. In this case, the target is 0.9930 and in the range of 0.9930 - 0.9951 is the price consolidation. The potential value for the top is considered the level of 0.9984, upon reaching which we expect a rollback downwards.

The short-term downward movement is possible in the range of 0.9857 - 0.9834 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 0.9796 and this level is the key support for the upward structure.

The main trend is the ascending structure of January 10.

Trading recommendations:

Buy: 0.9897 Take profit: 0.9930

Buy: 0.9952 Take profit: 0.9982

Sell: 0.9855 Take profit: 0.9836

Sell: 0.9832 Take profit: 0.9800

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For the currency pair Dollar / Yen, the key levels on the scale of H1 are 108.69, 108.47, 108.29, 107.96, 107.66 and 107.25. Here, we continue to monitor the descending structure of January 8 on the scale of H1. 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 108.47 - 108.69 and the breakdown of the latter value will have to develop an upward trend. Here, the potential target is 109.08, up to this level, we expect the structure to be expressed for the top.

The main trend is the downward structure of January 8.

Trading recommendations:

Buy: 108.49 Take profit: 108.69

Buy: 108.72 Take profit: 109.06

Sell: 107.96 Take profit: 107.68

Sell: 107.64 Take profit: 107.27

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For the currency pair Canadian dollar / Dollar, 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. At the moment, the price is in the correction 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 an in-depth 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, the stage of correction.

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 currency pair Australian dollar / Dollar, the key levels on the H1 scale are 0.7391, 0.7313, 0.7270, 0.7238, 0.7180, 0.7152 and 0.7113. Here, we are following the ascending structure of January 3. The short-term upward movement is possible in the range of 0.7238 - 0.7270 and the breakdown of the latter value will lead to the movement to the level of 0.7313, near which consolidation is expected. The potential value for the top is considered to be the level of 0.7391 and we expect a movement to this level after the breakdown of 0.7315.

The short-term downward movement is possible in the range of 0.7180 - 0.7152 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 0.7113 and this level is the key support for the upward structure.

The main trend is the ascending structure of January 3.

Trading recommendations:

Buy: 0.7238 Take profit: 0.7270

Buy: 0.7273 Take profit: 0.7312

Sell: 0.7180 Take profit: 0.7155

Sell: 0.7150 Take profit: 0.7120

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For the currency pair Euro / Yen, the key levels on the H1 scale are 127.22, 126.70, 125.79, 125.15, 123.74 and 123.05. Here, we continue to follow the rising structure of January 3. At the moment, the price is in a deep correction. 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 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 123.74 - 123.05 and the breakdown of the latter value will have to form a downward structure. In this case, the potential target is 122.03, up to this level, we expect clearance of expressed initial conditions for the downward cycle.

The main trend is the ascending structure of January 3, the stage of deep correction.

Trading recommendations:

Buy: 125.15 Take profit: 125.76

Buy: 125.82 Take profit: 126.70

Sell: 123.70 Take profit: 123.10

Sell: 123.05 Take profit: 122.10

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For the currency pair Pound / Yen, the key levels on the H1 scale are 141.90, 140.50, 139.49, 137.49, 136.81 and 135.70. Here, we continue to follow 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

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

Technical analysis of EUR/USD for January 16, 2019

Overview:

The EUR/USD pair opened below the weekly pivot point (1.1440). It continued to move downwards from the level of 1.1440 to the bottom around 1.1378. Today, the first resistance level is seen at 1.1471 followed by 1.1516, while daily support 1 is seen at 1.1371.

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Furthermore, the moving average (100) starts signaling a downward trend; therefore, the market is indicating a bearish opportunity below 1.1440. So it will be good to sell at 1.1440 with the first target of 1.1371. It will also call for a downtrend in order to continue towards 1.1308. The strong daily support is seen at the 1.1371 level, which represents the double bottom on the H1 chart. According to the previous events, we expect the EUR/USD pair to trade between 1.1440 and 1.1371 in coming hours. The price area of 1.1471 remains a significant resistance zone. Thus, the trend is still bearish as long as the level of 1.1471 is not broken. On the contrary, in case a reversal takes place and the EUR/USD pair breaks through the resistance level of 1.1471, then a stop loss should be placed at 1.1503.

Comment:

  • The daily pivot is seen at the level of 1.1440.
  • Major resistance is see at the level of 1.1471.
  • The market is still in a downtrend. We still prefer the bearish scenario.
The material has been provided by InstaForex Company - www.instaforex.com

Wave analysis of GBP / USD pair for January 16. Ordered brexit

Wave counting analysis:

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On January 15, the GBP/USD pair lost about 10 bp, despite the fact that during there were ups and downs of more than 200 bp the day. The wave pattern due to yesterday's strong up and down jerking is broken and now looks not entirely unequivocal. News background can not be said as the reason that supported the pound or dollar. Brexit ordered Theresa May's plan will not be accurate, but in the coming days, I'll keep track of any information from the UK about what will happen next. Parliamentary elections? Theresa May's leaving? New referendum? Tonight a new vote should be already held in Parliament. This time on the issue of mistrust to Theresa May, which could end with her resignation.

Shopping goals:

1.2997 - 76.4% Fibonacci

Sales targets:

1.2716 - 38.2% Fibonacci

1.2609 - 23.6% Fibonacci

General conclusions and trading recommendations:

The GBP/USD pair continues to build the upward trend. The wave picture is now confused, and given the importance of current events in the UK and the events that are yet to come to fruition, there are grounds for suggesting new tool to jerk in different directions that are difficult to predict. Thus, I recommend that in the coming days you should watch the situation more.

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