Fundamental Analysis of USD/JPY for January 21, 2019

USD/JPY has been gradually climbing higher amid steady bullish momentum since the price bounced off the 104.50 area with a strong bearish rejection. Despite the recent mixed economic data from the US and the government shutdown, USD managed to sustain the momentum over JPY which indicates USD strength which might lead to further bullish pressure in the future.

FED has been raising its interest rates since 2015. The US central bank implemented a record cycle of monetary tightening in 2018 by raising rates 4 times in a year. Most of the FED officials agree about a pause in the cycle of rate hikes as too rapid pace might cause imbalance in the economy. The US government shutdown has been going on for 28 days in a row that could affect the domestic economy. Economic growth decreased to 0.3% as per Anderson, just only due to the government shutdown. Citing FED officials, further negative impacts are to follow in the short term. The US economy is currently growing at 2.17% in the first quarter of 2019 which is marginally higher than FED's forecast of 2.11%. This week, the economic calendar lacks macroeconomicdata from the US. Today US trading floors are closed for the national holiday, Martin Luther Kings Day.

On the JPY side, Japan is currently having a shaky outlook this year with the risk of sliding into recession due to the US-China trade war. Though Japan is working hard to avoid the recession this year growing to 0.8% or more, it is still quite indecisive. Japan has suffered an indirect impact of the US-China trade war because it produces equipment for China such as semiconductors and mobile phones. Moreover, the decline in Japan's exports is bearish for JPY. Earlier this year, JPY has been quite stronger in comparison to USD. Now JPY is expected to struggle further against USD in the coming days.

Meanwhile, USD is going to hold the upper hand over JPY. Impulsive pressure with positive economic reports on the USD side is expected before it starts to dominate with proper sustainability.

Now let us look at the technical view. The price is currently holding in the range of 108.50 to 110.50 from where a daily close above 110.50 is expected to lead to further bullish pressure towards 114.00-115.00 resistance area in the future. Though the price is still quite bullish, a better confirmation of a break above 110.50 is required. As the price remains above 108.50 area with a daily close, the bullish pressure is expected to continue.

SUPPORT: 108.50, 109.00

RESISTANCE: 110.50, 112.00, 114.00

BIAS: BEARISH

MOMENTUM: VOLATILE

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GBP / USD: plan for the American session on January 21. Pound remains in the channel and waits for news from British Prime

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

After a slight downward correction to the support area of 1.2822, buyers returned to the market, and their main task in the second half of the day will be to return and consolidate above the resistance of 1.2890, which will lead to a larger upward trend in the area of 1.2944 and 1.3006 maximum, where I recommend taking profits. Any news from British Prime Minister Theresa May on Brexit could lead to a surge in pound volatility. In the scenario of its further decline, it is best to look at long positions for a rebound from the low of 1.2752.

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

An unsuccessful consolidation above the resistance of 1.2890 will be the first signal to open short positions in the pound but the main task will be a breakthrough to the support level of 1.2822, which will lead to the removal of a number of stop orders of buyers and a larger downward correction to 1.2752 and 1.2679, where I recommend to take profits. In the case of an uptrend on the news on Brexit, it is best to consider short positions from the highs around 1.2944 and 1.3006.

Indicator signals:

Moving averages

Trade returned to the area of 30-day 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 21

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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

Euro may strengthen against the dollar to $ 1.22 - CIBC

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Despite weak eurozone statistics, Canadian Imperial Bank of Commerce (CIBC) analysts remain bullish on the euro.

"Eurozone statistics for the third quarter turned out to be the weakest over the past four years, which apparently explains the uncertain behavior of the single European currency. It is assumed that external trade pressure, as well as political uncertainty in Italy and France, will continue, causing a further slowdown in the pace of recovery in eurozone GDP," representatives of the financial institution said.

"Meanwhile, the situation in the European labor market remains favorable, which ensures a high level of consumer spending, and hence GDP growth. In the third quarter, wages increased by a record value in almost 10 years. At the same time, the unemployment rate fell below 8% for the first time in the last decade," they added.

"Despite the fact that the balance of risks has probably shifted to the negative side, the ECB continues to consider the economic outlook for the eurozone to be rather positive, which will further allow the regulator to carry out, albeit careful, but still raising interest rates. It is possible that this will happen in the second half of the year against the backdrop of consistently high inflation expectations," the experts noted.

According to the CIBC forecast, by the end of this year, the euro against the dollar may rise to $ 1.22.

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

Weekly review of the foreign exchange market from 01/21/2019

Apparently, in Foggy Albion, everything is very bad with entertainment, and this function was forced to assume the entire color of society in the face of the political elite of the United Kingdom. On Tuesday, Theresa May did bring to the parliament a "divorce" agreement with the European Union, which she vowed last year to finalize and achieve the economic part. But none of this was done and realizing that it smells like kerosene, she was able to receive from the head of the European Commission a promise to coordinate with all European countries the very notorious points of trade. But the British parliamentarians, as the true sons of the creators of the largest colonial empire in the history of mankind, are well aware of the price of promises to do something after the signing of the treaty. Their grandfathers and great-grandfathers repeatedly used this method to plunder entire continents, and they clearly did not want to be on the site of the victims, so the result of the vote was known in advance. And it is quite logical that the very next day, a number of parliamentarians demanded a vote on the issue of trust in the government because the Cabinet of Ministers is not able to resolve the issue with Brexit. However, this time, the parliament supported Theresa May, and only for the reason that quite a bit of time is left before the final date of secession from the European Union, and if early elections are held, the UK will go without fail according to a tough option, implying a complete lack of arrangements with Europe. It is precisely this that parliamentarians fear, and it is not just that they demand that the Prime Minister reach an agreement on this particular part. And by the end of the week, words began to sound about the possibility of postponing the withdrawal of the United Kingdom from the European Union to a later date. Some agreed right before the referendum. And naturally, the pound was thrown from side to side because of this, as if he were riding a roller coaster.

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It's funny, but within a couple of hours after the vote in the British parliament on an agreement with Europe, Jean-Claude Juncker expressed his disappointment with its results, adding that the proposed option is the best that Europe can offer the UK. And this is despite the fact that literally the day before that he promised to intensify the coordination with the heads of the countries of the European Union namely the economic part of the agreement. Which is not in it to this day. It turns out that Europe is not going to include in the text of the agreement issues of trade and customs duties. In other words, that there is an agreement, that it does not exist, for the British economy there is no difference. Moreover, the negotiations have been going on for almost two years, but during this time there has been no progress on the most important issue as if it had not been discussed. It turns out that the Europeans are just pulling time, and since they have done it so well in recent years, the UK can knock out any delays for itself, but if she does not want to remember what duties and trade quotas are in Europe, then we need to cancel the referendum results. True, those politicians who will do this will sign the death sentence of their political career.

So the situation is completely unpredictable, and no one can say what will happen tomorrow. But it was precisely this that saved the pound from decline, unlike the single European currency, which gradually went down both under the pressure of inflation, which dropped from 1.9% to 1.6%, and thanks to the content of the text of the minutes of the European Central Bank meeting. The fact is that in words the representatives of the ECB promise that they will begin to consider the possibility of raising the refinancing rate by the end of spring, but the text of the protocol states that only if macroeconomic dynamics permits. And judging by inflation, this very dynamic will not give any resolution.

Also worth noting is the British statistics, which, of course, no one paid attention. And it is very eloquent, since inflation decreased from 2.3% to 2.1%, and the growth rate of retail sales slowed down from 3.4% to 3.0%.

It is clear that the theater of the absurd called "Disputes around Brexit" attracts all the attention to itself, but even without this interesting enough. In particular, the lockdown in the United States of America, which has already broken all records in its duration. However, apparently, this is of no interest to anyone, since government structures continue to work, and to the delight of taxpayers, without paying salaries to government employees. Of course, most congressmen are not particularly fond of Donald Trump, but they are well aware that this cannot last for long, and sooner or later this performance will begin to have a negative effect on the economy. However, this week there are only preliminary data on business activity indices, which should be reduced. And all at once. And this will necessarily be attributed to the shutdown, and not without reason.

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In Europe, preliminary data on business activity indices will also be published, and forecasts for them are somewhat better than in the United States. And if the production index should remain unchanged, then in the services sector they expect good growth. But the main event of the week will be the meeting of the Board of the European Central Bank, and in the accompanying comment, everyone is waiting for instructions on the timing of the consideration of the possibility of raising the refinancing rate. Given the recent decline in inflation, you should not expect that the office of Mario Draghi will confidently announce the consideration of this issue in the spring. Most likely, there will be a streamlined formulation of risks and macroeconomic dynamics. In theory, this should have a negative impact on the single European currency, but investors already assume such a development of events, so no one will be particularly disappointed. Thus, given the negative data on business indices in the US and positive in Europe, it is worth waiting for the growth of the single European currency to 1.1450.

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British politicians do not intend to stop at what has already been achieved and will continue to destroy the tender childish psyche of both investors and ordinary citizens. It is obvious that the topic with a repeated referendum will now be pushed. In addition, data on the labor market will be published, but they will not introduce any diversity since their dull stability is predicted. But the decline in the number of approved mortgage loans may well make many nervous because the real estate market is one of the main factors determining the investment attractiveness of the British economy. So the pound has every chance to meet the end of the working week at the level of 1.2775.

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Fundamental Analysis of EUR/USD for January 21, 2019

EUR/USD has been quite impulsive with the bearish momentum since a bullish false breakout which happened above 1.1500 area. EUR was able to gain certain momentum starting the week today but could not sustain it further as the bears are currently holding the upper hand.

EUR has been weighed down by the recently published economic reports. Moreover, the BREXIT issue has not been settled yet. Ahead of European Central Bank (ECB) Meeting on Thursday, today German PPI report was published with a decrease to -0.4% from the previous value of 0.1% which was expected to be at -0.1%. Moreover, German Buba Monthly report is also going to be published today which is expected to have neutral outcome with a slight dovish bias amid the ongoing troubles in Germany and France. The ECB Press Conference with Mario Draghi is going to be held shortly after the monetary policy statement with the main refinancing rate unchanged at 0.00%. After ending the asset purchase phase in December, markets expected the ECB to raise the key policy rate in the third quarter of 2019. However, in light of downbeat data monetary tightening it may be delayed until the 4th quarter of 2019 or later.

Additionally, the Bank of Italy cut its growth forecast this year from 1.0% to 0.6% and from 1.1% to 0.9%. According to the eurozone's Economic Bulletin, Italy's economy and the overall eurozone's economy is losing momentum that is certainly bearish for EUR in the medium term. Italy's economy shrank at the end of 2018 which nudged the country into recession, but the government is making efforts to spur the domestic economy.

On the other hand, due to observance of Martin King Luther Day in the US, the economic calendar lacks data from the US. Thus, USD is trading steadily versus EUR. This week, USD gains are likely to be capped as upcoming economic reports are expected to reveal weak figures. Tomorrow Existing Homes Sales report is going to be published which is expected to decrease to 5.27M from the previous figure of 5.32M. Despite the government shutdown for over 28 days in a row, certain USD gains indicate strength of the US currency which is set to dominate EUR further this year, if everything sits in its places soon.

Meanwhile, this week is expected to be quite corrective and volatile as investors are still indecisive about the ECB policy update. On the other hand, the lacl of macroeconomic reports or events from the US could inject impulsiveness in the market, thus causing uncertainty. Though EUR is weaker than USD currently, any positive outcome from the ECB press conference can lead to an impulsive counter-move.

Now let us look at the technical view. The price is hovering below 1.1450-1.1500 resistance area as well as being held by the dynamic level of 20 EMA as resistance on the daily close. The price managed to push higher today but with worse economic results, the bears are back in the market and expected to lead the price much lower 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: 1.1200-50, 1.1300

RESISTANCE: 1.1450, 1.1500

BIAS: BEARISH

MOMENTUM: IMPULSIVE and VOLATILE

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

EUR / USD: Plan for the American session on January 21. Major players did not support the euro because of the next weak statistics

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

Euro buyers failed to return to the resistance level of 1.1388 after the release of weak fundamental statistics on producer prices in Germany, which have fallen sharply. The main task for the second half of the day remains to be the breakdown and consolidation above the resistance level of 1.1388, which will lead to a larger upward correction to the area of maximum 1.1423, where I recommend taking profits. In the event of a further decline with the trend in the euro, it is best to look at long positions with a test of support for 1.1348 or a rebound from this year's low around 1.1312.

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

Sellers showed up after the formation of a false breakdown at the resistance level of 1.1388, to which I paid attention in my morning forecast. Currently, the next task is to break through the support of 1.1348, which will lead to a larger sale of EUR/USD pair with a yield of at least 1.1312, where I recommend taking profits. When the return scenario is above the resistance of 1.1388 against the background of low trading volume due to the holiday in the US, I recommend to consider short positions in euro to rebound from the upper border of the side channel last week in the area of 1.1423.

Indicator signals:

Moving averages

Trade is conducted below the 30- and 50-medium moving, which indicates the nature of the market.

Bollinger bands

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

More in the video forecast for January 21

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Description of indicators

MA (moving average) 50 days - yellow

MA (moving average) 30 days - green

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

Bollinger Bands 20

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

GBP / USD: uncertainty around Brexit puts pressure on the pound

Today, British Prime Minister Theresa May is due to submit to the House of Commons an updated plan for the country's withdrawal from the European Union, the vote on which is scheduled for January 29.

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Details of the so-called "plan B" by Brexit were not disclosed.

It is assumed that the head of government will have to significantly change his position on the "divorce" agreement to win over, in particular, the Labor Party. Apparently, the latter are preparing to introduce an amendment that would force Theresa May to request Brussels to extend the membership of the United Kingdom in the alliance.

Also, Brexit supporters, who seek to exclude from the deal with the EU provision on the "insurance plan" for Ireland, in the Conservative Party can submit the proposal. In addition, parliamentarians can propose an amendment requiring a new referendum on Brexit.

Meanwhile, the Prime Minister, not expecting to find a common language with representatives of the opposition and various parties, prefers to try his luck on the continent and achieve a revision of the provisions on the Irish backstop, Bloomberg reports.

It is not excluded that Theresa May is not going to be original at all, presumably retaining a negative attitude regarding the question of postponing the country's withdrawal from the EU in accordance with Article 50 of the Lisbon Treaty, which probably means refusing the deal.

Thus, there are several options for further developments:

1. Conduct a re-referendum on Brexit after clarifying the terms of the transaction.

2. Preservation of the UK stay in the European Economic Area.

3. The United Kingdom leaves the EU without an agreement.

As for the British currency, its recent growth and subsequent attempts of the GBP/USD pair to break up are most likely related to expectations regarding the extension of the Brexit process or the implementation of the "soft" option. However, it should be considered that any of the above scenarios implies the absence of any clear plan on trade and economic relations between Brussels and London, which will adversely affect the country's economy and the sterling pound rate. Based on this, we can expect a decline in the GBP/USD pair in the medium term.

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

Simplified wave analysis of USD / JPY pair for the week of January 21

Large-scale graph:

On a large scale graph of the yen, a rising wave model is being formed. Starting in March last year, the first 2 parts (AB) were formed so far.

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Medium-scale graph:

Starting December 13, the impulse bearish wave completes the larger downward construction. The structure looks complete.

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Small scale graph:

Since January 3, there is a bullish movement on the chart, which has a strong reversal potential. It is at the level of M30 but in the near future, the scale of the movement will move to a larger TF.

Forecast and recommendations:

The current upward price movement of the pair will only increase over time. Kickbacks are expected in the form of a short-term flat. It is recommended to look for long entry signals.

Resistance zones:

- 111.00 / 111.50

Support areas:

- 109.00 / 108.50

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

Simplified wave analysis of EUR / USD pair for the week of January 21

Large-scale graph:

The downtrend over the past year has driven the euro major prices to decline. The wave is still not complete. In its structure, the first parts (A-B) are formed.

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Medium-scale graph:

The ascending section of the chart from November 12 corrects the last trend segment, which started in September. To date, the wave structure does not show completeness.

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Small-scale graph:

The bearish wave of January 10 in the model of the older TF was the final part of the incorrect correction (B).

Forecast and recommendations:

In the coming weeks, the continuation of the last increase in the course of the last weeks is expected. The probability of a breakthrough to the upper zone of the resistance remains relevant. Short-term instrument purchases are possible within the inter-session.

Resistance zones:

- 1.1570 / 1.1620

- 1.1720 / 1.1770

Support areas:

- 1.1350 / 1.1300

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

Bitcoin analysis for January 21, 2019

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Bitcoin is expected to move lower towards $3,350 as long as it holds below the bearish trendline. The potential breakout of support at $3,480 will confirm the next move lower towards $3,350 and $3,100. I expect the price to move to the Pitchfork median line. Only a break above the resistance at $3,670 will negate the bearish view.

Trading recommendation: We will sell Bitcoin at the breakout of support at $3,480 with take profit orders at $3,350 and $3,100. If position is triggered, protective stop will be placed at $3,670.

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

Pound chaos will not scare

The British pound does not get tired of confusing those who are watching him. If recently it was thought that the polar results in the form of a soft or erratic Brexit could lead the pair GBP / USD to 1.45 or 1.15, then in 2019, the increased likelihood of the second scenario, to the surprise of investors, triggered a five-week rally of the analyzed pair. Of course, the US dollar was weakening before our eyes, but the fact that the value of sterling options with maturity dates is falling by the end of March indicates that there is no particular concern about Britain's exit from the EU.

In my opinion, the successes of the pound are due to the increased chances of a second referendum or the extension of the term of Article 50 of the European Union Code governing the withdrawal of any country from its structure. Previously, the date of the official divorce of Albion with the EU was considered March 29, but in fact, the term, at the request of London, can be changed. So, Britain will gain time to find a compromise with Brussels or to hold a second referendum and save its place in the European Union. Messy Brexit is not in fashion now, although it's premature to talk about improving the political landscape. If Theresa May's Plan B turns out to be very similar to Plan A and cannot pass the Parliament, then the Laborites will have the opportunity for a second vote of no confidence. The defeat of the Prime Minister will increase the risks of early elections, increase the volatility of sterling and put pressure on the bull position on GBP / USD.

The policy continues to hang like pounds on the legs of the fans of the pound, because, return to the economy and to the markets of Albion, certainty, underestimating sterling from a fundamental point of view would play into the hands of buyers. The slowdown of British inflation in a strong labor market and the steady growth of average wages leads to an increase in real incomes of the population and creates prerequisites for the expansion of consumer activity and GDP.

The dynamics of average wages and inflation in Britain

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At the same time, the reduction of political risks will contribute to an increase in business activity and capital investments, which will have a positive effect on the economy in the future. Simply put, the pound has a very serious hidden potential, and Goldman Sachs does not in vain call him the current year's favorite among G10 currencies. According to the bank, the pair GBP / USD can rise to 1.36 within 12 months. Blomberg experts believe that the sterling will be among the top three performers after the Norwegian and Swedish crowns.

Obviously, the weakness of the US dollar will not do. While the US currency continues to support strong indicators, including industrial production, the USD index feels confident. However, disabling the government, traditionally bad weather for this time of the year, and fading fiscal stimulus effects will contribute to an increase in GBP / USD.

Technically, the "bulls" in the analyzed pair do not lose hope for the implementation of the target by 88.6% in the "Shark" pattern. A prerequisite for the continuation of the rally is to update the January maximum.

GBP / USD, the daily graph

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

Intraday technical levels and trading recommendations for GBP/USD for January 21, 2019

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On December 12, the previously-dominating bearish momentum came to an end when the GBP/USD pair visited the price levels of 1.2500 where the backside of the broken daily uptrend was located.

Since then, the current bullish swing has been taking place. Recent bullish spike reached the price level of 1.2999 where significant bearish rejection was demonstrated (Bearish Engulfing candlestick around the down trend line).

This probably pauses the bullish scenario for a while, allowing sometime for bearish correction towards 1.2800 where confluence of demand levels as well as the H4 up-trend line come to meet the pair.

For the bullish scenario to remain valid, bullish persistence above the price level of 1.2800 should be maintained on a daily basis. Bullish breakout above 1.3000 will be needed to enhance further advancement towards 1.3130-1.3180.

Otherwise, any decline below 1.2800 invalidates the bullish scenario bringing the GBP/USD pair again into sideway consolidations that may extend down towards 1.2710 (Next demand level to meet the pair).

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

USD/CHF analysis for January 21, 2019

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USD/CHF is expected to move higher towards 1.0050 as long as it holds above the upward trendline. Ideally support at 0.9930 will be able to protect the downside for a break resistance at 0.9984 that confirms the next push higher towards 1.0070 and 1.0150. Only a break below support at 0.9930 will force a recount of the rally from 0.9975.

Trading recommendation: We are long USD/CHF from 0.9975 with take profits at 1.0007 at the 1.0050. Protective stop is placed at 0.9940.

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

What threatens the global economy with a slowdown in China?

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The Chinese economy in the fourth quarter did not withstand the pressure caused by a decline in domestic demand and a sharp increase in US tariffs, which led to a slowdown in growth in 2018 to its lowest level in three decades. Beijing will be forced to deploy additional incentives to prevent a more severe slowdown.

The growing signs of weakness in China, which in recent years has generated almost a third of global growth, are worrying about risks to the global economy and already affect the profits of many companies, ranging from Apple to large automakers. This year, the authorities declared greater support in order to reduce the risk of massive job losses, but excluded "aggressive incentives", thanks to which Beijing was able to restore growth in the past, but caused a lot of debts. Now the government has the means to support the economy. They can increase infrastructure spending and reduce the statutory reserves of banks. Therefore, there is no point in worrying about financing, the problem is consumption. As tensions between the United States and China increase, consumer sentiment suffers. Until recently, steady wage growth supported consumption, but now there is concern about the future.

The National Bureau of Statistics reported that in the fourth quarter, GDP grew at the slowest pace after the global financial crisis, dropping to 6.4 percent year-on-year from 6.5 percent in the third quarter. This led to a decrease in annual growth to 6.6 percent, the slowest since 1990. However, some observers, including those from China, believe that the actual growth was weaker than the official data show. It is believed that even if China and the United States agree on a deal, it will not be a panacea for China and its exporters.

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We bet on the dollar, despite the highs, the appetite for risk is growing

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The dollar continues to hold close to a two-week high against a basket of major currencies, investors' appetite for risk remains, despite data on a slowdown in China's economic growth in 2018 to a minimum of almost three decades.

Hopes for a thaw in the trade conflict between the US and China, the Fed's cautious tone and the likelihood that Britain may avoid the Brexit problem scenario, are boosting investor risk appetite, which fell in December immediately after a collapse in global stock markets. The dollar is still on the road to recovery. In early January, the currency was stuck in a downtrend, but now it is recovering its position against the yen, euro, pound, and commodity currencies.

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Potential risk factors for the "American" are negative data on corporate income in the United States and the failure of trade negotiations with the PRC. However, given that trade friction has already put serious pressure on the Chinese economy, there is a high probability that Beijing will make concessions, which means the risk of conflict escalation is reduced.

It is worth noting that, despite the growth of the dollar against the yen by more than 1 percent last week, it began the beginning of the week with a decrease. Even the returning risk appetite did not become a serious problem for the yen, which is becoming more expensive and, according to some experts, it plans to end this year at around 100 yen per dollar. Recall in the US financial markets will be closed on Monday in honor of Martin Luther King Day.

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China's economy shows the worst result in 28 years

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In the fourth quarter of 2018, China's economic growth, as expected, slowed to 6.4% amid falling domestic demand, as well as economic pressure from the United States.

China's GDP growth in 2018 was 6.6%, which is the worst figure since 1990.

Apparently, Beijing will be forced to introduce new incentive measures in order to avoid a more dramatic slowdown in the economy. The authorities have already announced measures that should reduce the risk of large-scale job losses, while noting that they will refrain from over-stimulation in order to avoid a strong increase in public debt.

China's economy accounts for about a third of global growth, so published data are worrying investors, as they can put pressure on the profits of large companies, from Apple to automakers.

In the near future, most analysts predict a further slowdown in the growth of China's GDP to 6.3%, since stimulus measures will not immediately begin to yield results, and the factors of pressure on the economy are still strong.

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

Multidirectional dynamics of European markets confuses investors

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At the moment, European stock markets are influenced by a huge number of multidirectional and contradictory signals. This confuses investors and reduces risk appetite, forcing market participants to lie low and watch the events unfold.

European markets are between two fires: at the epicenter of increasing tension around Brexit and uncertainty about the trade conflict between the United States and China. As for the UK exit from the EU, this question causes investors' dismay. In relations between China and the United States, the situation is beginning to clear up, and in the future a positive outcome is possible, experts say. For European investors, it is important that the increased import duties on Chinese goods can be abolished. This gives a positive signal for European markets, analysts emphasize.

Another important benchmark for European trading platforms is oil prices, which change unpredictably and in different directions. In the medium term, the decision of OPEC + to reduce production volumes was a positive factor for European markets. Due to this, the fears of market participants regarding the possible oversupply of black gold are significantly reduced.

The attention of participants in European stock markets is directed to the upcoming economic forum in Davos, which starts on Tuesday, January 22, and ends on Friday, January 25. Note that the forum will not be attended by US President Donald Trump and the leader of France Emmanuel Macron. The event will also not be the Russian President Vladimir Putin.

Despite the absence of many prominent politicians on the forum, a number of important issues are scheduled to be considered. One of the main topics for discussion will be oil prices and the general state of the world market.

Experts believe that the problem of global trade, in particular, the US-Chinese trade conflict, is another important topic of the forum. According to experts, the confrontation between these two countries significantly affects the entire global economy. The key theme of the event remains "Globalization 4.0: shaping the global architecture in the era of the fourth industrial revolution". Analysts remind that at the moment, the policy of protectionism and a departure from globalization has been taken, although quite recently leading politicians have been active supporters of global universalism.

An important topic of discussion at the forum in Davos will be the situation in the financial markets. At the end of last year, they were shocked by the collapse, partly analogous to the 2008 crisis. It is expected that an exit strategy will be developed taking into account past mistakes. However, experts are not sure that the forum participants will be able to fully assess all the risks of the world economy and draw the right conclusions, although they are counting on improving the situation.

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

Record Shutdown in the US and Theresa May's "Plan B". What awaits USD and GBP?

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The suspension of the US government helped to strengthen the dollar and stock markets, but in fact, this is a negative factor for US assets, and this is worth remembering. Shutdown dragged on, he never was so long. The fourth week is coming, and it can cost the country more than 0.5% of economic growth. Civil servants do not receive a salary and are forced to reduce spending and investment.

This situation will not last forever, and anxiety is brewing in the administration of the US president. Tens of thousands of employees return to work and hope to pay. The White House is behaving obstinately. So, Donald Trump did not allow the Speaker of the House of Representatives Nancy Pelosi to use a military plane to visit the troops in Afghanistan after she demanded to postpone the President's annual address "On the situation in the country". How much more time Trump will keep the economy and the country in a state of uncertainty, trying to force Democrats to allocate money for the construction of the border wall is not clear.

The US currency will rise in the case of resumption of government work in the near future. If this does not happen, the dynamics of the USD / JPY pair will depend on the appetite for risky assets. Other currencies at this time will depend on their economic data. This week is expected to meet the Bank of Japan monetary policy. It is unlikely that something will change in the direction of the course, but the regulator may worsen inflation and growth forecasts for this year.

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Today, Theresa May, the British Prime Minister, who won a vote of confidence earlier, should submit a contingency plan to parliament. The pound is extremely depressed and has been trading since Friday in negative territory against the dollar. It is worth noting that the sterling's response to uncertainty around Brexit was unexpected. Instead of falling, the rate rose to the highest level in 2 months, 1.30. This is due to the fact that a few days before the Brexit vote, the market already took into account the prospects for defeat. Strengthening the pound suggests that traders are counting on the extension of Article 50 and the reduction of the possibility of a "tough" exit of Britain from the EU.

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As for the "Plan B", for May there is no other way out than to ask European officials for more time. Apparently, article 50 will be extended. A vote will then take place at which EU representatives will approve the request. Brexit's European Parliament Coordinator, Guy Verhofstadt, suggested that May could be the deadline. Officials fear the possible impact of the Brexit crisis on European parliamentary elections.

In addition, it will be necessary to choose which course to take in the coming months. The "Norwegian model", a permanent customs union or a new referendum. Any decision should go to the benefit of the British pound, but May made it clear that for now, you shouldn't write off the hard version of Brexit.

Today, the prime minister will submit to the parliament an updated draft of the transaction, the discussion, and vote on which will be held in the House of Commons on January 29.

Variants of the "Plan B" scenario:

  • extension of article 50 and repeated referendum
  • the extension of Article 50 and the gradual transition to the transaction on the "Norwegian model" or in the permanent customs union
  • "Hard" Brexit
The material has been provided by InstaForex Company - www.instaforex.com

Analysis of Gold for January 21, 2019

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Recently, the EUR/USD pair has been trading downwards. As I expected, the price tested the level of $1,278.00 (first target met). Anyway, according to the H1 time frame, I have found that sellers are in control and that key support will be at the price of $1,275.90. Watch for a breakout of the key support to confirm further downward continuation.

Trading advice: We are still holding short positions from $1,282.00. We will add new short position if the Gold breaks through the level of $1,275 with the profit target at $1,266.20.

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

EUR / USD: Euro buyers have no reason to return to the market. Inflation in Canada has increased

The US dollar slightly strengthened its position against the European currency on Friday afternoon, which led to the exit from the narrow side channel, which we observed for almost the entire week.

According to the report, industrial production in the United States in December of this year increased mainly due to an increase in production in the processing industry.

According to the Federal Reserve, industrial production in the United States grew by 0.3% compared with the previous month, while economists had expected growth in December to be 0.2%. Compared with the same period last year, industrial production in December increased by 4%.

As I noted above, excellent manufacturing data in the manufacturing industry led to an increase in overall performance. Thus, manufacturing production grew by 1.1% in December compared with November. Production in the mining sector increased by 1.5%, despite the volatility of energy prices, while production in the utility sector decreased by 6.3% compared with November.

Weak data on the evaluation of the American economic outlook by American consumers did not allow the US dollar to continue its growth against risky assets.

According to the University of Michigan report, the preliminary consumer sentiment index in January 2019 fell to the level of 90.7 points against 98.3 points in December. The data turned out to be worse than forecasts of economists, who expected the index to be 96.4 points. A weak report indicates a high probability for consumers to reduce their expenses, which will affect the prospects for economic growth in the 1st quarter of this year.

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The speech of the President of the Federal Reserve Bank of New York did not affect the US dollar.

Williams said that the focus on economic data is now more important for the Fed than ever, and a further increase in interest rates will be justified only if the state of the economy is good. In his opinion, now it is necessary to demonstrate prudence, patience and the ability to make good conclusions. Williams also believes that the Fed can at any time change its plan to reduce the balance if the situation requires it, and if the economy's prospects deteriorate, the Fed will do everything possible to resume growth.

It is expected that US GDP growth will slow to 2% -2.25% this year, while the inflation target will remain around 2%.

As for the technical picture of the EUR / USD currency pair, the pressure on risky assets may continue at the beginning of this week, but the bears will need to keep the pair below the resistance level of 1.1390. An unsuccessful attempt to return to this range could form the next wave of euro sales with the upgrade of larger lows around 1.1340 and 1.1310. If the bulls are quickly rehabilitated after Friday's fall, the level of 1.1420 will act as a large resistance, above which it was not possible to break through last week.

The Canadian dollar ignored the good inflation data and continued to trade sideways in tandem with the US dollar.

According to the report, inflation in Canada in December 2018 accelerated due to the growth of food, which offset the decline in gasoline prices. According to the National Bureau of Statistics of Canada, the total consumer price index in Canada in December 2018 increased by 2% after rising 1.7% in November. Economists had expected the index to grow by 1.7%.

As for the technical picture of USD / CAD, much will depend on how long the bears will keep the pair below the resistance level of 1.3290-1.3300. If in the near future buyers will not be able to get above this range, most likely, the pressure on the trading instrument will resume, which will lead to a new downward wave with a breakdown of 1.3180 minimum and updating levels of 1.3090 and 1.3015.

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

Technical analysis of NZD/USD for January 21, 2019

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Overview:

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

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

Intraday technical levels and trading recommendations for EUR/USD for January 21, 2019

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Since June 2018, the EUR/USD pair has been moving sideways with slight bearish tendency. Narrow sideway consolidations have been maintained within the depicted Flag Channel (In red).

On November 13, the EUR/USD demonstrated recent bullish recovery around 1.1220-1.1250 where the current bullish movement above the depicted short-term uptrend (In blue) was initiated.

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.

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 consolidations below the key-level of 1.1400 encourages more bearish decline down to 1.1250 as an initial target.

Trade Recommendations:

Conservative traders can wait for a bearish breakdown below 1.1350 (short-term uptrend in BLUE) as a valid SELL entry.

T/P levels to be located around 1.1310, 1.1270 and 1.1225. S/L to be located above 1.1420.

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

GBP / USD. January 21. The trading system. "Regression Channels". Plan B from 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) - sideways.

CCI: -25.2416

The currency pair GBP / USD on Friday, January 18, adjusted to the moving average line. There were no weighty reasons for the fall of the British pound on Friday, however, firstly, on Fridays, profit-taking before the weekend often happens, which leads to corrections, secondly, the previous growth of the pound also had some logical reasons, considering all events of the last week in the UK. Plus, these factors can be added and failed report on retail sales in the UK in December. The increase in the indicator amounted to an annualized rate of only 3.0%, while forecasts predicted a growth of 3.6%. Well, today Theresa May will have to present the so-called plan "B" for Brexit in the British parliament. British parliamentarians will be able to make amendments to it until January 29, when a vote will be held on a new option for the country's withdrawal from the EU. However, it remains unclear what changes will be made to it in order for the document to be approved by the majority of deputies. And how will the EU leaders respond to these edits, and they will also have to agree on these additions? In general, we believe that the whole process of Brexit will again be delayed, and the date of the country's withdrawal from the EU, March 29, can be postponed since it only remains about 2 months.

Nearest support levels:

S1 - 1.2848

S2 - 1.2817

S3 - 1.2787

Nearest resistance levels:

R1 - 1.2878

R2 - 1.2909

R3 - 1.2939

Trading recommendations:

The currency pair GBP / USD has started a downward correction. Thus, it is recommended to open new long positions in case of a rebound of the price from the moving with targets 1.2939 and 1.3000. A 1-2 bar color with a Heikin Ashi indicator in purple will confirm the completion of the correction.

Sell positions will become relevant no earlier than price fixing below the moving average line. The initiative, in this case, will pass into the hands of bears, and the first target for the downward movement will be the level of 1.2817.

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 21. The trading system. "Regression Channels". The dollar strengthened slightly, volatility remains low

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: -80.7382

The last trading day of last week ended for the EUR / USD pair with another fall. Just a week ago, there was every reason to expect further strengthening of the European currency, but now it becomes clear that without the fundamental support of the euro, it will be very difficult to show growth. Despite the fact that no super-optimistic data from the States is now also coming in, it is clear to everyone that the economy of this country remains much stronger than the EU economy. And if the UK leaves the bloc without a "deal," then a certain blow will be delivered to the EU economy. Draghi hinted at a recession in one of his last speeches. Many experts have been talking about the recession in the USA for a long time. But even in the confrontation of two recessions, there is a demand for the American currency. On Friday, only one more or less important report was published, US industrial production. The increase in December was 0.3%, which is higher than the forecast. On Monday, January 21, not a single important macroeconomic report has been scheduled either in the USA or in the Eurozone. Thus, trading today can be calm and low volatility. Friday at first glance, the pair seems to be large, in fact, it does not exceed 40 points. Just in recent days, the pair volatility has greatly decreased.

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 EUR / USD currency pair continues to move weakly down. A rebound from the level of 1.1353 warns of correction with the aim of the moving. Therefore, it is recommended to open new short positions after its completion with the goal of 1.1353.

Buy orders will become relevant for the purpose of 1.1475 if the pair overcomes the moving average line. In this case, the bulls will receive a new opportunity to form an uptrend.

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

The demand for risky assets is growing in anticipation of a deal between the US and China

Friday brought a bunch of conflicting data to the markets. The growth of industrial production in the US in December was slightly better than expected, the positive trend should somewhat reduce the negative from the slowdown in PMI. At the same time, the consumer confidence index from the University of Michigan fell from 98.3p to 90.7p, that is, to levels corresponding to the time Trump was elected.

Consumer confidence held at high levels for a long time, since tax reform eased fiscal pressure on all major taxpayer groups, but the shutdown that began in December and the recognition that economic growth slowed down could not but affect consumer sentiment.

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Nevertheless, the markets ended Friday with rapid growth, which lasts for the fourth day in a row. Dow Jones added 3%, the yield on 10-year Treasuries rose to a maximum since December, growth was supported on Asian markets on Monday. The main reason for the positive is the insider that the US is considering the option of easing duties on a part of goods imported from China in preparation for a large-scale trade agreement. These concessions should also push China toward reciprocal steps, which in the end will bring the trade war to an end. According to rumors, China is ready to increase merchandise imports from the United States by $ 1 trillion over 6 years and reduce the commodity deficit to zero by 2014, if these rumors are true, they can provoke a rapid growth of risky assets and will contribute to changes in expectations Fed rate in the direction of renewed growth.

At the same time, macroeconomic data coming from China indicate a gradual completion of the rapid growth phase, in December there was a noticeable decline in both imports and exports, there was a decline in car sales by more than 10%, which forces China's financial authorities to introduce all new and new incentives. Fears of a hard landing should have contributed to a decrease in stock indices, but on Monday the Shanghai Composite is also trading in the green zone, that is, the rising probability of ending the trade war blocks the negative from the upcoming slowdown in the Chinese economy.

Positive, most likely, will continue with the opening of Europe on Monday, the growth of stock indices, a decrease in defensive assets such as gold and the Japanese yen is likely.

Eurozone

Despite the fact that macroeconomic data from the United States indicate an approaching recession, players are in no hurry to buy euros. A number of factors indicate that the slowdown in the eurozone is systemic and not temporary (budget crisis in Italy, yellow vest protests in France, political risks in Germany, Brexit are temporary factors and are indirectly related to the economy), that is, the incentive program which the ECB has been pursuing since 2014, has not achieved results, but only temporarily allowed to postpone the most difficult phase of the crisis.

The likelihood of a trade deal between the US and China increases the potential pressure on the eurozone, because immediately after what is desired from China is received, Trump turns his attention to Europe and we can expect a new trade war.

Negative to the euro strengthened the performance of Mario Draghi last week, in which he admitted that macroeconomic data looked worse than expected and the period of low growth could drag on. The only thing that looks confident at this stage is the growth of wages in the eurozone, but this factor alone is not enough to expect hawkish rhetoric from the ECB on Thursday.

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On Tuesday, the ZEW indexes will be published, on Thursday, Markit's PMI, negative expectations, the euro is under pressure and the situation is unlikely to change until Thursday. On Monday, EUR / USD may test the trend line at the support level of 1.1330, more pronounced sales are unlikely until new data is available.

Great Britain

Britain is preparing for a new vote on Brexit, which is scheduled for January 29. There are a lot of options for the development of events, and they are largely polar, so the pound can react in any direction, if a corresponding insider appears. Today, in the absence of new data, trading in the range is most likely, support at 1.2831 is likely to hold out, movement towards 1.30 is a bit more likely, but is unlikely to be expressed without new data.

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

Technical analysis of GBP/USD for January 21, 2019

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Overview:

The GBP/USD pair will continue rising from the level of 1.2824 which represents the daily pivot point on the H1 chart in the long term. It should be noted that the support is established at the level of 1.2745. The price is likely to form a double bottom in the same time frame. Accordingly, the GBP/USD pair is showing signs of strength following a breakout of the highest level of 1.2824. So, buy above the level of 1.2824 with the first target at 1.2932 in order to test the daily resistance 1. The level of 1.3019 is a good place to take profits. Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). This suggests that the pair will probably go up in coming hours. If the trend is able to break the level of 1.2932, then the market will call for a strong bullish market towards the objective of 1.3019 today. On the other hand, in case a reversal takes place and the GBP/USD pair breaks through the support level of 1.2745, a further decline to 1.2624 can occur. It would indicate a bearish market.

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

Analysis of the divergence of EUR / USD for January 21. In favor of a possible growth says rebound

4h

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The currency pair EUR / USD, despite the formation of two bullish divergences, nevertheless performed a fall to the correction level of 23.6% - 1.1358. Quoting quotes from this level will allow traders to expect a reversal in favor of the European currency and some growth in the direction of the correctional level of 38.2% - 1.1446. New emerging divergences on January 21 is not observed. Closing the pair below the Fibo level of 23.6% will work in favor of continuing to fall in the direction of the next level of 1.1269.

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

Daily

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On the 24-hour chart, the fall in quotations of the pair continues in the direction of the correctional level of 127.2% - 1.1285. The release of the pair's course from this Fibo level will make it possible to count on a turn in favor of the EU currency and some growth in the direction of the correction level of 100.0% - 1.1553. There are no maturing divergences. Fixing the rate under the level of 127.2% will increase the probability of a further fall in the direction of the next Fibo level of 161.8% - 1.0941.

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

Recommendations to traders:

Purchases of the EUR / USD currency pair can be made now with a target of 1.1446 and a Stop Loss order below the level of 23.6% since the pair has completed the rebound from the correction level of 1.1358.

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 GBP / USD Divergences for January 21. The pound began to lose ground

4h

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The currency pair GBP / USD on the 4-hour chart performed a reversal in favor of the American currency and a fall to the correctional level of 50.0% - 1.2869. Rebounding the pair from the Fibo level of 50.0% will make it possible to count on a reversal in favor of the British currency and some growth in the direction of the correction level of 61.8% - 1.2970. Closing quotes below the Fibo level of 50.0% will increase the pair's chances of continuing falling towards the next correction level of 38.2% - 1.2765.

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 currency pair also began falling quotations, in the direction of the correction level of 100.0% - 1.2815. However, the correction level of 50.0% on the 4-hour chart is more important and the release from it will work in favor of the beginning of the pair's growth. Rebounding quotes from the Fibo level of 100.0% will similarly work in favor of some growth in the direction of the correctional level of 127.2% - 1.2916. There is no maturing divergence in any indicator.

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

Recommendations to traders:

Purchases of the GBP / USD currency pair can be made with the target of 1.2970 and a Stop Loss order under the level of 50.0% if the pair bounces off of the level of 1.2869 (4-hour chart).

Sales of the GBP / USD currency pair can be made with the target of 1.2765 and a Stop Loss order above the 50.0% level if the pair closes below the level of 1.2869 (hourly chart).

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

The uncertainty factor in the foreign exchange market will remain

The situation on the foreign exchange market remains ambiguous and is characterized by the absence of a clear and distinct trend. A number of important reasons have a chilling effect on markets. First of all, these are clear signals of slowdown, which the world economy demonstrates, and secondly, a clear signal from the Fed, which indicates that the regulator will continue to carefully consider the likelihood of further increases in interest rates.

We have previously repeatedly pointed out these problems and consider it necessary to recall this since the lack of certainty carries significant risks of high volatility. Thus, the economic statistics data from China released at the beginning of the year clearly indicate a slowdown in economic growth in the country, and the country's GDP data presented today only confirms this.

According to published values, GDP declined in annual terms in the fourth quarter of last year to 6.4% from 6.5%, which turned out to be in line with forecasts. The quarterly indicator value decreased to 1.5% from 1.6%. True, the volume of industrial production increased compared with the previous period to 5.7% from 5.4%, while it was expected to decrease to 5.3%, but this does not change the overall picture of its gradual decline since the middle of last year.

The slowdown in economic growth has already had a negative impact on the rates of the Australian and New Zealand currencies. If the further slowdown process continues, then these currencies may be under pressure against the US dollar, if the Fed decides to make the two rate hikes promised earlier, this will definitely lead to a decrease in the AUD / USD and NZD / USD pairs.

In relation to the USD / CAD currency pair, a lot will depend on the dynamics of crude oil prices, which are currently supported primarily by OPEC +, aimed at reducing crude oil production in order to have a supporting effect on it.

The currency pairs EUR / USD and GBP / USD are hostages to the uncertainty surrounding Britain's exit from the EU. Despite the fact that T. May, the Prime Minister of Great Britain, retained her position, this did not add to certainty, but only contributed to a certain detente followed, in our opinion, by an increase in the tension around Brexit. Assessing this state of affairs, we believe that the sterling will be extremely active in responding to this topic, which remains the most important.

Regarding the dynamics of the eurodollar pair, we believe that in the short term, it will consolidate in a narrow range against the background of negative news from the eurozone, which indicates a noticeable decrease in the growth of the regional economy and a signal from the Fed about a more cautious attitude to the process of further raising interest rates. These two events balance each other and do not allow the pair to move in a certain direction.

Forecast of the day:

The currency pair EUR / USD remains in the range. It can grow to 1.1385. If this level resists, then there is a probability of a resumption of its local decline to 1.1345.

The currency pair GBP / USD is trading above 1.2855. If it overcomes this mark, there is a probability of its decline to 1.2800.

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

Fractal analysis of major currency pairs for January 21

Dear colleagues.

For the currency pair Euro / Dollar, we expect further downward movement after passing by the price of the range of 1.1375 - 1.1358 and we consider the upward movement as a correction. For the currency pair Pound / Dollar, an upward movement is possible after the breakdown of 1.2944 and the range of 1.2839 - 1.2802 is the key support. For the currency pair Dollar / Franc, we should continue the development of the upward cycle from January 10 after the breakdown of the level of 0.9984 and we consider the downward movement as a correction. For the currency pair Dollar / Yen, we expect the upward movement to continue after the price passes the range of 109.57 - 109.74. 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 price is in the correction and we expect further development of the upward structure from January 15 after the breakdown of 142.00.

Forecast for January 21:

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 continue to follow 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, 1.3056, 1.3024, 1.2944, 1.2839, 1.2802, 1.2751 and 1.2661. Here, we are following the local ascending structure of January 15th. An upward movement is expected after the breakdown of 1.2944. In this case, the target is 1.3024 and in the range of 1.3024 - 1.3056 is the price consolidation. The potential value for the top is considered the level of 1.3118, after reaching which we expect a rollback downwards.

The range of 1.2839 - 1.2802 is the key support for the top. Its price passage will lead to an in-depth correction. Here, the target is 1.2751, before this value, we expect the appearance of a pronounced downward structure.

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

Trading recommendations:

Buy: 1.2945 Take profit: 1.3024

Buy: 1.3057 Take profit: 1.3118

Sell: 1.2839 Take profit: 1.2804

Sell: 1.2800 Take profit: 1.2754

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For the currency pair Dollar / Franc, the key levels on the H1 scale are 1.0065, 1.0034, 0.9984, 0.9930, 0.9906, 0.9874 and 0.9847. Here, we continue to follow the development of the ascending cycle of January 10. An upward movement is expected after the breakdown of 0.9984. In this case, the target is 1.0034. The potential value for the top is considered the level of 1.0065, upon reaching which we expect consolidation, as well as a rollback to the top.

The short-term downward movement is possible in the range of 0.9930 - 0.9906 and the breakdown of the last value will lead to a prolonged correction. Here, the target is 0.9874 and this level is the key support for the ascending structure. Its breakdown will lead to a movement to the level of 0.9847.

The main trend is the ascending structure of January 10.

Trading recommendations:

Buy: 0.9986 Take profit: 1.0032

Buy: 1.0035 Take profit: 1.0065

Sell: 0.9930 Take profit: 0.9910

Sell: 0.9904 Take profit: 0.9880

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For the currency pair Dollar / Yen, the key levels on the scale of H1 are 110.33, 110.07, 109.74, 109.57, 109.08, 108.88, 108.60 and 108.21. Here, we continue to monitor the ascending structure of January 10. The movement upwards is expected after the price passes the range of 109.57 - 109.74. In this case, the target is 110.07. The potential value for the top is considered the level of 110.33, after reaching which we expect consolidation, as well as a rollback to the top.

The short-term downward movement is possible in the range of 109.08 - 108.88 and the breakdown of the latter value will lead to a prolonged correction. Here, the goal is 108.60 and this level is the key support. Its breakdown will lead to the development of a downward trend. Here, the goal is 108.21.

The main trend is the rising structure of January 10.

Trading recommendations:

Buy: 109.76 Take profit: 110.05

Buy: 110.08 Take profit: 110.30

Sell: 109.06 Take profit: 108.90

Sell: 108.86 Take profit: 108.63

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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, the situation is in equilibrium 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 equilibrium state of the structure.

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, the price entered the equilibrium state. 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 consolidated 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 the 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 145.74, 144.44, 143.91, 142.82, 141.94, 141.04, 140.21 and 139.31. Here, we are following the development of the ascending structure of January 15. The short-term upward movement is possible in the range of 141.94 - 142.82 and we expect further upward movement after the breakdown of 142.82. In this case, the target is 143.91, and in the range of 143.91 - 144.44 is the price consolidation. The potential value for the top is considered the level of 145.74, upon reaching which we expect a rollback downwards.

The short-term downward movement is possible in the range of 141.04 - 140.21 and the breakdown of the latter value will lead to an in-depth correction. Here, the target is 139.31 and this level is the key support for the top.

The main trend is the local ascending structure of January 15.

Trading recommendations:

Buy: 142.00 Take profit: 142.80

Buy: 142.84 Take profit: 143.90

Sell: 141.00 Take profit: 140.30

Sell: 140.20 Take profit: 139.40

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