Soros: "cold" war between the United States and China could turn into a "hot"

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The famous American financier George Soros believes that the United States and China are in a state of cold war, while there is a danger of it becoming a "hot one".

Speaking at the World Economic Forum in Davos, Soros said that the current relationship between the United States and China can be described as "a cold war that could escalate into a hot one."

According to him, the United States should pursue an effective policy towards China, but now President Donald Trump seems to follow a different course: he makes concessions to China, while he declares victory and at the same time leads attacks on the US allies.

J. Soros believes that this practice harms the main goal of the presidential administration, to curb abuses and excesses on the part of the PRC.

According to the American financier, China is an authoritarian regime, which at the same time is a rich, strong and technologically advanced state, which makes President Xi Jinping the most dangerous opponent for an open society.

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GBP / USD pair: plan for the American session on January 25. Optimism regarding Brexit fades away, as does the British pound

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

Buyers again failed to maintain demand for the British pound, which led to a decrease and update the minimum of the day at the support level of 1.3074, which I paid attention to in my morning review. Moreover, keeping the pair from further decline keeps hope for the resumption of the rising wave in GBP/USD with a break of 1.3133 maximum, above which resistance levels of 1.3186 and 1.3233 open, where I recommend to fix profits. In the scenario of reducing the pair under the support of 1.3074, you can immediately buy to rebound from the minimum of 1.3013.

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

The bears coped with the morning task of returning to the level of 1.3074, however, it was not possible to break below this range. In the afternoon, a breakthrough in this area of support is required, which will strengthen the downward impulse and lead to a minimum of 1.3013 and 1.2950, where I recommend taking profits. In the case of an uptrend in the second half of the day, you can take a closer look at sales at the next unsuccessful fixing above the resistance of 1.3133 or on the rebound from the maximum of 1.3186.

More in the video forecast for January 25

Indicator signals:

Moving averages

Trade is conducted above the 30- and 50-day moving, which indicates the continuation of the bullish nature of the market.

Bollinger bands

In the case of a pound increase, sales can be viewed from the top line of the Bollinger Bands indicator around 1.3150. If the pound goes down, support will be provided by the lower limit in the area of 1.3013.

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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 / USD: problems of the dollar are growing like a snowball

The dollar index did not hold its position and again collapsed in the region of 95 points, demonstrating the inability of the greenback to large-scale actions. Despite attempts at recovery, the dollar cannot ignore the burden of existing problems, from the political crisis to the dovish attitude of Fed members. Even the single currency, which is also under pressure from a negative fundamental background, shows character and does not allow the EUR / USD pair to drop below the 13th figure. Moreover, in my opinion, the dollar at the moment is an overvalued currency, which is in certain demand only "by inertia", after many years of stable growth.

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The US Senate yesterday, predictably, failed two legislative initiatives that were aimed at ending the record-breaking shutdown. And the senators did not support both the Democrats project (which is expected, because they don't have a majority in the Upper House), nor did Trump's proposal. 51 senators voted for the presidential bill, 47 voted against (60 votes are needed for approval). Democrats offered to restore the work of the government before February 8, but without any concessions in the context of financing the border wall. But the head of state, on the contrary, offered to allocate $ 5.7 billion for the wall and $ 800 million for a humanitarian aid program for migrants. But the Senate blocked both proposals, thus continuing the shutdown, which lasts 34 days.

After that, the press started talking about the fact that Trump is preparing to declare a state of emergency in the country, allocating $ 7 billion to bypass the Senate for the construction of the wall and other actions in this direction. This idea does not like neither politicians nor ordinary Americans. According to the results of opinion polls, the vast majority of US citizens do not support the idea of introducing an emergency. Nevertheless, according to the same polls, Shutdown significantly weakened Trump's position in the eyes of the population, and his rating decreases, as they say, not by day, but by the hour. Therefore, if he retreats on this issue, he will lose electoral attractiveness among those Americans who support a tough anti-immigration policy. Given this fact, the likelihood of a state of emergency in the United States is large enough, despite all the risks of a political crisis, which will undoubtedly follow.

And here it is worth recalling that very soon, in February, Republicans and Democrats will start another political battle, this time on the limit of the national debt of the country. The fact is that the government has the right to increase unlimited loans only until March 1 of the current year. After that, the so-called public debt ceiling will be earned, which will not allow borrowing above the level of debt that has been reached by this date. According to a number of experts, the budget deficit of the United States by next year will reach one trillion dollars, and by 2028 the size of the debt will reach 96% of the country's GDP. Trump also set a record in this area. So, during his tenure as president, public debt increased by two trillion dollars, reaching its record value in the last 70 years.

All this suggests that the political struggle regarding the limit of public debt will be tough enough, and the country may again plunge into the swamp of the political crisis. Against the background of all other problems, the dollar will receive another "anchor", especially if the major rating agencies (S & P, Moody's and Fitch Ratings) lower the US credit rating. Rumors about this are also exaggerated in the American press, although representatives of these agencies have not yet voiced such intentions.

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Thus, the overall fundamental picture does not bode well for the dollar in the foreseeable future. Earlier this week, Greenback enjoyed a certain demand due to rumors that the trade negotiations between the United States and China had stopped due to insurmountable disagreements. However, yesterday, the Ministry of Commerce of China officially denied this information, after which the dollar was no longer interesting as an "island of security."

In general, the behavior of the EUR / USD pair is dictated by the dynamics of the American currency. Yesterday's PMI data, which was published in Europe, did not actually affect the mood of the traders (although the German data sank quite badly). Today's data from IFO produced a similar effect, confirming market benchmarks.

From a technical point of view, the situation has not changed much this week. Bulls EUR / USD needs to overcome the mark of 1.14240 to confirm their dominance. In this case, the Ichimoku Kinko Hyo indicator will generate a bullish Parade of Lines signal, which will open the way to the top line of the Bollinger Bands indicator, the mark of 1.1525. The support level is at 1.1310, this is the bottom line of the Bollinger Bands on the daily chart.

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EUR / USD pair: plan for the US session on January 25. Bears are in no hurry to return in the market

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

Euro buyers are slowly but surely confidently moving up to the resistance level of 1.1340 and trying to cling to it. As long as the trade will be conducted above this range, it will be possible to count on the continuation of the upward trend to the area of the larger level 1.1376, where I recommend taking profits. In the event of a decline in the euro in the second half of the day, it is best to return to buying a rebound from support 1.1307 or from a new annual minimum around 1.1272. as the pair has rested against the upper limit of the downward price channel following the trend.

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

The pair rested on the upper limit of the downward price channel and returning to the resistance level of 1.1339, on which there are no sellers active, will be a good signal to open short positions in euro with the first test goal of 1.1307 minimum. A breakthrough of which will lead to a larger EUR/USD sale in the support of 1.1272, where I recommend to take profits. In case of further smooth growth of the euro in the second half of the day, it is best to consider short positions to rebound from resistance 1.1376.

More in the video forecast for January 25

Indicator signals:

Moving averages

Trade is conducted in the area of 30- and 50-medium moving but the bearish trend continues.

Bollinger bands

In the event of a euro decline in the afternoon, support will be provided by the lower limit of the Bollinger Bands indicator around 1.1294.

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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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Wave analysis of GBP / USD pair for January 25. Pound develops upward momentum

Wave counting analysis:

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On January 24, the GBP/USD pair dropped by 10 bp, but the current wave counting did not undergo any changes and suggests building an uptrend. In the proposed third wave, the elongation and internal 5-wave structure are already visible. Given the unresolved issue with Brexit, there is doubt that this impulse wave will be built completely and the wave pattern does not transform into anything. An unsuccessful attempt to break through the Fibonacci level of 100.0% may lead to the construction of an internal fourth wave in 3.

Purchases targets:

1.3168 - 100.0% Fibonacci

1.3367 - 127.2% Fibonacci

Sales targets:

1.2996 - 76.4% Fibonacci

1.2889 - 61.8% Fibonacci

General conclusions and trading recommendations:

The wave pattern involves the construction of 5 ascending waves. Now, I recommend buying with targets located near the estimated level of 1.3168, which corresponds to 100.0% Fibonacci, since the estimated third wave does not look fully completed. After building the fourth wave in 3, it is expected that the instrument will continue to increase with targets located near 1.3367.

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EUR / USD: Euro is tired of falling and ignores weak fundamental statistics

Apparently, the euro is tired of constantly having the same fundamental data indicating a slowdown in the European economy, because, despite the next row of weak statistics in Germany, the EUR / USD pair maintained its corrective upward movement in the first half of the day.

As it became known today, the Ifo business confidence index in Germany in January 2019 was lower than expected. This is another confirmation of the fact that the monetary policy of the European Central Bank will remain soft for a very long period.

According to the report of the Ifo Institute, the preliminary index of business sentiment in January 2019 fell to 99.1 points against the December value of 101.0 points. Economists had expected the index to remain above 100 points and reach 100.6 points. In Ifo noted that recent data suggests that the German economy is experiencing a slowdown after the growth cycle.

A survey of economists at the European Central Bank was also published today, in which a number of analysts revised their expectations regarding economic growth and inflation for the eurozone. The main reason for the revision was the weak economic data and problems in world trade.

According to the European Central Bank, respondents expect that eurozone GDP growth in 2019 and 2020 will drop to 1.5%, whereas previously they predicted an increase in eurozone GDP by 1.8% in the current year and by 1.6% in the next.

As for the inflation forecast, it was also lowered for this year, 1.5% from 1.7%. In 2020, inflation in the eurozone is expected to be 1.6%, not 1.7%, as previously assumed. Let me remind you that the target inflation rate, indicated by the ECB, is slightly below 2%.

As for the technical picture of the EUR / USD pair, the demand for the euro is unlikely to hold out above the resistance level of 1.1340 for a long time, and a return under this range will be a signal to close a number of long speculative positions, which will lead to increased pressure on risky assets and updating the minima in the 1.1305 area to support 1.1270.

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Venezuela could be a driver for oil growth this spring

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In fact, there are currently no factors on the market that can significantly support oil prices. Energy stocks in the United States continue to grow, the first results of the OPEC + transaction will not appear soon. In addition, from the side of stock markets, the threat continues to go. A new wave of flight from risk will surely overwhelm the commodity segment.

The bulls did a good job at the end of last December and the first decade of January this year. In order to drag quotes up, they need a new feed. If we consider what we have now, geopolitics may well become a positive factor. In particular, the threat of US sanctions against the oil sector of Venezuela as a protest against the Maduro regime, who stepped in for a second presidential term on January 10. Judging by the information in the media, Donald Trump may make such a decision in the coming days.

In recent months, oil has significantly reduced in price, and Washington, apparently, has weakened its fears about the rise of black gold in the event of the imposition of sanctions. It is important to remember that Trump needs cheap oil, which he openly stated more than once. Certainly, symbolic sanctions against Iran are a vivid illustration of his position. Therefore, if measures are still taken to Venezuela, then they are likely to turn out to be a special format that contributes to a slight push up of oil.

Sanctions hurt the US

Sanctions will seriously hit Venezuela, while the States themselves will be among the victims. Now the oil storage facilities in the USA are full, the plants are working at full capacity, and the stocks of petroleum products are accumulating.

Mexico at the time of solving the problems associated with the thefts from pipelines suspended the purchase of American raw materials. If Venezuela follows the same path (it will suspend imports), you can wait for a surge in stocks of petroleum products.

During 2019, oil production in Venezuela will drop to 1 million barrels per day. This opinion is shared by most analysts and strategists. In case of acceleration of this process due to sanctions, oil quotations in May may sharply increase.

A combination of factors such as sanctions against Venezuela, the beginning of the US auto season, the expiration of the exemptions issued to importers of Iranian oil, and the restrictive measures OPEC + can lead to a tightening of the market situation in spring.

On Friday, the prices of reference brands of oil change slightly. If during the Asian session, quotations began to grow due to the prospects of reducing the supply of fuel from Venezuela, then during the European one they decreased.

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EIA: US oil production will continue to grow until 2030

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According to the Energy Management Information (EIA) Annual Report of the US Department of Energy, oil production in the country will continue to grow until 2030, and by 2040 production will remain at more than 14 million barrels per day.

Volumes of production until 2030, EIA analysts expect at around 6 million barrels per day. The continuation of the development of hard-to-recover oil and shale gas resources in the eastern and south-western regions will contribute to maintaining such production rates.

By 2050, according to forecasts of the US Department of Energy, the production of dry natural gas will reach 43.4 trillion cubic meters. feet

As previously reported, the ministry has left unchanged its forecast for the production of "black gold" in 2019, at the level of 12.1 million barrels per day.

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Wave analysis of EUR / USD pair on January 25. New downtrend?

Wave counting analysis:

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On Thursday, January 24, trading for EUR / USD ended by 75 bp lower. Thus, such a reduction has led to the refinement of the current wave marking. The segment of the trend, which began on November 12, has been completed. If this is indeed the case, the tool has begun to build a new downward trend segment. Thus, the formation of 1st wave is now observed and the entire trend section can be quite long. Such a scenario slightly contradicts the news background since in the next month or two only negative news from the eurozone will have to come. News will have to support exactly the dollar.

Sales targets:

1.1269 - 100.0% Fibonacci

1.1188 - 127.2% Fibonacci

Purchases targets:

1.1340 - 76.4% Fibonacci

1.1384 - 61.8% Fibonacci

General conclusions and trading recommendations:

The pair allegedly began building a new downtrend trend. Thus, we are in the first wave, which is close to completion. It is corrected, after all, it equals 100.0% and 127.2% Fibonacci.

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EUR/USD: second wave to continue

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It's likely that wave (B) is taking the form of a double zigzag, as shown on the 10-hour chart. There're a finished impulse in wave A and a zigzag in wave B, so now an impulsive decline in wave C of (B) is taking place. In this case, after a short break, we're going to have the rest of the third wave of wave C, which means the low of wave ((i)) will be broken in the coming days.

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As we can see on the one-hour chart, wave ((i)) has arrived as a leading diagonal pattern, which

led to an upward correction. After a few weeks of consolidation, wave ((ii)) ended as a zigzag

with an ending diagonal in wave (c). A pullback from the upper side of this pattern turned out to

a decline, so there's a downward impulse wave, which could be the first wave of wave ((iii)).

The fifth wave of wave (i) has ended as an ending diagonal. That's why the following upward

three-wave price movement could be the first step into wave (ii). This correction is probably

taking the form of a double zigzag, which is going to move on during the day. Thus, we should

keep an eye on the 0.5 retracement level at 1.1453 as the nearest bullish target.

Meanwhile, if the price goes through this level, there'll be a moment for longer wave (ii). Also,

it's possible to have wave ((i)) as a flat pattern because of zigzags in waves w and x. The only

difference between two scenarios is what we'll have in the upcoming bullish wave. If we have a

double zigzag in wave (ii), as shown on the chart above, the price will develop a zigzag in wave

y of (ii). However, if we face with a flat pattern, then we could have an impulse in wave c of (ii).

Well, the hour is nearly upon us.

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Fundamental Analysis of EUR/GBP for January 25, 2019

EUR/GBP is currently trading higher after bouncing off the 0.8630 support area with a daily close after a non-volatile bearish trend earlier. GBP managed to gain momentum over EUR despite the BREXIT tensions. Now the time is ripe for EUR to assert itself as the market is correcting ahead of the BREXIT decision.

Bank of England's Governor Mark Carney recently stated that UK businesses cannot fully prepare themselves for the chaos of no-deal Brexit. With the risk of the UK leaving the EU without any transition agreement, Brexit may be delayed. However, a certain decision can be taken by March 29. UK Finance Minister Phillip Hammond is currently on the way to convince business leaders at the World Economic Forum in Davos, Switzerland where he will try to attract businesses in the UK. The British government is ready to allocate GBP100 million for 1,000 new doctoral research places focused on artificial intelligence for use in public hospitals, voice recognition software, and pollution monitoring. Hammond is also looking forward for a BREXIT deal, rather than no-deal BREXIT which may undermine the businesses currently operating between the UK and the EU region.

On the other hand, EUR is also interested in a BREXIT deal, but its terms are still quite uncertain. The UK is well set to leave without a deal but it is expected to hurt Europe as well as some of the bigger manufacturing businesses like Ford. Yesterday the ECB maintained the key interest rate at a record low of 0.00% as expected which held back EUR from further gains. In Frankfurt, ECB President Draghi stated that the eurozone's economy is already suffering from its biggest slowdown in half a decade which is putting questions on the interest rate hike decision. According to ECB Policymaker Villeroy de Galhau, The European Central Bank is committed to keeping the interest rates low and unchanged as it winds down its monetary stimulus to the economy. The ECB believes keeping the rate low is beneficial for the eurozone's economy in the long run which will let businesses grow under stable economic conditions. Though the ECB ensured that interest rates will be put on hold, thus expressing dovish rhetoric on monetary policy.

Meanwhile, EUR is expected to regain certain momentum while GBP is struggling for gains amid downbeat economic reports and the BREXIT dilemma.

Now let us look at the technical view. The price recently bounced off the 0.8630-50 support area. The pair is likely to trade higher, heading for 0.8850 area in the coming days. The dynamic level is currently quite far from the current price area which is expected attract the price towards the mean before pushing further lower. As the price remains below 0.8850 area with a daily close, the bearish bias is expected to continue.

SUPPORT: 0.8500, 0.8630-50

RESISTANCE: 0.8850, 0.8950

BIAS: BEARISH

MOMENTUM: NON-VOLATILE

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The dollar goes to serve

If in the week by January 25, the submission due to the ECB meeting and business activity data was on the side of the euro, then within five days by February 1 all investors' attention will be focused on the US dollar. The FOMC meeting, the labor market report for January and the first GDP estimate for October-December, can the economic calendar be richer? However, information about the growth of the US economy in the fourth quarter may not see the light. Due to the shutdown of the US government. Not only that, the longest suspension of his work in history is ready to haunt a very weak GDP in January-March, as well as the inaccessibility of statistics, muddies the water in financial markets.

Judging by the peak of EUR / USD below the base of the 13th figure, the euro lost its supply. Could it be otherwise, if the index of purchasing managers in the Eurozone services sector fell to its lowest level in the last five and a half years? If business activity in the manufacturing sector in Germany signals an increased risk of the technical recession of the largest economy of the currency bloc? The deterioration of the statistics was recognized by the ECB, which abandoned the same wording on balanced risks and noted that they were inclined downward. That was enough to attack the "bears" on the main currency pair. Mario Draghi said at the press conference that some members of the Governing Council spoke about the need for LTRO, but there was no wide discussion of this topic. Maybe in March. If the statistics continue to deteriorate.

In the meantime, the focus of attention of investors is shifting from the Old World to the New. The ideas of a pause in the process of normalizing the monetary policy of the Fed (CME derivatives altogether signal the end of the cycle) and the slowing down of the US economy forced investors to sell the USD index at the end of 2018. Nevertheless, at the beginning of 2019, the question arose against which currency to form short positions on the dollar? If the FOMC at its January meeting turns out to be a big dove than the markets currently assume, and after impressive December figures on employment, the indicator will go into correction, the bulls of EUR / USD will be able to recoup.

Dynamics of the probability of the Fed rate change

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Let's not forget about trade wars. On January 30-31, the next round of talks between the USA and China will take place. And although Wilbur Ross, the US trade minister, said that the parties share many miles, he believes in the possibility of a deal. According to most of the nearly three hundred Reuters experts, the escalation of the conflict even more than now will slow down global GDP. It will hit the euro, as a decline in external demand is detrimental to the export-oriented economy of the eurozone.

Technically, consolidation of EUR / USD in the range of 1.1265-1.1485 continues. After the target has been fulfilled by 88.6% for the Shark pattern, the risks of rollback towards 38.2%, 50% and 61.8% of the CD wave have increased as part of its transformation into 5-0.

EUR / USD, the daily chart

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The pound is ready to believe any rumors

The pound is again in the zone of price turbulence. Paired with the dollar this week, it jumped by almost 300 points, reacting to a decrease in the likelihood of a "hard" Brexit. However, the northern dynamics of GBP / USD should be treated with some caution. On the eve of the re-voting, the news background changes with a kaleidoscopic speed, so now you should not trust the impulse movements of the British currency.

Let me remind you that the main support for the pound was on the news that the British Parliament is ready to postpone the Brexit date. And although this information is unconfirmed, many indirect factors speak in favor of this scenario. In particular, at the moment there are two amendments registered in the Parliament, the essence of which is reduced to the transfer of the "X hour" to the end of the current year. It is noteworthy that similar amendments were made by representatives of the Labor Party, as well as the conservative ones.

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In the event that the parliament does not approve the draft deal by the end of February, the deputies will take responsibility for the negotiation process, excluding the government from it. Laborists and some conservatives declared that they would support this amendment, as they are confident that on January 29, the second vote will end in repeated failure. The market was inspired by such intentions of parliamentarians, although, by and large, such a scenario does not solve the problem as a whole. Brussels still does not want to meet the British, especially on the key issue of the Irish border.

Moreover, yesterday the pound lost another trump card after the speech of the Bank of England's head Mark Carney. He said that the regulator will return to the process of gradual increase in rates only if Britain leaves the European Union "in a civilized way." Thus, he made it clear that the postponement of Brexit would not open the way to tightening monetary policy since the degree of uncertainty will remain high.

That is why today's rumors about the position of the Democratic Unionist Party have provided such strong support for GBP / USD. The pair tested the 31st figure for the first time since last November. According to the British press, unionists have expressed their readiness to support the draft deal on Tuesday, if the May government will make "certain concessions". It is worth noting here that the DUP has a "golden share" in the British parliament, without the support of their 10 deputies, the conservatives have no majority. Therefore, their position is of great importance in the context of overall prospects for a compromise.

However, the pound was not long at the annual maximums. After the euphoria came to a sober calculation, which cooled the ardor of the bulls of the pair GBP / USD. First, the published information is unofficial. It is an insider of one of the British publications. Secondly, it is necessary to take into account the fact that the representatives of the DUP set a number of conditions regarding the future status of the border with Ireland. These conditions are unlikely to be "cosmetic" in nature, so they will need to be coordinated with the European Union, which, in turn, refuses to show any flexibility in this matter. For example, when Poland proposed to limit the operation of the backstop regime for two years, the main negotiator from the EU took this idea "in hostility", saying that the European Union is not yet ready for such maneuvers in the negotiations.

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In addition, Dublin has already managed to declare that Ireland will not make any concessions unless London offers "generous compensation." The EU will most likely support the Irish position and the situation will again be in a negotiating impasse. A spokeswoman for Theresa May just added fuel to the fire, saying that he was not aware of any planned talks with Brussels. And although he acknowledged that the working group is now working on an additional agreement on the back-stop issue, the overall prospects for the deal remain a big question.

Thus, traders of the GBP / USD pair remain optimistic, since the incoming signals indicate that the "hard" Brexit will not be implemented anyway, either they will agree on the deal, or they will postpone the exit date of the country from the EU. Nevertheless, long positions in the GBP / USD pair are unreliable, since all political constructions resemble "castles in the sand". First, the experts' assumptions contain too many "ifs", and secondly, we do not know the opinion of many conservatives and Laborites, who in the end can support or not support the ideas proposed in Parliament. Therefore, today it is better not to open deals for a pair, and open positions as close as possible, since the weekend may give too many unexpected surprises.

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Control zones of EUR/USD pair 01/25/19

Downward movement on the pair is still a priority. The probability of updating the January minimum is 70%. In order to break this impulse, it will be necessary to fix the price above yesterday's maximum.

Today, the pair forms an upward correctional movement. In the second half of the European session, testing the 1/4 CZ of 1.1340-1.1336 takes place. This zone can act as resistance, therefore, it is necessary to track the formation of a pattern for sale. The most favorable prices for sale are within the 1/2 CZ of 1.1391-1.1382. Testing this zone will allow you to make sales at an excellent risk to reward ratio.

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Yesterday's movement was provoked by the news, therefore, you may need a deep corrective movement to continue the fall. Therefore, you need to go on sale only after the reversal pattern has been formed.

To end the downward impulse requires the closure of today's US session above 1.1391. If this happens, then on Monday, it will likely consider purchases with medium-term goals. Today, the probability of formation of this model is 30%, so the purchases are not profitable. Without a pattern of false breakdown or absorption, a downward impulse reversal will not occur.

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

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

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

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Control zones of AUD/USD pair 01/25/19

In the second week, there is a formation of a downward model, which makes it possible to search for favorable prices for the sale of the instrument. Yesterday, there was another confirmation of the medium-term decline.

Today, the pair is trading within yesterday's American movement. It has already been tested by 1/4 CZ of 0.7143-0.7111, which came out as resistance. If the pair does not overcome this zone, the downward movement will continue. The probability of updating the weekly minimum is 70%. The most favorable prices for sale are within the 1/2 CZ of 0.7144-0.7137. Achieving this zone will allow you to open a short position with the potential to drop 100 points. This makes sales from this zone profitable, since the ratio of risk to profit with a stop of 20-25 points will be 1 to 4.

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The upward movement remains corrective, hence, purchases from current grades are not profitable. The probability of obtaining the required profit is 30%. This does not allow to consider patterns in the direction of growth.

The situation may change in the direction of the strengthening of the Australian dollar if the current closing of the American session occurs above the level of 0.7114. This will allow us to speak about the formation of a local accumulation zone, where the extremes of the last two days will come to the fore. The main resistance will remain to be 1/2 CZ, which will coincide with the top level of the flat. The decisive level of support will be yesterday's closing of the American session.

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

Weekly CZ - weekly control zone. The area is formed by marks of important times for the market.

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

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

Intraday technical levels and trading recommendations for EUR/USD for January 25, 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 a 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, quick bearish decline took place below 1.1350 extending down towards 1.1290 (Yesterday's Low).

Bearish consolidations below the key-level of 1.1350 (minor up trendline in BLUE) encourages more bearish decline down to 1.1250 as Initial target.

Otherwise, any bullish breakout above 1.1350 enhances further bullish advancement towards 1.1390, 1.1430 and 1.1475.

Trade Recommendations:

Conservative traders should consider the current bullish pullback towards 1.1350-1.1370 (short-term uptrend in BLUE) as a valid SELL entry if bearish rejection is demonstrated on lower timeframes.

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

GOLD: Bulls to reach 4/8 Murrey Math Level

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Gold has been moving sideways since the first pullback from 3/8 Murrey Math Level happened. At the same time, there're several pullbacks from 2/8 MM Level, which is acting as support. Moreover, the price hasn't fixated below the Daily SuperTrend Indicator Line, which highlights an opportunity to have another bullish rally.

The main intraday target is 4/8 MM Level. However, we also should watch 3/8 MM Level, which acted as resistance many times before. In this case, if just another pullback from this level happens, there'll be a moment for a local bearish correction before the main upward price movement resumes. In this case, we should watch the SuperTrend lines as a possible starting point for the next stage of the bullish rally.

There're two pullbacks from -1/8 MM Level in a row, which points to an opportunity to have at least an upward correction. Thus, we should keep an eye on 2/8 MM Level as the nearest short-term target because this line might be a starting point for a local downward correction towards 1/8 MM Level. The subsequent pullback from this level could lead to another advance in the direction of 4/8 MM Level.

Besides, we should monitor the SuperTrend lines, which are about to form a 'Bullish Cross'. If this happens, there'll be a strong confirmation for the outlook. Meanwhile, if the market returns below the SuperTrend lines straight away, the bullish scenario will be at risk. In such a case, we should wait until the price returns above these lines and fixates higher 1/8 MM Level.

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

Control zones of USD / JPY pair 01/25/19

An upward movement remains a medium-term impulse. Therefore, any reduction must be used to purchase the instrument. The goal of growth is the monthly CZ of January, which allows keeping open purchases already.

Working on the pair involves finding favorable prices for the purchase and retention of already open long positions. It should be understood that the consolidation above the weekly CZ of 109.63-109.64 makes it possible to consider the movement of the 1/2 CZ of 110.59-110.50. Purchases from current levels are not profitable, as setting a stop-loss after the last daily minimum will result in large losses and will not allow you to get a profitable risk-to-profit ratio. However, a reduction to the 1/2 CZ of 109.13-109.04 will give favorable prices, where purchases will acquire priority status.

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For the fourth day, the pair is trading within the local accumulation zone. This allows considering going beyond its limits as a confirmation of upward priority. Closing the trading at the current week above the maximum of the environment will continue to hold a long position next week.

An alternative reversal pattern will be developed only in the event of a large supply, which will lead to the absorption of two-day growth. This model will allow you to start working in the flat phase. A flat one involves the search for prices for transactions at its borders. The bottom of the flat is the minimum of the current week, which is located near the 1/2 CZ (defining support for the medium-term trend).

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

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

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

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

Control zones of USD/CHF pair 01/25/19

Throughout the current week, the pair is trading within the monthly CZ of January. This is the reason for stopping the strong bullish momentum. The most interesting in trading is the downward correctional models.

The formation of a local zone accumulation on the pair occurs within a monthly control zone. This allows you to consider sales after fixing the price below the 1/4 CZ of 0.9938-0.9933. If today's US session closes below this zone, the next reduction target will be 1/2 CZ of 0.9887-0.9877 where the first sales fixation point will be. A short position from the limits of a monthly control zone always has the probability of working out above 70%.

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It is important to take into account that the upward movement is a strong medium-term impulse, hence, the probability of a return to the January maximum is 70% in the near future. However, this may require correction, within which you can take up to 120 profit points.

Sales of the USD/CHF pair are possible only after going outside the flat. Purchases of this instrument within the upper monthly short-circuit are not profitable, therefore, it is better to refuse long transactions until the close of January trading. Another reason for purchases could be a decrease in the pair to 1/2 CZ of 0.9887-0.9877. The test of this zone will allow getting favorable prices and the profit on purchases will be more than 100 points when the January maximum is updated. This model must be traded when the price drops to the desired levels.

Sales of the USD/CHF pair are possible only after going outside the flat. Purchases of this instrument within the upper monthly control zone are not profitable, therefore, it is better to refuse long transactions until the close of January trading.

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

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

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

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

GBP / CAD: significant bearish opportunity on the table

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There's a bearish 'Wolfe Wave' pattern on the twelve-hour chart. As you can see, the 1-3 line acted as resistance, and that could be the beginning of wave 6. Moreover, we've got a pullback from the 0.5 retracement of the previous decline, which provides more evidence for the bearish outlook. In this case, we're likely at the early stages of a massive decline.

The main target here is the 0.618 multiple of the last decline at 1.6405, which is nearby the 1-4 line. However, first of all, we should watch line 2-4 as the nearest target because only if the price goes through this line, there'll be a green light for achievement of the 0.618 level.

Keep in mind, that if the outlook is right, the market should begin declining pretty soon. If we have a new local high instead, this scenario will be at risk. In other words, if the pair fixates above the 0.5 retracement, bulls will lead, at least for a while.

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

Sterling reached an 11-week high, the euro is preparing to fall

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Pound updated the 11-week high after The Sun reported that the Democratic Unionist Party of Northern Ireland privately decided to offer conditional support to the deal of Prime Minister Theresa May. This week, the pound rose about 1.8 percent, above the key psychological level of 1.30 dollars in the hope of a Brexit deal.

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The Sun's article raised the pound by 0.4 percent, to $ 1.3114, its highest since November 8. In relation to the euro, sterling rose by 0.25 percent, to 0.8631 euro, and by 0.35 percent in relation to the Australian dollar, to 1.8478. If the British press does not lie, the pound is likely to rise to 1.32 dollars, if we take into account the technical analysis, then a breakthrough to 1.38 dollars is possible.

The euro rose 0.1 percent to $ 1.1321, although the long-term outlook for the single currency looks bleak. The ECB expects growth to decline in Europe, predicting weaker than expected growth.

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So, in the near future, the euro will be inferior to its peers, as it is expected that monetary policy in the eurozone this year will remain adaptive. The dollar also faces a difficult year, as economic growth in the country and around the world is under pressure, and the Fed is preparing to pause its rate hike cycle.

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

In 2020, the cost of oil will reach $ 75 per barrel - Barclays

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According to forecasts of the leading British bank Barclays for the 2019th and 2020th years, this year Brent oil will cost about $ 70 per barrel. Next year, the price of raw materials will rise to $ 75 per barrel, financial institution experts are sure.

Bank experts predict that in the current year oil reserves will be below the average over the past five years. The reason for this is that analysts consider the fulfillment of the terms of the OPEC + deal to reduce oil production.

At the same time, oil supplies from Iran will gradually decrease, Barclays believes. However, until the situation improves on the oil market, its participants will have to face a reduction in demand, financial institution experts warn.

By the end of trading on Thursday, January 24, for Brent crude oil was given $ 61.20 per barrel. According to analysts, since the beginning of this year, the value of black gold has increased by 13.9%. In December 2018, oil prices fell to near two-year lows. However, to date, the cost of oil has recovered by 23%.

The trend noted by Barclays experts is based on a thorough analysis of the current situation in the global black gold market. Market participants are laying in oil prices an increasing decline in reserves amid a potential economic downturn.

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

Simplified wave analysis of GOLD for January 25

Large-scale graphics:

The rising wave that sets the main motion vector of gold starts from the middle of last year. The wave structure does not show completeness.

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Medium scale graphics:

The current wave construction started on November 13th. The price has been drifting along the last weeks for strong resistance. The probability of the beginning of the correction phase (B) is high.

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Small scale graphics:

From January 4 a bearish wave develops on the graph, which at the time of analysis in a larger model takes the place of correction. The wave structure may have the wrong appearance.

Forecast and recommendations:

The potential price increase in gold in the coming weeks has been exhausted. The period of flat stabilization is expected, a decrease is possible. In such a market only short-term sales in a small lot can be justified.

Resistance zones:

- 1305.0 / 1310.0

Support areas:

- 1255.0 / 1250.0

Explanatory notes for the figures: The simplified wave analysis uses waves consisting of 3 parts (A – B – C). The analysis uses 3 consecutive scale graph. 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.

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

Pound sterling rose sharply on the news from Northern Ireland

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Today, the pound sterling against the dollar rose to an area of 2.5-month highs amid the appearance of positive news on Brexit.

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The British currency was supported by local media reports that Northern Irish unionists expressed their readiness to support a plan for the UK to secede from the European Union, promoted by the country's Prime Minister Theresa May. At the same time, they put forward a number of conditions regarding the future status of the border with Ireland, which London will still have to coordinate with Brussels.

"This news increases the likelihood that a "tough" Brexit will not happen eventually. If this information is confirmed, the pound rally can continue up to $ 1.32. It is also possible to break through the level of $ 1.38," said CMC Markets analyst Michael McCarthy.

"The market perceives the situation with the extension of Article 50 of the Lisbon Treaty as something almost solved and clings to this idea. However, isn't this attitude too optimistic? After all, it is still impossible to exclude the possibility that Brexit opponents and supporters of the postponement will not be able to draw up a clear plan that would lead to an increase in the chances for the implementation of the "soft" scenario. In this case, there is a reason to believe that the GBP / USD pair rushes to the level of 1.31 before the retreat," said John Hardy of Saxo Bank.

"Next week promises to be very interesting, because we are expecting a vote in the House of Commons on Theresa May's reserve plan on January 29," he added.

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

Simplified wave analysis of EUR / JPY for January 25

Large-scale graphics:

The wave of the bearish trend from February last year set the main direction of the cross trend. The structure has now been completed, the proportions of all parts of the wave have been achieved.

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Medium scale graphics:

From mid-September, the price completes the downward wave of the older TF. The price is within the boundaries of a strong support zone. High probability of changing the course of the entire short-term trend.

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Small-scale graphics:

The rising wave of January 3 forms the final part in models of several time scales at once. In the upcoming weekly period, the end of the current correctional phase (B) and the beginning of active price growth (C) are expected.

Forecast and recommendations:

In the coming weeks, sales of the tool will be hopeless. At the end of corrective declines, it is recommended to track long entry signals.

Resistance zones:

- 125.20 / 125.80

Support areas:

- 123.30 / 122.80

Explanatory notes for the figures: The simplified wave analysis uses waves consisting of 3 parts (A – B – C). The analysis uses 3 consecutive scale graph. 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.

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

EUR / USD: The euro is under pressure after yesterday's statements by the ECB President Mario Draghi

The European currency fell against the US dollar after the press conference of the President of the European Central Bank, Mario Draghi, at which the policy was revised to a softer side, which, of course, did not please buyers of risky assets, putting on an increase in interest rates in the middle of this year.

Yesterday, it became known that the European Central Bank left the refinancing rate unchanged, at the level of 0.0%. The deposit rate also remained at the same negative level, -0.40%.

The ECB expects rates to remain at current levels for at least this summer inclusive. The European regulator also assured that it would completely reinvest the profits from QE over a long period after the first rate increase, which again upset traders who are putting more of a more aggressive monetary policy tightening.

Mario Draghi

The President of the ECB said that the growth momentum in the short term is likely to be weaker than expected, and the balance of risks for the growth prospects of the eurozone economy is shifted to the downside. The uncertainty of outcome Brexit makes an even greater contribution to the growth of uncertainty.

According to Draghi, general inflation is likely to fall in the coming months, while core inflation, in general, will remain restrained.

The head of the ECB also noted that if the uncertainty persists, the current monetary policy will remain softer for a long time. A key aspect that needs to be assessed is the duration of the overall uncertainty. Draghi is also confident that, if necessary, the ECB uses all the tools to stimulate economic growth in the region.

New discussions related to monetary policy will now take place only in March of this year. Predictably, then it will be given and new forecasts concerning interest rates.

USA

Data released yesterday on the US labor market supported the dollar. According to a report by the US Department of Labor, the number of initial claims for unemployment benefits fell by 13,000 in the week from January 13 to 19, to 199,000. Economists expected the number of applications last week to be 218,000.

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The indicator of manufacturing activity in the US private sector rose in January, which also supported the US dollar. Growth was due to production, while activity in the services sector slowed slightly.

According to HIS Markit, the preliminary purchasing managers index for the manufacturing sector in January rose to 54.9 points from 53.8 points in December, while the service sector index fell to 54.2 points from 54.4 points in December. Let me remind you that the index values above 50 indicate an increase in activity.

As for the current technical picture of the EUR / USD pair, a breakthrough in the intermediate support of 1.1305, above which trade is currently conducted, will lead to the formation of the next wave of the trading instrument's decline with the renewal of the annual minima in the 1.1270 and 1.1220 regions. The upward correction will be limited by the resistance of 1.1340, and the larger sellers will show themselves immediately after the test of the area of 1.1360.

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

Bitcoin analysis for January 25, 2019

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Background: In the background BTC got failed to test the Pitchfork median line inside of the downward channel, which is a sign of strength. There is also a rejection of the key support cluster at the price of $3.411 and the potential end of the larger downward correction (abc flat), which is another sign of strength. So far, the BTC is trading inside of the mini upwards Pitchfork channel and you should watch only for buying opportunities.

Trading recommendation: We are long BTC/USD from $3.540 and the first upward target at $3.700. The protective stop is placed at $3.410.

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

GBP / USD: plan for the European session on January 25. The pound continues to strengthen the position on the expectations

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

The Brexit news is over, but many players are putting on a postponement for the UK to leave the EU, which will allow the pound to gradually strengthen its position. The next signal for continued growth will be the breakdown and consolidation above the resistance of 1.3133, which will lead to a test of new monthly highs around 1.3186 and 1.3233, where I recommend fixing the profits. In the case of GBP / USD decline in the first half of the day, long positions can be viewed at a false breakdown in the area of 1.3074 or at a rebound from the support of 1.3013.

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

Only another unsuccessful fixing above the resistance of 1.3133 will be the first signal to open short positions on the pound with the main goal of breaking and fixing below the area of 1.3074, which will lead to a larger GBP / USD sale to yesterday's support area of 1.3013, where I recommend fixing the profits. When scenarios for further growth, against the background of news on Brexit, consider short positions after updating the highs of 1.3186 and 1.3233.

More details about the forecast can be found in the video review.

Indicator signals:

Moving Averages

Trading takes place above the 30-day and 50-day moving, which indicates the bullish nature of the market.

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Bollinger bands

In the case of a decrease in the pound, the lower limit of the Bollinger Bands indicator in the 1.3000 area will act as support. The break of the upper border of the indicator near 1.3150 will allow the bulls to continue to strengthen the pound.

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

Analysis of Gold for January 25, 2019

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We are still bullish about Gold from $1,285.00. There is no change in the forecast since the price failed to break the key support at $1,275.00, which only added more strength into our bullish position.

Background: In the background we got failed test of the Pitchfork median line inside of the downward channel but on the same time we got a test of the upper median Pitchfork line. For the past 4 days, Gold is trying to break the key support at $1,275.00 but without success, which give us more odds to be buyers.

Trading recommendation: We are long Gold from $1.285.00 and the first upward target at $1,294.00. The protective stop is placed at $1,275.00.

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

EUR / USD: plan for the European session on January 25. Mario Draghi expectedly disappointed the markets

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

The press conference of Mario Draghi was of a "precautionary" nature, which, as expected, led to a decline in the euro. At the moment, it is best to consider long positions after the formation of a false breakdown in the support area of 1.1307 or to rebound from a new minimum in the area of 1.1272. The main task will be a breakthrough and fixation on the resistance of 1.1339, which will lead to a larger upward correction in the area of 1.1376 and 1.1411, where I recommend fixing the profits. However, it is worth noting that today's weak German data may push the euro even lower, to a minimum area of 1.1223.

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

The formation of a false breakdown in the resistance area of 1.1339 will be the first signal to open short positions in the euro, and fixing below the support of 1.1307 will only reinforce the bearish trend, which will lead to the renewal of new annual lows around 1.1272 and 1.1223, where I recommend fixing the profits. In the case of a good report on Germany and the growth of EUR / USD above the resistance of 1.1339, short positions can be considered to rebound from the large level of 1.1376 and 1.1411.

Indicator signals:

Moving Averages

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

Bollinger bands

In the event of a decline in the euro, support will be provided by the lower limit of the Bollinger Bands indicator at 1.1280. Short positions at once for a rebound can be opened from the upper border of the indicator in the area of 1.1362.

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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

Mario Draghi admitted the eurozone's apparent slowdown

In the USA, PMI Markit's business activity index in January grows relative to December, the manufacturing sector grew from 53.8p to 54.9p, the composite from 54.4p to 54.5p, the service sector looks slightly worse, in general, the business activity in the US is slightly higher than in most developed economies.

The dollar, however, responds poorly to economic indicators, focusing on the impact on the market of shutdown and trade negotiations with China. Domestic political differences block the work of government agencies for 5 weeks in a row, there are no signs of compromise yet, which may soon lead to a lowering of the US rating and the exit of investors from bonds.

In recognition of US Secretary of Commerce Wilbur Ross, the United States and China are "very far" from concluding a trade deal. The development of the situation will stimulate the growth of demand for gold and defensive assets and increases the pressure on oil quotes.

Eurozone

The euro responded with a decline to the outcome of the ECB's monetary policy meeting on Thursday. Despite the fact that there were no changes in policy, and this was known in advance, the general tone of the accompanying documents turned out to be pigeon. The ECB finally had to admit that the risks around growth prospects had shifted down. At the December meeting, risks were considered in a generally balanced manner.

As Mario Draghi specifically explained, the purpose of the January meeting was only to assess the economic situation. Well, the assessment had no chance of remaining positive. The PMI indices published on the eve of the meeting signaled a further slowdown in growth, the largest drop was observed in the manufacturing PMI, which fell from 51.4p to 50.5p, the sub-index of new orders continued to decline to 47.9p, which indicates not only a slowdown but a reduction in production.

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Components for core inflation have softened, business activity indices indicate that the slowdown is likely to continue in the first half of 2019.

Nevertheless, apart from the clearly negative effect of the reassessment of risks, the ECB sweetened the pill with two positive conclusions. In his opinion, the benefits of negative rates still outweigh the negative side effects, while TLTRO still remains in the realm of reasoning, not practical action.

At the press conference, the position of the EB regarding TLTRO was touched several times, however, Draghi responded very evasively, informing the well-known facts that these operations were very effective by the recent past, but did not give any hints about the possibility of resuming the incentive program in the near future.

Despite weaker growth prospects and heightened downside risks, the ECB continues to expect inflationary pressures in the euro area to continue to accumulate. A strong recovery in the labor market and a rise in wages, along with still positive economic growth, should start pushing prices up. Draghi mentioned that the reason for which wage growth has a weak effect on prices was the compression of corporate profits, which is expected to end.

In general, the outcome of the ECB meeting did not lead to a significant increase in volatility, the euro paired with the dollar currently looks weaker. During the day, EUR / USD may rise to the trend line punched on the eve, which runs in the 1.1335 / 40 zone, but only to turn south again. A more likely look is a decline during the day and an attempt to update yesterday's low of 1.1288 with an eye to 1.1269.

Great Britain

The British pound rose after reports that the Democratic Unionist Party is ready to support Theresa May's new Brexit plan with some reservations about the future border with Ireland. The probability of a hard exit from the EU declined, which allowed the pound to update the next maximum.

Today, the probability of growth of GBP / USD remains high, an attempt to update the November maximum of 1.3174 is likely.

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

GBP / USD. 25th of January. The trading system. "Regression Channels". The UK exit dates from the EU are postponed to 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: 125.3651

The currency pair GBP / USD on Friday, January 25, continues to show steady growth, as indicated by the purple bars of the Heikin Ashi indicator. Yesterday's meeting of the ECB had nothing to do with the British currency, however, we already wrote that the pound is now becoming rather illogical. Of course, you can call the reason for the strengthening of the pound is the American "shutdown", but paired with the euro, the US dollar is growing. The situation around Brexit has already ceased to influence the British currency in any way. Or, traders are well aware that the only way for the pound in the current conditions is down, and they take another "overclocking" before a new long fall. In the meantime, the first bells appeared that there will be no "hard" Brexit with a 99% probability, as well as the fact that the UK exit date from the EU will be postponed to at least May. This was stated by Austrian Chancellor Sebastian Kurz. He also noted that the UK should take steps towards Brussels. In general, it turns out the situation we already wrote about, the negotiations will last as long as necessary, and the "tough" Brexit will be possible only if one of the parties categorically refuses new concessions in order to achieve an orderly Brexit. Given that the previous negotiations lasted almost two years, the new negotiations may also be delayed.

Nearest support levels:

S1 - 1.3062

S2 - 1.3000

S3 - 1.2939

Nearest resistance levels:

R1 - 1.3123

R2 - 1.3184

R3 - 1.3245

Trading recommendations:

The currency pair GBP / USD continues to move up. Therefore, purchase orders with targets at 1.3123 and 1.3184 are relevant now. Turning the Heikin Ashi indicator down will signal a manual reduction of long positions.

Short positions can be considered not earlier than traders overcome 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 1.2878.

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. 25th of January. The trading system. "Regression Channels". Mario Draghi finished off Euro currency

4-hour timeframe

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Technical details:

The senior linear regression channel: direction - up.

The junior linear regression channel: direction - down.

Moving average (20; smoothed) - down.

CCI: -149.8684

On Friday, January 25, the EUR / USD currency pair fell to Murray's level of "1/8" - 1,1292 and, having failed to overcome it, the upward correction began. The key event of the past day was the speech of the head of the ECB, Mario Draghi, dedicated to the meeting of the regulator. In general, his speech can be described for the euro as negative. There were too many "concerns", "increased risks" and "negative trends". Draghi noted the increased uncertainty in the Brexit issue, as well as the negative impact of this on the EU economy. He also noted weak macroeconomic indicators in the eurozone. In general, according to yesterday's results, the eurocurrency collapsed quite strongly against the US dollar. Today a weak upward correction has begun, but the trend in the instrument remains the same. The only important macroeconomic event of the day will be a report on orders for durable goods in the United States. In America, by the way, the record "shutdown" continues, but this event has no negative impact on the US dollar paired with the euro. From a technical point of view, you should wait for the completion of the correction, that is, the Heikin Ashi indicator turns down.

Nearest support levels:

S1 - 1.1292

S2 - 1.1230

S3 - 1.1169

Nearest resistance levels:

R1 - 1.1353

R2 - 1.1414

R3 - 1.1475

Trading recommendations:

The EUR / USD currency pair has begun a round of upward correction. Thus, it is recommended to open new short positions in case of a downward reversal of the Heikin Ashi indicator with targets at 1.1292 and 1.1230.

Buy orders will become relevant if traders overcome the moving average with the first goal of 1.1414. Senior linear regression channel can support an upward trend. There are no fundamental reasons for this now.

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

Analysis of EUR / USD Divergences for January 25. Two signals to the growth of euro currency

4h

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The currency pair EUR / USD, after the formation of a bearish divergence, completed a fall towards the level of 1.1269. A new bullish divergence at the CCI indicator allowed the pair to make a turn in favor of the EU currency and start growing in the direction of the correction level of 23.6% - 1.1358. Rebounding the pair from the Fibo level of 23.6% will make it possible to expect a reversal in favor of the American currency and a resumption of decline in the direction of the level of 1.1269.

The Fibo grid was built on extremums from September 24, 2018, and November 12, 2018.

Daily

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On the 24-hour chart, the pair fell to the correctional level of 127.2% - 1.1285. Quoting quotes on January 25 from this level will allow us to count on a turn in favor of the euro currency and some growth in the direction of the Fibo level of 100.0% - 1.1553. There are no maturing divergences on the current chart. Closing the pair below the correction level of 127.2% will increase the chances for a further fall in the direction of the next correction level of 161.8% - 1.0941.

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

Recommendations to traders:

Purchases of the currency pair EUR / USD can be carried out with the target of 1.1358, as bullish divergence has formed, and a Stop Loss order under the low of this divergence.

Sales of the currency pair EUR / USD will be possible with the goal of 1.1269 with a Stop Loss order above the Fibo level of 23.6% if the pair bounces off the level of 1.1358.

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