Fundamental Analysis of GBP/USD for February 5, 2019

GBP/USD has been quite impulsive amid the bearish momentum recently which is currently leading the price towards 1.30 price area. USD has been quite stronger than GBP in light of robust US nonfarm payrolls. On the other hand, USD growth is capped by dovish Fed's rhetoric on monetary policy and the recent government shutdown.

GBP has been struggling for gains due to downbeat economic reports and the unsettled Brexit deal ahead of March 29, 2019. Brexit developments have been the main driving force for GBP, whereas the downbeat economic data added to the drawdown even more. Negotiations are being held between the UK and the EU. There is a growing likelihood that the UK could leave the EU without any deal on tough conditions. In case of a hard Brexit, custom checks may be eased for at least three months in Britain for the goods arriving from Europe. A no deal BREXIT is expected to hamper not only the UK economy but also a large number of big companies in the world that might trigger extreme volatility in global financial markets. Recently, UK Construction PMI report was published with a decrease to 50.6 from the previous figure of 52.8 which was expected to be at 52.6 and today Services PMI report was published with a decrease to 50.1 from the previous figure of 51.2 which was expected to be at 51.1. The market-moving events this week are a BOE Inflation report, MPC Official Bank Rate Vote, Monetary Policy Summary, and an Official Bank Rate report which is expected to be unchanged at 0.75%.

On the USD side, the US Federal Reserve kept the official funds rate in December. The Labor Department released mixed employment data, being optimistic with the overall economic growth. As a result, USD is likely to extend strength this week. The Federal Reserve is currently quite patient with the interest rate decisions. Citing Cleveland FED President Mester, it is the best approach under the current situation. However, to boost the US sustainable economic growth, further rate hikes are needed. Today US ISM Non-Manufacturing PMI report is going to be published which is expected to decrease to 57.2 from the previous value of 57.6 and later President Donald Trump is also going to speak about the US-Mexico deal which is expected to contribute to USD gains.

Meanwhile, USD is expected to gain further momentum over GBP but certain spikes and volatility may be observed along the way which might lead to certain throwbacks along the way. Nevertheless, the long-term market sentiment is expected to be against GBP.

Now let us look at the technical view. The price is currently falling deeper towards 1.30 area which is expected to climb higher after retesting off the area with a daily close if any strong bullish momentum is observed with a daily close above the area. As the price remains above 1.30 area with a daily close, further bullish pressure is expected in this pair.

SUPPORT: 1.2930, 1.30

RESISTANCE: 1.3200, 1.3300

BIAS: BULLISH

MOMENTUM: VOLATILE

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EUR / USD could rise to 1.31 - Morgan Stanley

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According to experts of the investment bank Morgan Stanley, despite the fact that the position of the US currency is still strong, its prospects in the medium and long term look far from optimistic.

"Markets today underestimate the potential for weakening the greenback, taking into account shifts in the course of the US Federal Reserve System (FRS), as well as in indicators of the country's economic growth," said representatives of the financial institute.

"We believe that the USD index has reached a peak. It is assumed that in the future, along with such factors as a slowdown in US GDP growth and a pause in the Fed's monetary tightening cycle, pressure on the dollar will have an outflow of capital from the US securities market, they added.

"The cost of hedging assets issued in the United States has never been so high. Thus, with its use, the yield on investments in 10-year treasuries for a European investor will be negative (-0.35%)," the experts noted.

"It's one thing when foreign investors are confident in the strength of the US currency. In this case, they may not insure risks. Another is when the prospects for the dollar appear to be bearish. If non-residents start to take money (and their investments in the US securities market significantly exceed the investments of Americans in foreign stocks and bonds), then the greenback will obviously not be easy." Morgan Stanley believes.

The bank expects that by the end of this year, the pair EUR / USD may rise to the level of 1.31, and USD / JPY will fall to 102.

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Intraday technical levels and trading recommendations for EUR/USD for February 5, 2019

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Since June 2018, the EUR/USD pair has been moving sideways with slight bearish tendency within the depicted bearish Channel (In RED).

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

Bullish fixation above 1.1420 was needed to enhance further bullish movement towards 1.1520.

However, the market has been demonstrating obvious bearish rejection around 1.1420 few times until January 28 when the daily candlestick achieved a bullish closure above 1.1420.

A further bullish advance was expected towards the price level of 1.1550 where the upper limit of both depicted channels (RED & BLUE) was located.

Around 1.1550-1.1570, there's a confluence of supply levels (upper limit of channels & previous historical bottoms) where bearish rejection as well as a valid SELL entry would be expected.

However, the EUR/USD pair has lost its bullish momentum since Thursday when a bearish engulfing candlestick was demonstrated around 1.1514. Thus, another descending high was established then.

Hence, any bearish closure below 1.1420 terminates the current bullish movement (initiated on January 25) allowing another bearish visit towards 1.1350 and 1.1300.

Trade Recommendations:

Conservative traders should wait for the current bullish pullback to pursue towards the price level of 1.1550-1.1570 for a valid SELL entry. T/P levels to be located around 1.1420 and 1.1300. S/L to be located above 1.1600.

Risky traders SELL the GBP/USD pair upon a bearish H4 candlestick closure below 1.1400. T/P to be located around 1.1350 and 1.1285.

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February 5, 2019: GBP/USD is approaching the previous weekly high around 1.3000, shall it hold ?

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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 until January 28 when the GBP/USD pair was almost approaching the supply level of 1.3240.

That's when the current bearish pullback was initiated around slightly lower price levels near 1.3215 (around the depicted supply levels in RED).

This was followed by a bearish engulfing daily candlestick on January 29. Thus, the GBP/USD pair lost its bullish breakout above 1.3155. Hence, an intraday supply level was recently established around 1.3155.

As expected, the recent bearish decline below 1.3150 brought the GBP/USD pair into a deeper bearish correction towards 1.3000 where bullish recovery should be anticipated.

On the other hand, for the bullish scenario to regain its validity, bullish persistence above the price level of 1.3150 (Recent Supply Level) should be re-established on a daily basis. This would enhance another bullish visit towards 1.3240.

Trade Recommendations:

Risky traders have been suggested a counter-trend short trade around 1.3150. Final T/P level around 1.3000 was already reached.

On the other hand, conservative traders should consider the current bearish pullback towards 1.3000-1.2970 (backside of the broken downtrend in RED) for a valid BUY entry.

T/P levels to be located around 1.3055, 1.3155 and 1.3200. Any bearish H4 closure below 1.2950 invalidates this scenario.

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BITCOIN Analysis for February 5, 2019

Bitcoin jumped higher into the Kumo Cloud resistance while being held by the dynamic levels like 20 EMA, Tenkan, and Kijun lines as support. The price is currently climbing higher off the dynamic level of support after 2 consecutive bearish bars. As the price is being held by the dynamic support levels, it is expected to advance higher towards the trend line resistance, from where after rejecting the buyers, BTC is expected to extend the upward bias in the coming days. On the contrary, a daily close above 200 EMA as well as $3,500 area is expected to lead to further bullish momentum. As a result, the price could rise higher towards $3,600 and later towards $4,000 area in the future.

SUPPORT: 3,000, 3,250

RESISTANCE: 3,500, 3,600, 4,000

BIAS: BEARISH

MOMENTUM: VOLATILE

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Brent drew the "bears" to flight

Rumors of problems with global positions make it possible for the "bulls" on the North Sea oil to feel comfortable near the maximum levels for the last two months. The factor of US sanctions against Venezuela is, to a large extent, taken into account in futures quotes, but the fact that the European Union has recognized the opposition leader as the head of the South American country suggests that their expansion is not far off. Paired with the active reduction of production by OPEC and the reluctance of Italy and Greece to buy black gold from Iran, this allows Brent to gain a foothold above $ 62 a barrel.

Even though the US sanctions against Caracas look less ambitious than those against Tehran, their influence is already being felt. According to Commonwealth Bank of Australia, the restrictions imposed on the country can reduce global shipments by 0.5-1%. At the same time, the fall in oil production in Venezuela, Libya, and Iran, as well as the active fulfillment of contractual obligations by Saudi Arabia, suggest that OPEC's desire to balance the market is brought to life. In January, the cartel pumped 31.02 million b / d, reducing production by 930 thousand b / d for the month. Alas, but so far Moscow cannot do what it promised, for which Riyadh has been criticized. Instead of the planned cutting of 228 thousand b / d compared to the base October, in January, Russia reduced the figure by 47 thousand b / d. However, there are reserves, which allows the bulls of Brent and WTI to look to the future with optimism.

Rising oil prices are due to the throwing of a white towel "bears". As a result of the week by January 29, their short positions decreased by 27%. At the same time, buyers are not in a hurry to make serious decisions. Long-term financial managers have increased by a modest 4.5%. In my opinion, investors felt that the bottom has already been passed, but they doubt that the current bullish drivers are able to push the quotes of futures for the North Sea variety much higher. Last year's story with a sharp increase in the activity of American mining companies amid a Brent rally above $ 65 a barrel is still fresh in memory.

Dynamics of oil prices and speculative positions

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Positive emotions to fans of black gold are added by Iran's complaints to Greece and Italy, without explaining the reasons for not wanting to use the grace period set by the United States to buy oil from Tehran. Let me remind you that this factor at one time allowed the "bullish" effect of American sanctions against a Middle Eastern country to be smoothed over. If it does not work, then long-ranked financial managers receive additional whists.

The growth of quotations of Brent and WTI is constrained by a stronger dollar after the release of data on the US labor market in January. If the "bearish" forecasts of large banks on it begin, finally, to work, oil will receive a new impetus to continue the rally.

Technically, there is a correction in the direction of 38.2% and 50% of the CD wave as part of the transformation of the Shark pattern in 5-0. The rebound from resistances, as a rule, are used for sales.

Brent, the daily chart

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Euro and pound under pressure due to fears of a recession approaching

Eurozone

There is no opportunity for the bad news of the euro to end. The indicator of investor confidence Sentix declined for the sixth time in a row, reaching -3.7p, which was the lowest since November 2014.

The analytic group Sentix believes that the main reason for the decline is waiting for Brexit as the economy has to deal with contingency plans. Many companies, one way or another connected with trade between the UK and the EC, do not have a desire for growth and are looking for ways to keep their business stable.

Until recently, respondents had not yet anticipated the onset of a recession, but the rhetoric of the Central Bank is becoming more and more dovish and along with a decrease in investor confidence, consumption and retail sales are down.

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The GDP growth of 0.2% in the last quarter of the past year and published macroeconomic data indicate that in the first quarter of 2019, there is no reason to expect economic recovery. The PMI indices are at 5-year low and if in France and Spain there are some signs of stabilization, then Germany falls in all sectors without exception. Italy has already plunged into recession.

The ECB finally acknowledged the lack of strong growth and changed the risk assessment. At the same time, the ECB did not make any changes in the monetary policy. Thus, investors need to wait for the March meeting to understand how much the changed assessment will affect the regulator's plans. So far, only two parameters support a relatively positive decision, is it stable inflation and wage growth in the eurozone? But, will there be enough of them to continue the growth of the euro?

Today, the EUR / USD pair is under pressure. The nearest support is at 1.1405 and 1.1389 , however, a deeper decline is still unlikely.

Great Britain

The PMI in the services sector fell to 50.1p in January and closely approaching the border, below which is the beginning of a recession and the minimum value since July 2016. The economic growth in the last quarter was minimal in six years while employment in the sector fell for the first time also in six years.

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The pound continues to be under pressure against the backdrop of growing political uncertainty due to Brexit. Two reasons are known to bring growth to the pound in January. Firstly, it is due to the completion of negotiations and secondly, the development of a decision that brought the parties closer to a compromise. However, this decision intensified the domestic political crisis in Britain.

The main financial threat does not matter at all in matters of migration policy and not in matters of trade, which can be completely settled by a separate agreement. The main threat is that British financial institutions will lose or significantly weaken their influence on continental cash flows. At the moment, this is the main reason that could lead to increased pressure on the pound in the event that "Plan B" does not receive support in parliament.

The GBP/USD pair declines on Tuesday with the nearest support level at 1.2995 / 3010. It draws the mouth before the end of the day since there are no reasons for turning north. The decline can go without correction up to 1.2953 / 65. If there is at least some negative news about the upcoming vote, the probability of which is rather high.

Oil

Brent continues to trade above $62 per barrel, reflecting the change in the Fed's position and the activity of OPEC + countries to reduce production levels. Stock indices of most countries of the world are growing. Against this background, oil has a chance to go above 63.60 in search of stronger resistance.

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Control zones of EUR / USD pair 02/05/19

The upward movement remains an impulse, therefore the important level of support is the a CZ 1.1422-1.1413. The test of the specified zone should be considered for the appearance of demand and the pattern for purchases. If this happens, the first goal will be the maximum of last week. Further targets will be measured from the weekly CZ of 1.1492-1.1474, hence, the ratio of risk to profit of a long position will be profitable.

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The last impulse movement started from the current levels, therefore, prices below 1.1433 are in the zone of limit orders. Until these orders are removed, the downward movement will stop.

To break the upward momentum, it is necessary to close today's American session below 1.1413. When this happens, the decline to the weekly CZ of 1.1330-1.1311 will come to the fore. This will allow you to look for favorable prices for sales in tomorrow's European session. It is important to understand that changing the direction of the trend will oblige to close all long positions opened last week.

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

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

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

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GBP / USD: plan for the American session on February 5. PMI composite index returned to 50 points

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

The pound continued to decline against the background of weak data on PMI indices, which continue a series of weak statistics on the UK economy. Buyers today can only rely on the formation of a false breakdown in the support area of 1.2995, and otherwise, it is best to open long positions to rebound from a new low of 1.2947. The main task will be to return and consolidate above the resistance level of 1.3048, which will not be so easy without more compelling reasons, including the positive news on Brexit from British Prime Minister Theresa May.

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

The bears worked the scenario for sale from the level of 1.3048, to which I paid attention in my morning review. At the moment, the challenge is to re-test support of 1.2995, which may lead to a larger sale of GBP / USD to the area of minimum 1.2947 and 1.2894, where I recommend taking profits. In the case of an upward correction scenario in the second half of the day, short positions can be opened on the condition of a false breakdown in the area of the morning resistance at 1.3048 or for a rebound from 1.3099.

Indicator signals:

Moving Averages

Trade is conducted below the 30-day and 50-day moving, which indicates a possible drop in the pound in the short term.

Bollinger bands

In the case of GBP / USD growth, the upside potential may be limited by the upper limit of the Bollinger Bands indicator around 1.3053.

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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: plan for the US session on February 5. Eurozone PMI indices pushed the euro down

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

Buyers of the euro were in a losing situation after the release of weak PMI indices for the eurozone countries, which led to a further decrease in the euro along with the trend. At present, it is best to return to long positions after the formation of a false breakdown around the support level of 1.1412 or to rebound from a minimum of 1.1392, where major players will show themselves. The main task will be the recovery of EUR / USD and the resistance test of 1.1448, where I recommend fixing the profits. However, only a breakdown of this level will lead to a real change in the current downtrend.

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

In the second half of the day, sellers will try to break through the support of 1.1412 from the second time, which will lead to a further sale of the euro to the minimum area of 1.1392, where I recommend fixing the profits, especially if weak fundamental statistics on the American economy are released. In the case of a larger upward correction of the euro, short positions can be considered immediately to rebound from a maximum of 1.1448, above which buyers are unlikely to be able to get out today.

Indicator signals:

Moving Averages

Trade is conducted below 30-day and 50-day moving averages, which indicates that the pressure on the euro remains.

Bollinger bands

In the case of EUR / USD growth, the upside potential may be limited by the upper limit of the Bollinger Bands indicator in the area of 1.1444.

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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

Control zones of AUD / USD pair 05.02.19

Yesterday there was a breakdown of the 1/2 CZ of 0.7232-0.7226, indicating a change in priority and a probable decrease to a weekly control zone. Today's growth of the pair will be decisive for the downward model. If the pair fails to overcome the 1/2 CZ of 0.7281-0.7275 formed from yesterday's minimum and upon the outcome leads to an increase in supply upon testing this zone, the formation of a local accumulation zone will continue. This model involves the search for a pattern for sales after testing the level of 0.7273.

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From the mid-term point of view, the upward movement is a medium-term impulse. This allows you to keep some of the purchases opened at the end of January. Holding a long position will be relevant as long as the pair is trading above weekly short-time 0.7169-0.7157.

An alternative growth model will come to the fore if today's growth absorbs the fall of the last two days. This will allow you to look again for favorable price purchase for any downward movement. The growth potential of the pair is high and the immediate goal will be a weekly CZ of 0.7332-0.7320, formed from the current minimum. It is important to understand that the risk-to-profit ratio makes a profitable deal when setting a stop loss and take profit, so be sure to consider this fact when searching for purchases.

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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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Fractal analysis of major currency pairs on February 5

Dear colleagues.

For the currency pair Euro / Dollar, we are following the downward structure of January 31 and in order to continue the upward movement, it is necessary to design the local structure. For the currency pair Pound / Dollar, the development of the downward cycle of January 28 is expected after the price passes the range of 1.3015 - 1.2991. For the currency pair Dollar / Franc, we are watching the initial conditions for the top of January 31. For the currency pair Dollar / Yen, the upward structure development from January 31 is expected to continue after the breakdown of 110.22. For the currency pair Euro / Yen, the price has issued local initial conditions for the top of February 1. For the currency pair Pound / Yen, we are following the local structure from February 1 and the development of which is expected after the breakdown of 144.00.

Forecast for February 5:

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 1.1548, 1.1514, 1.1467, 1.1415, 1.1387 and 1.1353. Here, we are following the development of the downward structure of January 31 and in order to continue the development of the upward trend, it is necessary to design the local structure. The short-term downward movement is expected in the range of 1.1415 - 1.1387 and the breakdown of the latter value will lead to a movement to the potential target of 1.1353, near which we expect consolidation.

The level of 1.1467 is the key support for the downward structure. Its price passage will have to form local initial conditions for the resumption of the upward trend. Here, the first goal is 1.1514.

The main trend is the downward structure of January 31.

Trading recommendations:

Buy 1.1467 Take profit: 1.1512

Buy 1.1516 Take profit: 1.1546

Sell: 1.1413 Take profit: 1.1390

Sell: 1.1385 Take profit: 1.1355

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For the currency pair Pound / Dollar, the key levels on the H1 scale are 1.3181, 1.3068, 1.3015, 1.2991, 1.2929 and 1.2885. Here, we are following the downward cycle of January 28th. We expect the downward movement to continue after the price passes the range of 1.3015 - 1.2991. In this case, the target is 1.2929. The potential value for the bottom is considered the level of 1.2885, after reaching which we expect consolidation, as well as a possible rollback to the correction.

The corrective movement is possible in the range 1.3068 - 1.3118 and the breakdown of the last value will have to form a local ascending structure. In this case, the first potential target is 1.3181.

The main trend is the downward cycle of January 28.

Trading recommendations:

Buy: 1.3068 Take profit: 1.3116

Buy: 1.3119 Take profit: 1.3180

Sell: 1.2990 Take profit: 1.2930

Sell: 1.2927 Take profit: 1.2885

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For the currency pair Dollar / Franc, the key levels on the H1 scale are 1.0081, 1.0058, 1.0025, 0.9999, 0.9972, 0.9959 and 0.9939. Here, after the cancellation of the formation of the downward structure of January 30, we are monitoring the initial conditions for the top of January 31. The continuation of the upward trend is expected after the breakdown of 1.0000. In this case, the goal is 1.0025 and consolidation is near this level. The breakdown of the level of 1.0025 should be accompanied by a pronounced upward movement. Here, the target is 1.0058. The potential value for the top is considered the level of 1.0081, upon reaching which we expect consolidation, as well as a rollback to the top.

The short-term downward movement is expected in the range of 0.9972 - 0.9959 and the breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.9939.

The main trend is the initial conditions for the top of January 31.

Trading recommendations:

Buy: 1.0000 Take profit: 1.0022

Buy: 1.0027 Take profit: 1.0055

Sell: 0.9972 Take profit: 0.9960

Sell: 0.9957 Take profit: 0.9940

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For the currency pair Dollar / Yen, the key levels on the scale of H1 are 111.32, 111.08, 110.66, 110.22, 109.64, 109.34 and 109.01. Here, we continue to monitor the ascending structure of January 31. The movement upwards is expected after the breakdown of 110.22. Here, the target is 110.66 and consolidation is near this level. The breakdown of the level of 110.66 must be accompanied by a pronounced upward movement. Here, the target is 111.08. The potential value for the top is considered the level of 111.32, 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 109.64 - 109.34 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 109.01 and this level is the key support for the upward structure. Its breakdown will have to develop the downward structure. In this case, the first target is 108.48.

The main trend is the rising structure of January 31.

Trading recommendations:

Buy: 110.22 Take profit: 110.65

Buy: 110.68 Take profit: 111.08

Sell: 109.64 Take profit: 109.36

Sell: 109.32 Take profit: 109.03

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For the currency pair Canadian dollar / Dollar, the key levels on the H1 scale are 1.3190, 1.3139, 1.3114, 1.3074, 1.3026 and 1.2973. Here, we continue to monitor the downward structure of January 24. At the moment, the price is in the zone of correction. The continuation of the downward movement is expected after the breakdown of 1.3074. In this case, the goal is 1.3026 and price consolidation is near this level. The potential value for the bottom is considered the level of 1.2973, after reaching which we expect a rollback to the top.

The short-term uptrend is possible in the range of 1.3114 - 1.3139 and the breakdown of the latter value will lead to a deep correction. Here, the target is 1.3190 and this level is the key support for the downward structure.

The main trend is the downward structure of January 24, the stage of correction.

Trading recommendations:

Buy: 1.3114 Take profit: 1.3137

Buy: 1.3141 Take profit: 1.3190

Sell: 1.3072 Take profit: 1.3030

Sell: 1.3025 Take profit: 1.2975

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For the currency pair Australian dollar / Dollar, the key levels on the H1 scale are 0.7359, 0.7336, 0.7296, 0.7267, 0.7225, 0.7208 and 0.7184. Here, we continue to monitor the ascending structure of January 25. At the moment, the price has issued a local potential for the top of February 5. An upward movement is expected after breakdown of 0.7267. In this case, the target is 0.7296 and near this level is the price consolidation. The breakdown of the level of 0.7296 must be accompanied by a pronounced upward movement. Here, the target is 0.7336. The potential value for the top is considered the level of 0.7359, upon reaching which we expect a rollback downwards.

The short-term downward movement is possible in the range of 0.7225 - 0.7208 and the breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.7184 and this level is the key support for the upward structure.

The main trend is the ascending structure of January 25, the local structure for the top of February 5.

Trading recommendations:

Buy: 0.7268 Take profit: 0.7294

Buy: 0.7298 Take profit: 0.7336

Sell: 0.7225 Take profit: 0.7208

Sell: 0.7206 Take profit: 0.7184

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For the currency pair Euro / Yen, the key levels on the H1 scale are 126.89, 126.46, 125.89, 125.15, 124.91, 124.53 and 123.74. Here, the price has issued local initial conditions for the top of February 1. The continuation of the movement upward is expected after the breakdown of 125.90. In this case, the goal is 126.46 and near this level is the price consolidation. The potential value for the top is considered the level of 126.89, 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 125.15 - 124.91 and the breakdown of the latter value will lead to a prolonged correction. Here, the goal is 124.53 and this level is the key support for the top. Its price will have a downward trend. In this case, the potential goal is 123.74.

The main trend is the local structure for the top of February 1.

Trading recommendations:

Buy: 125.90 Take profit: 126.44

Buy: 126.47 Take profit: 126.89

Sell: 125.15 Take profit: 124.91

Sell: 124.88 Take profit: 124.55

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For the currency pair Pound / Yen, the key levels on the H1 scale are 146.68, 145.74, 144.86, 144.00, 142.69, 142.12 and 141.37. Here, we continue to monitor the local structure for the top of February 1. The continuation of the upward movement is expected after the breakdown of 144.00. In this case, the first target is 144.86 and the breakdown of which will allow us to count on the movement to the level of 145.74. The potential value for the top is considered the level of 146.68, 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 142.69 - 142.12 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 141.37 and this level is the key support for the top.

The main trend is a local rising structure from February 1.

Trading recommendations:

Buy: 144.00 Take profit: 144.80

Buy: 144.88 Take profit: 145.74

Sell: 142.69 Take profit: 142.14

Sell: 142.10 Take profit: 141.40

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

Bitcoin analysis for February 05, 2019

analytics5c596bb1509f5.png

The Bitcoin is trading sideways at the price of $3.471 on a light volume.

White lines - bearish flag in creation

Most recently, I have found that a fake breakout of the resistance ($3.535) and hidden bearish divergence on the MACD oscillator, which is a sign of weakness in the background. Short-term resistance is set at the price of $3.545. For the downward continuation watch for a breakout of the short-term support at $3.440.

Trading recommendation: We will sell BTC on the breakout of support ($.3440). Profit target will be set at $3.388 and protective stop at $3.490.

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

Oil is between two fires

analytics5c59566a220ad.jpg

The beginning of the week on the oil market was quite volatile. On Monday, the trading range of quotations was quite wide. Thus, during the day, a barrel of raw materials of the Brent variety managed to rise in price to a 2-month high and drop in price to a weekly minimum.

Today, the black gold of this brand is traded near the mark of $ 62 per barrel.

According to experts, the volatility of quotations is explained by the presence of opposing factors.

On the one hand, geopolitics speaks in favor of price increases.

In particular, market participants continue to monitor the situation in Venezuela, fearing a decline in oil supplies from this country after the introduction of new restrictions on it by the United States. Earlier, the US Treasury announced that sanctions apply not only to the export of Venezuelan oil to the United States, but also to all transactions carried out with the participation of the US financial system.

On the other hand, a strong dollar is against the rise in quotes. On the eve of the greenback, decently gaining weight against most of its competitors in the G10, prevented the barrel of Brent raw material from gaining a foothold above the $ 63 mark. This fact, apparently, indicates the absence of drivers at the current stage, sufficient to move prices up.

Despite the fact that the breakdown of an important level turned out to be false, attempts to break through to new heights can be regarded as some improvement in the technical picture.

Thus, it remains only to wait for the emergence of more significant catalysts that will open the way for a more sustainable rise in prices. It is assumed that such may be the settlement of the trade conflict between the United States and China. In the meantime, we continue to follow the dynamics of the dollar exchange rate, as well as news from the geopolitical front, where further destabilization of the situation could provoke another surge in purchases in the commodity segment.

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

GBP/USD analysis for February 05, 2019

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The GBP/USD pair made a successful change in trend behavior from bullish to bearish. The key resistance at 1.3215 held successfully and the sellers started the distribution process. Short-term trend remains bearish and we are still holding our short position.

Blue lines - bearish channel

GBP/USD is in a bearish trend making lower highs and lower lows. Price is below the Ichimoku cloud and both the tenkan- and kijun-sen indicators plus below the pivot level (1.3054) and yesterday's low (1.3028). As long as we trade below the Ichimoku cloud on the H1 time – frame, the trend remains bearish.

Trading recommendation: We are still short on GBP/USD from 1.3052 but we secured our position on breakeven (SL moved to entry level 1.3052). The downward target is set at the price of 1.2965.

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

Analysis of Gold for February 05, 2019

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Sellers are in control on Gold. We found a confirmed head and shoulders pattern, which is another strong sign of weakness. The price did small upward correction and fund support at $1.308.00 but in my opinion only temporary. The key short-term resistance remains at $1.323.00. As long as this resistance is holding, you should watch for selling opportunities. The breakout of short-term support at the price of $1.308.00 would confirm a potential test of $1.297.75.

R1: $1.324.00

R2: $1.329.70

R3: $1.335.60

Pivot: $1.318.20

S1: $1.313.75

S2: $1.307.60

S3: $1.302.56.

Trading recommendation: We are still short on Gold from $1.311.00 and protective stop at $1.322.00. The first objective target is set at the price of $1.297.75.

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

Fundamental Analysis of USD/JPY for February 5, 2019

USD/JPY has been quite impulsive amid the recent bullish momentum. The price is holding at the edge of 110.00-50 resistance area with a daily close. Ahead of macroeconomic data from the US this week, JPY has been quite solid amid the recently published economic reports while the Bank of Japan is busy with the wage recalculation process.

Recently Bank of Japan's Governor Kuroda today stated that there is no change in the central bank's assessing the economy after finding errors which forced the labor ministry to revise monthly wages data. The labor ministry is expected to recalculate data by this week that is expected to dent policymakers' hopes for sustained inflation. Recently BoJ Monetary Base report was published with a slight decrease to 4.7% from the previous value of 4.8% which was expected to be worse, decreasing towards 4.6%.

On the USD side, the Federal Reserve is currently quite patient to take decisions on interest rates. Citing Cleveland FED President Mester, it is the best approach in the current situation. Nevertheless, to boost the US economic growth the interest rates remain appropriate to current GDP rates, so further rate hikes are needed. Today US ISM Non-Manufacturing PMI report is going to be published which is expected to decrease to 57.2 from the previous value of 57.6 and later President Donald Trump is also going to speak about the US-Mexico deal which is expected to contribute to USD gains.

Meanwhile, JPY is quite strong in comparison to USD. Upcoming economic report and events in the US could make a bearish impact on USD. Thus, JPY may hold the upper hand in the short term.

Now let us look at the technical view. The price is currently residing at the edge of 110.00 area while developing Bearish Divergence in the MACD Histogram. As the price remains below 110.50 area with a daily close, there are certain chances for the bears to push the price lower towards 108.50 support area in the coming days before the price starts to climb higher in the future.

SUPPORT: 108.50

RESISTANCE: 110.00-50

BIAS: BEARISH

MOMENTUM: VOLATILE

analytics5c5962090311a.png

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

Technical analysis of AUD/USD for February 05, 2019

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Overview:

The AUD/USD pair is set above strong support at the level of 0.7046 which coincides with the 23.6% Fibonacci retracement level and 0.7168. This support has been rejected four times confirming the uptrend. Hence, major support is seen at the level of 0.7046, because the trend is still showing strength above it. Accordingly, the pair is still in the uptrend in the area of 0.7046 and 0.7168. The AUD/USD pair is trading in the bullish trend from the last support line of 0.7112 towards the first resistance level of 0.7168 in order to test it. This is confirmed by the RSI indicator signaling that we are still in the bullish trending market. Now, the pair is likely to begin an ascending movement to the point of 0.7168 and further to the level of 0.7290. The level of 0.7389 will act as major resistance and the double top is already set at the point of 0.7389. At the same time, if there is a breakout at the support levels of 0.7112 and 0.7046, this scenario may be invalidated. Overall, however, we still prefer the bullish scenario.

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

Wave analysis of GBP / USD pair on February 5. Background news does not allow the pound to complete the ascending segment

Wave counting analysis:

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On February 4, the GBP / USD pair lost 35 bp. Despite the fact that wave 4 takes a fairly extensive form and now it already reached 50% mark of Fibonacci from the size of wave 3, the chances that the ascending section of trend will continue its formation. However, I warn you that the news background is clearly not on the side of the "British", therefore, it will be extremely difficult to continue raising the instrument. The situation with Brexit is not yet resolved and the top officials of the EU continue to stand their ground, not agreeing to new negotiations with Britain, whose parliament does not agree with the current version of the Brexit deal. Thus, the variant with the new fall of the pound and the transformation of the wave pattern into a more complex must be ready.

Purchase targets:

1,3297 - 127.2% 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 still assumes the construction of an upward wave of 5, 3. Hence, I expect the resumption of the increase but considering the lengthening of wave 4, I recommend buying the instrument with targets near the estimated level of 1,3297, which equals 127.2% based on Fibonacci after receiving weighty confirmation of the readiness of the instrument to build a new ascending wave. A successful attempt to break through the mark of 1.3023 will most likely cancel the variation with the construction of wave 5 in 3.

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

Technical analysis of GBP/USD for February 05, 2019

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Overview: The GBP/USD pair will continue rising from the level of 1.3048 today. So, the support is found at the level of 1.3048, which represents the pivot point in the H1 time frame. Since the trend is above the pivoti level, the market is still in an uptrend. Therefore, the GBP/USD pair is continuing with a bullish trend from the new support of 1.3048. The current price is set at the level of 1.3080. Equally important, the price is in a bullish channel. According to the previous events, we expect the GBP/USD pair to move between 1.3048 and 1.3139. Therefore, strong support will be formed at the level of 1.3048 providing a clear signal to buy with the targets seen at 1.3139. If the trend breaks the support at 1.3139 (first resistance), the pair will move upwards continuing the development of the bullish trend to the level 1.3222 in order to test the daily resistance 2. In the same time frame, resistance is seen at the levels of 1.3048 and 1.3222. The stop loss should always be taken into account for that it will be reasonable to set your stop loss at the level of 1.2959.The material has been provided by InstaForex Company - www.instaforex.com

Simplified wave analysis of the currency pair EUR / GBP for February 5

Large-scale graphics:

Since April of last year, the rising wave has been developing on the chart of the motocross pair. In its structure, the middle part (B) is nearing completion.

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Medium scale graphics:

The bearish stretch of December 10 in the larger wave model formed a correction. The price has reached the potential reversal zone, but signals of a quick change of course are not yet observed.

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Small-scale graphics:

From the powerful support from January 25, the price started upwards, forming the basis for a potentially reversing design. In the coming days, followed by a rollback down.

Forecast and recommendations:

The price of the cross expects movement in the "side", which will allow the current price rise to gain the necessary level to change the short-term trend. Trading in such conditions is quite risky, the best solution would be to refrain from trading.

Resistance zones:

- 0.8790 / 0.8840

Support areas:

- 0.8630 / 0.8580

Explanations 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

Simplified wave analysis of the currency pair USD / CHF for February 5

Large scale graphics:

On the daily scale of the major franc chart, the last wave is ascending. Its countdown began in February last year. The structure is fully completed the first 2 parts (A + B). In the last part, the preparation for the final price spurt is completed.

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Medium scale graphics:

In the ascending wave of January 10 in the last week, the middle part of the structure (B) is being formed. The wave has the wrong kind of structure.

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Small-scale graphics:

The bullish section of January 31 does not yet have a reversal potential. Before lifting, one should wait for repeated pressure on the support area.

Forecast and recommendations:

The price of the franc in the coming days will continue lateral movement between the nearest oncoming zones. In the area of settlement support, supporters of the inter-day trading style are advised to track long entry signals.

Resistance zones:

- 1.0030 / 1.0080

Support areas:

- 0.9910 / 0.9860

Explanations 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

GBP / USD. February 5th. The trading system. "Regression Channels". Brexit: The collapse of hopes of Theresa May?

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: -117.6714

The currency pair GBP / USD on Tuesday, February 5, has fixed below the moving average line and continues not a too strong downward movement. Meanwhile, the main negotiator from the EU, Michel Barnier, said that the EU would not return to negotiations on the terms of the UK exit from the alliance. According to Barnier, a safety plan is the only working option on the Irish border at the moment. At the same time, the EU is ready to conduct further work on alternative solutions, but only during the transition period. Earlier, similar statements came from other EU leaders, including Angela Merkel and Jean-Claude Juncker. Thus, this means that EU leaders do not intend to sit down at the negotiating table and make additional concessions. At the same time, the British Parliament is not ready to accept the Brexit plan in the form in which it is now. And the stumbling block is the question of the Northern Ireland border. Interesting. The next parliamentary vote is scheduled for February 13th. What may change in the next 8 days? Hardly much. A typical situation, which is called "Path." However, one of the parties still have to make concessions, otherwise we are waiting for the "hard" version of Brexit, which the UK is also not satisfied. Continues to follow the situation.

Nearest support levels:

S1 - 1.3000

S2 - 1.2939

S3 - 1.2878

Nearest resistance levels:

R1 - 1.3062

R2 - 1.3123

R3 - 1.3184

Trading recommendations:

The currency pair GBP / USD continues the downward movement, so now short positions with targets at 1.3000 and 1.2939 are relevant. Heikin Ashi's reversal to the top will indicate a round of upward correction.

Orders for the purchase can be re-considered in the event of a reverse price fixing above the moving with the first target of 1.3123. But as we have said, there are no fundamental reasons for the new growth of the pound.

In addition to the technical picture should also take into account 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. February 5th. The trading system. "Regression Channels". The pair is preparing to overcome the moving

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) - sideways.

CCI: -118.4254

On the second trading day, the currency pair EUR / USD continues to decline weakly and has reached a moving average line. The further dynamics of the pair now depends on whether the pair is able to overcome the moving average. Volatility in the last days on the instrument remains low. From a technical point of view, a decrease in the instrument to the area of 1.1290 - 1.1280 is very likely. In recent months, the instrument has dropped at least five times into this area. As we have repeatedly said, there are no compelling reasons for getting out of a not too accurate range of 1.1290 - 1.1500. Thus, for some time, the pair will continue to stay in this range. Today in the European Union, the publication of retail sales for December, business activity indices in services and production sectors Markit is scheduled. In the States today, there are Markit business indices and an index of business activity in the ISM services sector. The latter is the most significant indicator of today. Despite the fact that today, 6 reports of varying degrees of importance will be released immediately, we believe that fairly low volatility will continue, and traders will be able to overcome the moving average line. In any case, the Heikin Ashi indicator will show a possible reversal of the pair to the top, although it is unlikely.

Nearest support levels:

S1 - 1.1414

S2 - 1.1353

S3 - 1.1292

Nearest resistance levels:

R1 - 1.1475

R2 - 1.1536

R3 - 1.1597

Trading recommendations:

The EUR / USD currency pair continues to be adjusted. New long positions are recommended to open in case of price rebound from the moving and after turning the indicator Heikin Ashi to the top with the first goal of 1.1475.

Sell positions will become relevant no earlier than overcoming the moving average line. If the indicator Heikin Ashi continues to paint the bars blue, then the first target for the short positions will be the level of 1.1414.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanations for illustrations:

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

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

CCI - blue line in the indicator window.

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

Murray levels - multi-colored horizontal stripes.

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

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

EUR: The direction of the euro will depend on today's PMI data

The American dollar stopped its growth, which was formed yesterday in the first half of the day against the European currency after the release of a number of weak fundamental statistics for the eurozone. However, the decline in the EUR / USD pair stopped after a similar series of weak data on the US economy, which came out in the second half of the day.

According to a report by the US Department of Commerce, manufacturing orders in the United States fell very strongly in November, although economists had expected growth.

The data came out with a delay due to the suspension of the government. Thus, industrial orders in the US in November 2018 fell by 0.6% compared with October, while economists had expected orders to grow by 0.1%. Orders excluding transport decreased by 1.3%, while orders excluding defense orders fell by 1.1%.

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Orders for durable goods in November increased by 0.7% compared with the previous month.

The index reflecting employment trends in January of this year decreased compared with the previous month. As indicated in the Conference Board report, the employment trends index in January dropped to 109.56 points against the December value of 110.96 points. As noted in the Conference Board, a slowdown in employment growth is expected in 2019, however, given the fact that overall economic activity grew at the end of 2018, employment growth will still remain strong in early 2019.

A negative contribution was made by a report on the indicator of conditions for doing business in the city of New York. According to the Institute for Supply Management, the ISM-New York current business environment index in January 2109 dropped to 63.4 points from 65.4 points in December. Let me remind you that the index values above 50 indicate an increase in activity.

As for the technical picture of the EUR / USD currency pair, the pressure on the euro will remain as long as the trade is conducted below the resistance of 1.1450. The main task of the bears will be a major support update in the area of 1.1405, and an unsuccessful return to the resistance level of 1.1450 will be a good signal in the first half of the day to increase short positions in risky assets, but much will depend on what statistics on the composite PMI index for largest eurozone economies.

In the case of a trading instrument returning to the resistance level of 1.1450, a larger upward correction can be expected in the maximum area of 1.1490.

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

Wave analysis of EUR / USD pair for February 5. Euro currency continues to descend slowly within wave 3

Wave counting analysis:

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On Monday trading, February 4, it ended with a slight decline for the EUR/USD pair by 15 bp. Thus, the current wave counting maintains its integrity and implies the construction of a downward wave 3 within the framework of a new downtrend trend. If the current version is not correct but an alternative version is being developed with a three wave structure, which we have seen several times before, I still expect the instrument to decline to the level of 1.1290. The news background is not strong now. Several indices of business activity in various fields from Europe and America, which will be released today, are unlikely to break or significantly change the current wave counting.

Sales targets:

1,1289 - 0.0% Fibonacci

1.1215 - 0.0% Fibonacci

Purchase targets:

1.1502 - 76.4% Fibonacci

1.1569 - 100.0% Fibonacci

General conclusions and trading recommendations:

Presumably, the pair moved to the construction of a downward wave of 3. Thus, I still recommend now selling the instrument with targets located near the marks of 1,1289 and 1.1215, which equals 0.0% and 0.0% Fibonacci. The 50.0% level on the higher Fibonacci grid is the first reference for both wave 2 and for all further development of the downward trend segment. Above it, you can place protective orders.

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

Indicator analysis. The daily review of the currency pair GBP / USD on February 5, 2019

Trend analysis (Fig. 1).

On Tuesday, the price will try to continue moving down. To do this, it will have to overcome the recoil level of 23.6% - 1.3034 (blue dashed line), which is unlikely. From this level, an upper movement is possible.

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Fig. 1 (daily schedule).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger lines - down;

- Weekly schedule - up.

General conclusion:

On Tuesday, the price will try to continue moving down. To do this, it will have to overcome the recoil level of 23.6% - 1.3034 (blue dashed line), which is unlikely. From this level, an upper movement is possible.

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

Indicator analysis. The daily review of the currency pair EUR / USD on February 5, 2019

Trend analysis (Fig. 1).

On Tuesday, the price will continue to move down. The first lower target of 1.1429 is the recoiling level of 38.2% (blue dashed line). Then the top is possible.

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Fig. 1 (daily schedule).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - down;

- Volumes - up;

- Candlestick analysis - down;

- Trend analysis - down;

- Bollinger lines - up;

- Weekly schedule - up.

General conclusion:

On Tuesday, the price will continue to move down. The first lower target of 1.1429 is the recoiling level of 38.2% (blue dashed line). Then the top is possible.

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

Analysis of the divergence of EUR / USD for February 5. The pair shows the willingness to fall

4h

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The currency pair EUR / USD, after rebounding from the correctional level of 50.0% - 1.1517, performed consolidation below the Fibo level of 38.2% - 1.1446 and continues the process of falling in the direction of the level of 23.6% - 1.1358. Overlapping divergences on February 5th are not observed in any indicator. Fixing quotations of the pair above the Fibo level of 38.2% will work in favor of the Euro currency and the resumption of growth in the direction of the correction level of 50.0%.

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 retains chances for further growth in the direction of the correction level of 100.0% - 1.1553. Rebounding the rate of the pair from this level will allow traders to expect a reversal in favor of the American currency and a slight drop in the direction of the Fibo level of 127.2% - 1.1285. Fixing quotes above the correction level of 100.0% will increase the chances of continued growth in the direction of the correctional level of 76.4% - 1.1789.

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 1.1517, if the pair closes above the correction level of 38.2%, and with a Stop Loss order under 1.1446.

Sales of the currency pair EUR / USD can be carried out now with the goal of 1.1358 with a Stop Loss order above the Fibo level of 38.2%, since the pair completed the closure below the level of 1.1446.

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

Analysis of GBP / USD Divergences for February 5th. Bullish divergence does not help the pound sterling

4h

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The currency pair GBP / USD on a 4-hour chart rebounded from the Fibo level of 76.4% - 1.3094 with a turn in favor of the American dollar. As a result, February 5 continues to fall in the direction of the correction level of 61.8% - 1.2969. Rebounding the pair from the Fibo level of 61.8% will allow traders to expect a reversal in favor of the British pound and some growth in the direction of the correction level of 76.4%. Closing quotes below the level of 61.8% will increase the chances of a further fall towards the next level correction of 50.0% - 1.2869.

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 pair quotes rebounded from the correctional level of 23.6% - 1.3088 and resumed the process of falling in the direction of the correction level of 38.2% - 1.3008. A new bullish divergence at the MACD indicator allows traders to expect a reversal in favor of the pound sterling and some growth in the direction of the Fibo level of 23.6%. The end of quotes from the level of 38.2% will similarly work in favor of the beginning of the pair's growth. Closing the pair below the Fibo level of 38.2% will work in favor of continuing to fall in the direction of the next correction level of 50.0% - 1.2943.

The Fibo grid was built on extremes from January 15, 2019, and January 25, 2019.

Recommendations to traders:

Purchases of the currency pair GBP / USD can be made with the target of 1.3088 and a Stop Loss order below the level of 38.2% if the pair bounces off the level of 1.308 (hourly chart).

New sales of the currency pair GBP / USD will be possible with the target of 1.2943 and a Stop Loss order above the level of 38.2% if the pair closes below the level of 1.3008 (hourly chart).

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

GBP / USD plan for the European session on February 5. The Pound remains under the lower boundary of the channel

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

Buyers of the British pound are not yet available in the market, however, a strong bearish correction is also not observed. The main task for the first half of the day will be the return and consolidation above the resistance of 1.3042, which will lead to an upward corrective impulse to the area of 1.3099. However, to break the current downward trend requires the breakdown of this range with a yield of 1.3159, where I recommend to take profits. In the event of a further decline of the pound on weak data in the UK, it is best to look for long positions on a rebound from a minimum of 1.2971.

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

A failure to consolidate above the resistance of 1.3042 will be the first signal to sell to the British pound, however, the main target for sellers will be a large level of support in the 1.2971 area, where I recommend taking profits. In the case of a pound rising above 1.3042, it's best to take a closer look at short positions after updating the maximum in the area of 1.3099 or at a rebound from the level of 1.3159. Any news of the failure of negotiations between Theresa May and EU representatives could lead to a rapid fall in the pound.

Found in the video review.

Indicator signals:

Moving averages

Trade is conducted below the 30- and 50-day moving, which indicates the further formation of the downward movement.

Bollinger bands

Volatility is low, which does not give signals for entering the market using the Bollinger Bands indicator.

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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

Forecast for GBP / USD for February 5, 2019

GBP / USD

The British pound continues to decline under the pressure of uncertainty at the final stage of the Brexit agreement. Over the past month, the index of business activity in the UK construction sector fell from 52.8 to 50.6. On the four-hour chart, the trend is completely decreasing, on the daily scale, the price needs to be fixed under the price channel line (1.3004) in order to continue to decline towards the support of the Kruzenshtern line around 1.2880. Fixing under this line will allow considering lower target levels, for example, 1.2625, support for the downstream nested line of the price channel.

The upward price movement is also possible, since formally on the daily timeframe, the price is still in an upward trend. A reversal may occur from the level of 1.3004, which may coincide with the reversal of the Marlin signal line from the border with the territory of decline. This is also prevented by weak price convergence with the Marlin indicator on the lower chart. The growth of prices, in this case, is difficult to determine, perhaps, to the Kruzenshtern line on H4 - 1.3130, and then down again.

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

Forecast for USD / JPY on February 5, 2019

USD / JPY

Japanese Yen vigorously recovers last week's losses. Over the past 2 days, growth was more than 100 points. The growth of the American stock market helps it in this, yesterday the S & P 500 grew by 0.68%, Russell 2000 by 1.23%.

At the moment, the price is above the Kruzenshtern line on the four-hour chart and is trying to overcome the balance line on the daily chart (red). Here, the price may be delayed. A delay may also occur on a stronger resistance of 110.40, where the price channel line and the Kruzenshtern line on the daily chart converge. From this level, a full correction is possible.

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