Good times for German industry are over, how will it affect the euro

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Weak demand from abroad unexpectedly reduced the volume of industrial orders in Germany, this is another sign that exporters in Europe's largest economy are suffering from a slowdown in the global economy and growth in the number of trade barriers. Contracts for goods produced in Germany declined by 1.6% in December, the overall decline was caused by a fall in orders of 5.5% from customers outside the eurozone, while domestic orders decreased by 0.6%.

"It is now clear that the best times for the German industry have passed. Due to the slowdown of the global economy and many political risks, I doubt that new and sustainable growth impulses will appear in the near future," said Alexander Kruger, an economist at Bankhaus Lampe.

Growth is expected to remain weak early in the year, as sentiment indicators indicate a decline in industrial activity in the coming months. Industrial orders declined, and any recovery in industrial activity would be slow. The Ifo indicator last week showed that business sentiment in Germany fell in January for the fifth month in a row. Other data showed that retail sales in Germany fell in December more noticeably in just 11 years, which became an alarming signal about household spending, which became a key factor in growth in Germany. Positive factors include record high employment, real wage growth, and low borrowing costs.

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The speech of the head of the RBA led to the sale of the Australian dollar

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On Wednesday, February 6, the head of the Reserve Bank of Australia, Philip Lowe, made an unexpectedly mild speech, while investors were awaiting statements about raising interest rates. This caused the sale of the Australian currency.

In a speech titled "Next Chapter," he pointed out that the increase in interest rates of the US Federal Reserve and other large central banks does not have automatic consequences for Australia.

The official also noted that the flexible rate of the Australian dollar gives the RBA considerable time independence for the implementation of domestic policy.

In addition, high mortgage arrears means that consumer consumption may decrease due to higher rates.

P. Lowe said that the RBA is not aimed at conducting fine-tuning of monetary policy. According to him, the state of the country's economy is improving, but there are still risks, noting that the surge in investment activity in the mining industry is gradually subsiding.

The head of the regulator believes that in order to raise real income per capita, it is necessary to increase productivity.

After the speech of the head of the RBA, the Australian dollar against the US dollar as of 16:30 Moscow time fell by 1.44% to 0.7130, the minimum since January 21 against the euro by 1.27%.

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Fractal analysis of major currency pairs on February 6

Dear colleagues.

For the currency pair Euro / Dollar, we follow the downward structure of January 31 and we expect further downward movement after passing by the price of the range of 1.1387 - 1.1375. For the currency pair Pound / Dollar, we should continue the downward movement after the breakdown of 1.2929. 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 of January 31 is expected to continue to develop after the breakdown of 110.22. At the moment, the price is in the zone of initial conditions. For the currency pair Euro / Yen, the situation is in equilibrium and the level of 124.53 is the key resistance for the bottom. For the currency pair Pound / Yen, the price set the initial conditions for the downward movement of February 4.

Forecast for February 6:

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 1.1441, 1.1419, 1.1405, 1.1387, 1.1375, 1.1353, 1.1326 and 1.1307. Here, we are following the development of the downward structure of January 31. We expect the downward movement to continue after the price passes the range of 1.1387 - 1.1375. In this case, the target is 1.1353, and consolidation is near this level. The breakdown of the level of 1.1353 should be accompanied by a pronounced move to the level of 1.1326. The potential value for the bottom is considered the level of 1.1307, near which we expect consolidation in the range of 1.1307 - 1.1353.

The corrective uptrend is possible in the range of 1.1405 - 1.1419 and the breakdown of the latter value will lead to a prolonged correction. Here, the target is 1.1441 and this level is the key support for the downward structure.

The main trend is the downward structure of January 31.

Trading recommendations:

Buy 1.1405 Take profit: 1.1419

Buy 1.1421 Take profit: 1.1440

Sell: 1.1375 Take profit: 1.1355

Sell: 1.1350 Take profit: 1.1326

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For the currency pair Pound / Dollar, the key levels on the H1 scale are 1.3068, 1.3015, 1.2991, 1.2929, 1.2885, 1.2828 and 1.2789. Here, we continue to monitor the downward cycle of January 28th. The short-term downward movement is possible in the range of 1.2929 - 1.2885 and the breakdown of the latter value should be accompanied by a pronounced downward movement. Here, the target is 1.2828. The potential value for the bottom is considered the level of 1.2789, after reaching which we expect consolidation, as well as a rollback to the correction.

The corrective movement is possible in the range of 1.2991 - 1.3015 and the breakdown of the last value will lead to a prolonged correction. Here, the target is 1.3068.

The main trend is the downward cycle of January 28.

Trading recommendations:

Buy: 1.2991 Take profit: 1.3015

Buy: 1.3017 Take profit: 1.3060

Sell: 1.2929 Take profit: 1.2888

Sell: 1.2883 Take profit: 1.2830

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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, we are following the ascending structure 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 rising structure 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 1.3274, 1.3257, 1.3226, 1.3206, 1.3176, 1.3152 and 1.3117. Here, we are following the development of the ascending cycle of February 1. The short-term upward movement is possible in the range of 1.3206 - 1.3226 and the breakdown of the latter value should be accompanied by a pronounced upward movement. Here, the target is 1.3257 and the potential value for the top is considered the level of 1.3274, after reaching which we expect consolidation.

The corrective movement is possible in the range of 1.3176 - 1.3152 and the breakdown of the latter value will lead to an in-depth correction. Here, the goal is 1.3117 and this level is the key support for the upward structure.

The main trend is the upward cycle from February 1.

Trading recommendations:

Buy: 1.3206 Take profit: 1.3224

Buy: 1.3228 Take profit: 1.3255

Sell: 1.3174 Take profit: 1.3154

Sell: 1.3150 Take profit: 1.3125

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For the currency pair Australian dollar / Dollar, the key levels on the H1 scale are 0.7193, 0.7169, 0.7150, 0.7112, 0.7085, 0.7049 and 0.7025. Here, we are following the development of the downward structure of January 31. The short-term downward movement is expected in the range of 0.7112 - 0.7085 and the breakdown of the latter value will lead to a pronounced movement. Here, the target is 0.7049. The potential value for the top is considered to be the level of 0.7025, after reaching which we expect consolidation and rollback to the top.

The short-term upward movement is possible in the range of 0.7150 - 0.7169 and the breakdown of the latter value will lead to a deep correction. Here, the target is 0.7193 and this level is the key support for the downward structure.

The main trend is the downward cycle of January 31.

Trading recommendations:

Buy: 0.7150 Take profit: 0.7167

Buy: 0.7171 Take profit: 0.7193

Sell: 0.7112 Take profit: 0.7088

Sell: 0.7083 Take profit: 0.7050

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For the currency pair Euro / Yen, the key levels on the H1 scale are 126.46, 125.98, 125.52, 124.91, 124.53 and 123.74. Here, we expect the initial conditions for the downward cycle. The short-term downward movement is possible in the range of 124.91 - 124.53 and the breakdown of the latter value should be accompanied by a pronounced movement. Here, the potential target is 123.74.

The short-term upward movement is possible in the range of 125.52 - 125.98 and the breakdown of the latter value will have to develop an upward trend on the scale of H1. Here, the first potential target is 126.46.

The main trend is the equilibrium situation.

Trading recommendations:

Buy: 125.52 Take profit: 125.95

Buy: 126.00 Take profit: 126.46

Sell: 124.88 Take profit: 124.55

Sell: 124.44 Take profit: 123.80

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For the currency pair Pound / Yen, the key levels on the H1 scale are 143.35, 142.86, 142.53, 141.84, 141.18, 140.38 and 139.80. Here, the price set the initial conditions for the development of a local downward cycle of February 4. We expect short-term downward movement in the range of 141.84 - 141.18 and the breakdown of the latter value should be accompanied by a pronounced downward movement. Here, the target is 140.38. The potential value for the bottom is considered the level of 139.80, after reaching which we expect consolidation, as well as rollback to the top.

The short-term upward movement is possible in the range of 142.53 - 142.86 and the breakdown of the latter value will lead to a deep correction. Here, the target is 143.35 and this level is the key support for the bottom.

The main trend is the initial conditions for the downward cycle of February 4.

Trading recommendations:

Buy: 142.53 Take profit: 142.84

Buy: 142.88 Take profit: 143.35

Sell: 141.80 Take profit: 141.20

Sell: 141.15 Take profit: 140.45

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GBP / USD plan for the American session on February 6. Divergence worked on the buyers side of the pound

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

The formation of the divergence, which I drew attention to in my morning review, led to a return in demand for the British pound and consolidating above 1.2950 support, which may strengthen the upward correction in the afternoon. The main objective of the bulls is to break through the resistance level of 1.2992, just above which the upper limit of the current downward channel passes. In the case of a repeated decline of the pound to the support area of 1.2931, from there it is best to return to long positions only on a false breakdown or on a rebound from a new minimum of 1.2883.

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

The bears could not continue the downward trend in the pound in the first half of the day, which led to the closure of a number of short positions and a slight upward rebound of the GBP/USD pair. At the moment, short positions can return to a false breakdown in the area of large resistance at 1.2992, where the 50-day moving average is located, or to rebound from a maximum of 1.3048. The main task of the sellers will be a repeated test of the support area 1.2931 and a breakout will open a direct road to the area of new weekly lows of 1.2883 and 1.2833, where I recommend taking profits.

More in the video forecast for February 6

Indicator signals:

Moving averages

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

Bollinger bands

Bollinger Bands indicator volatility has plummeted, which does not give signals on the market entry.

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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 6. There is no bad news for the euro

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

Given that there are no expected significant fundamental statistics to be released today, euro buyers took advantage of this moment and managed to keep the pair from a larger sale. Now the bulls are trying to return to the resistance level of 1.1403, fixing above which will lead to a stronger upward correction in the area of maximum at 1.1432 and 1.1459, where I recommend fixing profits. In the case of another wave of EUR / USD and a decline in the second half of the day, you can look for long positions on a rebound from the support of 1.1370 and 1.1342.

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

Sellers need to form a false breakdown in the area of resistance at 1.1403 and keep the euro below this level, which will keep the downward potential in the pair. The purpose of which is for further reduction of EUR / USD in the area of the minimum at 1.1370 and 1.1342, where I recommend fixing profits. In the case of consolidation above the level of 1.1403, a series of stop-orders of sellers may occur, which will lead to an increase in the euro to an area of maximum 1.1432, where I recommend today to sell immediately for a rebound.

More in the video forecast for February 6

Indicator signals:

Moving averages

Trade is conducted below the 30- and 50-medium moving, which indicates the continued pressure on the euro.

Bollinger bands

In case of EUR / USD growth, the upside potential may be limited by the upper limit of the Bollinger Bands indicator in the 1.1418 area.

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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

Dollar is trading in different directions to the yen and the euro after Trump's speech

The speech of US President Donald Trump with an annual message to Congress had a weak effect on currency trading. The dollar strengthened against the euro but weakened against the yen. As of 11:00 London time, the EUR/USD rate dropped to 1.1385 mark and the USD/JPY rate dropped to a level of 109.70. The dollar index rose by 0.09% to 96.16 points.

Yesterday, Donald Trump promised to complete the construction of the border wall in Mexico. According to the White House administration, a letter was sent to Congress with a proposal that is apt to end the crisis on the country's southern border.

Touching on the topic of trade with China, the US president said that the new deal with China should include significant structural changes in the trade interaction of the two countries and lead to a reduction in the trade deficit of the United States.

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February 6, 2019: EUR/USD has lost its bullish breakout above 1.1420.

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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 so far.

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.

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, the current 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 bearish pullback to pursue towards the price zone of 1.1285-1.1300 (lower limit of the depicted movement channel) for a valid BUY entry.

T/P level to be located around 1.1350 and 1.1420. S/L to be located below 1.1250.

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GBP / USD: Will the Bank of England support the pound?

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On the eve, the pound sterling against the dollar sank below $ 1.30 after the UK data on the service sector PMI were released, which were the weakest since June 2016, when a referendum was held on the issue of the country's withdrawal from the EU.

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According to experts, the dynamics of the pound suggests that hopes of reaching a compromise between London and Brussels are fading again, giving way to fears of the implementation of the "tough" Brexit scenario.

"One of the options for the destructive impact of Brexit without a deal can be a situation where the United Kingdom will be isolated almost as much as Iceland in 2010 after the eruption of the Eyjafjallajokull volcano," said experts of the National Institute for Economic and Social Research (NIESR).

"In this case, the British economy can expect a recession of varying degrees of severity, depending on the measures taken by the authorities. Meanwhile, according to our estimates, under the "soft" scenario, GDP growth in the state in 2019 will be 1.5%, and in 2020, 1.7%," they added.

It is assumed that this week, British Prime Minister Theresa May will hold another round of talks with EU representatives to conclude a new deal, which is then approved by the House of Commons.

"At the moment, almost no one is waiting for a breakthrough, and it seems that the recent positive mood, supported by the pound, is drying up," said Lee Hardman, currency strategist at MUFG.

In addition to the uncertainty around Brexit, the pound this week will have to go through another important event. Tomorrow, the first meeting of the Bank of England is to take place this year.

The regulator is expected to leave the interest rate unchanged.

"Since the risks associated with Brexit have increased since the last meeting of the Central Bank before Christmas, this further limited its room for maneuver," said Adam Cole, an analyst at Royal Bank of Canada.

It is likely that weak macroeconomic data, an unresolved situation with the UK leaving the EU, a restrained position of the Fed may force the Bank of England to take a softer position with respect to its monetary policy, which will cause a sharp depreciation of the pound. At the same time, any sign of strengthening the "hawkish" rhetoric of the Central Bank can support the British currency.

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Simplified wave analysis of EUR / CHF for February 6

Large-scale graphics:

The last, current wave construction on the D1 chart dates back to September of last year. The ascending shape has the form of a standard plane.

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Medium scale graphics:

The bullish section of January 3 in the wave of the older TF forms the final part (C).

Small-scale graphics:

The rising wave from January 25 completes a larger ascending zigzag. The lower boundary of the preliminary target zone is in the area of the calculated resistance.

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Forecast and recommendations:

In the coming weeks, the price is expected to rise in the pair, within one and a half price figures. Proponents of a mid-day style from calculated support can make short-term purchases.

Resistance zones:

- 1.1490 / 1.1540

Support areas:

- 1.1380 / 1.1330

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 GBP / USD for February 6

Large-scale graphics:

Analyzing the large scale of the pound chart, we can note the downward wave that dominates since April last year. The price has reached a strong support, but the incomplete structure of the wave indicates the probability of formation of no more than a correction.

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Medium scale graphics:

The ascending portion of December 12th completes a complex wave correction in a larger model. The figure on the graph is more like a moving plane.

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Small-scale graphics:

From strong resistance on January 28, the price forms a bearish wave. So far, it does not have enough wave level to change course. In the coming days, it is worth waiting for the re-rise of the course.

Forecast and recommendations:

The rising wave is nearing completion, but no reversal signals have been observed so far. It is recommended to complete the previously opened instrument purchases and start tracking reversal signals in order to find the entrance to the "short" deals.

Resistance zones:

- 1.3140 / 1.3190

Support areas:

- 1.2770 / 1.2720

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

Aussie and Kiwi will rise by the end of the year: Reuters survey

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Australian and New Zealand dollars will be more sustainable in the coming months as the US Fed signals a more cautious policy, although growth will be limited by uncertainty about the global economy. The Reuters survey, which was attended by 46 analysts, showed that the average forecast for the Australian for the next three months remains at $ 0.72, the forecast for six months was slightly raised to $ 0.73.

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The survey is conducted against the background of renewed downward pressure on the Australian currency, which lost almost 10 percent in 2018, and reached a week low on Wednesday when the country's central bank chose a neutral position. Weak economic data has led investors to expect a rate cut by almost 60 percent by the end of the year. By mid-2020, a 25 basis point decrease is expected, which is a significant change from what was done just a couple of months ago, when investors were ready for a rate hike. But even reducing the rate by 50 basis points is unlikely to lead to the fall of the Australian dollar below $ 0.70, given the recent rise in prices for iron ore, base metals, oil, and gold. The AUD / USD pair will trade for a long time in the range of 0.70–0.75, the dollar.

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February 6, 2019: The GBP/USD pair is looking for bullish demand around 1.2950

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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 persistence above 1.3155 as a result.

As expected, the recent bearish decline below 1.3150 brought the GBP/USD pair into a deeper bearish correction towards 1.3000 where lack of bullish demand was recently noticed.

That's why, further decline was demonstrated towards 1.2920-1.2950 where (38.2% Fibonacci level) as well as the backside of the depicted broken trend are located (in RED).

For the bullish scenario to remain valid, significant bullish recovery should be demonstrated around the current price levels 1.2920-1.2950. This would enhance a quick bullish visit towards 1.3000 and 1.3150.

Trade Recommendations:

Conservative traders should consider the current bearish pullback towards 1.2940-1.2920 (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 1.2900 invalidates this scenario.

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

The dollar sustained Trump's speech; Australian struck by the change in the Central Bank rate

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The dollar almost did not respond to the speech of US President Donald Trump, which touched on issues of trade and budget, but did not give investors many surprises. In an annual speech on priorities for the coming year, President Trump declared that illegal immigration is a serious national problem, and confirmed his intention to build a wall. Trump also said that any trade agreement with China "must include real structural changes to put an end to unfair trade practices, reduce chronic trade deficits, and protect American jobs." There were no surprises in Trump's address, he didn't declare an extraordinary "financial" position and didn't make any important comments on China, and in general, the fall of the Australian dollar seemed to attract more attention.

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The Australian dollar collapsed when the head of the Central Bank, Philip Lowe, announced a possible rate cut, after talking about tighter monetary policy in the future for over a year. In his first public speech this year, Lowe said that the stakes could go in any direction, depending on the labor market and inflation. The Australian dollar, as a result, fell immediately by 1 percent. Note that the growth of the yen against the oppressed Australian was considered as a factor influencing the dollar/yen rate, and the US dollar has already reached a five-week maximum of 110.165 yen. The dollar manages to keep up well, despite the decline in yields on Treasury bonds.

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Dollar suspended gold

A strong report on the US labor market somewhat cooled the ardor of precious metal admirers. Amid reports of employment growth outside the agricultural sector, ETF stocks dropped by 5.3 tons immediately since February. A rather noticeable loss, given the fact that the figure had increased by 25 tons over the previous four days. Profit taking on long positions contributes to the development of XAU/USD consolidation.

From the levels of the November lows, precious metals rose by almost 10%. The rally accelerated in December as US stock indices fell in January due to a change in the Fed's rhetoric. Jerome Powell and his colleagues talking about the need for a long pause in the process of normalizing monetary policy in large numbers. It will drag on at least until June, according to the President of the Federal Reserve Bank of Dallas, Robert Kaplan. At the same time, gold is supported by geopolitical risks aside from concerns over the fate of the global economy and low rates of the global debt market. Donald Trump announced his intention to dislodge the necessary money from the US Congress to build a wall on the border with Mexico. Otherwise, we are waiting for re-disabling the government. According to estimates of the Budget Committee, it will cost the US economy $3 trillion initially.

The dynamics of supply managers' indices convince the further slowdown of the world economy. Business activity in the United States began to fall in the fourth quarter and much earlier in the eurozone and China, which caused the weakness of the euro and the yuan in 2018.

Dynamics of business activity indexes

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Perhaps the main culprits of hitting the XAU/USD bulls are weak currency competitors of the US dollar. The euro cannot move higher when Italy's economy falls into a technical recession while France's PMI indicates an early recession. The European retail sales are declining at the highest rates since 2011 and the European Commission significantly cuts the forecast for GDP currency block from 1.9% to 1.4%.

At the same time, the weakness of the world economy and the passivity of central banks associated with it should have a positive effect on gold in the future. The fact is that the propensity of regulators to soft monetary policy reduces the yield of bonds. The attractiveness of a precious metal that does not provide its interest holders grows, similarly to its share in investment portfolios. Thus, the longer the global economy feels unimportant and the lower the rates on debt markets are, the greater the chances for the XAU/USD rally to continue.

For the resumption of the upward trajectory, gold will require disappointing macroeconomic statistics for the United States, which will lead to a weakening of the US dollar. In my opinion, traditionally bad weather for this time, the manifestation of the effect of turning off the government and the fading of the fiscal stimulus suggest that the indicators will deteriorate.

Technically, the idea of implementing the target of 161.8% using the AB = CD pattern is still relevant, there is no reason to doubt the upward strength. Therefore, it makes sense to use kickbacks to support for $1,310 and $1,300 per ounce in forming long positions.

Gold daily chart

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Control zones of AUD / USD pair 02/06/19

Yesterday's closing of the American session occurred below the 1/2 CZ of 1.2034-1.3005. This indicates a change of priority to downward. Any growth must be used to find favorable prices for the sale of the instrument. It is important to understand that the weekly CZ of 1.2832-1.2793 is now the medium-term target. The probability of the testing this zone is 70%, which allows you to search for sales above current marks.

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It is important to note that at a distance of 70 points below the current price is the zone of the average progress for the current week. A test of this zone can lead to a halt of the fall until Friday, hence, it is worth considering with caution on sales below yesterday's low.

An alternative model will be developed if yesterday's fall is absorbed by growth, and the American session closes above the level of 1.3030. This will allow considering the formation of a local accumulation zone. The new target for the work will be the a CZ formed from today's minimum. This model is not a high probability but it must be considered as an auxiliary.

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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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AUD / USD: Lowe and Trump knocked down the Australian pair

The main outsider in the Asian session was the Australian dollar, which, together with its American namesake, collapsed more than 100 points in a few hours as it heads for the main psychologically important support level of 0.70. It is noteworthy that Ozzy actually ignored the meeting of the Reserve Bank of Australia and even grew a little after it. However, it could not stand the dovish mood of Philip Lowe, who did not rule out a reduction in interest rates in the foreseeable future. The flat was replaced by a southern impulse that could "grow" into a southern trend, especially if the bears push the above level of support.

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It should be noted that the sharp decline in the Australian is in particular because of the "surprise factor". After all, just a day ago, the RBA summed up the first meeting this year and the voiced theses did not surprise traders. The regulator left the key interest rate unchanged at a record low one-and-a-half percent level and also reduced economic growth forecasts to 3% from the previous forecast of 3.5%. In general, this result is widely expected. Let me remind you that at its November meeting, the Australian regulator predicted economic growth by 3.5% in 2018, while the real numbers were significantly lower - 2.8%. Therefore, many experts did not doubt that the RBA will revise the forecast for 2019 in the direction of deterioration. Moreover, some analysts warned that the Central Bank would rather substantially revise its position, however, these concerns were not justified. Yet, the Australian regulator focused on a number of other negative factors.

First, it is a slowdown in inflation and a decline in retail sales. Thus, the consumer price index in annual terms in the fourth quarter of last year came out at 1.8% with a forecast of 1.7%, continuing the trend of its decline for the second quarter in a row. The level of retail sales fell to 14-month lows, coming out in December at around 0.4%. Trends in the real estate market are also disturbing: housing has fallen in price in almost all major Australian cities (especially in Sydney and Melbourne). Prices have been falling for 13 of the last 15 months and over the past three months, the rate of decline has accelerated significantly. Since the peak recorded in the fall of 2017, the real estate in Australia has fallen by more than six percent.

At first glance, data on the labor market also did not impress the members of the Australian regulator. The fact is that the growth in employment in December was entirely due to part-time employment. But on the contrary, full employment declined by three thousand, continuing the negative trend. This factor adversely affects the dynamics of wage growth since full-time positions offer higher wages.

Summing up all the above factors, the Reserve Bank lowered the forecast for economic growth but did not talk about possible mitigation of monetary policy conditions. But a day after the meeting, the head of the Central Bank, Philip Lowe, did not rule out this scenario. He acknowledged the heightening of both external and internal risks. The trade war between China and the United States could flare up with a new force in the spring, pulling the world economy and the commodity market. Ascertaining this fact, Law stated that the regulator can react to external circumstances accordingly and the option of lowering the interest rate cannot be ruled out. It is worth noting here that earlier in the text of the accompanying statement of the RBA, there was a phrase that "the next action regarding the interest rate will most likely be upward. Now the reverse option is not excluded.

Given the current fundamental picture, short positions in AUD/USD pair looks quite justified. However, caution should be observed at the base of the 70th figure. As a rule, this level is given to bears hard, therefore, a corrective pullback is possible from this target. The behavior of the American dollar also speaks in favor of the southern Ozzy movement. Contrary to expectations, Donald Trump did not exert downward pressure on the national currency. He did not threaten the state of emergency, although he hinted at the high probability of a new shutdown, at the same time caused the anxiety of traders about the negotiations between the US and China. As a result, the US dollar index jumped to the border of 96 points, reflecting the demand for the US currency.

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In technical terms, the first level of support is located at around 0.7090 on the bottom line of the Bollinger Bands indicator on the daily chart. However, in my opinion, the strongest level in this context is lower, at around 0.70. If the bears break through and consolidate within the 69th figure, we can talk about the resumption of the southern trend for the pair.

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Analysis of the divergence of EUR / USD on February 6. Euro falls again to its annual lows.

4h

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The currency pair EUR / USD continues to fall in quotations in the direction of the correctional level of 23.6% - 1.1358. The end of the pair's February 6 exchange rate from the Fibo level of 23.6% will allow traders to expect a reversal in favor of the euro currency and some growth in the direction of the next correction level of 38.2% - 1.1446. There is no indicator of the emerging divergences today. Fixing the pair below the Fibo level of 23.6% will increase the probability of a further fall 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 reversed in favor of the American dollar and began the process of returning to the level of correction 127.2% - 1.1285. Rebounding the pair from this level will allow us to expect a reversal in favor of the European currency and the beginning of new growth in the direction of the correctional level of 100.0% - 1.1553. The closing of quotations below the Fibo level of 127.2% will work in favor of continuing the 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 1.1446 if the pair rebounds from the correction level of 38.2%, and with a Stop Loss order under 1.1358.

Sales of the currency pair EUR / USD can be continued to carry out now with the goal of 1.1358, as the pair completed closing below the level of 1.1446.

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Trading Plan 02/06/2019

The big picture: There is no reason for optimism.

On Tuesday, the main event was Trump's speech in Congress addressing the country.

Trump again declared "We will build a wall!" (on the border with Mexico) and called on the Democrats to abandon the resistance to the financing of the wall but offered nothing to the Democrats, no compromise.

However, the temporary funding was signed only until February 15 and a red signal came on ahead of us.

British Prime Minister, Theresa May, met with the EU leadership in Brussels but no breakthrough can be seen. According to rumors, there was a secret meeting of the Cabinet of May on the topic of "Postpone Brexit".

Against this background, another attempt to exit the euro from the 3-month range again failed.

Nevertheless, we are waiting for the start of the movement.

We are ready to buy euros from 1.1515.

On the other hand, we can sell from 1.1285.

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Forecast for AUD / USD pair on February 6, 2019

AUD / USD pair

The Australian dollar has overcome the support of the MACD line on the daily chart in today's Asian session. At the younger half on H4, the price consolidated below the balance lines and MACD. Conditions for further decline formed.

The immediate goal is the embedded line of the price channel in the area of 0.7043 and the second target will be the area of support at 0.6933.

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Analysis of Gold for February 06, 2019

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Sellers are in control in the Gold market. We found a confirmed head and shoulders pattern in the background, which is another strong sign of weakness. After the breakout of the HSS pattern, the price went into the bullish corrective phase, but in my opinion that upward correction is about to finish. There is a breakout of the upward trendline together with the breakout of the 20h rectangular pattern, which is another sign of weakness. Short – term resistance is set at the price of $1.316.00 while the short-term support is set at the price of $1.308.00.

R1: $1.321.85

R2: $1.324.50

R3: $1.328.00

Pivot: $1.318.30

S1: $1.315.65

S2: $1.312.35

S3: $1.309.45

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

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GBP/USD analysis for February 06, 2019

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The GBP/USD pair did a great job on the downside and our profit target at 1.2963 has been reached. So far, I still see that sellers are in control and that trend is bearish. GBP/USD is trading between yesterday's low at 1.2924 (support) and daily pivot (1.2973 – intraday resistance). Price is still trading below the Ichimoku cloud on the H1 time, which is a sign of weakness. My advice is still to watch for selling opportunities.

1.2924 – Intraday support – yesterday's low

1.2973 – Intraday resistance- Daily pivot and Kijun-sen (purple line)

Trading recommendation: We exited our GBP/USD position at 1.2963 and we made 120 pips. We will add a smaller sell position on the potential breakout of support (1.2924). Potential targets will be set at the price of 1.2890 and 1.2850. Protective stop will be placed at 1.2980.

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Bitcoin analysis for February 06, 2019

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Bitcoin is trading downwards and the price tested the level of $3.398. I have found a breakout of the bearish flag pattern, which exactly what I expected to happen. The breakout confirmed the downward continuation and the down trend resumed. Pay attention to the level $3.387, since it is the short-term support. The level of $3.484 is current resistance.

Trading recommendation: We are bearish on BTC from $3.440. Profit is set at $3.168 and protective stop at $3.490.

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Analysis of the GBP / USD Divergences for February 6. Bullish divergence will help the pound grow a little

4h

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The currency pair GBP / USD on the 4-hour chart completed closing below the Fibo level of 61.8% - 1.2969. As a result, on February 6, the process of falling quotations can be continued in the direction of the next correction level of 50.0% - 1.2869. Fixing the rate of the pair above the Fibo level of 61.8% can be interpreted as a turn in favor of the British currency and one can expect some growth in the direction of the correction level of 76.4% - 1.3090. There are no emerging divergences today.

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 performed a fall to the correction level of 50.0% - 1.2943. Rebounding the pair from this level will allow us to expect a reversal in favor of the British currency and some growth in the direction of the Fibo level of 38.2% - 1.3008. Also today, the bullish divergence of the MACD indicator is brewing, which increases the probability of rebound from the correction level of 50.0%. Passing the low of this divergence will work in favor of continuing to fall in the direction of the correctional level of 61.8% - 1.2880.

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 1.3008 and a Stop Loss order below the level of 50.0% if the pair bounces off of the level of 1.2943 (hourly chart), especially in conjunction with the bullish divergence.

New sales of the currency pair GBP / USD can be made with the target of 1.2880 and a Stop Loss order above the level of 50.0%, if the pair passes the low bullish divergence (hourly chart).

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US dollar: is recession inevitable?

The PMI indices, published on Tuesday, confirm the assumption that the change of the Fed's rhetoric was not accidental, business activity in the US is slowing down. The January ISM index for the services sector, while still at a high level of 56.7, fell against 58.0p a month earlier, this is the worst value since March 2018, and the IBD / TIPP economic optimism index instead of the projected growth fell from 52.3p to 50.3p, it is the minimum in 19 months.

The Congressional Budget Committee (NWO) has published the next 10-year forecast, from which rather gloomy prospects follow. It is assumed that already this year the federal budget deficit will reach 900 billion dollars, and from 2022, it will exceed 1 trillion a year and will range from 4.1% to 4.7% of GDP, which is significantly higher than the average for 50 years. Due to the constantly growing deficit, the federal debt will rise to 150% of GDP by 2049, well ahead of the previous record set after World War 2.

As the head of NWO explained in the comments to the forecast, the current scenario is more optimistic than negative, since federal spending will grow at a high rate, mainly due to interest payments and social security costs

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As for revenues, their growth is largely expected due to the planned completion of the tax benefit period within the Trump reforms. The average budget deficit of 4.4% for the next 10 years against the background of low unemployment is an unusual and frightening phenomenon since it indicates that even with an economy operating at full capacity, it is unrealistic to reach a deficit-free budget.

In other words, CBO sees no prospects for higher income growth and come to the conclusion that the likelihood of a fiscal crisis is increasing, which is another argument in favor of approaching a large-scale recession.

Trump's speech in the US Congress was mainly devoted to attempts to justify the need to build a border wall between the United States and Mexico, assurances of the success of tax reform, but did not give any clarity neither on the trade negotiations with China, nor on the possibility of another shutdown after the current extension.

Eurozone

The volume of production orders in Germany declined by 1.6% in December, year-on-year, a fall of 7%, a decline in production was observed in 7 of the last 8 months, which indicates a protracted and systemic nature. According to experts from Deutsche Bank, Germany is very close to a recession, and in the first quarter of this year, we should expect a decline in GDP. In a similar situation is the third eurozone economy in Italy, and the situation is aggravated by a serious debt crisis.

Today, the ECB will publish a regular economic bulletin, which is expected to provide explanations of its estimates on a number of macroeconomic indicators. In any case, there is no positive wait, EUR / USD is under pressure, support is at 1.1360 / 70 and 1.1335 / 40, corrective growth is unlikely.

Great Britain

The slowdown in business activity in all sectors of the UK economy, without exception, against the backdrop of a political crisis associated with a country's exit from the EU, does not give any reason to believe that the Bank of England at this meeting will be able to voice at least some positive. Voting at a rate is assumed to be unanimous in favor of keeping the current policy unchanged, the inflation report will give guidance on the main macroeconomic indicators.

In general, the pound has no reason to resume growth at least until the final decision on the issue of Brexit. The EU has made it clear that new negotiations are excluded, so the best option would be to accept the inevitable. GBP / USD will try to find support in the zone of 1.2901 / 10, but in any case, it will be temporary and will not be able to stop further decline.

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Overview of the foreign exchange market on February 6, 2019

The dollar continues its steady climb, which is a combination of several factors at once. It was not without Brexit, around which disputes and other scandals do not subside. Theresa May is once again sent to Brussels to negotiate with Jean-Claude Juncker, who is already tired of repeating to her that the existing version of the agreement, which does not suit the British parliament, is final and will not be changed. It should be recalled that the Minister of Commerce of Great Britain recently swore that he was about to sign separate trade agreements with each of the countries of the European dormitory that he would relieve parliamentarians' concerns about the border between Ireland and Northern Ireland. But for a strange reason, the ministry remains silent. In other words, the United Kingdom is in an extremely inconvenient position, since, in fact, it was imposed on such a withdrawal from the European Union, which not only does not take into account the economic interests of Great Britain, but also threatens its territorial integrity. And there is no turning back, because voters will not understand such a turn. The politicians themselves are still planning to continue their political career, which brings them not modest welfare. The moral of this story is that when you put such serious questions to a vote, you need to convey to the voters the information in full, explaining all aspects of this issue, including those that do not lie on the surface. Although there is an option that the British political class itself simply did not know about the pitfalls. So investors have something to fear, since politicians do not understand what they are doing.

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Another factor in the strengthening of the dollar was European statistics, especially retail sales data, which, although they turned out to be better than expected, are not particularly encouraging. Indeed, the growth rate of retail sales slowed from 1.8% to 0.8%, although they expected a slowdown to 0.5%. Nevertheless, there is almost a two-fold slowdown in growth rates, which is unlikely to please anyone. Against this background, even the final data on business activity indices were of little interest to anyone, although they did not coincide with preliminary data. Thus, the business activity index in the service sector remained unchanged, rather than decreased from 51.2 to 50.8, and the composite index decreased from 51.1 to 51.0, and not to 50.7. Similar data in the United States also did not coincide with the forecasts, and although the business activity index in the service sector showed the same results as the preliminary estimate, that is, it decreased from 54.4 to 54.2, but the composite index did not increase from 54.4 to 54.5, but remained unchanged.

Today, neither in the Old World nor in the New World does not come out any serious data, and only regular statements regarding Brexit can affect the markets. Given that the tone of these very statements is constantly changing (sometimes positive with negative, then vice versa), it is likely that the next words of politicians will have a more beneficial effect. Beneficial for the pound and the single European currency. If, however, someone decides to say something. But even without this, given the confident strengthening of the dollar for several days, a local correction suggests itself, and the calm information background does not contradict this.

So we can expect the growth of the single European currency to 1.1400 - 1.1425.

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The pound should also grow, to about 1.2975 - 1.3000.

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China and the United States: a new wave of trade negotiations between China and the United States. The decline in the euro

The US dollar continued to strengthen its position against the euro and a number of other world currencies against the background of the emergence of good news about trade negotiations between the US and China, as well as due to weak statistics on the eurozone countries and the UK.

As it became known, next week, Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin will hold their next meeting in Beijing, which will be directly related to trade negotiations. Let me remind you that the truce in the trade war was concluded before March 1, 2019, and before this deadline, it is necessary to clarify the most important points, as well as to come to a single decision on duties.

It is already known that China has agreed to expand the list of topics under discussion in the framework of trade negotiations, including hacker attacks. Whether the meeting is attended by US President Donald Trump is still unknown, but the probability is quite high. The presence of the US leader will be a clear sign that the White House is determined to resolve the trade conflict between the two countries, which will benefit the entire global economy.

As for the fundamental statistics for the United States, which was released yesterday afternoon, despite the slight decline in indicators, which were mainly due to the suspension of the US government, the situation in the economy remains pretty good.

According to the ISM Institute for Supply Management, the PMI Purchasing Managers Index for the non-manufacturing sector of the United States in January of this year fell to 56.7 points against 58.0 points in December. As noted above, the slowdown in activity is directly related to the consequences of the suspension of government work, but in general, the index remains above 50 points, which maintains a rather high optimism. Economists had expected the index to fall to 57.0 points.

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US service activity continued to grow in January, albeit at a slower pace. According to the data, the final indicator of business activity in the US services sector in January 2019 was 54.2 points against 54.4 in December. The composite PMI for the US service sector in January was at 54.4 points.

The speech of the representative of the Fed Robert Kaplan did not lead to serious changes in the market, as he generally repeated what he said earlier this week.

The representative of the Fed said that more clarity is needed before the Fed decides on the next step, as it is necessary to eliminate uncertainty about the economy and financial conditions. Kaplan also noted that the Fed is still trying to determine the right course in terms of balance, as the global economy slows down and the US economy is subject to its influence.

As for the technical pattern of the currency pair EUR / USD, the bearish trend persists and the pair is aiming for the area of major lows of 1.1370 and 1.1290. In the case of an upward correction, sellers will be noticeable in the large resistance areas of 1.1430 and 1.1460.

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Fundamental Analysis of EUR/JPY for February 6, 2019

EUR/JPY has been quite corrective and slow with the recent bearish momentum while consolidating at the edge of 125.00 area. In light of upbeat economic reports from Japan, JPY is picking up steam versus EUR. EUR has been hurt by a slowdown in the eurozone's economic growth and the looming BREXIT.

The power engine of the eurozone's economy, Germany is currently losing momentum. The slowdown is making an impact on tax revenues in overall Europe. Besides, Germany is expected to face a budget shortfall in the coming years. Global trade tensions and concerns about Brexit is assumed as the catalyst to slash down the growth forecast from 1.8% to 1.0% which weakened the overall economic strength of the eurozone. The policymakers are currently back footed as ECB President Mario Draghi is leaving in October this year. As the eurozone economy is losing steam, the ECB's long-standing guidance for a rate hike this year is not expected to get delayed which may not occur this year as well.

Today German Factory Orders report is going to be published which is expected to increase to 0.3% from the previous value of -1.0%. Moreover, tomorrow German Industrial Production is expected to show a bounce to 0.8% from the previous drop of -1.9% and French Trade Balance is also expected to increase to -4.1B from the previous figure of -5.1B. Ahead of the ECB Economic Bulletin, such economic reports are going to provide the required direction for the pair's momentum, whereas positive readings may lead to further bullish pressure on the EUR gains.

On the other hand, JPY has been quite firm amid the recently published economic reports despite the fact that the recent wages' issues weakened the currency and questioned the economic growth. Tomorrow Japan's Leading Indicators report is going to be published which is expected to decrease to 97.9% from the previous value of 99.1% and on Friday Japan's Household Spending report is going to be published which is expected to increase to 0.8% from the previous value of -0.6%. Moreover, Bank Lending report is expected to be unchanged at 2.4% while Current Account is expected to increase to 1.52T from the previous figure of 1.44T.

Meanwhile, while EUR is struggling amid a slowdown in the eurozone's economy, JPY is expected to gain further in the coming days as the Bank of Japan keeps interest rates steady at a historical low and upcoming economic reports are likely to reveal positive figures.

Now let us look at the technical view. The price is currently residing at the edge of 125.00 area from where it is expected to push lower towards 123.50 support area. On the contrary, if the price remains above 125.00 area, certain bullish pressure can be also observed.

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GBP / USD. February 6. The trading system. "Regression Channels". The secret meeting of the British Parliament. Compensation

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: -159.5340

The currency pair GBP / USD on Wednesday, February 6, continues its downward movement in the framework of the general tendency of strengthening the US dollar. Despite the fact that the parliament refused to postpone the exit from the EU to a later date, Theresa May repeatedly opposed this decision. Yesterday, there was information that the politicians held a secret meeting, at which it was decided to postpone the final Brexit date to the end of May. Probably, this decision was made in order to still be able to agree with the European Union on new conditions for withdrawing from the alliance. Of course, the mere fact of a postponement of Brexit does not mean that the parties will now resolve the issue of the Northern Irish border. Moreover, there is currently no official confirmation of this information. Therefore, the whole process remains in limbo, like the pound sterling. In the meantime, Ireland is demanding compensation for export losses that the country will incur as a result of Brexit. Every year the country exports goods to the UK at 4.5 billion euros. It seems that the European Union does not mind compensating for the damage, but this question is an additional "stick in the wheel." As previously stated by the Prime Minister of Scotland, Nicola Sturgeon, the UK is not ready to withdraw from the EU within two months. These words are very similar to the truth.

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, therefore, short positions with targets at 1.2939 and 1.2878 are now relevant. Heikin Ashi's upward reversal will indicate the beginning of an 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. However, so far this option is unlikely.

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 6. The trading system. "Regression Channels". Donald Trump's speech did not affect the US dollar

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: -152.0108

On the third trading day of the week, the EUR / USD currency pair continues its downward movement. It cannot be said that the Euro currency began to fall in price after another weak macroeconomic statistics package from the eurozone (it was published yesterday), since the US statistics, also published the day before, did not please the traders. On the whole, we predicted a decline in the pair a few days ago, based on the fact that, above the level of 1.1500, the pair will require strong fundamental reasons for continued growth, which are not. To date, not a single important macroeconomic publication has been planned either in the US or in the EU. Just a few hours ago, a speech was made by US President Donald Trump. He did not say anything significant, but regular calls to unite and criticize "ridiculous partisan investigations". Therefore, the market, even in the absence of news, did not respond to the words of the American leader. Trump also hinted that joint efforts of the Republican and the Democratic Party are needed for "ridiculous" wars, clearly hinting at China. From a technical point of view, as before, we expect a decline to the area of 1.1290, around which the further fate of the tool will decide.

Nearest support levels:

S1 - 1.1353

S2 - 1.1292

S3 - 1.1230

Nearest resistance levels:

R1 - 1.1414

R2 - 1.1475

R3 - 1.1536

Trading recommendations:

The currency pair EUR / USD continues to move down. Therefore, it is now recommended to trade short positions with the first goal of 1.1353. Manual reduction of the short positions will be possible when the Heikin Ashi indicator turns up.

Buy-positions will become relevant no earlier than the price fixing above the moving average line. In this case, we will again expect an upward movement with the target of 1.1475.

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