Brexit: The exit of the UK from the EU can be postponed to June 30th. Traders are waiting for the Fed statement

The British pound began to gradually decline against the US dollar after appearing on the market that British authorities did not intend to ask the EU for a long postponement of Brexit. This was announced by government representatives.

The short period of delay will not allow the Prime Minister of the United Kingdom to get the EU to make important changes to the Brexit agreement, which is so expected in parliament. Moreover, a short delay calls, in general, the Brexit procedure itself and the UK's exit from the EU, since in fact, nothing will change in such a short time, except for the next period of uncertainty, which lasts for about 3 years.

Already in the afternoon, it became known that the government of the country sent an official petition to the EU leaders to postpone the exit of Great Britain from the union to the date after March 29. During her speech, British Prime Minister Theresa May said she was asking to postpone the official date of Brexit to June 30 and ratify additional documents so that a new vote could be taken on Brexit. However, the duration of the delay will be determined by the EU authorities. Most likely, this will happen tomorrow during the summit.

Tomorrow, the decision of the Bank of England on interest rates will be published.

Given the excitement around Brexit, traders ignored today's inflation data in the UK, which accelerated slightly in February of this year. This happened due to rising prices for food and alcoholic beverages.

According to a report by the National Bureau of Statistics, in February 2019, compared with the same period last year, consumer prices rose 1.9% after rising 1.8% in January. With regard to growth in February, compared with January of this year, inflation increased by 0.5%, while economists expected it to grow by 0.4%.

DpFADPYfJvytxsnS_TfuXuFRUlg1VSc5rEFbVwRL

Let me remind you that quite recently, the Bank of England has signaled that it can continue to raise rates in the next few years in order to keep annual inflation near the target level of 2%. I think it is at this point that you should pay attention to the statements that will be published tomorrow, along with the decision on interest rates. It is unlikely that a small jump in inflation will frighten the regulator.

In the first half of the day, a report was also published, which indicated that in January of this year, as compared with January of last year, housing prices in London decreased by 1.6%.

As for the technical picture of the GBPUSD pair, a breakthrough of a sufficiently dense support area led to the sale of the pound. At the moment, the pressure of bears can be kept in the region of minimum 1.3130, while larger support can be seen in the area of 1.3020. However, we can already say that the current short-term uptrend for the pound is broken, however, as I mentioned above, much will depend on tomorrow's decision at the EU summit.

Fed and interest rate

In the afternoon, all attention will be focused on the decision of the US Federal Reserve on interest rates. No one doubts that the regulator will leave them unchanged, but the forecast for their further increase may be significantly revised. If the Fed refuses to tighten monetary policy this year, this could lead to a significant weakening of the US dollar, as previously, at least two rate hikes were raised.

As for the technical picture of the EURUSD pair, it remained unchanged. Another unsuccessful attempt to update yesterday's high led to a slowdown in euro growth and a decline. The goal remains the support of 1.1335, the breakthrough of which will lead to a larger sale to the minima of 1.1300 and 1.1250. In the case of growth above the resistance of 1.1370, the demand for the euro will significantly increase, which will open a direct road to the highs of 1.1410 and 1.1490, however, such a large increase will occur only with real changes in the monetary policy of the United States, which we will learn in the afternoon.

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

GBP / USD. March 20. The trading system. "Regression Channels". The key events of the day: inflation in the UK and the Fed

4-hour timeframe

RM5I4gQuXl_IKqy0rgPqDKdXDAMo7jqIxa6Afrxv

Technical details:

The upper linear regression channel: direction - up.

The lower linear regression channel: direction - up.

Moving average (20; smoothed) - up.

CCI: -14.6308

The GBP / USD currency pair remains near its local maximums and cannot overcome the Murray level "6/8" (1.3306). Meanwhile, Theresa May is going to Brussels to ask the EU to postpone the exit from the EU until June 30, 2019. Well, this is the most obvious scenario. However, as we have said many times before, by and large, this delay does not solve anything if the current version of the "deal" with the EU is not revised or supplemented so that it suits both the British Parliament and the European Union. Given the reluctance of EU leaders to enter into new negotiations, it will be extremely difficult to achieve this. At the same time, Theresa May remains faithful to her most important method of influencing parliament - threats. Once again, she noted that the parliament should support its version of the agreement, otherwise Brexit may never happen at all or the country will have a "hard" option. In general, nothing new. Yesterday's publications in the UK can even be called moderately positive since the unemployment rate unexpectedly dropped to 3.9%, and the average wage, including bonuses, rose by 3.4%, although forecasts were lower. Today in the UK, inflation will be published in February, and in the evening, the results of the Fed meeting and a press conference will be announced.

Nearest support levels:

S1 - 1.3245

S2 - 1.3184

S3 - 1.3123

Nearest resistance levels:

R1 - 1.3306

R2 - 1.3367

R3 - 1.3428

Trading recommendations:

The pair GBP / USD has launched a new round of downward correction, as Murray's level "6/8" remains unresolved. If this level is still overcome, the purchase orders will be relevant to the objectives of 1.3367 and 1.3428.

It is recommended to open short positions in case the pair is able to overcome the moving average line. In this case, the trend in the instrument will change to downward and become relevant short positions with targets at 1.3184 and 1.3123.

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. March 20. The trading system. "Regression Channels". We are waiting for the new "pigeon" rhetoric from the Fed

4-hour timeframe

P21ad3OF-WACnspmvSJ4finfVoLvn0hwcZUgS8FS

Technical details:

The upper linear regression channel: direction - down.

The lower linear regression channel: direction - down.

Moving average (20; smoothed) - up.

CCI: 86.5078

The EUR / USD currency pair on Wednesday, March 20, once again fulfilled Murray's level of "4/8" (1.1353) and still cannot overcome it. At the same time, instrument volatility remains extremely low. It is also impossible to say that, on the eve of the announcement of the results of the Fed meeting to be held today, traders give a clear preference for one of the currencies. On the contrary, just after the traders know the results of the meeting, it is possible that both volatility increases and a clear movement to one of the parties. What possible decisions can the American regulator make? First, we believe that the rate in March will remain unchanged. After a whole cycle of increases in the key rate, without any preconditions, the Fed is unlikely to start reducing it so sharply. There are very few reasons for a new increase, given the frankly "pigeon" rhetoric of Fed representatives in recent months. Secondly, as before, much will depend on the rhetoric of the Fed. If the market receives hints or clear statements that the monetary tightening cycle has been completed or that the Fed stops reducing its own balance, which has been accumulating over the years under the QE program, this could trigger a wave of sales of the US currency and Donald Trump's unrestrained joy. There are no important macroeconomic reports planned for today in the European Union.

Nearest support levels:

S1 - 1.1322

S2 - 1.1292

S3 - 1.1261

Nearest resistance levels:

R1 - 1.1353

R2 - 1.1383

R3 - 1.1414

Trading recommendations:

The EUR / USD currency pair may start a new round of correction. Thus, it is recommended to open new long positions if HeikIn Ashi turns up the indicator with the target at 1.1383.

Sell positions will become relevant not earlier than a consolidation of the pair below the moving average line with targets at 1.1229 and 1.1261, as the trend for the pair, in this case, will change to descending.

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

Gold is waiting for the verdict of the Fed

The best start of the American stock market since 1991 and unwilling to break the "bullish" trend provoked the USD index to a 3% gold correction. Investors began to doubt that the 14% rally from August lows levels could continue. Its key drivers were concerns about the slowdown of the global economy under the influence of trade wars and the low rates of the global debt market. If the States and China agree, and the global GDP, headed by the Celestial Empire, goes to a V-shaped recovery, the precious metal will have a hard time. However, other trumps can play on his side.

Goldman Sachs believes that different sectors of the American and world economy will lead to a weakening of the US dollar, which will allow the bulls to restore the uptrend by XAU / USD. A leading indicator from the Atlanta Federal Reserve Bank indicates a decline in US GDP growth to less than 1% in the first quarter. At the same time, investors believe that the eurozone has reached the bottom, and large-scale fiscal and monetary stimulus will help China. The situation abroad begins to look better than in the States, which, as a rule, leads to a weakening of the USD index.

Enough exchange funds react sensitively to the change of the gold market conjuncture. Their reserves have declined since the beginning of the year from 73.3 million to 71.8 million ounces. At the same time, the sluggish dynamics of the European economy and the negative rates of the German debt market contribute to the high demand for ETF products from the Old World. It has been increasing for three years in a row, and, most likely, will continue to do so. This circumstance allows us to count on the recovery of the uptrend on XAU / USD.

Gold dynamics and ETF stocks

kzKTuZtFvN9e1UMANXJHMMJvemyt6jjtWziCqe85

Structure and dynamics of demand for ETF products

5dIWMOQ-AI-bAJzcQSL8Wy3HDljzYoGtmztT13Um

If we proceed from the assumption that the economy of the Middle Kingdom will not be restored V, but U-shaped and the US stock market will soon change fear, then the medium-term outlook for the precious metal looks optimistic. Moreover, the rates of the global debt market amid slower GDP growth and inflation are more likely to remain at historically low levels, and the completion of the Fed's monetary policy normalization cycle will help the dollar to weaken.

In the short term, the fate of the precious metal will be determined by Jerome Powell and the company. Fed concerns about the state of the US and world economy, lower FOMC forecasts for the federal funds rate and GDP are the "bearish" factors for the US dollar. On the other hand, the dovish rhetoric of the Fed chairman will support US stocks, improve global risk appetite, and continue to put pressure on safe-haven assets. Gold risks falling into consolidation in anticipation of new drivers capable of leading it from this state.

Technically, the correction to the CD wave continues as part of the transformation of the "Shark" pattern at 5-0. Rebound from the levels of $ 1307 and $ 1315 per ounce will allow the "bears" to continue the attack. To restore the "bullish" trend, confident assaults of resistances at $ 1333 and $ 1340 are required.

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

The dollar rises to most currencies on Wednesday

Today, the value of the dollar rises in pairs with the rates of major world currencies in anticipation of the outcome of the meeting of the US Federal Reserve System (FRS). According to experts, the change in rates by the American regulator during this meeting should not happen, and all attention will be focused on the final statement, as well as on the comments of US Central Bank Governor Jerome Powell. Market participants expect the Federal Reserve to announce its plans for a program to reduce assets on the Central Bank's balance sheet, which is scheduled later this year.

According to experts, the Fed may signal a longer suspension of rate normalization but still does not rule out one increase before the end of 2019.

The pound sterling is declining today. Earlier this week, Speaker of the House of Commons, John Bercow, excluded the holding of a regular vote on Britain's withdrawal from the European Union if Theresa May, the country's prime minister, does not make changes to the proposal for Brexit terms. Michel Barnier, the main negotiator with the European Union for Brexit, declared on the eve that any delay in the "Euro-Divorce" process would lead to political and economic costs for the EU, and urged London to present a clear plan.

34T6CmzY0aZWiDARV7Vrty46tTDptNwja9HyQRNp

Today, during the operation to protect its currency, which falls in tandem with the dollar, Hong Kong was once again forced to resort to interventions in the foreign exchange market. The Hong Kong Monetary Authority (NKMA) bought out 604 million Hong Kong dollars amid a depreciation of the currency to 7.85 Hong Kong dollars per US dollar. During March, NKMA spent 8 billion Hong Kong dollars to protect the national currency.

The dollar index, which tracks the dynamics of the US dollar against six major world currencies, rose 0.1%.

By 06:12 London time, EURUSD slipped to $ 1.1349. The USDJPY pair rose by 0.13%, reaching 111.54 yen. The EURJPY pair rose 0.12% to 126.62 yen.

SlNiirlIN1ps1x4wZ9AIsR8qOEfnvstjdglakSUm

ZsGeaMbXcZmlwfmki42QexlO4_vF-NBUodktx1Zp

The national currency rate of Britain sank in pair with the dollar by 0.09%, to 1.3556 dollars. The EURGBP pair decreased by 0.07%, to 1.1680.

The dollar rises in price by 0.2% paired with the national currency of Australia and by 0.3% with the New Zealand dollar.

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

Dollar pays no attention to the Fed's caution, American grows stronger!

The dollar returned to growth, which may continue. Investors choose safe currencies after reports of tensions in US-China trade negotiations but growth is hindered by the Fed's caution. Volatility in foreign exchange markets fell sharply due to the "dovish sentiment" from main central banks, including the US Federal Reserve. But even in such a situation, the dollar manages to demonstrate amazing resilience. The negative impact of the pause in the interest rate increase cycle of the Fed has somewhat weakened by cautious actions of the ECB, which was faced with the problems of the eurozone economy. Today, the Fed is expected to maintain its base interest rate unchanged. Expectations of interest rate cuts increased after the production data came out weaker than expected.

uuyWpNpW7EA8rrkVI9zFUXoqD68rEm-S8Tr7Ilby

At the same time, the dollar on Wednesday rose against the Australian dollar, as well as the Canadian dollar and the Japanese yen despite the gloomy prospects. This is partly due to its attractiveness as a safe-haven asset, after the US authorities expressed concern that China refuses to comply with the agreements reached at the trade negotiations. The Australian dollar on this news immediately went to a decline. Otherwise, most currencies remain within the usual trading ranges until the announcement of the Fed decision. Most likely, the dollar will not decline much in price following the Fed meeting since the market has already won back the regulator's decision to keep rates at the same level.

a-lcBj4jJDiwv4DzPFeT92cqb-_VHPmHflSH5f9V

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

GBP / USD plan for the American session on March 20. Inflation in the UK was ignored by traders

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

Despite good inflation data in the UK, pressure on the pound remains prior to tomorrow's important decision of the Bank of England on interest rates and the EU summit, which will discuss the issue related to Brexit. Buyers managed to return from the support level of 1.3220, to which I paid attention in my morning forecast. Now their main task will be a breakthrough and consolidation above the resistance of 1.3266, which will lead to a larger upward trend of the pound to the area of maximum at 1.3316 and 1.3375, where I recommend taking profits. In the event of a further decline in the pound and a break of support at 1.3220, it is best to rely on new purchases at the lower limit of the lateral range in the area of 1.3182 and 1.3131.

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

The bears tried to break below the support of 1.3220 in the first half of the day and formed a resistance level of 1.3266. As long as trading continues below this range, the pressure on the pound will continue, leading to a repeated attempt at the support test of 1.3220. Its breakdown will increase the pressure on the GBP/USD pair and the main task of sellers will be to update the lows around 1.3182 and 1.3131, where I recommend taking profits. In the case of the pound rising above the resistance of 1.3266, short positions can return to rebound from the highs of 1.3316 and 1.3375.

More in the video forecast for March 20

Indicator signals:

Moving averages

Trading is below 30 and 50 moving averages, which indicates the advantage of the pound sellers.

Bollinger bands

A breakthrough with the lower boundary of the Bollinger Bands indicator near the level of 1.3220 may increase the pressure on the pair.

2uqf-uBqYDbL3ecQNwq22TGoVukpSUS3zoGMKuK_

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

EUR / USD plan for the US session on March 20. All attention to the Fed meeting

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

The situation in the euro has not changed in comparison with the morning forecast, however, buyers managed to show themselves from the support level of 1.1337, to which I paid attention. The main task of the bulls remains a breakthrough and consolidation above the resistance of 1.1370, which will lead to a new wave of growth in the area of 1.4107 maximum, where I recommend fixing the profit. With the scenario of EUR/USD decline in the second half of the day, long positions can only be expected after a false breakdown in today's low of 1.1337 or a rebound from the larger support area of 1.1301 and 1.1278.

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

If the Fed announces a return to soft monetary policy in the afternoon, the pressure on the US dollar will increase. In this scenario, it is best to rely on short positions after the update of the maximum around 1.1407 and 1.1460. If the main approaches of the Fed does not change, the bears can return to the market. The unsuccessful consolidation above the resistance of 1.1370 will be the first signal to open short positions in order to break and consolidate below support 1.1337. A breakthrough of 1.1337 will lead to a larger sale of EUR/USD and lows in the area of 1.1301 and 1.1278, where I recommend taking profits.

More in the video forecast for March 20

Indicator signals:

Moving averages

Trade has moved to the area of 30 and 50 day moving averages, which indicates the lateral nature of the market before the release of important data.

Bollinger bands

Volatility in the Bollinger Bands indicator is very low, which does not give signals on market entry.

LpSDUWuex_WNQM21Q2-hTQ87bhuHrvL4GFNfYpsi

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

Is it worth selling a dollar against the yen?

All attention for today will focus on the US Federal Reserve and more specifically to the long-awaited press conference of the head of the US central bank, Jerome Powell. No one is expecting rate changes and market participants are interested in both of the economic forecasts and Powell's comments.

SmW9K5utnamq3vSLjIdl7Rr72ykMqYd6HEpmHBhk

Considering the current situation, we need to monitor every step of the dollar today. We should also not lose sight of the dynamics of the yield of US state bonds. In the past few weeks, the USD/JPY pair almost never leaves the narrow range of 111.00-112.00. For some unknown reason, the dollar decided not to react to the political baton of successive polls on the UK leaving the EU. In addition, he ignored the worst report in 17 years on China's industrial production, as well as the decision of Donald Trump to postpone a meeting with his Chinese counterpart Xi Jinping. Recall that the audience was expected to sign a bilateral trade agreement between the countries.

It seems that traders needed other fundamental drivers and Powell's upcoming press conference is more than suitable for this role. Market participants believe that the main blow to the dollar will be caused by Fed officials, who are likely to report on a wait-and-see attitude and unwillingness to multiply raise rates during 2019. An excellent prelude to such comments could be the deterioration of estimates of economic growth in America for this year, as a result of heightened risks in the sphere of world foreign trade.

The dollar in this situation will very quickly be among the outsiders with the potential for closing the day below 111.00.

What do analysts think?

Justifying the sale of the dollar against the Japanese yen at Westpac, taking a short position in the US dollar should be based on the fact that the spot market was not able to break through the resistance of 112.00-112.50, according to market strategists. The recommendation from Westpac is as follows: sale from 111.90 with a target at 110.10 and a stop order at 112.55.

YjJsq1RT0T4I_YHuCxL9fNWY3bfVo-UxpECXfeNH

Experts also named the reasons that prompted them to adhere to such a strategy, namely:

  • The Brexit negotiation up to March 29 will negatively affect risk sentiment.
  • At the moment, the positive effect of the result of the US-PRC trade negotiations cannot be calculated and take into account.
  • The Fed will definitely sound in "soft" colors and they will confirm willingness to exercise patience in raising rates.

Meanwhile, the USD/JPY pair opened with growth today, testing the resistance level of 111.67. Some analysts do not exclude that in the future, the pair will move to 113.00 after a breakdown in this level.

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

Why wait for the dollar from Jerome Powell and his colleagues?

Today, the Federal Reserve System (FRS) will announce its decision on monetary policy and will publish updated forecasts, including on economic growth and inflation in the country.

It is expected that following the results of the next meeting of the American Central Bank will leave the interest rate at the level of 2.25-2.50%.

At the same time, macroeconomic forecasts for the current year are likely to be revised downward.

In January, the Fed signaled that it intends to take a cautious approach in the matter of changing the interest rate.

q-JW9pcGbxR3Gj-qbAGBHISGqQvYga1MUCJpG8L8

What does the regulator's call for patience mean? Will he no longer raise the rate this year? The answer to this question can give a "point" forecast.

The following options are possible:

1. The revision of the forecast to one increase per year is the most likely scenario that will allow the Fed to return to monetary policy tightening, provided that global economic growth begins to recover and the momentum for the rise of the American economy continues. In this case, the reaction of the dollar may be positive but its growth will be limited.

2. The scenario that does not involve a single rate increase in the current year will have a negative effect on the greenback. At the same time, it will support the possibility of lowering the rate in 2020 or earlier, which could even derail the US currency.

3. Keep the forecast unchanged. If the Fed surprises the markets by leaving two acts of monetary restriction on the table this year, the dollar will be back on the line.

In addition to the rates and macroeconomic forecasts, investors are also interested in the question of how far the Fed will reduce the volume of assets on its balance sheet.

Earlier, FOMC representatives hinted that this process could already be completed this year and made it clear that they would soon publish a detailed action plan.

For the dollar, the soonest completion of the balance reduction program will mean an increase in the volume of currency in circulation, with which the "American" can become cheaper. It is assumed that the extension of the program until 2020 will be a positive moment for the greenback and its curtailment in the near future will be a negative one.

Thus, the dollar is waiting for the outcome of the next meeting of the Federal Reserve, which can help determine the future direction of movement.

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

Fed: The United States and China are close to concluding an agreement. The Fed may reconsider its attitude toward monetary

Before the important meeting of the Federal Reserve System, the euro continued to trade in a narrow side channel paired with the US dollar, which many analysts expect, can change its tone of statements to a softer one. This suggests that the US regulator refuses to raise interest rates in the near future in order to maintain the current rate of economic growth. For more details on this topic, we will talk closer to the meeting itself.

Yesterday, news emerged that the United States Trade Representative, Lighthizer, and the US Treasury Secretary Mnuchin will fly to Beijing on March 25 to hold regular talks on trade relations between the United States and China, which have reached the final stage. The meeting will be held with Chinese Vice Premier Liu He, but it is not yet clear how long the talks will last. Liu He will pay a return visit to Washington next week, which may put the final point in the negotiations.

Markets calmly received this news. The data that came out yesterday afternoon was ignored.

According to the report, the Retail Economist-Goldman Sachs index, which characterizes sales in US retail chains, declined by 2.6% in the week from March 9 to 16 compared with the previous week. The fall in sales was due to rainy weather. Compared to the same period of the previous year, sales for the week increased by 1.5%.

As noted by the Retail Economist, poor weather was hampered by the poor performance of retail chains, which affected sales. Let me remind you that a week earlier, sales in retail chains increased by 1.2% compared with the previous week.

According to the Redbook, for the first 2 weeks of March, the retail sales in the US increased by only 0.1%, while compared to the same period in 2018, sales increased by 4.6%. As for sales for the week from March 6 to March 16, compared with the previous year, the growth was 4.9%.

Weak data on production orders in the United States also failed to help the US dollar. According to the report of the Ministry of Commerce, industrial orders in the United States in January 2019 increased by only 0.1% and $ 500.48 billion, which fully coincided with the expectations of economists.

20W1bMyTFFQSGpfV-fMU_jAu7pNb_x_3HnDtRo5q

Production orders excluding transportation in January decreased by 0.2% compared with the previous month, while excluding defense goods, orders rose by 0.2%. As for orders for durable goods, they increased by 0.3% in January compared with December.

As for the technical picture of the EURUSD pair, it remained unchanged. Another unsuccessful attempt to update yesterday's high will be a signal to open short positions in risky assets, which may lead to a decrease in the trading instrument to the support area of 1.1335, a breakthrough of which will lead to a larger sale to the minima of 1.1300 and 1.1250. In case of growth above resistance 1.1370, the demand for the euro will increase significantly, which will open a direct path to the highs of 1.1410 and 1.1490, however, such large growth will occur only with real changes in the US monetary policy, which we will learn in the second half of the day.

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

Analysis of EUR / USD divergence for March 20: the calm before the new fall?

4h

cC6dN49w0qd6Nv4FX_CgzG8uW9N9no6pq00VTDzI

On the 4-hour chart, the EUR/USD pair completed closing above the retracement level of 38.2% (1.1328). As a result, on March 20, the pair is expected to continue to grow in the direction of the next retracement level of 50.0% (1.1374). Quoting quotes from the 50.0% level will allow traders to count on a reversal in favor of the US currency and a return to the Fibo level of 38.2%. Fixing the pair over the retracement level of 50.0% will increase the chances for further growth in the direction of the Fibo level of 61.8% (1.1420).

The Fibo grid is based on extremums of January 10, 2019, and March 7, 2019.

Daily

eoo5ZqNuGdefKV2Uxp8MtC9pX7Nr2BLa5XwqY_2G

As seen on the 24-hour chart, after fixing the quotations above the Fibo level of 127.2% (1.1285), the pair continues the sluggish growth process in the direction of the retracement level of 100.0% (1.1553). Today, there are no emerging divergences observed on the current chart. Closing the pair below the Fibo level of 127.2% will work in favor of the American currency and resuming the fall in the direction of the retracement level of 161.8% (1.0941).

The Fibo grid is based on extremums of November 7, 2017, and February 16, 2018.

Trading recommendations:

Buy deals on EUR / USD pair can be opened with the target at 1.1374, as the pair completed closing above the level of 1.1328. The stop-loss order should be placed under the retracement level of 38.2%.

Sell deals on EUR / USD pair can be carried out with the target at 1.1269 if the pair completes consolidation below the level of 1.1328. The stop-loss order should be placed above the Fibo level of 38.2%.

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

Technical analysis of GBP/USD for March 20, 2019

analytics5c9222b5b4ea5.png

Overview:

The NZD/USD has broken resistance at 1.3221 which acts as support this morning. The pair is moving between the levels of 1.3221 and 1.3382. As the trend is still above the 100 EMA, a bullish outlook remains the same as long as the 100 EMA is headed to the upside. Consequently, the level of 1.3221 remains a key resistance zone.

Therefore, there is a possibility that the NZD/USD pair will move upwards above 1.3221, which coincides with a ratio 61.8% of Fibonacci retracement.

The falling structure does not look corrective. In order to indicate a bearish opportunity above 1.3221, buy above this level with the first target at 1.3382. Moreover, if the pair succeeds to pass through 1.3382, it will move upwards continuing the bullish trend development to 1.3487 in order to test the daily resistance 2. However, if a breakout happens at 1.3123, this scenario may be invalidated.

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

Technical analysis of EUR/USD for March 20, 2019

analytics5c921d4291efc.png

Overview:

Pivot: 1.1393.

The EUR/USD pair is trading around the daily pivot point (1.1393). It continued to move downwards from the level of 1.1393 to the bottom around 1.1335. This week, the first resistance level is seen at 1.1393 followed by 1.1426, while the first daily support is seen at 1.1335. Furthermore, the moving average (100) starts signaling a downward trend; therefore, the market is indicating a bearish opportunity below 1.1393. So, it will be good to sell at 1.1393 with the first target of 1.1335. The downtrend is also expected to continue towards 1.1294. The strong daily support is seen at the 1.1254 level. According to the previous events, we anticipate the EUR/USD pair to trade between 1.1393 and 1.1254 in coming hours. The price area of 1.1393 remains a significant resistance zone. Thus, the trend remains bearish as long as the level of 1.1393 is not broken. On the contrary, in case a reversal takes place, and the EUR/USD pair breaks through the resistance level of 1.1393, then a stop loss should be placed at 1.1453.

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

Trading recommendations for the EURUSD currency pair - placement of trading orders (March 20)

Over the past trading day, the Euro / Dollar currency pair showed an extremely low volatility of 25 points, to put it bluntly, trampling in one place. From the point of view of technical analysis, we see an upward course, where, yesterday, a congestion has formed in the form of waiting positions. Informational and news background is waiting for the upcoming Fed meeting, for the same reason we saw the congestion. In the divorce proceedings of Britain & the European Union, everything is stable in the form of utter confusion. Earlier, the Speaker of the House of Commons, John Bercou, said that Parliament refused to put the Brexit deal to a vote for the third time, citing an agreement in 1604, according to which the question is not "voted on" again and again, if no key changes appear in its wording. Now London is obliged to request a deferment from Brussels until March 21. In turn, the EU is already displeased. The EU coordinator at the Brexit talks, Michel Barnier, warned that any delay in Brekzit's process would involve "political and economic costs" for the EU, and urged London to present a clear plan. France, on the other hand, is ready to use the right of veto to block the meaningless proposal of Great Britain to extend the terms of leaving the European Union.

analytics5c91f65fb21cb.jpg

Today, as I have repeatedly written, the key day of the week is the meeting of the federal commission on open market operations. Experts suggest that the Fed may demonstrate some measures to mitigate monetary policy, and, of course, at least say something about the fate of the rate. In any outcome, the current lull in the trading chart can be replaced by an increase in volatility at a given event.

United States 21:30 MSK - FOMC press conference

Further development

Analyzing the current trading chart, we see that the accumulation of 1.1340 / 1.1360, remains in the market. What to expect next? Probably, there is a continuation of the current bumpiness with a gradual expansion of the amplitude, but it is already in anticipation of the Fed meeting and the first comments / rumors, volatility can increase.

analytics5c91f67ba34c9.png

Based on the available data, it is possible to decompose a number of variations, let's consider them:

- We consider buy positions in case of price fixing higher than 1.1365, with the prospect of 1.1380-1.1400-1.1.1420

- We consider selling positions in the case of price fixing lower than 1.1330, with the prospect of 1.1315-1.1300--1.1280.

Indicator Analysis

Analyzing a different sector of timeframes (TF ), we see that in the short term, indicators of indicators have changed to descending against the background of stagnation. Intraday and mid-term prospects both retain an upward interest against the general background of the market.

9JLleqdOg-ifF6WImUyhDdNG2nnptaAYQTtf5KMo

Weekly volatility / Measurement of volatility: Month; Quarter; Year

Measurement of volatility reflects the average daily fluctuation , with the calculation for the Month / Quarter / Year.

(March 20, was based on the time of publication of the article)

The current time volatility is 16 points.It is likely to assume that due to the upcoming Fed meeting, volatility may accelerate.

5tbnCrX2udcm0QHX-mM-NreBrTBXDnxgpRhvvRcZ

Key levels

Zones of resistance: 1.1440; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1.2100

Support areas: 1.1300 **; 1.1214; 1.1120; 1.1000

* Periodic level

** Range Level

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

Wave analysis of EUR / USD for March 20. All attention to the Fed and Jerome Powell

analytics5c91ec573f150.png

Wave counting analysis:

On Tuesday, March 19, trading ended on EUR / USD by 15 bp increase for the pair EUR / USD. Thus, even at a very slow pace, wave a continues its construction with targets located near the 50.0% level on the older Fibonacci grid. A very important event for the couple will take place tonight - the Fed's press conference following a two-day meeting. Markets do not expect any changes in monetary policy, but they expect important statements from Jerome Powell. Thus, Powell's strong statements can lead to the beginning of the construction of a correctional wave b, and the weak ones - to the lengthening of wave a.

Sales targets:

1.1269 - 38.2% Fibonacci (small grid)

1,1234 - 23.6% Fibonacci (small grid)

Purchase goals:

1.1373 - 50.0% Fibonacci

General conclusions and trading recommendations:

The pair presumably continues to build the first wave of the upward trend. Now I recommend buying a pair with targets located near the mark of 1.1373, which corresponds to 50.0% Fibonacci, but take into account that the construction of a correctional wave b may soon begin. Special care will be needed tonight, as important news from the Fed can lead to sharp reversals on the instrument.

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

Analysis of the GBP / USD divergence for March 20. Insurmountable obstacle 1.3300

4h

ekq_fa1fJKdHXA-bRS3FKcPKqUJJBzjq-41yNF5z

On the 4-hour chart, the pair GBP / USD made a new return to the retracement level of 100.0% (1.3300). However, the Fibo rebounded with the formation of a bearish divergence at the MACD indicator and a reversal of the pair in favor of the US dollar. Thus, on March 20, the drop in quotations may continue in the direction of the Fibo level of 76.4% (1.3094). Fixing the pair above 100.0% will increase the likelihood of continued growth in the direction of the retracement level of 127.2% (1.3530).

The Fibo grid is built on the grounds of the extremums from September 20, 2018, and January 3, 2019.

1h

LA2xOvfuE1J412MBA8w15GMxw9Z9HbKb6y0ZpOP8

As seen on the hourly chart, the pair made another turn around the retracement level of 23.6% (1.3228) in favor of the American dollar and the beginning of a fall in the direction of the Fibo level of 38.2% (1.3220). Rebounding the pair from the level of 38.2% (which is very likely) will work in favor of the British currency and the resumption of growth in the direction of all that level of retracement 23.6%. Closing the pair above the Fibo level of 23.6% will increase the chances for further growth in the direction of the next retracement level of 0.0% (1.3380).

The Fibo grid is built on the grounds of the extremums from March 11, 2019, and March 13, 2019.

Trading advice

Buy deals on GBP / USD pair can be opened with the target at 1.3380 and a stop-loss order below the level of 23.6% if the pair closes above 1.3281 (hourly chart).

Sell deals on GBP / USD pair can be opened with the target at 1.3220 and a stop-loss order above the level of 23.6% since the pair has completed the rebound from the retracement level of 1.3281 (hourly chart).

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

Wave analysis of GBP / USD for March 20. Pound sterling "in the fog"

analytics5c91ec9a7a44f.png

Wave counting analysis:

On March 19, the GBP / USD pair added about 20 bp. The instrument continues to be in limbo, since the current position may well continue to build a wave with in Y, and begin a new descending trend section. In the news plan, too, nothing really changes. There is no new data on Brexit, most likely, it will be transferred for 3 months, until June 30. And how all this will help to reach an agreement with the European Union on an agreement that the Parliament of Great Britain will arrange, it is still difficult even to assume. Today, the inflation rate and the outcome of the Fed meeting, which is important for the pound sterling, can significantly affect the movement of the instrument especially this concerns the evening press conference of the Fed. I expect that today the wave pattern will become clearer, and the pound will come out of the "fog".

Purchase goals:

1.3350 - 100.0% Fibonacci

1.3454 - 127.2% Fibonacci

Sales targets:

1.2961 - 0.0% Fibonacci

General conclusions and trading recommendations:

The wave pattern assumes the construction of an upward wave with targets located near the estimated marks of 1.3350 and 1.3454, which corresponds to 100.0% and 127.2% of Fibonacci. However, the probability remains that the upward wave is completed. The news background on Wednesday can clarify the current wave marking. The pound will have chances of growth if Powell and the company declare a relaxation of monetary policy.

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

Markets focus on the outcome of the Fed meeting

Today, the focus of the market will be on the decision of the American regulator on the monetary policy, which will undoubtedly have an impact particularly to the foreign exchange and generally in global markets. As expected, the outcome of the two-day meeting will not only on the decision of interest rates but most importantly on the forecasts and plans of the Central Bank for the near future.

After the end of the year, the US stock market showed a strong decline in the wake of fears of expanding the trade war between the US and China, which was further stimulated by the December increase in interest rates, as well as, plans to increase it further twice this year as a whole by 0.50% of members. The Fed began to urgently assure investors that the future monetary policy will be revised which will also be joined by the colleagues of Fed Head Jerome Powell. This somewhat calmed the markets and became the reason for the winter rally and influenced the stock and commodity markets, despite the dollar under pressure.

However, the slippage in the negotiations on the terms of mutual trade between Washington and Beijing, as well as the publication of economic statistics, which in general still show good dynamics of economic growth, caused cautious optimism in the markets and a certain ambiguity in understanding the bank's future plans. On the one hand, Powell and most members of the Federal Reserve made it clear that the process of raising interest rates could be stopped and even the regulator's decline in balance could be stopped. But on the other hand, some of the heads of federal banks stated at least one interest rate increase even if the current growth rate was maintained.

This is why the March meeting is extremely important. If the Fed clearly and bluntly informs that it stops the cycle of raising interest rates and stops reducing its balance in the second half of this year, this will undoubtedly be positive for the markets and cause a new wave of optimism, which will pull up the demand for risky assets. In this situation, the course of the American dollar will certainly suffer. But if the decision is not concrete given the uncertainty with the indication that the bank's monetary policy decisions will depend on the economic situation, as well as the external factor, then first of all we can expect an increase in disappointments on the state of trade wars and a decrease in stock indices in the world. There will also be an increase in demand for defensive assets and the US dollar.

Forecast of the day:

The EUR/USD pair consolidates below 1.1355. If the outcome of the Fed meeting is positive for the demand for risky assets, the pair will overcome the mark of 1.1355 and rush to 1.1400. At the same time, a negative and ambiguous decision will lead to a fall in prices to 1.1315 and then possibly to 1.1290.

The USD/JPY pair can also rise or fall on the outcome of the Fed meeting. A positive result will lead to an increase in the price to 112.60 after overcoming the level of 111.80 while negative data will trigger a drop to 110.60.

kft5q7UU5SfLTXMtgjw5c4d7YKgbYq02inCjRIP8

Fu5BrntU2CMUL7HxLPoKRQMtWgdNRUUTRWldpGb0

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

Overview of the foreign exchange market on 03/20/2019

Waiting is one characteristic that can describe what is happening in the market. The single European currency generally stands still on a tight spot, even the pound responded to the data on the labor market only by a small and short-term increase. Nonetheless, it turned out to be much better than predicted. Not only did the growth rate of average wages with premiums remained unchanged and did not decline as expected, the unemployment rate also fell from 4.0% to 3.9%. Indeed, the growth rate of average wages without taking into account bonuses slowed down but only due to a larger revision of the previous data. It is also worth noting that the American statistics turned out to be slightly worse than forecasts since production orders grew only by 0.1% and not by 0.3% as predicted, however, all these did not make a proper impression. Moreover, market volatility was extremely low. The market is waiting for the outcome of today's meeting of the Federal Commission on open market operations.

L3jJ1A2_azVJ3ZU5iAIrfM2V711_FF9LBA5--cRY

The fact that immediately after the meeting, a press conference of Jerome Powell will take place adds piquancy to the situation. Practically no one doubts that the head of the Federal Reserve System will declare in almost direct words that the refinancing rate will not be raised this year. But everyone knows this anyway. The regulator has already hinted at this development. The whole point is that there are good reasons to believe that some measures to mitigate monetary policy will be announced today. This is what everyone is waiting for after the European Central Bank has actually resumed its quantitative easing program. Moreover, the Federal Reserve System hinted at the possibility of easing its monetary policy at the very beginning of the year and as soon as this is confirmed, the single European currency will rush to 1.1400.

T8YgOvnH5Q8oXW8E5gDZppklUCq_JdY19S1LzW21

But before Jerome Powell shares his life plans with us, we are waiting for data on inflation in the UK. Of course, this is not as interesting as another attempt to push through the House of Commons bonded divorce agreement but after all the vote was canceled. Hence, we have to be content with what it is and there is nothing to look at because inflation should remain unchanged. Nevertheless, the pound will also revive only after the announcement of the results of the meeting of the Federal Commission on open market operations and it will most likely move towards 1.3325.

ggFXmZSlo3HGw83yPMOIkvKt_THnMKmizNG20DHv

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

Burning Forecast 03/20/2019

On Thursday, British Prime Minister Theresa May will meet with the EU leadership regarding the postponement of the Brexit deadline. May wants to make another attempt at negotiating an agreement with the EU until mid-April. In any case, the Brexit date will be delayed and this is not a hot topic for the markets.

The main event is the decision of the Federal Reserve on monetary policy today at 18.00 London time.

The main question is how soft the text of the Fed's commentary will be.

We are waiting for the beginning of an upward trend in the euro.

We buy the euro from 1.1365.

Alternative: when turning down, we sell from 1.1175.

cEI0ecBSd-nlpMQpmx_Wm7-bqPvpnbhzLRhFdgYz

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

Indicator analysis. Daily review for March 20, 2019 for the pair GBP / USD

Trend analysis (Fig. 1).

On Wednesday, there is a high probability of continuing the downward movement. The first lower target of 1.3221 is the pullback level of 38.2% (yellow dotted line).

0Zl9i1wIf5wwJ819Y-zle1NYwmeMtsUih5uDaPXH

Fig. 1 (daily schedule).

Comprehensive analysis:

- indicator analysis - down;

- Fibonacci levels - down;

- volumes - down;

- candlestick analysis - down;

- trend analysis - down;

- Bollinger lines - up;

- weekly schedule - down.

General conclusion:

On Wednesday, there is a high probability of continuing the downward movement. The first lower target of 1.3221 is the pullback level of 38.2% (yellow dotted line).

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

Trading Plan 03/20/2019

Today at 18.00 London time, the Federal Reserve will announce a decision on rates (unchanged at +2.375%) - and a comment on the state of the economy.

Everyone expects that the comment will be soft - the market will assess how soft.

It is likely that the Fed will signal the beginning of the dollar's trend against the euro and the pound.

The euro is ready to go out of the 5-month range of 1.1200 - 1.1600 and start the trend.

We are ready to buy the euro from 1.1365.

Alternative: we are ready to sell the euro from 1.1175.

svNGoyQVIJ6kBTSjk8yxomYBKKbCU2Rm5oJfY1ug

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

Fundamental Analysis of AUD/USD for March 20, 2019

The Australian economy has been struggling with an economic slowdown which has been proved by a series of downbeat data. The economy has been affected by a drastic fall in the housing market and the ongoing US-China trade war.

Today Australia cuts its annual immigration rate by 15 percent to adjust for urban congestion in an effort to cope with the economic drawdown. RBA Assistant Governor Bullock today stated in her speech that the central bank is working on the financial stability while undertaking analysis of the economy in various sectors. The Australian economy was improving with a good pace 6 months ago. However, an increase in the household debt and a slowdown in the housing and credit markets derail a steady economiv growth.

Though there are certain differences in various cities of Australia, the overall picture is gloomy. According to Bullock, vulnerabilities from the level of the household debt, the apartment development cycle, and the level of non-residential commercial property valuation still pose risks for the financial stability of the economy. The financial sector has remained quite positive. The focus of the RBA is to monitor closely the household debt and property markets in the medium term.

On the other hand, despite downbeat economic reports and FED's silence, recently the White House chief economist stated that US economy is on track to grow by 3% or more this year as the economy is still quite strong despite some challenges it is facing along the way. Ahead of a FOMC Statement and Federal Funds Rate report to be published today which is expected to be unchanged at 2.50%, USD is going to trade with higher volatile across the board. Today FED Chairman Jerome Powell is expected to be quite neutral in his speech today, but other FED officials are expected to be quite hawkish which may result in certain gains on the USD side in the coming days. Additionally, the FED is expected to shave the number of projected rate hikes this year and present a long-awaited details of a plan to end tapering the massive balance sheet.

Meanwhile, as the RBA is quite confident to tackle the current economic drawbacks, this stance may attract certain market sentiment in favor of AUD. If the Fed's policy meeting ends up with positive statements, further gains on the USD side is more probable under the current market conditions.

Now let us look at the technical view. The price is currently trading at the edge of 0.7050 from where the price managed to shoot higher earlier. The price recently formed Hidden Bullish Divergence which is expected to get activated after a daily close above 0.71. As the price remains above 0.7000-50 support area, further bullish momentum is expected in the coming days.

analytics5c91d8de8e488.png

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

Indicator analysis. Daily review March 20, 2019 for the pair EUR / USD

Trend analysis (Fig. 1).

On Wednesday, the price may start moving down. The first lower target of 1.1336 is the pullback level of 14.6% (yellow dotted line).

elhE2GBRhLSM2QsZKyaIlNWIxbQpNdEv51CVS6fl

Fig. 1 (daily schedule).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - down;

- volumes - down;

- candlestick analysis - down;

- trend analysis - down;

- Bollinger lines - up;

- weekly schedule - up.

General conclusion:

On Wednesday, the price may start moving down. The first lower target of 1.1336 is the pullback level of 14.6% (yellow dotted line).

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

USD / JPY: the Fed and Japanese inflation will bring back to life the pair

On the regular meeting of the Bank of Japan last week, the meeting of the members of the regulator was quiet and inconspicuous, especially against the background of loud Nonfarm and political battles regarding prospects on Brexit.

The yen also ignored the March meeting of the Central Bank as the USD/JPY pair showed only a modest surge in prices to the level of 111.92 but has already rolled back by 50 points lower on the same day, where it continued to rally. The bulls of the pair could not take advantage of the situation and break through the 112th figure, although such attempts have recently been made more than once. Meanwhile, Haruhiko Kuroda's rhetoric was too boring and the outcome of the meeting was too predictable, hence, the Japanese currency remained virtually in place as they wait for the next news driver. Waiting will not take long since we will find out the results of the Fed meeting today and then tomorrow, there will be an estimate on the dynamics of Japanese inflation. These fundamental factors are capable of shaking the pair, which is clearly stuck in a swamp of sluggish flat.

c-_WJaZgQpQMqjYFlbB8AsJ3NGzMJD9tKP964QwM

Returning to the March meeting of the Japanese regulator, it is worth recalling that on the eve of this event. There are rumors that Kuroda could expand the incentive program by increasing the purchase of government bonds, which were actively discussed on the market. Prior to that, he warned that the regulator would resort to such measures "if the economy and inflation lose momentum." Moreover, given the fact that the Japanese economy grew by only 0.3% compared to the third quarter, the realization of such a scenario where the forecasts of most analysts will not be reached was quite real. They predicted a growth of 0.4%.

However, such fears were not justified. The regulator only lowered the estimate of growth in key sectors of the country's economy, particularly in the production and export sectors. Compared to the January meeting, Kuroda's rhetoric noticeably softened but the regulator only warned about growing external risks for the economy. Also, the Bank of Japan has traditionally expressed concern about the dynamics of inflation.

Inflation in Japan is indeed growing at a rather weak pace. the consumer price index has been declining since October last year, while core inflation, excluding the cost of fresh food, has been trampling in the range of 0.8% -1% for more than a year still far from the target level of 2%. According to a report published by the Bank of Japan, "some representatives of the Central Bank" expressed concern that the target level would remain unattainable for another three years, that is until 2021. Although the report does not indicate which members of the regulator are talking about and who shares their opinions, it should be noted that where there are 7 members of the board voted to keep the rate at the current level while two were against it, according to the results of the meeting.

All of these suggest that further inflationary dynamics will determine the mood of the Japanese regulator. If core inflation drops below 0.7%, the probability of monetary policy easing will increase in many ways, even despite the sluggish growth of the oil market but thanks to which, the Japanese inflation reached its local maxima last year. This why tomorrow's release may cause significant volatility in the USD/JPY pair, especially if it goes beyond the forecasts.

According to the general expectations of experts, the consumer price index will stop the decline and recover to the December level, which is to the level of 0.3%. Yet, the core inflation indicator remains at the last month level of 0.8%.

yCbllwH7KXHVaPjqo63Zr_NHlw-OMoCAlnFrHC0d

It should be immediately noted that predicted values are rather weak. Therefore any even the smallest deviation to the downside will be perceived by the market quite painfully, especially if the core inflation fails to reach 0.7%. Yet, a slight excess on the forecast levels is unlikely to cause special delight among traders. Inflation is still too far from the target levels, hence, either a strong inflation spurt or a many-month upward trend will help the yen. In all other cases, the reaction in the USD/JPY pair will be minimal.

It is also worth recalling that tomorrow's release on the growth of Japanese inflation will take place after the March meeting of the Fed and the results of which will be announced tonight. Therefore, it is not expedient to open transactions from the current USD/JPY positions. the dollar can change the fundamental background for a pair and it is rather difficult to predict its reaction. If Fed members follow the most anticipated scenario, involving a single rate hike this year and Powell's low-key rhetoric, then greenback can strengthen its position in the market. However, alternatives are not excluded. For example, the Fed may finally abandon the tightening of monetary policy this year and/or even assume the likelihood of easing. Also, the regulator can reduce the upper limit of the range of the neutral rate. All these dovish scenarios will cause strong volatility.

Thus, it is advisable to make a decision in the USD/JPY pair following the upcoming events. The Fed was able to pull the pair towards the base of the 110th figure and weak Japanese inflation can redraw the fundamental picture and then return the price back again. Only a cumulative assessment of the situation will determine the course.

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

Technical analysis for EUR/USD for March 20, 2019

EUR/USD has reached our target area but there is still no sign of a reversal. Our medium-term view remains bearish as long as price is below 1.14, but bulls could still hope for a longer-term reversal as long as price holds above 1.13.

analytics5c91eebacb393.png

Blue line - bearish divergence

Red line -major resistance trend line

Green line - support trend line

Orange rectangle -short-term support

Red rectangle - resistance area

EUR/USD is trading above 1.1330 inside our target area, but still below the important long-term resistance trend line. As long as price is below this trend line I will remain bearish. The bearish RSI divergence supports my bearish view for a pullback at least towards 1.13 over the coming days. Breaking below 1.1290-1.13 support will open the way for a move towards 1.12 and lower. I prefer to be bearish at the current levels with stops above 1.14.

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

Trading recommendations for the GBPUSD currency pair - placement of trading orders (March 20)

For the last trading day, the currency pair Pound / Dollar showed a low volatility of 69 points. As a result, it remained within the previously formed range. From the point of view of technical analysis, nothing has changed. The quotation continues to move in the range of 1,3200 / 1,3300, consistently working out the boundaries. Looking at the news background, we see that the speaker of the British Parliament, John Bercow, refused to vote for Brexit for the third time, referring to the agreement of 1604, according to which the question is not "voted on" again and again, unless there are key changes in its formulation. Now, London must request a deferment from Brussels until March 21. In turn, the European Union has already declared that any delay in the process to Brexit will cost the EU expenses, and urged London to present a clear plan. From the point of view of the information background, we see that there was data on unemployment in Britain yesterday, where there is a decline from 4.0% to 3.9%. In turn, the number of applications for unemployment benefits for February show an increase from 15.7K to 27.0K with a forecast of 13.1K. As a result, with such background and statistics, the pound remains within the range.

iuxnSc68-N6iz_rRqyHOo8Dov4pB_XlnHOrqG4qF

Today, we can say that the key day of the week, is the meeting of the Federal Commission on open market operations. Experts suggest that the Fed may demonstrate some measures to mitigate monetary policy, and, of course, at least say something about the fate of the rate. In any outcome, the current lull in the trading schedule can be replaced by an increase in volatility for this event. In Britain, waiting for data on inflation, where, according to forecasts, its level will not change, which is 1.8%.

United Kingdom 12:30 MSK - Consumer Price Index (CPI) (y / y) (Feb): Prev. 1.8% ---> Forecast 1.8%

United States 21:30 MSK - FOMC press conference

Further development

Analyzing the current trading chart, we continue to observe the swing at 1.3200 / 1.3300, where the quote is currently working off the upper limit, heading down. It is probably assume that the current amplitude is maintained, with a movement towards 1.3220. What to expect next? Meetings of the Fed, where it is better to take a wait-and-see position, tracking the breakdown of existing boundaries.

Based on the available data, it is possible to decompose a number of variations. Let's consider them:

kfo8jn7dprSs6NRIyZmqsgG5CBiURlUvvJkmi5al

- We consider buying positions in the case of a lower limit of 1.3220, with a smaller volume.But due to the meeting, this tactic can be risky. Most of the traders took a waiting position, tracking clear fixes higher than 1.3300.

- Positions for sale were initially considered after working out the border of 1.3300. Now, the transaction is being led towards 1.3220. If we do not have deals, then it is better not to twitch and take a waiting position and monitor the lower limit of 1.3200 for breakdown.

Indicator Analysis

Analyzing the different timeframe (TF) sector, we see that there is a variable upward interest in the short term. Intraday perspective is set to fall while the medium-term perspective maintains the upward interest against the background of the past

v7Fyhg8ZoePVyBZc1OHTz7slCl_zJQSrhq579f6e

Weekly volatility / Measurement of volatility: Month; Quarter; Year

Measurement of volatility reflects the average daily fluctuation, with the calculation for the Month / Quarter / Year.

(March 20, was based on the time of publication of the article)

The current time volatility is 24 points, which is an extremely low value for a given time segment. It is likely to assume that due to the upcoming meeting, the volatility of the day may increase.

mpMz7W5DmU6sVN2QOee6ds7xWz-8RQ0fHIpnH0PL

Key levels

Zones of resistance: 1.3300 **; 1.3440; 1.3580 *; 1.3700

Support areas: 1,3200 *; 1.3130 *; 1.3000 ** (1.3000 / 1.3050); 1.2920 *; 1.2770 (1.2720 / 1.2770) **; 1.2620; 1.2500 *; 1.2350 **.

* Periodic level

** Range Level

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

Markets are stable in anticipation of the outcome of the Fed meeting

TOM FOMC will present updated macroeconomic forecasts for the markets tonight and is expected to leave the target rate in the range of 2.25% -2.50% unchanged. The Fed has no reason to change the tone of the accompanying comment for a more hawkish one. Moreover, there are well-founded concerns in which the Fed plans to have a one rate increase this year.

At the end of the meeting, the dollar index runs the risk of going down, but volatility is unlikely to increase significantly, unless, of course, the Fed finds some ways to surprise the players.

EURUSD

Investor confidence in the German economy rose to -3.6p in March against -13.4p a month earlier. The similar index for the eurozone as a whole rose from -16.6p to -2.5p. The dynamics are positive, reflecting serious changes in the prospects for the eurozone.

yAOhT0K44eJeLS5m3ufMsokdujX0x7kldoclyyi1

Investors hope that the failure of 2018 will be surpassed, since a number of external factors for the eurozone provide grounds for such optimism. The probable postponement of Brexit reduces the risks. The announcement of the imminent completion of the US-China trade negotiations gives hope that the "world trade war" will not take place.

At the same time, optimism about the prospects for the eurozone remains cautious. The ECB recently lowered its forecast for economic growth. On Tuesday, advisers to the German government lowered their GDP forecast for 2019, from 1.6% to 0.8%, while noting that risks to the economy remain high. Nevertheless, the threat of recession, quite real a couple of months ago, is already over. This factor will contribute to the growth in demand for the euro amid uncertainty in the UK, the threat of China's slowdown and weak US tax reform results.

EURUSD reached the upper boundary of the downward channel, which was formed in the first months of this year. And with a high probability, today, there will be an attempt to overcome this border. The resistance zone is 1.1360 / 70, it is expected that after the announcement of the FOMC meeting results, the euro will resume growth and be able to gain a foothold with the intention to test the previous maximum of 1.1420 for stability.

GBPUSD

The unemployment rate in the UK for 3 months to January inclusively fell to 3.9% , which is the absolute minimum for 44 years. The result was unexpected for experts, while the number of employees has increased by 222 thousand, which serves as the maximum since 2015, and a record high employment rate of 76.1% was also noted.

Also during this period, the average wage rose above the forecasts. The result is 3.4% higher than the expected 3.2%.

D0tFv01hMEwvPazUqaYGQE1iwEdibT8zjD3bD7qo

A noticeable improvement in the labor market has a simple explanation - the influx of labor migrants into the country has declined, fearing toughening labor legislation due to Brexit, despite the fact that the prepared agreement preserves the principles of labor migration for EU citizens. Reducing the amount of cheaper labor than UK citizens, labor objectively contributes to the growth of average wages and record levels of unemployment.

There is no doubt that the Bank of England will not react in any way to improve the employment situation. This will leave the monetary policy unchanged at the meeting on Thursday. The issue with Brexit is still on the agenda. There is no clarification on its decision, which means that we should not expect a resumption of investment inflows, and under these conditions, the Bank of England cannot plan any measures to tighten monetary policy.

On Thursday, Theresa May will ask for a postponement at the EU summit, since there are simply no other scenarios left after the speaker of the House of Commons of Berkou blocked an attempt to bring the agreement to a new vote. According to rumors, London will ask for a delay of 9 to 12 months, which means an extension of the period of uncertainty, thus ultimately will not allow the pound to resume growth.

The likelihood of increased volatility on the basis of the environment remains high, but the chances of the pound to consolidate above the recent high of 1.3379 are very little. More likely, trade in the range, support 1.3180. The pound will wait for the outcome of the EU summit.

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

Forecast for EUR/USD on March 20, 2019

EUR/USD

On Tuesday, the euro slightly grew, but the upper limit of the resistance of the price channel failed to reach several points. But this does not prevent the price from turning around from its current values, following the example of the February 28 reversal (red arrow), when the euro turned into a 240-point decline. But for a technically correct signal, it is necessary for the price to go under the MACD line, below 1.1310.

sgOxygeZCQ-jCxK4kXPyWroTgtao-Llfh_SjDITC

The marlin oscillator signal line is quite a bit on the four-hour chart, but has already moved into negative territory, a double divergence formally took place. Here, the key support is the MACD line at 1.1305, which is near the support on a daily basis.

eFMLBFMNb-28JP-nBGltpDXFUFpKRJyVPgrdgdWh

Thus, when the price leaves the area below the range of 1.1305/10, it paves the way to the support of the price channel 1.115.

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

Forecast for GBP/USD on March 20, 2019

GBP/USD

Yesterday, the British pound failed to reach a Fibonacci correction level of 110.0% at a price of 1.3321, the situation remained unchanged at the end of the day - the price still lies on the MACD four-hour chart, the double divergence with the Marlin oscillator did not change on a daily scale. On the four-hour chart, the marlin oscillator slightly entered the decline territory.

Consolidating the price below the signal level 1.3210 (high of January) opens up the possibility of a sharper fall to support the MACD line on the daily chart 1.3000.

zmsy53A_aQJYGxY5oiwb-kONtGlf0gxQZOpvbFPLXjZILL_d7lGS7XJaS7CWMnFokgVe5W9Yxk-ZxzfW

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