Good Monday for the euro: reasons for the correction of EUR/USD and target levels

On the first trading day of the week, the dollar bulls weakened their grip, after which the EUR/USD pair was able to move away from the levels of local minima and even demonstrate a fairly clear correction, rising to the middle of the 12th figure. The pair has the first resistance level of 1.1285 (the middle line of the Bollinger Bands indicator on the daily chart) when overcoming which it will be possible to speak with confidence about the conquest of the 13th figure, at least to the level of 1.1315 (the Kijun-Sen line on the daily chart). However, it is still too early to talk about this, given the unreliability of those fundamental factors that are now pushing the pair up.

The correction of the euro-dollar pair is due to two reasons: first, the decline in the yield of 10-year-old American Treasuries, and secondly – rumors that the European regulator at its April meeting may revise the policy of negative rates. The combination of such fundamental factors weakened the greenbacks and allowed the EUR/USD bulls to show character. If we consider the situation in a broader aspect, today's corrective growth is due to the fact that the bears did not push and did not gain a foothold below 1.1160. According to the results of Friday Nonfarms, the sellers could not even reach this level of support, which is of key importance for the development of the southern trend. The events of Monday finally knocked the ground out from under the sellers' feet, after which the buyers expectedly intercepted the initiative.

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After the publication of conflicting data on the US labor market, traders did not immediately determine the EUR/USD movement. First, the pendulum swung towards the bulls of the pair, then the mood changed, and the price completed the five-day trading at the bottom of the 12th figure. Today, the market has decided that "the glass is still half empty", rather than vice versa: a significant slowdown in wage growth indicates a further slowdown in US inflation. Against the background of such prospects, record low unemployment and an impressive increase in the number of employed could not convince traders: the dollar began to slowly get rid of. By and large, the US labor market has always been reliable support for the dollar, while downward inflation can play a decisive role in determining the future fate of the Fed's monetary policy. Given the recent statements by Trump and his protege at the Fed, Stephen Moore about the need to lower the rate, the overall picture does not appear in favor of the dollar, despite the restoration of Nonfarm (relative to February values).

In addition, the market is optimistic about the outcome of the next negotiations between Beijing and Washington. The previous round ended on April 5, and this week the parties will meet again, continuing the discussion of the details of the "broad" trade transaction. The probability that the tariff war will end with a truce (and in the foreseeable future) is growing "by leaps and bounds," especially after the loud statement of Donald Trump. Many experts are confident that the deal will be signed before the end of April, although in my opinion, these are too hasty conclusions. The tone of the rhetoric of the representatives of China and the United States has really changed lately, but any statement on this issue is accompanied by a note about the remaining differences. Therefore, most likely the parties will finally blow out to the finish line closer to the beginning of the summer, that is, to the G20 summit, which will be held on June 8-9. Nevertheless, the general mood in the market has changed, the risk appetite has increased, and the yield of treasuries, as well as the demand for the dollar – has decreased.

The above factors put pressure on the US currency, while the single currency received unexpected support from the European Central Bank. Last week, Mario Draghi rather transparently hinted that members of the regulator are concerned about the "negative consequences of negative interest rates". Although this statement cannot be interpreted as a signal for a possible tightening of monetary policy, such rhetoric surprised traders. The fact is that earlier members of the ECB expressed confidence that negative rates have only a positive effect on the eurozone economy, keeping silent about side effects.

Initially, this statement by Draghi put pressure on the euro because the losses of the banking sector of the ECB can be reduced by using LTRO or similar mechanisms. But this week it was reported that representatives of the German banking sector called on the European Central Bank to introduce a differential rate on deposits. At the moment, there is no reliable information – whether the members of the regulator agree to consider this issue at the April meeting or not. But the issue of reducing the interest rate will certainly not be discussed – this was reported today by two news agencies, citing informed sources. This fact was the main reason for the strengthening of the single currency, against the backdrop of the weakening of the dollar and a general fundamental background in the market.

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Despite the impressive correctional growth, the bulls of the EUR/USD pair still need to gain a foothold above 1.1285 (the middle line of the Bollinger Bands indicator on the daily chart) in order to reverse the situation and enter the 13th figure. Otherwise, the price will slide back to the base of the 12th figure, continuing to demonstrate a wide-range flat.

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"Hard" Brexit loomed again on the horizon

The British currency continues to be under strong pressure since Brexit's "hard" scenario is still on the table.

According to the British Prime Minister Theresa May, only the achievement of a compromise between the Conservatives and Labor will allow the current situation around the "divorce" process to get off the ground.

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"Since the parliament has made it clear that it will block the exit of the country from the European Union without a deal, we now have a hard choice: either leave the alliance with the agreement or not leave it at all," she said.

The stumbling block in the negotiations between the Conservatives and the Labor Party is the question of holding a second referendum and maintaining British membership in the Customs Union. The opposition insists that after Brexit, the country should keep as close as possible economic ties with the EU, while May and her supporters want to withdraw the state from the single trade and legal space of the bloc.

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"Now we are waiting for the cabinet members to come to us and tell if they are ready to cross one of the red lines they have drawn. We had excellent negotiations and discussed many technical details. However, so far we have not seen any steps on the part of the government that would prove that it is ready to change at least one clause of the agreement, "said Rebecca Long-Bailey, a representative of the Labor Party.

Brussels hopes that the parties will be able to reach an agreement before the start of the summit of European leaders, which will be held on April 10.

Recall that last week, Theresa May asked the EU to postpone the final date of Brexit to June 30th and whether the alliance will meet her will be known already this Wednesday.

"It is assumed that there will be another extension of Article 50 of the Lisbon Treaty, but this is still an unresolved issue, and this week a number of turns may occur, which will lead to the volatility of the pound," said by MUFG analyst, Lee Hardman.

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EUR / USD plan for the American session on April 8. The euro has passed an important level of resistance and gaining strength

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

The euro managed to overcome the resistance in the area of 1.1248 after a good report on the indicator of investor confidence, which led to the demolition of a number of stop orders of sellers and the formation of a new upward trend with the exit from the side channel. As long as trading continues to be above support at 1.1248, the demand for the euro will continue, which will lead to an update of the maximum near 1.1284 and 1.1324, where I recommend taking profits. Under the scenario of a decline below the level of 1.1248, it is best to open long positions in the euro to rebound from a low of 1.1212.

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

The bears did not manage to keep the pair below the resistance of 1.1248 and the main task for the second half of the day will be to return to this level, which may scare away potential euro buyers and push the EUR/USD pair down to the support area of 1.1212, where I recommend taking profits. In a scenario of further growth of the pair, it is best to open short positions to a rebound from the maximum of 1.1284 and 1.1324.

More in the video forecast for April 8

Indicator signals:

Moving averages

Trade is conducted above the 30- and 50-medium moving, which indicates the resumption of the bull market.

Bollinger bands

In the case of a decline, support will be provided by the average Bollinger Bands indicator around 1.1235.

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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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Euro: Disappointing weekly forecast. Caution first!

The euro continues to experience difficulties, plunging almost at the level of the monthly minimum. Investors need to be more careful about the forecast for the currency at least before the ECB meeting this week. Statistics show that traders are actively reducing long positions in euros, while the yield on major European bonds has shifted to negative territory. Moreover, the PMI data showed that the eurozone economy is trying to gain momentum. Currently, there is increasing skepticism in the market regarding the euro, as the expectations of a rise in the ECB rate have changed and there are no clear deadlines in the foreseeable future. That is why, even though at the beginning of the day, the single currency was slightly higher than the greenback at the level of 1.1228, it will remain within the monthly minimum of 1.1183 dollars reached last week.

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Risk appetite in foreign exchange markets as a whole has weakened due to the strengthening of the yen and the fall of the Australian dollar, as concerns about the prospects for the world economy have negatively affected sentiment. The dollar is under pressure from the decline in the yield of US Treasury bonds. The American started the week with losses against the yen minus 0.3 percent to 111.385 yen after a brief rise to a three-week maximum of 111.825 yen on Friday after a positive report on the US labor market. The Australian dollar fell by 0.1 percent to $ 0.7095, after the cost of copper declined. The pound held around a weekly low as France and the Netherlands expressed doubts about the further postponement of Brexit.

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BITCOIN Analysis for April 8, 2019

Bitcoin managed to sustain the bullish momentum above $5,000 area while having the confluence off the dynamic levels. The price is currently trading at near $5,250. BTC recently retraced from a slightly higher price and it is currently being held by the dynamic levels like 20 EMA, Tenkan and Kijun line.

The price formed back to back bearish rejection candles off the dynamic level after a retracement along the way that is indicating further bullish pressure. MACD is currently quite neutral with not much of activity on the histogram and converging slope on the moving averages. The bullish wave was formed lately. It is expected to push the price higher towards $5,500 in the coming days while the dynamic levels carry it higher along the way. As the price remains above $5,000 with a daily close, BTC is likely to extend the bullish bias.

SUPPORT: 4,800-80, 5,000

RESISTANCE: 5,250, 5,000

BIAS: BULLISH

MOMENTUM: NON-VOLATILE

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Weekly review of the foreign exchange market from 04/08/2019

Indeed, as we contemplate what is happening in London, I am becoming more and more convinced that this is not even a circus tent, but some kind of rural amateur art club. Great Britain, which had to vacate an occupied room in a European dormitory a week ago, seems to have begun to realize that it is moving to a country castle, but without sewage, water supply, heating, electricity and even a telephone with the internet. The butler there is such that it is not clear, whether he will have to be buried now or he just got out of the grave for the weekend. Hence, Theresa May started begging the whole European bureaucracy for a new reprieve because she remembered that in two years she hadn't talked to the parliamentary majority, who strangely didn't really like the divorce agreement. It's like the property itself somehow we grab a little upon departure. Hence, the "Iron Lady - 2.0" and Jeremy Corbin agreed on a plan for negotiations on the discussion of Brexit and they did it after the United Kingdom had already left the premises. Such a turn of events has produced such an effect on the unfortunate Brussels bureaucrats that they seem to have been speechless. As a result, the proud nobleman Donald Tusk took the initiative but has no authority on this issue. Therefore, his words should not bother anyone at all but now, the British yellow press screamed as if it were the Savior himself who brought them the good news. He said that the UK could get a reprieve for as much as a whole year and settle down at any moment, as soon as it is morally ready for it, but the trouble is that the son of the great Polish-Lithuanian Commonwealth is not authorized to make such decisions. All that is needed is to observe a small formality in the form of unanimous approval of such a brilliant idea by all countries of the European Union. The meeting of all these wonderful people is scheduled for April 10th. Jean-Claude Juncker became completely ill from everything that was going on as he already had the means to tell everyone that there would be no new delays either the United Kingdom accepts the agreement or it will be evicted on April 12 without any kind of "preliminary caresses" as a transitional period. And let them say thank you, that they will not endure with their feet ahead. Simply put, the probability of a "hard" Brexit'a does not grow from day to day but from hour to hour. However, Theresa May and Jeremy Corbin continue to talk sweetly. After all, they have something to discuss like it or not, but almost two years did not communicate.

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It is not surprising that the realization of the inevitability of the "hard" Brexit while the pound gradually surrendered its positions. Yes and a single European currency too. But the funny thing about all this is that if you look at macroeconomic statistics, then this is how it should happen. That is, we get another proof that it is the economy that determines the actions of politicians. It is difficult to imagine that today's frills of the next elected representatives of the people influenced statistical data reflecting what happened much earlier and the same macroeconomic statistics showed us a lot of amazing things. Thus, the business activity index in the UK manufacturing sector increased from 52.1 to 55.1 but in the services sector, it fell from 51.3 to 48.9. Thus, the composite index increased only to 49.7 from 49.5. Therefore, it continues to remain below the critical level of 50.0 points. On the other side of the Channel, it's time to grab my head, as preliminary inflation data showed its slowdown from 1.5% to 1.4%. It became clear to everyone that the European Central Bank at least as long as Mario Draghi continues to head it will print money in the form of cheap or rather free, and very long-term loans to European (or German) banks. Even retail sales, whose growth rates accelerated from 2.2% to 2.8%, only temporarily raised the mood for all sorts of investors. However, the content of the report of the United States Department of Labor, which was for investors as a heart balm, made the greatest impression on everyone. Not only that, 196 thousand new jobs were created outside of agriculture versus 33 thousand in the previous month. Therefore, the average working week increased from 34.4 hours to 34.5 hours and the growth rate of average hourly wages slowed from 3.4% to 3.2%. That is, everything is the same as those investors like - people work more and they pay less for it.

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Naturally, the most important event will be the summit of the European Union, which will be held on April 10. During this gathering of the club, the fate of Great Britain will be decided, and this day will go down in history for a long time. Obviously, Theresa May and Jeremy Corbin obviously did not have time to decide something by this date considering the trepidation and tenderness with which they coordinated the plan (PLAN) of the negotiations on the discussion of Brexit options. Perhaps, only make a calendar of meetings for the month ahead. Europeans themselves are obviously not so vegetarian and the same Jean-Claude Juncker repeatedly voiced them. It's not just that Brussels has managed to adopt as many as several hundred regulations since 2017 that are designed to minimize the consequences for Europe of the "hard" Brexit. In short, sheer pleasure but not Brexit. It is not from scratch over the past few weeks from the lips of numerous European politicians of all stripes, there were words about the "hard" Brexit in combination with words about the possible benefits for European business. Most likely, there will be no new delay and frankly, it will be a shock for many. They are so eager to believe in friendship and eternal values. Excluding the fact that Europe suddenly remembers about humanism, which she herself invented, definitely not worth it. Hence, the situation is completely unpredictable. But all the same, the Europeans will most likely recall to the United Kingdom all past grievances and make a good leg swing considering all the fact that various politicians have spoken lately.

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But do not think that everything is limited only by the gathering of "friends of Great Britain". After all, as has been repeatedly noted, the reaction of markets to loud attempts by politicians of all stripes in a strange way clearly corresponds to the logic of macroeconomic statistics. Data on inflation will be published in the United States, which should show its growth from 1.5% to 1.8% and almost synchronously with these data, the text of the minutes of the meeting of the Federal Commission on Open Market Operations is published. The growth of inflation and at least some specification of the plans of the Federal Reserve System will be an excellent reason for the massive purchases of the dollar. Moreover, if the European Union refuses to give the United Kingdom another postponement, then generally it will be a question of wholesale purchases.

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In Europe, there will be a meeting of the Board of the European Central Bank, after which Mario Draghi will speak in a conversational genre. To the main banker of all Europe there is one extremely unpleasant question - how long does the ECB intend to refinance European banks for free? This will most likely continue until Mario Draghi heads the European Central Bank but he will not be able to say this directly, so he will try to give an extremely evasive and unintelligible answer again. Yet, investors are extremely disliked when they do not understand anything and it seems to them that they are being held for fools. They usually express their indignation through massive sales. Therefore, the single European currency will have to decline to 1.1150.

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About the British statistics, it is better to keep quiet for now, otherwise, you can run into rudeness. What other statistics when the heads of the European Union decide the fate of the entire United Kingdom? If we proceed from the most likely scenario, which implies that the United Kingdom is leaving the European dormitory with things on April 12, then the pound will move with a confident pace in the direction of 1.2850. Of course, if luck is on the side of Theresa May and the Europeans will give another delay, the pound will grow and grow. Here, even the guidelines should not be set.

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GBP/USD: plan for the American session on April 8. The pound remains in the channel and waits for news on Brexit

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

The technical picture in the British pound has not changed amid the lack of fundamental data and news on Brexit. It is best to return to long positions after the support test of 1.3034, however, the main goal of the bulls will be a breakthrough and consolidation above the resistance of 1.3080, which will return the upward momentum to the market and lead to an update of the highs in the area of 1.3118 and 1.3160, where I recommend fixing the profits. In the case of a decline in GBP/USD under the support level of 1.3034, long positions can be opened for a rebound from the minimum of 1.2988.

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

An unsuccessful consolidation above the resistance of 1.3080 will be a signal to sell the British pound, but the main task will be to return to the support level of 1.3034, the breakthrough of which will resume a larger downward wave in GBP/USD with an update of the lows in the area of 1.2988 and 1.2950, where I recommend fixing the profits. In the scenario of the pound growth above the resistance of 1.3080 in the second half of the day, it is best to consider new short positions on the rebound from the high of 1.3118 and 1.3160.

Indicator signals:

Moving Averages

Trading is conducted in the area of 30 and 50 moving averages, which indicates the lateral nature of the half-day market with a bearish advantage.

Bollinger bands

Breakthrough of the lower border of the Bollinger Bands indicator in the area of 1.3030 will lead to a new wave of the pound decline. The growth will be limited by the upper border of the channel around 1.3075.

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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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The yen has fallen out of favor

After an impressive 2018, when the trade wars, the slowdown of the economy of the Middle Kingdom, the collapse of world stock indices, political crises in Britain and Italy made the Japanese Yen the best performer of G-10, in 2019 the currency of the rising sun fell out of favor. After the January flash crash, many Bloomberg experts talked about the readiness of the "bears" on USD/JPY to lead the pair to the psychologically important mark of 100. Alas, since then their worldview has changed significantly.

The main drivers for the yen decline are the improvement of the global risk appetite and the associated increase in interest in carry trade operations. Unlike last year's debacle, the monetary units of developing countries feel confident in the conditions of low borrowing costs, falling volatility and a better start for US stock indices since 1998. Funding currencies, on the contrary, came under pressure. The main reasons should be sought in the Fed's intention to make a long pause in the process of monetary restriction, as well as in the de-escalation of the US-Chinese trade conflict. If in 2018 the trade wars led to the fall of the Shanghai Composite and the slowdown of China's GDP to minimum levels for several decades, then in 2019 the situation has changed.

The yen does not help the Japanese investors reduce their demand for foreign assets (in the first quarter they acquired foreign securities for £ 7.85 trillion, for the same period last year - by £ 20.1 trillion), nor the drop in the yield of US Treasury bonds to the region of 16 -month lows.

Dynamics of USD/JPY and the yield of US bonds

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It is doubtful that the Fed decided to resume the cycle of normalization of monetary policy in an environment where the US President requires Jerome Powell and his team to reduce rates and resuscitate QE. If so, then competing central banks are unlikely to change their minds and continue to adhere to the "pigeon" rhetoric. The yield of bonds will remain low, the markets will not experience a lack of liquidity, which will increase interest in risky assets. Funding currencies, by contrast, will remain under pressure. This circumstance allows us to count on the continuation of the rally USD/JPY.

The situation for bears in EUR/JPY is no better. The unemployment rate in Japan is at around 2.3%, the lowest in two decades, but, unlike in the eurozone, wages are characterized by sluggish growth. The level of debt in the Land of the Rising Sun (230% of GDP) is also incomparable with the currency block (89%). After several years of fiscal consolidation, the latter can count on a large-scale fiscal stimulus that will support the euro.

Important statistics on US inflation, European industrial production, the publication of the minutes of the FOMC meeting and the meeting of the Governing Council of the ECB force us to pay increased attention to the USD/JPY and EUR/JPY pairs.

Technically, in the case of updating the March maximum and activating the AB = CD pattern, the dollar risks continuing to rally against the yen in the direction of 113.5-113.6 (161.8% target).

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Weak trade data questions Germany and the euro

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Germany: exports and imports fell more than expected in February — the latest sign that Europe's largest economy is likely to grow very weakly in the first quarter. German exporters are suffering from a slowdown in the global economy, trade disputes and uncertainty about Brexit. Last week, leading economic institutions reduced their forecast for German growth in 2019 and warned that the growth period was over. The Federal Statistical Office said that, due to seasonal fluctuations, exports declined by 1.3 percent compared with the previous month, which is the biggest decline in 12 months, while imports decreased by 1.6 percent. The trade surplus rose to 18.7 billion euros ($ 20.99 billion) compared with 18.6 billion euros in the previous month.

World trade is experiencing several crises at once, and for the German export sector, it is a difficult task to deal with them at the same time. Particularly dangerous are the trade dispute between the United States and China, growing concerns about the "tough" Brexit, the possible slowdown in the Chinese economy and problems in other emerging markets. The published data was another blow to the single European currency, which is unlikely to recover from a series of serious shocks in the near future.

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Bitcoin analysis for April 08, 2019

BTC has been trading sideways at the price of $5.193 in past 10 hours. BTC is testing the key short-term resistance at the price of $5.326. Buying looks risky at this stage,

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According to the H1 time-frame, we found that ADX reading is below 25 and falling, which is sign that short-term trend is weak and sideways price action is present. We found potential for ascending triangle in creation but the price would need to break the resistance at $5.326 and then successfully test it before we start to buy again. If the resistance at the price of $5.326 holds, sell off will be possible. The breakout of the support at $5.000 may confirm downward scenario and potential test of $4.636.

Trading recommendation: We are neutral but we are closely observe potential breakout of the support or resistance to confirm further direction.

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Greenback prefers to "sit on the sidelines"

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The Fed continues to maintain a cautious position, preferring to "sit and wait on the sidelines." The US currency, too, cannot yet choose the final direction of movement.

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Published last Friday, a report on the US labor market in March showed that despite a significant increase in the number of new jobs in the country, wage growth rates are losing momentum. The indicator expanded by 0.1% on a monthly basis. According to the forecast, it should accelerate to 0.3%.

According to Yukio Ishizuki, currency strategist at Daiwa Securities, based on the March release on the labor market, the Fed can neither raise the interest rate nor reduce it, as they do not allow to make a decisive step in any of the directions.

"Friday's report on jobs did not change our opinion that the Federal Reserve will not go to reduce the interest rate in 2019," – said the representatives of ABN Amro.

"The market's expectations that the regulator will ease monetary policy, that is, lower the interest rate on federal funds, are excessively high. This, combined with the continued weakness of the eurozone economy, should support the American currency," they added.

ABN Amro believes that by the end of the second quarter, EUR/USD will drop to the level of 1.10.

"The world economy has not yet got rid of the risk of recession," JPMorgan experts said.

They recommend a long position in greenback against the euro and the Australian dollar.

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EUR./USD analysis for April 08, 2019

EUR/USD has been trading upward in last 16 hours. The price tested the level of 1.1262 and we expect more upside in the next period.

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According to the H4 time-frame, we found that ADX reading is above 30 and rising, which is sign of the strong short-term bullish trend and strong upside momentum. Also, in the background, we found the breakout of the contracted consolidation pattern, which even adds more upside potential. Support levels are seen at the price of 1.1250 and 1.1206. Resistance levels are seen at the price of 1.1320 and 1.1375.

Trading recommendation: We are long on EUR/USD from 1.1260 and with targets at 1.1320 and 1.1375. Protective stop is placed at 1.1200.

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Analysis of Gold for April 08, 2019

Gold has been trading upwards. The price tested the level of $1.301.00. We expect further bullish movement and increase momentum on the upside.

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According to the H1 time-frame, we found that ADX reading at 46, which is sign of the strong short-term bullish trend and strong upside momentum. Also, in the background, we found the breakout of the supply trendline and the potential accumulation phase, which even adds more upside potential. Support levels are seen at the price of $1.293.00 and $1.284.00. Resistance levels are seen at the price of $1.309.55 and $1.317.50.

Trading recommendation: We are long on the Gold from $1.300.00 and with targets at $1.310.55 and $1.317.50. Protective stop is placed at $1.292.00.

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GBP/USD. April 8. Trading system "Regression Channels". Theresa May: Brexit may not take place

4-hour timeframe

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Technical details:

The higher linear regression channel: direction - up.

The lower linear regression channel: direction - down.

Moving average (20; smoothed) - down.

CCI: -56.1714

The currency pair GBP/USD continues to "storm" because of the uncertainty associated with Brexit. Nothing new. Theresa May made another statement in which she informed the Parliament and the public that Brexit might not take place at all if the approval process of the "deal" would be delayed further. She also said that she wants the country's withdrawal from the EU to take place according to an orderly scenario. Since the British Parliament rejected the "deal" with the EU proposed by May three times, then, according to the Prime Minister, there are only two ways: either to accept her agreement anyway or to abandon the idea of leaving the European Union altogether. May's plans include new negotiations with EU leaders, which allows extending the EU exit period for another 6 weeks, during which, Theresa May will again try to convince the Parliament to accept her Brexit version. That is, we can already assume that the Parliament will vote on this "deal" for the fourth and possibly fifth time. Until it is approved, or the EU runs out of patience and the UK leaves the bloc without any agreements. By the way, the "nearest release date" is April 12. So far, there have been no reports that the EU has agreed to move it. They will agree to its transfer only with the provision of guarantees that the agreement reached will nevertheless be approved by Parliament. What guarantees can May provide? Personal promises?

Nearest support levels:

S1 - 1.3062

S2 - 1.3000

S3 - 1.2939

Nearest resistance levels:

R1 - 1.3123

R2 - 1.3184

R3 - 1.3245

Trading recommendations:

The pair GBP/USD has started a new round of upward correction, and in general, can not overcome the level of 1.3300. Traders are now in complete confusion, as it is not clear how Brexit will end. Accordingly, no one opens long-term positions. Short positions with a target of 1.3000 after the completion of the next round of correction are relevant.

Buy-positions can be considered after fixing the pair above the moving average, but only with a "short" target – 1.3184.

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

Explanations for illustrations:

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

The lower 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.

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

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

EUR/USD. April 8. Trading system "Regression Channels". Calm trading will continue today

4-hour timeframe

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Technical details:

The higher linear regression channel: direction - down.

The lower linear regression channel: direction - down.

Moving average (20; smoothed) - down.

CCI: 46.1538

On Monday, April 8, the currency pair EUR/USD continues to be located below the moving average line, and the volatility remains quite low. By tradition, on Monday there will be practically no macroeconomic publications, which means that today the market's low activity is likely to continue. In general, the most important question remains open for the euro currency paired with the US dollar – will the pair be able to overcome the level of 1.1200, which represents the lower boundary of a strong support area? If traders still manage to overcome it, the euro can almost go to a free fall. Over the past 3-4 months, it became clear that there are few buyers of the pair. Accordingly, for a strong strengthening of the euro currency, strong fundamental bases are needed, which are not present. There was a chance that due to the completion of the program of a systematic increase in the Fed's interest rates, the US dollar would begin to feel pressure, but it was logical for traders to judge that the situation with the ECB is still worse. The European regulator is not even thinking about any tightening of monetary policy. Moreover, a new LTRO program has been launched, which is once again called upon to support the banking sector and the economy as a whole. From a technical point of view, short positions remain relevant until the pair is fixed above the moving average. It is recommended to be careful since the level of 1.1200 is quite strong.

Nearest support levels:

S1 - 1.1200

S2 - 1.1169

Nearest resistance levels:

R1 - 1.1230

R2 - 1.1261

R3 - 1.1292

Trading recommendations:

The currency pair EUR/USD may continue to move downwards. Thus, now it is still recommended to consider trading for a fall with the targets at 1.1200 and 1.1169, before the new reversal of Heiken Ashi's indicator to the top.

It is recommended to open buy orders no earlier than traders overcome the moving average line with the targets at 1.1261 and 1.1292. In this case, the tendency for the instrument to change to bullish, and the euro will have a small chance of growth.

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

Explanations for illustrations:

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

The lower 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.

Heiken Ashi is an indicator that colors bars in blue or purple

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

Trading Plan 08/04/2019

The big picture: The market is preparing a move.

The fight around Brexit continues. Despite the seemingly successful start of the May-Corbin negotiations on a compromise, it was stated that May was not ready to make sufficient concessions for the deal.

Thus, a long delay on Brexit is more likely to take place on Monday morning.

The US news shows that the US economy is in a state of slowdown.

The EUR/USD rate seems ready to finally organize the movement.

We are ready to buy from 1.1255.

We are ready to sell from 1.1175.

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

Technical analysis of GBP/USD for April 08, 2019

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Overview:

The GBP/USD pair continues to move upwards from the level of 1.3087. Last week, the pair rose from the level of 1.3087 to a top around 1.3201 but it rebounded to set around the spot of 1.3140. Today, the first resistance level is seen at 1.3206 followed by 1.3268 , while daily support 1 is seen at 1.3087 (38.2% Fibonacci retracement). According to the previous events, the GBP/USD pair is still moving between the levels of 1.3087 and 1.3268; so we expect a range of 181 pips in coming days. Furthermore, if the trend is able to break out through the first resistance level at 1.3206, we should see the pair climbing towards the double top (1.3268) to test it. Therefore, buy above the level of 1.3087 with the first target at 1.3206 in order to test the daily resistance 1 and further to 1.3268. Also, it might be noted that the level of 1.3268 is a good place to take profit because it will form a double top. On the other hand, in case a reversal takes place and the GBP/USD pair breaks through the support level of 1.3087, a further decline to 1.2976 can occur which would indicate a bearish market.

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

Technical analysis of USD/CHF for April 08, 2019

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Overview:

The USD/CHF pair continues moving in a bullish trend from the support levels of 0.9895 and 0.9948. Currently, the price is in an upward channel. This is confirmed by the RSI indicator signaling that the pair is still in a bullish trend. As the price is still above the moving average (100), immediate support is seen at 0.9948 coinciding with a golden ratio (23.6% of Fibonacci). Consequently, the first support is set at the level of 0.9948. So, the market is likely to show signs of a bullish trend around 0.9948. In other words, buy orders are recommended above the golden ratio (0.9948) with the first target at the level of 0.9983. Furthermore, if the trend is able to breakout through the first resistance level of 0.9983, we should see the pair climbing towards the double top (1.0036) to test it. It would also be wise to consider where to place a stop loss; this should be set below the second support of 0.9895.

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

Europe prepares for Brexit, the USA for elections, and Japan for recession

The US labor market report for March was without any surprises. After the disappointment in February, the number of new jobs expectedly increased and the result of 196 thousand exceeded the forecast of 180 thousand. The result of the two previous months was revised by +14 thousand. Overall, the growth of jobs returned to the average value of last year and this should be considered a clearly positive factor since the Fed's calculations assumed a decrease in the number of newly created jobs to 60-70 thousand per month last year.

At the same time, the growth of the average wage slowed down to 0.1% on an annualized basis with the slowdown from 3.4% to 3.2%. The fears of a slowdown in inflationary pressure increase, which gives a quite logical justification for the pause taken by the Fed in normalizing monetary policy.

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In general, the report should be considered balanced and the dollar could somewhat weaken given the slowdown in wage growth but the end-of-week factor and the increased tension regarding Brexit did not allow it to decline.

On Wednesday, data on consumer inflation will be published, which may somewhat adjust market expectations. In general, the dollar situation should be considered stable, despite the fact that in general there are not so many real growth factors. Negotiations with China are noticeably slowed, despite the rather vigorous statements by US Trade Representative Robert Lighthizer and Finance Minister Stephen Mnuchin. Moreover, if the agreement was expected to be signed at the beginning of the year by the end of March, it is now unclear whether the negotiations will be completed in April or May.

The arrival of a recession is inevitable but this will not happen today or tomorrow. Apparently, this is the slogan of the day. Oil is growing and stock indices are growing. Central banks have refused to tighten and as a result, risk capital rules the ball.

USD / JPY pair

Japan's consumer confidence index fell to 40.5p in March against 41.5 p a month earlier, a decline is noted for all sectors including employment, real income, purchase of durable goods and the general standard of living.

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The slowdown is also shown by the Eco Watchers complex indicator of economic activity, where the current situation index fell to a 2.5-year low from 47.5p to 44.8p and the forecast indicator from 48.9p to 48.6p. Everything indicates that the exports decline in Japan leads to a decrease in real income and inflation will remain below the target of 2% for a long time. A quarterly survey of investors conducted by Mizuho showed that the number of respondents who are waiting for easing from the Bank of Japan has increased dramatically and most likely this factor will not allow the yen to grow in the near future.

The USD/JPY pair aims to test the March peak of 112.10 with a small threat of a return to the downward trajectory.

EUR / USD pair

On Wednesday, a regular meeting of the ECB will be held but the publication of new economic forecasts is not planned. The focus will be on Mario Draghi's press conference, which can change the delicate balance between the still strong labor market as well as the first signs of economic recovery on the one hand and low inflation and Brexit uncertainty on the other.

Draghi may disclose additional details of preparing for the introduction of the TLTRO3 program in September and combating the growing negative from negative deposit rates, which would indicate the depth of ECB fears about the timing of the recession.

The EUR/USD pair is near the multi-month low of 1.1173. The chances of testing it looks high, but they are unlikely to be realized before Wednesday. Monday trading is more likely to be range-bound at 1.1182 / 1255 with a gradual decrease to the lower limit of the range.

GBP / USD pair

The coming week may be decisive for the pound in terms of the development of a long-term trend. On Wednesday, several important macroeconomic releases will be published, including the trade balance, a report on industrial production and a forecast of GDP growth rates, and the last attempt will be made to find a way out for the UK from the EU with minimal losses at an extraordinary EU summit. By Friday, everything should be decided and the pound can expect an extremely volatile end of the week.

While there is no direction on Monday, the support zone is at 1.2960/85 and the resistance is at 1.3090/95. The pound will trade in a range in anticipation of news.

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Brexit: May does not want to make concessions to the Labor Party, and the euro continues to be traded in the channel

Euro attempted growth on Friday after the release of data on industrial production in Germany, but a report on the good state of the American labor market returned to the market equilibrium.

According to the data, industrial production in Germany grew in February of this year. Growth was due to support for construction while manufacturing production declined.

The report of the Federal Bureau of Statistics of Germany indicated that industrial production in February increased by 0.7% compared with January. Economists had forecast an increase in production by 0.5% in February. Production in the construction sector immediately increased by 6.8% compared with January, while manufacturing production fell by 0.2%. Compared with February 2018, industrial production decreased by 0.4%.

Greece lends money again. Last Friday, eurozone finance ministers decided to approve Greece's payment of 1 billion euros. Let me remind you that the Greek authorities made such a request and after analyzing the current economic situation, as well as certain economic reforms, financial assistance was approved.

The current state of the US labor market raises no questions.

According to the US Department of Labor, the number of non-farm jobs in March 2019, contrary to economists' expectations, increased by 196,000. Unemployment remained at 3.8%.

A good sign of the state of the labor market was the growth of average hourly earnings in the private sector, which in March increased by 3.2% compared to the same period of the previous year. Economists had forecast that the number of jobs in March would increase by 175,000, while unemployment would remain at 3.8%.

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The slowdown in consumer lending is a bad signal for the American economy. As indicated in the report of the Federal Reserve System, unsecured consumer lending in February increased by only 4.52%, or by 15.19 billion US dollars compared with January. Economists had expected a rise in lending in February at 17.75 billion dollars. According to revised data, the January increase was 5.3% per annum.

As for the technical picture of the EURUSD pair, it remained unchanged. The bears have failed to consolidate below the middle of the side channel in the area of 1.1210, and today, this is their main task. Only under this condition will the pressure on risky assets continue, which may lead to a renewal of the lower boundary in the area of 1.1185. In the scenario of the upward correction of the euro, the upper limit of the side channel in the area of 1.1250 remains a good resistance.

The British pound fell seriously on Friday after the news that British Prime Minister Theresa May did not intend to make major amendments to the Brexit agreement. This was stated by representatives of the opposition Labor Party, with whom May is now engaged in active negotiations. Let me remind you that the British Prime Minister asked for a postponement from the EU representatives on Brexit until June 30 to agree on the basic conditions with the Labor Party to ratify the agreement on withdrawing from the union by the country's parliament.

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Analysis of EUR/USD divergence for April 8. The euro is stuck between 1.1200 and 1.1240

4h

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As seen on the 4-hour chart, the EUR/USD pair returned to the retracement level of 76.4% (1.1241) and rebounded from it with a reversal in favor of the US dollar. However, in the last hours, the pair started the process of returning to the Fibo level of 76.4%. Thus, the new rebound of quotations on April 8 from this level will again work in favor of the American currency and will allow us to expect some fall in the direction of the retracement level of 100.0% (1.1177). Fixing the pair's rate above the Fibo level of 76.4% will increase the chances of continued growth in the direction of the next retracement level of 61.8% (1.1281).

The Fibo grid is based on extremes from March 7, 2019, and March 20, 2019.

Daily

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As seen on the 24-hour chart, the pair retain chances of falling in the direction of the retracement level of 161.8% (1.0941), as it completed the closure below the Fibo level of 127.2% (1.1285). However, the previous low of quotes still does not allow a pair below itself. Before the pair closes above the retracement level of 127.2%, however, the probability of a further fall remains high. And only the closing of the pair above the Fibo level of 127.2% will work in favor of the EU currency and some growth in the direction of the retracement level of 100.0% (1.1553).

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

Trading advice:

Buy deals on EUR/USD pair can be opened with the target at 1.1281 if the pair complete above the retracement level of 76.4%. The stop loss order should be placed below the level of 1.1241.

Sell deals on EUR/USD pair can be opened with the goal at 1.1177 if the pair performs a new rebound from the level of 76.4%. The stop loss order should be placed above the level of 1.1241.

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Analysis of GBP/USD divergence for April 8. Bullish divergence pushes the pair to growth again

4h

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As seen on the 4-hour chart, the GBP/USD pair performed a new reversal in favor of the British currency and began the process of returning to the Fibo level of 76.4% (1.3094), after the formation of the new bullish divergence of the MACD indicator. The rebound of the pair on April 8 from the level of 76.4% will allow traders to count on a reversal in favor of the American dollar and the resumption of a fall in the direction of the retracement level of 61.8% (1.2969). Closing the pair above the Fibo level of 76.4% will increase the chances of continued growth towards the next retracement level of 100.0% (1.3300).

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

1h

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As seen on the hourly chart, the quotes of the pair, without the formation of any signal, performed a reversal in favor of the British pound and consolidation above retracement level of 76.4% (1.3060). As a result, the growth process can be continued in the direction of the next Fibo level of 61.8% (1.3121). There are no emerging divergences on the current chart. The consolidation of quotations back under retracement level of 76.4% can be interpreted as a reversal in favor of the US currency and the resumption of a fall in the direction of the Fibo level 100.0% (1.2961) is expected.

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

Trading recommendations:

Buy deals on GBP/USD pair can be opened with a target at 1.3121 and a stop loss order under the correction level of 76.4% as the pair completed closing above the level of 1.3060 (hourly chart).

Sell deals on GBP/USD pair can be opened with the target at 1.2961 and a stop loss order above the level of 76.4% if the pair consolidates below the level of 1.3060 (hourly chart).

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Trading recommendations for the GBPUSD currency pair - placement of trading orders (April 8)

By the end of the last trading week, the currency pair pound / dollar showed a high volatility of 134 points, as a result having a splash to the predicted level of 1.3000. From the point of view of technical analysis, we have a downward movement towards the direction of the predicted level of 1.3000, where after reaching the quote slowed down and formed a rollback. On the other hand, the information and the news background ended the week with complete confusion about the ill-fated Brexit. Theresa May requested a postponement from the EU once again. At the same time, Donald Tusk, who does not have full authority, speaks of a possible delay for the year for England. But also a person who knows what he says, Jean-Claude Juncker says clearly said there will be no further postponement unless Britain accepts the existing agreement by April 12. Here, we have such a circus and, in principle, from the point of view of the trading schedule everything is fine. However, the pound has been declining for some time.

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The week begins, so to speak, with an empty economic calendar. The main stream of news that traders are waiting for will be from Wednesday. At the same time, we should not forget about the information background, which will spontaneously continue to take off on the market, giving a new round of volatility.

Further development

Analyzing the current trading chart, we see that the pullback from the level of 1.3000 led us to the level of 1.3070, but then there is an attempt to restore short positions. If we consider the general background that we have, it becomes clear that there is nothing good about a pound. Thus, the primary judgment is decomposed in the format of fluctuations of the levels of 1.3000 / 1.3070, where we follow the information background and follow clear fixations lower than 1.3000.

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

- As discussed in the previous review, traders considered buying positions when they reached the level of 1.3000. ow, working on the rebound has already been made, and if we do not have deals, then it is better not to hurry and consider them only if the price is fixed higher than 1.3080.

- Traders sold positions for sale were still from the level of 1.3150, as a result of reaching the predicted level of 1.3000, see previous reviews. Now, here's the deal, the primary course is, in principle, can be considered from the level of 1.3040, in the direction of 1.3000. The main move will be considered only after a clear fixation of the price lower than 1.3000, with the support of the information background.

Indicator Analysis

Analyzing a different sector of timeframes (TF), we see that there is a downward interest on the general background of the market in the short, intraday and medium term.

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

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

(April 8 was based on the time of publication of the article)

The current time volatility is 47 points. Although there is not much on the news, no one has canceled the information background. For this reason, I do not exclude that, according to tradition, the volatility of the day will be close to the daily average.

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Key levels

Zones of resistance: 1.3220 *; 1,3300 **; 1.3440; 1.3580 *; 1.3700

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

* Periodic level

** Range Level

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Stagnation in the foreign exchange markets will continue

The global currency market remains completely confused against the background of conflicting signals as it indicates the US labor market is still quite strong and the risks of a continued slowdown in the global economy on another. In particular, it may force the Fed to a long pause in order to begin the process of lowering interest rates.

Data on employment in the United States Published on Friday has shown again the strongest increase in the number of new jobs in March after their negative value in February. According to the data presented, the US economy received 196,000 new jobs against the forecast of growth to 175,000 and a revised upward February value of 33,000. The unemployment rate remained at the same level of 3.8%.

It is true that the data from the labor market continue to be positive, but as we have previously mentioned, the values of production indicators began to give signals to inhibition, which likely prompted the American President Donald Trump to urge the Fed to reduce interest rates once again.

"I personally believe that the Fed should lower the rate. They really slowed down (the economy of the country). There is no inflation," Trump said once again.

As long as the Fed holds on and makes it clear that it will expect clear and clear signals from the country's economy, as well as external factors, before taking decisive measures. By the way, the minutes of the March meeting of the regulator will be published this week, which will show whether there have been any changes in his views on the prospects for monetary policy or not.

Naturally in this situation, uncertainty and high risks Central banks, from which one could expect an increase in interest rates. Yet, central banks including the ECB, the RBA, the RBNZ and the Bank of England gave signals that they will not make any changes in their monetary policies. If the Fed signals about the likelihood of interest rate cuts, we generally get the feeling that many of the world's central banks, those who can afford it, will try to keep up with the American regulator. In this case, we will witness what has already been in the acute phase of the previous crisis of 2008–09 when the distillation banks lowered their interest rates and the largest of them, headed by the Federal Reserve, started economic stimulation programs.

In this situation, we expect in the near future the continuation of the stagnation of the currency market and the side range movements of the main currency pairs. In the future, one can hardly expect a noticeable drop in the dollar even if the Fed lowers interest rates since the US currency will begin to be considered as a safe-haven currency, as it was 10 years ago for example.

Forecast of the day:

The GBP/USD pair remains in a very narrow range of 1.2975-1.3180 in the wake of waiting for the next Brexit vote, as well as the publication of the Fed's Fed data protocol. If the pair holds above 1.3025, it can continue to drift to 1.3180.

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The USD/CAD pair continues to form a triangle in the wake of the uncertainty of the future policy of the Fed and the Bank of Canada. Even rising oil prices do not put pressure on the pair. From a technical point of view, if the price keeps above the level of 1.3365, this can support the rise in the pair to 1.3425. However, if it falls below this mark, it may fall to 1.3310.

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Fundamental Analysis of EUR/USD for April 8, 2019

EUR is expected to be quite volatile this week as the economic calendar is loaded with macroeconomic reports and events which are meaningful for both EUR and USD.

The EU regultor is quite concerned about the economic slowdown in the eurozone's economy. Indeed, all the countries in the European Union is struggling to maintain momentum. According to European Commission's vice president Valdis, Italy may be forced to freeze some of its plans for public expenditures as the country's growth is slower than forecasted. Additionally, the European Commission is going to set priorities for the eurozone's budget for all countries. However, some of the countries need separate budgets that might create internal conflicts in the euro area.

On Wednesday, the ECB main refinancing rate statement is going to be published which is expected to be unchanged at 0.00% along with Monetary Policy Statement which is expected to be neutral as well. The ECB Press Conference will be held following the statement. The events of major importance for EUR will clear up market sentiment about EUR. Investors assume the ECB to unveil its assessment and forecasts for thr eurozone's economy.

On the other hand, USD has been weighed down by mixed economic reports. However, USD managed to sustain momentum over EUR. Therefore, EUR is losing favor with investors. Recently US Average Hourly Earnings report was published. The average wage in the US sank to 0.1% from the previous value of 0.4% which was expected to be at 0.3%. The unemployment rate remained unchanged as expected at 3.8%. On the plus side, the non-farm employment change was better than expected with a surge to 196k from the previous figure of 33k which was expected to be at 172k.

So, the Employment Change came in beyond expectations. On the flip side, averge hourly earnings eased notably last month that casts a shadow over the US labor market. This week FOMC Meeting Minutes along with Federal Budget Balance report are going to be published on Wednesday. Federal Budget Balance is expected to contract to -194.7B from the previous figure of -234.0B. Moreover, on Thursday US PPI report is going to be published with factory inflation increasing to 0.3% from the previous value of 0.1%. FOMC Members Clarida and Bullard are due to speak about current and future monetary policy and short-term interest rate decisions.

Meanwhile, experts do not rule out even a rate cut by the Federal Reserve this year. The US central bank views the labor market as a key criterion for policy decisions. So, mixed employment data released on Friday assures the Fed to adop a patient approach. At the same time, EUR is unable to regain its momentum due to a series of downbeat data from the eurozone.

Now let us look at the technical view. The price is currently climbing higher after consolidating and rejecting off the 1.1200 support area for a few days now. The price could rise higher towards 1.1300 from where the price is going to trade under bearish pressure. As the price remains below 1.1300 with a daily close, the bearish bias is likely to persist.

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Wave analysis of EUR / USD for April 8. Euro thinks about the future plan of action

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Wave counting analysis:

On Friday, April 5, trading ended for EUR / USD with a decrease of several basis points. In fact, the wave pattern does not change at all in the last few days. Wave b is supposedly completed, and I still expect to build an upward wave with targets around 1.1450 and higher. Similar to what happened before, the news background plays against the euro which won't give the market any reason to buy an instrument. Today, it is unlikely that something will change dramatically, since there will be no important news based on the calendar. Thus, the construction of the ascending wave remains the main option until the successful attempt to break through the minimum of the supposed wave 5.

Sales targets:

1.1177 - 100.0% Fibonacci

Purchase goals:

1.1448 - 0.0% Fibonacci

General conclusions and trading recommendations:

The pair supposedly has completed the construction of wave b. Now, I recommend buying a pair with targets near the 1.1455 mark, which corresponds to the maximum of wave a, based on the construction of wave c. Purchases should not be large in volume, since the news background does not support the euro. This, in turn, can lead to the resumption of sales by the market, as well as the complication of the downward trend.

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

Wave analysis of GBP / USD for April 8. The triangle still holds the pair inside

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Wave counting analysis:

On April 5, the GBP / USD pair lost about 40 bp. However, there was a failed attempt to break through the lower line forming a tapering triangle. Thus, the tool remains clamped in the specified triangle and we just have to wait for it to leave. Based on the current wave counting, we can expect further construction of a downtrend trend, but the overall uncertainty on the Brexit makes the markets cautious. Thus, I recommend waiting for new messages on Brexit and waiting for the triangle to go beyond.

Purchase goals:

1.3350 - 100.0% Fibonacci

1.3454 - 127.2% Fibonacci

Sales targets:

1.2961 - 0.0% Fibonacci

General conclusions and trading recommendations:

Wave pattern involves the construction of a downward trend. However, trades will take place inside it until the pair breaks through one of the lines of the triangle. This also limits the markets of the possibility to open various medium-term and long-term deals. The break through of one of the lines of the triangle will be a strong enough signal to buy or sell.

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Indicator analysis. Daily review on April 8, 2019 for the pair GBP / USD

Trend analysis (Fig. 1).

On Monday, technical analysis demonstrates an upward movement. The first upper target of 1.3131 is the pullback level of 38.2% (yellow dashed line).

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Fig. 1 (daily schedule).

Comprehensive analysis:

- indicator analysis - down;

- Fibonacci levels - up;

- volumes - up;

- candlestick analysis - down;

- trend analysis - up;

- Bollinger lines - up;

- weekly schedule - up.

General conclusion:

On Monday, technical analysis demonstrates an upward movement. The first upper target of 1.3131 is the pullback level of 38.2% (yellow dashed line).

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Indicator analysis. Daily review for April 8, 2019 for the pair EUR / USD

On Friday, before the news, the price did not manage to break through the pullback level of 23.6% - 1.1247 (yellow dashed line), when moving upwards. The market, contrary to the technical analysis, went down on strong news, having worked the news down. On Monday, strong calendar news is not expected.

Trend analysis (Fig. 1).

On Monday, the price may continue to move upwards. The first upper target of 1.1247 is the pullback level of 23.6% (yellow dashed line).

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Fig. 1 (daily schedule).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - up;

- volumes - up;

- candlestick analysis - up;

- trend analysis - up;

- Bollinger lines - down;

- weekly schedule - up.

General conclusion:

On Monday, the price may continue to move upwards. The first upper target of 1.1247 is the pullback level of 23.6% (yellow dashed line).

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

EUR/USD: plan for the European session on April 8. US labor market data provided temporary support for the US dollar

To open long positions on EURUSD you need:

As expected, the release of data on the US labor market only temporarily supported the US dollar, which did not even lead to a breakdown of the middle of the channel in the area of 1.1212. To continue the upward trend in EUR/USD, you need to break through the resistance of 1.1248. A consolidation at this level will lead to a new increase with an update of the highs in the area of 1.1284 and 1.1324, where I recommend to lock in profits. In case the euro declines in the first half of the day, it is best to consider new long positions, provided that a false breakdown is formed in the support area of 1.1212 or to rebound from the lower border of the side channel in the area of 1.1183.

To open short positions on EURUSD you need:

The challenge remains the same for the bears. The formation of a false breakdown in the resistance area of 1.1248 will maintain pressure on the euro. However, the main task for the first half of the day will be to return below the middle of the wide side channel of 1.1212, which will increase the pressure on EUR/USD and lead to a test of its lower border in the area of 1.1186, where I recommend taking profits. When the growth scenario is above 1.1248 in the first half of the day, it is best to consider short positions to rebound from resistances of 1.1284 and 1.1324.

Indicator signals:

Moving averages

Trade is conducted in the area of 30-day and 50-day moving averages, which indicates the lateral nature of the market.

Bollinger bands

Volatility is very low, which does not provide signals for entering the market.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
The material has been provided by InstaForex Company - www.instaforex.com

GBP/USD: plan for the European session on April 8. Buyers have returned from major support levels

To open long positions on GBP/USD you need:

The pound's decline on Friday led to a test of large levels of support and the formation of a new rising wave. At the moment, it is best to return to long positions after the support test of 1.3034, however, the main goal of the bulls will be a breakthrough and consolidation above the resistance of 1.3080, which will return the uptrend to the market and will lead to updating highs around 1.3118 and 1.3160, where I recommend taking profits. In the GBP/USD declines below the support level of 1.3034, long positions can be opened for a rebound from a low of 1.2988.

To open short positions on GBP/USD you need:

An unsuccessful consolidation above the resistance of 1.3080 will be a signal to sell the British pound, but the main task will be to return to the support level of 1.3034, a break of which will resume a larger downward wave in GBP/USD with updated lows in the areas of 1.2988 and 1.2950, where I recommend taking profits. In the event of a pound growth scenario above the resistance of 1.3080 in the first half of the day, it is best to consider new short positions to rebound from a high of 1.3118 and 1.3160.

Indicator signals:

Moving averages

Trade is conducted below the 30-day and 50-day moving averages, which creates a number of problems for buyers of the pound. A medium breakthrough will be an additional signal to buy.

Bollinger bands

In the scenario of a following wave of the pound's decline, support will be provided by the average indicator border around 1.3034, as well as the lower border of the Bollinger Bands indicator around 1.3005. A break of the upper border in the area of 1.3080 will strengthen the demand for the pound.

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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

EUR/USD: fasten your seat belts, strong price turbulence is expected

The second week of April promises to be saturated: upcoming events can affect not only the euro/dollar pair, but also other currency pairs, changing the overall fundamental picture. Increased volatility is expected in the market, as traders will monitor events not only of political, but also macroeconomic nature. The "hottest" will occur in three days - from Tuesday to Thursday. Therefore, today we can calmly assess the situation on the market and weigh the existing risks.

The calendar of the current week can be divided into two parts. The first category includes the Brexit and the US-China trade negotiations. The second category is the most important macroeconomic reports, the minutes of the Fed meeting and the ECB meeting. In other words, traders will evaluate the monetary policy prospects of the ECB and the Federal Reserve against the backdrop of political fights around Brexit and a trade deal between the US and China. Such a "bunch" of fundamental factors makes it difficult to predict the EUR/USD's situation, since unexpected statements, numbers or decisions can turn the price movement by 180 degrees, with lightning speed. Therefore, traders have no choice but to build a plan on the basic scenarios of the upcoming events, while retaining hopes that the most likely scenario will be realized. So, first things first.

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Brexit has an indirect impact on the EUR/USD pair, but at the key stages of the divorce process, the euro follows the pound - therefore, the results of the EU summit, which will be held on April 10, is important for the pair. According to preliminary data, Theresa May will ask for a delay until May 22 or June 30, but eventually will agree to the "flexible delay" proposed by Donald Tusk for a year. Under this scenario, Britain will participate in the elections to the European Parliament and work on the approval of the transaction throughout the year. If this can be done ahead of time, then the British will announce it, initiate the EU summit, and the Alliance "releases" London. The deputies of the European Parliament from Britain add their powers. According to rumors, Theresa May will approve this idea, the only question is whether the rest of the EU leaders will support the Tusk initiative. There is an intrigue here.

The intrigue remains regarding the prospects of the US-China relations. Last week, Donald Trump made a rather ambiguous statement: on the one hand, he acknowledged the progress in the negotiations (and even announced the signing of the deal this month), on the other hand, he reported continuing differences over "issues of duties on goods and intellectual property. " The fact is that these issues were initially the most difficult to resolve, so if the parties stalled on them, then it's premature to even talk about a deal. But if by this week, Washington or Beijing signals a breakthrough in the negotiation process, risk appetite in the market will increase in many ways: the dollar will sink, and the EUR/USD pair respectively, will receive a reason for its growth.

If we talk about the publication of the minutes of the Fed and the April meeting of the ECB, these events can significantly affect the pair's dynamics under one condition - if representatives of the regulator raise the issue of an interest rate reduction. Such hypothetical perspectives are widely discussed by experts - especially after the disappointing data on the growth of European inflation (as well as inflation in the US) and the slowdown of the global economy as a whole. Of all the central banks of the leading countries at the moment, the RBNZ is the only one that openly hinted at a possible rate cut this year. The rest of the central banks took a wait and see position, not jumping to conclusions. In my opinion, the Fed and the ECB will not take hasty decisions, refraining from making loud statements. In this case, the Fed's minutes will have a minimal impact on EUR/USD's dynamics, while the neutral-optimistic position of the ECB can provide substantial support to the single currency.

The most important macroeconomic reports for the pair will be published on Wednesday and Thursday. First, we find out data on the growth of US inflation, and then - the producer price index in the United States. In both cases, a minimal but still positive trend is expected. Thus, the consumer price index on a monthly basis should rise to 0.3% (from 0.2%), in annual terms - 1.8% (from 1.5%). The producer price index will also show slight growth - from 0.1% in February to 0.3% in March. You should also pay attention to the dynamics of Chinese inflation, since this indicator may indirectly affect both the dollar and the general mood of the market. Moreover, experts predict an impressive jump - from 1.5% in February to 2.4% in March. If this forecast is implemented, then Chinese inflation will return to highest values of last year.

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Thus, EUR/USD traders should "fasten their seat belts" in anticipation of strong price turbulence. The task of bears of the pair is to pull down the price below 1.1160 (the bottom line of the Bollinger Bands indicator on the daily chart). In this case, they will open their way to the main support level of 1.1000. The task of EUR/USD bulls is to rise and gain a foothold above 1.1285 (the middle line of this indicator on the same timeframe). This dynamic will mark the priority of an upward movement.

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

Technical analysis for EURUSD for April 8, 2019

EURUSD is showing stabilizing signs as the bearish trend has weakened and there are signs of a possible bounce towards 1.13. Short-term and medium-term trend remain bearish, however we expect short-term trend to change to bullish and provide us with a good bounce at least towards 1.13.

analytics5caae8f186f42.png

Red lines - bearish channel

Green rectangle - support area

Black line - short-term resistance

Blue lines - bullish divergence

The bullish divergence signs we talked about last week were a warning for bears that the down trend was losing momentum. On a break above the black short-term trend line resistance I would expect EURUSD to reach fast the 1.1270 level and ideally would test the upper channel boundary and the 1.1310-1.1330 resistance area. Major resistance is found at 1.14-1.1450 area and recapturing this level would change medium-term trend to bullish.

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Technical analysis for Gold for April 8, 2019

Last week Gold bears were warned by the bullish divergence signs and the fact that support at $1,280-90 area was respected. Gold price is now bouncing having broken above short-term resistance heading at least towards $1,310-15 area.

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Green rectangle - major support area

Blue rectangle - short-term resistance

Red rectangle - short-term target

Blue lines - bullish divergence

Black line - major trend line resistance

Gold price has broken above short-term resistance and as long as it holds above the blue rectangle area I expect prices to move higher towards the red rectangle and to test the black major trend line resistance around $1,310-$1,315. Support remains strong at $1,290-80 and we will not go towards $1,250-60 as long as price respects this support level. In the short-term we are bullish expecting price to challenge more important resistance levels. Bulls need to recapture $1,300 and stay above it in order to hope for a move towards $1,350-60 first than a move to $1,250 and lower.

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