Elliott wave analysis of GBP/JPY for April 11, 2019

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The extension of the Brexit deal to October 30 has given GBP a lift. We were looking for renewed GBP strength, but this extension should give GBP/JPY an extra push towards the upside.

We are looking for a clear break above minor resistance at 146.05 to confirm a corrective low is in place near 144.90 and renewed upside strength should push GBP/JPY towards 147.00 and 148.50 near term.

Support remains seen in the 144.90 -145.10 area.

R3: 147.00

R2: 146.50

R1: 146.00

Pivot: 145.55

S1: 145.00

S2: 144.62

S3: 144.15

Trading recommendation:

We are long GBP from 146.51 with our stop placed at 144.80

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April 11, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

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On January 10th, the market initiated the depicted bearish channel around 1.1570.

Since then, the EURUSD pair has been moving within the depicted channel with slight bearish tendency.

On March 7th, recent bearish movement was demonstrated towards 1.1175 (channel's lower limit) where significant bullish recovery was demonstrated.

Bullish persistence above 1.1270 enhanced further bullish advancement towards 1.1290-1.1315 (the Highlighted-Zone) which failed to provide adequate bearish pressure.

On March 18, a significant bullish attempt was executed above 1.1380 (the upper limit of the Highlighted-channel) demonstrating a false/temporary bullish breakout.

On March 22, significant bearish pressure was demonstrated towards 1.1280 then 1.1220.

By the end of last week, a bullish Head and Shoulders reversal pattern was demonstrated around 1.1200.

This will probably enhance further bullish advancement towards 1.1300-1.1315 where price actions should be re-assessed for a possible bullish breakout.

For Intraday traders, the price zone around 1.1235 stood as a significant demand-zone where significant bullish rejection was demonstrated during Yesterday's consolidations.

Short-term outlook remains bullish towards 1.1300 unless bearish breakdown below 1.1250 is achieved on H4 chart.

Trade recommendations :

Conservative traders were suggested to have a valid BUY entry around 1.1235. It's running in profits now.

TP levels to be located around 1.1280, 1.1320. SL should be advanced to 1.1245 to offset the associated risk.

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Elliott wave analysis of EUR/JPY for April 11, 2019

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EUR/JPY has failed to follow-through towards the downside and the break above minor resistance at 125.45 indicates that wave ii completed with the test of 123.64 and wave iii higher towards 132.49 now is developing.

Support is now seen at 125.45 and again just below at 125.22.

R3: 127.50

R2: 127.00

R1: 126.17

Pivot: 126.45

S1: 125.22

S2: 124.76

S3: 124.50

Trading recommendation:

Our stop at 125.50 was hit. We will buy EUR at 125.30 or upon a break above 125.65

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EUR and GBP: euro and pound are traded in the channel amid further uncertainty with the direction

The European currency failed to break above the key resistance level around which trading is conducted throughout the week. Weak data on inflation in Germany does not please economists.

According to the report of the Federal Bureau of Statistics, the German consumer price index harmonized by EU standards in March of this year increased by 0.5% compared with February and only 1.4% compared with March 2018. The decline is directly related to the weak growth in food prices.

As before, the main driver of growth was energy prices, which increased by 4.2%, while food prices slowed down in March to 0.7%. As for the base index, which does not take into account the prices of energy and food, the growth in March compared to March of the previous year was 1.1%.

Data on producer prices in the United States returned to demand the US dollar in the first half of the day. The growth took place against the backdrop of rising energy prices.

According to a report by the US Department of Labor, the PPI final demand index in March 2019 rose by 0.6% compared with the previous month, while economists had forecast an increase in the index of 0.3% in March. The base index, which does not take into account volatile prices, rose by 0.3% in March compared with February. Compared with the same period of the previous year, producer prices rose 2.2%, while the base index rose 2.4%.

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As for the technical picture of the EURUSD pair, it remained unchanged. Buyers of risky assets will still try to find strength and overcome resistance around 1.1290, which will lead to a strong increase in the euro in the area of the maximum of 1.1325 and 1.1360. With the further development of the bear scenario, support will be provided by the lower border of the side channel 1.1230, and its breakthrough will only increase the pressure on the euro, which will lead to a test of the minimum of the month around 1.1180.

The speech of the former Fed Chairman Janet Yellen was ignored by the market. Yellen noted that the Central Bank has the right policy. In her opinion, there is currently no need to reduce rates, however, it is possible that the Fed will need to reduce rates in the future since it is already clear that the US economy continues to face many uncertainties.

The British pound remains in a narrow side channel, and the volatility gradually decreases. Yesterday's news that the leaders of the European Union agreed to provide a respite for the UK to exit the block until October 31 did not affect the market, as the result was quite expected. In June, the UK will have to report on the progress of the Brexit talks.

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The dollar received a black mark from the Fed

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For quite a long time, greenback and the Fed have been moving in the same direction. However, the fact that the monetary policy of the regulator is not a one-way street has become much more important for the EUR/USD pair than the readiness of the European Central Bank to allocate another portion of additional stimulus to the economy of the currency bloc.

Published on the eve of the minutes of the March meeting of the Fed indicated that the regulator seems to have set the bar too high to return to a tightening of the monetary rate in the near future. It is assumed that the Central Bank will keep the interest rate at 2.5% at least until the end of this year. In this case, the probability of its decline in the event of a deterioration of the economic situation in the country is not excluded.

It should be noted that the derivatives market has long been a sign of increasing risks of monetary expansion. Sellers of USD needed only a go-ahead from the Fed, and they eventually got it.

The disappointing data on core inflation in the US for March added fuel to the fire. Last month, the indicator increased by 2% in annual terms against a rise of 2.1% in February. By the way, it is precisely the inability of the indicator to continue to grow against the background of the assumed stay of the US economy in a state of full employment that is now the most worrying for the Fed. According to FOMC representatives, the main external threats are slowing global GDP, trade conflicts and Brexit.

According to the ECB head, Mario Draghi, it is the risk of Washington increasing trade duties on cars shipped to America from the Old World, which are the main argument for the fact that the European economy will continue to slow down. The uncertain situation in global trade continues to cloud the outlook for the region. Most likely, the ECB Board of Governors would prefer to wait until June before deciding what amount of incentives will be required for weakening eurozone GDP.

Thus, the leading securities are still relying on incoming data.

It is expected that if the Chinese economy recovers during the remainder of the year, global GDP will go uphill, which in turn will positively affect European exports. In this case, the euro in 3-6 months may well strengthen against the dollar to $1.15-1.16 and reach the mark of $1.18-1.19 by the end of this year. However, the protectionist policy of Washington may confuse the "bulls" on EUR/USD with all the cards. The resumption of trade wars and the associated growth in demand for defensive assets will create prerequisites for the pair to march southwards.

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EUR./USD analysis for April 11, 2019

EUR/USD has been trading sideways at the price of 1.1270. The price is still trading inside of the trading range.analytics5caf52535775e.jpg

According to the H4 time-frame, we found that potential bearish flag pattern is in creation and that buying looks risky. We found few tests of the resistance at the price of 1.1286 and as long as this resistance is holding, we see potential downside break. Support level is seen at the price of 1.1228 and key short-term support at 1.1186.

Our advice is to watch for potential breakout of the bearish flag pattern to look for selling opportunities with target at 1.1186.

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Bitcoin analysis for April 11, 2019

BTC has been trading downwards. The price tested the level of $4.955. We are expecting more downside.

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According to the H4 time-frame, we found that our support trendline got finally broken, which is sign that sellers are in control and that buyers got exhausted. We found that fake breakout of the resistance at $5.324 in the background, which adds more weakness on the BTC. Our advice is to watch for selling opportunities with the downward targets at $4.651 and $4.133.

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Analysis of Gold for April 11, 2019

Gold has been trading downwards. The price tested the level of $1.294.00. We are seeing supply on the market and the buying looks risky.

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According to the H4 time-frame, we found the bearish divergence on the LBR oscillator did evolved and the buyers didn't have power for any upward extension. The supply which came today took previous 2 swing lows and, on that way, confirming us strong selling pressure. Our advice is to watch for selling opportunities on the rallies with the target at $1.281.00. Resistance is seen at the price of $1.310.15.

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The growth of oil prices will be short-lived according to experts

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According to some experts, the current rise in oil prices will not last long. Analysts pay attention to the negative dynamics of the ratio of potential risk and income from oil quotes.

OPEC countries are trying to keep the situation on the black gold market under control. Along with the reduction in oil production, according to the previous transaction, they stimulate oil prices to increase. However, according to the latest data, the volume of cartel production has decreased to a minimum over the past four years, and oil prices have updated the next maximum.

Currently, quotes North Sea Brent crude oil reached high levels. Previously, such growth was recorded in November 2018. Last month, the total production of OPEC countries decreased by an impressive 534 thousand barrels per day, and the average volume of oil production amounted to 30,022 million barrels per day. According to experts, the last time such indicators were recorded in February 2015.

Saudi Arabia is one of the main supporters of the reduction of oil production. The authorities of the Kingdom do not need too high prices for black gold, threatening the national economy, experts believe the largest Bank ING. Compared with November of last year, the level of oil production in Saudi Arabia fell by 11%. In March of this year, the decline amounted to 324 thousand barrels.

High prices for black gold have a negative impact on the growth rate of the global economy, which is in a pre-crisis state. However, this does not stop active market players. Supporters of lower oil prices at the moment are the United States. US President Donald Trump has repeatedly urged OPEC to increase shipments to bring down prices, but his opinion is ignored. As for the Government of the Russian Federation, it does not support the uncontrolled rise in oil prices.

Experts do not exclude that in the summer of 2019, the OPEC + agreement will be revised and oil production will increase. ING believes that the increase in oil prices will cause investors to doubt the renewal of the OPEC + deal until the end of the second quarter of this year.

Earlier it became known that OPEC lowered its estimate of the growth in global demand for black gold in 2019 to 1.21 million barrels per day. The reason for this is that analysts believe a slowdown in economic growth. As a result, this year oil demand is projected at 99.9 million barrels per day.

In the future, the estimate of the growth in supply from non-cartel countries to 2.18 million barrels per day was also worsened. The volume of supply of raw materials from independent oil producers is now estimated at 64.54 million barrels per day.

According to OPEC research, the demand for fuel will be under pressure from the growing supply of petroleum products worldwide. Significant supply volumes are typical for countries in Asia, the USA, and Europe. The United States is expected to slow down the growth of demand for gasoline, and in Europe – for diesel fuel, analysts sum up.

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Simplified wave analysis of the main currency pairs on April 11

EUR/USD

The general vector of the euro price movement in recent weeks is set by the upward wave of March 3. In the larger wave of H4, it completes the upward correction model. Since March 20, a wave zigzag of the middle part (B) is formed in the wave structure. There is a high probability of breaking down the level of the beginning of the current wave.

Forecast:

In the next trading session, the price of the pair will reach the boundaries of the calculated resistance. Short-term break of the upper limit is not excluded. Further, a change of course and the beginning of a decline is expected. The nearest support will limit the volatility of the pair for the next day.

Recommendations:

Short-term purchases are possible only on the smallest TF. Upon reaching the resistance zone, it is recommended to pay special attention to the sell signals.

Resistance zone:

- 1.1300 / 1.1330

Support zone:

- 1.1210 / 1.1180

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GBP/USD

A bullish wave of the scale H4 indicates the main vector of movement in the short term. But the estimated range up is exhausted. The price is near the potential reversal zone. Unfinished wave H1 is starting from March 13. In the last 2 weeks, the structure formed the middle part.

Forecast:

The greatest probability of completion of the current rate in the last days rises in the nearest resistance zone. In case of a breakthrough, a short-term extension up to the middle of the 133rd figure is possible. Either option will be followed by a change of course and a decline to one of the calculated support zones.

Recommendations:

Purchases are quite risky because of the small potential. It is recommended to track the reversal signals to find the point of sale of the pair.

Resistance zone:

- 1.3120 / 1.3150

Support zone:

- 1.3000 / 1.2970

- 1.2890 / 1.2860

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USD/JPY

The last unfinished wave of the short-term trend of the Japanese yen is starting from March 25. It gave rise to the final part (C) in a larger wave model. The nature of the movement is close to impulse. In the structure, the middle correctional part (B) is nearing its end. The price has reached the estimated completion zone, but there are no turn signals yet.

Forecast:

In the next day, we should wait for the completion of the bearish stage of the price movement and the beginning of an active price increase. The upper limit of the expected daily volatility is within the resistance zone.

Recommendations:

Sales have little potential and are very risky. After a second rollback to the support area, it is recommended to monitor the signals of your trading systems to make purchases of the pair.

Resistance zone:

- 111.75 / 112.05

Support zone:

- 110.95 / 110.65

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Explanations for the figures: Waves in the simplified wave analysis consist of 3 parts (A – B – C). The last unfinished wave is analyzed. Zones show areas with the highest probability of reversal. The arrows indicate the wave marking according to the method used by the author, the solid background is the formed structure, the dotted ones are the expected movements.

Note: The wave algorithm does not take into account the duration of the instrument movements in time.

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GBP / USD plan for the American session on April 11. Traders do not know what to do next with the pound

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

Yesterday's decision of the EU to provide a long delay to the UK put traders into a dead end. Currently, the support is observed in the area of 1.3056 but opening long positions from there is best of all, provided that a false breakdown is formed. In a different scenario, buying a pound for a rebound is best in the area of 1.3021 and 1.2988. The main task for the second half of the day will be a breakthrough and consolidation above the resistance of 1.3119, which will lead to an update of the weekly highs around 1.3160 and 1.3195, where I recommend taking profits.

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

Given the uncertainty that persists, bears can return to the market only after they decline and consolidate below the support level of 1.30756, which will automatically result in closing long customers' positions before yesterday's news and reducing the GBP/USD pair to the minimum area of 1.3021 and 1.2988, where I recommend taking profits. Under the pound growth scenario in the second half of the day, one can take a closer look at sales from the upper border of the side channel 1.3119 or immediately on the rebound from the new resistance of 1.3160.

More in the video forecast for April 11

Indicator signals:

Moving averages

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

Bollinger bands

In the case of the pound growth scenario, the upper limit of the Bollinger Bands indicator in the area of 1.3119 will act as resistance.

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Description of indicators

MA (moving average) 50 days - yellow

MA (moving average) 30 days - green

MACD: fast EMA 12, slow EMA 26, SMA 9

Bollinger Bands 20

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EUR / USD plan for the US session on April 11. Euro remains in the channel while market uncertainty remains

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

Data on inflation in Germany coincided with forecasts of economists and limited the upward potential of the euro, while the report on inflation in the United States led to a decrease in the pair. At the moment, buyers will try to form a false breakdown in the support area of 1.1260, but I recommend to open long positions immediately for a rebound only at a minimum of 1.1232. The main objective of the bulls remains to break through at the resistance of 1.1287, which will lead to a new upward trend in the area of highs at 1.1324 and 1.1358, where I recommend fixing profits.

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

The bears showed themselves and formed a false breakdown in the area of resistance at 1.1287, to which I drew attention in my morning review, which led to renewed pressure on the euro and a decline in the area of support 1.1260. The main task of sellers for the second half of the day will be to breakthrough at the level of 1.1260 and a minimum test in the area of 1.1232 and 1.1183, where I recommend taking profits. With the EUR / USD growth scenario above 1.1287, it is best to consider short positions on a rebound from the maximum of 1.1324.

More in the video forecast for April 11

Indicator signals:

Moving averages

Trade is conducted in the region of 30 and 50 moving averages, which indicates keeping the lateral nature of the market.

Bollinger bands

The pressure on the euro may increase in the event of a breakdown of the lower limit of the Bollinger Bands indicator in the region of 1.1260.

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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 market wants to reduce the interest rates of the Fed

The published minutes of the March Fed meeting, which investors were looking forward to with great impatience, did not bring anything of what they hoped for. Namely, the markets expected that the American regulator would clarify its position regarding the prospects for interest rates, the beginning of their likely decrease but that did not happen. The uncertainty factor in its possible actions will persist.

Earlier, the markets hoped that the signals of slowing the growth of the American economy against the background of the US-Chinese trade war, as well as strong pressure from President Donald Trump in his desire for the Central Bank to begin the process of lowering interest rates, would force the Fed to show softness and make it clear if negative trends continue. Trends in the national economy that it will go on lowering the cost of borrowing. However, the published protocol showed that the majority of the heads of federal banks believe that for now, it is necessary to show patience and watch the developments. While most managers expect interest rates to remain unchanged throughout the year, they have not shed any light on whether they will change at all in the foreseeable future. According to the Fed, the main reason that forces them to be "patient" is significant uncertainty on the external situation such as the situation around Britain's exit from the EU, the trade war with China and the continuing possibility to slow down the growth of the American economy.

The foreign exchange market began to operate even before the publication of the protocol in the hope that it would shed light on the prospects for interest rates. The dollar began to decline and the main currencies add against it. The market seems to have little interest in what will be. In fact, in this Protocol, since on the one hand, they are sure that the fed will still have to go to lower interest rates, and on the other, he has already made sure that, as a "tail" can confidently wag the "dog", that is the US fed. Therefore, it can get away if not by hook or by crook, which course, in this case, many market players seem to have started laying on the global weakening of the US currency.

Forecast of the day:

The EURUSD pair is trading in a very narrow range after the outcome of the ECB meeting and the release of the Fed's protocol, as well as the extension of the Brexit tragedy until the end of this year. It is likely that the pair will remain in the "sideways", however, if it overcomes the 1.1285 mark, it can grow towards 1.1325 for today.

The AUD/USD pair has adjusted after reaching a local maximum of 0.7175and can continue to decline to 0.7140, before resuming growth to 0.7220 if it overcomes the level of 0.7160.

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Gold: modesty is the sister of talent

Gold managed to capitalize on US intentions to impose $ 11.2 billion in import duties against the European Union for illegal subsidies for Airbus, as well as from the results of the ECB meeting and the contents of the March FOMC minutes protocol. Fears of the European Central Bank about the further slowing of the eurozone economy and the Fed's readiness to keep the federal funds rate at 2.5%, at least until the end of 2019, contributed to a fall in bond yields in the Old and New World. In the face of declining borrowing costs, the precious metal usually feels very confident due to the increase in its share in investment portfolios.

Gold that lacks bullish forecasts is still modest. Societe Generale believes that as the probability of a recession in the US economy grows in 2020. The demand for precious metals will increase and predicts that its average price in the first quarter of next year will be $1,400 per ounce. But for the whole of 2020, it is around the same figure, says TD Securities. As the main "bullish" drivers for the XAU/USD pair, the company cites growing demand from China for a physical asset and the gradual elimination of long positions in the US dollar. In March, the Celestial Empire acquired the next 11.2 tons of gold and increases reserves to 1,885 tons. Over the past 4 months, these increased by 42 tons. In 2018, the central banks led by Russia and Kazakhstan actively bought precious metals and the fact that they were joined by China in 2019.

The slowdown in the US economy and the Fed's intention to keep the federal funds rate, at 2.5% at least until the end of 2019, is forcing large banks to change their forecasts for US Treasury yields. Thus, HSBC lowered its estimate for 10-year securities from 2.5% to 2.1% at the end of the year. The lower the yield falls then the greater the chances of gold to continue the rally. In this regard, the fall in German debt rates after the ECB meeting, as well as the release of US inflation data for March and the publication of the FOMC meeting minutes played into the hands of the XAU/USD bulls.

Dynamics of gold and yield of US Treasury bonds

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In my opinion, gold could rise higher if it was not for the strong position of the US dollar but more precisely, if not for the weakness of the euro. The share of the single European currency in the structure of the USD index is 57%, hence, the sluggish dynamics of the eurozone economy has a positive effect on the US currency and restrains the offensive outburst of precious metal fans. If the situation in China and in the eurozone begins to improve, buyers of EUR/USD and XAU/USD pairs will extract dividends. For this, it is necessary that the situation with Brexit be clarified and Donald Trump did not start another trade war but this time with the EU.

Technically, a breakthrough of resistance levels at $1313 and $1322 per ounce with a simultaneous release of gold futures quotes beyond the descending short-term trading channel will increase the risk of activating the harmonious trading "Crab" pattern. Its target for 161.8% corresponds to $1389.

Gold daily chart

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GBP/USD. April 11th. The trading system "Regression Channels". EU leaders agreed to postpone Brexit dates

4-hour timeframe

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Technical details:

The upper linear regression channel: direction - up.

The lower linear regression channel: direction - down.

Moving average (20; smoothed) - sideways.

CCI: 112.6238

The GBP/USD currency pair has again overcome the moving average line, however, it remains in complete uncertainty. Despite a large amount of important macroeconomic information published the day before, the pair did not manage to overcome the Murray level of 1.3000 (even there was no attempt) and leave above the Murray level of 1.3123. The pound sterling received little support due to the decision taken at the emergency EU summit regarding the extension of the UK release dates, as well as the Fed's protocol, which stated that there were no plans to raise the rate in 2019. Now Donald Tusk must hold talks with Theresa May and approve a new date for Brexit, then it must be approved by the British Parliament. Thus, as we expected, Brexit will be postponed for at least several months, at most until October 31, 2019. Now, the British government will have to start a new job to agree on the version of Brexit. On Thursday, no important macroeconomic publications in the States and the UK are planned. At the European trading session, a surge of activity is possible, due to the fact that the Europeans were deprived of the opportunity to respond to the evening news of yesterday.

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 fixed above the MA, but not the fact that it will continue to move up. The level of restraint is 1.3123. If the price manages to overcome it, then it will be possible to open long positions with the target at 1.3184.

Sell positions can be considered after fixing the pair below the moving average line and the level of 1.3062. In this case, you can count on a decline to 1.3000.

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

Explanations for illustrations:

The upper 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.

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EUR/USD. April 11th. The trading system "Regression Channels". Mike Pence: the key rate should be lowered

4-hour timeframe

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Technical details:

The upper linear regression channel: direction - down.

The lower linear regression channel: direction - down.

Moving average (20; smoothed) - up.

CCI: 94.5368

On Thursday, April 11, the currency pair EUR/USD returned to its original positions after a decline to Murray's level of "0/8" during yesterday's trading. The Fed's evening minutes, as expected, did not contain fundamentally new information. The regulator, as it has done many times before, noted that in 2019 he does not plan to raise the rate. Much more interesting was the statement by US Vice President Mike Pence. He said that in order to stimulate GDP growth, the key rate should be lowered. Earlier, US President Donald Trump has repeatedly criticized the Fed and Jerome Powell for raising rates too fast. In his opinion, this hinders the economic growth of the country, as well as complicates the process of servicing the public debt, since during the entire period of the rate hike the dollar was prone to growth. Today, neither the States nor the European Union has planned important macroeconomic events. Thus, based on the readings of the system "regression channels", we conclude that the upward trend, albeit weak, is maintained, and the indicator Heiken Ashi signals a local upward movement. Volatility on the instrument may return to low values today.

Nearest support levels:

S1 - 1.1261

S2 - 1.1230

S3 - 1.1200

Nearest resistance levels:

R1 - 1.1292

R2 - 1.1322

R3 - 1.1353

Trading recommendations:

The EUR/USD currency pair has resumed its upward movement. Thus, it is now recommended to consider purchase orders with targets at 1.1292 and 1.1322. A new turn of the Heiken Ashi down indicates a new round of downward correction.

It is recommended to open short positions not earlier than re-fixing the pair below the moving with the objectives of 1.1230 and 1.1200. In this case, the downward trend in the pair may resume.

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

Explanations for illustrations:

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

The lower linear regression channel is the violet 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.

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Fundamental Analysis of AUD/JPY for April 11, 2019

The Australian economy is currently going through certain troubles. Oddly enough, weakness in the domestic economy is blended with strong employment data. Another amazing fact is that the stock market is rallying which the economic growth is coming to a standstill.

The Australian economy slowed down in the last half of 2018, but the healthy labor market managed to attract certain sentiment along the way. Despite the economic slowdown, the nation's benchmark index ASX 200 gained 10% in the first quarter of 2019 which is the highest performance in the latest three decades. Australia is experiencing the weakest economic period since the global financial crisis which was reflected in last month's GDP figure.

Yesterday Westpac Consumer Sentiment Index jumped to 1.9% from the previous value of -4.8%. Today MI Inflation Expectation report is published with a decrease to 3.9% from the previous value of 4.1%. Ahead of RBA's Financial Stability Review tomorrow, AUD is set to trade higher volatility that might lead to significant AUD weakness if the review expresses dovish rhetoric.

On the other hand, Japan's Current Account report revealed an increase to 1.96T as expected from the previous figure of 1.83T. However, Consumer Confidence Index and Economy Watchers Sentiment Indicator showed worse than expected readings which derived the market sentiment further away from JPY. Bank of Japan's Governor Kuroda is still quite optimistic with the economic growth despite the recent challenges of exports and imports on the back of the lingering trade conflict between the US and China. Additionally, Kuroda recently stated about the central bank's monetary easing to achieve its 2% inflation target. He also stated that the inflation will be accompanied by growth in corporate profits and wages which will not affect the economy but will help in the long run.

Today M2 Money Stock report was published unchanged as expected at 2.4% which did not quite help the currency to gain momentum over AUD.

Meanwhile, AUD is confusing the investors and traders as Australia's economic slowdown contrasts to robust employment and strong financial markets. AUD asserts strength over JPY. Nevertheless, in light of hawkish statements from the BOJ recently certain counter pressure may arise in the short term.

Now let us look at the technical view. The price formed Bearish Divergence in the volatile and corrective structure it created recently which is expected to lead the price lower towards 78.50 support area in the coming days. Though the previous trend is bullish, the price is expected to decline lower amid the counter trend correction. If the price remains below 80.00, the bearish pressure is expected to persist.

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Technical analysis of GBP/USD for April 11, 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.

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Brexit decided to postpone Halloween as discarded masks do not always mean masquerade is over

More recently, the European Council President Donald Tusk sadly joked that politicians who advocate Brexit without a clear understanding of how to implement it have a "place in hell". Ironically, an emergency EU summit timed a new deadline for the UK to withdraw from the alliance for Halloween. Of course, the new date (October 31) is connected with other circumstances, namely with the upcoming change of management in the EU. On November 1, the new European Commission should begin work and if the United Kingdom is really going to leave the bloc. Then, it is important for Brussels that Foggy Albion could not influence the appointments in the new EC or the future important decisions of the union.

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"The current extension is as flexible as I expected, but a bit shorter than I had hoped, but this is still enough to find the best solution. Please do not waste this time, "- said by Tusk at a press conference on the results of the summit, referring to London.

What's next?

Under the terms of the deferment provided, the UK may not wait for it to end and leave the EU earlier if the House of Commons approves the already three times rejected version of the deal with the alliance proposed by the country's Prime Minister Teresa May.

In this case, the withdrawal of the United Kingdom from the bloc will take place on the first day of the month following the date in which the divorce agreement will be ratified.

However, if parliamentarians will not approve the deal in the coming weeks, then the country will have to take part in the elections of the European Parliament, which will be held in late May. Other options are possible, including a new referendum and the abolition of Brexit, which is still counted on by opponents of the release of Foggy Albion from the EU.

Repeat referendum?

Last week, Theresa May reported that if the agreement with the EU again does not pass in the British Parliament, then alternative options for action related to Brexit will be submitted to the House of Commons.

If among these options is a proposal to hold a repeated referendum and it receives a majority of votes, this event will become a reality. May is now strongly opposed to this. In her opinion, the duty of the government and British politicians in general is to fulfill the decision adopted at the 2016 referendum.

Resignation of the Prime Minister?

At the end of March, May promised her party members to resign before May 22 if the House of Commons finally approves the "divorce" agreement.

However, more and more opponents of the Prime Minister within the Conservative Party are openly talking about the need to remove her from office in the near future — perhaps by the end of May — and in the summer to choose a new party leader.

It is possible that she will be replaced by one of the radical Brexit supporters and will bring the matter to a decisive break with the EU with or without an agreement to withdraw from the alliance.

"The days of Theresa May as prime minister will be numbered if she cannot agree with Labor on the issue of a customs union with the EU. For traders who play the sterling pound this is most likely the last hope on the short-term outlook, except that the current rate of the British currency is more fearful of the "hard" Brexit than I think. If interparty negotiations do not lead to anything and it comes to a new referendum, the latter is unlikely to take place sooner than in a few months and this will make the pound vulnerable because of fears that the UK's withdrawal from the EU without a deal remains possible in the long term ",said by hardcore currency strategist at Saxo Bank, John Hardy.

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Technical analysis of USD/CAD for April 11, 2019

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Overview:

The USD/CAD pair continues to move upwards from the level of 1.3228. Yesterday, the pair rose from the level of 1.3228 (the level of 1.3228 coincides with a ratio of 38.2% Fibonacci retracement) to a top around 1.3357. Today, the first support level is seen at 1.3228 followed by 1.3311, while daily resistance 1 is seen at 1.3377. According to the previous events, the USD/CAD pair is still moving between the levels of 1.3228 and 1.3402; for that we expect a range of 174 pips (1.3402 - 1.3228). On the one-hour chart, immediate resistance is seen at 1.3357, which coincides with the double top. Currently, the price is moving in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. The price is still above the moving average (100), Therefore, if the trend is able to break out through the first resistance level of 1.3357, we should see the pair climbing towards the daily resistance at the levels of 1.3377 and 1.3402. It would also be wise to consider where to place stop loss; this should be set below the second support of 1.3282.

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BITCOIN Analysis for April 11, 2019

Bitcoin was trading with high volatility aiming to climb higher after a breakout above $5,250. Indeed, the price jumped higher towards $5,500 but failed to sustain the bullish momentum as the impulsive counter pressure intervened.

The price recently rejected off the $5,000 area acting as support and revealed certain bullish pressure which will be able to lead the price higher towards $5,250 again. However, having dynamic levels like 20 EMA, Tenkan, and Kijun line as resistance, there is a bigger likelihood for BTC to reject the bulls and continue moving lower in the coming days. Though the market is currently quite impulsive with the bearish pressure, breaking above the $5,250 area again with a daily close is expected to reinforce upward momentum in the coming days. As the price remains above $5,000 area with a daily close, the impulsive bullish bias is likely to continue.

SUPPORT: 4,800-80, 5,000

RESISTANCE: 5,250, 5,500

BIAS: BULLISH

MOMENTUM: VOLATILE

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Trading recommendations for the EURUSD currency pair - placement of trading orders (April 11)

The euro / dollar currency pair for the last trading day showed volatility, close to the average daily, 56 points, as a result of having a fairly wide fluctuation amplitude of fluctuations. From the point of view of technical analysis, we see that there were two phases. The first reflected a rebound from the previously formed cluster of 1.1250 / 1.1285, where the quotation flew to the mark of 1.1230. The second phase reflects the recovery, where literally there was a return to the opening of the day. In general terms, we have all the same correction from the level of 1.1180.

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Information news background had a lot of important events, let's consider them in order. The first event that worried the entire market was the emergency summit of the European Union countries, where the British approved a long-awaited postponement with a number of conditions. The terms of the postponement are that the UK is obliged to approve the existing agreement in parliament until May 22, where in this case the exit will take place on June 1. If the British Parliament does not approve the agreement, then there are two options: on June 1, it withdraws from the EU without a deal or takes part in elections to the European Parliament, and the delay in this case is valid until October 31.

"In June, we will not re -negotiate, either between us or the UK, about the agreement reached on exit, because it must be respected," said European Commission President Jean-Claude Juncker.

The second event of the past day was a meeting of the United Central Bank, where rumors had previously occurred that the regulator was allegedly disappointed in the policy of negative interest rates. Naturally, the rumors were not confirmed, Mario Draghi is concerned about low inflation. And if the situation does not change, then the rate will remain at a record low in the next year 2020.

Upon completing the flow of important events data on inflation in the United States, there was a significant increase from 1.5% to 1.9%.

Today, it is worth waiting for some understanding of everything that is happening. In terms of the economic calendar, we have data on the number of applications for unemployment benefits in the United States, where applications are expected to increase.

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Further development

Analyzing the current trading chart, we see that the quotation fixates around the value of 1.1285, where even earlier we felt a periodic resistance in front of us. It is likely to preserve ambiguous fluctuations within 1.1255 / 1.1285, where traders monitor the boundaries for a clear breakdown.

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

- Buy positions are considered in the case of a clear price fixing higher than 1,1285, with a primary perspective of 1,1300, then we analyze the price fixing relative to the new coordinate.

- Positions for sale are considered in the case of price fixing lower than 1.1250.

Indicator Analysis

Analyzing a different sector of timeframes (TF ), we see that in the short term there is a variable downward interest against the background of a bump in stagnation. Intraday and mid-term perspectives retain an upward interest.

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

Measurement of volatility reflects the average daily fluctuation, based on monthly/quarterly/year.

(April 11, was based on the time of publication of the article)

The current time volatility is 16 points. If the ambiguous move is maintained within the existing cluster, the volatility may remain low.

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Key levels

Zones of resistance: 1.1300 **; 1.1440; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1.2100

Support areas: 1.1180; 1.1000

* Periodic level

** Range Level

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Fed and ECB prepare for recession

As follows from the minutes of the FOMC meeting of March 20, published on Wednesday, the normalization policy has been suspended due to a variety of external and internal reasons. The Fed notes a slowdown in the US economy as well as a decline in consumer activity due to the weakening effect of tax incentives and a slowdown in the global economy. At the same time, the Fed assumes that the slowdown will be delayed and will be significant not only in 2019 but also in the next few years.

In fact, the Fed's position means an obvious expectation of a recession and therefore, maintaining interest rates unchanged this year, which looks like a reasonable and obvious step.

Central to the discussion was the question of balance. The current reduction program will be completed in September and apparently, the overall balance will remain unchanged for some time. There is also a possibility that the Fed will get rid of mortgage-backed securities in its portfolio, which could lead to an increase in mortgage rates.

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Markets regard the outcome of the Fed meeting in two ways. In the short term, the decision to abandon the growth rates in the current year is a step towards improving financial conditions and therefore will lead to an increase in demand for risky assets. In the long term, the markets received a clear signal. You need to prepare for a protracted recession that could begin this year.

The first signs that fears of a recession are not in vain were revealed on Wednesday as the core inflation rose by 0.1% in March against the forecast of 0.2%. Annually, the growth slowed from 2.1% to 2.0%. The US economy will slow down and the short-term euphoria of dovish Fed decisions will end fairly quickly.

EUR / USD pair

The ECB left interest rates unchanged as predicted at its regular meeting on April 10 and confirmed its intention to keep them at least until the end of 2019.

Like the Fed, the ECB is beginning to prepare for a recession. The probability of lowering rates has risen and inflation expectations have worsened. It was confirmed that the details of the next TLTRO refinancing program will be disclosed at one of the next meetings which will most likely be in June. There are already assumptions that TLTRO loans will occur at negative rates.

The press conference of Mario Draghi ultimately produced a negative effect, despite attempts to maintain an optimistic tone. Draghi admitted that the impact of negative factors was longer than expected and the slow growth will continue this year.

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The negative reaction of the markets to Draghi's performance turned out to be short-lived. They did not see any strong arguments in favor of further reducing the euro and therefore, EUR/USD will remain near current levels with a probability to increase. The euro may rise to 1.13 during the day and try to go above the limit of the range. There is low growth potential but there are even fewer reasons for the decline in support for 1.1240.

GBP / USD pair

The EU leaders at an extraordinary summit agreed to postpone the exit of the UK from the EU until October 31. The threat of an uncontrollable Brexit has been eliminated. Additional negotiations will be held on the exit conditions in June. The next season of the Escape from the EU saga is completed. Now, Britain will have to take part in the elections to the European Parliament, which will be held in May. The internal political struggle is unlikely to weaken, but the foreign exchange market can take a breath.

Meanwhile, the pound received support after the publication on Wednesday of macroeconomic data. Industrial production in February has unexpectedly increased instead of the predicted decline. Also, the GDP grew, therefore, we can now expect that quarterly growth to be higher than expected.

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NIESR forecasts a growth of 0.4% in the first quarter and 0.3% in the second, provided that current trends continue. The latest data for March turned out to be better than expected and the UK economy was a little further from the threat of recession than expected quite recently.

The pound completely lost direction, as it focused on political, rather than economic factors. Today, the pair will most likely continue to trade in the range with the resistance level at 1.3122 and 1.3196 and the support at 1.2976. Volatility is unlikely to be high.

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Analysis of EUR/USD divergence for April 11. A retreat from the level of 76.4% returned the euro to life

4h

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As seen on the 4-hour chart, the EUR/USD pair performed a decline to the retracement level of 76.4% (1.1241), rebound from it, a turn in favor of the EU currency and a return to the retracement level of 61.8% (1.1281). The end of the quotations of the pair on April 11 from the Fibo level of 61.8% will again work in favor of the American currency and the resumption of decline in the direction of 76.4%. Closing the pair above the Fibo level of 61.8% will increase the chances for further growth in the direction of the next retracement level of 50.0% (1.1313). There are no emerging divergences on the current chart.

The Fibo grid was built on extremums from March 7, 2019, and March 20, 2019.

Daily

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As seen on the 24-hour chart, the pair retains the chances of resuming a fall in the direction of the Fibo level of 161.8% (1.0941), since it cannot yet close at the level of 127.2% (1.1285). Rebounding the pair from this level will work in favor of the US dollar and the beginning of a fall in the direction of the retracement level of 161.8%. Fixing the rate of the pair above the Fibo level of 127.2% will allow traders to rely on some growth in the direction of the retracement level of 100.0% (1.1553).

The Fibo grid was built on extremes from November 7, 2017, and February 16, 2018.

Trading advice:

Buy deals on EUR/USD pair can be opened with the target at 1.1313 if the pair consolidates above the Fibo level of 61.8%. The stop loss order should be placed below the level of 1.1281.

Sell deals on EUR/USD can be opened with the target at 1.1241 if the pair rebounds from the level of 61.8%. The stop loss order should be placed above the level of 1.1281.

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Analysis of GBP/USD divergence for April 11. Bullish divergence supported pound sterling

4h

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As seen on the 4-hour chart, the GBP/USD pair performed a return to the retracement level of 76.4% (1.3094). The new release of the pair from this level will again allow traders to expect a reversal in favor of the American currency and the resumption of a fall in the direction of the Fibo level of 61.8% (1.2969). Today, there are no emerging divergences on the chart. Fixing the rate above the retracement level of 76.4% will increase the probability of continued growth of the pair in the direction of the next Fibo level of 100.0% (1.3300).

The Fibo grid is built according to the extremums of September 20, 2018, and January 3, 2019.

1h

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As seen on the hourly chart, the pair also fell to the retracement level of 38.2% (1.3087). After the formation of a bullish divergence, the CCI indicator performed a reversal in favor of the British pound and resumed the growth process in the direction of the retracement level of 50.0% (1.3122). Today, there are no emerging divergences on the current chart. The rebound of the pair from the Fibo level of 50.0% will again allow counting on a reversal in favor of the US currency and a slight drop in the direction of the retracement level of 38.2%.

The Fibo grid is built according to the extremums of March 27, 2019, and March 29, 2019.

Trading recommendations:

Buy deals on GBP/USD pair can be opened with targets at 1.3122 and 1.3157 and a stop loss order under the retracement level of 38.2% as bullish divergence was formed (hourly chart).

Sell deals on GBP/USD pair can be opened with the target at 1.3087 and a stop loss order above the level of 50.0% if the pair bounces off the level of 1.3122 (hourly chart).

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The ECB and the Fed have announced that there will be no increase in interest rates

The euro declined during a speech by the president of the European Central Bank, who acknowledged the weakening of the economic cycle. In his opinion, the incoming data confirms the slowdown of the economic impulse, however, some of the special factors that impair economic growth weaken. Geopolitical risks and threats associated with protectionism remain the main problem, which worsens economic sentiment, and the eurozone still needs a significant degree of monetary stimulus.

Draghi noted that the slowdown in the economic momentum will continue this year, and overall inflation is likely to decline in the coming months. As for the details of the new LTRO operations, they will be announced at a future meeting. The main pressure on the euro was formed by the statement that the ECB is ready to adjust all the instruments if necessary, which is a direct signal to maintain or lower rates if necessary to negative levels.

Good data on consumer price increases in the United States also supported the US dollar. The increase was due to volatile oil prices, which allowed to hide the moderate basic inflationary pressure.

According to the US Department of Commerce, the consumer price index in March 2019 rose by 0.4% compared with the previous month, while the basic consumer price index, which does not take into account the volatile categories, grew by only 0.1% compared with the previous month. Economists had expected that in March of this year, the overall index rose by 0.3%, while the base index would add 0.2%.

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As noted above, the main growth was due to the increase in energy prices, which rose in March by 3.5% compared with the previous month. Compared with the same period of the previous year, consumer prices rose by 1.9%.

In the afternoon, the minutes of the April meeting of the Federal Reserve System was released, which indicated a slowdown in economic growth in the 1st quarter. However, the committee believes that it is temporary and growth will resume in the 2nd quarter of 2019. Most of the Fed officials also agree that the rates will not change this year, although there is still a small chance for one increase. Much will depend on the incoming economic data.

Fed officials also revised down their forecasts for US GDP growth this year and were surprised by the fact that inflation remains weak, despite the strong labor market and duties.

As for the technical picture of the EURUSD pair, it remained unchanged. Buyers of risky assets are still trying to find the strength and overcome resistance in the area of 1.1290, which will lead to a strong increase in the euro in the area of highs of 1.1325 and 1.1360. With the development of the bearish scenario, the lower limit of the side channel 1.1230 will support, and its breakthrough will only increase the pressure on the euro, which will lead to a test of the monthly minimum around 1.1180.

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Trading recommendations for the currency pair GBPUSD - placement of trading orders (April 11)

For the last trading day, the currency pair pound / dollar showed a low volatility of 78 points, as a result of having a slight increase in the market. From the point of view of technical analysis, we see that there is a decrease in volatility for the third day in a row, where the quotation after the corrective movement from the level of 1.3000 began to form a certain side-line with the boundaries of 1.3030 / 1.3120. On the other hand, the information and news background had many important events, but because of the entire array, there was only one key event for Britain - the EU summit regarding Brexit. At this summit, the European Council agreed to a further extension of the Brexit term, that is, the long-awaited postponement was received. Now, for more details: the postponement is given until October 31 with a number of conditions, if Britain does not approve an agreement in parliament until May 22, then it will have to participate in the elections to the European Parliament. Of course, if, nevertheless, England manages to approve the existing agreement before May 22, the withdrawal will take place on June 1, without participating in the elections. How did the market respond to such an event? Honestly - no way. Why? Most likely, the sacred meaning lies in the fact that the new postponement has further confused the process of Britain's exit from the EU, and investors have trivially stopped thinking about what is happening.

At the same time, yesterday, data on inflation in the United States were published, where a significant increase was recorded from 1.5% to 1.9%. However, the news did not make up for the market due to the same confusion about Brexit. In simple terms - everything went into the background.

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Today, understanding of everything that is happening will continue, in terms of the economic calendar, we have data on the number of applications for unemployment benefits in the United States, where applications are expected to grow.

Further development

Analyzing the current trading chart, we see an insignificant increase to the local maximum on April 9, which is 1.3120, where the quotation felt in front of itself a periodic resistance and then slowed down. It is likely to assume the preservation of turbulence within 1.3030 / 1.3120, where traders are analyzing a clear price fixation outside the boundaries for setting trade orders.

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

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- Buy positions are considered in the case of price fixing higher than 1.3120.

- Positions for sale are considered in two versions: Firstly - work in the existing range of 1.3030 / 1.3120, where the entrance is predicted around the level of 1.3070 and the perspective of 1.3030. The second option is to wait for fixations lower than 1.3030, but the prospect is primary the level of 1.3000, with the premise that the level of 1.3000 might decline, where traders monitor fixations below it and produce refilling.

Indicator Analysis

Analyzing different sectors of timeframes (TF), we see that there is a downward interest against the background of uncertainty in the short term. On the other hand, intraday perspective is still in the correction phase while he medium-term perspective maintains the initial downward interest.

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

Measurement of volatility reflects the average daily fluctuation, based on monthly / quarterly / yearly.

(April 11 was based on the time of publication of the article)

The current time volatility is 30 points. From the point of view of logic, the prolonged stagnation in terms of volatility should be replaced by its increase. However, if the quote is trapped within 1.3030 / 1.3120, nothing will change.

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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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"Perish but not now": the outcome of the EU summit did not inspire the British currency

The British currency paired with the dollar reacted rather coolly to the results of the extraordinary summit. Firstly, the summit results were too predictable given the prior rhetoric of key European players and representatives of Britain. Secondly, there was no final decision on Brexit.

Hence, the extraordinary summit of the European Union countries ended as expected: Brussels did not allow the onset of a "hard" Brexit and postponed the release date of Britain and the Alliance. The parties quickly reached a compromise regarding the timing of the transfer. Initially, May asked to transfer Brexit to June 30. In turn, Tusk insisted on a one-year delay. They agreed almost in the middle: the British were given time until October 31.

The delay is "flexible". London may not wait until the end of the allotted time, approving the transaction at any time. In such a case, Brexit will take place on the first day of the month that follows the one on which the transaction will be ratified. By the way, the date of October 31 was chosen not by chance. The next day, that is November 1, the composition of the European Commission will be updated according to the results of the elections to the European Parliament Let me remind you that at the first plenary meeting, the EU parliament elects not only the new chairman but also the president of the European Commission. Later, they approve of the entire composition of the commission. Apparently, the British will be forced to participate in the elections to the European Parliament but Brussels plans to prevent their participation in the functioning of the new EU government. This explains the demand of the Europeans to leave the Alliance before the first day of the last month of autumn.

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However, Theresa May does not intend to wait for several months. She initially insisted on a short postponement and did not refuse from her intentions to leave the EU as soon as possible - at least on a public plane. Moreover, she designated the "internal deadline" for May (or rather, until May 22) in order to avoid participation in the European Parliament elections. Also here, we are not only talking about political expediency. The electoral process is quite a costly pleasure and the British will have to pay for it. Considering the existing tension in society, it will be difficult for ordinary citizens to explain on why would Britain join the European Parliament's election campaign if the country decided to leave the Alliance de facto? In other words, the government has plenty of motivational arguments to speed up the negotiation process.

Thus, despite the fact that Britain received an "extra minute" to think about it, this does not mean that the news background regarding Brexit will subside. On the contrary, the focus of attention of traders will shift again to London. Negotiations will resume today, one of which is between the government and labourists and on the other, the government and conservatives. For Theresa May, the date of May 22 is much more important than October 31, since the elections to the European Parliament symbolize the European integration process.

The British currency paired with the dollar reacted rather coolly to the results of the extraordinary summit. although the pair has grown a bit, it was unable to gain a foothold in the framework of the 31st figure, showing a phlegmatic flat. Firstly, the summit results were too predictable, given the prior rhetoric of key European players and representatives of Britain. Secondly, there was no final decision on Brexit. Therefore, there are no reasons for large-scale growth of GBP/USD either. The pair remains in the region of the 30s only because Europe and Britain were able to avoid the implementation of the toughest scenario but this factor is not the driver that allows buyers to organize an attack at least up to the 32nd figure. Moreover, in this case, the downward pullback to the base of the 30th figure is more likely to occur.

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It is also worth noting that quite good macroeconomic data came out yesterday in Britain, which remained in the shadow of Brexit. Nevertheless, they should not be ignored, since the English regulator will evaluate the dynamics of the first half of the year at its next meeting. According to published figures, the country's GDP growth slowed to 0.2% in monthly terms, but was at the level of forecasts. In quarterly terms, the indicator remained at the level of last month. Although experts expected a negative trend but the data on the volume of industrial production were better than the predicted values. Thus, in annual terms, the indicator turned out to be above the zero value for the first time since September last year, rose to a minimum of 0.1%. On a monthly basis, a slight decline was recorded from a half-maximum of 0.7% to 0.6%.

If it were not for the Brexit factor, the pound would be able to show a more pronounced reaction to the published figures. However, the GBP/USD pair traders are still forced to monitor the news flow regarding the prospects of the "divorce process". It is this fundamental factor that will soon set the tone in trading the GBP/USD pair.

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Wave analysis of GBP / USD for April 11. Brexit is transferred. The pound sterling is calm.

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Wave counting analysis:

On April 10, the GBP / USD pair gained about 35 bp, but remains within the limits of the narrowing triangle. Given the news background on the previous day, there were several reasons to assume that the instrument went beyond the triangle. However, this did not happen. Thus, we can only continue to wait for the pair to succeed. At yesterday's EU summit, a decision was made to grant a deferment on Brexit which calls a positive news for the pound. Also, GDP figures for March pleased the markets. This caused a rise in the British pound, but only a small one. Today, no statistics will come out. You can only rely on news from government circles in Britain or from parliament.

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, until the pair breaks through one of the lines of the triangle, the bidding will take place inside it. The news background today is likely to be absent, so the tool may fall to the bottom line of the triangle. A successful attempt to break through the top line will be a strong enough signal for small purchases.

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Wave analysis of EUR / USD for April 11. Wednesday news caused only short-term market activity

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Wave counting analysis:

The trading on Wednesday, April 10, ended with a 15 bp rise for the EUR / USD pair, although there was a tool tug down during the day. Nevertheless, the markets could not drastically change the current wave pattern, and the amplitude of the movement was not so strong, although there was a lot of news yesterday. The most important news are about the inflation in the United States (positive for the dollar), comments by the European Central Bank (ECB) on monetary policy (not in favor of the euro), and the minutes of the Fed meeting (with dove-colored). Therefore, it can be noted that all the news on Wednesday were ambiguous. The ECB and the Fed did not expect any strong statements, and the inflation in America, although accelerated in March, still remains below the target level of 2.0%.

Sales targets:

1.1177 - 100.0% Fibonacci

Purchase goals:

1.1448 - 0.0% Fibonacci

General conclusions and trading recommendations:

The pair presumably continues to build the wave c. The trading strategy remains the same - I recommend buying a pair with targets located near the level of 1.1455, which corresponds to the maximum of wave a, but not large volumes, since the instrument rises, as if reluctantly. Such desire to buy in the market may result in the opposite phenomenon - stronger sales.

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Fundamental analysis of AUDUSD for April 11, 2019

The Australian dollar managed to sustain gains against USD which is expected to lead to further upward movements before the trend reverses lower with counter momentum in the coming days.

The Reserve Bank of Australia keeps a close eye on divergence of economic slowdown and strong labor market which is expected to deviate the upcoming interest rate decision in the coming days. The Australian economy slowed down in the last half of 2018, but the positive employment report managed to attract certain sentiment along the way. Recently, the Westpac Consumer Sentiment showed a positive increase to 1.9% from the previous value of -4.8%. Furthermore, today MI Inflation Expectation report was published with a decrease to 3.9% from the previous value of 4.1%. Ahead of the RBA's Financial Stability Review tomorrow, certain volatility may be observed along the way which might lead to significant weakness of the Australian dollar if the review results come dovish.

On the USD side, a rise in the US employment rate may contribute to a fall in the American currency in the coming days as high employments may be a sign of tame inflation. The Federal Reserve is not going to change its interest rate this year, though certain probabilities about rate cuts were discussed earlier. As the financial markets and President Trump's administration have been looking forward to lower interest rates while an economic slowdown is observed, the Fed is most likely to be unshakeable on the interest rate decision. Recently, the FOMC meeting was a bit neutral and slightly dovish which resulted in further weakness of the USD. However, the positive CPI report which showed an increase to 0.4% from the previous value of 0.2% may help USD regain momentum after certain spikes along the way. Today, the US PPI report is going to be published which is also expected to increase to 0.3% from the previous value of 0.1% along with several FOMC official's speeches including Clarida, Williams and Bullard.

As of the current scenario, the US positive economic reports as well as the Fed's dovish stance created certain market sentiment. At the same time, Australia delivered better economic reports with strong employment, so AUD managed to extend gains. Though the Australian currency is currently gaining momentum, if the US PPI report comes out with better results, then certain gains on the USD side are also expected to be observed in the coming days.

Now let us look at the technical view. The price is currently residing above 0.7150 price area, having regained strong bullish momentum earlier today. Thus, the price is expected to move higher towards 0.7200 area in the coming days. The price formed the Bearish Divergence along the way, so if it closes below 0.7200 area with a daily close, it can inject further bearish momentum in the process which is expected to lead the price lower towards 0.7050 support area again.

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GBP/USD: plan for the European session on April 11. The UK can stay in the EU until October 31, 2019

To open long positions on GBP/USD you need:

During yesterday's vote, it was decided that the UK could remain in the EU until October 31, 2019. This result preserves uncertainty in the future direction of the pound, since it again does not provide clear guidelines for big players. Today, buyers need to form a false breakdown in the support area of 1.3079, which will be the first signal to buy based on a break of the upper border of the side channel of 1.3119 and on the formation of a new uptrend, which will lead the GBP/USD to a high in the area of 1.3160 and 1.3195, where I recommend to lock in profit. In case the pound decreases below the level of 1.3079, it is best to consider new long positions on a false breakdown from a support of 1.3032 or on a rebound from a larger low of 1.2988.

To open short positions on GBP/USD you need:

Today, bears will count on a return and consolidation below the intermediate support level of 1.3079, which will lead to a sharper sale to the area of 1.3032 and 1.2988, where I recommend taking profits. An unsuccessful consolidation and the formation of a false breakdown in the region of the upper boundary of the side channel of 1.3119 will also be a signal to open short positions in GBP/USD. When the growth scenario is above 1.3119 in the first half of the day, it is best to rely on selling the pound from new highs around 1.3160 and 1.3195.

Indicator signals:

Moving averages

Trade is conducted in the region of 30 and 50 moving averages, which indicates the formation of a side channel.

Bollinger bands

A break of the lower limit of the Bollinger Bands indicator near 1.3070 will put pressure on the pound. Growth will be limited to the upper region around 1.3117.

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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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Trading plan for 04/11/2019

The European Union still took pity on Theresa May and gave the UK another delay with a number of reservations. Formally, the United Kingdom is given a delay of as much as a whole year but only if the United Kingdom takes part in elections to the European Parliament. Theresa May herself understands that such a development will delay the entire process so much that the United Kingdom itself will seriously have to hold a second referendum, and this can lead to a serious political crisis in the UK. So the prime minister made another oath that she would agree with the opposition by May 22 and sign a "divorce" agreement. In this case, the UK will leave the European hostel on June 30 without any elections to the European Parliament, and even with a transition period. Frankly speaking, the rather moderate growth of the pound is due to the doubts of many investors in Theresa May's ability to keep this promise. There are too many contradictions between the government of the United Kingdom and the House of Commons.

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The decision of the European Union was so significant that market participants almost did not pay attention to other factors. In particular, the data on inflation in the United States somehow went through every day, which showed its growth from 1.5% to 1.9%, which means that the rhetoric of representatives of the Federal Reserve System will soon reappear the words about the further course of tightening monetary policy. The press conference of Mario Draghi was somewhat disappointed, as the head of the European Central Bank waited for specifics about the timing of long-term lending to European banks, but they heard a completely different thing. The answer to the most important question was never given. At the same time, the European Central Bank is again concerned about low inflation, and Mario Draghi even said that if the situation does not change, the rates will remain at record low levels in 2020. In theory, all this should have led to a sharp weakening of the single European currency, but the next postponement of Brexit did its dirty work, tearing the markets away from reality.

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In theory, today the market should correct the imbalances that caused the European Union decision on Brexit. After all, Mario Draghi's statements and inflation growth in the United States clearly indicate the growth of the dollar. However, to rectify the situation, we need some grounds, but we have a problem with them today. It is expected that the total number of applications for unemployment benefits should increase by 30 thousand. In particular, the number of initial applications may increase by 9 thousand, and repeated ones by 21 thousand. Also, the growth rate of producer prices may remain unchanged. Although after yesterday's inflation data, which exceeded expectations, it is hoped that they will show a slightly better result. However, the increase in the number of applications for unemployment benefits will have a negative impact.

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The euro/dollar currency pair showed a considerable amplitude for the past day, but as a result, having a close almost at the opening point. Probably assume a temporary fluctuation in the values of 1.1260/1.1285, where traders monitor the upper limit for a breakdown.

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The currency pair pound/dollar for the last trading day has managed to slightly grow, focusing on the peak of April 9, 1.3120. Probably assume a temporary fluctuation in the range of 1.3170/1.3120, analyzing fixation points.

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