GBP/USD: plan for the US session on May 2. The Bank of England left interest rates unchanged

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

The Bank of England's decision on interest rates led to a slight surge in market volatility, but the technical picture did not change compared to the morning forecast. At the moment, buyers of the pound need a return and consolidation above the resistance of 1.3057, which will return the demand and lead to a repeated test of a maximum of 1.3093 with its update in the area of 1.3129, where I recommend fixing the profits. With the scenario of further GBP/USD decline, it is best to return to long positions on a false breakdown in the area of 1.3018 or on a rebound from the low of 1.2983.

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

Bears have formed a false breakout in the resistance area of 1.3057, and while trading is conducted below this range, you can count on a return to the support area of 1.3018, the breakdown of which will lead to a larger downward correction to the minimum of 1.2983, where I recommend fixing the profits. In the GBP/USD growth scenario above the resistance of 1.3057, it is best to consider short positions on the rebound from the high of 1.3093 and 1.3129.

Indicator signals:

Moving Averages

Trading 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 a decrease in the pound in the afternoon, support will necessarily provide the lower limit of the indicator in the region of 1.3018.

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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 May 2. Production activity in the eurozone leaves much to be desired

To open long positions on EURUSD, you need:

Weak data on eurozone manufacturing activity did not allow euro buyers to resume an upward correction. At the moment, the problematic level is the resistance area of 1.1227, the breakthrough of which will lead to further growth of EUR/USD and the renewal of the maximum of 1.1260, where I recommend fixing the profit. In the case of the euro decline in the afternoon, after the release of good reports on the US labor market and production orders, it is best to return to long positions on a false breakdown in the support area of 1.1188 or to rebound from a larger level of 1.1150.

To open short positions on EURUSD, you need:

The bears managed to return the pair to the morning resistance level of 1.1215, but so far it was not possible to create the necessary pressure to continue the downward trend. As long as trading continues below 1.1227, the probability of further decline of the euro will remain very high, and good data on the US economy can contribute to the fall of EUR/USD in the area of the lows of 1.1188 and 1.1150, where I recommend fixing the profits. In the growth scenario above the level of 1.1227, it is best to return to the short positions on the rebound from the maximum of 1.1260.

Indicator signals:

Moving Averages

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

Bollinger Bands

In case of a decline in the euro in the second half of the day, the support will be provided by the lower limit of the indicator around 1.1180.

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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 and GBP: the eurozone suffers from weak manufacturing activity. The Bank of England may raise rates earlier than many

The European currency failed to properly recover from yesterday's fall against the US dollar after the publication of reports on industrial activity in the eurozone, which continued to show a slowdown.

According to the data, the Purchasing Managers Index (PMI) for Italy's manufacturing sector rose to 49.1 points in April of this year, while it was projected at 47.7 points. In March, Italy's manufacturing PMI was 47.4 points.

A similar index of Purchasing Managers Index (PMI) for the manufacturing sector in France in April managed to return to the level of 50.0 points, with a forecast of 49.6 points. In March, the manufacturing PMI of France was 49.7 points.

Given the decline in production activity in the eurozone, which occurred directly due to trade conflicts and weak exports, the European currency remains under pressure paired with the US dollar.

According to the statistics agency, the PMI purchasing managers' index for the manufacturing sector in the eurozone grew to 47.9 points in April of this year, while economists had predicted it in the area of 47.8 points. Back in March, the index was 47.5 points. Finding an index below 50 points indicates a decrease in activity.

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As for the technical picture of the EURUSD pair, it remained unchanged compared with the morning forecast. Further growth of risky assets is limited by the resistance of 1.1215. Only a return to this level will return new buyers to the market, who are counting on the renewal of major resistance of 1.1260, which yesterday has limited the upward trend. Bears will count on a breakthrough and a return below the support level of 1.1175, which will completely reverse the current upward trend, formed on April 24, and return the trading instrument to the lows of 1.1150 and 1.1110.

All traders' attention in the first half of the day was focused on the decision of the Bank of England on interest rates, which led to only a small surge in volatility but did not allow the bulls to resume pound growth, even despite the fact that the regulator announced a more rapid tightening of monetary policy than previously predicted. However, it is really necessary to understand that while there will be no clarity and any specifics on Brexit, the British regulator will not act. Therefore, it will be possible to talk about real changes in the policy of the Central Bank not earlier than this autumn.

According to the data, the Bank of England left a key interest rate at the level of 0.75% today, saying that, according to its expectations, monetary policy tightening may be required in the coming years, as inflation will rise above the target level. In general, a gradual and limited increase in the key interest rate is projected in the following years.

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Economists have also raised forecasts for the UK economy's growth in the coming years, which will certainly lead to increased inflationary pressure. UK GDP is expected to grow by 0.5% in the 1st quarter, but growth is likely to return to 0.2% in the 2nd quarter. Despite this, the Bank of England raised the UK GDP growth forecast in 2019 to 1.5% from 1.2%.

As for the inflation background, it is predicted that by 2021 inflation will be above the target of 2% and will continue to grow.

The technical picture of the GBPUSD pair in the next few trading days. The situation remains on the side of sellers, as the bulls are not yet able to quickly gain a foothold above the resistance level of 1.3060. Only a real breakthrough of this range will allow us to continue the upward trend formed on April 25, which will lead the trading instrument to the highs of 1.3130 and 1.3230. With a decrease in the pound, in the continuation of yesterday's downward correction, one can look at long positions after updating the larger support levels in the area of 1.2990 and 1.2940.

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The dollar is recovering after a hard night and is ready to rise

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The dollar is growing, despite the soft tone chosen by the Fed. The dollar quickly recovered after it had experienced some short-term losses the day before, traders did not expect policy tightening and focused on fairly confident comments from the head of the Fed Jerome Powell regarding the prospects for the economy.

Recall that the dollar retreated back after an unexpectedly sharp decline in the ISM production index to 52.8 points, and the lower forecast for US inflation prompted investors to sell the US currency. However, the situation changed when Jerome Powell stated that the factors negatively affecting inflation are "temporary", and he sees no reason to change the rate in any direction. As a result, the dollar was half a percentage point higher than the nightly lows against a basket of major currencies, while the yield on 10-year Treasury bonds was seven basis points higher.

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"Powell sees the glass as half full," said Konstantinos Antis, head of ADSS research in Dubai. The most important thing in the speech of the Fed head was the moment when he made it clear that he saw no reason for lowering interest rates. However, markets estimate the probability of lower interest rates by the end of the year at 64%. The euro returned to the level of 1.1198 dollars after it reached 1.1265 dollars at night. But the American fell against the yen, 111.55 yen.

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Key reristance on the test - Bitcoin analysis for May 05,2019

BTC has traded upward. The price tested the level of $5.715.BTC is at the key resistance $5.655 and buying at this stage looks risky. My advice is to watch for potential selling opportunities and downward correction.

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Purple rectangle – Swing high (resistance)

Smaller yellow channel – short-term channel

BTC is on the key short-term resistance at the price of $5.655. The resistance is created from previous swing high and the upper diagonal of the upward channel. Since there is possibility that BTC is in overbought condition, you should focus on potential selling plays. Support levels are seen at the price of $5.441 and $5.350. In case that BTC still go higher, the top of the larger upper channel will be strong resistance at $5.840, so you can watch to sell from that point.

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USD/JPY analysis for May 02, 2019

USD/JPY has been trading upwards post FOMC minutes. The price did test the level of 111.65. We are expecting more upside on the USD/JPY In the next period.

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Yellow horizontal lines – Resistance levels

Smaller white lines – bullish flag pattern (continuation)

Larger white line – resistance trendline

USD/JPY did break the key supply trendline in the background, which is sign that buyers took control from sellers. Watching the H4 time-frame, we found that there is the bullish divergence on the Stochastic oscillator in the background combined with the bullish flag after the breakout of resistance, which is strong sign for further upside. Resistance levels are seen at the price of 111.89 and 111.97. Key support remains at the price of 111.00. Watch for buying opportunities.

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May 2, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

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On March 29, the price levels of 1.2980 (the lower limit of the newly-established bearish movement channel) demonstrated significant bullish rejection.

This brought the GBPUSD pair again towards the price zone of (1.3160-1.3180) where the upper limit of the depicted bearish channel as well as the backside of the depicted broken uptrend line demonstrated significant bearish rejection.

Since then, Short-term outlook has turned into bearish with intermediate-term bearish targets projected towards 1.2900, 1.2800 and 1.2750 where the lower limit of the depicted channel comes again to meet the GBPUSD pair.

Earlier this week, a bullish pullback was executed towards the price levels around 1.3035 (50% Fibonacci) which is being temporarily breached to the upside.

Short term outlook remains bearish provided that the price levels around 1.3075 remains defended by the bears.

For the bearish side to gain sufficient momentum, a quick bearish H4 candlestick closure should be achieved below 1.3035. Otherwise, the pair remains trapped within the depicted Price-zone (1.3035 - 1.3090).

Trade Recommendations:

A Bearish SELL entry was suggested around 1.3090. It's already running in profits. Bearish Targets are located towards 1.3035, 1.2920, 1.2800.

Any bullish breakout above 1.3074 (61.8% Fibonacci level) invalidates this bearish scenario.

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EUR./USD analysis for May 02, 2019

EUR/USD has been trading downwards. The price did drop after FOMC report yesterday and tested the level of 1.1187 with a high volume. Since the strong reaction from sellers of resistance at 1.1260, we are expecting further downward continuation.

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Yellow rectangle – Swing high (resistance)

Larger white channel – Upward trend (broken

Smaller white lines - bearish flag

Yesterday was the key price action clue for us. The resistance at the price of 1.1260 held successfully and price action confirmed big aggression from sellers and that is why we still expect further downside movement. The upward channel got broken and the bearish flag after the breakout confirmed that breakout Support levels are seen at the price of 1.1152 and 1.1113. The short-term high is set at the price of $1.1218. Watch for selling opportunities.

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Simplified wave analysis and forecast for EUR/USD, GBP/USD, USD/JPY and Gold on May 2

EUR/USD

The unfinished wave pattern on the euro chart is downward, starting from March 20th. In this case, it is necessary to take into account the correctional nature of the whole structure in a larger wave model. The wave completed the first 2 parts. Since April 12, the last phase of the movement develops, in which the bullish correction is approaching the end.

Forecast:

Yesterday's exchange rate change has not yet been confirmed by the reversal signals on the chart, so the chance of a re-rise to the resistance zone remains. By the end of this week, several blocks of important data are expected to be released, which can cause a sharp increase in volatility.

Recommendations:

In the conditions of the expected change in the direction of the intersessional trend, euro purchases become high-risk. Before the appearance of clear reversal signals, it is recommended to refrain from trading, tracking the signals of your vehicle in order to find the entrance to the sale of the pair.

Resistance zones:

- 1.1230 / 1.1260

Support zones:

- 1.1090 / 1.1060

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GBP/USD

As part of the short-term analysis, the last wave construction begins on March 13 and moves to the "south" of the chart. The structure of the wave has changed in recent days. The upward section of April 25 exceeded the wave level of the rollback, which makes it the final part of the complex correctional model of March 21. The price reached a wide reversal zone, but no reversal signals were formed.

Forecast:

The release of a block of important news in the next session can cause a sharp rise in volatility. Without confirmation of the completion of the current bullish wave before the change, of course, it is possible to extend the price up to the next zone.

Recommendations:

Buying the pound today can be very risky. In the control resistance zones, it is recommended to track the reversal signals to find the entry into the sales of the pair.

Resistance zones:

- 1.3190 / 1.3220

- 1.3090 / 1.3120

Support zones:

- 1.2970 / 1.2940

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USD/JPY

The current wave model of the yen is rising, from March 25. On April 12, the correctional part (B) is formed in it. Since the end of last week, a counter rollback of the wrong kind has developed within its framework.

Forecast:

At the upcoming trading sessions, the current flat design is expected to be fully completed, then the formation of a reversal and the beginning of a price decline. The last expected stage can be shifted to the next day.

Recommendations:

Yen purchases are possible today, but only as part of the intraday strategy with a reduced lot. In the area of resistance, it is recommended to monitor the emerging signals to sell the pair.

Resistance zones:

- 111.90 / 112.20

Support zones:

- 110.90 / 110.60

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Gold

Gold price quotes from March 25 formed a short-term trend. In its framework, on April 23, the formation of a counter wave zigzag began. The analysis of its wave level indicates the continuation of the price rise.

Forecast:

Gold price quotes from March 25 formed a short-term trend. In its framework, on April 23, the formation of a counter wave zigzag began. The analysis of its wave level indicates the continuation of the price rise.

Recommendations:

Current sales of gold should be fixed at the first reversal signals. After confirming the exchange rate change, it is recommended to start tracking the instrument purchase signals.

Resistance zones:

- 1305.0 / 1310.0

- 1285.0 / 1290.0

Support zones:

- 1270 / 1265.0

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Explanations to 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 tool movements over time.

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Analysis of Bitcoin for May 2, 2019

Bitcoin has been quite impulsive with the recent bullish momentum which resulted in a break above $5,500 area.

Reportedly, Bitcoin exchanges in the US received significant investments which enabled the cryptocurrency to attract buyers. So, the ongoing rally is expected to continue. As seen on the H1 chart, the price has already broken above the $5,500 area. The next targets lie at $5850 and later towards $6,000 area in the future.

After the recent rebounds towards the dynamic levels like 20 EMA, Tenkan and the Kijun line in the intraday chart, bitcoin is expected to gain bullish momentum in the process. The Kumo Cloud, having more wide area to support the price, indicates further upward pressure in the coming though certain correction and rebonds can be observed along the way.

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SUPPORT: 5000, 5250, 5500

RESISTANCE: 5850, 6000

BIAS: BULLISH

MOMENTUM: NON-VOLATILE

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EURUSD: Fed Chairman Jerome Powell believes in the US economy and is not going to lower rates

The US dollar weakened slightly against the euro and the pound before the publication of the decision on interest rates in the United States, but then confidently regained a number of positions.

Yesterday's report on the number of jobs in the US private sector had no impact on the market.

According to Automatic Data Processing Inc., the number of jobs in April this year increased by 275,000, while economists had expected growth of 177,000. The agency noted that the temporary weakness of the economy at the beginning of this year did not affect employment.

Let me remind you that tomorrow the US Department of Labor will publish its monthly report on the number of jobs outside the US agriculture. Growth is expected to reach 190,000 jobs.

Pressure on the US dollar had a weak report on manufacturing activity in the US in April this year. Activity slowed amid fears of trade tensions. According to the report of the Institute for Supply Management, the production index in April 2019 dropped to 52.8 points against 55.3 points a month earlier. Economists had expected the index to be 55 points in April. Let me remind you that the index values above 50 points indicate an increase in activity.

The main decision of yesterday was that the Federal Reserve kept the range of interest rates on federal funds unchanged between 2.25% and 2.50%. However, it is worth noting that the committee lowered the rate on excess reserves IOER to 2.35% from 2.4% to stop the federal funds rate from moving up.

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The Fed announced a patient position, as economic activity has been growing at a moderate pace since the last meeting. Despite this, labor markets remain strong, and employment is growing at a steady pace, which was confirmed by the report from ADP.

Speech by Jerome Powell supported the US dollar. The Fed Chairman said that the incoming data mostly correspond to March expectations, and the economy continues to go on a healthy course. In this regard, Powell sees no weighty arguments in favor of changing rates in one direction or another. This meeting also did not decide on the composition of the Fed's portfolio.

As for inflation expectations, the Fed Chairman has every reason to believe that the easing of inflation was partly due to temporary factors, and weak basic inflation in the 1st quarter of this year is not associated with an increase in interest rates at the end of last year.

As for the technical picture of the EURUSD pair, the further growth of risky assets is limited by the resistance of 1.1215. Only a return to this level will return new buyers to the market, who are counting on the renewal of major resistance of 1.1260, which yesterday limited the upward trend. Bears will count on a breakthrough and a return below the support level of 1.1175, which will completely reverse the current upward trend, formed on April 24, and return the trading instrument to the lows of 1.1150 and 1.1110.

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GBP/USD. May 2. The trading system "Regression Channels". Mark Carney's speech – the main event of the day

4-hour timeframe

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Technical details:

The upper linear regression channel: direction - sideways.

The lower linear regression channel: direction - down.

The moving average (20; smoothed) - up.

CCI: 81.5425

In the first half of the last day, the British pound showed steady growth, although the index of business activity in the UK manufacturing sector declined in April from 55.1 to 53.1. Only after the start of the publication of American macroeconomic statistics (which was also ambiguous), traders began to reduce long positions for the pair, which led first to a rollback and then to a correction. However, if the EUR/USD pair fell to the moving average, the GBP/USD pair slightly rolled back from its highs and retains high chances for the resumption of the upward movement. Today, the UK will first release the index of business activity in the construction sector, and then the results of the meeting of the Bank of England will be known. As in the case of the Fed, no changes in monetary policy are expected, respectively, all attention will be focused on the speech of Mark Carney. It is expected that the head of the Central Bank will touch upon the topic of Brexit once again and will be inclined to designate the risks associated with the uncertainty regarding Brexit, the lack of a specific solution on this issue and with a possible "hard" scenario of leaving the EU. We believe that there will be nothing optimistic about Carney's speech, which means that the US dollar can continue strengthening after lunch. This is also indicated by the Heiken Ashi indicator. Prior to its turn upward, a downward movement remains preferable.

Nearest support levels:

S1 - 1.3031

S2 - 1.3000

S3 - 1.2970

Nearest resistance levels:

R1 - 1.3062

R2 - 1.3092

R3 - 1.3123

Trading recommendations:

The pair GBP/USD began to be adjusted. Thus, it is now recommended to consider buy orders with targets at 1.3062 and 1.3092, but after the completion of the correction round. The results of the Bank of England meeting and Mark Carney's speech can have a strong impact on the movement of the pair.

Sell positions should be considered after the consolidation of the pair below the moving average with the first target at 1.2970 and 1.2939. Today, the trend for the instrument may also change.

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.

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

Fundamental Analysis of AUDUSD for May 2, 2019

AUD/USD broke below 0.7050 area and is set to decline further with target towards 0.6850.

Australia released a positive employment change report but a negative unemployment rate report. As a result, the Australian currency weakened. Other econmic reports reinforsed the downward pressure. Thus, home prices declined again in April amid lackluster demand and tight credit, though the pace of losses eased as auction clearance rates stabilized in the major cities. The Reserve Bank of Australia may be forsed to cut the interest rate at its next policy meeting in the coming days. Consequently, the Australian dollar may take a nosedive against the US dollar.

Tomorrow, Australia's Building Permits report is going to be published which is expected to decrease significantly to -12.5% from the previous positive value of 19.1%. Additionally, the AIG Services Index report is also going to be published which previously was at 44.8. Recently, the AIG Manufacturing Index was published with an increase to 54.8 from the previous figure of 51.0, so the AIG Services Index is also expected to have a positive reading.

On the other hand, the Federal Reserve kept the interest rate unchanged at 2.50% and presented a dovish statement. Some analysts expected that the Fed might somehow signal they are shifting or perhaps biased toward a rate cut. The focus is still on the fact that the inflation is below the Fed's target, so the Fed officials may be reluctant to make any dramatic changes to its policy in the coming months.

The non-farm employment change report which is expected to show a decrease 181k from the previous figure of 196k. At the same time, the average hourly earnings report is expected to increase to 0.3% from the previous value of 0.1% and the unemployment rate is expected to be unchanged at 3.8%. Amid a deluge of economic data, the US dollar will come under the spotlight. On the back of the upbeat GDP report, the American currency has all the chances to extend gains.

As of the current scenario, USD is expected to sustain the bearish momentum as AUD may struggle further with downbeat economic reports to be published in the coming days. Though the Fed has been quite dovish in the recent meeting, any positive outcome on the employment reports may result in impulsive gains on the USD side.

Now let us look at the technical view. The price has recently retested the 0.7050 area after the impulsive bearish break which is expected to lead the price to the next important support area at 0.6850 in the coming days. The price broke below the 4-months lows with a strong bearish daily close which is expected to result in more downward pressure. As the price remains below 0.71 area with a daily close, the bearish bias is expected to continue.

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EUR/USD. May 2. The trading system "Regression Channels". The results of the Fed meeting: nothing new

4-hour timeframe

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Technical details:

The upper linear regression channel: direction - down.

The lower linear regression channel: direction - down.

The moving average (20; smoothed) - up.

CCI: 115.9561

Yesterday was a very controversial day for the US currency. On the one hand, there were positive moments. For example, the report on changes in the number of employees in the private sector, which greatly exceeded the forecast. The index of business activity in the manufacturing sector of Markit was also higher than market expectations. On the other hand, the more important index of business activity in the manufacturing sector of ISM was significantly worse than market expectations (52.8 against the forecast of 55.0). In the evening, the Fed announced the absence of any changes in monetary policy (very predictable), once again declared inflation below the target level of 2.0%, while noting that the labor market continues to grow at a steady pace, as well as economic activity. Thus, in general, the information received from the Fed is neutral. The US dollar rushed down last night, but very quickly stopped its strengthening, thus maintaining a short-term upward trend in the pair. Today, neither the EU nor the US will have any important publications. Therefore, we will be able to find out whether the bears have enough strength to overcome the moving average line and return to the downward trend. According to the general fundamental picture, it should be enough. However, until the overcoming of the moving has not happened, the upward movement is more preferable.

Nearest support levels:

S1 - 1.1169

S2 - 1.1108

Nearest resistance levels:

R1 - 1.1230

R2 - 1.1292

R3 - 1.1353

Trading recommendations:

The EUR/USD currency pair is adjusted against the upward trend. Long positions remain relevant at the moment, with the target of 1.1292, but you should wait until the current round of correction is completed, if it does not develop into a downward movement.

It is recommended to open sell orders no earlier than fixing the pair below the moving with targets at 1.1169 and 1.1108. In this case, the pair will return to a downward trend.

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 - the 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

Fundamental analysis of USD/CAD for May 2, 2019

USD/CAD has been quite volatile with the recent price action above 1.3400 area. Previously, an impulsive break above this level was seen at a daily close. The Federal Reserve has taken a dovish stance, keeping the rates unchanged. It is expected to lead to further weakness of USD against CAD in the coming days.

At its latest monetary policy meeting, the FOMC left the funds rate unchanged at 2.50%. There had been some expectations regarding the Fed's intentions to shift towards a rate cut. The focus is still on the fact that the inflation rate is below the Fed's target which suggests that the central bank is reluctant to make any dramatic changes in the coming months.

The non-farm employment change report which is expected to show a decrease 181k from the previous figure of 196k. At the same time, the average hourly earnings report is expected to increase to 0.3% from the previous value of 0.1% and the unemployment rate is expected to be unchanged at 3.8%. Amid a deluge of economic data, the US dollar will come under the spotlight. On the back of the upbeat GDP report, the American currency has all the chances to extend gains.

On the other hand, Canada's central bank also left the interest rate unchanged at 1.75%. Nonetheless, CAD managed to gain momentum against USD due to the recent dovish statements of the Fed. The Bank of Canada provided rather feeble outlook for the economic growth, so it would be surprising if the actual results undershoot the estimates. The is a 50% chance that the BOC will decide on an interest rate cut this year, but this kind of tepid growth projection has raised the bar for policy easing. The Canadian GDP forecast for the year was decreased to 1.2% from the previous estimate of 1.7%.

Remarkably, the Bank of Canada is monitoring the economic developments, especially in household spending, the oil market and global trade. BOC Governor Stephen Poloz is still quite optimistic and sees developing economy, expecting a rate hike if the consistency is ensured in the future.

As of the current scenario, USD can be highly volatile ahead of high-impact economic reports and amid the Fed's dovish sentiment observed recently. On the other hand, if CAD fails to gain ground against USD according to the current scenario, then USD is expected to advance in the coming days.

Now let us look at the technical view. The price is currently residing below 1.3450 area after certain retest while being quite corrective and volatile. Though certain bearish pressure is currently observed, a break above 1.3450 with a daily close is expected to lead the price higher with the target towards 1.40 price area in the future. As the price remains above 1.3400 area, the bullish bias is expected to continue further.

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Bitcoin. The volume of transactions in the Bitcoin network has increased

The Bitcoin rate is steadily moving to the resistance area of 5660, the breakthrough of which will lead to new automatic purchases with an update of annual highs. Yesterday, an interesting study was published, which said that the volume of transactions in the Bitcoin network increased, reaching the level of April 2017. Coincidence or not, the volume is similar to June 2018, when the price of Bitcoin was about 7000 USD.

Signal to buy Bitcoin (BTC):

To resume the upward trend, the main goal of the buyers is to break the maximum of 5660, where the market can continue its rapid growth in the area of 5880 and 6025 levels, where I recommend fixing the profits. In the scenario of another unsuccessful growth attempt, you can look at the long positions on the support test of 5500 and on the rebound from the area of 5360.

Signal to sell Bitcoin (BTC):

Another unsuccessful consolidation above the resistance of 5660 can again push potential buyers of Bitcoin, which will be a sell signal with the main aim of returning to the support area of 5500 and 5360, which I recommend fixing the profits. In a scenario of a breakthrough of 6605, you can count on sale after updating the highs of 5880 and 6025.

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Analysis of EUR/USD divergences for May 2. Bearish divergence helped the dollar

4h

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As seen on the 4-hour chart, the EUR/USD pair performed a reversal in favor of the US dollar. The process of falling towards the retracement level of 100.0% (1.1177) began after the formation of a bearish divergence at the MACD indicator and a rebound from the Fibo level of 76.4% (1 1241). The retreat of quotations on May 2 from the retracement level of 100.0% will allow us to count on a reversal in favor of the EU currency and the resumption of growth in the direction of the Fibo level of 76.4%. Closing the pair below the level of 100.0% will increase the likelihood that the fall will continue in the direction of the next Fibo level of 127.2% (1.1102).

The Fibo grid is built according to the extremes of March 7, 2019, and March 20, 2019.

Daily

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As seen on the 24-hour chart, the pair continues the process of returning to the retracement level of 127.2% (1.1285). The rebound of the pair from this level will allow us to count on a reversal in favor of the US currency and the resumption of the fall in the direction of the retracement level of 161.8% (1.0941). Closing the pair above the Fibo level of 127.2% will work in favor of further growth in the direction of the next retracement level of 100.0% (1.1553). None of the indicators have emerging divergences on the current chart.

The Fibo grid is built according to the extremes of November 7, 2017, and February 16, 2018.

Forecast for EUR/USD and trading recommendations:

Buy deals on EUR/USD pair can be opened with the target at 1.1241 if the pair rebounds from the level of 100.0%. The stop loss order should be placed below the level of 1.1177.

Sell deals on EUR/USD pair can be opened with the target at 1.1102 if the pair consolidates below the retracement level of 100.0%. The stop loss order should be placed above the level of 1.1177.

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Analysis of GBP/USD divergences for May 2. The pound is ready for a new fall

4h

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As seen on the 4-hour chart, the GBP/USD pair performed an increase to the retracement level of 76.4% (1.3094), a rebound from it and a reversal in favor of the US currency. As a result, on May 2, the process of falling in the direction of the Fibo level of 61.8% (1.2969) began. None of the indicators have emerging divergences on the current chart. The consolidation of quotations above the retracement level of 76.4% can be interpreted as a resumption of growth of the pair in the direction of the retracement level of 100.0% (1.3296).

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

1h

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As seen on the hourly chart, the GBP/USD pair closed below the Fibo level of 61.8% (1.3069) and fall towards the retracement level of 50.0% (1.3031) after the formation of the bearish divergence of the MACD indicator. However, the bullish divergence at the CCI indicator has already worked in favor of the British currency. Thus, the pair quotes began to return to the Fibo level of 61.8%. Closing above this level will increase the chances for further growth in the direction of the retracement level of 76.4% (1.3117). Fixation below the level of 50.0% will work in favor of continuing the fall in the direction of the retracement level of 38.2% (1.2992).

The Fibo grid is built according to the extremes of April 3, 2019, and April 25, 2019.

Forecast for GBP/USD and trading recommendations:

Buy deals on GBP/USD pair can be opened with the target at 1.3069 and a stop loss order under the retracement level of 50.0% as bullish divergence was formed (hourly chart).

Sell deals on GBP/USD pair can be opened with the target at 1.2992 and a stop loss order above the level of 50.0% if the pair closes below the level of 1.3031 (hourly chart).

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

Experts: buy a dollar in May for profit

According to analysts for many years, the peak of the growth of the American currency usually falls on May. This is backed by the data collected over 10 years. In the last month of spring, the US dollar appreciated 8 times, experts emphasized.

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At present, analysts note that the dollar against a basket of six world currencies, as the main US trading partners, is growing for three months in a row. Experts believe that the "bulls" in the US dollar can be expected to rise in the fourth month that is in May. According to a study by specialists from JPMorgan Chase, the largest bank, the US dollar index rose at least eight times in May over the past decade. For the American currency this is the strongest month of the year, as emphasized by analysts.

Last week, the US dollar index updated the annual maximum and reached a record of 97.458 points. The coming month is also the strongest for the "American" against the euro. Over ten years, the US currency strengthened in May against the European currency by an average of 1.8%. In the last month of spring, the market volatility of the EUR / USD rate rises as a rule.

In the first trading day of May, the US currency marked a dizzying rally. This has contributed a lot to the actions of the Fed. The US dollar won back previous losses and significantly strengthened after Fed Chairman Jerome Powell ruled out the possibility of easing monetary policy. Recall that following the meeting, the American regulator retained the key rate unchanged. Positive comments by the Fed Chairman marked the beginning of a strong rally of the US currency. As a result, the EUR/USD pair fell below the 1.12 mark, while on the contrary, the USD/JPY pair rose to the level of 111.60 from the previous level of 111.05.

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Experts point out two main reasons for the further strengthening of the US dollar. First, the Fed chairman expects an improvement in the prospects for the American economy as statistics recovers. Secondly, he sees no reason for lowering interest rates. However, his point of view differs from the opinion of other regulators who are seriously concerned about the strengthening of the American currency. Last month, there were differences in the monetary policies of a number of states that led to a strengthening of the US dollar, noted by analysts. Experts summed up that this trend will continue and will contribute to an increase in demand for the American currency.

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Technical analysis of AUD/USD for May 02, 2019

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

Technical analysis of EUR/USD for May 02, 2019

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Overview: The EUR/USD pair continues to move downwards from the level of 1.1192. Last week, the pair dropped from the level of 1.1192 to the bottom around 1.1111. Today, the first resistance level is seen at 1.1192 followed by 1.1216, while daily support 1 is seen at 1.1111. According to the previous events, the EUR/USD pair is still moving between the levels of 1.1192 and 1.1111; for that we expect a range of 81 pips. If the EUR/USD pair fails to break through the resistance level of 1.1111, the market will decline further to 1.1069. This would suggest a bearish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.1069 with a view to test the second support. On the other hand, if a breakout takes place at the resistance level of 1.1192 (major resistance), then this scenario may become invalidated. The material has been provided by InstaForex Company - www.instaforex.com

Hard times await Lira. Turkey will not be able to solve problems with currency

Investors are still in the dark about what is happening with the foreign currency assets of Turkey. The published report of the Central Bank of Turkey on inflation showed what exactly is happening with the monetary policy of the country and how quickly foreign exchange reserves are reduced. But even after its publication, the situation remains obscure. Lira recovered slightly after the head of the Central Bank announced that another round of raising interest rates is possible if it is necessary to stop inflation. But if this is a real opportunity, then why was it excluded from the monthly report of the Monetary Policy Committee? This frightened the currency markets because investors' confidence in Turkey has eroded and although the regulator has done its best to calm the market, this cannot be considered good news.

In addition, the head of the Central Bank was unable to clarify the situation with foreign exchange reserves. Recognizing the "need for further action on reserves," he was unable to voice any of these "follow-up actions" either in the press briefing or in the report. In any case, even the figures voiced by the head of the Central Bank of 80 billion dollars for foreign currency reserves and a net amount of 27 billion dollars are not insufficient to cover Turkey's short-term foreign currency debt of 120 billion dollars. This is a serious problem for the current government. One rhetoric does not support the lyre. Investors must believe that the Central Bank is sincerely committed to its fight against inflation and independent of government intervention. Until there is a more credible official response, the lira will fall.

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EUR / USD: Fed chief did a disservice to the pair

Yesterday, the euro/dollar bulls attempted to consolidate above the key resistance level of 1.1240, which was the middle line of the Bollinger Bands indicator on the daily chart that would allow them to rise to the 13th figure and above in the future. After the announcement of the results of the May meeting of the Fed, the pair impulsively reached the mark of 1.1265, thereby updating the two-week high.

But Jerome Powell's subsequent comments were in favor of the US currency as the head of the Fed smoothed over the "sharp edges" of the accompanying statement, refuting market rumors about the regulator's further steps towards easing monetary policy. As a result, the EUR/USD pair is now at the level of yesterday's discovery at the base of the 12th figure. Both upward and downward impulsive price movements did not receive their continuation. Neither the bulls nor the EUR/USD bears found support from the majority of traders and the pair actually remained in their previous positions, awaiting the next fundamental driver.

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Despite Jerome Powell's confident rhetoric about the prospects for the American economy, the tone of the accompanying statement was worried. The regulator expectedly drew attention to the reduction of key inflation indicators. In fact, it would be surprising if the Fed ignored this trend. Indeed, over the past few weeks, almost all inflation indicators went out in the "red zone" worse than expected. In general and especially the core inflation, there was negative dynamics, the price index of GDP updated the three-year minimum and the main index of expenditures on personal consumption fell to zero for the first time since March last year. Plus, a weak wage growth rate amid a general strengthening of the labor market. The negative picture is clearly systemic, therefore, the regulator in its final communique expressed particular concern about this fact. According to Fed members, the slowdown in inflation is not caused only by lower energy prices (especially considering the dynamics of the oil market). So in this case, the Fed is not dealing with a temporary seasonal phenomenon but with a steady trend.

At the same time, the regulator did not specify in the text of the accompanying statement whether he is considering the option of reducing the rate among other scenarios or not. The Fed just repeated the phrase about the need to "be patient", without defining any time guidelines.

The "dovish" rhetoric of the accompanying statement put strong pressure on the dollar, after which, the greenback fell in price across the entire market. The situation hastened to fix Jerome Powell. At his traditional press conference, he stated that he currently does not see compelling reasons for changing the base interest rate both upward and downward. He acknowledged that core inflation declined "quite unexpectedly", but this dynamic may be due to "temporary factors." It is worth noting that in this case, Powell's rhetoric goes against the rhetoric of the accompanying statement. Fed members do not consider the current trend as a "temporary phenomenon," indicating an alarming trend. Therefore, the position of the head of the Federal Reserve in this context looks quite surprising.

Nevertheless, the market heeded the words of Powell and the dollar made up the lost positions in a matter of minutes to the basket of major currencies. In general, the position of the Fed chairman was "cautiously optimistic". He announced the strengthening of the US economy with the GDP growth in the first quarter exceeded forecasts, noting separately the strengthening of the labor market, amid growing Nonfarm and reducing unemployment. At the same time, he started a slowdown in consumer spending and business investment but global financial conditions have softened, according to Powell. Factors including the progress in trade negotiations between Washington and Beijing, a decrease in the likelihood of a "tough" Brexit, an increase in the key indicators of China and the EU, reduce the likelihood of a slowdown in the global economy.

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In other words, the head of the Fed is quite optimistic about the prospects for global growth in general and the US economy in particular. However, he did not express particular concern about the slowdown in inflation, associating this trend with the influence of temporal factors. Such a peace-loving tone supported the dollar.

In my opinion, the optimism of dollar bulls is premature. Of course, greenback received a powerful reason for its recovery - at least in the short term. But if inflationary indicators continue to show negative dynamics, Powell will no longer be able to "brush off" this problem, explaining the current dynamics by temporary factors. In this context, Nonfarm will play an important role, namely the dynamics of wage growth. If this indicator disappoints investors, the dollar will again be under considerable pressure.

In technical terms, EUR/USD buyers still need to gain a foothold above the resistance level of 1.1240. At this price point, the Bollinger Bands midline was not only drawn on the daily chart but also the Tenkan-sen and Kijun-sen lines. If the bulls overcome this target, they can count on a return to the area of the 13th figure. Otherwise, the bears will again return the price to the base of the 11th level.

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While investors listened to the speech of the Fed chairman, the Kiwi is the only one who does not stand still.

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Holiday - not a reason to rest. There is always movement in the foreign exchange market, however,most currency pairs are traded in narrow ranges this time. Nevertheless, there are exceptions. The New Zealand dollar could not bear the weak data on the number of jobs, which increased the likelihood of lowering the interest rates. Otherwise, the rest of investors around the world listened to the predictable speeches of Fed Chairman, Jerome Powell, at the end of a two-day meeting.

The Fed meeting took place after the publication of very strong data on the US economy, as a result of which, the dollar exchange rate updated the two-year maximum. Thus, the Fed has justified the expectations of the market in relation to its position, but even in this case, the dollar is probably waiting for another price increase. While this did not happen, the euro, taking advantage of the lull, is rebuilding its position against the American, reaching a mark of 1.1224 dollars. Strong data on economic growth in the eurozone is pushing the single currency upwards.

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Against the background of a general lull, the New Zealand dollar stood out, which fell immediately by half a percentage point after the government data showed that the level of employment decline unexpectedly. Even though the unemployment rate fell to 4.2 percent, the market perceived this as a decrease in the chances of an increase in interest rates by the Reserve Bank of New Zealand, which had previously stated that the next step was likely to be a decrease. Meanwhile, the RBNZ will hold a meeting next week. It seems that the regulator will overtake other central banks of the G10 countries in the transition to an easier monetary policy, and this adjustment will continue to keep the Kiwis under pressure in the short term.

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Wave analysis of GBP / USD for May 2. The impressive growth of the pound may be replaced by a stronger fall

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Wave counting analysis:

On May 1, the GBP / USD pair gained about 20 basis points, but by the end of the day, just like the euro, it rolled back from the reached maximums. With the pound sterling, the situation is less clear. In addition, wave counting also involves the construction of a downward wave. However, the MACD indicator did not turn down, and the deviation from the reached maximums is small. Today, the results of the Bank of England meeting will be announced in the UK, and the head of the bank, Mark Carney, will also deliver a speech. Thus, if the markets perceive the information from the Bank of England negatively, this may lead to a new decrease in the pound, a turn of the MACD downwards, and the resumption of the construction of wave 3.

Purchase goals:

1.3118 - 61.8% Fibonacci

1.3168 - 50.0% Fibonacci

Sales targets:

1.2954 - 100.0% Fibonacci

1.2838 - 127.2% Fibonacci

General conclusions and trading recommendations:

Wave pattern still involves the construction of a downward trend. Now, I recommend waiting for the completion of the corrective wave construction and selling the pair with targets located near the estimated levels of 1.2839 and 1.2693, which corresponds to 127.2% and 161.8% Fibonacci. A signal from the MACD may indicate the pair's willingness to construct a downward wave.

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Burning forecast 05.02.2019 EURUSD

The EURUSD rate has formed new boundaries of the range.

The situation is quite uncertain: during the first few days of the week, the euro rose and canceled its downward movement. At the same time, the euro fell sharply on the Fed's decision, quickly zeroing out half of its three-day growth. The Fed gave a soft comment, drawing attention to the slowdown. At the same time, the employment report from ADP, on the contrary, showed a sharp increase in employment at +275K

Thus, the market must finally choose a direction.

We are ready to sell the euro from 1.1110

We are ready to buy the euro from 1.1270

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Wave analysis of EUR / USD for May 2. The pair shows signs of readiness to build a descending wave

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Wave counting analysis:

On Wednesday, May 1, the trading ended for the EUR / USD with a decrease of 25 b.p. Also during the day, the instrument increased by 50 bp, but by the end of the day, it began to fall. The MACD indicator, on the other hand, turned down, which may be a signal that the pair is ready to resume the construction of the downward wave 3. If this assumption is correct, the pair will continue to decline from its current positions with targets located at around 11 and 10 figures. Meanwhile, the news background yesterday could support both the euro and the dollar. Nevertheless, the markets decided that the lack of frank negative in the Fed's rhetoric is a good reason for buying the dollar. Thus, wave 3 can take on a very long form and a complex internal wave structure.

Sales targets:

1.1097 - 161.8% Fibonacci

1.1045 - 200.0% Fibonacci

Purchase goals:

1.1324 - 0.0% Fibonacci

General conclusions and trading recommendations:

The pair continues to build the downward section of the trend. The correctional wave is presumably completed. The current wave counting implies the continuation of the decline of the pair with the closest targets 1.1097 and 1.1045, which equates to 161.8% and 200.0% Fibonacci. The MACD turned down, and thus, I recommend selling the pair first in small lots with designated goals.

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Technical analysis of Ethereum for 02.05.2019:

Crypto Industry News:

According to the published advertisement, Amazon Web Services (AWS), a subsidiary of Amazon's cloud computing giant, has made its Amazon Managed Blockchain (AMB) package generally available.

This product allegedly allows customers to establish a Blockchain network in their organizations and uses the open Ethereum and Hyperledger structures. Amazon particularly emphasizes that AMB can scale to handle thousands to millions of transactions.

The company claims that the Blockchain-as-a-Service (BaaS) service will enable companies to create their own networks faster and cheaper because they eliminate the need to "provide hardware, install software, create and manage access certificates"

Technical Market Overview:

The ETH/USD pair has tested the technical support located at the level of 165.45 and bounced off it again. The bounce is quite shallow for now because the recent local high at the level of 172.00 ha snot been violated yet, as per the Elliott wave scenario. The top of the wave c might be now in place, but to confirm this, the bears must push the price below the level of 165.46 so the sell-off could accelerate.

Weekly Pivots:

WR3 - 204.74

WR2 - 190.50

WR1 - 176.25

Weekly Pivot: 160.51

WS1 - 146.54

WS2 - 132.16

WS3 - 116.96

Trading recommendations:

There is no good setup to trade this pair right now, so all traders should stay aside and wait for better trading conditions.

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

Technical analysis of Ethereum for 02.05.2019:

Crypto Industry News:

According to the published advertisement, Amazon Web Services (AWS), a subsidiary of Amazon's cloud computing giant, has made its Amazon Managed Blockchain (AMB) package generally available.

This product allegedly allows customers to establish a Blockchain network in their organizations and uses the open Ethereum and Hyperledger structures. Amazon particularly emphasizes that AMB can scale to handle thousands to millions of transactions.

The company claims that the Blockchain-as-a-Service (BaaS) service will enable companies to create their own networks faster and cheaper because they eliminate the need to "provide hardware, install software, create and manage access certificates"

Technical Market Overview:

The ETH/USD pair has tested the technical support located at the level of 165.45 and bounced off it again. The bounce is quite shallow for now because the recent local high at the level of 172.00 ha snot been violated yet, as per the Elliott wave scenario. The top of the wave c might be now in place, but to confirm this, the bears must push the price below the level of 165.46 so the sell-off could accelerate.

Weekly Pivots:

WR3 - 204.74

WR2 - 190.50

WR1 - 176.25

Weekly Pivot: 160.51

WS1 - 146.54

WS2 - 132.16

WS3 - 116.96

Trading recommendations:

There is no good setup to trade this pair right now, so all traders should stay aside and wait for better trading conditions.

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

GBP/USD: plan for the European session on May 2. The pound fell after Powell's speech, but a return to 1.3060 will return

To open long positions on GBP/USD you need:

The upward trend in the pound ended after the press conference of the Fed chairman, during which positive moments in the US economy were noted. At the moment, the pound buyers need to return and consolidate above the resistance of 1.3057, which will return demand and lead to a repeated test of a high of 1.3093 with its update in the area of 1.3129, where I recommend taking profits. In case the GBP/USD further declines, it is best to return to long positions on a false breakdown in the area of 1.3018 or on a rebound from a low of 1.2983.

To open short positions on GBP / USD you need:

Bears will count on an unsuccessful consolidation above the resistance of 1.3057 in the first half of the day, which will be the first signal to open short positions in order to return to the support area of 1.3018, breaking down will lead to a larger downward correction to a low of 1.2983, where I recommend to lock in profits. When the GBP/USD growth scenario is above the resistance of 1.3057, short positions are best seen as a rebound from the highs of 1.3093 and 1.3129.

Indicator signals:

Moving averages

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

Bollinger bands

In case the pound increases, the upper limit of the indicator will be in the area of 1.3093.

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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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Technical analysis of Bitcoin for 02.05.2019:

Crypto Industry News:

CoinMarketCap will remove the exchanges from its calculations if they do not provide mandatory data by June, the company wrote in its blog entry on the occasion of the sixth anniversary.

CoinMarketCap, the main source of data on all digital currencies sold, has published a series of announcements on the occasion of its sixth birthday. Consequently, CMC announced a new alliance called Data Accountability & Transparency Alliance (DATA) to ensure "greater transparency, accountability and disclosure of project information in the cryptographic space".

A huge number of exchanges have joined the new alliance, including Binance, Bittrex, OKEx, Huobi, Liquid, UpBit, IDEX, OceanEX, Gate.io, KuCoin, HitBTC and Bitfinex, with more partners expected in the future.

As part of its transparency initiative, CoinMarketCap will now require all cryptographic exchanges to provide mandatory API data that includes transaction data and order portfolio data in real time. Emphasizing that the condition will be mandatory, CMC has written that no stock exchange that does not provide these mandatory data will be included in the price calculation and the adjusted volume on the page.

The stock markets now have a 45-day grace period to send the required data, while the changes will take effect on June 14, 2019, CoinMarketCap writes.

Technical Market Overview:

The BTC/USD pair has broken above the technical resistance at the level of $5,666 and made a local higher high at the level of $5,710 at the time of the writing the article. According to the scenario, this is still a part of the corrective wave (b) in the making, so after the target at the level of $5,728 is hit, the market should reverse. Moreover, the move up has been made in three waves only, so any violation of the level of $5,528 will confirm the corrective wave (b) scenario.

Weekly Pivots:

WR3 - $6,630

WR2 - $5,993

WR1 - $5,751

Weekly Pivot: $5,379

WS1 - $5,117

WS2 - $4,744

WS3 - $4,481

Trading recommendations:

The level of the recent high at $5,666 is a good level to enter a short term sell position with a target at the level of $5,348 or even below ( it all depends on the form of the corrective cycle in wave (c)). The longer-term outlook is still bullish, but currently, the market entered a corrective cycle.

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EUR/USD: plan for the European session on May 2. Powell crossed out the bulls' plans for further growth

To open long positions on EURUSD you need:

Yesterday, euro buyers were disappointed with the Fed chairman's statements, who spoke rather optimistically about the prospects for the US economy, which led to a decrease in EUR/USD. At the moment, buyers are required to return and consolidate above the resistance of 1.1215, which will return hope for the resumption of growth and lead to a repeated upward trend in the area of a high of 1.1260, where I recommend taking profits. In case the euro further declines, long positions can be seen at a false breakdown in the support area of 1.1178 or at a rebound from a larger low of 1.1150.

To open short positions on EURUSD you need:

Yesterday, the sellers showed themselves well after the test of resistance at 1.1260, to which I paid attention to in my review. An unsuccessful attempt to consolidate at 1.1215 will be another signal to open short positions in the euro with the aim of decreasing and consolidating below the support level of 11178, the breakdown of which will push EUR/USD to the area of a low of 1.1150, where I recommend taking profits. With the euro rising above the resistance of 1.1215 in the first half of the day, it is best to open short positions to rebound from a high of 1.1260.

Indicator signals:

Moving averages

Trade is conducted below 30 and 50 moving averages, which indicates a possible change of the upward trend to a downward one.

Bollinger bands

The lower limit of the indicator in the region of 1.1178 will limit the euro's downward potential. In case of growth, the average border of the indicator in the area of 1.1215, as well as the upper one in the area of 1.1250, 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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Technical analysis of EUR/USD for 02.05.2019

Technical Market Overview:

The EUR/USD pair has made a trend reversal candlestick pattern called Bearish Engulfing after the 61% Fibonacci retracement was hit and tested. The local high was made at the level of 1.1264, but the big reversal candle closed close to the end of the range, so the reversal signal is clear. The first technical support is seen at the level of 1.1176 again and nay breakout below this level will be considered bearish.

Weekly Pivots:

WR3 - 1.1369

WR2 - 1.1315

WR1 - 1.1220

Weekly Pivot: 1.1165

WS1 - 1.1067

WS2 - 1.1006

WS3 - 1.0913

Trading recommendations:

The sell orders should be now in play due to the potential reversal candlestick pattern at the H4 time frame chart. Any breakout below the level of 1.1176 might accelerate the losses and the price will dive towards the level of 1.1118.

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Technical analysis of GBP/USD for 02.05.2019:

Technical Market Overview:

The Bearish Engulfing candlestick pattern made at the GBPUSD pair at the level of 1.3101 indicates a potential trend change. Moreover, the market conditions are now overbought and the momentum indicator is pointing down. The key technical resistance zone located between the levels of 1.3121 - 1.3131 has not been tested yet and it looks like the market is going down to test the technical support at the level of 1.3017 and 1.3000.

Weekly Pivots:

WR3 - 1.3137

WR2 - 1.3074

WR1 - 1.2986

Weekly Pivot: 1.2980

WS1 - 1.2827

WS2 - 1.2766

WS3 - 1.2683

Trading recommendations:

This move up should be considered as a corrective pull-back in a downtrend, so the price is now at a good level to open the sell position in anticipation of the downtrend to resume.

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Trading plan for EUR/USD for May 02, 2019

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Technical outlook:

The EUR/USD pair rose to 1.1260 levels yesterday, slightly higher than expected, before reversing sharply in the New York Session. At this point in time, the currency pair is seen to be trading around 1.1190/95 levels, looking to push lower towards 1.1020 levels as discussed earlier. Another probable wave count suggests that EUR/USD has rallied in 3 waves until now from 1.1111 levels to 1.1260. Yet another high from the current levels, probably towards 1.1324, could complete an impulse rally and thus open doors for further moves towards 1.1500/1.1600 and higher. It would be too early to predict the latter probability and hence it could be a safe trading strategy to exit the short positions taken earlier around 1.1175/1.1190 levels respectively, or exit at a breakeven point. A more aggressive trading strategy is likely to remain short with the risk above yesterday's high at 1.1260 levels. The immediate resistance remains at 1.1260 and support is at 1.1111 levels.

Trading plan:

Conservative traders exit short positions taken yesterday at 1.1175/90 levels. Aggressive traders hold short against 1.1260 levels.

Good luck!

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Technical analysis: key intraday levels for EUR/USD for May 02, 2019

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When the European market opens, some economic data will be released such as the Final Manufacturing PMI, the German Final Manufacturing PMI, the French Final Manufacturing PMI, the Italian Manufacturing PMI, the Spanish Manufacturing PMI, and the German Retail Sales m/m. At the same time, the US will release the Treasury Currency Report, the Natural Gas Storage data, Factory Orders m/m, Unemployment Claims, Prelim Unit Labor Costs q/q, as well as Prelim Nonfarm Productivity q/q, and Challenger Job Cuts y/y. So, amid the reports EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1257.

Strong Resistance:1.1250.

Original Resistance: 1.1239.

Inner Sell Area: 1.1228.

Target Inner Area: 1.1201.

Inner Buy Area: 1.1175.

Original Support: 1.1164.

Strong Support: 1.1153.

Breakout SELL Level: 1.1146.

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Technical analysis: key intraday level for USD/JPY for May 02, 2019

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In Asia, Japan will not release any economic data today while the United States will unveil the Treasury Currency Report, the Natural Gas Storage data, the Factory Orders m/m, the Unemployment Claims, the preliminary reading of the Unit Labor Costs q/q, as well as the preliminary nonfarm productivity q/q, and the Challenger Job Cuts y/y. So there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance. 3 : 112.12. Resistance. 2: 111.907. Resistance. 1: 111.68. Support. 1: 111.42. Support. 2: 111.20. Support. 3: 110.97.

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Elliott wave analysis of GBP/JPY for May 2, 2019

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GBP/JPY is struggling near the resistance line, which is seen near 146.00. If this resistance line is able to cap the upside, we will need to consider the alternate count as our preferred count. However, as long as minor support at 144.95 is able to protect the downside, we will be looking for a clear break above the resistance line near 146.00 for a continuation higher to 146.85 on the way higher to 148.50 and 151.50.

Should minor support at 144.95 be broken, the alternate count will gain momentum. Under this count, renewed downside momentum will be seen for a break below important support at 143.75 that calls for a final dip to 141.05 to complete wave 2.

R3: 147.00

R2: 146.28

S1: 146.00

Pivot: 145.41

S1: 144.95

S2: 144.61

S3: 144.02

Trading recommendation:

We will take half profit on our long position from 144.00 here at 145.60. We will also move our stop higher to 144.85.

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Elliott wave analysis of EUR/JPY for May 2, 2019

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EUR/JPY is trying to break clearly above 125.17, but it does not look to have the strength to do it this time, which likely will produce the final into the target-zone between 123.85 - 124.05 we have been looking for. This dip should complete the corrective decline in wave ii and call for a new impulsive rally in wave iii higher to 127.50 on the way to 129.30.

Only a clear break above 125.17 will confirm that wave ii already has completed and wave iii is well underway.

R3: 126.10

R2: 125.85

R1: 125.18

Pivot: 125.00

S1: 124.62

S2: 124.09

S3: 123.85

Trading recommendation:

We are looking for opening buy deals on EUR at 124.05 or upon a break above 125.20.

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Fractal analysis of major currency pairs on May 2

Dear colleagues.

For the currency pair Euro/Dollar, the continuation of the upward trend in the scale of H1 is expected after the breakdown of 1.1236 and the level of 1.1171 is the key support. For the currency pair Pound/Dollar, we continue to monitor the development of the upward structure from April 25 and the level of 1.2997 is the key support. For the currency pair Dollar/Franc, we follow the formation of the initial conditions for the downward cycle of April 26 and the development of this structure is expected after the breakdown of 1.0150. For the currency pair Dollar/Yen, we expect the continuation of the downward movement after the passage of the range of 111.44 – 111.30. For the currency pair Euro/Yen, the price forms the initial conditions for the top from April 26 and the level of 125.31 is the key resistance. For the currency pair Pound/Yen, we continue to follow the upward structure of April 26 and the continuation of the upward movement is expected after the breakdown of 145.73 and the level of 145.07 is the key support.

Forecast for May 2:

Analytical review of H1-scale currency pairs:

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For the currency pair Euro/Dollar, the key levels on the H1 scale are 1.1313, 1.1271, 1.1256, 1.1236, 1.1188, 1.1171, 1.1147 and 1.1117. The upward structure of April 25th was considered as a large initial condition. The development of this structure is expected after the breakdown of 1.1236. In this case, the first goal is 1.1256 and in the area of 1.1256 – 1.1271 is the consolidation. The breakdown of the level of 1.1271 should be accompanied by a pronounced upward movement. The potential target is 1.1313.

The short-term downward movement is possible in the range of 1.1188 – 1.1171 and the breakdown of the latter value will lead to a prolonged correction. The target is 1.1147 and this level is the key support for the upward structure.

The main trend is the upward structure of April 25.

Trading recommendations:

Buy 1.1236 Take profit: 1.1255

Buy 1.1271 Take profit: 1.1310

Sell: 1.1188 Take profit: 1.1172

Sell: 1.1169 Take profit: 1.1147

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For the currency pair Pound/Dollar, the key levels on the H1 scale are 1.3185, 1.3119, 1.3093, 1.3030, 1.2997 and 1.2955. We follow the development of the upward structure of April 25. The continuation of the upward movement is expected after the price passes the range of 1.3093 – 1.3119. In this case, the first potential target is 1.3185 and consolidation is near this level.

The short-term downward movement is expected in the area of 1.3030 – 1.2997 and the breakdown of the last value will lead to a prolonged correction. The target is 1.2955 and this level is the key support for the upward cycle.

The main trend is the upward structure of April 25.

Trading recommendations:

Buy: 1.3093 Take profit: 1.3118

Buy: 1.3120 Take profit: 1.3185

Sell: 1.3030 Take profit: 1.3000

Sell: 1.2996 Take profit: 1.2955

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For the currency pair Dollar/Franc, the key levels on the H1 scale are 1.0234, 1.0211, 1.0193, 1.0150, 1.0118, 1.0085 and 1.0044. We follow the formation of the downward structure of April 26. The continuation of the downward movement is expected after the breakdown of 1.0150. In this case, the first goal is 1.0118 and the breakdown of which will lead to a pronounced movement. The goal is 1.0085 and price consolidation is near this level. We consider the level of 1.0044 as a potential value for the downward trend.

The short-term upward movement is possible in the area of 1.0193 – 1.0211 and the breakdown of the latter value will have to form an upward structure. The potential target is 1.0234.

The main trend is the formation of the downward structure of April 26.

Trading recommendations:

Buy: 1.0193 Take profit: 1.0210

Buy: 1.0213 Take profit: 1.0234

Sell: 1.0150 Take profit: 1.0120

Sell: 1.0116 Take profit: 1.0090

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For the currency pair Dollar/Yen, the key levels on the H1 scale are 112.14, 111.89, 111.74, 111.44, 111.30, 110.97 and 110.57. We continue to monitor the downward structure of April 24. The subsequent development of this structure is expected after the price passes the range of 111.44 – 111.30. In this case, the goal is 110.97, and consolidation is near this level. We consider the level of 110.57 as a potential value for the downward cycle, near which we expect consolidation, as well as a rollback to the top.

The short-term upward movement is possible in the area of 111.74 – 111.89 and the breakdown of the latter value will lead to a prolonged correction. The goal is 112.14 and this level is the key support for the downward structure of April 24.

The main trend is the downward structure of April 24.

Trading recommendations:

Buy: 111.74 Take profit: 111.88

Buy: 111.90 Take profit: 112.14

Sell: 111.30 Take profit: 111.00

Sell: 110.95 Take profit: 110.58

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For the currency pair Canadian Dollar/Dollar, the key levels on the H1 scale are 1.3516, 1.3487, 1.3465, 1.3448, 1.3407, 1.3370, 1.3346, 1.3329 and 1.3275. We follow the development of the downward structure of April 25. The continuation of the downward movement is expected after the breakdown of 1.3407. In this case, the target is 1.3370 and the breakdown of which will lead to the subsequent development of the downward trend on the H1 scale. The first target is 1.3346. The price pass of the range of 1.3346 – 1.3329 should be accompanied by a pronounced movement towards a potential target of 1.3275, from this level, we expect a rollback to the top.

The short-term upward movement is expected in the area of 1.3448 – 1.3465 and the breakdown of the last value will lead to an in-depth correction. The target is 1.3487 and this level is the key support for the downward structure. Its breakdown will have an upward trend. In this case, the potential target is 1.3516.

The main trend is the downward structure of April 25.

Trading recommendations:

Buy: 1.3448 Take profit: 1.3463

Buy: 1.3466 Take profit: 1.3485

Sell: 1.3405 Take profit: 1.3370

Sell: 1.3368 Take profit: 1.3346

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For the currency pair Australian Dollar/Dollar, the key levels on the H1 scale are 0.7137, 0.7116, 0.7088, 0.7064, 0.7046, 0.7003, 0.6986 and 0.6967. The price is close to the abolition of the upward structure of April 25, for which a breakdown of the level of 0.7003 is necessary. In this case, the first target is 0.6986 and consolidation is near this level. We consider the level of 0.6967 as a potential value for the downward movement. The resumption of the upward movement is expected after the breakdown of 0.7046. The goal is 0.7064, the breakdown of which, in turn, will lead to a pronounced movement. In this case, the goal is 0.7088.

The main trend is the upward structure of April 25, the stage of deep correction.

Trading recommendations:

Buy: 0.7046 Take profit: 0.7062

Buy: 0.7066 Take profit: 0.7088

Sell: 0.7003 Take profit: 0.6988

Sell: 0.6984 Take profit: 0.6968

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For the currency pair Euro/Yen, the key levels on the H1 scale are 126.13, 125.86, 125.31, 125.13, 124.71, 124.48, 124.30 and 124.05. We continue to monitor the formation of the initial conditions for the upward cycle of April 26. The short-term upward movement is expected in the area of 125.13 – 125.31 and the breakdown of the latter value will lead to the development of a pronounced movement. The goal is 125.86. We consider the level of 126.13 as a potential value for the top, after reaching which, we expect consolidation, as well as a rollback to the bottom.

A corrective downward movement is possible in the area of 124.71 – 124.48. The passage of the key support price of 124.48 – 124.30 will lead to the subsequent development of the downward trend on the H1 scale. In this case, the potential target is 124.05.

The main trend is the formation of initial conditions for the top of April 26.

Trading recommendations:

Buy: 125.31 Take profit: 125.80

Buy: 125.88 Take profit: 126.13

Sell: 124.70 Take profit: 124.50

Sell: 124.30 Take profit: 124.05

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For the currency pair Pound/Yen, the key levels on the H1 scale are 146.63, 146.20, 146.00, 145.73, 145.29, 145.07 and 144.74. We follow the development of the upward cycle of April 26. The continuation of the upward movement is expected after the breakdown of 145.73. In this case, the goal is 146.00. The passage of the price of the range of 146.00 – 146.20 will lead to movement to a potential target of 146.63, from this level, we expect a rollback to the bottom.

The short-term downward movement is possible in the area of 145.29 – 145.07 and the breakdown of the latter value will lead to an in-depth correction. The goal is 144.74 and this level is the key support for the top.

The main trend is the upward structure of April 26.

Trading recommendations:

Buy: 145.75 Take profit: 146.00

Buy: 146.20 Take profit: 146.60

Sell: 145.27 Take profit: 145.07

Sell: 145.04 Take profit: 144.80

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