EUR/USD: plan for the American session on May 20. The market is calm and unchanged

To open long positions on EURUSD, you need:

The situation has not changed in comparison with the morning forecast. It is best to return to long positions after updating a large support level at 1.1138, from where you can expect an upward correction to return to a maximum of 1.1180, above which you can reach the resistance of 1.1205, where I recommend fixing the profits. If there is no rapid upward movement in the area of 1.1138, it is best to wait for the minimum test of 1.1112 and open long positions in EUR/USD there.

To open short positions on EURUSD, you need:

The bears have missed the support level of 1.1159, and now their main task will be to return and consolidate under it, which will keep the pair in the downward price channel and return sellers to the market who are counting on the minimum test in the area of 1.1138 and 1.1112, where I recommend fixing the profits. In the case of the euro growth in the second half of the day, it is best to look at short positions after updating the maximum of 1.1180 and 1.1205.

Indicator signals:

Moving Averages

Trading is conducted in the area of 30 and 50 moving averages, which indicates a slowdown in the downward trend.

Bollinger Bands

The volatility of the indicator is low, which does not give signals to enter the market.

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Description of indicators

  • MA (moving average) 50 days – yellow
  • MA (moving average) 30 days – green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
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EUR./USD analysis for May 20, 2019

EUR/USD has been trading downwards as we expected. Anyway, we expect potential rally on the EUR.

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According to the H1 time-frame, we found that there is the breakout of the downward supply trendline, which is sign of the potential rally. We also found a rejection of the 20EMA at 1.1161, which is signal of the increase in demand for the EUR. Watch for potential buying opportunities with the targets at 1.1179 and 1.1182.

Upward references are set:

Swing high – 1.1180

Swing low acting like resistance – 1.1182

Downward references are set at:

Intraday swing low – 1.1156

Swing low – 1.1150

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Analysis of Gold for May 20, 2019

Gold has been trading downwards as we expected. The price tested the level of $1.273. We still expecting more downside but we expect rally first.

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According to the 30M time-frame, we found that there is the breakout of the downward channel and successful re-test, which is sign of the potential rally. We also found a strong bullish divergence on the MACD oscillator, which is another sign for the potential rally. Our advice is to watch for buying opportunities with the targets at $1.284 and $1.287.

Upward references are set:

Swing high – $1.284

Major high – $1.287

Downward references are set at:

Intraday swing low - $1.274

Swing low - $1.273

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Euro clings to a straw

The elections to the European Parliament, the release of data on business activity in Germany, the Eurozone for May and the publication of the minutes of the April meeting of the ECB make the euro the main contender for the role of the most interesting currency of the week by May 24. Despite the unfavorable external background, the "bulls" on EUR/USD are clinging to the trading range of 1.1135-1.1265, the break of the lower border of which can lead to the continuation of the southern hike of the main currency pair.

Looking at how the euro fell against the background of the growing probability of a disorderly Brexit and the escalation of the US-EU trade conflict in 2018, you wonder why it does not do it now. Indeed, the States are ready to impose duties on all Chinese imports, Beijing is not eager to resume negotiations, stock indices and the currency of China are falling rapidly, while Donald Trump's belief at the conclusion of the deal supports the S&P 500. The US economy looks strong, while China has to use large-scale fiscal and monetary stimulus in order not to slow down GDP growth to less than 6%.

Theoretically, the reduction in external demand will hit German exports and the eurozone economy as a whole, forcing the ECB to weaken monetary policy. The futures market has increased the chances of lowering basic rates in the first quarter of 2020 to 40%, and concerns about the "dovish" rhetoric of the minutes of the April meeting of the Governing Council keep the "bulls" on EUR/USD in check. The growing risks of monetary expansion and trade war are weighty "bearish" arguments for the euro. I associate its stability with low volatility, abnormal in the conditions of growth of global political risk.

The dynamics of the volatility of the euro and political risks

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Indeed, when eurosceptics in the run-up to the elections to the European Parliament raise their heads, and in Britain, the probability of Theresa May's resignation from the post of Prime Minister is growing, it is quite unusual to see a more or less stable euro. According to the leader of the Northern League Salvini, Italy will abandon the EU's demand for 3% of the budget deficit from GDP if its party improves its position in the elections. The coming to power in the government of former foreign minister Boris Johnson could bring down GBP/USD to 1.2, according to a forecast by Societe Generale. Given the close correlation of the pound and the euro, we can only assume at what levels EUR/USD will be quoted in this situation.

The dynamics of the euro and the pound

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The situation with business activity looks interesting. German and other European purchasing managers already knew about the escalation of the conflict between the US and China, so PMI may, in fact, be worse than forecasts of Bloomberg experts, which will put pressure on the euro. On the other hand, the fact that the White House decided to postpone the increase in import duties on cars from the EU for 6 months will allow the companies of the Old World to sigh with relief.

Technically, a breakthrough of the lower limit of the consolidation range of 1.135-1.1265 within the activation pattern "splash and a shelf" will increase risks in the implementation of the target at 161.8% according to the model AB=CD. It corresponds to 1.1.

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How much more can the euro and the pound fall in price?

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According to the results of the previous week, the dollar index showed maximum growth since the beginning of March.

The tension in trade relations between Washington and Beijing remains in the focus of investors' attention.

Although trade war harms both the US and the rest of the world, there is no doubt that the US is holding the blow more easily, which explains the continuing demand for the US currency.

On Wednesday, the minutes of the FOMC meeting in May will be published in the US. The so-called "minutes" of the Fed can have a strong impact on the dollar if the protocol contains a forecast for the US economy for the current and next years, or will be given relatively clear guidelines for the future monetary policy of the Fed. The more optimistic the forecasts and statements of the regulator are, the stronger greenback will be able to strengthen against its main competitors.

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The euro retreated throughout the previous trading week. Despite the fact that the data on the eurozone cannot be called strong, the fall of the single European currency is largely due to the possible effect of a slowdown in global growth on the economy of the currency bloc.

It should be noted that for most of this year, the ECB did nothing that warned about these threats. If trade relations between the United States and China do not improve over the next few weeks, the upcoming meeting of the European regulator promises to be bleak.

This week, indicators of business activity in the eurozone and the IFO report on Germany will be published. If the data is weak, the EUR/USD pair may fall to the level of 1.10. If the numbers are strong, then the euro may form a springboard for further recovery.

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For the pound, the main problem is still Brexit. There is no progress in this process, which increases the risks of implementing the "hard" scenario.

Last weekend, British Prime Minister Theresa May said that she intends to propose a new version of the "divorce" agreement with the EU for consideration by the House of Commons.

According to her, this will be a new, bold proposal with an improved package of measures. The head of the Cabinet of Ministers believes that this option should be supported by parliamentarians.

In the coming week, there will be April releases on inflation and retail sales in the country. It is expected that consumer spending may increase, but inflationary pressure should be restrained.

Despite the fact that the mark of 1.2700 is an important support level for GBP/USD, we can not exclude the fall of the pair below 1.26.

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This week, investors will also follow the elections to the European Parliament, which will be held from May 23 to 26 and can be the decisive moment for the "United Europe" project.

According to most experts, the party of eurosceptics will significantly improve their positions, which may complicate the task of choosing the next head of the European Commission and approval of the EU budget.

The defeat of the UK ruling Conservative Party can accelerate the resignation of Prime Minister T. May and increase the chances of disordered Brexit. At the same time, the high performance of the Italian "League of the North" may be the reason for the dissolution of the coalition government and the holding of new elections in the country.

It is assumed that good results for the extreme right and the extreme left will be bad news for the euro and the pound.

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Weekly technical review on EUR/USD and GBP/USD currency pairs from May 20 to 25, 2019

Last week, both pairs moved down but due to different factors. The pair EUR/USD could not decide what to break through – the support line of 1.1132 (blue bold line) or the resistance line of 1.1267 (white bold line). The GBP/USD pair was rapidly moving down under the pressure of fundamental analysis.

EUR/USD pair.

Trend analysis (Fig. 1).

In the coming week, the price will move down with the first target of 1.1132 – support line (blue bold line) and further with a greater probability of working down with the target of 1.0902 – a pullback level of 76.4% (yellow dotted line).

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Fig. 2 (weekly schedule).

Indicator analysis on the weekly chart (Fig. 2).

Comprehensive analysis:

- Indicator analysis – down;

- Fibonacci levels – down;

- Volumes – down;

- Candle analysis – up;

- Trend analysis – down;

- Bollinger bands – down;

- Monthly schedule – down.

The conclusion from the comprehensive analysis is the downward movement.

The overall result of the calculation of the GBP/USD candle on the weekly chart: the price of the week is likely to have a downward trend with the presence of the first upper shadow of the weekly black candle (Monday – up) and the absence of the second lower shadow (Friday – down).

In the coming week, the price will move down with the first target - 1.2672 target level of 161.8% (yellow dotted line).

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May 20, 2019 : GBP/USD demonstrating oversold status around the current price levels.

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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 was located.

Since then, Short-term outlook has turned into bearish with intermediate-term bearish targets projected towards 1.2900 and 1.2850.

On April 26, a bullish pullback was executed towards the price levels around 1.3000 (the bottom of March 29) where temporary bullish breakout was temporarily executed until May 13 when evident bearish rejection was demonstrated.

Hence, a bearish Head and Shoulders pattern was expressed on the H4 chart with neckline located around 1.2980.

That's why, the price zone of 1.3030-1.3060 turned to become a prominent supply-zone where a valid bearish entry was offered two weeks ago.

Bearish persistence below 1.2980 (Neckline of the reversal pattern) enhanced further bearish decline.

Initial bearish Targets were already reached around 1.2900-1.2870 (the backside of the broken channel) which failed to provide any bullish support for the GBPUSD pair.

Currently, The GBPUSD pair looks oversold around the current price levels (1.2730). However, no signs of bullish recovery have been manifested yet.

That's why, bullish breakout above 1.2756 is needed to enhance the bullish side of the market on the short-term.

Trade Recommendations:

For those who had a valid SELL entry around the price levels of (1.3035-1.3070). It's already running in profits. S/L should be lowered to 1.2765 to secure more profits.

Conservative traders should wait for another bullish pullback towards 1.2870-1.2905 (newly-established supply zone) to look for valid sell entries. S/L should be placed above 1.2950.

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Technical analysis of USD/CAD for May 20, 2019

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Overview: The USD/CAD pair continues to move upwards from the level of 1.3457. The pair rose from the level of 1.3457 (the level of 1.3457 coincides with a ratio of 61.8% Fibonacci retracement) to a top around 1.3505. But it rebounded from the top pf 1.3505 to 1.3477. Today, the first support level is seen at 1.3457 followed by 1.3425, while daily resistance 1 is seen at 1.3457. According to the previous events, the USD/CAD pair is still moving between the levels of 1.3505 and 1.3457; for that we expect a range of 48 pips (1.3505 - 1.3457). On the one-hour chart, immediate resistance is seen at 1.3505. 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 1.3505, we should see the pair climbing towards the daily resistance at the levels of 1.3532 and 1.3560. It would also be wise to consider where to place stop loss; this should be set below the second support of 1.3425.The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of EUR/USD for May 20, 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.

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Simplified wave analysis and forecast for EUR/USD and GBP/JPY on May 20

EUR/USD

The main vector of the short-term movement of the European currency is given by the bearish wave of March 20. In a larger model, this is a correction. Its structure looks complete today. The price is in the area of a potential reversal. There are no early reversal signals on the chart yet.

Forecast:

Over the next 24 hours, the general flat mood of the euro price fluctuations is expected to continue. The probability of an upward vector is preserved. The limit size of the lift limits the resistance zone.

Recommendations:

Staying out of the European market will be the best tactic today. "Pipsing" on purchases is possible, but the risk of getting a loss is large enough. It is recommended to wait for the full completion of the rollback part of the movement and look for signals to sell the pair at its end.

Resistance zones:

- 1.1220 / 1.1250

Support zones:

- 1.1160 / 1.1130

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GBP/JPY

The direction of the trend movement of the last months of the cross is set by the bearish wave of March 14th. Since May 3, the final part (C) has been developing in its structure. On the small scale, by the end of last week, an upward reversal structure of the wrong kind was formed.

Forecast:

Before the trend continues downward, the price needs to work out a counter rollback. Today, we expect a flat mood. The upward vector is probable, but not beyond the calculated resistance zone. The return to the bearish rate can be expected at the end of the day or tomorrow.

Recommendations:

Cross purchases within the next trading sessions are possible, but the lot should be reduced to a minimum. When the price reaches the calculated zone of a potential reversal, it is necessary to complete long trades and look for reversal signals to find the entrance to the pair's sales.

Resistance zones:

- 141.10 / 141.40

Support zones:

- 140.10 / 139.80

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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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EURUSD: Market volatility will decline before the elections to the European Parliament

Volatility is gradually decreasing before an important week, during which elections to the European Parliament will be held. Many experts expect that the major currencies will trade around the current levels, and as the elections are held, the future direction of movement in risky assets will be outlined.

Let me remind you that the elections to the European Parliament will be held in 28 countries — members of the European Union — from May 23 to 26.

The data released on Friday on inflation in the eurozone is expected not to affect the market, as coincided with the forecasts of economists.

According to a statistics agency report, the eurozone CPI in April of this year rose by 0.7% compared with March and by 1.7% per annum, which fully coincided with economists' forecasts. As for core inflation, which does not take into account volatile categories, then prices in the eurozone in April rose immediately by 0.9% compared with March and by 1.3% per annum. The eurozone consumer price index excluding tobacco products in April added 0.7%.

According to the report, there are fewer problems in the eurozone with inflation than in the US, however, given the weak economic growth, the European Central Bank is unlikely to return to talk about changing monetary policy towards its tightening in the first half of this year.

On Friday, a report was also released, which indicated a decline in sales of new cars in the EU in April this year. The demand was mainly provided by the countries of Central Europe.

According to the Association of European car manufacturers, the number of new car registrations in the EU decreased by 0.4% compared with April 2018, to 1.30 million units. Let me remind you that quite recently, the White House administration postponed the final decision on duties on cars for 180 days.

The US data supported the dollar in the second half of the day, as household sentiment rose quite seriously in early May of this year.

According to preliminary data from the University of Michigan, the consumer sentiment index rose to 102.4 points in May 2019 against 97.2 points in April, while economists had expected the index to be 97.0 points in May. The index was mainly supported by the excellent situation in the labor market, where jobs continue to be created and wage growth is observed.

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As for the technical picture of the EURUSD pair, the further movement will depend on the parliamentary elections. There is support in the area of 1.1135, below which it will be difficult for the bears to break through from the first rose. As for the upward correction, it will be limited by the resistance of 1.1205, where you can count on a return to the market of sellers of the European currency.

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Bitcoin. Bitcoin returns to 8000, and the largest banks invest in the development of the blockchain

The Bitcoin rate returned to the level of 8000 USD, which maintains a further upward trend. Over the weekend, it was reported that a number of the world's largest banks have invested about $50 million in the creation of a payment system based on blockchain. If this is the case, then this is another very good news for the industry.

Signal to buy Bitcoin (BTC):

Bitcoin buyers face a level of 8100, the breakthrough of which will provide good demand and lead to new annual highs in the area of 8440 and 8700, where I recommend fixing the profits. Of course, the main goal will be to test the psychological level of 9000 USD. In a decline scenario, there is a support level of 7650, but it is best to open long positions immediately on a rebound from a minimum of 7250.

Signal to sell Bitcoin (BTC):

Bears should wait for the formation of a false breakdown in the resistance area of 8150, and it is best to try to return Bitcoin to the support level of 7650, from where the demolition of a number of stop orders will collapse the cryptocurrency rate to the area of minimums 7260 and 6820, where I recommend fixing the profit.

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Forecast for EUR/USD and GBP / USD on May 20. The euro is under pressure again, the pound continues to collapse

EUR/USD – 4H.

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As seen on the 4-hour chart, the pair EUR/USD has completed the closing under the Fibo level of 100.0% (1.1177). As a result, the process of falling quotations continues on Monday, May 20, in the direction of the next retracement level of 127.2% (1.1102). Friday's trading was again against the euro. Among the news of this day, inflation in the European Union can be identified, which fully met the expectations of traders (1.7%). The base consumer price index rose by 1.3%. However, this news did not seem too important to the markets, and the consumer confidence index in the US – important news. The University of Michigan figure rose from 97.5 to 102.4, and the dollar continued to grow with pleasure. There are no emerging divergences in the EUR/USD pair today. The consolidation of quotations above the Fibo level of 100.0% will allow traders to expect a reversal in favor of the EU currency and some growth in the direction of the retracement level of 76.4% (1.1241). Today, we pay attention to the German producer price index for April, and later on the national activity index of the Federal Reserve Bank of Chicago. Reports are not the first degree of importance but can support the US dollar.

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

Forecast for EUR/USD and trading recommendations:

The EUR/USD pair still showed a desire to continue the process of falling towards the level of 1.1102. Thus, I recommend selling the euro for this purpose, with a protective order above the Fibo level of 100.0%. I recommend buying the pair after closing above the retracement level of 100.0% with a view to a Fibo level of 1.1241.

GBP/USD – 4H.

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As seen on the 4-hour chart, the GBP/USD pair continues to fall in the direction of the retracement level of 23.6% (1.2639), as it was closed below the Fibo level of 38.2% (1.2765). At about 38.2%, the pair did not even think about rebounding and rebounding upwards in favor of the British pound. This shows the absolute weakness of the pound on May 20. The Forex market continues to sell the pound, seeing no reason to keep it in its portfolios. Only disappointing news continues to come from the UK, reflecting the government's inability to negotiate with one another and complete the Brexit process three years after it began. There is still a bullish divergence in the CCI indicator, which allows us to count on some growth of the pair. The rebound of the euro from the Fibo level of 23.6% will similarly work in favor of the beginning of the growth of quotations.

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

GBP/USD – 1H.

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As seen on the hourly chart, the pair GBP/USD shows a hopeless fall of the pound even better. After closing the quotes below the Fibo level of 127.2% (1.2782), the target for the fall – 161.8% (1.2673). In addition to the emerging bullish divergence of the CCI indicator, we also have a bearish divergence of the same indicator. It seems that bearish divergence has more power and is able to help traders make a decision about new sales of the pound and purchases of the US dollar. In the evening, there will be a speech in the British Parliament Ben Broadbent – members of the Monetary Committee. Perhaps the market will learn any new information regarding monetary policy in the most severe conditions of Brexit. Theresa May, fiercely unwilling to resign voluntarily, said in an interview that she was preparing a new version of the deal with the EU, an improved one.

The Fibo grid was built according to extremums from April 25, 2019, and May 3, 2019.

Forecast for GBP/USD and trading recommendations:

The pair GBP/USD continues to fall, so I recommend selling the pair with the target at 1.2673. The formation of a bearish divergence will only increase the chances of a further fall in the pound. I recommend buying the pair in very small volumes with the price quotations from the Fibo level of 161.8% (hourly chart) with the target of 1.2782 and a protective order below the level of 161.8%. It is best to abandon the purchase of the pound sterling.

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Overview for GBP/USD on May 20. The forecast for the system "Regression Channels". Theresa May announces a new proposal for

4-hour timeframe

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Technical data:

The upper linear regression channel: direction – down.

The lower linear regression channel: direction – down.

The moving average (20; smoothed) – down.

CCI: -110.1798

On Monday, May 20, the British pound continues its non-stop downward movement against the US dollar. As we have repeatedly noted, the current type of depreciation is the most dangerous possibility for the pound, as there are no rollbacks and corrections (the Heiken Ashi indicator eloquently shows this), and even the foundation cannot save the pound from new falls. In general, this situation is called "waited". Traders have been waiting for a long time and did not sell the pound in the hope that the UK parties will be able to at least agree among themselves so that in the future the country could finally accept the option of an agreement on Brexit. However, Labor and the Conservatives did not agree. Theresa May reported recently in the Times column that she is preparing a "new and bold proposal" to the British Parliament. We immediately have a lot of questions, for example, what new proposal are we talking about, if there were no additional negotiations with the European Union? It seems that several minor additions will be made to the current version of the agreement, and in total it will be called "new agreement". And the Parliament will gladly reject the "deal" on Brexit for the fourth time and can do it at least until October 31. And on October 31, Britain and the EU can postpone Brexit to an even later date.

Nearest support levels:

S1 – 1.2695

S2 – 1.2634

S3 – 1.2573

Nearest resistance levels:

R1 – 1.2756

R2 – 1.2817

R3 – 1.2878

Trading recommendations:

The pair GBP/USD continues its downward movement. Thus, short positions with targets at 1.2695 and 1.2634 are now relevant, before Heiken Ashi's indicator turns to the top, which will indicate a turn of an upward correction.

Buy-positions are recommended to be considered only after fixing the pair above the moving average with the first targets at 1.3000 and 1.3062. However, at the moment, the bulls are extremely weak and they are unlikely to have enough strength in the near future to overcome the MA.

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

Explanation of illustrations:

The upper linear regression channel – the blue line of the unidirectional movement.

The lower linear regression channel – the purple line of the unidirectional movement.

CCI – 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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Overview for EUR/USD on May 20. The forecast for the system "Regression Channels". US trade wars can be supplemented by a

4-hour timeframe

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Technical data:

The upper linear regression channel: direction – down.

The lower linear regression channel: direction – sideways.

The moving average (20; smoothed) – down.

CCI: -133.4496

Friday's publication of the inflation rate in the eurozone did not help the euro, although it did not fail, as is often the case in recent years with reports from Europe. However, traders once again turned to sales of euro and purchases of the dollar, because they did not find any reason to change the basic trading strategy. As we have repeatedly written, in 2019, which is clearly seen on the higher timeframe, the trend for the euro/dollar pair is clearly downward, moreover, each peak of the euro rate is lower than the previous one, which is a distinctive feature of a confident downward trend. Thus, in the near future, we expect a decline to 1.1100, and subsequently lower. On the first trading day of the week, May 20, no important and significant macroeconomic publications are planned.

Donald Trump briefly turned his attention from China and the European Union to Iran and has already managed to write in his Twitter that Iran will come to an end if the country wants to fight with the United States. These words were a reaction to the fact that Iran has ceased to adhere to the agreements on the nuclear program, mobilized its groups for a possible attack on the US military (according to US intelligence). There is no new information on the topic of trade wars, so on Monday, we expect very calm and balanced trading, without changing volatility.

Nearest support levels:

S1 – 1.1108

Nearest resistance levels:

R1 – 1.1169

R2 – 1.1230

R3 – 1.1292

Trading recommendations:

The EUR/USD currency pair continues to move down and overcome the level of 1.1169. Thus, sell orders remain relevant to the target of 1.1108.

It is recommended to consider trading for an increase in the pair with extreme caution and small lots not earlier than fixing the price above the moving average line with the first goal of 1.1230. The next target is 1.1260.

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

Explanation of illustrations:

The upper linear regression channel – the blue line of the unidirectional movement.

Youngest linear regression channel – the purple line 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.

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Trading Plan for EUR/USD pair on 05/20/2019

The big picture: The market is waiting for momentum. On Wednesday there will be "minutes" from the last Fed meeting.

There is no important news.

On Wednesday, there will be "minutes" from the last Fed meeting.

In addition, there is a halt to the US-China trade negotiations but it is unlikely to play strongly until mid-June.

EUR / USD: We sell from 1.1130 .

We buy from 1.1225.

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

By the end of the last trading week, the euro / dollar currency pair showedan extremely low volatility of 29 points, but this was enough to keep the downward interest. From the point of view of technical analysis, we have the preservation of short positions, where the previously passed level of 1.1180 served as a result of a strengthening point (see chart). Now I propose to consider the schedule in general terms, what have we seen for three weeks? That's right, a corrective move from the 1.1100 range level, and what we have now is a recovery of more than 70%, which means that the downward trend has been maintained on a global scale. We go further, and now let's talk about the uttermost uncertainty, which rather strongly influences the information and news background. On Friday, data on inflation in Europe were published, where we saw an acceleration from 1.4% to 1.7%, and in general terms everything is not so bad. What result? The decline of the euro, the reason - the divorce proceedings under the name "Brexit", which pulls over all interest and removes all other news, in particular statistics, into the background.

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Today, in terms of the economic calendar, we do not have any statistics on Europe and the United States, thereby continuing to go on about the fear of uncertainty.

Looking ahead, I would like to remind you that Fed Chairman Jerome Powell will make a report on the growth of threats to the stability of the financial system of the United States on the night of May 20 to 21 (02:00 Moscow time), and in light of the recent mutual increase in customs duties between the United States and China, Powell's words can seriously affect the market. For this reason, be careful about leaving your trading positions on the market if you decide not to close them by the end of the day.

Further development

Analyzing the current trading schedule, we see the preservation of the downward interest, where the quote has already overcome the low of the end of last week. What to expect next? Traders are already actively discussing the growing overheating of short positions, but still the inertial move, albeit with low volatility, remains. Thus, one should not exclude further movement towards the main points 1.1135 (local minimum of May 3 - in the form of lumbago), 1.1112 - the point of the main support.

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

- Buy positions are considered in several ways: first, bearish interest, decreases at the current stage, and in the case of price fixing higher than 1.1190, buy positions are laid; The second option is considered in a deeper decline, in the case of a slowdown in the range of 1.1112.

- The positions for sale were initially considered in the area of 1.1155, where, in principle, the quote now wags. If we do not have deals, then we take the current minimum and we consider entry below it. The first priority is 1.1135, then 1.1112.

Indicator Analysis

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

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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.

(May 20, based on the time of publication of the article)

The current time volatility is 17 points. The probability that the volatility of the day will remain low is, of course, great, but do not forget that at the time of the Fed's speech at night, volatility may increase.

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Key levels

Zones of resistance: 1.1180; 1.1180; 1,1300 **; 1.1440; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1.2100

Support areas: 1.1112; 1.1080 *; 1.1000 ***; 1,0850 **

* Periodic level

** Range Level

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US-China trade negotiations halted: AUD and NZD will continue to decline

Trade negotiations between the United States and China are suspended after it became clear that the basis for a mutual search for compromises was not formed, and moreover, there is an escalation of tension. China was ready to continue negotiations but after the US imposed restrictions on Huawei, it became obvious that the period of escalation had not yet worked out to the end.

Google is preparing to end cooperation with Huawei and will close the Chinese company access to Google services, including the Google Play app store, the Chrome browser, the Gmail client, YouTube, and maps. Whether this threat will be fully realized is not yet clear, however, the principles of the United States in negotiating were fully manifested and do not leave the Chinese side to the choice.

China is ready to reduce GDP by 1% due to the escalation of a trade war but does not intend to make any changes to the plans for the structural development of China. Anyway, the trading partners of China, especially the countries of Asia, will feel the deterioration of external conditions, which can lead to a decrease in trade turnover, as well as a slowdown in investment inflows and as a result, there was a fall in the exchange rate of national currencies.

Major stock markets have responded with a decline , reacting to a new round of escalation and the trend remains negative.

AUD/USD pair

The latest NAB and Ai Group polls show that business conditions in Australia are declining. In April, the NAB index fell by 4p up to + 3n and despite the fact that the index formally remains in positive territory, its dynamics are clearly negative for the time being.

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The dynamics of the labor market is also gradually changing direction. The employment index in the NAB survey fell in April to a record low since August 2015 by 7 points. The unemployment rate has resumed growth, participation in the labor force is still at high levels but in order to rely on wage growth, conditions look weak. This moment is reflected in the outpacing growth in the number of part-time workers. According to the ABS Wage Price Index in the first quarter, wage growth was at the level of 2.3%, which was unchanged from 4 square meters in 2018. The general inflation was only 1.3%. Overall, the dynamics are such that it is not necessary to rely on inflation.

These trends can not be ignored by the RBA. Despite the fact that the meeting on May 7, the RBA left the key rate at 1.5% and did not lower it. As predicted, it is expected that the minutes to be published on Tuesday, May 21. This will reflect concerns about the labor market, showing weak inflation and lower investment, which will prepare investors to reduce rates at the next meeting.

The AUD/USD pair fell to the lower border of the channel at 0.6870/85 and technically can make a small pullback up to 0.6960/70, however, this growth will be sold out with high probability right there. Bearish pressure on the AUD remains strong. The trend reversal is unlikely, so the direction at 0.67 remains a priority in the medium term.

NZD/USD pair

Most short-term indicators indicate that New Zealand's economy will continue to slow down. In April, ANZ lowered its forecast for GDP, justifying the decline in a whole list of negative trends while the situation is developing according to the forecast.

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ANZ believes that the RBNZ will cut rates again this year in August, as external conditions continue to deteriorate, and all domestic trends are either neutral or negative. In particular, activity in the manufacturing sector is declining. In the first quarter, there was a clear trend towards a slowdown in the labor market. Inflation is slowing down due to weak growth in average wages and a decrease in the trade balance.

The intensification of the trade war between the US and China may lead to a decrease in exports. Meanwhile, the RBA is able to strengthen measures to support the economy, which in one way or another will lead to a decline in the rate of the Kiwi.

After the RBNZ meeting in March, the NZD/USD pair turned to the south immediately and since then, there has been no reason to return to the growth trajectory. Kiwi is clearly aimed at a long-term low of 0.6418. The closest support at 0.6525/35 will not stand for long.

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Analysis of EUR/USD for May 20, 2019: USD to sustain gains

EUR/USD has been quite impulsive with the recent bearish momentum after rejecting off the 1.1250 area with a daily close. The US dollar is stronger agains the euro despite the worse-then-expected economic reports from the United States and trade war tensions by side.

The eurozone is struggling with the economic slowdown and the upcoming European Union Elections can influence Brexit. The parliamentary election is expected to have a high impact on the single European currency which might lead to certain indecision and volatility in the market. Eurosceptic parties are widely expected to make a strong showing, which could hamper approval of the next European Commission President and budget.

What is more, the EU Inflation rate has not met the ECB target yet but an uptick to 1.7% from 1.4% indicates positive changes as now the rate is closer to 2%. On Thursday, the French Flash Services PMI report is going to be published which is expected to have a slight increase to 50.7 from the previous figure of 50.5. Besides, the French Flash Manufacturing PMI is expected to grow to 50.1 from the previous figure of 50.0. Further on, experts predict that the German Flash Manufacturing PMI will rise to 44.9 from the previous figure of 44.4 but the German Flash Services PMI is expected to decrease to 55.2 from the previous figure of 55.7. Additionally, the ECB monetary policy meeting accounts report is also going to be published which may inject volatility.

On the USD side, trade tensions remain a sore point for market participants as well as the renewed concerns over the US-China trade war which has gone the wrong way. The US has held back from escalating the trade war on the Japanese and European fronts. However, US President Donald Trump stated that the European Union was less fair to the United States in trade relations than China. This week a number of FOMC members including Clarida, Evans, Rosengren and Williams are going to speak about the upcoming monetary policies and the interest rate decision. However, their speeches are likely to have a neutral effect.

This week, a fresh round of economic data will be closely watched at a time when markets are trying to gauge the impact of the trade conflict on the outlook for growth, both in the US and the global economy. The US is to publish reports on durable goods orders and data on both existing and new home sales.

As of the current scenario, this week the pair is expected to be quite volatile and corrective which might lead to certain indecision and non-definite trade momentum in the process. The US dollar is having several events to be taken care of, so the European Parliament Election may have a minor impart on it. Despite some pullbacks, USD is still the stronger currency in the pair and can sustain the momentum in the process.

Now let us look at the technical view. The price is currently falling lower at the edge of 1.1150 area from where it is expected to reach 1.0950-1.1050 support area before any bullish intervention can be observed along the way. As the preceding trend is bearish, so as the momentum, the bearish bias is expected to continue until any daily close. At the same time, the strong bullish counter-trend is observed along the way from support areas.

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

By the end of the last trading week, the pound / dollar currency pair showed volatility just slightly below the daily average of 86 points, but at the same time, we see that the bearish interest is firmly entrenched in the market. From the point of view of technical analysis, we see a steady downward interest, having the results of more than 320 points a week without any corrections. On the other hand, the level of 1.2770, which traders considered as a periodic pivot point and showing us the local minimum of February of the current year, declined, and the quotation was firmly fixed below it, demonstrating that the inertial move still remains on the market. Meanwhile, the information and the news background continues to be held on the "hype" of the ambiguous divorce process of the United Kingdom & European Union. This time we have a new statement by Prime Minister Theresa May - "When the draft agreement on leaving the EU is proposed to members of Parliament, it will be a new, bold proposal for deputies in the House of Commons with an improved package of measures, which, in my opinion, can get support."

The answer to this miracle agreement with the old ones was immediately followed by the Labour leader Jeremy Corbyn, who appreciated the hopes of Theresa May skeptically, arguing that the "new" proposal is actually virtually no different from the previous one.

The general background information in Britain disappointingly pulls the pound to the bottom, preventing it from being corrected, but against the background of a severe overheating of short positions.

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Today, in terms of the economic calendar, we do not have any solid data on the United States and Britain. Thus, we must continue to listen to the information background. Looking a little ahead, I would like to remind you that on the night of May 20-21 (2:00 Moscow time), Fed Chairman Jerome Powell will discuss the topic regarding the growing threats to the stability of the financial system of the United States, and in the light of the recent mutual increase in customs duties, between the US and China, Powell's words can seriously affect the market. For this reason, be careful about leaving your trading positions on the market if you decide not to close them by the end of the day.

Further development

Analyzing the current trading schedule, we see that the bears are sitting tight in shorts, and that there is currently this insignificant pullback. Many traders, including myself, have repeatedly stated that short positions are overheated and a correction is already approaching. This is the case. However, as long as the information background is rigid and will remain on the market, we may not see any significant reversal. Now, the first theoretical consideration is formed in the form of fluctuations of 1.2710 / 1.2770. Next, we move to the analysis of the breakdown of these same boundaries when placing trading orders.

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

- Positions for buy are considered in the case of price fixing higher than 1.2770, with preservation of bullish interest and then move to the level of 1.2850.

- Positions for sale are considered in terms of continuing the bearish rally, where the quote is lower than 1.2710, giving us the opportunity to enter the market.

Indicator Analysis

Analyzing the different sectors of timeframes (TF), we see that in the short term, indicators have taken a neutral interest against the background of a small pullback. On the other hand, the intraday and mid-term outlook retains a downward interest in the market. This is understandable, as we take a look from last week.

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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.

(May 20, based on the time of publication of the article)

The current time volatility is 17 points. Volatility is likely to increase all, whether this correction, or the continuation of the inertial course. Do not forget that on the night of May 20-21, there will be an additional incentive from the head of the Fed.

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Key levels

Zones of resistance: 1.2770 **; 1.2880 (1.2865-1.2880) *; 1.2920 * 1.3000 **; 1.3180 *; 1,3300 **; 1.3440; 1.3580 *; 1.3700

Support areas: 1.2620; 1,2500 *; 1.2350 **.

* Periodic level

** Range Level

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Dollar may receive support this week: Expect a continuation of the prospective decline in the EUR/USD and GBP/USD pairs

For this week, the market will pay attention to the publication of the minutes of the May meeting of the Fed and the ECB on monetary policy, to the speeches of the heads of the US Federal Reserve Bank and its head J. Powell, as well as the ECB President M. Draghi.

Market participants are expected to clear up the position of the regulator regarding the prospect of a decrease in interest rates this year from the Fed protocol. Recall that earlier in the winter, the head of the Central Bank, J. Powell, as well as his colleagues, made it clear several times that they had taken a wait-and-see attitude towards further actions by the bank on monetary policy. Signals about the deceleration of the national economy forced investors to think that the Fed might have to lower interest rates instead of their promised increase at the December meeting at the end of 2018, which stimulated the growth in demand for risky assets and put downward pressure on the dollar.

But following the May meeting, Powell's rhetoric has somewhat changed. He was more optimistic and economic statistics showed some improvement in core indicators, which forced markets to begin to doubt that rates could be lowered. Now, market participants will want to see in the published protocol, as well as in the speech of the head of the bank, either to confirm the probability of reducing the cost of borrowing or not, which, in our opinion, can have a noticeable effect on the US dollar rate.

As for the content of the minutes of the last meeting of the ECB, as well as the essence of the speech of its president M. Draghi, we expect the bank and the president to confirm their view of the need to continue the current monetary policy, which remains extremely "soft" and puts pressure on the dynamics of the single European currency. Taking this into account, we believe that the main currency pair may continue to gradually decrease, which may increase as a result of Powell's speech. If he again doesn't say anything about a likely decrease in interest rates, but on the contrary will say that there is a risk of a return to inflation. In fact, in this case, this will be confirmed by the expectant position of the regulator, which can end up as a maximum by raising interest rates by the end of this year or at least maintaining their current level.

Forecast of the day:

The EUR/USD pair is trading below 1.1155. Fixing below this mark will allow the pair to continue to decline to 1.1125 and then probably to 1.1100.

The GBP/USD pair is trading lower against the backdrop of a political crisis in Britain due to the uncertainty of the Brexit result and maintaining this negative will put pressure on the pair. Hence, we expect the resumption of its fall to 1.2700, and then to 1.2675.

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Indicator analysis. Daily review on May 20, 2019 for the currency pair EUR / USD

On Friday, the market in both currencies continued its downward movement. However, if the GBP / USD pair moved down, relying on fundamental analysis, the EUR / USD pair will be in the standby mode, and the traders will not decide where to go further, and what to break through - the support or resistance line. On Monday, strong calendar news is not expected.

Trend analysis (Fig. 1).

Today, the price can continue to move down with the goal of 1.1147 - the support line (blue bold line). Upon reaching this level, it is possible to continue the downward movement with the goal of 1.1112 which is the lower fractal.

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Fig. 2 (daily schedule).

Comprehensive analysis:

- indicator analysis - down;

- Fibonacci levels - down;

- volumes - down;

- candlestick analysis - up;

- trend analysis - down;

- Bollinger lines - down;

- weekly schedule - down.

General conclusion:

On Monday, technical analysis demonstrates a downward movement. The first lower target of 1.2662 is the pullback level of 76.4% (blue dashed line).

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Wave analysis of EUR / USD and GBP / USD for May 20. Jeremy Corbin refuses to maintain agreement with the European Union

EUR / USD

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On Friday, May 17, trading ended for EUR / USD with a decline of 20 bp, which is still fully consistent with the current wave counting, which suggests the construction of a downward wave 3, 3, 3 with targets under 11 figure. The report on inflation in the European Union on Friday was ignored by the Forex market. However, it should be noted that the real value coincided with the forecast. Often in such cases, there is no reaction to the news. While Trump continues to fight with China in a commercial direction, and escalate the military conflict with Iran, the US dollar continues to rise against the euro. News background cannot be called now in favor of the dollar, however, it does not say anything if it's in favor of the euro. I believe that the current wave counting will be maintained in the coming days; therefore, we can expect a decline to 1,1100 and 1,1050.

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 euro / dollar is still in the process of building a downward trend. Now, I recommend to remain the bears on the instrument with targets of 1.1097 and 1.1045, which corresponds to 161.8% and 200.0% in Fibonacci and a restrictive order above the level of 50.0% in Fibonacci.

GBP / USD

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On May 17, the GBP / USD pair lost another 80 basis points and, thus, continues to build the estimated wave c, as part of the new downward three-wave structure. The current wave is very simple in its internal structure. The US dollar in the recent days has an unconditional advantage over the pound. However, this will not always continue. The news background for the pound sterling, of course, remains negative. The Forex market no longer believes in the new announcements of Theresa May regarding the changes made to the Brexit document and does not regard this news as potentially positive for the pound. The leader of the opposition party Jeremy Corbin, who openly stated that it was unlikely that the last version of the document, for which the parliament voted three times, did not believe in this. Significant changes were made, thus he and his party are against this Brexit agreement. Considering that it was with the opposition whereas Theresa May wanted to come to an agreement in order to nevertheless carry out her agreement through parliament. Now, the words of Corbin look like yet another failure for Theresa May.

Sales targets:

1.2675 - 161.8% Fibonacci

1.2554 - 200.0% Fibonacci

Purchase goals:

1.3175 - 0.0% Fibonacci

General conclusions and trading recommendations:

The wave pattern of the pound / dollar instrument implies a continuation of the instrument decline within the wave c. Thus, now, I recommend sales with targets located near the estimated marks of 1.2675 and 1.2554, which corresponds to 161.8% and 200.0% in Fibonacci. An unsuccessful attempt to break through the 161.8% mark may lead to a departure of quotes from the lows reached.

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GBP/USD: plan for the European session on May 20. UK returned to a hard Brexit scenario

To open long positions on GBP/USD you need:

Theresa May's final failure in negotiations with Labour on the topic of Brexit returned the likelihood of a hard Brexit that continues to put pressure on the British pound. At present, it is best to return to long positions on a false breakdown in the support area of 1.2723 or to rebound from a larger level of 1.2672. The goal of the bulls will be the resistance of 1.2766, consolidating on which will lead to the formation of a large upward correction with an update of highs of 1.2812 and 1.2858, where I recommend to lock in the profit.

To open short positions on GBP/USD you need:

May's failure continues to weigh on the pound. Breakthrough and consolidation below the support of 1.2723 will lead to a new wave of short positions in GBP/USD with a rise to the lows of 1.2672 and 1.2614, where I recommend taking profits. However, do not forget that the pound has been declining for two weeks without a single correction. Therefore, the best scenario will be selling after an upward correction from the resistance of 1.2766, under the condition of a false breakdown, or to rebound from a high of 1.2813.

Indicator signals:

Moving averages

Trading is below 30 and 50 moving averages, which indicates the bearish nature of the market.

Bollinger bands

A break of the lower border of the indicator around 1.2710 will lead to a new wave of the pound's decline.

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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 European session on May 20. Bears will strive to support 1.1135

To open long positions on EURUSD you need:

The pair's situation is uncertain. It is best to return to long positions after updating a large support level at 1.1138, from where you can expect an upward correction to return to a high of 1.1180, above which you can reach the resistance of 1.1205, where I recommend taking profits. If there is no fast upward movement in the area of 1.1138, it is best to wait for the test of a low of 1.1112 and open long positions in EUR/USD there.

To open short positions on EURUSD you need:

Forming a false breakdown in the resistance area of 1.1155 will be the first signal to open short positions in EUR/USD, which will keep the pair in a downward price channel and return sellers to the market, counting on the test of a large support level in the area of 1.138 and 1.112, where I recommend taking profits. In case the euro grows in the first half of the day and consolidation is on the intermediate area of 1.1155, it is best to look at short positions after updating a high of 1.1180 and 1.1205.

Indicator signals:

Moving averages

Trading is below 30 and 50 moving averages, which indicates that the euro is likely to decline.

Bollinger bands

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

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
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BITCOIN regained momentum after the stronger dip, May 20, 2019

Bitcoin managed to regain the bullish momentum after a sharp dip below $8000 area earlier. The price is currently residing at the edge of $8000 area with a dynamic level of 20 EMA holding the price as support. Thus, further upward pressure might occur in the coming days.

Bitcoin is currently up by 8%. Most of the ALTCOINS have joined the rally and gained momentum. Bitcoin is recovering after a certain bearish pressure. The bullish trend is likely to continue and lead to further upward pressure with a target towards $10,000 in the coming days. Over a one-week period, BTC has incurred some choppy price action, surging from lows of $6,800 to highs of $8,300 before reeling back to below $7,000. Since dropping below $7,000, Bitcoin has been able to build greater buying pressure that has allowed it to continue its upward ascent.

Despite this, the recent pullback may be bullish for BTC, as it may allow the crypto to garner greater levels of buying pressure that could ultimately allow it to continue surging higher as it continues recovering from its 2018 lows of $3,200. As the price remains above $7000 area with a daily close, the impulsive bullish momentum is expected to continue further but certain correction and volatility may be observed along the way.

SUPPORT: 7500, 7850

RESISTANCE: 8000, 8400, 8500

BIAS: BULLISH

MOMENTUM: VOLATILE

analytics5ce2434dad22d.png

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Trading plan for EURUSD for May 20, 2019

analytics5ce243e3db5c4.jpg

Technical outlook:

The EURUSD has dropped lower as discussed. The pair is now trading around 1.1155 levels. We are presenting a contrarian view today, as depicted on chart here. The pair could be carving out a complex correction since 1.1260 highs earlier and the current bottom could form close to 1.1140 levels respectively. Interim support remains at 1.1111 levels for now and till the time EURUSD stays above that, we can expect a rally as Wave C higher towards 1.1320 levels as shown here. The above view would hold true only if prices manage to bounce above 1.1111 levels hence a strict stop should be placed there to avoid more losses. A push above 1.1180 levels would be confirmation of a short term bottom formation and would enable bulls to remain in control going further.

Trading plan:

Long now @ 1.1155, stop @ 1.1110, target @ 1.1320.

Good luck!

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EUR / USD: China and the European Parliament are in the spotlight

Despite the abundance of macroeconomic reports and planned speeches by representatives of the ECB and the Fed, the euro-dollar pair will focus on political fundamental factors this week. The focus will be on Italy, China and the European Parliament elections. Factors such as the intentions of Italian politicians, the prospects for the US-China trade negotiations and the results of the European elections will determine the degree of anti-risk sentiment in the market.

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Let's start with China. Let me remind you that on Friday, the Chinese state-owned media published the news that Beijing could withdraw from the negotiation process with Washington. As reported by the press, the Chinese side "does not see the sincere intentions" of the Americans to find a compromise and conclude a mutually beneficial deal. According to representatives of China, the States profess a policy of trade protectionism that impedes negotiations. Although this information was of an informal nature, it was obvious to all that the state publications of the PRC could not publish such a message without the knowledge and consent of the authorities. A bit later, the official position of Beijing appeared, which was somewhat veiled.

Thus, according to a senior Chinese diplomat, Wang Yi, China is still ready to resolve differences through negotiation "but countries must be on equal footing." He also added that Washington should "change the direction of its actions" since China will "firmly defend its national interests." The Chinese reaction is understandable after the introduction of additional duties while the White House introduced a state of emergency in the information and communication infrastructure in the country, which allowed the US Department of Commerce to add Huawei and 70 related companies to the "blacklist" that prohibits the use of US components and technology.

In other words, it will become clear this week on what direction the further relations between the US and China will develop. If Washington strengthens the anti-Chinese policy, Beijing will most likely come out of the negotiation process and the financial world will be on the verge of another escalation of the trade war. In this case, the dollar will again enjoy the status of "island of security", dominating in all currency pairs. In this situation, only one exception is permissible: if the Chinese decide to withdraw from the US government debt or significantly reduce their share in this market. Given this situation, the dollar will be in the role of the victim, not the "protector." China owns US $1.13 trillion in US Treasury bonds, therefore, any more or less large-scale actions in relation to these securities will have the effect of a bombshell in the financial world. Yet according to experts, such a scenario is unlikely at least in the context of retaliation in a trade war. At the same time, the Chinese can take this step if the yuan goes to a "steep peak" against the background of possible US actions. In this case, China can reduce investments in these assets by several tens of billions of dollars, according to experts polled by Bloomberg. However, currently, the dollar can significantly weaken only on rumors of similar intentions on the part of the PRC.

Yet, the single currency this week will respond to the results of elections to the European Parliament, which will be held from 23 to 26 May. According to surveys, the next European Parliament (which will operate until 2024) will maintain a pro-European liberal-democratic majority. Sociologists react saying that political forces "constructively and consistently advocate for strengthening European unity and oppose populism and radical ideas" will receive from 450 to 500 seats. Thus, the European People's Party should retain its leading position while the Progressive Alliance of Socialists and Democrats is predicting the second place. Lastly, the Greens and representatives of the Alliance of Liberals and Democrats for Europe will compete for the third place.

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At the same time, the extreme right and euro skeptics (which is mostly the same) can also strengthen their presence in the European Parliament. Thus, the Europe of Nations and Freedoms Party (Marine Le Pen) can double its presence in the new parliament, gaining 60–65 seats instead of the current 37. 45-50 seats (in the current convocation 41). But left-wing political forces can weaken their positions by reducing their presence in the EP from 52 to 40 members. In general, if the real numbers differ from the above in the direction of the right (Euro-skeptics), then the euro will be under considerable pressure.

Thus, the fate of the EUR/USD pair will depend on global processes. If China finally "slam the door", the dollar will rise in price across the entire market (unless the Chinese touch on the topic of US public debt). In addition, the downward trend of the pair will continue if the right strengthens its presence in the European Parliament, reflecting the electoral preferences of Europeans. In the event that these fundamental factors are resonating, the euro-dollar pair will test and possibly consolidate within the framework of the 10th figure. Otherwise, the price will return to the usual range of 1.1130-1.1240.

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GOLD to regain bullish momentum again? May 20, 2019

GOLD has lost ground against USD recently. Hence, the price resided at the edge of 1276 support area with an impulsive bearish pressure.

GOLD hit two-week lows on Friday as the US dollar surged up following the release of the data that showed US consumer sentiment was at 15-year high. The US dollar was also supported by reports about China's impatience over the progress of trade negotiations with Washington. The US Index showed rise of 0.1% to 97.87 is the two-week high which became the catalyst for the market sentiment to boost. Gold has in a unique position in the US-China trade war. A positive resolution on that means bullion could benefit from more jewelry and other bullion-related cosumption in China. A negative outcome could bolster gold's standing as a safe-haven hedge against further weakening in Chinese growth.

This week, a fresh round of economic data will be closely watched at a time when markets are trying to gauge the impact of the trade conflict on the outlook for growth, both in the US and the broader global economy. The US is to publish reports on durable goods orders and data on both existing and new home sales figure.

The price is still residing inside the Bullish Flag pattern while being above the support area above 1265 with a daily close. Though there are not much of a Bullish Divergence but the figure above 1265 with a daily close indicates possibility of further upward pressure.

As of the current scenario, despite the impulsive bearish pressure due to gains on the USD side, GOLD is expected to regain momentum as it remains above the important support area of 1265 whereas a break above 1300 is likely to establish strong bullish momentum. Thus, the price might go higher with target towards 1500 resistance area in the future.

SUPPORT: 1265, 1276

RESISTANCE: 1290, 1300

BIAS: BULLISH

MOMENTUM: VOLATILE

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Forecast for AUD / USD pair on May 20, 2019

AUD / USD pair

On Thursday and Friday last week, the Australian dollar was actively declining, but did not reach the support of the embedded line of the price channel and opened a new week from an increasing gap of 46 points this morning. Thus, convergence with the marlin oscillator was formed on the four-hour chart, which practically worked out taking into account the gap. Now, we are waiting for the closing of the gap forme, and testing the support for the nested line of the price channel in the region of 0.6842.

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Inertial continuation of the growth of the "Australian" is also possible. Resistance is in the level of coincidence at the balance line with the MACD line of 0.6930 on the four-hour chart.

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Technical analysis of Ethereum for 20.05.2019

Technical analysis of Ethereum for 20.05.2019

The wave 4 cycle is still in progress.

Crypto Industry News:

The largest Russian bank, Sberbank, demanded from customers to provide information about their revenues from cryptocurrencies, according to the financial media.

Co-founder of the cryptocurrency trading platform Toxenbox.io, Vladimir Smerkis, told media that a client had received a letter from Sberbank demanding disclosure of his cryptographic income. The letter was based on Federal Law 115 "On combating money laundering and financing of terrorism". The client has reportedly already informed the bank about his revenues from trading in cryptocurrencies.

In particular, Sberbank wanted to know the cryptographic address of the client's portfolio, which mining equipment the customer uses (including the model and parameters of the mining farm) and hash rate indicators. The bank also asked for documents confirming the ownership or lease of mining equipment and the premises where the farms are located.

"We are very worried about how Sberbank can refer to terms that do not yet exist in Russian law" - Smerkis said.

The founder and director of the regulated decentralized Tokenomica exchange, Artem Tolkachev, replied that this is not a new type of demand, saying that Sberbank "operates under the regulatory framework for the handling of cash. It is, therefore, a way of legally entering revenues from cryptocurrency into circulation".

Technical Market Overview:

The ETH/USD pair is still making the wave 4 correction despite the recent bounce from the level of $226.10. The current corrective pattern is starting to look like a Triangle pattern, which is very typical for this correction. After the corrective cycle in wave 4 is completed, there is still one more wave up missing in order to complete the impulsive wave. The local technical resistance is located at the level of $265.35 and the local technical support is seen at the level of $245.00.

Weekly Pivot Points:

WR3 - $10,110

WR2- $9,180

WR1 - $8,627

Weekly Pivot - $7,705

WS1 - $7,135

WS2 - $6,315

WS3 - $5,743

Trading Recommendations:

The best trading strategy in the current market conditions is to buy the local pull-back as wave 4 is in progress in anticipation of the wave 5 to the upside. It might take some time for the wave 4 to complete, so it does not have to be a day-trading strategy. Please pay attention to the technical support at the level of $226.17 as any violation of this level will accelerate the sell-off towards the next technical support at the level of $212.12.

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Technical analysis of Bitcoin for 20.05.2019

Crypto Industry News:

Judge Joel Cohen of the Supreme Court in New York approved the request of the Bitfinex cryptocurrency exchange to change the order of the New York Attorney General.

As announced, the court order will allow the Bitfinex stock exchange and the related stable coin Tether operator to continue its normal operations. The court also states that the prosecutor's original order expires in 90 days and that any request for extension will lie with the prosecutor's office.

The New York Attorney General originally claimed that Bitfinex lost $ 850 million, and then used the funds from Tether to cover the deficit in secret. Bitfinex then responded to the allegations stating that they were full of inaccuracies and false claims.

While the application will allow Bitfinex and Tether to continue operations, it also requires information about the loan and the credit line. Cohen's decision prohibits Tether from lending any assets to Bitfinex or other parties, distributing reserve funds to employees or modifying documents. In his announcement, Bitfinex was optimistic about the decision.

Technical Market Overview:

The BTC/USD pair has bounced significantly after the recent local pull-back completed at the level of $6,986. The pair almost make it to the recent high at the level of $8,309 and is currently consolidating the gains around the level of $8,000 in a narrow horizontal range. From the Elliott Wave Principle point of view, the market is now in wave B of the overall corrective cycle after the bottom of the wave A was made at the level of $6,986. It means, there is still wave C to the downside missing in order to complete the corrective cycle in wave 2.

Weekly Pivot Points:

WR3 - $10,110

WR2- $9,180

WR1 - $8,627

Weekly Pivot - $7,705

WS1 - $7,135

WS2 - $6,315

WS3 - $5,743

Trading Recommendations:

The best trading strategy in the current market conditions is to sell the local pull-backs with a tight protective stop loss just above the high at the level of $8,309 in anticipation of the wave C of the overall corrective structure. Please pay attention to the technical support at the level of $7,584 as any violation of this level will accelerate the sell-off towards the next technical support at the level of $7,032.

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