May 24, 2019 : GBP/USD demonstrating early signs of bullish recovery.

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On March 29, a visit towards the price levels of 1.2980 (the lower limit of the newly-established bearish movement channel) could bring the GBPUSD pair again towards the upper limit of the minor bearish channel around (1.3160-1.3180).

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

On April 26, another bullish pullback was initiated towards 1.3000 (the same bottom of March 29) which has been breached to the upside until May 13 when a bearish Head and Shoulders pattern was demonstrated on the H4 chart with neckline located around 1.2980-1.3020.

That's why, the price zone of 1.3000-1.3020 turned to become a prominent supply-zone where a valid bearish entry was offered few 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 pair.

Further bearish decline was demonstrated towards the lower limit of the long-term channel around (1.2700-1.2650).

The GBPUSD pair looks oversold around the current price levels (1.2650-1.2700). That's why, SELL signals shouldn't be considered at such low prices.

On the other hand, bullish persistence above 1.2690 and 1.2750 is needed to enhance the bullish side of the market towards 1.2870 (Bottom of April 26).

Trade Recommendations:

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.

Counter-trend traders can consider the current bullish breakout above 1.2690-1.2700 as a valid BUY signal. T/P level to be located around 1.2750 and 1.2820. S/L to be located below 1.2640.

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Striking heroism of the euro and restrained optimism of the pound

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After falling to the lowest levels since May 2017, the pair EUR/USD was able to recover and close yesterday around 1.1180, where it is consolidating today.

Investors' concerns about the increased tension in trade relations between Washington and Beijing, as well as concerns about the prospects of the US economy provoked the sale of the dollar on Thursday, against which the euro managed to win back the previously lost points.

The weak data on housing sales and business activity in the manufacturing sector of the US economy released yesterday caused talk about the possible onset of a recession in the country next year. On these rumors, the yield of 10-year treasuries sank to 2-year lows at 2.30%, and the USD index retreated from annual highs near 98.

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It should be recognized that there is no reason for a significant strengthening of the euro.

Recent economic releases for the eurozone have been weaker than expected. Business activity in the services and manufacturing sectors in Germany and the currency bloc as a whole has slowed down. The IFO report on Germany also showed a deterioration: the business climate index fell to its lowest level since 2014. The US and China trade war affected the mood of the German business circles, and, according to the head of the IFO Clemens Fuest, there is a reason for concern, especially on the manufacturing sector.

In addition, until the end of May, the "European" will not have guidelines in the form of meetings of the European Central Bank, which will take another decision on monetary policy only in June.

The pound also managed to win back its losses against the dollar against the background of reports of the impending resignation of British Prime Minister Theresa May.

The GBP/USD pair found strong support near 1.2600 and was able to recover most of the points after falling to 4.5-month lows.

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Today, T. May announced that she will resign as leader of the ruling conservative party in the United Kingdom on June 7.

Until her successor is elected, T. May will continue to perform the duties of the head of the Cabinet of Ministers.

The election process for a new Tory leader will begin on June 10. The main candidate is former foreign Minister Boris Johnson.

After the statement of T. May, the pound against the dollar jumped by 0.5%, exceeding the level of $1.27, but then stopped the growth.

Apparently, investors fear that the successor of T. May could withdraw Foggy Albion from the EU without a deal or call early parliamentary elections.

"T. May's resignation is most likely already in the quotes, but I am not sure that the market is ready for B. Johnson," said Andrew Cole from Pictet Asset Management.

"The market's attention is already turning to what will happen after the resignation of T. May. We still see further potential for the pound to decline even after the recent sharp sell-off," said Fritz low, currency strategist at MUFG Bank.

According to Russell Silberston, portfolio Manager of Investec Asset Management, the British currency can test levels below $1.20 if the chances of a "hard" Brexit or the probability of holding general elections continue to grow.

"In the short term, the only thing that can work in favor of the pound is any benefits for the pro-European parties in the elections to the European Parliament, which are held this week," he said.

"The next Prime Minister may find himself in the same impasse faced by T. May, which will increase the risk of a disordered UK exit from the EU and increase the loss of the pound. However, it is possible that the British Parliament will eventually vote for the abolition of Brexit", – said Luke Hickmore of Aberdeen Standard Investments.

He expects the pound to stabilize at $1.30–1.35.

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The oil market has experienced the worst week in the last six months

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According to experts, this week was the most disastrous for the black gold market in the last six months. Attempts to restore it on Friday, May 24, do not give a special result, although they can help avoid strong subsidence.

Oil prices are trying to go "to the kings" after the collapse the day before. The cost of Brent increased by 0.87% to $68.57 per barrel. The price of WTI light oil rose 0.74% to $58.63 per barrel.

The end of this week brought the oil quotes the most significant drop since January 2019. According to analysts, pressure on oil prices was exerted by such factors as the fear of a slowdown in the world economy and the growth of black gold reserves in the US to the highs since July 2017.

Analyzing the incoming data on the oil market, experts record the rise in prices for short-term contracts. Experts come to the conclusion that such a picture is typical for a situation when the current production and sale of oil is more profitable than its storage and sale after a certain period of time.

At the moment, market participants are following the actions of the two main figures in the trade conflict, the United States and China. They pay special attention to the degree of tension in relations between the two powers, believing that this confrontation will reduce the demand for black gold.

At the end of this week, the margin of oil refineries in Asia (refineries) fell to its lowest level in ten years, experts say. Analysts fear that the trade conflict between the US and China will lead to a further collapse of oil prices, which is difficult to stop. Unfortunately, the "snowball" effect has not been canceled.

According to experts of the analytical company London Capital Group, if Washington and Beijing do not come to a compromise in the near future, then a further rally in oil prices will be questionable.

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GBP/USD: plan for the US session on May 24. Theresa May resigns, and the pound leaves this case without attention

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

Today's news that British Prime Minister Theresa May will resign on June 7, passed for the market without a trace, as it was quite expected. Buyers of the pound in the second half of the day need to stay above the support of 1.2662, and the formation of a false breakdown there will be a signal to open long positions based on updating the morning high of 1.2723 and its breakthrough, which will open a direct road to the resistance area of 1.2789, where I recommend fixing the profits. When returning to the support of 1.2662, it is best to open long positions to rebound from a low of 1.2607.

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

Bears are expected to return in the resistance area of 1.2723, after a report on retail sales in the UK, which did not please traders. The main task for the second half of the day will be a decrease and a breakthrough of the support of 1.2662, which will lead to a new, larger will of sales of GBP/USD with the update of the lows in the area of 1.2607 and 1.2564, where I recommend fixing the profit.

Indicator signals:

Moving Averages

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

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: plan for the US session on May 24. Buyers reached the morning level of 1.1206, but then slowed down

To open long positions on EURUSD, you need:

The goal of updating the resistance of 1.1206 was completed at the first half of the day, and as long as the trade is conducted above the new support level of 1.1178, the demand for the euro will continue. The main task of the bulls in the afternoon will be a breakthrough of the resistance of 1.1206, which may contribute to the bad data on the US economy, which will be released soon. In this scenario, you can count on updating the maximum of 1.1237, where I recommend fixing the profits. When returning to the support of 1.1178, it is best to return to the long positions in EUR/USD to the rebound from 1.1149.

To open short positions on EURUSD, you need:

Bears are required to form a false breakdown in the resistance area of 1.1206, which will be the first signal to open short positions with the main goal of returning to the support area of 1.1178, where I recommend fixing the profits. In the EUR/USD growth scenario above the resistance of 1.1206, it is possible to open short positions immediately on the rebound from the maximum of 1.1037.

Indicator signals:

Moving Averages

Trading is conducted above 30 and 50 moving averages, which keeps the market on the side of euro buyers.

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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Overview of GBP/USD on May 24. The forecast for the "Regression Channels". The market is waiting for May to announce today

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: -43.5119

If the euro rose sharply and strongly yesterday against the US currency against the background of weak statistics from the US, the pound simply began a slight correction. This once again points to the fact that traders do not want to buy the British currency now, even when there are grounds for this, and the main topic of interest to the Forex market is Brexit. Even today, the whole world will follow the speech of Theresa May, who after a meeting with Graham Brady, Chairman of the Committee "1922", said that on May 24, she will announce the date of her resignation. We believe that today is full of surprises. May could have resigned 5 times already, but each time she stayed to finish what she had begun (Brexit). Therefore, it is quite possible today that May will announce the need to complete Brexit after all and that "she will fight to the end." For the pound, this will be disappointing news. But the specific date of the resignation of Theresa May, who, as it is already clear to everyone, did not cope with Brexit, can fill the markets with optimism and push the pound upward. In addition, in the UK, a report on retail sales for April will be published today, which predicts a decline in the growth rate of this indicator, and even a reduction (in monthly terms). Thus, the dynamics of the pound today will depend on the nature of the fundamental data.

Nearest support levels:

S1 – 1.2634

S2 – 1.2573

Nearest resistance levels:

R1 – 1.2695

R2 – 1.2756

R3 – 1.2817

Trading recommendations:

The GBP/USD pair started a weak upward correction. Thus, it is recommended to wait for its completion, and then resume the sale of the pound with the targets at 1.2634 and 1.2573.

It is recommended to consider long positions after the consolidation of the pair above the moving average with the targets at 1.2817 and 1.2878. However, at the moment, the position of the bulls are still extremely weak.

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 – blue line unidirectional movement.

The lower linear regression channel – purple line 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 of EUR/USD on May 24. The forecast for the "Regression Channels". The euro has updated the lows and pulled up

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) – up.

CCI: 266.9045

The American trading session yesterday suddenly made a surprise for the traders. Macroeconomic reports on business activity indices in the United States were a failure. We are not talking about the shortage of one or two-tenths of a point to the projected values. We are talking about much lower values. For example, business activity in the manufacturing sector in May was 50.6 with a forecast of 52.5, and in the services sector – 50.9 with a forecast of 53.2. However, these are only preliminary values, not final. Nevertheless, it is clear to any trader that with such preliminary figures, the totals will also be quite disappointing. Thus, the US dollar fell under the pressure of the foreign exchange market yesterday. Market participants began to sharply withdraw from the "dollar" positions, which led to changes in the technical picture. The trend for the euro/dollar pair has changed to an upward one and buy orders have become relevant. On the last trading day of the week, all the attention of the market will be focused again on the States. There will be published a report on the change in the volume of orders for durable goods for April. Almost all forecasts predict a decline in volumes, and if they come true, the euro for the second day in a row can show growth against the US dollar. Today, macroeconomic information is not expected from Europe, but elections to the European Parliament began there.

Nearest support levels:

S1 – 1.1169

S2 – 1.1139

S3 – 1.1108

Nearest resistance levels:

R1 – 1.1200

R2 – 1.1230

R3 – 1.1261

Trading recommendations:

The EUR/USD currency pair changed its direction and overcame the moving average line. Thus, it is recommended to consider the long positions with the targets at 1.1200 and 1.1230, but in small lots, since both linear regression channels are directed downwards.

It is recommended to consider selling orders for the euro/dollar pair only after the reverse consolidation of the price below the moving average with the targets at 1.1139 and 1.1108.

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 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

EURUSD: Euro growth limited due to trade war and elections to the European Parliament

Yesterday, US President Donald Trump made several new statements on the trade agreement between the US and China, as well as instilled some confidence in the likelihood of a deal. Trump noted that the achievement of a trade agreement with China is very likely in the near future, and concessions for Huawei may be included in the terms of the transaction. However, according to Trump, it is too early to talk about the details of the transaction, as negotiations continue and can go on different scenarios. Let me remind you that a number of experts, including Fed economists, noted that trade wars that the United States is waging with other countries harm the US economy and limit its growth.

Returning to the fundamental statistics, the US dollar yesterday was badly affected by a weak report on sales of new homes in the United States. Data on the labor market were ignored by traders.

According to a report by the US Department of Labor, the number of initial applications for unemployment benefits for the week from May 12 to 18 decreased by 1,000 and amounted to 211,000. Economists had expected that the number of new applications would be 215,000. The moving average for four weeks fell to 220,250.

As noted above, the weak report on sales of new homes in the US in April of this year seriously affected the quotes of the US dollar. This again confirms the fact that the housing market is in a weaker state, which indicates a slow economic growth in the 2nd quarter of this year.

According to the US Department of Commerce, home sales in the primary housing market in April of this year fell immediately by 6.9% to 673,000 homes per year. Economists had expected that the decline will amount to 2.7%.

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Yesterday, the data on the Fed-Kansas City composite manufacturing index was also released, which fell in May of this year to 4 points against 5 points in April, which indicates a sluggish growth. The industrial production index rose to 23 points in May against 22 points in April, while the expectations index increased to 12 points against 11 points.

It is important to note the fact that production activity in the US, as well as the service sector, at any time can show a decline, as the indices have approached very unpleasant levels.

According to Markit, the preliminary purchasing managers index (PMI) for the US manufacturing sector was 50.6 points in May, while the preliminary purchasing managers index (PMI) for the US services sector reached 50.9 points in May. Let me remind you that the index above 50 points indicates an increase in activity, while below it indicates its slowdown.

As for the technical picture of the EURUSD pair, the further upward trend will be limited by the resistance around 1.1205. It is unlikely that buyers of risky assets will attempt to consolidate above this range before the elections to the European Parliament, the results of which will be announced this weekend. The downward correction in the pair may be limited by the support around 1.1160.

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Forecast for EUR/USD and GBP/USD on May 24. The euro and the pound received a gift from US macroeconomic statistics

EUR/USD – 4H.

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The euro/dollar continued the process of falling towards the retracement level to 127.2% (1.1102). However, after the formation of a bullish divergence, the MACD indicator reversed in favor of the euro currency and began the process that subsequently ended with the closure above the Fibo level of 100.0% (1.1177). The formation of bullish divergence coincided with the release of business activity indices in America, which were all much worse than the forecasts. It was these indices that caused the rejection of new purchases of the US dollar among traders, which is so necessary for the euro. Thanks to these statistics, the euro was able to breathe freely, at least for a while. As a result, on May 24, the growth process can be continued in the direction of the retracement level of 76.4% (1.1241). But today, during the US session, another important economic indicator for the US will be released – orders for long-term goods, which can just help the EU currency to consolidate yesterday's success, but only if the statistics from the United States today are weak.

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

Forecast for EUR/USD and trading recommendations:

The EUR/USD pair closed above the retracement level of 100.0%, which indicated the desire for growth. Thus, I recommend buying the euro today with a target of 1.1241, a protective order under the Fibo level of 100.0%. I recommend selling the pair again after closing the quotes below the level of 100.0% with the goal of a correction level of 1.1102. Do not forget about the important report from the US today.

GBP/USD – 4H.

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The pound/dollar pair reacted to the reports from America on business activity much more modestly. Practically didn't react at all. Once again, we can see that there is no demand for the pound, even when there is a favorable fundamental background for it. And the reason lies in the same Brexit. According to the latest data, Theresa May can resign today, and what will happen next is unknown. Thus, the outcome of Brexit is now even harder to say, and the pound continues to feel worse than ever. With grief in half, the pair closed above the Fibo level of 76.4% (1.2661), which allows traders to count on continued growth in the direction of the next retracement level of 61.8% (1.2796), however, given the current mood of the currency market, it is more likely to resume the fall in the direction of the retracement level of 100.0% (1.2437), even despite the bullish divergence in the MACD indicator.

The Fibo grid is built on the extremes of January 3, 2019, and March 13, 2019.

GBP/USD – 1H.

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On the hourly chart, the pound slightly "rose", but hardly for long. First, the bullish divergence sent the pound quotes to the retracement level of 161.8% (1.2673), but the pair's rebound from this level and the formation of bearish divergence at the CCI indicator allow traders to expect a resumption of the fall in the direction of the retracement level of 200.0% (1.2554). Theresa May canceled the Brexit vote earlier scheduled for early June. What could it mean, given all the information about her possible resignation in the coming days? Resignation – is logical, but what awaits Brexit and the whole of the UK, it becomes more difficult to say. The most logical thing for the new government of the country will be to recognize that there will be no orderly exit, and leave the EU on any terms or completely abandon the exit. Such events could support the pound.

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

Forecast for GBP/USD and trading recommendations

The GBP/USD pair can continue the process of falling, so I recommend selling the pair with a target of 1.2554 with a stop loss order above the level of 161.8%, as the rebound from the level of 161.8% is executed and bearish divergence is formed. I recommend buying the pair in very small volumes at the close above the Fibo level of 161.8% (hourly chart) with a target of 1.2782 and a protective order under the level of 1.2673.

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The dollar is punished for overconfidence

When there is too much negativity on the market, it can sadly end for bears. The sellers increased the EUR/USD quotes to the base of the 11th figure amid worsening European business activity and concerns of the ECB about a long period of slowing down of the eurozone economy. But, it did not take into account the fact that the States are experiencing problems due to trade wars. The fall in US purchasing managers' indices and disappointing statistics on the US real estate market contributed to the growth of fears about the imminent recession. The inversion of the yield curve and the increased likelihood of the Fed lowering the rate in 2019 to 78% hit the dollar.

If in 2018 the "American" perceived trade wars as a pretext for strengthening, then the situation changed in 2019. The USD index no longer has support from a large-scale fiscal stimulus and is ready to raise the federal funds rate of the Fed. Judging by business activity, the eurozone's GDP in the second quarter will slow down from 0.4% to 0.2% q/q, however, the growth rate of the US economy will decline from 3.2% to 1.2% according to the leading indicator from the Atlanta Fed. The escalation of the trade conflict between Washington and Beijing, coupled with growing recession risks, is a weighty argument in favor of increasing the chances of monetary expansion in the current year, which negatively affects the dollar position.

Dynamics of the probability of the Fed rate change

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It seems that the EUR/USD "bears" overdid it and the fall in stock indices made the main currency pair go on a roller coaster ride and for some time return above 1.12. The development of the correction of the S&P 500 will help non-residents to flee from the securities issued in the States, which will result in a rollback on the USD index. In this regard, a logical question arises: Will trade wars really continue to support the US dollar as the currency of a country that is a potential winner of the conflict? In my opinion, the answer is no. The yen, the franc and gold regained the status of the main safe-haven assets. Therefore, weak statistics from the May purchasing indices of China's purchasing managers will contribute to a fall in world stock indices and the USD/JPY pair.

In order to cling to the lower limit of the medium-term consolidation range of 1.12-1.15, the EUR/USD bulls must go through the elections to the European Parliament and the release of data on German unemployment, retail sales and inflation. Improving the situation in the leading currency bloc economy will be a catalyst for the euro. The single European currency was supported by the pound in which the principle of "sell on rumors, buy on facts" was implemented. For a long time they were getting rid of the sterling because of the talk about the resignation of Theresa May from the post of prime minister, but as soon as it was officially announced, the GBP/USD pair began to grow.

Technically, the failure of the EUR/USD "bears" to consolidate below the support at 1.113 was the first sign of their weakness. A double bottom was formed, which increases the risks of activating and realizing the Wolfe Wave pattern with an initial target near 1.15. At the same time, a successful assault on resistance at 1.1265 will add optimism to the "bulls". In this scenario, the expanding wedge reversal pattern will become relevant.

EUR / USD daily chart

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Wave analysis for EUR / USD and GBP / USD pairs on May 24: Theresa May resigns June 7

EUR / USD pair

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Trading the EUR/USD pair ended on Thursday, May 23, with an increase of 30 basis points, which somewhat confused the cards at the hands of traders. The wave pattern implied a further fall in the euro but now an alternative scenario is emerging, which implies the completion of the construction of the downward trend that takes its start on March 20. The unsuccessful attempt to break through the minimum of the supposed wave 1, 3, 3 speaks precisely in favor of this and shows the unavailability of the pair to fall. All of these changes are associated with weak American statistics. Business activity in both areas of production and services unexpectedly turned out to be much worse than forecast. Meanwhile, markets were disappointed with such figures and began to get rid of the dollar. Now, the tool can attempt to break through the maximum of wave 2, 3, and 3.

Sales targets:

1.1097 - 161.8% Fibonacci

1.1045 - 200.0% Fibonacci

Purchase targets:

1.1324 - 0.0% Fibonacci

General conclusions and trading recommendations:

The euro/dollar is still in the process of building a downtrend trend. But after yesterday's withdrawal of quotes from the lows reached, I recommend waiting for the signal down from the MACD and again selling the euro with targets at 1.1097 and 1.1045, which corresponds to 161.8% and 200.0% in Fibonacci. I recommend to place a restrictive order above the level of 100.0% Fibonacci.

GBP / USD pair

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On May 23, the GB /USD pair also gained 30 basis points. However in consideration of the average market activity for the pair, the reaction is completely unequal to the reaction for the euro/dollar pair. There is no reason to clarify the current wave marking on the instrument now, even if the MACD indicator gave an upward signal. This also warns at least a rollback. Nevertheless, given the not so rosy news background from the UK, there is every reason to wait for the resumption of the fall of the sterling pound. Just a few hours ago, the current Prime Minister of Great Britain, Theresa May, announced that she was retiring on June 7. Markets did not respond to this statement, although one could expect a wave of optimism since the new prime minister is more likely to bring Brexit to a logical end. May lost the support of both the public and the parliament early in the year.

Sales targets:

1.2554 - 200.0% Fibonacci

1.2360 - 261.8% Fibonacci

Purchase targets:

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 still recommend selling pounds sterling with targets located near the estimated levels of 1.2554 and 1.2360, which corresponds to 200.0% and 261.8% Fibonacci. With one clarification, I recommend waiting for the signal MACD for new sales.

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Bitcoin. Bulls returned to the desired levels

Bitcoin buyers managed to return to the level of 7650 yesterday, which is a good sign for the continuation of the upward trend. As for the further growth of Bitcoin, some experts tied it to the trade conflict between the US and China. In the scenario of further tightening of relations, the upward trend can be expected to continue, while the consensus reached on this issue may harm the upward trend. However, in my opinion, this is nothing more than a coincidence.

Signal to buy Bitcoin (BTC):

Bitcoin buyers face the level 8100 again, 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 profit. Of course, the main goal will be the test of the psychological mark of 9000 USD. In a decline scenario, there is a support level of 7650, but opening long positions immediately on the rebound is best 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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Simplified wave analysis and forecast for EUR/USD and GBP/JPY on May 24

EUR/USD

The structure of the bearish wave dominating from March 20 is fully formed. Since yesterday, an upward movement with a high wave level has been developing towards its trend. It can be argued that the previous wave is over. The price of the euro has reached intermediate resistance.

Forecast:

Today, in the first half of the day, the formation of the correctional part of the movement to yesterday's site is expected. The most likely "side", but the downward vector cannot be excluded. A return to the active growth phase is expected by the end of the day. You can focus on the time of the release of news blocks.

Recommendations:

Euro sales are not relevant today. At the end of the current rollback, it is recommended to track reversal signals to find the entry into long positions for this tool.

Resistance zones:

- 1.1220 / 1.1250

Support zones

- 1.1170 / 1.1140

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GBP/JPY

In the bearish wave dominating from March 14, the final section is formed on the bearish wave cross. It formed the first 2 parts (A + B). Since May 21, the final part has started, which has a pronounced pulse form. Within its framework, a hidden correction is being developed on a small scale, in which the latter part is missing.

Forecast:

Today, a flat mood is expected, most likely with an upward vector. The rise above the upper limit of the calculated resistance zone is unlikely. Return to the main trend direction is expected in the second half of the day.

Recommendations:

Purchasing a pair within the framework of an intra-session is possible today, but with increased volatility can be very risky. When the price reaches the calculated resistance zone, it is recommended to start tracking reversal signals to find a point of sale of the cross.

Resistance zones:

- 139.30 / 139.60

Support zones:

- 138.50 / 138.20

- 137.50 / 137.20

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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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The berries can be bitter: we expect local movement in the ranges of EUR/USD and USD/CAD pairs

Yesterday's collapse in crude oil prices, along with the fall of stock indices in Europe and the possibility of further negatively affect investor sentiment amid the protracted trade conflict between China and the United States may further, which ultimately will have an impact or rather already reflected in the real dynamics of the world economy, which is experiencing great difficulties with growth.

The events of recent months clearly indicate that without reaching a compromise in the trade dispute between the Chinese and the Americans. The world economy will slow down in its growth, which in the future may lead to a new recession and economic crisis. Markets understand this and act on the basis of the logic of self-preservation, believing that the disputants will still have to agree. Indeed, everything is logical and correct but there are "but" that prevent it and can really be insurmountable, which can cause a new global economic crisis and complicated by the political opposition of countries.

The first and most important "but" is too energetic and even one can say that Donald Trump's brazen pressure on China. The States in his person does not just want to crush an economic rival but it seems to crush him politically. As they say, this is already a bust and can simply exclude any possible agreement. The internal political confrontation of the US President with his opponents in the country pushes him to take radical and simply extremist actions on the outer contour, which will impede the achievement of a compromise. The desire of the opposing sides in an economic dispute to save face is a very important obstacle.

In our opinion, investors' hopes may not be justified. There were too many events in history that seemed insignificant at first, illogical and simply wrong, but ultimately led to dire economic consequences and even wars.

Investors are still hoping for common sense, which is why we don't see the hardest collapse in world markets, which so far are simply balancing. While it is difficult to say how it will end, But the consequences can really be unpredictable and very difficult. The crisis of 2008 may seem like flowers in this situation but the berries can be bitter.

Forecast of the day:

The EUR/USD pair seems to be trading again in the range. Investors are not yet ready to drive her to the floor amid hopes that the Fed will still have to start lowering rates this year. The pair is trading above the level of 1.1185 and may continue the local upward trend to 1.1260.

The USD/CAD pair has been trading since the end of April in the range 1.3370-1.3500. An attempt to restore oil prices may lead to a decrease in the pair to the lower limit of the range at 1.3370.

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Technical analysis of EUR/USD for May 24, 2019

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Overview:

Pivot point: 1.1166.

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. However, if a breakout takes place at the resistance level of 1.1192 (major resistance), then this scenario may become invalidated.

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Technical analysis of NZD/USD for May 24, 2019

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Overview:

The NZD/USD pair is showing signs of weakness following a breakout of the lowest level of 0.6571. On the H1 chart, the level of 0.6571 coincides with 38.2% of Fibonacci, which is expected to act as minor resistance today. Since the trend is below the 38.2% Fibonacci level, the market is still in a downtrend. However, the resistance is seen at the level of 0.6571. Furthermore, the trend is still showing strength above the moving average (100). Thus, the market is indicating a bearish opportunity below the above-mentioned support levels, for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. Therefore, resistance will be found at the level of 0.6571 providing a clear signal to buy with a target seen at 0.6500. If the trend breaks the first supprt at 0.6500, the pair is likely to move downwards continuing the bearish trend development to the levels 0.6469 and 0.6424.

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Bitcoin regains momentum to reside at $8,000 again, May 24, 2019

Bitcoin managed to regain momentum after a certain throwback towards $7,500 area recently. The price is currently residing at the edge of $8,000 and after certain corrections along the way, the price is expected to resume a rise in the coming days.

BTC failed to break the resistance at $8,300 after several attempts, so it started a move downwards that looked convincing. It reached an intraday low of just over $7,500 before turning around and marching back upwards. The crypto market dumped around $15 billion as a result. It appears to have settled back in the channel and may well remain there for a few more days. Many traders and investors are still waiting for this to occur as prices have been surging upwards without any significant retreat since early February. Last Friday's flash crash knocked just 15 percent of bitcoin price, so a larger correction is still expected.

Overall, the crypto market has rebounded as another correction gets recovered. The big dip from yesterday was expected to accelerate today and throughout the weekend, but bitcoin and its brethren appear to have settled at higher levels of support and have managed to reach the resistance area of $8000 area again. So far, the total market capitalization has been back over $240 billion as a result.

As of the current scenario, the price is showing certain bearish pressure off the $8,000 area while forming the Bearish Continuous Divergence along the way. It indicates certain retrace towards the dynamic level of 20 EMA i.e. at $7,800 area. If the price shows any further evidence of bullish momentum off the rejection to the dynamic level of 20 EMA, i.e. $7,800 area, the price will possibly break above $8,000 and shoot for the $8,300 resistance area again in the coming days. As the price remains above $7,500 area with a daily close, the impulsive bullish pressure is expected to continue.

SUPPORT: 7,500, 7,800

RESISTANCE: 8,000, 8,300

BIAS: BULLISH

MOMENTUM: VOLATILE

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Trading Plan for EUR/USD pair on 05/24/2019

EUR/USD trend: signal to the top

Two events had an impact on the market: Theresa May's resignation statement, which is expected Friday. It gives hope for a way out of the endless crisis around Brexit.

Second: The US stock market showed a strong decline. At the same time, the yield of treasuries plummeted, this changes the situation against the dollar.

The EUR/USD rate has broken up a key maximum of 1.1190.

The beginning of the big trend will be a breakthrough above 1.1270.

We buy from 1.1190.

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EUR / USD: the dollar has ceased to receive dividends from the trade war

The dollar index soared to its two-year highs yesterday, marking in the area of 98 points. The surge in volatility was primarily due to investors' concerns about China's retaliatory steps in a trade war. However, the dollar did not remain "on horseback" for long. An hour after reaching the peak values, the greenback collapsed throughout the market, especially with respect to defensive assets. Although the US currency is usually in demand during periods of global tensions taking into account possible countermeasures from China, which in this case, investors were afraid to invest in the dollar. Rumors that Beijing could use its advantage in the market of rare metals excited traders, after which the stock market significantly decreased, pulling the greenback and the yield on 10-year Treasuries.

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Consequently, the US stock indices slipped yesterday by 1.1-1.6% against the background of investors' concerns about the aggravation of the trade conflict between the United States and China. For example, the Dow Jones industrial index fell by 1.11%, (to 25,490.4) points, the NASDAQ high-tech companies index - by 1.58%, to 7,628.28 points, and the S&P 500 broad market index - by 1.19%, (up to 2822.24 points). The yield on 10-year Treasury securities fell from 2.42% to 2.32%, which was the minimum value since October 2017.

Macroeconomic reports that came out in the red zone yesterday also put pressure on the dollar. According to data published yesterday, sales of new buildings in the United States decreased by 6.9% to 673 thousand compared to the revised March figure. This is the weakest result since December of the year before.

According to preliminary estimates with the updated multi-year lows and a composite US PMI, it collapsed to 50.9 points in May with a forecast of growth to 53.6 points in April. An increase to 53 points was recorded. The indicator came close to the key mark of "50", which is the boundary between the improvement and the deterioration of the situation in the business sphere. According to one of the experts, the rate of created business projects showed the lowest result since the 2008 crisis.

Although the macroeconomic data published yesterday are of a secondary nature, they added to the alarming fundamental picture. According to most analysts, the further conflict between the US and China will lead to the fact that economic growth in America will slow down. According to investors, Chinese countermeasures may cause more significant damage to the US economy than previously thought.

Yttrium, scandium, erbium, lanthanum, lanthanoids - all these little-known names of representatives of rare-earth metals suddenly appeared to be heard by traders. After all, experts believe that it is in this area that Beijing can strike back with an economic blow to the States. The fact is that China annually produces more than 100 thousand tons of rare-earth metals, which in turn amounts to more than 80% of the total world production. Such a monopoly position in the RMZ market allows Beijing to "show its teeth" in a trade war. An embargo or restriction of the export of rare-earth metals from the PRC will deal a severe blow to the American technological sector. These metals are actively used in radio electronics, instrument making, nuclear engineering, mechanical engineering, chemical industry, and metallurgy. RMZ is used almost everywhere, even in the production of mobile phones.

In other words, China has a powerful Trump card in the trade conflict and is fully capable of using it - at least the unexpected visit of the PRC leader to one of the enterprises for processing RMZ eloquently testifies to this. At the same time, Beijing proposed to resume negotiations through its diplomats but on condition of "equality of the parties". What exactly is behind this general demand can only be guessed, but at the same time it is obvious that Beijing will demand additional concessions from the Americans. So far, the White House is not ready to take such steps and at the same time, the recent actions of Washington suggest the opposite. In particular, it became known that the States, following Huawei, can also blacklist the Chinese corporation Hikvision yesterday. This company is one of the world's largest manufacturers of video surveillance equipment.

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It is worth noting that immediately after the introduction of sanctions against Huawei, Washington took a step back, issuing the appropriate 90-day license to the Chinese. However, these are not signs of a "thaw" in relations between the PRC and the United States since the trade war is in full swing. Apparently, it has moved to a "technological level". Such metamorphoses were not to the liking of dollar bulls, which are forced to follow the stock market and the yield of 10-year-old treasuries.

All of these allow buyers of EUR/USD pair to divert the price from the base of the 11th figure, protecting themselves from stalling in the 10th figure and below. The single currency is still helpless, thus the corrective growth of the pair is due only to the weakness of the dollar. Currently, traders are testing a resistance level of 1.1190 (the middle line of the Bollinger Bands indicator, which coincides with the Tenkan-sen and Kijun-sen lines). If the EUR/USD bulls overcome this target, they can count on the assault on the upper line of the Bollinger Bands, which corresponds to the price of 1.1235. When consolidating above, the pair will finally return to its "April range" of 1.1240-1.1310.

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We waited for a rebound (a review of EUR / USD and GBP / USD on 05/24/2019)

You should never forget about the overbought or oversold of a particular currency, especially when it comes to the dollar. The longer the correction is delayed, the stronger and more unexpected the rebound. That is exactly what happened yesterday. At first, the dollar continued to grow steadily, supported by weak and rather strange preliminary data on European business activity indices. In particular, the composite index of business activity rose from 51.5 to 51.6, while they expected growth to 51.7. However, as a composite index could grow, it remains a mystery. The fact is that the business activity index in the service sector has decreased from 52.8 to 52.2, and the production index from 47.9 to 47.7. So it is completely incomprehensible how something can increase if all its component parts have decreased. Apparently, this is some kind of new European mathematics. But shortly before as similar data for the United States should have been published, the dollar began to grow at an incredible rate. Like someone knew something. And as soon as the data was published, this spring, which was compressed for nearly two weeks in a row, fired so that a little more - and one could see the stratosphere. After all, the business activity index in the manufacturing sector decreased from 52.6 to 50.6, and in the services sector from 53.0 to 50.9, which led to a decrease in the composite index of business activity from 53.0 to 50.9. A little later, the data on sales of new homes has already decreased by 6.9%, which only heightened negative emotions. It is also noteworthy that the market tritely ignored data on applications for unemployment benefits, the total number of which increased by 13 thousand. But they went out to business activity indices and sales of new homes. This happened due to an increase of 14 thousand in the number of repeated applications for unemployment benefits. Also, the number of initial applications decreased by 1 thousand. Apparently, it is time for Markit to seriously think about internal security and to check his employees for friendly gatherings with the Wall Street guys.

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Theresa May's resignation is expected on June 10. After all, in fact, the British Prime Minister has no other choice, since she even understands that for the fourth time, the version of the "divorce" agreement with the European Union that she proposes will be rejected. And this time, perhaps, with a crushing score, for even the general provisions of this very agreement are completely rejected by both the conservatives and the laborers. Moreover, her own partners in the Conservative Party gently hinted that it would be better to leave in a good way, otherwise she would be asked to leave the office of the prime minister. In short, what happened was not quite scandalous. In any case, it is obvious that Brexit will have to deal with her changer, and there will be no definite time for any negotiations with Europe, which, moreover, has made it clear that there will be no more negotiations and changes to the proposed version of the agreement. Therefore, someone else will be responsible for the unregulated Brexit, with all its remarkable implications for the economy of the United Kingdom. But the concern is not only this endless political booth, but also the real state of affairs. Indeed, in the UK, retail sales data is also published, the growth rate of which should slow down from 6.7% to 4.6%. So the dollar has a reason for growth not only because of the uncertainty that awaits Europe in the event of an unregulated Brexit, but also because of weak British statistics. However, it will not be too long to rejoice.

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Thus, the single European currency is likely to be waited first by a decline to 1.1150, followed by a return to 1.1200.

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The scenario for the pound is about the same, and first we are waiting for a decline to 1.2625, and then a return to 1.2675.

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Trading recommendations for the GBPUSD currency pair - prospects for further movement

For the last trading day, the currency pair pound / dollar showed a low volatility of 78 points, which was expressed in the slowdown and subsequent pullback. From the point of view of technical analysis, we see that the quotation slowed down after reaching the key level of 1.2620, and then moved into the rollback stage smoothly. Overall plan: for three weeks we watched a not tedious descending movement, having as a result more than 550 points without any correction, whether the quote overheated is unconditional. Oversold, overheating - these words have tormented traders for more than one day, so what, the correction has come? The question is, of course, a philosophical one, but we will return to it later. Now, let's talk about the news flow. Brexit background has been densely populated in the market and in the minds of speculative investors, even when we don't have any statements made by dignitaries, the market still reacts cautiously to everything and is more prone to draining the pound. From the news feed, we had statistics on new home sales in the United States, where we were expected to receive a decline, but stronger: Prev. 8.1% --- Prog. -2.8% ---- Fact. -6.9%, perhaps against this background, the oversold pound received at least some support.

Today, in terms of the economic calendar, we have statistics on UK retail sales, where there is nothing good. According to forecasts, they expect a decline from 6.2% to 4.2%. In the afternoon, there will be data on the volume of orders for durable goods in the United States, where they also expect a decline from 2.8% to -2.0%. As it turns out, the outgoing data for both countries, frankly, not very much. The first thing that comes to mind is a temporary dragging in the form of a tug of trading power. What can put additional pressure is the information background, which can set the direction. If we look in more detail at this moment, we see that the British Prime Minister Theresa May will announce her resignation from the post of leader.

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The upcoming trading week in terms of the economic calendar is empty. The week starts with a day off in the United States and the UK, although some kind of activity begins only on Thursday, where the data on US GDP will be released, and, in principle, everything. In any case, at least a week has a modest amount of statistical data in it, do not forget that the information background does not sleep.

Monday

Closed: USA - Memorial Day

Closed: UK - Spring Bank Holidays

Thursday

United States 12:30 UTC+00 - GDP (q / q) (Q1): Prev. 3.2% ---> Forecast 3.1%

United States 12:30 UTC +00 - The number of initial claims for unemployment benefits

United States 14:00 UTC +00 - Index of pending sales in the real estate market (m / m) (Apr): Prev. 3.8% ---> Forecast 1.1%

Friday

United Kingdom 8:30 Universal time - The volume of mortgage lending (Apr): Prev. 4.12V ---> Forecast 3.54

These are preliminary and subject to change.

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Further development

Analyzing the current trading schedule, we see that the quotation is trying to correct, but on its way there is a periodic value of 1.2690 and a huge information and news background that holds it. The first thing we are considering is a temporary fluctuation within 1.2620 / 1.2700. Then we are already analyzing the outgoing information flow, in particular, the reaction to Theresa May. There are not so many options for the price behavior. Thus, we will either stay within the range, or quickly break through it. Our methodology will be incorporated in the form of analysis of fixation points outside the expected boundaries, and then entering the market.

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

- Buying positions will be considered in case of price fixing higher than 1.2700.

- Sell positions will be considered in the case of price fixing lower than 1.2590, with a prospect of 1.2500, the first point.

Indicator Analysis

Analyzing a different sector of timeframes (TF), we see that indicators in the short-term perspective jump arbitrarily, with respect to current indicators, interest is descending. Intraday perspective has changed interest from descending to ascending due to rollback. The medium-term outlook keeps the downward interest on the general decline.

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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 24, was based on the publication of the article)

The current time volatility is 36 points. If the information background puts pressure on the market, then the volatility will quickly overcome the average daily value, otherwise we will be trapped in a range, relative to which and see the current volatility.

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Key levels

Zones of resistance: 1.2620; 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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Burning forecast EURUSD 05/24/2019

On Thursday, the EURUSD broke through the long-term lows of 1.1130 and 1.1110. However, it sharply turned up and approached the key level upwards of 1.1190 at the end of the day.

On Friday morning, the euro broke through the level of 1.1190.

This is a strong signal for an upward turn, and perhaps a signal for an upward trend.

We need to look at the closing of the day - in the case of closing above 1.1190 - the probability of an upward trend will increase.

We buy from 1.1190 with a target of 1.2000.

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Indicator analysis. Daily review for May 24, 2019 for currency pairs EUR / USD and GBP / USD

On Thursday, the market in both currencies moved in different directions.

The GBP / USD pair has gradually shifted to the side channel after a strong trend. The first sign of a pullback. The rollback level of 76.4% - 1.2662 (blue dashed line) was retested.

The EUR / USD pair, moving down before lunch, tested the lower fractal - 1.1108 (yellow dotted line). But then, the most interesting thing happened. Having gone up to the pullback, the price received a powerful support in the form of a foundation. As a result - a rally upwards by 81 points.

On Friday, strong calendar news come out at 8.30 (pound), 12.30 (US dollar) Universal time.

Trend analysis (Fig. 1).

Today, the price will continue to move upward with the first target of 1.1204 (blue dashed line) - the pullback level of 61.8% and then move further upwards to the resistance line of 1.1234 (white thin line).

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Fig. 2 (daily schedule).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - up;

- volumes - up;

- candlestick analysis - up;

- trend analysis - down;

- Bollinger lines - down;

- weekly schedule - down.

General conclusion:

On Friday, we are expecting a pullback upward movement. The first upper target of 1.2689 is the pullback level of 14.6% (yellow dotted line).

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Control zones for USD/CAD pair on 05/24/19

Yesterday's growth of USD/CAD pair led to a breakdown of significant resistance by the 1/2 WCZ of 1.3470-1.3459, which indicates an increase in the likelihood of further growth if we manage to stay above the zone in today's US session.

The pair continues to form a medium-term accumulation zone throughout May. Today, a test of the upper border of the flat takes place, which can lead to the formation of a correctional model and a decline to yesterday's minimum. This model is a priority since the zone of the average weekly move was tested and growth stopped. The likelihood of closing trades within the middle move zone is 70%, thus sales from current levels are more profitable. It is necessary to form a "false breakout" pattern to enter a trade.

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Work within the accumulation zone indicates the need to close all purchases as the upper limit of the range has been tested. The goal of a short position will be at least the current week.

An alternative model will be developed if the close of today's trading occurs above the weekly average trading area. This will allow starting work on Monday to return to this zone. The probability of return will increase to 90%, which will make sales even more profitable.

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Daily CZ - daily control zone. The area formed by important data from the futures market, which changes several times a year.

Weekly CZ - weekly control zone. The area formed by marks from the important futures market, which changes several times a year.

Monthly CZ - monthly control zone. The area is a reflection of the average volatility over the past year.

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GBP/USD: plan for the European session on May 24. The pound's further growth will depend on the retail sales data

To open long positions on GBP/USD you need:

Only a good report on retail sales in the UK, scheduled for release in the first half of the day, will help the British pound in overcoming the resistance at 1.2670 and continue its upward correction to the highs of 1.2730 and 1.2789, where I recommend taking profits. If the decline scenario is on a weak report, you can take a long look at a rebound from the low of 1.2626, and the best way is to buy the pound on a rebound from 1.2564.

To open short positions on GBP/USD you need:

Forming a false breakout and returning to a resistance of 1.2670 will be the first signal to sell the British pound, and a breakthrough of support at 1.2626, against the background of poor retail sales data in the UK, will lead to the resumption of the downward trend with an exit to the lows in the areas of 1.2564 and 1.2500, where I recommend taking profits . In case the pound increases in the first half of the day, you can take a closer look at short positions at 1.2730 or rebound from a high of 1.2789.

Indicator signals:

Moving averages

Trade is conducted in the region of 30 and 50 medium moving, which indicates a slowdown in the bear market.

Bollinger bands

Volatility has decreased, 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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EUR/USD: plan for the European session on May 24. Euro buyers are trying to return to the market, but the problem with the

To open long positions on EURUSD you need:

At present, the goal of euro buyers is a large resistance level of 1.1187, a breakthrough of which will allow you to count on the continuation of an upward correction with the update of highs of 1.1206 and 1.1237, where I recommend taking profits. In a downward scenario, it is best to open long positions on a false breakdown from a support of 1.1166 or to rebound from a low of 1.1143. Given the lack of important fundamental statistics today, European Parliament elections can support the euro at the end of this week.

To open short positions on EURUSD you need:

False breakdown and a return below a large resistance level of 1.1187 will be a signal to open short positions in the euro, and a return below a support of 1.1166 may lead to a larger drop with a test of a low of 1.1143, where I recommend taking profits. When the growth scenario is above 1.1187, you can sell after updating the resistance of 1.1206 or to rebound from a high of 1.1237.

Indicator signals:

Moving averages

Trade is conducted just above 30 and 50 moving averages, but it's still premature to speak about the formation of a large upward movement.

Bollinger bands

If the euro rises in the first half of the day, the upward trend may be limited by the upper limit of the indicator in the area of 1.1206, while the lower limit in the area of 1.1135 will support the euro while decreasing.

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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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GOLD to surge higher towards $1300 soon. May 24, 2019

GOLD managed to gain bullish momentum recently which engulfed the bearish and volatile price directions and close above $1276 area with a daily candle. As the Bullish Flag Pattern prevails, a break above $1289-90 area is expected to lead to further upward pressure.

GOLD broke through above $1276 area indicating strong bullish momentum after volatility near the support area between $1265 to 1276 for a few days.

The bullish momentum indicated the presence of bulls at the support area which is expected to lead the price higher towards the Flag resistance and break above that area as the bullish pressure continues. Gold futures jumped by nearly 1% recently, the biggest hike in almost two weeks as risk-averse investors fleeing everything from equities to oil embraced the safe-haven sanctuary of the yellow metal.

It was the largest percentage gain in a day for gold since May 15 and came despite a near-1% gain in the rival US dollar earlier in the day. Just earlier this week, gold hit a two-week low under $1275 an ounce. Now, as per current observation, the price might not have trouble pushing higher with a target towards $1300 in the coming days.

Wall Street's three key stock indexes fell by more than 1% each as investors fled from risk on fears that the U.S.-China trade war will have profound and long-term consequences for growth. The United States 10-year Treasury note fell to its lowest level since November 2017, down nearly 4% on the week, a sign of panic over the trade war.

As of the current scenario, having USD weaker with the momentum, GOLD is expected to sustain the impulsive bullish pressure it acquired recently with an engulfing. The price is currently affected by the dynamic level of 20 EMA as of the earlier bearish volatile pressure kept the average to unrest. A daily close above $1289-90 area is expected to lead the price higher towards $1300-10 or more as the Bullish Flag Pattern will be validated with the break. As the price remains above $1265 with a daily close, the bullish bias is expected to continue.

SUPPORT: 1265, 1276

RESISTANCE: 1289-90, 1300-10

BIAS: BULLISH

MOMENTUM: VOLATILE

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Control zones for NZD/USD pair on 05/24/19

Today's movement relative to 1/4 WCZ of 0.6519-0.6515 will allow determining further priority. If the closure of Asian trading occurs above the zone, then the continued growth will be the basis for trading at the end of this week. The determining resistance is the 1/2 WCZ of 0.6555-0.6548. While the pair is trading below this zone, the bearish momentum remains a priority. The most favorable prices for sale are located within the above 1/2 WCZ.

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Yesterday's growth led to the formation of the previous day's takeover model. This indicates a high probability of updating yesterday's high.

An alternative model will be developed in case the pair fails to consolidate above the 1/4 WCZ. The resumption of the fall will be a priority and the goal will remain the 1/2 WCZ of 0.6459-0.6451. All of these this will make sales from current rates to be profitable -both in terms of probability and in relation to risk and profit.

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Daily CZ - daily control zone. The area formed by important data from the futures market, which changes several times a year.

Weekly CZ - weekly control zone. The area formed by marks from the important futures market, which changes several times a year.

Monthly CZ - monthly control zone. The area is a reflection of the average volatility over the past year.

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USD weakness lead to CHF gains. May 24, 2019

CHF rose to USD indicating strong bearish momentum. The price of the pair resided at the edge of 1.00 support area with a daily close. The US economy is likely to be under a turbulent mood due to mixed economic data and trade war tension. The US economy is expected to slow down until the market sentiment improves.

During the FOMC meeting, all members agreed to stick to a dovish monetary policy and keep the key interest rate unchanged. However, the trade tension between the US and China and inflationary pressure are weighing the economy down. Amid the U.S.-China trade tension, market uncertainty worsens the forecast about economic growth. The newest round of U.S. tariffs on Chinese imports will cost the typical American household $831 annually.

Moreover, amid the trade-war rumblings, investors fled to the safety of bonds and drove down yields, a potential negative for bank profits. Recently, the New Home Sales report showed a decrease to 673k from 723k which was expected to be at 678k. Today, the US Core Durable Goods Orders report is going to be published. The reading is expected to drop to 0.1% from 0.3% The Durable Goods Orders are expected to fall to -2.0% from 2.6%.

On the other hand, despite the weakened economy, the Swiss Franc managed to sustain gains as the greenback lost momentum. The Swiss franc remains a fundamentally bearish currency due to interest rates of -0.75% and inflation falling further into negative territory. Opposition from across the political spectrum will make it all but impossible for the Swiss government to sign a draft treaty with the European Union next month, sources close to the matter. Failure to sign the accord that Brussels has sought for a decade and which was negotiated over four years would plunge Swiss ties with its biggest trading partner into a new ice age, potentially disrupting trade and cross-border securities deals.

Next week, the Swiss Trade Balance report is scheduled to be published as well as the GDP report. Analysts say that it won't make great shakes because of the lack of news in the Swiss economy and a downtrend in the Eurozone.

The US dollar is likely to lose ground against the Swiss franc. Certain volatility and pullbacks may be anticipated.

Now let us look at the technical view. The price recently formed Bullish Divergence while pushing lower towards 1.00 support area with a daily close. The price is currently resting above 1.00 area with certain bullish pressure in the process which is expected to lead the price higher towards 1.0050 area where the dynamic level of 20 EMA currently resides before pushing lower with the preceding bearish trend in the coming days. As the price remains below 1.0130-50 area, the bearish bias is expected to continue.

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Trading plan for EURUSD for May 24, 2019

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Technical outlook:

The EUR/USD pair just made a marginal low yesterday at 1.1107 levels before pulling back almost 100 pips. Those aggressive traders who managed to stay on the long side must exit taking profits now, while those got stopped out must stay flat for now. Please notice the arrows presented here projecting the bullish scenario; 1.1260 resistance needs to be taken out to confirm that bulls are back into play. Taking note of the current rally, it has taken out immediate short term resistance at 1.1184 levels but that does not confirm a bullish reversal yet with strong conviction. Hence, we would take on a more conservative approach to trade the next few sessions. Please note that the bearish boundary which is between 1.1260 and 1.1107 levels. Prices have managed to reach 50% retracement for now. A safe direction to trade would be short now remaining around 1.1200 levels with a directional trade. At the same time keep in mind that 1.1140/50 is the short term support. Hence, we shall review our positions at that level.

Trading plan:

Aggressive traders who managed to hold long, can take profits now. Those who got stopped out remain flat.

Now go short at 1.1185/1.1200 levels, stop at 1.1270, target 1.1140 and below 1.1107.

Good luck!

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Technical analysis of Ethereum for 24.05.2019

Crypto Industry News:

The Japanese Financial Services Agency (FSA) is reportedly cracking down on cryptographic exchanges that offer anonymous transactions or have weak identity verification practices in preparation for inspection by the Money Laundering Special Interest Group (FATF) this fall.

The FATF will allegedly carry out an investigation to check the strength of the Japanese anti-money laundering policy (AML), which includes the rules for running cryptographic exchanges and other financial services.

In the 2008 FATF report, Japan received the worst possible result of identity verification in financial institutions. Ten years later, the Japanese FSA issued business upgrade orders for companies that did not take adequate AML resources, such as allowing users to register in their accounts using a post office instead of a personal home address.

According to the report, Japan was the first country to implement a registration system for cryptocurrencies. In October, the FATF changed its principles to include cryptographic exchanges in the AML regulatory framework and asked the G-7 member countries to start implementing the strategies for registration, licensing and monitoring of cryptocurrency exchanges.

Technical Market Overview:

The ETH/USD pair has bounced back up above the short-term trendline resistance around the level of $240.00. Nevertheless, after the Shooting Star candlestick pattern appeared on the chart, the market has started to reverse again. After the corrective cycle in wave 4 is completed, there is still one more wave up missing in order to complete the whole impulsive wave.

Weekly Pivot Points:

WR3 - $390.48

WR2- $336.28

WR1 - $299.99

Weekly Pivot - $239.34

WS1 - $205.35

WS2 - $147.46

WS3 - $113.47

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 24.05.2019

Crypto Industry News:

Fraudsters have added fake cryptocurrency wallets to the Google Play store, trying to make money from the rising prices of Bitcoins, say researchers from ESET, which provides antivirus solutions.

One malicious application mimicked the Trezor hardware portfolio. The investigation showed that the software has links to another fake application that has the potential to steal from unsuspecting users. While the application page on Google Play looked real, researchers claim that the software itself does not contain any of the Trezor brandings, and the general login screen is gimmicking the credentials.

According to ESET, over 1,000 users have downloaded one of the suspicious applications. Although the information provided showed that the application allows its clients to create wallets for storing their cryptocurrencies, the software was intended to trick users into transferring coins to addresses belonging to cheaters.

Technical Market Overview:

The BTC/USD pair has bounced from the technical support located at the level of $7,419 and went up towards the level of $7,900. Nevertheless, the bounce was shallow and short-lived, so after the Shooting Star candlestick pattern was made, the price started to reverse back to the range territory. From the Elliott Wave Principle point of view, there is still wave C to the downside missing in order to complete the corrective cycle in wave 2, so the next target short-term for bears is seen at the level of $7,419

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 $7,419 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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