Elliott wave analysis of GBP/JPY for September 19, 2019

analytics5d83000cb902f.png

GBP/JPY still needs to break below minor support at 133.85 to confirm that red wave c of red wave ii is developing towards the ideal target 130.78. As long as minor support at 133.85 is able to protect the downside a minor new high above 135.66 is possible, but the loss of upside momentum, makes this outcome more and more unlikely.

That said, we need to take into account, the possibility that GBP/JPY trades sideways for a couple of days within the 133.85 - 135.66 and the take off again towards 137.40 and above. As GBP/JPY has displayed more strength than first anticipated, this is an option we can not disregard.

R3: 135.66

R2: 135.10

R1: 134.89

Pivot: 134.42

S1: 133.85

S2: 133.33

S3: 132.72

Trading recommendation:

We are looking for a possible buying opportunity near 131.15

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

Elliott wave analysis of EUR/JPY for September 19, 2019

analytics5d82fdc1d8315.png

The resistance-line near 120.00 held again and turned EUR/JPY lower as expected. The decline from near 120.00 has been larger than expected and does increase the possibility, that red wave ii still is in motion. If, this is the case, then a decline to 118.48 should be expected before red wave iii takes over and a rally to at least 121.97 takes off.

Only a direct break above minor resistance at 119.40 will tell us, that red wave iii is unfolding and the expected impulsive rally higher already is well under way.

R3: 120.30

R2: 120.00

R1: 119.80

Pivot: 119.40

S1: 119.00

S2: 118.68

S3: 118.48

Trading recommendation:

We are long EUR from 118.25 with our stop placed at 117.50

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

EUR/USD approaching support, potential for big bounce!

analytics5d8324b57fea1.jpg

EURUSD is approaching our first support level.

Entry: 1.10589

Why it's good : 23.6% Fibonacci retracement, horizontal overlap support

Stop Loss : 1.10365

Why it's good : 38.2% Fibonacci retracement

Take Profit : 1.11049

Why it's good: 100% Fibonacci extension, horizontal swing high resistance

analytics5d832493d60fa.png

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

Indicator analysis. Daily review on September 19, 2019 for the GBP / USD currency pair

Trend analysis (Fig. 1).

On Thursday, the price can continue to move up with the target of 1.2502 - a pullback level of 38.2% (red dashed line) and in case of breaking further up to the upper fractal - 1.2527 (blue dashed line).

analytics5d8309081586e.png

Fig. 1 (daily chart).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - up;

- volumes - up;

- candlestick analysis - down;

- trend analysis - down;

- Bollinger Lines - up;

- weekly schedule - up.

General conclusion:

On Thursday, the price may begin to move up.

An unlikely scenario is a downward movement, with the first target of 1.2393 - a lower fractal.

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

Indicator analysis. Daily review on September 19, 2019 for the EUR / USD currency pair

Trend analysis (Fig. 1).

On Thursday, an upward movement with the target of 1.1051 is possible - a pullback level of 50.0% (red dashed line). In case of breaking up, the next target is 1.1065 - a pullback level of 61.8% (red dashed line). Breaking through 1.1065 is unlikely.

analytics5d830029a09e9.png

Fig. 1 (daily chart).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - up;

- volumes - up;

- candlestick analysis - neutral;

- trend analysis - up;

- Bollinger Lines - down;

- weekly schedule - up.

General conclusion:

On Thursday, an upward movement is possible.

An unlikely scenario is a downward movement with the first target of 1.1015 - the lower fractal.

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

NZD/USD Drop in progress!

analytics5d8324525075f.jpg

NZDUSD drop in progress below resistance

Entry: 0.63220

Why it's good : Horizontal graphical resistance, 38.2% Fibonacci retracement

Take Profit : 0.6270

Why it's good: 61.8% and 100% Fibonacci extension, Horizontal swing lowStop Loss: 0.63315Why it's good:

Horizontal graphical overlap

analytics5d8324351cc24.png

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

USD/JPY approaching 1st resistance, potential to rise further!

analytics5d83239fa7926.jpg

USDJPY is approaching 1st resistance at 108.23 and could reverse from here!

Entry :108.234

horizontal swing high resistance

100% Fibonacci extension

Take Profit : 107.46

Why it's good :38.2% Fibonacci retracement

23.6% Fibonacci retracement

Horizontal overlap support

analytics5d832384f24fc.png

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

GBP/USD: plan for the European session on September 19. Pound buyers regained 1.2465 and are waiting for the Bank of England's

To open long positions on GBP/USD you need:

Today, the Bank of England will announce its decision on interest rates, and the further direction of the pound will depend on it. It is expected that the regulator will leave the current monetary policy unchanged. Buyers need to wait until a false breakdown forms in the support area of 1.2465, which will resume demand for the pound and lead to a further upward trend in GBP/USD, the aim of which is to break the resistance of 1.2534, which will only strengthen the bullish sentiment. In this scenario, we can expect the highs to be renewed around 1.2563 and 1.2600, where I recommend taking profits. When the pound drops to a support of 1.2465 in the morning, it is best to consider new long positions on a rebound from a large low of 1.2397.

To open short positions on GBP/USD you need:

Sellers will rely on less aggressive statements by the Bank of England on raising interest rates in the future, which will weaken the pound. The formation of a false breakdown in the resistance area of 1.2534 will be the first signal to open short positions. However, a more important task in the first half of the day will be to break the low at 1.2465, which could further pull down GBP/USD to the levels of 1.2397 and 1.2345, where I recommend taking profits. If the bullish sentiment persists, then it is best to count on new sales after the test of a high of 1.2600, or even higher, from the level of 1.2639.

Signals of indicators:

Moving averages

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

Bollinger bands

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

analytics5d831ed531dc3.png

Description of indicators

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

EUR/USD: plan for the European session on September 19. The Fed lowered interest rates, and the market ignored it

To open long positions on EURUSD you need:

Yesterday, a decision was made to lower the key interest rate in the US to 2.00%, however, such a decision was already taken into account by the market, which did not lead to a sharp surge in volatility, since the Federal Reserve did not talk about further changes in monetary policy. Nothing has changed at all from a technical point of view. Buyers still need to break above the resistance of 1.1074, which will lead to the euro's continued growth to the area of a high of 1.1110, as well as to update a larger resistance level of 1.1151, where I recommend taking profits. If the pressure on the euro returns in the morning, then it is best to consider new purchases after updating support at 1.1031, with the condition of the next formation of a false breakdown there, or a rebound from a larger low in the region of 1.0992.

To open short positions on EURUSD you need:

Sellers will wait for a breakout of support at 1.1031, which will increase the pressure on the pair and will lead to a further decline to the area of larger lows at 1.0992 and 1.0955, where I recommend taking profits. In case the pair grows in the first half of the day to the resistance area of 1.1074, one can look at short positions there only on a false breakdown. You can immediately sell EUR/USD for a rebound from last week's high in the region of 1.1110. Given that there are very few fundamental reasons for the euro's growth, amid the gradual pullback of the economy into recession, the bears will try to return the market to their side in the near future.

Signals of indicators:

Moving averages

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

Bollinger bands

A break of the lower boundary of the indicator at 1.1015 will increase pressure on the euro, while the upper boundary at 1.1068 will limit the upward potential in the morning.

analytics5d831d718ea5a.png

Description of indicators

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

Technical analysis of ETH/USD for 19/09/2019

Crypto Industry News:

German finance minister Olaf Scholz said lawmakers cannot accept parallel currencies like the stablecoin Libra proposed by Facebook.

According to financial media reports, the German deputy chancellor and finance minister said during a panel discussion in Berlin that Facebook's planned cryptocurrency, Libra, would be clearly rejected.

"We cannot accept the parallel currency. [...] We must clearly reject it" - he said.

According to a document made available to the media, German regulators are working closely with their European and international allies to ensure that stablecoins do not become an alternative to traditional currencies.

The German government has already spoken out against the Libra project. On September 13, German MP Thomas Heilmann said the government would block projects like Libra, claiming that the authorities were not planning to allow any significant private Stablecoins on the market, following in the footsteps of France.

Technical Market Overview:

The ETH/USD pair has hit the level of 215.74 which is now a top for the wave (3) and then reversed in order to start the wave (4). The momentum is still increasing as well, so the rally might continue even higher after the wave (4) is completed, just as Elliott Wave theory scenario proposed last week The nearest technical support is seen at the level of $202.70 (hit already) and then at $186.70.

Weekly Pivot Points:

WR3 - $212.96

WR2 - $200.24

WR1 - $196.12

Weekly Pivot - $184.92

WS1 - $179.10

WS2 - $168.22

WS3 - $163.07

Trading Recommendations:

The best strategy in the current market conditions is to trade with the larger timeframe trend, which is still up. All the shorter timeframe moves are being treated as a correction inside of the uptrend. The current cycle is wave 2 of the lower wave degree and it might have been completed, so the uptrend should resume soon. The global investors are waiting for a breakout above the level of $202.59 and $238.68 to confirm the resumption of the uptrend.

analytics5d8312d499a72.jpg

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

Technical analysis of BTC/USD for 19/09/2019

Crypto Industry News:

Craig Wright, the self-styled inventor of Bitcoin, asked for another extension of the deadline for settling the case with his late partner Dave Kleiman.

Wright's lawyers have filed a new request for a 30-day extension of the deadline, citing the need to facilitate ongoing discussions with Dave Kleiman's assets as the parties began "extensive settlement negotiations."

According to the document, Wright's lawyers and Kleiman's property reached a non-binding agreement to settle the case and continue to negotiate and finalize all relevant conditions.

Referring to a number of upcoming deadlines, such as Wright's opposition to Judge Reinhart's sanction to be held on September 24, the defendant claimed that the final binding settlement is the best interests of both parties, and this requires a prolongation.

Technical Market Overview:

The BTC/USD pair broke below the technical support at the level of $9,795 and made a new local low at the level of $9539 at the time of the writing the analysis. This move down might be the last subwave of the corrective cycle in the wave (2, so the (a) (b) (c) corrective pattern might have been terminated already. In a case of a trend resumption, the next target for bulls is seen at the level of $10,407 and it needs to be violated in impulsive fashion in order to continue the up move, otherwise, the whole Elliott Wave scenario will be changed and updated.

Weekly Pivot Points:

WR3 - $11,232

WR2 - $10,847

WR1 - $10,552

Weekly Pivot - $10,174

WS1 - $9,851

WS2 - $9,477

WS3 - $9,160

Trading Recommendations:

The best strategy in the current market conditions is to trade with the larger timeframe trend, which is still up. All the shorter timeframe moves are being treated as a correction inside of the uptrend. The wave 2 corrective cycles are about to be completed and the market might be ready for another impulsive wave up of a higher degree. Any violation of the level of $9,231 invalidates the bullish impulsive scenario.

analytics5d83111811dff.jpg

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

Technical analysis of GBP/USD for 19/09/2019

Technical Market Overview:

After reaching the new swing high at the level of 1.2526, the GBP/USD bulls have started to consolidate their positions in a narrow range and the trneline test has begun. It is clear, that the move-up might have been completed as there is a Shooting Star candlestick formation present at the end of the rally. Please keep an eye on how this key level will be played by the market participants, because of the overbought conditions. The momentum remains strong and positive, so the bulls can still make pressure on higher price levels. Nevertheless, there is a clear and visible negative divergence between the price and momentum indicator, so the correction might occur any time soon. The nearest technical support is seen at the level of 1.2381.

Weekly Pivot Points:

WR3 - 1.2885

WR2 - 1.268

WR1 - 1.2601

Weekly Pivot - 1.2422

WS1 - 1.2331

WS2 - 1.2133

WS3 - 1.2067

Trading Recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. In order to reverse the trend from down to up, the key level for bulls is seen at 1.2505 and it must be clearly violated. As long as the price is trading below this level, the downtrend continues towards the level of 1.2000 and below.

analytics5d830f79a4517.jpg

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

Control zones for USD / CAD pair on 09/19/19

The upward movement is an impulse, so keeping a part of the purchases open this week is the best strategy. Testing the weekly short of 1.3326-1.3308 led to a halt in growth. Therefore, there is a likelihood of the formation of a reversal pattern. In the case of yesterday's "false breakdown" formation, a short position can be opened with the target of 1/2 WCZ of 1.3221-1.3212.

analytics5d83119a9dead.png

Working between the two zones may become the main in the second half of the month. Sales from the upper border and purchases from 1/2 WCZ should be considered when patterns appear on the zone tests.

An alternative model will be developed if today's trading closes above the level of 1.3326. This will indicate a continuation of the upward impulse. The next growth target will be the upper zone of the average weekly move, where full fixation of the long position will be required.

analytics5d8311b4a7a1b.png

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.

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

Technical analysis of EUR/USD for 19/09/2019

Technical Market Overview:

The bounce from the level of 1.0997 which was a 61% of the Fibonacci retracement was very short-lived and terminated before the new local high has been made at the level of 1.1074. In order to continue the move up, the bulls must break through the technical resistance at the level of 1.1027 - 1.1034 and head towards the level of 1.1091 again. Otherwise, the bounce will be treated only as a local bounce inside of the corrective cycle of a lesser degree that will be used by bears to open more sell orders with a better price. The nearest technical support is located at the level of 1.0978.

Weekly Pivot Points:

WR3 - 1.1336

WR2 - 1.1226

WR1 - 1.1152

Weekly Pivot - 1.1040

WS1 - 1.0980

WS2 - 1.0859

WS3 - 1.0789

Trading Recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. The downtrend is valid as long as it is terminated or the level of 1.1445 clearly violated. There is an Ending Diagonal price pattern visible on the larget timeframes that indicate a possible downtrend termination soon. The key short-term levels are technical support at the level of 1.0926 and the technical resistance at the level of 1.1267.

analytics5d830ea505874.jpg

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

Technical analysis: Important Intraday Levels For EUR/USD, September 19, 2019

analytics5d82ec2914b65.jpg

When the European market opens, some economic data will be released such as Spanish 10-y Bond Auction and Current Account. The US will also publish the economic data such as Natural Gas Storage, Existing Home Sales, CB Leading Index m/m, Unemployment Claims, Current Account, and Philly Fed Manufacturing Index, so amid the reports, the EUR/USD pair will move wih low to medium volatility during this day. TODAY'S TECHNICAL LEVELS: Breakout BUY Level: 1.1079. Strong Resistance: 1.1073. Original Resistance: 1.1063. Inner Sell Area: 1.1053. Target Inner Area: 1.1029. Inner Buy Area: 1.1004. Original Support: 1.0994. Strong Support: 1.10984. Breakout SELL Level: 1.0978. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels for USD/JPY, September 19, 2019

analytics5d82ebaa6a305.jpg

In Asia, Japan will release the All Industries Activity m/m, BOJ Policy Rate, and Monetary Policy Statement. The US will also publish some economic data such as Natural Gas Storage, Existing Home Sales, CB Leading Index m/m, Unemployment Claims, Current Account, and Philly Fed Manufacturing Index. So there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance.3 : 108.72.

Resistance. 2: 108.51.

Resistance. 1: 108.30.

Support. 1: 108.02.

Support. 2: 107.81.

Support. 3: 107.60.

(Disclaimer)

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

Forecast for EUR/USD on September 19, 2019

EUR/USD

As a result of the two-day meeting, the Federal Reserve on Wednesday expectedly lowered the base rate from 2.25% to 2.00% and focused on the feasibility of further reductions in the event of changes in economic conditions. The Fed's forecast for the economy turned out to be neutral: for GDP it was increased from 2.1% to 2.2%, for unemployment it was increased from 3.6% to 3.7%, for inflation it was kept at 1.5%. The markets calmly met the received information, trading volumes were above average, that is, the closing of long positions, as we expected, occurred only without a preliminary price growth.

analytics5d83122e98fd8.png

On the daily chart, the price reversal occurred from the Fibonacci level of 123.6% and the balance indicator line, the Marlin oscillator has already tested the boundary with the territory of negative values, currently remaining in the growth zone.

analytics5d83124476139.png

On a four-hour chart, the price is held by the MACD indicator line, the Marlin oscillator is in the decline zone. The situation is much lower. The price remains fixed at yesterday's low to move lower to 1.0987 (in fact, this is not the goal itself, but rather the signal level near the lows of September 17 and 11), and then to 1.0926.

The negative scenario, that is, possible against our main one, assumes the euro grows to 1.1122 - here the advantage of the Fibonacci level of 110.0% as the target level has already been lost.

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

Forecast for GBP/USD on September 19, 2019

GBP/USD

Very slowly, on the fourth day, the pound unfolds after the rapid growth on the 13th. On the daily chart, the Marlin oscillator is moving down, the resistance of the embedded line of the price channel remains unattained. Leaving the price at the signal level 1.2381 will trigger a significant decrease to the target values of 1.2230 - the Fibonacci level of 223.6% and 1.2160 - the Fibonacci level of 238.2% at the point of intersection with the price channel line.

analytics5d830f9a9d572.png

An elongated double divergence on the Marlin oscillator is formed on the four-hour chart, this is a sign of a price reversal. But while the signal level has not been overcome, there remains the likelihood of another price jump up to the 1.2540 range.

analytics5d830faf87a4a.png

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

Results of the Fed meeting: a split of opinions, Powell's diplomacy and views on China

The US Federal Reserve fully met the expectations of the markets. Despite some disputes on the eve of the meeting, most experts were confident that the regulator would reduce the interest rate by 25 basis points. Intrigue persisted only in the part of Jerome Powell's subsequent rhetoric regarding the future prospects of monetary policy, but the US Central Bank was able to surprise traders even before the press conference of the head of the Fed, indicating a split in their ranks. This fact supported the dollar, which yesterday strengthened throughout the market, despite a decrease in interest rates.

analytics5d82f7b069451.jpg

In general, the American events reminded of a split in the ECB camp. It is only now that the greenback has become the beneficiary of this situation. Let me remind you that members of the European regulator also disagreed on the resumption of the incentive program. Moreover, such political "heavyweights" as Germany, France, and Austria took the side of the "hawks". As a result, the euro jumped in pair with the dollar by several figures (from 09th to 11th), despite the "dovish" decisions of the Central Bank.

In turn, the Federal Reserve mirrored European battles. Against the interest rate cut, Fed members such as Kansas Fed Chairman Esther George and Boston Fed Chairman Eric Rosengren again spoke out. They were against the easing of monetary policy in July, so yesterday they only confirmed their reputation. Considering the fact that their position was largely predictable, the EUR/USD bulls were more disappointed with the dot chart of the Fed members' expectations, according to which the rate will remain at the current level at least until the end of 2019. It is worth noting that earlier, the probability of another round of rate cuts was quite high. Judging by the futures on the Fed rate, more than half of the market participants expected such a move from the regulator. Therefore, the published point forecast clearly played in favor of the US currency.

Although here, members of the Fed did not show unanimity. Ten members of the regulator see no reason for easing monetary policy until the end of this year, while seven still allowed this scenario. If we talk about the prospects for next year, here the split takes on a more pronounced character: eight members of the Committee stated the need to maintain a wait-and-see attitude, while the rest of their colleagues think differently. In their opinion, the regulator should increase the rate back by at least 25 basis points. Thus, the prospects for the monetary policy of the Fed remain vague, although even the most pessimistic scenario of the regulator does not imply an aggressive easing of monetary policy parameters.

Jerome Powell, himself, tried to maintain a balance between hawks and bears. At his press conference, he strongly avoided making any predictions regarding future prospects, "hiding" behind vague and ambiguous formulations. He said that members of the regulator will make decisions depending on the current situation, while monitoring key indicators and other factors. " Powell did not announce further steps towards monetary policy easing, but he did not say that the September rate cut was the last this year. In other words, the head of the Fed left a certain gap for a possible maneuver but the market "did not believe" him, relying on the point forecast of the regulator.

Thus, the results of the September meeting could not support the EUR/USD bulls, but at the same time, they could not provoke a dollar rally. The pair remained within the 10th figure and price fluctuations were more like market noise.

It can be assumed that the prospects for the monetary policy of the Fed depend on the prospects for US-Chinese trade relations. Perhaps this explains the excessive caution of Jerome Powell, who remained "over the fray" of the regulator members. Indeed, the next trade negotiations between Beijing and Washington will begin only in early October, so it is not advisable to draw any long-term conclusions.

analytics5d82f79aa3c5d.jpg

Arguing for a rate cut, the Federal Reserve focused on a decrease in exports and investment in fixed assets. Obviously, all these are consequences of the global trade conflict, which will only worsen if the 13th round of negotiations ends like all the previous ones. It is noteworthy that the regulator only casually mentioned the positive dynamics of key macroeconomic indicators (inflation, GDP, Nonfarm, salaries, etc.). Relevant comments Powell said that "the US economy is in great shape, but ...". Behind this "but" are the risks of a further escalation of the trade war and the negative consequences of increased uncertainty.

In other words, Jerome Powell shifted his focus once again to the prospects for the development of the US-Chinese conflict. By and large, the fate of the American currency in the long run now depends on the outcome of the next negotiations between the United States and China. If the parties come to a compromise in spite of that (which is unlikely), the greenback will receive strong support because in this case, the probability of a further reduction in the rate will be reduced to zero. Moreover, the regulator may raise it by 25 basis points in 2020. Otherwise, this issue will remain hanging in the air, exerting background pressure on the US currency.

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

Forecast for AUD / USD pair on September 19, 2019

AUD / USD pair

The Australian dollar successfully broke the support area, consisting of two lines - balance and MACD of price channels and indicator lines. Moreover, the breakthrough occurred today on quite good employment data. The growth of new jobs amounted to 34.7 thousand against the expectation of 10.0 thousand and the share of the economically active population increased from 66.1% to 66.2%. Against this background, the level rose slightly to 5.3% from 5.2%, which is a fairly strong sign of the market's intention to sell the AUD/USD pair at an accelerated pace.

analytics5d82f7f074e25.png

The Immediate target of 0.6678 at the support line for the red price channel coincides with the low of August 7 that can be reached in three days. Then, the blue channel comes into play with support in the region of 0.6605.

On the four-hour chart, the price is in free fall and there are no signs of a stop in the correction.

analytics5d82f80c4d38f.png

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

Fractal analysis of the main currency pairs for September 19

Forecast for September 19:

Analytical review of currency pairs on the scale of H1:

analytics5d82ba8994feb.png

For the euro / dollar pair, the key levels on the H1 scale are: 1.1227, 1.1188, 1.1135, 1.1114, 1.1019, 1.0987 and 1.0932. Here, we continue to monitor the ascending structure of September 12. The target is 1.0932. The continuation of the movement to the top is expected after the breakdown of the level of 1.1080. In this case, the first goal is 1.1114. The passage at the price of the noise range 1.1114 - 1.1135 should be accompanied by a pronounced upward movement. Here, the goal is 1.1188. For the potential value for the top, we consider the level of 1.1227. Upon reaching this value, we expect a pullback to the bottom.

Short-term downward movement is expected in the range of 1.1019 - 1.0987. The breakdown of the latter value will lead to the development of a downward trend. In this case, the first potential target is 1.0932.

The main trend is the local structure for the top of September 12th.

Trading recommendations:

Buy: 1.1080 Take profit: 1.1114

Buy 1.1135 Take profit: 1.1188

Sell: 1.1019 Take profit: 1.0990

Sell: 1.0985 Take profit: 1.0935

analytics5d82baa47a6d9.png

For the pound / dollar pair, the key levels on the H1 scale are: 1.2738, 1.2673, 1.2622, 1.2549, 1.2460, 1.2403, 1.2338 and 1.2281. Here, we continue to monitor the local ascendant structure from September 12. The continuation of the movement to the top is expected after the breakdown of the level of 1.2549. In this case, the target is 1.2622. Price consolidation is in the range of 1.2622 - 1.2673. For the potential value for the top, we consider the level of 1.2738. Upon reaching which, we expect a pullback to the bottom.

We expect consolidated movement in the range 1.2460 - 1.2403. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.2338. This level is a key support for the top. Its passage at the price will lead to the development of a downward structure. In this case, the first goal is 1.2281.

The main trend is the local ascending structure of September 12.

Trading recommendations:

Buy: 1.2550 Take profit: 1.2620

Buy: 1.2674 Take profit: 1.2736

Sell: 1.2401 Take profit: 1.2340

Sell: 1.2336 Take profit: 1.2282

analytics5d82bae1d2f9b.png

For the dollar / franc pair, the key levels on the H1 scale are: 1.0070, 1.0027, 1.0004, 0.9970, 0.9945, 0.9927 and 0.9904. Here, we are following the formation of the upward potential of September 13. The continuation of the movement to the top is expected after the breakdown of the level of 0.9970. In this case, the target is 1.0004. Short-term upward movement, as well as consolidation is in the range of 1.0004 - 1.0027. For the potential value for the top, we consider the level of 1.0070. Upon reaching which, we expect a pullback to the bottom.

Short-term downward movement is expected in the range of 0.9945 - 0.9927. The breakdown of the last value will lead to an in-depth correction. Here, the target is 0.9905. This level is a key support for the upward structure.

The main trend is the potential formation for the top of September 13.

Trading recommendations:

Buy : 0.9972 Take profit: 1.0004

Buy : 1.0006 Take profit: 1.0025

Sell: 0.9945 Take profit: 0.9928

Sell: 0.9925 Take profit: 0.9905

analytics5d82bb0243850.png

For the dollar / yen pair, the key levels on the scale are : 109.58, 109.26, 108.75, 108.50, 108.03, 107.77, 107.32 and 107.12. Here, we are following the development of the ascending structure of September 3. Short-term upward movement is expected in the range of 108.50 - 108.75. The breakdown of the last value will lead to a pronounced movement. Here, the target is 109.26. For the potential value for the top, we consider the level of 109.58. Upon reaching this value, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement is possibly in the range 108.03 - 107.77. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 107.32. The range 107.32 - 107.12 is the key support for the top. Before which, we expect the expressed initial conditions for the downward cycle to be formed.

Main trend: local upward structure from September 3.

Trading recommendations:

Buy: 108.50 Take profit: 108.72

Buy : 108.77 Take profit: 109.26

Sell: 108.03 Take profit: 107.80

Sell: 107.74 Take profit: 107.45

analytics5d82bb20cefd0.png

For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3379, 1.3343, 1.3326, 1.3297, 1.3260, 1.3235, 1.3198 and 1.3172. Here, we are following the development of the ascending structure of September 10. The continuation of the movement to the top is expected after the breakdown of the level of 1.3297. Here, the target is 1.3326. Price consolidation is in the range of 1.3326 - 1.3343. For the potential value for the top, we consider the level of 1.3379. Upon reaching this level, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 1.3260 - 1.3235, The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.3198, This level is a key support for the top. Its breakdown will lead to the development of a downward structure. In this case, the potential target is 1.3172.

The main trend is the ascending structure of September 10.

Trading recommendations:

Buy: 1.3299 Take profit: 1.3226

Buy : 1.3344 Take profit: 1.3378

Sell: 1.3260 Take profit: 1.3237

Sell: 1.3233 Take profit: 1.3200

analytics5d82bb41b74f1.png

For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6890, 0.6873, 0.6855, 0.6840, 0.6807, 0.6782, 0.6767 and 0.6745. Here, we are following the formation of the descending structure of September 13. The continuation of the movement to the bottom is expected after the breakdown of the level of 0.6807. In this case, the target is 0.6782. Price consolidation is in the range of 0.6782 - 0.6767. For the potential value for the bottom, we consider the level of 0.6745. Upon reaching this value, we expect a rollback to the top.

Short-term downward movement is possibly in the range of 0.6840 - 0.6855. The breakdown of the last value will lead to a long correction. Here, the potential target is 0.6873. This level is a key support for the downward structure. Its breakdown will allow you to expect movement to a potential target - 0.6890.

The main trend is the formation of the downward structure of September 13.

Trading recommendations:

Buy: 0.6840 Take profit: 0.6853

Buy: 0.6856 Take profit: 0.6873

Sell : 0.6805 Take profit : 0.6782

Sell: 0.6765 Take profit: 0.6745

analytics5d82bb5ff3c09.png

For the euro / yen pair, the key levels on the H1 scale are: 121.95, 121.39, 120.36, 119.95, 118.99, 118.50 and 117.73. Here, we continue to monitor the ascending structure of September 12. Short-term upward movement is expected in the range of 119.95 - 120.36. The breakdown of the level of 120.36 should be accompanied by a pronounced upward movement. Here, the goal is 121.39. For the potential value for the top, we consider the level of 121.95. Upon reaching which, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range 118.99 - 118.50. The breakdown of the latter value will lead to the cancellation of the upward structure from September 12. Here, the first potential target is 117.73.

The main trend is the local structure for the top of September 12.

Trading recommendations:

Buy: 119.95 Take profit: 120.34

Buy: 120.38 Take profit: 121.35

Sell: 118.99 Take profit: 118.53

Sell: 118.46 Take profit: 117.80

analytics5d82bb7be8657.png

For the pound / yen pair, the key levels on the H1 scale are : 137.21, 136.13, 135.37, 134.10, 133.39 and 132.23. Here, we are following the local ascending structure of September 12. Short-term upward movement is expected in the range of 135.37 - 136.13. The breakdown of the last value will lead to movement to a potential target - 137.21, when this level is reached, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 134.10 - 133.39. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 132.23. This level is a key support for the upward structure.

The main trend is the ascending structure of September 3 and the local ascending structure of September 12.

Trading recommendations:

Buy: 135.38 Take profit: 136.10

Buy: 136.15 Take profit: 137.20

Sell: 134.10 Take profit: 133.42

Sell: 133.35 Take profit: 132.30

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

Canadian dollar promised stagnation and slight growth

analytics5d82c27fd0dc2.jpg

The Black Swan, which suddenly plunged the oil market, affected a number of world currencies. The Canadian dollar did not bypass this fate. After an attack on an oil refinery in Saudi Arabia, the loonie can stay in the range of 1.3150–1.3250 for a long time, Scotiabank analysts said.

According to Sean Osbourne, Scotiabank's currency strategist, the dynamics of the loonie are significantly affected by short-term regression models, which include the cost of oil, bonds, stocks and current volatility. These factors reflect the fair value of the loonie, which is approaching 1.2994, S. Osborne asserts. The expert does not exclude short-term retesting of the level of 1.3300, however, he emphasizes that the possibilities for the loonie's significant growth are currently limited.

According to Scotiabank analysts, the USD/CAD pair can trade within 1.3150–1.3250 for a long time, until a more clear trend appears. S. Osborne is confident that the loonie will "settle" in the range of 1.3150 to 1.3250, as it will continue to respond to events in the black gold market after attacks on the oil infrastructure of Saudi Arabia. Currently, the loonie is trading near the marks of 1.3259-1.3263.

Bipan Rai, Head of North American Currency Strategy at CIBC, agrees with Scotiabank. Predicting the further dynamics of the Canadian currency, he expects to consolidate it in the range of 1.3150-1.3220. B. Paradise also takes into account the relationship of the loonie with the dynamics of the price of light oil WTI. When the correlation of the CAD – WTI pair was low, an increase in the realized volatility of raw materials helped to strengthen the CAD – WTI connection, the analyst emphasizes. With a decrease in the CAD – WTI correlation, the possibility of the benefits that the loonie gains from rising oil prices is reduced.

More optimistic expectations regarding the Canadian dollar came from analysts at JP Morgan. They increased the forecast for the loonie from 1.3200 to 1.3100 by the end of this year, and in the third quarter of 2020 they expect a figure of 1.3000. The calculations of specialists are based on a possible one-time rate cut by the Bank of Canada. It is possible that this will happen next month, according to JP Morgan. Analysts take into account the current policy of the Canadian regulator, which does not always coincide with the decisions of the US Federal Reserve.

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

Reflections on EURUSD

Predicting the movement of assets before the publication of such news as the decision of the US Federal Open Market Committee is a futile task. It is much easier to do this when the solution has already been published, and then you can very thoroughly explain why it happened this way and not otherwise. But I still take the risk and try to propose the most likely scenario for the development of events, all the more subsequently it will be interesting to see if I turned out to be right or not.

Actually, the question that I want to answer in this article is whether the Fed's decision and Jerome Powell's speech can turn the dollar back, or at least to provoke it to a correction. If the upward trend in the US currency has already been going on for a year and a half, and Trump is very dissatisfied with this. The answer to this question will help me make the EURUSD rate, especially since the dollar index consists of almost 60 percent of the euro. In addition, EURUSD is the most popular and complex currency pair, so I think it will be interesting to everyone to understand what is happening in the European currency.

analytics5d82bf4b69d06.jpg

To analyze the situation, I will not draw graphs, patterns and clutter up the article with an abundance of indicators. I hope that my fundamental approach based on the analysis of the futures market will help someone create their own strategy for assessing the situation. I will use the data of the futures market provided by the CME exchange on option positions of traders, and I will proceed from the hypothesis that the sellers of options are big players, and most of the options bought burn up without being in the money. Alas, this is so, buying options is a game with a negative mathematical expectation, which, however, does not make strategies with their application automatically unprofitable.

So what do we know at the moment? We will use the CME exchange data for weekly and monthly option positions, which determine the dynamics of the asset for an hour and four hour time. At the same time, we will take into account the fact that now the difference between the cash contract that we see in the terminal and the December futures, the so-called forward point, is 72 points.

EU3U9 weekly option, basic contract 6EZ9

This EU3U9 option contract closes on Friday, September 20, and gives the right or obligation to buy or sell the December futures euro contract 6EZ9 at a pre-agreed price. Since there is still a lot of time before the futures close (expiration), the contact is not of great value, especially in the conditions of the expected strong volatility inherent in the decisions of the US Federal Reserve. However, the EU3U9 option contract implies a disposition equivalent to an hour time in InstaForex terminals (Fig. 1), which makes it a valuable analysis tool for traders working in that time.

First of all, pay attention to the ratio of the number of put options and Put/Call Ratio calls equal to 1.10, which means a slight excess of the number of put options over call options, and suggests that the futures rate is slightly easier to move up than down.

analytics5d82bf5eed8bb.jpg

Fig. 1: Positioning of the EU3U9 option contract. Source - CME Exchange

Chart 1 attracts two large levels of put options located at 1.10 and 1.1025, which for a cash contract will correspond to levels 1.0925 and 1.0950. This is the so-called lower limit of the market. On the right is the level of 1.1150, which corresponds to the value of 1.1075, in the InstaForex terminal and this is the upper boundary of the market. In the center is the so-called Max Pain point, level 1.1125, where option buyers will incur maximum losses. Sellers, in turn, want the price to be as close to this level as possible when closing the contract on Friday.

In a calm market, one could make the assumption that the price in InstaForex terminals on Friday, September 20, will close there, near the level of 1.1050 (remember the forward point 72 points between the cash and the futures contract), but today is a special case, and we it is necessary to make an amendment to the publication of the decision of the US Federal Reserve.

EUUV9 monthly option, basic contract 6EZ9

This EUUV9 option contract closes on October 4 and gives the right or obligation to buy or sell the December euro futures at a pre-agreed price. This option contact is more valuable than the EU3U9 weekly contract, especially amid expected strong volatility inherent in the decisions of the US Federal Reserve. The EUUV9 option contract assumes a disposition equivalent to a four-hour half-time in InstaForex terminals (Fig. 2).

analytics5d82c0ed50e26.jpg

Fig. 2: Positioning of the EUUV9 option contract. Source - CME Exchange

As can be seen from chart 2, the open interest in this monthly option contract is about ten times higher than the EU3U9 weekly contract. The ratio of put and call options is 1.40, i.e., the number of puts is much higher than the number of open calls, which makes it difficult for the price to move down and facilitates the growth of the rate.

The MP point is at a value of 1.12, which corresponds to the level of 1.1125 in InstaForex terminals. The lower boundary of the market is at the level of 1.1050 or 1.0975 for the cash contract. The upper boundary of the market is located at 1.1250 or 1.1175 for a cash contract.

Based on the current disposition corresponding to the four-hour time, it can be assumed that in the future, until October 4, the euro exchange rate in the terminals will tend to the zone of 1.1125 and may try to rise slightly higher and gain a foothold at the level of 1.12.

Summing up the results of this analysis, we can conclude that by October 4, with a probability of 68%, the EURUSD rate at InstaForex terminals will be in the range of 1.0925 –1.1200. Higher levels are not yet available for EURUSD, since they are limited by significant option barriers in the futures market. From below, the course will support levels 1.0925 - 1.0950.

The situation in the EURUSD course, in the long term from one to four weeks, can be described as a range for the breakthrough of which a significant news background is needed. Thus, it is likely that the decision on the rate will really be able to reverse the euro. However, this will be very difficult to do, and with a high probability the formation of a wide range of 1.0950 - 1.1250 will continue until the Fed meeting in December.

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