Control zones USD/JPY 10/04/19

Today's plan is to find a favorable price for the purchase of the instrument, as the pair is trading below the average weekly rate. The best price is within the weekly control zone 106.50-10631. The formation of the "false breakdown" pattern of yesterday's minimum will allow us to enter into corrective purchases.

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It is important to note that the downward movement is an impulse. Therefore, any growth in the medium term should be considered as an opportunity to get favorable prices for the sale of the instrument.

An alternative decline model has a probability below 30%, which makes sales from current marks unprofitable. To enter a short position, growth to one of the correction zones will be required again.

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

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

Monthly CZ - monthly control zone. The zone that reflects the average volatility over the past year.

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GBP/USD. Pound optimism premature: Johnson has to go through 9 circles of "political hell"

Yesterday's surge in volatility for the pound-dollar pair was due not only to the Brexit theme. The US currency continues to demonstrate its vulnerability amid a slowdown in important economic indicators and in anticipation of the release of Nonfarms. This combination of fundamental factors made it possible for GBP/USD bulls to update the weekly high and approach the 24th figure. Nevertheless, the further growth of the pair remains in doubt: if today's data on the US labor market comes out in the "green zone", the dollar will quickly regain its position throughout the market. Moreover, if it is supported by Federal Reserve Chairman Jerome Powell, who will voice his opinion at the close of the US session (18:00 London time). The situation with Brexit is even more complicated. Cautious optimism in this matter can instantly be replaced by habitual pessimism, after which the pound will return to the price range of 1.2000-1.2250. There are certain prerequisites for this.

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By and large, yesterday's optimism of GBP/USD traders was explained by one factor: rumors appeared in the British press that the Conservative Party and their temporary allies from the Democratic Union Party were ready to support Boris Johnson's new Brexit proposals. But it is worth noting here that, firstly, such rumors over the 3.5 years of the epic of the negotiation process have often not been confirmed. Secondly, in Europe they were rather skeptical about the initiatives of the British prime minister. And although the head of the European Commission called the voiced proposals "a breakthrough," many facts suggest otherwise. Almost all experts, politicians and journalists on both sides of the English Channel are confident that Johnson's "new plan" is doomed to failure.

The backstop is the root of the problem. Brexit supporters were initially against the "transparent" border between Northern Ireland and the Republic of Ireland. Instead of a back-stop indefinite mechanism, Johnson proposed an alternative - a "translucent" border. According to him, customs checks will return to the island - both on land and at sea - but they will be practically invisible to those crossing the border. Nevertheless, the border is de facto returned, and customs posts, even at a remote distance from the borders, remain customs posts, regardless of their location. This proposal does not suit many politicians - both among Europeans and among the British. In particular, the Laborites have already called Johnson's plan "terrifying."

The remaining items are also ambiguous. For example, the British prime minister proposed that the Northern Ireland Assembly (the Parliament of the region) have a veto. Local deputies must confirm the legitimacy of the agreement with the European Union at 4-year intervals; otherwise, Belfast will return to the orbit of British law. This idea was received "with hostility" both in Brussels and in Dublin. In addition, judging by the newspaper headlines in the European press, EU countries also do not support such an initiative.

Firstly, the aforementioned Assembly has not held its meetings for more than three years (!) Due to the lack of a quorum. Local political confrontations, which are protracted, blocked the work of this body. Secondly, Europeans are indignant at the very formulation of the question: in fact, a relatively small region will decide the fate of the European integration processes. And given the background to the relationship between Dublin and Belfast, it is impossible to imagine that the authorities of the Republic of Ireland agreed on such a mechanism. President of the European Council Donald Tusk has already managed to declare that in this matter he fully supports Varadkar, and the proposals of the British prime minister are "unconvincing" for him.

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Another obstacle to agreeing on the "Johnson Plan" is purely technical in nature. Not only political will is needed to implement his proposals in European law. The legal approval process involves the consent of all 27 member countries of the European Union. According to the participants in previous negotiations (when Theresa May was in office), this is quite a time-consuming process. All of them unanimously argue that the parties will not have time to prepare the relevant document before the EU summit, which will take place in just two weeks.

Thus, Johnson has to solve a number of difficult tasks. First of all, he needs to convince the EU leadership, as well as representatives of the EU member countries of the need to agree on the above changes. Then the negotiating group needs in a short time - about two weeks - to prepare a legally verified document, which should be supported at the EU summit. If the British prime minister passes all these millstones, then only on October 19-20 will he bring an updated draft of the deal to London, which will need to be agreed with the deputies of the House of Commons. Here it is worth recalling that as a result of recent "purges", the Conservatives expelled more than 20 from their ranks. Therefore, Johnson will need to seek support "on the side", that is, among other deputy groups. The Labour Party has already categorically disagreed with his plan, while the positions of the other parties (except for the DUP and the representatives of Scotland) are still unknown.

In other words, the position of the British currency is currently quite precarious. Rumors of support for Conservatives and DUP provided temporary support to the pound, but long positions on the GBP/USD pair look risky: there are too many "ifs" in the way of Boris Johnson. Therefore, based on the results of Nonfarm and Jerome Powell's speech, one can consider short positions with the downward targets of 1.2270 and 1.2180 (the Kijun-sen line and the lower border of the Kumo cloud on D1, respectively). It's too early to speak about deeper kickbacks - the stages of the negotiation process over the next two weeks will "throw" the pair from side to side until the prospects of Brexit are finally determined.

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Technical analysis of GBP/USD for 04/10/2019

Technical Market Overview:

The GBP/USD pair has broken through the short-term trendline resistance around the level of 1.2308 and made a local high at the level of 1.2411. Nevertheless, at the end of the move up, there is a Shooting Star candlestick pattern, which is a trend reversal signal. The next target for bulls is seen at the level of 1.2504, but the traders should be very cautious now as the bears might try to regain control over the market again and puch the price back under the trendline again.

Weekly Pivot Points:

WR3 - 1.2628

WR2 - 1.2566

WR1 - 1.2402

Weekly Pivot - 1.2333

WS1 - 1.2163

WS2 - 1.2096

WS3 - 1.1935

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. The key short-term technical support is seen at the level of 1.2231 - 1.2224 and the key short-term technical resistance is located at the level of 1.2381. As long as the price is trading below this level, the downtrend continues towards the level of 1.1957 and below.

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Control zones USD/CHF 10/04/19

Today's trading plan should take into account the test of the average weekly move that occurred yesterday. The probability of keeping the price within the range is 70%. Thus, it is necessary to consider the pattern of "false breakdown" and look for an opportunity to sell the instrument. The transaction is corrective in nature, so partial consolidation is necessary in the Weekly Control Zone 1/4 0.9964-0.9958. The rest should be transferred to breakeven and left in case of decline to Weekly Control Zone 1/2 0.9904-0.9892.

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Work within the framework of the flat formed by the extremes of the current week is the main one and consists in the search for purchases from the lower border and sales from the upper one.

An alternative model will be the breakdown and closing of trading above the level of 1.0024. This will allow us to talk about the continuation of the upward movement next week. However, the probability of returning to the limits to the average weekly rate will increase to 90%.

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

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

Monthly CZ - monthly control zone. The zone that reflects the average volatility over the past year.

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Technical analysis of EUR/USD for 04/10/2019

Technical Market Overview:

The EUR/USD pair is currently testing the upper channel boundary around the level of 1.0977 in overbought market conditions. The bulls still have a chance for a move towards the level of 1.1024 and higher towards the level of 1.1075, but they need to break out of the descending channel. The momentum is now above its fifty levels, so it is positive and strong. There is a chance for another leg up towards the next targets, but it must be made soon, otherwise, the bears will regain the control over the market again and push the prices towards the technical support at the level of 1.0879.

Weekly Pivot Points:

WR3 - 1.1116

WR2 - 1.1087

WR1 - 1.0996

Weekly Pivot - 1.0951

WS1 - 1.0872

WS2 - 1.0826

WS3 - 1.0757

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.

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Analysis of EUR / USD and GBP / USD for October 4. How will Jerome Powell please the markets tonight?

EUR / USD

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Thursday, October 3, ended for the pair EUR / USD with an increase of 5 basis points. The instrument also made a successful attempt to overcome the 76.4% Fibonacci level and an unsuccessful level of 61.8% Fibonacci. Thus, the pair moves farther and farther away from the continuation of the construction of the bearish section of the trend, or rather its wave 5. A successful attempt to break through the 61.8% level will indicate the readiness of the markets to build an upward trend, although it is necessary that the news background also favors this scenario.

Fundamental component:

The Euro currency is in demand in the foreign exchange market in recent days, although the news background is far from always in its favor. Nevertheless, there is an increase in the EU currency and now, the question is about building a full-fledged upward trend section. On Friday, October 4, all the most interesting economic reports will come from America. There will be Nonfarm Payrolls, a report on the change in average wages in September, and Fed Chairman Jerome Powell will speak late at night. I think that Powell's performance is the most important. With economic reports, everything is more or less clear. If their values are better than market expectations, the demand for the dollar will be high in the afternoon, if worse, then low and this will significantly increase the chances of building an upward wave, originating on October 1. However, with Powell's performance, it's much more complicated as the economic performance of the United States continues to deteriorate, since Donald Trump continues to put pressure on the Fed so that the regulator lowers rates as soon as possible, and markets are increasingly convinced that in October (October 29-30) the Fed will lower its key rate again, in the third once in a row. Thus, today, we will be waiting for hints from Powell about a possible Fed decision in October.

Purchase goals:

1.1109 - 0.0% Fibonacci

Sales goals:

1.0876 - 127.2% Fibonacci

1.0814 - 161.8% Fibonacci

General conclusions and recommendations:

The euro-dollar pair continues to build a downward set of waves. I still expect the pair to decline again with targets located near the calculated levels of 1.0876 and 1.0814, which equates to 127.2% and 161.8% Fibonacci, within the framework of wave 5 to 5. I recommend selling the instrument according to the MACD signal "down". However, a successful attempt to break through the level of 61.8% may change the current wave pattern.

GBP / USD

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On October 3, the GBP / USD pair continued to build the proposed wave b as part of the new bearish trend section and gained about 30 base points. If the current wave count is correct, then the instrument should go to the construction of the descending wave with the goals, placed under 22 the figure today. In order for this option to be executed, you need support for the news background, which in general, has recently been more neutral than negative for the pound-dollar pair. However, building a wave of c today requires economic reports from the United States to be weak, and Powell's evening speech filled with hints of easing monetary policy at the next meeting.

Fundamental component:

Yesterday, the index of business activity in the UK services sector "went under water", falling to 49.5. Thus, the news background specifically from the UK does not support the pound. Also, information was received that the EU government did not at all arrange Boris Johnson's proposal for a deal on Brexit. It was rejected, but it seems that the European Union is still open to further negotiations. Time is running out and, most likely, the parties will not have time to agree on an agreement. Thus, Brexit will either be rescheduled (a positive factor for the pound), or Britain will leave the EU in a tough scenario (negative factor). Today, economic reports from the USA will come first in importance.

Sales goals:

1.2229 - 61.8% Fibonacci

1.2147 - 76.4% Fibonacci

Purchase goals:

1.2582 - 0.0% Fibonacci

General conclusions and recommendations:

The pound / dollar instrument supposedly continues to build a new bearish trend section. Thus, now, I expect the completion of the construction of the correctional wave b, which could have completed near the 38.2% Fibonacci level, and the continuation of the decline of the instrument in the direction of the levels of 61.8% and 76.4% Fibonacci as part of the construction of wave 3 or c. The MACD signal "down", in turn, may indicate the construction of a new bearish wave.

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GBP/USD: plan for the European session on October 4. The likelihood of the EU abandoning the plan of Boris Johnson has increased

To open long positions on GBP/USD you need:

A few days ago, the British government announced a new Brexit plan, the essence of which was the absence of customs points on the border between Ireland, which was what the EU representatives wanted. However, rumors appeared yesterday that the EU is unlikely to be able to trust this proposal and agree to it. Against this background, the pound lost its position, having failed to break above the resistance of 1.2400, from which I recommended opening short positions yesterday. At the moment, the bulls need to protect the support level of 1.2313, and the formation of a false breakdown on it will be a direct signal to open long positions in the calculation of a break and consolidation above the resistance of 1.2364. Only such a scenario will provide GBP/USD with a new wave of growth to a high of 1.2406, where I recommend taking profits. If the bulls miss the support of 1.2313, it is best to count on new long positions on a rebound from a low of 1.2263.

To open short positions on GBP/USD you need:

Bears showed themselves in the region of a high of 1.2400, and also formed an additional intermediate resistance level of 1.2364. The formation of a false breakdown on it in the morning will be a direct signal to open short positions in order to break through and consolidate below the support of 1.2313, which will provide the pair with new sellers that can return the pound to a low of 1.2263, where I recommend taking profits. If the bulls manage to break above resistance at 1.2364, consider new short positions from the upper boundary of 1.2406-1.2410.

Signals of indicators:

Moving averages

Trade is conducted above 30 and 50 moving averages, which indicates a possible continued growth of the pound.

Bollinger bands

In case the pound declines, support will be provided by the lower boundary of the indicator in the region of 1.2300, while the upper boundary of the indicator in the region of 1.2406 will act as resistance.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: Fast EMA 12, Slow EMA 26, SMA 9
  • Bollinger Bands 20
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EUR/USD: plan for the European session on October 4. Euro growth gradually slows down before the release of important data

To open long positions on EURUSD you need:

Yesterday's slight slowdown in the growth of the PMI index for the US services sector led to the continuation of the upward correction in the pair, which, most likely, has already grown into a new trend. One talk about the further growth of EUR/USD, without a weak report on the number of people employed in the non-agricultural sector of the United States, is not entirely true. The bulls will continue to strive to break above the resistance level of 1.0993, which will provide them with growth already last week's highs in the area of 1.1022, where I recommend taking profits. However, the protection of the 1.0965 support, on which a lot depends today, will be a more important task in the first half of the day. The formation of a false breakdown on it is a direct signal to euro purchases. If the bulls miss this range, you can return to long positions immediately to the rebound from a low of 1.0935.

To open short positions on EURUSD you need:

All that is required today by euro sellers in the morning is the formation of a false breakdown in the resistance area of 1.0993. However, a more important task will be a breakthrough and consolidation below support at 1.0965. Only this will push EUR/USD to yesterday's low at 1.0935, where I recommend taking profits. For the first half of the day the release of important statistics on the economy of the eurozone is not planned. Therefore, in the scenario of the euro growth above resistance at 1.0993, further along the trend, it is best to consider short positions on a rebound from a high of 1.1022.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 moving average, which indicates the likely continuation of the upward correction.

Bollinger bands

In case of EUR/USD decline in the morning, support will be provided by the lower boundary of the indicator in the region of 1.0950. Growth will be limited by the upper limit in the area of 1.0995.

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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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Elliott wave analysis of GBP/JPY for October 4 - 2019

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GBP/JPY is now hovering just above the ideal corrective target at 130.78. We continue to look for a final dip closer to this target as long as minor resistance at 132.55 and more importantly as long as resistance at 133.36 is able to cap the upside. However, a break above resistance at 133.36 will indicate that red wave ii has completed and red wave iii towards 139.15 is developing.

R3: 133.36

R2: 132.85

R1: 132.55

Pivot: 132.00

S1: 131.47

S2: 131.25

S3: 130.78

Trading recommendation:

We will buy GBP at 131.25 or upon a break above 132.55

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Elliott wave analysis of EUR/JPY for October 4 - 2019

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EUR/JPY broken below short-term key-support at 117.43 is indicating a final dip closer to the 117.14 - 117.28 area (the low has been seen at 117.05). This new low for wave ii has been followed by a clear loss of downside momentum and we expect a turn higher shortly. A break above minor resistance at 117.63 will be the first good indication that wave ii has completed and wave iii higher to 121.93 is developing, while a break above resistance at 118.47 confirms the low is in place and a new impulsive rally is developing.

R3: 118,47

R2: 118.01

R1: 117.67

Pivot: 117.43

S1: 117.05

S2: 116.88

S3: 116.65

Trading recommendation:

We will buy EUR here at 117.20 with our stop placed at 116.20. A more conservative approach will be to wait for a break above 117.63 before buying EUR

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Forecast for EUR/USD on October 4, 2019

EUR/USD

In anticipation of today's important US employment data, the euro has moved into a neutral technical position for a likely major move. On the daily chart, the price is kept at the Fibonacci level of 138.2%, the signal line of the Marlin oscillator probes the border with the growth territory, from which there can be either a downward movement or, with breaking through, further growth. The forecast for new jobs outside the agricultural sector is 145 thousand against 130 thousand in August, an increase in the average wage in September is expected to be 0.3%. Previously published data on private sector employment and the employment sub-indexes in the ISM PMI structure suggest that weaker Nonfarm Payrolls today, but overall positive data on weekly applications for unemployment benefits give optimism, the total number of citizens receiving this benefit, reduced 5 consecutive weeks. In such a situation, investors may already be wondering: how much worse than the forecast should the data go in order to be considered weak, to be accepted by the Federal Reserve as one of the reasons for a rate cut at the end of the month? There are often no answers to such a question. Historically, such a boundary number for Nonfarm is considered to be 100 thousand.

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Our main scenario - Nonfarm Payrolls will come out good. The main indicator here is recognized as the least vulnerable to manipulation (as it is considered by a number of the largest consulting companies) weekly reports on applications for unemployment benefits. Based on them, we are reaching exactly the forecasted figure of 140-145 thousand. With support no worse than expectations for wage growth (0.3%), the dollar may return to strengthening. Technically, when the euro moves below the signal level 1.0926, the target 1.0845 opens - the Fibonacci level is 161.8%. The release of still weak data will lead the euro to the MACD line with the target of 1.1055.

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On a four-hour chart, the price is consolidating between the support of the MACD line and the resistance of the Fibonacci level of 138.2% (1.0985). The Marlin indicator in the growth zone moves horizontally. The situation is neutral, the market is waiting for important data.

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Forecast for GBP/USD on October 4, 2019

GBP/USD

The British pound has shown wide-range trading at the events around Brexit in the last three days - then Boris Johnson will propose a new double border plan in Ireland, then the EU has doubts about the preparation of all documents before October 31. Employment data for September is coming out today in the US, and if the pound chooses, especially if the data turns out to be close to the forecasts, it can be ignored - there are 3.5 weeks left until the X date. Brexit news can be released at any time.

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Technically, the situation remains upward; on the daily chart, the price has already pierced the resistance of the Fibonacci level of 200.0% and the signal level of 1.2375, the Marlin oscillator is attacking the boundary with the growth territory. A repeated attempt to exit above the resistance may be successful and the price will go to the price channel line at 1.2495. Strong data on the US Nonfarm Payrolls can return the price to support at 1.2230, which, with the current volatility, the pound can afford even with the further intention to grow.

On a four-hour chart, the price is clamped in clusters of technical lines, the price position is neutral.

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Technical analysis: Important intraday Level For EUR/USD, October 04,2019

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When the European market opens, some economic data such as French Gov Budget Balance will be released. The US will publish such economic data as Trade Balance, Unemployment Rate, Non-Farm Employment Change, and Average Hourly Earnings m/m. So, amid the reports, EUR/USD will move in a medium to high volatility during this day. TODAY'S TECHNICAL LEVEL: Breakout BUY Level: 1.1027. Strong Resistance:1.1021. Original Resistance: 1.1010. Inner Sell Area: 1.0999. Target Inner Area: 1.0974. Inner Buy Area: 1.0949. Original Support: 1.0938. Strong Support: 1.0927. Breakout SELL Level: 1.0921. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important intraday level for USD/JPY, October 04,2019

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Today Japan will not release any economic data , while the US will release such economic data as Trade Balance, Unemployment Rate, Non-Farm Employment Change, and Average Hourly Earnings m/m. So, there is a probability that the USD/JPY pair will move with medium to high volatility during this day.TODAY'S TECHNICAL LEVEL: Resistance.3:107.39. Resistance. 2:107.18. Resistance. 1:106.97. Support. 1:106.72. Support. 2:106.51. Support. 3:106.30. (Disclaimer)

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Overview of GBP/USD on October 4th. Forecast according to the "Regression Channels". Juncker and Tusk abandon Boris Johnson's

4-hour timeframe

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Technical data:

The upper channel of linear regression: direction – sideways.

The lower channel of linear regression: direction – down.

The moving average (20; smoothed) – sideways.

CCI: 158.5970

A day earlier, we wrote that Jean-Claude Juncker considered Johnson's plan "requiring refinement" and having "controversial issues." Such rhetoric of the President of the European Commission left room for maneuver. However, later, when Johnson's plan began to be criticized by other leaders of EU member States and political scientists, it became clear that Juncker simply expressed himself very restrained and polite. The new plan for Brexit does not suit the European Union and moreover, it does not carry again any proposals that can solve the problem with the border on the island of Ireland structurally and completely. The main proposals of Boris Johnson are to not conduct any checks and searches on the border between the countries but to conduct them 10 kilometers from this border and only if necessary. And fill out all customs declarations remotely. European politicians still do not like this option. Donald Tusk wrote on his Twitter: "Today, I had two phone calls about Brexit, first with Dublin, then with London. My message to Leo Varadkar: we fully support Ireland. My message to Boris Johnson: we remain open, but not convinced."

Well, the Prime Minister of Great Britain continues to try to remove British parliamentarians from their work. Johnson conceived the second prorogation of the Parliament, from October 8 to 14. And although this time Johnson's initiative is much less questionable, since the suspension of Parliament's work is planned for a week, and before the opening of a new session, which will begin with the Throne Speech (speech performed by Queen Elizabeth II), this is normal practice, still it is surprising.

By the way, not only in the European Union were skeptical of Johnson's plan. The deputies of the House of Commons did not show much enthusiasm when they learned the essence of the new plan of the Prime Minister. Opposition leader Jeremy Corbin said: "Three years later, the government has yet to find a solution to the Irish border problem and Good Friday agreement. If earlier the government wanted to have no border in Ireland, today it proposes to create two borders." In essence, this means that the British Parliament will not support Johnson's plan. What's next? Johnson said that if the EU rejects this offer, then Britain will leave the EU without an agreement. So we move on to the most interesting act of the play because the question is "how is Johnson going to get Britain out of the EU without an agreement of Parliament?" Remains open.

The pound paired with the dollar, meanwhile, has fixed above the moving average line, which allows it to continue strengthening. However, as we have said many times, the fundamental aspect remains not on the side of the British currency. This week, for example, Britain has already managed to fall in indexes of business activity in services, construction and a composite index. In industry, business activity rose slightly but remained below 50.0. Thus, it will not be surprising if the downward trend on the GBP/USD pair is resumed shortly.

Nearest support levels:

S1 – 1.2329

S2 – 1.2268

S3 – 1.2207

Nearest resistance levels:

R1 – 1.2390

R2 – 1.2451

R3 – 1.2512

Trading recommendations:

The GBP/USD pair continues its upward correction on October 4. Thus, today, bears are still advised to expect its completion and in the case of reverse consolidation below the moving, resume sales of the pound/dollar pair with the first target of 1.2268. It is recommended to buy a pair with the target of 1.2390, while the bulls are held above the moving average.

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

Explanation of the illustrations:

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

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

CCI – the blue line in the indicator regression window.

The moving average (20; smoothed) – the blue line on the price chart.

Support and resistance – red horizontal lines.

Heiken Ashi – an indicator that colors bars in blue or purple.

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Forecast for USD/JPY on October 4, 2019

USD/JPY

The USD/JPY pair could not stand the general pressure of the market on the dollar and the weakening of the stock market. Yesterday, the S&P 500 grew 0.8% after the previous two-day plunge, but this correction cannot yet be considered a market reversal. So today, Japanese investors are in no hurry to restore long positions - the Nikkei225 index is losing 0.02%. Things are very bad on the Chinese market - the Shanghai Composite has been falling steadily since September 23rd and today its losses are -0.92%. The worsening of the situation will lead to the price falling below the MACD line on the daily scale chart (106.45) and working out the movement near the price channel line in the region of 105.96. The Marlin oscillator goes deeper into the zone of negative numbers. A condition for growth is price consolidation above the green price channel line 107.27.

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On the H4 chart, the price is below all indicator lines, Marlin is in a horizontal mini-trend. In general, the situation is 60% lower.

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Overview of EUR/USD on October 4th. Forecast according to the "Regression Channels". Trump has not calmed down and continues

4-hour timeframe

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Technical data:

The upper channel of linear regression: direction – down.

The lower channel of linear regression: direction – down.

The moving average (20; smoothed) – up.

CCI: 137.5426

The last trading day of a very busy week came. The week in which EUR/USD managed to win back some of the positions of the US currency and move away from the 2-year lows. However, macroeconomic statistics from the European Union still does not give the euro to look forward with optimism. This week, it became clear that business activity in the services and manufacturing sectors of the European Union is declining, and inflation continues to slow down. And just because macroeconomic indicators in the United States began to fall (the same indices of business activity in the services and manufacturing sectors), the euro was a little lucky this week. I repeat once again: from the EU itself, no positive news has been received and is not received.

The last trading day of the week will be no less interesting than the whole week. All statistics today will come from overseas, and there will be a speech by the head of the Fed Jerome Powell in the evening. Among the reports, the most interesting for traders is, of course, the number of new jobs created outside the agricultural sector, or Nonfarm Payrolls, in September. It is expected that the "figure" will be equal to 145,000. Also, an important report will be published on changes in average hourly wages (forecast +3.2% y/y in September), the unemployment rate (+3.7 y/y) and the trade balance. As before, if the aggregate real values of the indicators are higher than traders' expectations, then today we can expect the resumption of the downward trend, as the demand for the US dollar can grow significantly. However, this requires that NonFarm Payrolls did not fail, and wages were not below the forecast values. Otherwise, bulls will get new fundamental grounds for buying the euro/dollar pair.

Meanwhile, the topic that led to the talk of Trump's impeachment has developed. The US leader rightly considered that since all the details of his talks with Ukrainian President Vladimir Zelensky were published, there is nothing to hide. Trump takes a new step forward, which can be interpreted in different ways. He openly stated that China could also investigate the activities of Biden in his territory and he, the US president, "advises them to do this." The question immediately arises: why is it for China, against which the same Donald Trump is waging a trade war? The correct answer: for nothing. Therefore, the words of Trump – this is just another game for the public. The US President shows the Americans that he has nothing to hide, and calls to investigate the Biden cases in Ukraine and China are just a concern for the national security of the country, and not an unfair attempt to eliminate the rival before the US presidential election in 2020. It is difficult to say whether the electorate will believe this, but in any case, all these proceedings between Trump and Biden will lower the political ratings of both.

The technical picture of the pair suggests an upward movement, as traders managed to overcome the moving average. However, it was not possible to gain a foothold above the Murray level of "4/8" – 1.0986. Thus, to continue growing, the pair must overcome this level.

Nearest support levels:

S1 – 1.0925

S2 – 1.0864

S3 – 1.0803

Nearest resistance levels:

R1 – 1.0986

R2 – 1.1047

R3 – 1.1108

Trading recommendations:

The euro/dollar pair continues its corrective movement, already above the moving average. Thus, the bears are still advised to wait until the correction is completed and resume selling the Euro currency with the goal of a Murray level of "2/8" – 1.0864 after re-fixing below the moving average line. Purchases of the pair can be considered as small lots now with a target of 1.1047 if the level of 1.0986 is overcome.

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

Explanation of the illustrations:

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

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

CCI – the blue line in the indicator window.

The moving average (20; smoothed) – the blue line on the price chart.

Support and resistance – red horizontal lines.

Heiken Ashi – an indicator that colors bars in blue or purple.

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

#USDX vs EUR / USD vs GBP / USD vs USD / JPY - H4. Comprehensive analysis of movement options from October 04, 2019 APLs

Here's a comprehensive analysis of the development options for the movement of currency instruments #USDX, EUR / USD, GBP / USD and USD / JPY from October 4, 2019

Minuette operational scale (H4 time frame)

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US dollar index

From October 4, 2019, the development of the movement of the dollar index #USDX will begin to depend on the development and direction of the breakdown of the boundaries of the equilibrium zone (99.00 - 98.80 - 98.60) of the Minuette operational scale fork. The details are shown in the animated chart.

If the lower boundary of ISL61.8 (support level of 98.60) is broken, the equilibrium zone of the Minuette operational scale fork, the downward movement of the dollar index can be continued towards the targets - the start line SSL (98.30) of the Minuette operational scale fork - local minimum 98.14 - final Shiff Line Minuette (98.00).

The breakdown of the upper boundary of ISL38.2 (resistance level of 99.00) of the equilibrium zone of the Minuette operational scale fork - the development of the #USDX movement will continue in the 1/2 Median Line Minuette channel (99.00 - 99.15 - 99.30), and if the breakdown of the upper boundary (99.30) of this channel occurs, then it will be possible to continue the upward movement to the goals - the initial line SSL Minuette (99.60) - maximum 99.67 - the control line UTL Minuette (99.80) - the warning line UWL100.0 (99.85) Minuette operational scale fork.

The details of the #USDX movement are presented in the animated chart.

analytics5d961051a601e.jpg

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Euro vs US dollar

The movement of the single European currency EUR / USD from October 4, 2019 will be due to the development and direction of the breakdown of the boundaries of 1/2 Median Line channel (1.0940 - 1.0965 - 1.0985) of the Minuette operational scale fork. We look at the animated chart for the movement markings inside the channel.

The breakdown of the upper boundary of the 1/2 Median Line Minuette channel resistance level of 1.0985) will make it relevant to continue the development of the upward movement of EUR / USD to the initial SSL line (1.1030) of the Minuette operational scale fork and the boundaries of the equilibrium zone (1.1040 - 1.1085 - 1.1125) of the Minuette operational scale fork.

On the contrary, the breakdown of the lower boundary of the 1/2 Median Line channel (support level of 1.0940) of the Minuette operational scale forks will determine the option to continue the development of the downward movement of the single European currency towards the goals - the initial SSL line Minuette (1.0905) - local minimum 1.0879 - LTL Minuette control line (1.0870) - control line LTL (1.0825) of the Minuette operating scale fork.

The details of the EUR / USD movement options are shown in the animated chart.

analytics5d96102ba1d17.jpg

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Great Britain pound vs US dollar

Meanwhile, the development of Her Majesty's currency movement GBP / USD from October 4, 2019 will begin to occur within the 1/2 Median Line channel (1.2310 - 1.2440 - 1.2565) of the Minuette operational scale fork taking into account the working out of the boundaries of the 1/2 Median Line channel (1.2406 - 1.2465 - 1.2520) of the Minuette operational scale fork. The movement markup is presented in the animated graph.

If there is a breakdown of the upper boundary of the 1/2 Median Line Minuette channel (resistance level of 1.2565) with the subsequent update of the local maximum 1.2582 , then the upward movement of Her Majesty's currency can continue to the upper boundary of ISL61.8 (1.2530), the equilibrium zone of the Minuette operational scale fork and the lower boundary of ISL38.2 (1.2650) the equilibrium zone of the Minuette operational scale fork

The return of GBP / USD below the support level of 1.2310 on the lower boundary of the 1/2 Median Line channel of the Minuette operational scale - option for the development of a downward movement towards the targets - initial SSL line (1.2265) of the Minuette operational scale - control line LTL Minuette (1.2235) - local minimum 1.2204 - the starting line of SSL Minute (1.2010).

The details of the GBP / USD movement can be seen in the animated chart.

analytics5d96100f1c517.jpg

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US dollar vs Japanese yen

As further, from October 04, 2019, the movement of the currency of the "land of the rising sun" USD / JPY will continue to be determined by the direction of the breakdown of the boundaries of the equilibrium zone (107.40 - 107.15 - 106.90) of the Minuette operational scale fork. The movement markings inside this zone are shown in the animated chart.

The breakdown of the lower boundary of ISL61.8 (support level of 106.90) of the equilibrium zone of the Minuette operational scale fork will confirm the continued development of the downward movement of USD / JPY to the boundaries of the 1/2 Median Line channel (106.50 - 106.00 - 105.45) of the Minuette operational scale fork.

On the contrary, if the breakdown of the upper boundary of ISL38.2 (resistance level of 107.40) of the equilibrium zone of the Minuette operational scale fork occurs, then the development of the currency of the country of the rising sun will continue to goals - 1/2 Median Line Minuette channel (107.55 - 107.75 - 107.90) - initial SSL Minuette line (108.10) - UTL control line (108.20) of the Minuette operational scale fork - UWL38.2 Minuette warning line (108.40) - UTL Minuette control line (108.50).

We look at the details of the USD / JPY movement in the animated chart.

analytics5d960fea54e54.jpg

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The review is made without taking into account the news background. Thus, the opening of trading sessions of the main financial centers does not serve as a guide to action (placing orders "sell" or "buy").

The formula for calculating the dollar index :

USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.

where the power coefficients correspond to the weights of the currencies in the basket:

Euro - 57.6% ;

Yen - 13.6% ;

Pound Sterling - 11.9% ;

Canadian dollar - 9.1%;

Swedish Krona - 4.2%;

Swiss franc - 3.6%.

The first coefficient in the formula leads the index to 100 at the start date of the countdown - March 1973, when the main currencies began to be freely quoted relative to each other.

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

Fractal analysis of Ethereum on October 3

Forecast for October 3:

Analytical review of cryptocurrency on a scale of H1:

analytics5d964ce4a3122.png

For the Ethereum instrument, the key levels on the H1 scale are: 202.53, 195.98, 186.28, 178.09, 163.87, 160.78 and 153.76. Here, we are following the development of the upward cycle of September 26. Currently, the price is in correction. The continuation of the upward movement is expected after the breakdown of the level of 178.10. In this case, the target is 186.28. The breakdown of which, in turn, should be accompanied by a pronounced upward movement to the level of 195.98. For the potential value for the top, we consider the level of 202.53. Upon reaching which, we expect consolidation, as well as a pullback to the bottom.

The range of 163.87 - 160.78 is a key support for the upward structure. Its passage at the price will favor the development of a downward trend. In this case, the potential target is 153.76.

The main trend is the upward structure of September 26.

Trading recommendations :

Buy: 178.10 Stop Loss: 168.40 Take Profit: 186.20

Buy: 187.00 Stop Loss: 178.00 Take Profit: 196.00

Sell: 160.50 Stop Loss: 170.00 Take Profit: 154.00

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

GBP/USD: Great Britain rushes to the "hard" Brexit in full steam, while the pound rises

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The GBP/USD pair rose to weekly highs near 1.24 on Thursday.

Initially, the pair fell after the release of weak data on business activity in the UK services sector, but the fall was short-term, and the pair remained within the weekly range.

Now it remains to be expected whether GBP/USD will be able to develop growth on a "bullish" course or will it encounter resistance at local highs.

Meanwhile, less than a month remains until October 31, which means that Brexit is already so close that it is almost at hand. In this regard, the most difficult negotiations are underway right now. For proponents of the release of Great Britain from the European Union, this may be the last chance to say goodbye to their continental neighbors, and for Brexit's opponents, this is the hardest attack on the position of their opponents, led by British Prime Minister Boris Johnson himself. He is trying to find a shaky compromise, but it seems he will still have to take radical measures.

On the eve of B. Johnson announced his final EU proposal for Brexit. The British prime minister quite unexpectedly made some concessions to the EU regarding the question of the Irish border. This is a key issue in Britain's exit from the bloc. Maintaining a transparent border between Northern Ireland and the Republic of Ireland virtually eliminates the essence of Brexit, and the creation of a rigid demarcation line can lead to unrest on Green Island. Moreover, this is absolutely unacceptable to European leaders. Now B. Johnson has provided a plan that they can accept. The British prime minister proposes to keep Northern Ireland in a single EU market, but at the same time remove all the UK lands from the common customs space. This will mean the emergence of control both on the Irish border and on maritime borders between EU states and the United Kingdom.

It should be recognized that this proposal is far from the very "ideal" deal that the EU was waiting for, but better than what was offered earlier. Now the Northern Irish border will not cease to be transparent and will not provoke the separation of the island into two parts. This was also noted by the Prime Minister of the Republic of Ireland Leo Varadkar. According to him, the proposed deal does not fully meet the agreed goals. Nevertheless, he stated that he would like to continue negotiations and sign this agreement.

EU officials' reaction to Johnson's proposal was controversial. Thus, the President of the European Commission, Jean-Claude Juncker, welcomed the determination of the prime minister of the United Kingdom to make progress on Brexit. The representative of Brussels at the talks with Great Britain Michel Barnier, in turn, noted that progress was made in the negotiations, but stressed that there was still a lot of work. At the same time, the representative of the European Parliament Guy Verhofstadt said that the first assessment of Johnson's proposal was negative. Thus, he made it clear that they expect much greater concessions from Great Britain in order to seriously discuss the new agreement.

In such conditions, it seems more and more that Brexit without a deal can still happen. The European Union has not become more accommodating, and B. Johnson is still ready to withdraw his country from the EU at any cost. This can explain the intention of the British prime minister to suspend the work of the national Parliament again. Recall, the last time his initiative was considered by the Supreme Court of Great Britain and was declared illegal. In this situation, B. Johnson is going to ask the Queen of England for a short respite: only until October 14 to prepare the initiatives that will be voiced in the traditional "speech from the throne", which opens the next session of Parliament.

Apparently, B. Johnson is trying to buy time to prepare Brexit and complicate the task of his opponents. It seems that the proposal for an EU deal was indeed the last. Great Britain enters the zone of increased "turbulence", and the ship's commander asks everyone to fasten their seat belts.

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

EUR/USD: headwinds for the dollar's growth

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The United States has been leading for many decades, while the rest of the world has been led. US stock indices reacted mainly to internal statistics and the Federal Reserve's monetary rate, crises were born in the United States and spread to other places, and not vice versa. Due to the low proportion of exports to US GDP, they were protected from the negative impact of headwinds blowing from abroad. However, in recent years, much has changed. In 2015-2016, the Fed postponed the decision to raise interest rates due to a "fire" in the financial markets of China and Brexit. In 2019, the regulator is forced to soften monetary policy amid growing international risks. It is obvious that the trade wars unleashed by the White House are beginning to negatively affect the US economy, which contributes to the growth of EUR/USD.

Business activity in the US manufacturing sector fell in September to the lowest levels in the last 10 years, while private sector employment in the country showed the worst growth rate in the last few months. At the same time, positive reports on business activity in China cast doubt on the divergence in the economic growth of the US and the rest of the world. This robs the greenback of the main trump card.

Meanwhile, domestic problems are growing in the United States. Rumors about the impeachment of Donald Trump increase political risks, and the liquidity crisis makes us talk about the need to increase the Fed's balance sheet. According to Morgan Stanley analysts, in order to avoid a second rise in money market rates above 10%, the Fed will have to purchase bonds worth $315 billion from November 2019 to May 2020.

The White House is likely to continue to criticize Chairman Jerome Powell and his colleagues, thereby increasing the chances of easing the Fed's monetary policy, including the revival of QE. At the same time, D. Trump seems to be beginning to realize that he has played in the trade wars. Starting October 18, the United States imposes duties of 10% and 25% on European goods worth $7.5 billion. According to Airbus estimates, tariffs will have a negative impact on 275 thousand jobs in the United States, since 40% of components for European aircraft are made in America. .

Disappointing reports on business activity in the manufacturing sector and employment in the US private sector reinforced investors' concerns about weak figures for the US labor market in September. If this release also disappoints, then the EUR/USD pair will be able to continue to grow to 1.1-1.1015. However, for starters, the "bulls" need to overcome the resistance at 1.096-1.0965.

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

EUR/USD: Brussels lost to the United States in the WTO, but the euro shows fortitude

The European currency actually ignored the news that the European Union lost a subsidy dispute for Airbus to the World Trade Organization, although this fact signals a new trade confrontation - between the United States and the European Union. Washington has already expressed its readiness to introduce tariffs authorized by the WTO ($7.5 billion), while Brussels has expressed similar willingness to use mirror measures.

The WTO decision was announced last night, but this morning it became known that the White House will exercise its right and from October 18 will introduce additional tariffs on the above amount for certain goods imported from the European Union. The list of these products is quite large - in particular, civil planes will impose a 10 percent tariff, and food and alcoholic beverages (Scotch whiskey, French wine, sire, clothing, coffee) will be charged at a 25 percent tariff. In addition, European pork, yoghurts, butter, olives and other European exports most in demand in the United States will fall under new sanctions.

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It is worth noting that traders in the foreign exchange market (primarily the euro) reacted fairly calmly to these events, as they were widely expected. Washington voiced its claims back in April this year: according to the White House, three EU countries (namely France, Italy, Spain and Germany) illegally subsidized the European aircraft manufacturing concern Airbus, causing the US state $7 billion in annual damage.

Trade negotiations on this issue were postponed for a long time, since Brussels could not agree on the candidacy of a negotiator. After numerous disputes, which lasted many months, representatives of the EU countries agreed to give a mandate for negotiations to the European Commissioner for Trade Cecilia Malmstrom. But in the end, the dialogue with Washington never began - neither in the beginning of summer, nor in the beginning of September. The US waited for the final decision of the WTO, after which they announced the introduction of new barriers. According to many analysts, Trump with the EU will follow the same strategy as with China - first he will introduce duties, and then he will sit at the negotiating table. There is another scenario. It is expected that in a few months the WTO will allow the European Union to introduce countermeasures against the United States as part of a parallel (and essentially similar) Boeing case due to the company's non-compliance with the organization's rules. In this period of time, the European Union will again try to resolve this issue peacefully.

Considering these factors, the EUR/USD pair showed only a formal reaction to the Brussels loss in the WTO - the price dropped to the bottom of the 9th figure, but returned to its previous position today. This does not mean the strength of the European currency, but rather the vulnerability of the dollar. The possible consequences of the situation around Airbus and Boeing have been discussed by the market for a long time, but negative macroeconomic releases from the US were an unpleasant surprise for dollar bulls. Therefore, after a short pause, the pair continued corrective growth.

It is obvious that the market is waiting for the main macroeconomic report of the week, which will be published on Friday. Yesterday there was another "wake-up call" in the form of a weak report from the ADP agency, which is a kind of storm petrel ahead of Nonfarms. If the official figures repeat the trajectory of the data from ADP, the dollar will again fall under the wave of sales - after all, in this case, rumors about another round of monetary policy easing by the end of this year will intensify in the market. By the way, tomorrow, Federal Reserve Chief Jerome Powell will speak at the close of the trading week. He will take part in the Fed hearings, which will be devoted to the problems of population employment and price stability. His speech is scheduled for 18:00 (London time), that is, after the publication of key data on the US labor market. Therefore, he will probably comment on the dynamics of Nonfarm in the context of the prospects of monetary policy. It is worth noting that the reaction to his speech may be stronger than the release itself. Given this assumption, do not rush to trading decisions immediately after the publication of US data.

But the European currency received a temporary respite. Negotiations on Brexit are moving forward (according to the latest rumors, the Conservative Party and the DUP have supported Boris Johnson's new proposals), and September inflation in the eurozone as a whole turned out to be at the forecast level. In addition, very good data on retail sales in the eurozone provided additional support for the single currency. There can be no talk of a trend reversal - the EUR/USD bears still control the situation. But amid the general vulnerability of the dollar, the European currency was able to afford a tangible correction.

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The "ceiling" of the correction is currently at the 1.1000 round mark - at this price point, the middle line of the Bollinger Bands indicator on the daily chart coincides with the Kijun-sen line. If the pair overcomes this resistance level, then the EUR/USD bulls will open the way to the next price barrier - to 1.1090 (where the upper line of the Bollinger Bands indicator coincides with the lower border of the Kumo cloud on the same timeframe). If tomorrow's events are in favor of the dollar, then the pair will return to the bottom of the 9th figure, and the bears will make another attempt to test weekly lows (1.0880 area).

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

The battle of the giants: gold versus the dollar

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In the global financial market, as concerns widen about the global economic slowdown, the degree of anxiety about the prospects for the US dollar and gold is increasing. The confrontation of the two largest defensive assets could "undermine" the global economy, analysts say.

The attitude towards safe haven assets is currently being reviewed. For example, Commerzbank analysts do not classify the US currency as such, but offer to sell it. The attitude towards the yellow metal is also becoming ambiguous, although the status of a reliable means of saving capital still remains with it.

The "boost" to the current gold rally has been the recent strengthening of the US dollar. The yellow metal interrupted the price flight that began this summer. Since the end of June 2019, the value of the precious metal has increased by more than 4%, analysts emphasize. The price rally of gold took place in the context of lower rates by world regulators and against the background of the trade conflict between the US and China.

At the moment, the yellow metal is trading in the range of $1,503– $1,504 per ounce. Analysts predicted a downward trend for the precious metal, but it does not give up and holds on to its gains. The completion of correction is observed in the XAU/USD pair. Here, analysts recorded a wave of growth to around 1500. Now the pair is trading in the consolidation range near the levels of 1498-1499. In the event of a breakdown of this bar, we should expect a fall to 1488, analysts said.

Despite the suspension of the rally and some downward trend, the yellow metal remains stable and is still in the spotlight of investors. They, like analysts at the Canadian bank TDS, are counting on higher gold prices. The financial institution claims high chances of the precious metal to grow to $1,600 per ounce. This is facilitated by lower interest rates by the US Federal Reserve. Analysts consider this step to be one of the main factors supporting gold. If another reduction in rates does not occur in October, the precious metal will receive support from the weakening of the stock market.

The yellow metal has always been an antagonist for the US currency, analysts emphasize. A stronger dollar tends to weaken gold, and vice versa. In this confrontation between the giants of the world market, everyone seeks to strengthen their own positions, having won their share of the financial "pie", analysts summarize.

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