Analysis of EUR / USD and GBP / USD for October 18. The opposition is unwilling to support the agreement of Boris Johnson.

EUR / USD

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Thursday, October 17, ended for the EUR / USD pair with an increase of 50 basis points and reaching the level of 50.0% Fibonacci. Thus, the alleged wave a continued its construction and now has every chance to complete near the level of 50.0%. An unsuccessful attempt to break through this level will indicate the readiness of the currency market to move away from the reached highs and build a wave b. At the same time, a successful attempt to break through the 50.0% level will show the readiness of the market to further complicate wave a.

Fundamental component:

The fundamental background for the pair EUR / USD remains quite weak. However, as we see, this does not prevent the markets from continuing to buy the euro, just as they were buying the dollar a few weeks ago. Yesterday, investors in the US dollar are clearly upset with the report on industrial production, which showed a decline of as much as 0.4% m / m. In addition to this report, positive news from the EU summit also affected the euro. Thus, in terms of combination of factors, the euro managed to add another 0.5 cents paired with the US currency. Today, I do not expect economic reports. Therefore, it is time to build a correctional wave b.

Purchase goals:

1.1145 - 50.0% Fibonacci

1.1208 - 61.8% Fibonacci

Sales goals:

1.0879 - 0.0% Fibonacci

General conclusions and recommendations:

The euro-dollar pair continues to build a new upward set of waves. An unsuccessful attempt to break the level of 1.1145 may lead to a departure of quotes from the reached highs and the construction of wave b. On the contrary, a successful attempt will show the intention of the markets to continue to buy the instrument with targets located near the calculated level of 1.1208, which corresponds to 61.8% Fibonacci.

GBP / USD

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On October 17, GBP / USD gained another 60 basis points and "pricked" the 127.2% Fibonacci level. An unsuccessful attempt to break through this level casts doubt on the further increase in the quotes of the pound-dollar pair. Even now, it can be assumed that wave 3 or C has completed its construction. If this is true, then the initiated decline in quotations will continue, possibly within the framework of wave 4, and possibly within the framework of a new downward trend section.

Fundamental component:

The news background is now of the highest importance for the pound / dollar pair. During the summit of the European Union, a decision was made by all 27 member countries of the bloc to approve the agreement proposed by Boris Johnson, the negotiations on which have been conducted in recent weeks are almost non-stop. However, this agreement is only 50% success. Now, it is necessary that the agreement should be approved by a majority vote at tomorrow's emergency meeting of the British Parliament. And with this, according to preliminary information, Johnson may have serious problems. It is already known that the Labor Party is opposed to a new version of the agreement with the EU, together with the DUP, which are considered allies of the conservatives, is also not satisfied with the text of the agreement, while the Scottish Democratic Party is against the deal in any of its variations. By the way, Scottish Prime Minister Nicola Sturgeon refused to vote for the deal. She said that Scotland, in principle, was against leaving the EU. Therefore, it would reject any bills related to exit from the EU, both with and without a deal. Moreover, Sturgeon also reiterated that the issue of holding a referendum on independence in her country is still open, and will be put on the agenda if Britain, nevertheless, leaves the European Union. Thus, the question of whether Parliament will accept an agreement with the European Union tomorrow is open, and so far, it is more likely that the deal will be rejected.

Sales goals:

1.2191 - 0.0% Fibonacci

Purchase goals:

1.2986 - 127.2% Fibonacci

1.3202 - 161.8% Fibonacci

General conclusions and recommendations:

The pound / dollar instrument continues to build an upward trend. However, an unsuccessful attempt to break the level of 1.2986 indicates that the instrument is ready to decline. Since the news background is now at its most importance, the continuation or completion of the construction of wave 3 or B will depend on the outcome of tomorrow's vote.

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Control zones USDJPY 10/18/19

Today's plan should take into account price taking above the September high. The decline is a correction, so the first support will be WCZ 1/4 108.44-108.39. The false breakout pattern of yesterday's low will give impetus to further growth. The risk/reward ratio will be higher than 1/3 if the monthly target of October is chosen as the profit target.

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The last growth of the pair is a strong impulse, so it is not necessary to consider a reversal model before consolidating below the WCZ 1/2. The probability of updating the monthly high is 70%.

An alternative model of a deeper correction will be developed if the closing of today's trading occurs below the WCZ 1/4. This will allow us to buy the instrument from WCZ 1/2 107.94-107.85 next week, which will significantly increase the risk/reward ratio in our favor.

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

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

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

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EUR/USD. Dollar bulls dejected by weak growth in industrial production in the United States

The euro-dollar pair consolidated within the 11th figure for the first time since the end of August, demonstrating a fairly large-scale correctional growth. Such a price dynamic is due, first of all, to Brexit: Brussels and London unexpectedly for many agreed on a draft deal, completing a many-month-long negotiating epic. Now, Johnson will have to agree with the MPs of his own Parliament - but, according to some experts, the issue of "hard" Brexit is in any case removed from the agenda. The prime minister will either convince MPs to support his version of the deal, or he will nevertheless ask Europe for a respite in order to re-elect the House of Commons and agree already with the new composition of the Parliament.

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In other words, the pressure on the EUR/USD pair has somewhat eased, although the European currency has enough problems - new US duties on the EU, weak inflation in the eurozone and the dovish rhetoric of the ECB representatives - all these factors do not allow the euro to "spread its wings" ". Nevertheless, the pair has been growing for the fourth day in a row, updating all new price highs. This growth is due, firstly, to Brexit, and secondly, to the weakness of the US currency. The second factor will play an increasingly significant role in the context of the prospects for the EUR/USD pair - especially on the eve of the next Fed meeting, the results of which we will learn on October 30.

The next round of trade talks between the US and China did not become a springboard for the dollar for a large-scale rally: the greenback showed formal growth, but overall remained at the same positions as before the negotiations. The parties did not conclude a deal, having concluded only an interim deal, essentially a "non-aggression pact", until the second stage of the negotiation process. It is at it that the most complex and fundamental issues will be discussed, which became a stumbling block in previous negotiations - at the beginning of this year and at the end of the past. Therefore, the restrained optimism of traders is quite justified, given the backstory of the US-Chinese dialogue.

However, dollar bulls are also worried about more pressing issues. Amid the long-running negotiation process, barrage trade barriers continue to operate, adversely affecting both China's economy and the US economy. Therefore, it is not surprising that the latest releases in the field of US industrial production come out in the red zone, provoking panic among bulls for the dollar. Moreover, various indicators signal pending problems, which add puzzles into one picture of a negative nature.

For example, according to the latest Nonfarm, the number of jobs in the manufacturing sector decreased by two thousand - for the first time since April this year. At the same time, the ISM production index has been consistently decreasing for the past six months, plunging in September to around 47.8 points. The last time the indicator was at such lows was no less around ten years ago. A significant decline in the US producer price index was also recorded. On a monthly basis, this indicator, which, among other things, is an early signal of changes in inflationary trends, unexpectedly fell into the negative area (for the first time since January of this year), reaching -0.3%. This is the weakest result since the fall of 2015. In annual terms, the indicator also did not significantly reach forecasts, falling to 1.4% instead of the expected growth to 1.8%. The utilization of industrial capacities in the US decreased to 77.5% in September (from the August level of 77.9%). The indicator also turned out to be lower than analysts' forecasts, who expected it to be at the level of 77.7%, and 2.3 percentage points less than the long-term average.

Yesterday's release only added to the negative fundamental picture: the volume of industrial production, which includes manufacturing, mining and utilities, fell in September by 0.4% (on a monthly basis). For the first time since April this year, this indicator fell into the negative area. Although the August indicator was revised up (+ 0.8% instead of 0.6%), the overall impression remained depressing: the published report, together with other releases, indicates a decrease in activity in this sector, and this is not good news for the dollar bulls.

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According to the latest Fed minutes, regulator members are still concerned about the trade conflict between the US and China, and more precisely, the consequences of this conflict. They stated that business investment and industrial production have recently continued to weaken amid unrest over the prospects for trade relations between the two superpowers. Jerome Powell has repeatedly spoken about this fact during his speeches. The above releases only confirm the validity of the announced position of the Fed.

Thus, the dollar is under the yoke of the latest macroeconomic reports, which again reminded traders of the intentions of some members of the Federal Reserve to reduce the interest rate by 25 basis points by the end of this year. Weak dynamics of industrial production may strengthen the position of the dove wing of the Fed at the October meeting. Against the background of such prospects, the dollar index fell over the past 10 days from 98.822 to the current value of 97.347 points. Speaking directly about the EUR/USD pair, here the price broke through the upper boundary of the Kumo cloud on the daily chart and approached the midline of the Bollinger Bands indicator on the weekly chart (1.1155). If the pair consolidates above this target, then on the daily chart the Ichimoku indicator will generate a bullish "Parade of Lines" signal , and on the weekly chart - the "Golden Cross" signal. This combination will allow the bulls of the EUR/USD pair to expect further price growth, up to the lower boundary of the Kumo cloud weekly chart, which corresponds to the price of 1.1305. If the Brexit issue fails in the British Parliament (which is likely), a price pullback will follow - right up to the bottom of the 10th figure.

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USDJPY short-term technical analysis

USDJPY is trading above 108.50 and this was a bullish sign. However bulls should not get overconfident or chase the market price. Traders need to be patient as there are signs showing that a small pull back towards 108-107.80 could be seen before more upside.

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USDJPY is trading above the Daily Ichimoku cloud. Trend is bullish. Both tenkan and kijun-sen are positively sloped and provide support for USDJPY around 108. This is a possible pull back area and back test of previous highs. Breaking below 108-107.90 could open the way for a test of the cloud support around 107.20. However we continue to focus on the upside towards 110 and as long as price is above the Kumo (cloud) we consider each pull back as a buying opportunity.The material has been provided by InstaForex Company - www.instaforex.com

GBP/USD: plan for the European session on October 18. The pound will rise if Labour supports the deal on Brexit. Parliamentary

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

The pound made another attempt to rise yesterday afternoon, which was limited to the resistance area of 1.2890. Further movement will depend directly on Boris Johnson's negotiations with Labour and the Democratic Unionist Party of Great Britain. While the former remain silent on the subject of the Brexit deal, the latter said yesterday that they are categorically against the deal. If Johnson enlists support, demand for the pound will return, and a breakthrough and consolidation above the resistance of 1.2916 will lead the pair to new local highs in the area of 1.2997, 1.3037 and 1.3074, where I recommend profit taking. Any negative background will put pressure on GBP/USD, so only the formation of a false breakout in the support area of 1.2833 will be a signal to buy the pound. In a different scenario, the pair will fall below the support of 1.2833, long positions can be returned to rebound from the lows of 1.2757 and 1.2664.

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

Sellers need bad news on Brexit, and the formation of a false breakout in the resistance area of 1.2916 will be an additional signal to sell the pound. However, the more important task of the bears today is to return and consolidate the pair below the support of 1.2833, which will push the pound to the lows of 1.2757 and 1.2664, where I recommend profit taking. However, such a downward movement will only be possible if Labour refuses to support the Brexit deal, which will make it very difficult for Boris Johnson to "live" ahead of tomorrow's vote in Parliament. In the scenario of the pound's further growth above the resistance of 1.2916, short positions can be looked at after the test of the highs of 1.2997 and 1.3074.

Signals of indicators:

Moving averages

Trading is above 30 and 50 moving averages, which indicates the maintenance of a bullish trend.

Bollinger bands

A break of the lower boundary of the indicator at 1.2833 may put pressure on the pair. Growth will be limited by the upper level at 1.2916.

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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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Short-term technical analysis of Gold for October 18, 2019

Gold price remains inside the short-term bearish channel that was created since price topped back in early September around $1,556. Since then price is making lower lows and lower highs and is vulnerable to a move lower towards $1,440-$1,400.

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Green lines - bearish channel

But what would make us change our bearish view? First bulls will need to break above this bearish channel and break above recent highs at $1,520. This would be a sign of strength that could cancel the bearish scenario. A break above $1,520, if real and not fake, should enough for bulls to be able to break above the $1,536 short-term top where price hits the upper channel boundary back in late September. Bears on the other hand want to see price eventually break below $1,490 and staying below it. This would be a sign of weakness. Our first downside target remains at $1,440 but there is always the probability of seeing lower levels like $1,400.

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Technical analysis of ETH/USD for 18/10/2019

Crypto Industry News:

An investment company allegedly dealing with cryptocurrencies and foreign exchange is on the cusp with the American CFTC commission and is accused of acting as a Ponzi program.

In a press release regarding the lawsuit, the CFTC stated that it accuses Circle Society based in Nevada and its operator David Gilbert Saffron of dishonest fundraising and misappropriation of investors' funds, as well as registration violations.

Through his company, Saffron offered binary options on currency pairs and cryptocurrency pairs, and from 2017 allegedly deceived investors for $ 11 million in Bitcoins and Fiat.

The lawsuit says that Saffron has unfairly applied for funds from at least 14 people asking for participation in the investment pool run by Circle Society. He made false claims about his commercial knowledge and "guaranteed" up to 300 percent of profits.

Instead of using the participants' investments to actually trade binary options contracts, Saffron used the funds - transferred to its own cryptocurrency portfolio - to pay other participants, "according to Ponzi's scheme."

"Digital assets and other 21st century goods are very promising for our economy. Fraud programs like this one not only deceive innocent people from their hard-earned money but also threaten to weaken the responsible development of these new and innovative markets," says President. CFTC Heath Tarbert.

The court ordered the freezing of all assets owned by Saffron and Circle Society, as well as the preservation of financial records. The hearing, in this case, will take place on October 29.

Technical Market Overview:

After falling out of the ascending channel, the ETH/USD pair has tried to bounce higher in order to test the lower line of the channel, but bulls were too weak to do so anyway. The downside momentum is clearly accelerating which is a not signal for bulls as the immediate technical support is very close at the level of $170.50. On the other hand, the key technical resistance is still located at the level of $196.61 and only a clear and dynamic breakout higher will open the road towards the next target at $202.70 and $215.73. If there is no move up back to the channel, then the next target for bears is seen at the level of $163.98 which is the next major support for the price.

Weekly Pivot Points:

WR3 - $223.04

WR2 - $209.75

WR1 - $194.13

Weekly Pivot - $180.64

WS1 - $164.92

WS2 - $151.12

WS3 - $135.26

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 still being treated as a counter-trend correction inside of the uptrend. When the wave 2 corrective cycles are completed, the market might will ready for another impulsive wave up of a higher degree and uptrend continuation.

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EUR/USD: plan for the European session on October 18. Bullish sentiment has decreased, but the euro is still likely to grow

To open long positions on EURUSD you need:

Yesterday's Brexit news was optimistic for euro buyers, and weak fundamental statistics on the US economy made it possible for the pair to remain at current highs. However, to continue the euro's growth, it is necessary to hold the level of 1.123 in the first half of the day, as well as the formation of a false breakout on it, which will update the highs in the area of 1.1151 and 1.1189, where I recommend taking profits. In the absence of important reports today on the eurozone, it will be extremely difficult to do so. Any negative news related to the agreement could put pressure on the pair. Therefore, in the scenario of its decline, you can count on buying from the minimum of 1.1090, where the moving average passes, as well as a rebound from the larger support of 1.1055.

To open short positions on EURUSD you need:

The resistance update at 1.1151 may coincide with the divergence that is now forming on the MACD indicator. This will be a clear signal to open short positions. However, the more important task of the bears will be to consolidate below the support of 1.123, which will push EUR/USD to the lows of 1.1090 and 1.1055, where I recommend profit taking. Pressure on the euro could also be provided by negative news from the UK Parliament. Tomorrow, it will discuss the Brexit deal and vote on it. In the scenario of a larger growth above 1.1151, it is best to return to short positions in the euro immediately on the rebound from the high of 1.1189.

Signals of indicators:

Moving averages

Trade is conducted above 30 and 50 moving averages, which indicates a further increase in the euro.

Bollinger bands

Volatility is greatly reduced. A break of the lower boundary of the indicator at 1.1117 may increase pressure on the euro. While growth above the upper level at 1.1130 will lead to new purchases of the euro.

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Description of indicators

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

Technical analysis of BTC/USD for 18/10/2019

Crypto Industry News:

18 million Bitcoin is to be mined on Friday, which means that at the moment only three million Bitcoins remain to be mined.It is worth noting that so far 17,997,150 BTC has been extracted so far - according to the BitcoinBlockHalf data page - and the upper limit for the number of Bitcoins that will ever be encoded in the system is 21 million.

As the number of coins remaining to be secured by securing the Bitcoin chain is still decreasing, Bitcoin halving is also approaching. During the event, the amount of Bitcoins created with each new block will be halved.

BitcoinBlockHalf estimates that on May 14, 2020 - the date is uncertain given the bitcoin block time irregularity - the block reward will be reduced from 12.5 to 6.25 coins. The website also indicates that 85.7% of all coins have already been mined.

As the number of coins that still need to be extracted decreases, competition for them appears to be increasing. The Bitcoin hash rate has for the first time ever exceeded 102 quintillions.

Technical Market Overview:

The BTC/USD pair is still trading under the short-term trendline resistance and the trendline itself has been tested three times already. The move down has been initiated after the Bearish Engulfing pattern was made around the level of 38% of the Fibonacci retracement and since then the bears have been pushing the price lower and lower. Any violation of the level of $7,672 will invalidate the current Elliott wave scenario and make the whole corrective structure more complex and time-consuming.

Weekly Pivot Points:

WR3 - $9,781

WR2 - $9,248

WR1 - $8,711

Weekly Pivot - $8,198

WS1 - $7,675

WS2 - $7,127

WS3 - $6,590

Trading recommendations:

Due to the short-term impulsive scenario invalidation, 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 still being treated as a counter-trend correction inside of the uptrend. When the wave 2 corrective cycles are completed, the market might will ready for another impulsive wave up of a higher degree and uptrend continuation.

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Forecast for EUR/USD on October 18, 2019

EUR/USD

The euro rose by 52 points on Thursday due to the conclusion of a government deal on Brexit EU-UK. The British Parliament will vote on the deal on Saturday. The United States showed weak economic indicators: 1.26 million y/y were laid in September against new forecasts of 1.32 million y/y, industrial production fell by 0.4% in September, while expectations were -0.1%, production load capacities at the same time decreased from 77.9% to 77.5%.

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The price broke the upper limit of the range of uncertainty at 1.1030-1.1125, but did it in an ambiguous manner - without consolidating above it and without turning down. The leading indicator Marlin does not give clear signals in this situation. False growth may continue to the Fibonacci level of 110.0% (1.1155), and then return to the price channel line (1.1125). Overcoming 1.1155 opens the upper target 1.1215 - Fibonacci 100.0% (last November low).

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On a four-hour chart, a turn from 1.1125 also does not show indicators; the decline in the Marlin signal line is still not deep enough. It is possible to continue the growth and possibly a corrective decline. Two main goals are identified for correction: 1.1074 - the Fibonacci level of 123.6% and 1.1030 - the MACD line of the daily scale.

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Technical analysis of GBP/USD for 18/10/2019

Technical market overview:

The bulls on GBP/USD pair has broken above the level of 1.2939, which was the first clue that the larger timeframe trend might be reversing, but the reaction from bears was immediate. The bulls made a high at the level of 1.2988 and a Pin Bar candlestick pattern was created, which means the supply is strong at this level and bears are defending the resistance zone. The market conditions are now overbought, so after the Pin Bar, the local pull-back might be in progress. The momentum is still positive, so the pull-back might not be that deep and reach the level of 1.2783 or 1.2705 before the rally resume.

Weekly Pivot Points:

WR3 - 1.3395

WR2 - 1.3032

WR1 - 1.2877

Weekly Pivot - 1.2532

WS1 - 1.2380

WS2 - 1.2032

WS3 - 1.1859

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 1.2939 and it must be clearly violated. The key long-term technical support is seen at the level of 1.2231 - 1.2224 and the key long-term technical resistance is located at the level of 1.3509. 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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Forecast for GBP/USD on October 18, 2019

GBP/USD

Pound speculation reached its peak. Yesterday, the trading range was 240 points, daily growth showed a total of 60 points. So the market once again reacted to Brexit news - it became known that the EU and Great Britain came to some version of the deal, which is still subject to approval by the British Parliament tomorrow on Saturday. The details of the contract are not specified, but, they say, this is actually May's previous deal with finalization along the Irish border - customs posts will be on the border with England.

On the daily chart, the price broke through the Fibonacci level of 100.0%, noted an overlying level of 76.4% (1.2988) and this morning returned to the level of 100.0%. Today is a day of respite, and on Monday the markets will work out the result of voting in the English Parliament. Irish Unionists have already announced their intention to vote against the deal, but there is still time until Saturday.

Ultimately, regardless of whether this deal will be adopted or not, we expect the pound to fall on Monday on the traditional market effect of sales. In fact, the price has risen very high on expectations in the last seven sessions, more than seven figures.

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On the daily chart, the precursor of a reversal is the reversal of the signal line of the Marlin oscillator from the overbought zone. The purpose of the reduction is the Fibonacci level of 161.8% at the price of 1.2548. The growth of the current week began from the same level. There is also strong technical support for the highs of September and the lows of June.

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A triple divergence has already formed on the four-hour chart according to Marlin, the signal line is close to the boundary with the territory of the "bears".

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Technical analysis of EUR/USD for 18/10/2019

Technical market overview:

The EUR/USD pair has broken out of the ascending channel around the level of 1.1109, which was the technical resistnace for the price as well. The local high was made at the level of 1.1139 and currently, bulls are testing the upper channel boundary from above. If the level of 1.1139 is clearly violated, then the next target for bulls is seen at the level of 1.1167 or even 1.1232. The immediate support is still located at the level of 1.1091 and the key technical support is seen at the level of 1.0999. Please remember, that the higher timeframe trend is still bearish.

Weekly Pivot Points:

WR3 - 1.1211

WR2 - 1.1133

WR1 - 1.1093

Weekly Pivot - 1.1014

WS1 - 1.0971

WS2 - 1.0893

WS3 - 1.0849

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 1.0999 and the technical resistance at the level of 1.1267.

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Elliott wave analysis of GBP/JPY for October 18 - 2019

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GBP/JPY is likely to see a short-term peak at 141.50 and a correction towards strong support near 135.67. Over the last couple of days, we have seen a clear loss of upside momentum and yesterday long unfavorable candle ending the day near the open (a shooting star) also indicating a short-term peak being in place and a dip towards strong support near 135.67 looks possible as Boris Johnson returns to the UK to fight for his Brexit deal with the EU.

R3: 142.26

R2: 141.50

R1: 140.08

Pivot: 138.64

S1: 137.84

S2: 137.21

S3: 136.46

Trading recommendation:

We will take profit here at 139.40 and enjoy a nice 815 pips profit of our long position from 131.25. We will look for a new buying opportunity near 135.75

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Elliott wave analysis of EUR/JPY for October 18 - 2019

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EUR/JPY has rallied as expected and has almost hit our 121.93 target (reaching its high at 121.50). We have seen a clear loss of upside momentum for the last couple of days. It indicates that a short-term correction is needed. We should expect a dip to strong support near 119.87 before the next strong push higher towards 124.64 and likely even higher before the new impulsive uptrend really.

R3: 122.01

R2: 121.50

R1: 121.00

Pivot: 120.64

S1: 120.25

S2: 119.87

S3: 119.10

Trading recommendation:

We are looking for EUR from 117.25 and we will move our stop higher to 119.00

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Technical analysis: Important Intraday Levels For EUR/USD, October 18, 2019

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When the European market opens, some economic reports will be released such as Current Account. The US will also publish the economic data such as CB Leading Index m/m, so amid the reports, the EUR/USD pair will move with low to medium volatility during this day. TODAY'S TECHNICAL LEVELS: Breakout BUY Level: 1.1180. Strong Resistance: 1.1174. Original Resistance: 1.1163. Inner Sell Area: 1.1152. Target Inner Area: 1.1126. Inner Buy Area: 1.1100. Original Support: 1.1089. Strong Support: 1.1078. Breakout SELL Level: 1.1072. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels for USD/JPY, October 18, 2019

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In Asia, Japan will release the National Core CPI y/y. The US will also publish some economic data such as CB Leading Index m/m. 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: 109.21. Resistance. 2: 109.00. Resistance. 1: 108.78. Support. 1: 108.52. Support. 2: 108.31. Support. 3: 108.09. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Forecast for USD/JPY on October 18, 2019

USD/JPY

On Thursday, the price worked out the resistance of the red price channel exactly and now, with the support of technical indicators, it is heading down. On the daily chart, the emerging divergence across Marlin has formed; the underlying trend lines are now the targets. The nearest of them is in the area of 108.05, below it 107.36.

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On the four-hour chart, divergence has also been developed, now the signal line is deepening into negative territory. The nearest target at 108.05 on this chart coincides with the support of the MACD line. Consolidation below it opens the second target 107.36.

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EURUSD approaching resistance, potential big drop coming up!

Entry: 1.11671Why it's good: 78.6% fibonacci retracement, horizontal pullback resistanceStop Loss : 1.12348Why it's good : horizontal swing high resistance Take Profit: 1.10990Why it's good: horizontal pullback support, 100% fibonacci extension, 23.6% fibonacci retracement

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USDNOK pull back below resistance

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Description :

USDNOK expected to pull back below resistance at 9.20590.

Entry: 9.18850

61.8% Fibonacci retracement

Take Profit : 9.11148The material has been provided by InstaForex Company - www.instaforex.com

Fractal analysis of the main currency pairs for October 18

Forecast for October 18 :

Analytical review of currency pairs on the scale of H1:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.1217, 1.1179, 1.1161, 1.1132, 1.1101, 1.1083 and 1.1054. Here, the continuation of the development of the upward cycle of October 8 is expected after the breakdown of the level of 1.1132. In this case, the goal is 1.1161. Short-term upward movement, as well as consolidation is in the range of 1.1161 - 1.1179. For the potential value for the bottom, we consider the level of 1.1217. Upon reaching this level, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range 1.1101 - 1.1083. The breakdown of the last value will lead to a long correction. Here, the goal is 1.1054. This level is a key support for the top.

The main trend is the local ascending structure of October 8.

Trading recommendations:

Buy: 1.1134 Take profit: 1.1160

Buy 1.1180 Take profit: 1.1215

Sell: 1.1100 Take profit: 1.1084

Sell: 1.1081 Take profit: 1.1055

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For the pound / dollar pair, the key levels on the H1 scale are: 1.3215, 1.3141, 1.3033, 1.2939, 1.2810, 1.2734 and 1.2625. Here, we are following the development of the upward cycle of October 9. Short-term upward movement is expected in the range 1.2939 - 1.3033. The breakdown of the level of 1.3035 should be accompanied by a pronounced upward movement. Here, the potential target is 1.3141. Price consolidation is in the range of 1.3141 - 1.3215 .

Short-term downward movement is expected in the range of 1.2810 - 1.2734. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.2625. This level is a key support for the top.

The main trend is the upward structure of October 9.

Trading recommendations:

Buy: 1.2940 Take profit: 1.3032

Buy: 1.3035 Take profit: 1.3140

Sell: 1.2810 Take profit: 1.2735

Sell: 1.2730 Take profit: 1.2625

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9923, 0.9902, 0.9886, 0.9859, 0.9836, 0.9822 and 0.9794. Here, we are following the development of the local descending structure of October 15. The continuation of the movement to the bottom is expected after the breakdown of the level of 0.9859. In this case, the target is 0.9836. Price consolidation in the range of 0.9836 - 0.9822. For the potential value for the bottom, we consider the level of 0.9794. Upon reaching which, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 0.9886 - 0.9902. The breakdown of the last value will lead to in-depth correction. Here, the goal is 0.9923. This level is a key support for the downward structure.

The main trend is the local descending structure of October 15.

Trading recommendations:

Buy : 0.9886 Take profit: 0.9900

Buy : 0.9904 Take profit: 0.9920

Sell: 0.9859 Take profit: 0.9836

Sell: 0.9820 Take profit: 0.9795

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For the dollar / yen pair, the key levels on the scale are : 109.66, 109.33, 108.90, 108.72, 108.24, 108.02 and 107.67. Here, we are following the development of the upward cycle of October 4. Short-term upward movement is expected in the range 108.72 - 108.90. The breakdown of the latter value will lead to a movement to the level of 109.33. Price consolidation is near this level. For the potential value for the top, we consider the level of 109.66. Upon reaching this level, we expect a consolidated movement, as well as a pullback to the bottom.

Short-term downward movement is expected in the range of 108.24 - 108.02. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 107.67. This level is a key support for the top.

The main trend: the upward cycle of October 4.

Trading recommendations:

Buy: 108.90 Take profit: 109.30

Buy : 109.34 Take profit: 109.65

Sell: 108.24 Take profit: 108.03

Sell: 108.00 Take profit: 107.70

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3211, 1.3177, 1.3156, 1.3107, 1.3082 and 1.3052. Here, we are following the development of the downward cycle of October 10. Short-term downward movement is expected in the range of 1.3107 - 1.3082. The breakdown of the last value will lead to a movement to a potential target - 1.3052. From this level, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 1.3156 - 1.3177. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.3211. This level is a key support for the downward structure.

The main trend is the downward cycle of October 10.

Trading recommendations:

Buy: 1.3156 Take profit: 1.3176

Buy : 1.3178 Take profit: 1.3210

Sell: 1.3107 Take profit: 1.3084

Sell: 1.3080 Take profit: 1.3052

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6886, 0.6860, 0.6842, 0.6832, 0.6810, 0.6795 and 0.6773. Here, we are following the development of the ascending structure of October 16. The continuation of the movement to the top is expected after the price passes the noise range 0.6832 - 0.6842. In this case, the target is 0.6860. Price consolidation is near this level. For the potential value for the top, we consider the level of 0.6886. Upon reaching this level, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.6810 - 0.6795. The breakdown of the last value will lead to an in-depth correction. Here, the target is 0.6773. This level is a key support for the upward structure.

The main trend is the upward structure of October 16.

Trading recommendations:

Buy: 0.6842 Take profit: 0.6860

Buy: 0.6863 Take profit: 0.6886

Sell : 0.6810 Take profit : 0.6797

Sell: 0.6793 Take profit: 0.6775

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For the euro / yen pair, the key levels on the H1 scale are: 121.95, 121.79, 121.34, 121.03, 120.61, 120.28, 119.92 and 119.64. Here, we are following the development of the local ascendant structure of October 15. Short-term upward movement is expected in the range 121.03 - 121.34. The breakdown of the level of 121.35 should be accompanied by a pronounced upward movement. Here, the target is 121.79. Price consolidation is in the range of 121.79 - 121.95. From here, we expect a correction.

Short-term downward movement is possibly in the range of 120.61 - 120.28. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 119.92. This level is a key support for the top. Its passage at the price will lead to the formation of initial conditions for the downward cycle. In this case, the first goal - 119.64.

The main trend is the upward structure of October 15.

Trading recommendations:

Buy: 121.05 Take profit: 121.34

Buy: 121.36 Take profit: 121.76

Sell: 120.60 Take profit: 120.33

Sell: 120.25 Take profit: 119.94

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For the pound / yen pair, the key levels on the H1 scale are : 142.82, 140.89, 139.53, 137.79, 137.08, 136.05 and 135.47. Here, we are following the development of the upward cycle of October 8. The continuation of the movement to the top is expected after the breakdown of the level of 139.55. In this case, the target is 140.89. Price consolidation is near this level. The breakdown of the level of 140.92 will lead to the development of a pronounced movement. In this case, the potential goal is 142.82. Upon reaching which, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement is possibly in the range of 137.79 - 137.08. The breakdown of the last value will lead to a long correction. Here, the target is 136.05. The range of 136.05 - 135.47 is a key support for the top.

The main trend is the medium-term upward structure of October 8.

Trading recommendations:

Buy: 139.55 Take profit: 140.85

Buy: 141.00 Take profit: 142.80

Sell: 137.77 Take profit: 137.08

Sell: 137.05 Take profit: 136.05

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AUD / USD vs USD / CAD vs NZD / USD vs #USDX (H4). Comprehensive analysis of movement options from October 18, 2019 APLs

Minuette (H4)

Here's a comprehensive analysis of the development options for the movement AUD / USD vs USD / CAD vs NZD / USD vs #USDX from October 18, 2019 on the Minuette operational scale (H4 time frame)

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US dollar Index

The movement of the #USDX from October 18, 2019 will be determined by the development and direction of the breakdown of the boundaries of the equilibrium zone (98.15 - 97.75 - 97.35) of the Minuette operational scale. Look at the animated chart for details.

If the lower boundary of ISL61.8 is broken (support level of 98.05) the equilibrium zone of the Minuette operational scale fork, with the subsequent update of the local minimum 97.21, then the downward movement of the dollar index will be directed to the final line FSL Minuette (96.10).

In the event of breakdown of the upper boundary of ISL38.2 (resistance level of 98.15) of the equilibrium zone of the Minuette operational scale fork, it will be possible to continue the development of the upward movement #USDX to the equilibrium zone (98.50 - 98.85 - 99.15) of the Minuette operational scale fork.

The markup of #USDX movement options from October 18, 2019 is shown in the animated chart.

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Australian dollar vs US dollar

From October 18, 2019, the development of the movement of the Australian dollar AUD / USD will be determined depending on the development and the breakdown direction of the range :

  • resistance level of 0.6840 (warning line UWL61.8 of the Minuette operational scale fork);
  • support level of 0.6815 (warning line UWL38.2 of the Minuette operational scale fork).

The breakdown of the resistance level 0.6840 (UWL61.8 Minuette) - continuation of the upward movement of the Australian dollar to targets - warning line UWL100.0 (0.6875) of the Minuette operational scale fork - local maximum 0.6896 - equilibrium zone (0.6925 - 0.6975 - 0.7025) of the Minuette operational scale fork.

The breakdown of the support level 0.6815 (UWL38.2 Minuette) - an option for the development of the downward movement of AUD / USD whose goals will be - the control line UTL Minuette (0.6795) - the initial SSL line Minuette (0.6775) - the initial SSL line (0.6760) of the Minuette operational scale fork with the prospect of reaching the boundaries of the 1/2 Median Line channel (0.6730 - 0.6710 - 0.6690) and the equilibrium zone (0.6690 - 0.6665 - 0.6640) of the Minuette operational scale fork.

From October 18, 2019, we look at the layout of the AUD / USD movement options in the animated chart.

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New Zealand dollar vs US dollar

The development of the movement of the New Zealand dollar NZD / USD from October 18, 2019 will continue based on the development and direction of the breakdown of the range :

  • resistance level of 0.6351 (local maximum);
  • support level of 0.6340 (upper boundary of ISL61.8 of the Minuette operational scale fork).

Updating the local maximum and securing the New Zealand dollar above the resistance level of 0.6531 will make it possible to continue the development of the upward movement of this currency instrument to the goals - the final Schiff Line Minuette (0.6365) - the equilibrium zone (0.6390 - 0.6445 - 0.6500) of the Minuette operational scale fork.

However, if you return below ISL61.8 Minuette (support level of 0.6340), the development of the NZD / USD movement will continue within the boundaries of the equilibrium zone (0.6340 - 0.6325 - 0.6305) and the 1/2 Median Line channel (0.6320 - 0.6305 - 0.6290) of the Minuette operational scale fork with the prospect of achieving the initial SSL (0.6255) and control UTL (0.6245) lines of the Minuette operational scale fork and updating the local minimum 0.6238.

From October 18, 2019, we look at the markup of the NZD / USD movement options in the animated chart.

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US dollar vs Canadian dollar

The development of the movement of the Canadian dollar USD / CAD from October 18, 2019 will also be determined by the development and direction of the breakdown of the range :

  • resistance level of 1.3155 (control line LTL of the Minuette operating scale fork);
  • support level of 1.3140 (warning line LWL61.8 of the Minuette operational scale fork).

The breakdown of support level 1.3140 on the warning line LWL61.8 of the Minuette operational scale fork will make it possible to continue the development of the downward movement of USD / CAD to the warning line LWL100.0 Minuette (1.3100) and the boundaries of the equilibrium zone (1.3085 - 1.3035 - 1.2985) of the Minuette operational scale fork.

On the contrary, the return of the Canadian dollar above the LTL Minuette control line (resistance level of 1.3155) is an option for the development of upward movement to the boundaries of the 1/2 Median Line channel (1.3180 - 1.3210 - 1.3240) of the Minuette operational scale fork with the prospect of reaching the final Schiff Line (1.3300) and the boundaries of the equilibrium zone (1.3325 - 1.3355 - 1.3385) of the Minuette operational scale fork.

From October 18, 2019, we look at the layout of the USD / CAD movement options in the animated chart.

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The review is made without taking into account the news background. Thus, the opening of trading sessions of major 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.

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Dollar loses trumps, while the euro and pound await news from the EU summit

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A weak report on retail sales in the US, heightened investor concerns about the resilience of the US economy to trade wars, as well as increased chances of a Brexit deal and a Federal Reserve rate cut in October, making it possible for EUR/USD bulls to storm support at 1.1065 and continue their attack towards 1.1100.

Consumer spending in the United States fell for the first time in seven months. At the same time, such a rate of decline has not been observed since February.

It is obvious that the US economy is losing steam, so the divergence in economic growth of the US and the rest of the world does not provide the dollar with the same support.

In addition, consumer spending is a pillar of the US economy, and the latest report may give the FOMC's "doves" a good reason to support a third federal funds rate cut.

If on Tuesday the derivatives market estimated the probability of easing the Fed's policy at the upcoming meeting at 72%, then on Wednesday this figure rose to 86%.

Meanwhile, the fall of European consumer prices to 0.8% in September (the lowest level in almost three years), apparently, does not bother the "hawks" of the ECB Governing Council. According to the President of the Bundesbank, Jens Weidmann, the Phillips curve is still working, and a 1% increase in average wages will accelerate inflation by 0.3%. Yes, this is a lengthy process, but it goes.

Meanwhile, the Fed began to acquire treasury bills. The volume of the first operation amounted to $7.5 billion, and proposals - $32.6 billion. Although Fed Chairman Jerome Powell noted that resuming asset purchases is not a new QE, the market seems to be of a different opinion. If the US Treasury increases the emission of short-term debt and reduces the release of long-term, this is unlikely to affect rates. However, if current plans remain unchanged, then profitability will decline across the entire spectrum of obligations. This is nothing more than monetary stimulation of the economy. Investors are well aware that its potential in the United States is wider than in Europe, so they continue to buy EUR/USD.

This week, the single European currency showed an upward trend, including due to the prospect of concluding a deal between London and Brussels under the Brexit conditions, which will reduce the degree of uncertainty and eliminate risks not only for the United Kingdom, but also for other members of the eurozone.

The deal should be announced in the coming days. This event may push EUR/USD to 1.1150 if the market considers the deal to be profitable. Although analysts predict further worsening macroeconomic statistics for the eurozone, optimism about Brexit and the prospects for the Fed to cut rates at the end of this month will be the main drivers of EUR/USD growth in the near future.

The British currency against the US dollar reached a five-month high, rising above $1.29 amid reports that the negotiators of the UK and the European Union agreed on the conditions for the country to leave the bloc before the decisive EU summit.

"We've got a great new deal", UK Prime Minister Boris Johnson tweeted.

He called on British lawmakers to support the deal when it is presented to the House of Commons on Saturday.

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European Commission President Jean-Claude Juncker called the deal "fair and balanced."

"I recommend that the European Council approve this deal," he said.

Discussions on the development of a divorce agreement continued until late at night on Tuesday and Wednesday. It will be presented to EU leaders at their summit, which will be held in Brussels on October 17–18, and then to the British Parliament on October 19.

"The full adoption of the document in the next few days looks extremely ambitious, although theoretically possible. However, this scenario is still unlikely. This means that the Benn act will come into play this weekend, requiring another Johnson request to defer Brexit's date," according to TD Securities.

Although the euro, the pound and other major currencies were ahead of the dollar, the losses of the greenback against the yen were not so great.

The Japanese currency fell 1.18% over the week. At the moment, the USD/JPY pair is trading near the level of 108.7.

"The yen maintains the status of the cheapest of the major currencies," said Mark McCormack, chief currency strategist at TD Securities.

According to Karen Fishman, an economist at Goldman Sachs, the weakness of the yen is due to purchases of foreign assets by Japan's Government Pension Investment Fund (GPIF), which puts pressure on the national currency.

"GPIF's large-scale investment in foreign assets frees the Japanese government from the need for foreign exchange interventions that could provoke Donald Trump's anger with the urge to accuse countries of manipulating their currencies," she said.

M. McCormack believes that a fall in US stocks could cause a significant strengthening of the yen, since in this case Japanese investors will get rid of US assets and return their money to their homeland.

Such a scenario will force the Japanese government to intervene and weaken the national currency, the analyst said, who determined the "pain threshold" for USD/JPY quotes at 95.

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