Technical analysis recommendations for EUR/USD and GBP/USD on January 9

EUR / USD

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Players on the downside continue to struggle with the support zone they met, which is located within 1.1168-44 (daily and monthly Tenkan) - 1.1130-11 (weekly Fibo Kijun + Tenkan + daily Kijun). Nevertheless, weekly closure under the support zone will help them achieve further success. After that, we will consider the support located at 1.1082-63 (weekly Kijun + upper border of the daily cloud + target for breakdown of the H4 cloud) and 1.1030 (lower border of the daily cloud + final level of the weekly golden cross) to continue the decline. The breaking of the met supports, and even more so the formation of a rebound, can delay the development of the situation and save uncertainty.

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The main advantage of the lower halves now belongs to the players on the decline. The reference points within the day when the decline continues will be the support of the classic Pivot levels 1.1081 (S1) - 1.1057 (S2) - 1.1014 (S3). The expansion of the capabilities of the current upward correction may provoke consolidation above the central Pivot level of the day (1.1124). In this case, the interests of the players to increase will shift to the conquest of the key resistance at H1 - the weekly long-term trend (1.1161).

GBP / USD

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The pair continues to close the working day under the attraction zone 1.3121-96, which has combined many important and strong levels of high halves, but it is impossible to go beyond it, so there is no change in the situation, and the conclusions and possible options for the development of events voiced earlier retain their relevance. At the same time, a separation from the zone of attraction will lead to the strengthening of bears, whose interests will be directed to 1.2920 - 1.2882 (weekly cloud + monthly Fibo Kijun + upper border of the daily cloud). Now, consolidating above 1.3121-96 may contribute to the further restoration of the bullish positions, with the goal of conquering the nearest monthly resistance (1.3314 - 1.3452).

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Yesterday, players on the upside failed when trying to break down key resistance on H1, while the pair remained in the zone of attraction of the levels and could not develop directional movement. At the moment, certainty and clear advantage are lacking again. The pound is testing key resistance levels again, combining the central Pivot of the day (1.3114) and the weekly long-term trend (1.3126), and continues to remain in their zone of attraction, with a slight advantage in favor of the bears, as the pair is now working under key levels. Today's intraday supports are 1.3059 (S1) - 1.3025 (S2) - 1.2970 (S3), while the resistances of the classic Pivot levels are located at 1.3148 (R1) - 1.3203 (R2) - 1.3237 (R3).

Ichimoku Kinko Hyo (9.26.52), Pivot Points (classic), Moving Average (120)

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American president demonstrated the wonders of political acrobatics again (there is a high probability of a local decline

After the United States launched a missile strike at the end of last week, which killed a prominent Iranian military commander, Q. Soleimani, protective assets began to be in sharp demand on global markets, as investors began to fear Tehran's retaliatory measures, which could lead to new attacks by America and the general escalation of the conflict.

Over the past three days, the tension has only increased, and when Iran responded to Washington by firing at an American military base and airfield on Iraqi territory on Tuesday, Trump very pathetically announced on Wednesday that the United States will respond to this only by increasing sanctions pressure. Thus, the tension in world markets has subsided and resulted in a rather noticeable increase in demand for risky assets. On this wave, the price of the "yellow" metal went down after a sharp increase, while the yen, and the Swiss franc also responded synchronously by lowering quotes, which were accompanied by an increase in the yield of American treasuries.

In fact, by observing what is happening around the conflict between Tehran and Washington, we can say that the United States and Iran, despite hawkish rhetoric, show miracles of caution so as not to overcome certain "red lines" behind which there are already real large-scale military operations. Unfortunately, these events have a direct impact on the dynamics of financial markets in general and the currency exchange market in particular. We believe that market volatility will be characterized by high volatility despite a slight decrease in tension, which led to the appreciation of the US dollar and a landslide drop in crude oil prices, which fell by more than 5.0% at the time. In turn, investors will, of course, respond to important economic data published, such as US employment figures this Friday, but will still consider them again through the prism of middle Eastern events that have not yet ended, with limited response.

Unfortunately, the US foreign policy, which is a continuation of the domestic one against the background of the presidential election campaign, will destabilize not only the Middle East, but also other regions of the world. For example, Latin America, which will fully influence financial markets. This state of affairs is likely to lead to a continuation of the general lateral dynamics in the main currency pairs with sharp shots, then up or down.

At the same time, it seems that commodity and commodity currencies will receive overall support in the short term in the wake of the signing of the US-China trade agreement, but will also fully respond to news from the Middle East, which will force quotes of crude oil to rise or fall. Sterling, like the Euro currency, seems to be moving in a "sideways" in anticipation of an end to Brexit on January 31. Shelter currencies - the yen and the franc, as well as gold - will remain hostages to tension or its decline both in the Middle East and around Britain's exit from the EU. In general, we continue to expect new "acrobatic political somersaults" from D. Trump, who will keep the markets in good shape.

Forecast of the day:

EUR/USD is under pressure, but still remains in a short-term upward trend. Thus, the price is likely to break the level of 1.1100 and rush to 1.1065 and even lower to 1.1050, if US employment data is strong on Friday.

The AUD/USD pair "lies" above the support level of 0.6860. The breakdown of which will lead to its local decline to 0.6800.

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Technical analysis of GBP/USD for 09/01/2020:

Technical Market Overview:

The GBP/USD pair has fallen out of the channel zone (marked on the chart in black) and is trading back and forth around the level of 1.3121, testing the lower channel line from below. In this situation, the bears have taken control of the market and might push the price towards the level of 1.3017, which is the local technical support level. In order to continue the move higher, the bulls must break through the level of 1.3171. The momentum has changed from neutral to negative, so the odds for another move up are low. The target for bears is seen at the level of 1.3051, 1.3017 and 1.2988.

Weekly Pivot Points:

WR3 - 1.3419

WR2 - 1.3347

WR1 - 1.3185

Weekly Pivot - 1.3120

WS1 - 1.2957

WS2 - 1.2894

WS3 - 1.2801

Trading Recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is up. All downward moves will be treated as local corrections in the uptrend. In order to reverse the trend from up to down, the key level for bulls is seen at 1.2756 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.

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Technical analysis of EUR/USD for 09/01/2020:

Technical Market Overview:

The EUR/USD pair has broken below the local technical support seen at the level of 1.1123 and made a fresh new local low on its way down at the level of 1.1100. Currently, the price is moving up and down in a narrow zone between the levels of 1.1103 - 1.1117 as the traders wait for move continuation. The larger timeframe trend remains down, so the pressure for bears intensifies and if the key technical support located at the level of 1.1006 is violated, then the sell-off might accelerate towards the level of 1.1065 and below.

Weekly Pivot Points:

WR3 - 1.1326

WR2 - 1.1283

WR1 - 1.1212

Weekly Pivot - 1.1166

WS1 - 1.1101

WS2 - 1.1048

WS3 - 1.0979

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 1.1040 and the technical resistance at the level of 1.1267.

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AUD/USD. Rise and fall: aussie can plunge to the 67th figure

The Australian dollar paired with the US currency reached 5-month highs at the end of December, for the first time since July, exceeding the key resistance level of 0.7000. However, the aussie could not resist in the region of the 70th figure, and the pair returned to their previous positions in January, settling in the region of the 68th figure. Such dynamics are caused, first of all, by the general strengthening of the US dollar, while the Australian currency cannot stand alone against dollar bulls. The ambiguous situation on the Australian labor market, large-scale fires and signs of a political crisis put pressure on the aussie. Therefore, if US Nonfarms come out in the green zone tomorrow, then the AUD/USD pair may well fall below the lower boundary of the Kumo cloud (on the daily chart), that is, under the mark of 0.6800.

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Judging by yesterday's report from ADP, the US labor market may again support the US dollar. According to unofficial data, in December more than 200 thousand (202) jobs were created in the private sector. According to forecasts, official data will be released at the level of 150 thousand, which is also a pretty good result. But the Australian labor market continues to show contradictory dynamics. And here it is worth recalling that the Reserve Bank of Australia during its last meetings focused on the dynamics of the labor market growth. While the latest published data in this area (the release was on December 19) are negative, despite the green color. The unemployment rate is slightly higher than the forecasted level (5.2%). Unemployment was at five percent at the beginning of last year, it then dropped to 4.9% in February, but then stabilized in the region of 5.2-5.3%. This is quite far from the RBA target level of 4.5%.

Most experts assumed that the indicator will remain at around 5.3% in December, but in reality the indicator has retreated to its previous position of 5.2% (at this level it went from April to July, as well as in September). Therefore, if we consider the situation throughout the year, then we can't talk about a decrease in unemployment, especially in the context of achieving the target level of RBA.

Even more questions are raised by the increase in the number of employees. It also entered the green zone in December. Following a significant decrease in October (-24 thousand) and rather weak forecasts for November (+14.5 thousand), the indicator showed a good, at first glance, result: +39.9 thousand. But considering the structure of this indicator, we can conclude that the situation does not look completely positive. The fact is that the positive dynamics of the growth of employed was only due to the growth of part-time employment - this component grew by 35.7 thousand. But full employment, on the contrary, showed extremely weak dynamics, having understood only four thousand. This trend may negatively affect the dynamics of wage growth, as regular positions, as a rule, offer a higher level of wages and a higher level of social security.

It is worth noting that the first RBA meeting in 2020 will take place only on February 4, and up to this date more recent data on the labor market will be published. But at the moment, traders are guided by the December numbers, which leave much to be desired. This fact puts background pressure on the Australian, who in the AUD/USD pair is forced to focus on the behavior of the US currency.

Natural disasters also put downward pressure on the aussie. According to recent data, the economic damage from forest fires devastating the eastern coast of the continent will exceed a record $4.4 billion. According to analysts at Moody's Analytics, fires will undermine Australia's already weak consumer confidence and also damage the economy due to significant air pollution (direct damage is done to industries such as agriculture and tourism). The country suffered similar damage ten years ago, during the major forest fires of 2009, called the "Black Saturday fires"....

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Thus, the Australian dollar paired with the US currency now has all the prerequisites for its decline - primarily due to the growth of the US dollar. The aussie does not have significant arguments for its own strengthening, so it is forced to stay in the wake of the quoted currency in the AUD/USD pair. Therefore, tomorrow's Nonfarm data can have a strong impact on the aussie's dynamics - especially if the real numbers will significantly differ from the forecast values.

From a technical point of view, the pair is between the middle and lower lines of the Bollinger Bands indicator on the daily chart. In addition, the Ichimoku indicator generated the Dead Cross signal, in which the Tenkan-sen and Kijun-sen lines are above the price, and the Kumo cloud is below it. All this suggests that the pair has the potential to decrease, up to the lower boundary of the above cloud, that is, to around 0.6800. If the price movement is impulsive, the pair may break through this level of support, gaining a foothold in the region of the 67th figure.

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Indicator analysis: Daily review on GBP / USD for January 9, 2020

Trend analysis (Fig. 1).

The price may continue to move up today with the target of 1.3170, a pullback level of 50.0% presented in a red dashed line. If this line is reached, a continuation of work up with the target of 1.3197, the retracement level of 61.8% presented in a red dashed line.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - neutral;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

The price may begin to move up this day.

A possible unlikely scenario is from the level of 1.3142, the retracement level of 38.2% presented in a red dashed line, is working down with the target 1.3054, the lower fractal presented in a red dashed line. In this case, the final lower target is 1.3041, the support line presented in a white bold line, from which upward movement can begin.

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Elliott wave analysis of GBP/JPY for January 9, 2020

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GBP/JPY has rallied stronger than expected and is currently testing the peak at 143.30 and will likely exceed it for a test of 143.58 before turning lower again towards 140.80 and the way towards the ideal target seen near 137.31. On the way lower good support is seen at 139.25.

Short-term, we expect GBP/JPY to peak at 143.58 for renewed downside pressure. A break below minor support at 143.04 and more importantly a break below support at 142.75 confirming renewed downside pressure towards 140.80 towards 139.25 and below.

R3: 144.23

R2: 143.96

R1: 143.58

Pivot: 143.04

S1: 142.75

S2: 142.31

S3: 141.96

Trading recommendation:

Our stop at 143.35 has been hit for a small loss of 85 pips. We will sell GBP again at 143.50 with a stop at 144.25 or we will sell GBP upon a break below 143.04 if 143.50 is not reached.

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Elliott wave analysis of EUR/JPY for January 9, 2020

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EUR/JPY is currently testing the 121.45 high and will likely exceed by a small margin before turning lower again, through minor support at 121.31 and more importantly below support at 121.07 for renewed downside pressure towards 120.15 on the way towards the ideal target at 119.26. Once the 119.26 has be reached a new impulsive rally is expected.

Short-term the corrective rally from 120.15 is expected to peak near 121.53 before turning lower again to complete the corrective decline from 122.50.

R3: 121.76

R2: 121.67

R1: 121.53

Pivot: 121.31

S1: 121.07

S2: 120.89

S3: 120.65

Trading recommendation:

We are short EUR from 121.20 and we will move our stop to 121.70 risking only 20 pips more

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Euro and pound are trading in a range in anticipation of the US employment report

Tension declined markedly after the US refused to continue the escalation of the military conflict with Iran. Iran's missile attack on US military bases in Iraq was limited and largely symbolic, which allowed both sides to demonstrate resolve but avoid a full-scale military conflict.

As a result, markets reacted by falling oil and gold prices, and as of Thursday morning, Brent quotes are lower than before the Soleimani assassination. At the same time, yen has returned to the range that it has been in since October, the US stock indexes closed in the green zone, and only gold somewhat falls out of the general trend slightly correcting after strong growth.

Moreover, geopolitical factors are diminishing for markets and economic factors are coming to the fore. The US Private Sector Private Employment Report ADP in December turned out to be noticeably better than expected, with growth of 202 thousand, which adds optimism before nonfarm publication on Friday.

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At the same time, the main trends remained unchanged. Employment growth was observed exclusively in the services sector plus construction, while the US industrial sector continues to slow down.

Despite the decline in tension, the demand for risk in the coming days will remain limited. There is no certainty in the markets that the world economy is capable of starting recovery this year, so consolidation is more likely in anticipation of new data.

EUR/USD

The bullish sentiment in the euro is gradually disappearing after the publication of weaker than expected indicators of production orders in Germany in November at the level of -1.3% m / m with a forecast of 0.2%. The speed of economic recovery in Germany raises questions, and even the growth of retail sales in the eurozone above the forecast and stable inflation are not able to give the euro an additional impetus sufficient to resume growth.

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The key industrial sectors of the eurozone will not return to the path of sustainable growth. The most noticeable changes in moods is in the automotive industry wherein there is an obvious decline in demand for European cars compared to American, which puts pressure on all related industries.

It is also necessary to take into account the growing risks associated with the reassessment of the prospects of the Fed and the ECB for managing the financial climate in the United States and the eurozone. Most recently, the Fed actively intervened in the repo market, and the markets proceeded from the fact that the probability of a rate cut in March increased, then at the moment, such sentiments have somewhat weakened, largely due to the fact that trading risks have decreased (which, in turn, supported the growth of stock indices), and also because of the difference in favor of the US data on consumer spending and business investment.

As a result, short-term technical signals in the euro are changing to bearish and with attempts to grow to resistance 1.1150 and 1.1180, resumption of sales is likely. Moreover, the euro is close to the support of 1.1100, from which a decline below 1.1065 will strengthen the bearish sentiment.

GBP/USD

The pound does not have its own diver due to the lack of economic news in the first decade of the year. Thus, it is trading mainly in the range and has no obvious intentions to go beyond it.

British Prime Minister Johnson met with European Commission President von der Leyen, reiterating that he wants to conclude a deal by the end of 2020, while the EU continues to emphasize that a comprehensive deal is "impossible in principle." Therefore, risks of increased tension are present, but they will begin to recoup by the markets later and are not yet taken into account.

GBP/USD forms a converging triangle with a gravitation towards the equilibrium point 1.3050, support at 1.2985, and resistance at 1.3200. Trading will continue for some time in the indicated range. There will be a lot of news next week, which will serve as a catalyst for getting out of the range, but it is too early to judge in which direction.

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Indicator analysis: Daily review on EUR / USD for January 9, 2020

Trend analysis (Fig. 1).

On Thursday, after testing the support line of the upward trend 1.1104 presented in a white bold line, the price may begin to move up with the first target of 1.1133, the 21 average EMA presented in a black thin line. If this level is achieved, the next goal 1.1166 is the historical resistance level presented in a blue dashed line.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

An upward trend is possible on Thursday.

A possible unlikely scenario is from 1.1104, the support line presented in a white bold line, the price goes down to a retreat level of 61.8% which is at 1.1081 presented in a red dashed line.

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GBP/USD: plan for the European session on January 9. Vote on Brexit bill will help determine the pound's direction

To open long positions on GBP/USD you need:

The British pound continues to be traded in the side channel of 1.3055-1.3205, going beyond which will determine the pair's direction. Today's vote on the Brexit bill may help, but the market will respond more clearly to statements by British Prime Minister Boris Johnson. The bulls need a return to the middle of the channel at 1.3130, a breakthrough of which will ensure growth in the region of the upper boundary of 1.3205, where I recommend taking profits. If pressure on the pound persists further, I recommend taking a closer look at long positions only after a false breakout is formed in the support area of 1.3055, and it is best to buy GBP/USD for a rebound near the new lows 1.3015 and 1.2971 with an upward correction of 30-35 points. A break of the upper boundary of 1.3205 will ensure that the bulls win in this situation, which will quickly return the pair to the highs of 1.3282 and 1.3348.

To open short positions on GBP/USD you need:

Important fundamental statistics are not published today, and the whole emphasis will be reduced to the discussion in the British Parliament of the bill on Brexit. The formation of a false breakout and unsuccessful consolidation in the first half of the day above the resistance of 1.3129 will be a signal to open short positions in the pair. A more important task will be a breakthrough and consolidation under the lower boundary of the side channel at 1.3055, which will quickly push the pound to the lows of 1.3015 and 1.2971, where I recommend taking profits. In a GBP/USD growth scenario above resistance at 1.3129, it is best to return to short positions to rebound from the upper boundary of the side channel at 1.3205, or after a test of the high of 1.3282, with the aim of a downward correction of 25-30 points.

Signals of indicators:

Moving averages

Trade is conducted in the region of 30 and 50 moving average, which indicates the lateral nature of the market.

Bollinger bands

In the event of a decline, the pound will be supported by the lower boundary of the indicator at 1.3087, the break of which will increase the pressure on the pair. A break of the upper boundary at 1.3150 will lead to a larger upward trend.

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Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
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EUR/USD: plan for the European session on January 9. German industrial production could sharply weigh on the euro

To open long positions on EURUSD you need:

A good report from ADP on the growth in the number of employees in the US private sector led to the strengthening of the US dollar against the euro at the US session yesterday. Today, the entire focus in the morning will be shifted to the report on industrial production in Germany and in case of weak indicators, pressure on the euro will continue. However, with a good report, which is unlikely, euro buyers will attempt to return to the level of 1.1130, which will be a signal to open long positions, counting on updating highs 1.1166 and 1.1205, where I recommend taking profits. You should also pay attention to the support of 1.1096, the update of which, together with the divergence on the MACD indicator, which may form after a test of this level, will also indicate a possible euro growth in the short term. Otherwise, it is best to open long positions in EUR/USD by rebounding from the lows of 1.1069 and 1.1041.

To open short positions on EURUSD you need:

Sellers continue to control the market and now their main task in the first half of the day will be the formation of a false breakout in the resistance area of 1.1130. This scenario may come true after a weak report on German industrial production, which is expected in the morning. An equally important task for the bears will be to break through and consolidate below the support of 1.1096, which will increase pressure on EUR/USD and will lead to an update of the lows of 1.1069 and 1.1041, where I recommend taking profits. However, before opening new short positions on the breakout of 1.1096, you should make sure that no divergence is formed on the MACD indicator. In case the euro grows above resistance at 1.1130 in the morning, short positions are best considered for a rebound from highs 1.1166 and 1.1205.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 moving averages, which indicates the advantage of euro sellers.

Bollinger bands

An unsuccessful breakout of the lower boundary of the indicator in the region of 1.1096 will be a signal to buy the euro. Growth will be limited by the upper level of the indicator in the area of 1.1140.

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Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
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The EUR/USD 20 Days PD Aray IPDA Data Range Analysis for Thursday January 09, 2020.

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Take into account this fact, EUR/USD is likely to have a bearish bias.

(Disclaimer)

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The USD Index Price Daily Range For Thursday, January 09, 2020.

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Source: Instatrader 4

If we look at the 4 Hour USD Index charts, we can see that they have already made a 123 Pattern (Hoe Pattern). Now the price may hit the Fair Value Gap Threshold at 97.38. It seems that the price can decline first to make a retrachement before growing again to test the Daily SELL Side Liqudity Pool at 97.82 level.

Take intro account this fact most of the time and today bias for USD Index is likely to be bullish.

(Disclaimer)

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Forecast for EUR/USD on January 9, 2020

EUR/USD

Yesterday, US President Donald Trump said that due to the lack of human casualties, there will not be a military resolution to Iran's missile attack on US military bases, only economic sanctions will be introduced. As a result, oil fell by 4.55% (the decline was 8.60% from the top of the day), gold fell by 1.19%. The euro fell by 47 points. The data on the correlation of commodities and geopolitical factors with the euro (the fall of the euro in any political situation) further strengthen the market sentiment to buy the dollar against other world currencies.

According to the ADP, the US private sector created 202 thousand jobs in December against the forecast of 160 thousand, which also affected the strengthening of the dollar and provides more optimism in anticipation of tomorrow's estimates of employment from the Department of Labor.

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On the daily chart, the signal line of the Marlin oscillator has taken root into the zone of negative values - into the decrlining trend zone. The 1.1045 goal on supporting the embedded line of the blue price channel of a higher scale is maintained.

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On a four-hour chart, the price falls below the indicator lines of balance and MACD, Marlin develops a decline. There are no reversal signs.

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Forecast for GBP/USD on January 9,2020

GBP/USD

The British pound moderately reacted to the strengthening of the dollar (dollar index 0.39%) yesterday, having lost only 25 points, but from the technical side it gave important signals to continue the decline. The price went below the MACD line on the daily chart, and it should close below it today in order to gain a foothold under this line and confirm the condition for a decline to 1.2820. The target is determined by the Fibonacci level of 138.2% on the baseline on September 3-20. The Marlin oscillator has entered the zone of negative values.

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On the four-hour chart, the Marlin signal line moves horizontally under the boundary with the growth zone, the price is above the MACD line (blue), but below the balance line (red), which means that market sentiment is shifting towards selling and the intention to attack the support of the MACD line in the near future. Success, that is, the price to fall below 1.3054, opens the way to 1.2820.

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Forecast for AUD/USD on January 9, 2020

AUD/USD

On Tuesday, the Australian dollar fell by 70 points, reaching support for the MACD line on the daily chart. Yesterday, the price tried to overcome this support, but failed and there is a slight correction from it this morning. Overcoming the MACD line (0.6862) will likely pull down the price to support the embedded line of the downward price channel to the area of 0.6830, where we are waiting for another correction before dropping to a January 3, 2019 low of 0.6659, when a flash-crash happened - an instant collapse. The price line will be waiting for the embedded price channel line in the area of the specified target.

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There is a slight consolidation at the level of 0.6862 on the four-hour chart, at the end of which the development of support at 0.6830 is likely.

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The collapse of the Boeing after another 737 crash

Good evening, dear traders. I present to you the trading idea for Boeing's Stock CFD.

So, yesterday, there was a terrible catastrophe of the Ukrainian Boeing 737 in Iran. Boeing fell shortly after takeoff and all 170 passengers died. Now, for the preliminary version: technical - engine fire. This is not the first crash with a Boeing in recent times. Thus, we recommended selling the shares that were mentioned back in December.

Boeing has a very interesting level of $ 318 from the point of view of hunting for stops. In fact, this is a platform with the feet of buyers of this asset for the entire last year. 737 was discontinued in December, but accidents continued with it. Against this background, we recommend holding short positions in order to break through the level of 319 with a further pull to historical 292:

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Since the opening, the shares have lost $ 4. Therefore, we recommend developing the reduction to the above levels if you are not yet on sale.

Good luck in trading and control the risks!

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

Technical analysis recommendations for USD/JPY and its crosses on early 2020

USD / JPY

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Last year, the yen spent in the fight against the clouds of Ichimoku the uppermost time intervals (week and month). However, it never managed to reach a significant result during the year, which is why the result of the year resulted in the formation of a candle of uncertainty. In the year 2019, the "Top" with a small range of movement conveyed uncertainty, reflection and struggle in 2020, and the key resistances remained in place. The following lines of 109.50 (weekly cloud + monthly medium-term trend) - 112.44 (monthly cloud) - 118.65 and 125.85 (maximum extremes allowing to leave the zone of uncertainty and struggle, will serve as a guideline for the increase in 2020): restoring an upward trend). For players on the downside, immediate interest is associated with consolidation below the daily cloud (108.11), and thus, breaking this through will open up new possibilities - the fulfillment of the descending goal for the breakdown of the daily cloud and the elimination of the weekly dead cross (107.10 - 106.48). On the other hand, further bearish prospects will be associated with leaving the existing zone of uncertainty (104.46 - 99.04) and moving towards a monthly target for breakdown of the cloud (95.74 - 92.39).

EUR / JPY

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For 2019, nothing significant was achieved. In the upper halves, the current advantage remains on the side of the bears, as development continues in the bear zone relative to the weekly and monthly clouds of Ichimoku. Support is currently being provided by the daily cloud (120 - 119.23) and the weekly golden cross (final line 118.43). So, consolidation below these guidelines will allow us to consider a decrease to the minimum extremes of 115.84 - 109.57, with the further possibility of reaching the monthly descending target for the breakdown of the cloud (100.09 - 94.57). For players on the upside, the restoration of positions and prospects lies in 2020 through overcoming the following lines of resistance - 122.55-123.30 (target for breakdown of the daily cloud) - 123.18-125.50 (weekly cloud) - 126.67-129.66 (elimination of the monthly dead cross + breakdown of the monthly cloud).

GBP / JPY

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The pair finished the year 2019 at about the same positions that it started, only throwing a long lower shadow in the direction of the bears for the year. As a result, it can be noted that the old contradictions persisted and new ones formed. At the moment, the pair has multi-directional targets at higher time intervals. Now, we can say that a certain current advantage belongs to the players on the upside, who maintain their location in the bull zone relative to the clouds (day and week) Ichimoku. The exit from the correction zone and the restoration of the upward trend will be updating of the maximum extremum (147.93), then the interests of the players will be raised to fulfill the raising goal to break the weekly cloud (152.26 - 155.12), as well as to fight the monthly resistance clouds above which are fixed (160.33) will create new global prospects for players to increase. On the other hand, in case of loss of support in the region of 140.34 (weekly cloud + upper border of the daily cloud) and a subsequent decrease to 137.22 (monthly short-term trend) and 134.70 (the final boundary of the weekly golden cross), bearish sentiment will be significantly strengthened, whose task after this will be the restoration of the monthly downward trend (124.80) and the execution of the monthly downward trend on the breakdown of the cloud (105.49 - 95.45).

Ichimoku Kinko Hyo (9.26.52), Pivot Points (classic), Moving Average (120)

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Gold received a stimulant from the Middle East

When in April 2013 gold dipped 13.5% during two trading days, investors started talking about the bear market. The hysterical cone and associated expectations about the strengthening of the US dollar made a whipping boy out of the precious metal. In January 2018, the XAU/USD pair marked an 11-day rally against the backdrop of a weakening US currency. At the beginning of 2020, it has been growing for 10 days and for the first time in almost seven years has exceeded $1,600 an ounce. This time the USD index has nothing to do with it.

After the assassination of the Iranian military leader and Tehran's threats of US revenge, many considered the conflict in the Middle East settled. China during the course of the trade war repeatedly promised to annoy the United States, but did not take a dangerous step. Iran turned out to be bolder than China. Having inflicted airstrikes on US military bases in Iraq, it actually untied the hands of Donald Trump. Prior to this, the US president claimed retaliation in the event of Tehran's attacks and claimed that he did not need Congress's consent to start a war. Judging by the dynamics of safe haven assets, it is not worth excluding the aggressive invasion of Americans in the Middle East. Indeed, US bond market indicators indicate the possibility of continuing the XAU/USD rally.

Dynamics of gold and the spread of yield on treasuries and bonds protected against inflation

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Goldman Sachs notes that the precious metal worked well during both gulf wars and after the September 11 attacks in 2001. Macquarie, on the contrary, recalls that these events, like attacks on industrial facilities in Saudi Arabia in early autumn 2019, only resulted in a temporary surge in gold prices. In the future, the bulls on XAU/USD did not find the strength to update the extremes and continue the rally.

Perhaps in 2020 the situation could have developed in a different scenario, if not for a strong dollar. The conflict in the Middle East is driving up oil prices, which is beneficial for the United States and not the global economy. Americans became a net exporter of black gold, so the Brent and WTI rallies play into their hands. Global GDP, by contrast, will not be able to quickly recover from the effects of the trade war between Washington and Beijing if the cost of raw materials continues to grow by leaps and bounds. As a result, the idea of expanding the divergence in the growth of the global and American economies will be put on the back burner, which will lead to an increase in the USD index and will restrain the offensive impulse of precious metal fans.

However, speculators are not discouraged. By the end of the week, by December 31, they had increased their net longs in gold to the highest level since September. The growth rate is the third consecutive five days.

Technically, after reaching the target by 113% according to the Shark pattern, the risks of correction increased to 23.6%, 38.2% and 50% of the CD wave, followed by the transformation of the model into 5-0. A signal about the development of the retreat may be a breakthrough of support at $1575 per ounce. If, on the contrary, it remains in the hands of the bulls, they will have the opportunity to renew the January high and continue the upward path.

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

EUR/USD. Results of the day: Trump's resonant performance and strong ADP report

The euro-dollar pair succumbed to panic today, amid another round of confrontation between the US and Iran. And although the anti-risk sentiment in the foreign exchange market began to weaken in the afternoon, demand for the US is still preserved, judging by the dynamics of the dollar index. In addition, the pair came under pressure from an informal report on the US labor market - data from ADP came out in the green zone, supporting the growth of the greenback.

Nevertheless, short positions on the EUR/USD pair now look quite risky. The behavior of defensive assets suggests that the demand for safe haven instruments has significantly declined (for example, look at the dynamics of the yen paired with the dollar). This suggests that the position of the dollar is now also quite precarious. In addition, the EUR/USD bears could not leave the frame of the 11th figure, despite the impulsive price movement, which made it easy to pass the support level of 1.1140 (the middle line of the BB indicator on the daily chart). But then the downward impulse slowed down - sellers feel counter resistance, which is due to the activity of buyers. In the face of such uncertainty, it is advisable to take a wait-and-see attitude, especially in anticipation of the release of official data on the growth of the US labor market.

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The main event of the day today took place in the large foyer of the White House - there, at 11:00 UTC, the US President spoke on recent events in the Middle East. Let me remind you that last night the US military bases deployed in Iraq were subjected to rocket fire. Iran thus avenged the United States for the death of its high-ranking military leader General Soleimani. In connection with this event, anti-risk sentiment significantly increased - CNN reporters spread rumors that Trump will appeal to the nation, during which he will announce the start of a full-scale war. A little later, the White House denied this information, but at the same time announced an "important" statement by the head of state.

Throughout the day, experts argued whether the US president would decide to retaliate or limit himself to economic measures, thereby taking a step toward de-escalation of the conflict. Based on the results of Trump's speech at the White House, a trivial, but rather unambiguous conclusion can be made: there will be no open and full-scale war. At least in the near future.

The US president said that no one was hurt when Iran attacked the US military base, so Washington will not resort to retaliatory measures of a military nature. He also said that "powerful sanctions" would be imposed against Tehran, which could be lifted in case of "good Iranian behavior". The head of the White House also walked around his political opponents - the Democrats - accusing them of having concluded a nuclear agreement with Iran. And although in the concluding part of his speech, Trump reminded his enemies of the military power of the United States, in general, his speech was peaceful and conciliatory. The titles of online publications following his speech were filled with headlines that "World War III is being canceled." The foreign exchange market also responded to the speech of the American president: defensive assets and commodity currencies significantly fell, while the dollar remained virtually in the same position.

It is worth noting that the US currency today is kept afloat due to the strong ADP report. According to published data, in December, 202 thousand jobs were created in the US private sector. This is the highest result in the last seven months. The components of the report in the production sector, both services and goods, have grown most strongly. The manufacturing sector also showed significant recovery. In other words, a very good signal sounded today in the form of a strong report from the ADP agency, which is a kind of "petrel" ahead of Nonfarms.

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Now the market is waiting for the main macroeconomic report of the week, which will be published on Friday. If the official figures repeat the trajectory of data from ADP, the dollar will again get on the horse. To date, a consensus forecast for official data suggests that the labor market will show growth in December: 150,000 jobs created with unemployment at a record low of 3.5%. A certain intrigue regarding Friday data remains, although dollar bulls can now count on exceeding forecast values. A separate line should be paid attention to the inflationary component of Nonfarm - an indicator of the average hourly wage. A month ago, this indicator came out at the level of 0.2% MOM and 3.1%YOY. This is a good result, and for the bulls of the pair it is important that tomorrow's release confirms the positive trend. Nonfarm's inflationary component is now extremely important for EUR/USD traders, even outside the context of an increase or decrease in the number of employees.

Thus, the dollar continues to dominate the EUR/USD pair - a strong ADP report and lower risk of a full-scale war with Iran made it possible for dollar bulls to decline to the bottom of the 11th figure. But while the bears of the pair did not conquer the 10th figure, it is too early to talk about the development of the downward trend. At the moment, it is advisable for the pair to take a wait-and-see attitude - at least regarding the release of data on the growth of the US labor market.

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GBP/USD. January 8. Results of the day. UK business continues to lose money due to Brexit

4-hour timeframe

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Amplitude of the last 5 days (high-low): 83p - 179p - 135p - 106p - 118p.

Average volatility over the past 5 days: 130p (high).

The British pound continues to trade quite actively on the third trading day of the week, although the trend movement is completely absent today. If the euro continues to show a downward movement, then the pound for some reason has stalled in one place today and is currently in standby mode. There were no important macroeconomic publications in the UK today, and macroeconomic statistics from across the ocean should have caused a new rise in the price of the US currency. Should have, but did not. Such a reaction of market participants, or rather the lack thereof, raises certain questions. Why did the pound suddenly stop for no reason? Usually, such behavior of traders is observed before some important events, the outcome of which is very difficult to predict. But at the moment, nothing of the kind looms on the horizon. Macroeconomic statistics are published, and the trend continued for the pair even during the Christmas and New Year holidays. Thus, we believe that such a behavior is an accident, nevertheless, we pay attention to the narrowed Bollinger bands (oriented sideways), as well as the location of the price inside the Ichimoku cloud. These factors do not contribute to active trading at this time.

While traders, analysts and experts from various fields continue to speculate on the prospects of the British economy after January 31, as well as after December 31, 2020, we continue to receive reports that British business continues to incur losses. Car production fell 17% last month, with many factories halting due to Brexit uncertainty. It is reported that since October 2019, car production has been deliberately reduced by manufacturers amid fears due to a complete break in ties established with the European Union for the supply of components and the further sale of products. According to the Automobile Manufacturers Association, production volumes in the machine-building industry have declined in the past 17 months. The entire engineering industry is very dependent on European sales markets, since about 55% of all production goes specifically to the European Union. If Britain is unable to conclude a trade agreement with the EU, which will be at least slightly worse than the current terms of trade with the EU countries, this will be a disaster for the UK automotive industry. However, not only this industry is facing serious problems. As we have repeatedly written, the entire economy of the United Kingdom will feel the charm of life outside the European Union. And the whole economy consists of individual industries, one of which is the state of things inside which we have highlighted today.

Meanwhile, the speech of the head of the Bank of England Mark Carney will be held tomorrow, who can dot all the "and". We have been waiting for several months when the British regulator decides to lower the key rate, since such a decision would be completely justified from the point of view of macroeconomic statistics from the UK in recent months. However, Mark Carney is not alone in deciding to change the key rate. At least seven members of the monetary committee continue to oppose. Mark Carney himself, in his last interview, said that the main central banks had at their disposal an extremely small number of tools to combat the economic downturn. Carney warned that the world economy is moving toward a "liquidity trap" and a further weakening of monetary policy will no longer be able to stimulate additional costs. Carney also believes that it is the governments of countries experiencing economic problems that should take responsibility and consider ways to reduce taxes and government spending to solve these problems.

From a technical point of view, the pound/dollar is now in some kind of flat. An attempt to overcome the lower boundary of the Ichimoku cloud - the Senkou Span B line - was unsuccessful, so further movement down is still being canceled. Given the clearly lateral direction of movement, a flat may be observed in the coming days with a decrease in volatility to 50-60 points per day. It is recommended to resume downward trading in case of overcoming the Senkou Span B. line

Trading recommendations:

The GBP/USD pair, it can be said, is currently being adjusted. Thus, traders are advised to wait until the price consolidates below the Senkou Span B line and resume trading downward with the goal of the support level of 1.2993 (which coincides with the lower boundary of the volatility channel on January 8). It is recommended that purchases of British currency be returned no earlier than when the price is consolidated above the Kijun-sen line with the first target at 1.3224, and under current conditions we also recommend waiting for the Bollinger bands to expand upward.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicators window.

Support / Resistance Classic Levels:

Red and gray dotted lines with price symbols.

Pivot Level:

Yellow solid line.

Volatility Support / Resistance Levels:

Gray dotted lines without price designations.

Possible price movement options:

Red and green arrows.

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

EUR/USD. January 8. Results of the day. ADP Employment Report provided strong support for the US dollar

4-hour timeframe

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Amplitude of the last 5 days (high-low): 42p - 59p - 55p - 49p - 64p.

Average volatility over the past 5 days: 54p (average).

The EUR/USD pair ends the third trading day of the week with a downward movement, which was resumed this morning after a minimal correction. Traders rightly reasoned that there is no reason to buy the European currency and continue to work out our hypothesis, which we have repeatedly voiced in recent weeks. For those who do not remember. We believe that the euro currency does not have sufficient reasons to show a long-term strengthening against the US currency, since the general fundamental background remains in favor of the dollar. The United States has a stronger economy, stronger monetary policy, not so pronounced signs of a slowdown, and the Federal Reserve has far more options for stimulating the economy than the ECB. All this leads to increased demand for the US currency as a whole. Of course, there are global corrections, kickbacks and corrections that take several months, but in general, the US dollar tends to grow. Even despite all the political troubles in the United States connected with the impeachment of Donald Trump, even despite the trade war with China, which is unknown when it will end, even despite the open hostilities that began a few days ago in Iran.

Meanwhile, Iran's supreme leader Ali Khamenei said rocket attacks on two US bases in Iraq are just a "slap in the face" to Washington. The Iranian leader has put forward demands on the US government to withdraw troops from the region. "It is important to end America's corrupt presence in the West Asian region," Khamenei said. "The US has caused wars, destruction and destruction of infrastructure in this region. They do it all over the world. However, this region will not accept the presence of America. The people of the region and the government will not accept it," the head of Iran summed up. However, the Iranian leader also reports that this attack on US facilities in Iraq was not the "tough retaliation" for the assassination of General Soleimani. Thus, firstly, it is quite possible to expect new attacks by the Iranian armed forces on US facilities in the region, and secondly, hardly anyone doubts that now there will be no retaliatory strike from America. Unfortunately, an even greater escalation of the military conflict in the Middle East is almost inevitable. Iranian television claimed "at least 80 dead American terrorists" and "heavily damaged equipment and helicopters at the bases." It is unlikely that Trump will leave this blow unanswered.

It's good that so far all the events in the Middle East do not particularly affect the forex currency market. Although in the future, as we have already noted, they can have a significant impact. The ADP report on changes in the number of employees in the US private sector, which showed an increase of 202,000 workers, was much more influenced by the course of today's trading, while only 160,000 were forecasted to increase, while the previous value was at the level of 67,000. Thus, after the failure ISM business activity index for manufacturing in the US, statistics are starting to prove again that they are in excellent condition, like the entire American economy. Traders praised this report, since it is the state of the labor market that is considered one of the most important engines of the economy of the whole country. The euro fell by 40 points against the dollar during the day, which fully fits into the current average volatility for five and 30 of the last trading days.

But macroeconomic statistics from the European Union today was secondary and did not have any impact on traders, but it turned out to be very interesting. Recall that the latest publication of business activity indexes in the manufacturing sectors of the EU countries showed a slight improvement in things. However, most of the indices still remained below the level of 50.0, which means the continued decline in European industry. Today, a report on production orders was published in Germany, which showed a decrease of 6.5% (!!!) YOY in November. Despite the fact that in October a decrease of 5.5% YOY was recorded. Data on industrial production in Germany for November will be published tomorrow, and it is likely that the real numbers will be much lower than the forecast, which predicts a decrease of 3.8% YOY.

Thus, we expect the downward movement to continue this week. A few more critical macroeconomic publications will take place on Friday. We are talking about NonFarm Payrolls in the United States, about changing the average hourly wage and unemployment rate. All three reports are critical to the US economy. The technical picture is now absolutely clear. The price consolidated below the Ichimoku cloud, so the current signal for selling the Dead Cross has strengthened. The pair has almost reached the first support level of 1.1109 and may rebound from it or the lower boundary of the volatility channel on January 8 - 1.1097. Thus, a new round of upward correction may begin today or tomorrow.

Trading recommendations:

The EUR/USD pair resumed its downward movement. Thus, now it is recommended for traders to trade lower with targets 1.1109 and 1.1097 and reduce shorts in case of a rebound from any of these levels. It will be possible to consider purchases of the euro/dollar pair no earlier than when the price is consolidated above the critical Kijun-sen line with the first goals of 1.1205 and 1.1224.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicators window.

Support / Resistance Classic Levels:

Red and gray dotted lines with price symbols.

Pivot Level:

Yellow solid line.

Volatility Support / Resistance Levels:

Gray dotted lines without price designations.

Possible price movement options:

Red and green arrows.

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