Hot forecast and a trading recommendation for EUR/USD on 01/15/2020

Despite the extremely insignificant scale of fluctuations, the movement of the single European currency is quite interesting. The dollar has been steadily growing since the morning, long before inflation data was published. But the single European currency began its return to the values with which yesterday began. This is interesting, since such behavior is simple contrary to macroeconomic statistics. Many attribute this to rumors that China and the United States may sign the first phase of a full-scale trade agreement today. Little is known about the agreement itself. White House officials only admit that, according to the plan, all tariffs and duties will remain unchanged until the second phase of the agreement is signed. But everyone already knew about this for a long time. Nothing more is known. The lack of understanding of what Washington and Beijing will sign today is scary and alarming. Rumors are already circulating that this agreement will do huge harm to other countries. So there is complete uncertainty, which scares investors much more than the understanding that the situation will worsen.

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However, inflation in the United States came out exactly as planned. It accelerated from 2.1% to 2.3%, which finally removes all doubts about the further actions of the Federal Reserve. There will be no more reductions in the refinancing rate, and no changes are expected in the monetary policy of the regulator at least within six months. Also, given that inflation accelerates for the fourth consecutive month and is two months above the target level of 2.0%, most likely, discussions will begin about the need to increase the refinancing rate in the middle of the year.

Inflation (United States):

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Today, Europe publishes data on industrial production, the decline of which should slow down from -2.2% to -1.4%, and along with general nervousness about the contents of the preliminary trade agreement between China and the United States, this will become a reason for the European currency's growth. At least until the opening of the US session.

Industrial Production (Europe):

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In addition data on US producer prices will be published today, the growth rate of which may accelerate from 1.1% to 1.4%. In many ways, this indicates that there is simply no reason to slow inflation in the near future. However, the general uncertainty surrounding the trade agreement between Beijing and Washington will lead the market to ignore this data. So, investors will be careful until the circumstances become clear.

Manufacturer Prices (United States):

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From the point of view of technical analysis, we saw an attempt to resume the downward movement, where in the area of 1,1100, a stop occurred again with a subsequent return. In fact, we see a kind of "Doji", which signals uncertainty and indecision in actions.

In terms of a general review of the trading chart, we see the correction phase in the structure of the two-week move. If we turn our attention to trends, we see that the current fluctuation is in the structure of a three-month upward trend.

It is likely to assume that the characteristic uncertainty will still persist in the market, where the quote will continue to fluctuate within the recent accumulation of 1.1135/1.1145, until the circumstances are clarified. In fact, the movement may occur, but in the US trading session, where it is worth analyzing the existing fluctuation for stagnation/accumulation and trade with respect to it.

If you focus on the current fluctuation and make an adjustment for the sluggishness of the market, then trading recommendations may look like this:

- We consider long positions in case of price consolidation higher than 1.1150.

- We consider short positions in case of price consolidation lower than 1.1120.

From the point of view of a comprehensive indicator analysis, we see that the indicators of technical indicators in the minute and intraday areas signal a local upward interest. Daytime periods still maintain a downward mood.

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Technical analysis of ETH/USD for 15/01/2020:

Crypto Industry News:

The Supreme Court of India has decided to adjourn the full hearing of the high-profile case against the Reserve Bank of India regarding bank transactions with cryptographic companies.

In a press interview, Kashif Raza - co-founder of the Indian Crypto Kanoon platform - summarized what the case was about, and argued that the news of the delay does not have to discourage the local cryptographic community.

According to earlier reports, Indian cryptocurrency exchanges and other industry companies met with a moratorium on banking services because the Indian central bank RBI introduced a ban on transactions of banks with cryptographic companies in April 2018. Since the controversial ban on RBI came into force in July 2018, both public and sectoral petitions have been brought to court because of unconstitutionality.

As Kashif noted, this case was a combination of various previous petitions and was brought to court by the Internet & Mobile Association of India (IAMAI).

IAMAI is a non-profit industry body that is tasked with expanding and improving the value-added online and mobile services sector and appealing to the government on behalf of consumers, shareholders and investors from the internet industry.

Raza emphasized that the main argument in the case remains an appeal against the ban for constitutional reasons.

The local community is awaiting further development, and in the meantime, attention has been paid to evidence of significant losses for the Indian cryptographic industry.

Technical Market Overview:

The ETH/USD pair broke through all of the technical levels located on its way to the high at $170.42. This price rally looks like a classic pump made on extreme volumes, which indicates that some part of the market participants has been actively selling the ETH on the way up. The rally has ended with a High-Tide Doji candlestick pattern and since then the bears are trying to push the prices lower to test the broken levels. The next technical support is seen at the levels of $156.77, $150.94 and $146.94.

Weekly Pivot Points:

WR3 - $163.70

WR2 - $155.20

WR1 - $149.53

Weekly Pivot - $140.92

WS1 - $136.16

WS2 - $127.09

WS3 - $122.67

Trading Recommendations:

The best strategy in the current market conditions is to trade with the larger timeframe trend, which is still down. All the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend. There is a possibility that the wave 2 corrective cycles are completed, so the market might be ready for another impulsive wave up of a higher degree and uptrend continuation.

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Signing of agreement between US and China could lead to a correction in the markets; NZD and AUD is under slight pressure

Wednesday's key event is the expected signing of the first phase of a trade deal between the US and China. Finally, the details of the deal are beginning to appear, with politico reports that China pledged to increase imports by $ 200 billion over two years, including $ 75-77 billion in manufacturing, $ 50 billion in energy and $ 40 billion in agriculture. The deal will also regulate technology transfer, currency and market access for specific sectors of the economy.

It seemed that one could expect the continuation of growth in demand for risky assets, but the markets behaved with restraint. US stock indices slightly corrected downward, gold resumes growth, Nikkei and Shanghai Composite lose on Wednesday morning to 0.5%, and most likely, the signing of the agreement will not have a positive effect on the markets.

At the same time, inflation in December expectedly grew by 2.3%, the growth was slightly below the forecast, but the dollar did not receive any support. Thus, the business is not sure of further inflation growth judging by the dynamics of Tips bond yields - Tips yields are below the March local maximum of 1.88%, which means the business is focusing on another rate cut.

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In all probability, the positive effect of the signing will be temporary and it is likely that renewed demand for protective assets will resume by the evening of the current day.

NZD/USD

Another quarterly study of business prospects from NZIER confirmed the cautious optimism that has contributed to the purchase of kiwi in the past two months. Any positive dynamics is perceived as positive, although the share of manufacturing enterprises that expect economic conditions to worsen in the coming year still exceeds optimists - 20% against 52% a quarter earlier.

The growth of optimism is based on expected factors - China and the United States are close to a trade deal, for some reason such a result is perceived as positive, although for the Chinese economy its effect will most likely be negative. In the services sector, the situation is a little worse, but we must proceed from the fact that the "worse" in the interpretation of firms is a decrease in expectations regarding the probability of further reduction in rates, which, on the contrary, is a bullish factor for the NZD rate.

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For the financial sector of New Zealand, recent RBNZ initiatives on bank equity requirements are of great importance. The Central Bank decided to stop on less stringent conditions than anticipated at the last moment, but a number of changes should be noted.

Firstly, banks are given a more preferential treatment in mortgage lending while tightening financing for the manufacturing sector, especially agriculture, which should stimulate domestic demand and at the same time reduce dependence on external capital. This factor is negative for kiwi and will help reduce NZD.

Secondly, the dairy sector is heavily indebted and faces a sharp decline in land prices and much more stringent environmental regulations. Moreover, deteriorating conditions will also make life difficult for exporters.

Thirdly, record low rates reduce the ability of banks to lend due to reduced margins, as it becomes more difficult to hold deposits, which tend to look for higher returns.

As a result, the situation began to look noticeably less bullish for kiwi, and the chances of resuming NZD growth are declining. The nearest resistance is 0.6635 and its breakdown will slightly improve the technical picture, but testing the recent low and leaving the range of 0.6520 - 0.6597 is more likely.

AUD/USD

Meanwhile, TD Securities inflation data for December were in line with expectations; pressure on the Australian currency is exerted by the protracted fight against forest fires, which threatens to cause the Australian economy significant damage.

The probability of going above resistance 0.6919 is not high and the impulse to growth is weakening. Now, AUD/USD is likely to decline to the support zone of 0.6837 / 47 after a short period of consolidation.

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Technical analysis of BTC/USD for 15/01/2020:

Crypto Industry News:

The Japanese Financial Services Agency (FSA) - the national financial regulator - proposed lowering the leverage limit for cryptocurrency margin trading from 4x to 2x. The FSA announced the proposed measure on January 14 in a cabinet ordinance - an official ordinance issued along with the new law.

The proposal, if adopted, would be the first case for the Japanese government to regulate the margin trading ratio. According to Nikkei, the state has not previously made any laws.

The FSA allegedly plans to enforce the order in April, when the revised version of the Financial Instruments and Stock Exchanges Act enters into force. The agency accepts public comments on the regulation until February 13.

Margin trading allows investors to use borrowed funds to increase their potential profits, but it is also a high-risk risk activity because it introduces the possibility of losses exceeding the investor's initial investment. According to Nikkei, the FSA aims to protect investors against "excessive speculation and the risk of losses caused by volatility."

Technical Market Overview:

The BTC/USD pair has made another marginal higher high at the level of $8,836 (at the time of writing the analysis) and a Shooting Star candlestick pattern has been made at this level. Currently, the bears are testing the local technical support at the level of $8,573, but the corrective move might extend lower towards the level of $8,405. Please notice, that this high was made on lower momentum than the previous one, so there is a negative divergence present. Before, the pair har tested the technical support located at the level of $7,601 - $7,581 and bounced higher, which means, the support had been recognized by the market participants as valid and they wanted to resume the recent uptrend. Moreover, there is no possibility to move lower at the price of Bitcoin unless the support is clearly violated.

Weekly Pivot Points:

WR3 - $9,744

WR2 - $9,058

WR1 - $8,561

Weekly Pivot - $7,905

WS1 - $7,428

WS2 - $6,754

WS3 - $6,270

Trading Recommendations:

The best strategy in the current market conditions is to trade with the larger timeframe trend, which is still down. All the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend. There is a possibility that the wave 2 corrective cycles are completed, so the market might be ready for another impulsive wave up of a higher degree and uptrend continuation.

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Trading plan on EUR/USD for January 15, 2020. The markets are waiting for the US-China trade agreement

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On Tuesday, the report on inflation in the United States was released. Retail inflation remained at the same level of +0.2% month-on-month, whereas the core inflation fell to +0.1%.

This data, however, did not bring clarity to the market.

EUR/USD: Euro pushed down all day, but by evening, it managed to bounce back strongly from 1.1100.

Uncertainty persists.

The market is waiting for the signing of the first phase of the US-China trade agreement, however, at the same time, there is news of new disputes on US and China. The Trump administration said that it will not reduce duties on goods from China until at least November this year.

EUR/USD: Wait for an exit from the range.

Buy at the break through of 1.1205 up.

Sell at the break of 1.1085 down.

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Technical analysis of GBP/USD for 15/01/2020:

Technical Market Overview:

The GBP/USD pair has bounced from the level of 1.2962 and bulls are trying to make another wave up towards the level of 1.3100 where the upper channel line is located. On the other hand, bears are still making pressure on the market because they are trying to test and possibly break out below the technical support at 1.2962 and head towards the next target located at the level of 1.2939. This is the last local support before the swing technical support located at the level of 1.2904. The negative momentum supports the short-term bearish outlook for Cable, but the larger timeframe trend remains up (for now).

Weekly Pivot Points:

WR3 - 1.3350

WR2 - 1.3274

WR1 - 1.3145

Weekly Pivot - 1.3077

WS1 - 1.2952

WS2 - 1.2870

WS3 - 1.2758

Trading Recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is up, so all downward market moves will be treated as local corrections in the uptrend. In order to reverse the trend from up to down in the longer term, 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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Trend or momentum? Phlegmatic franc suddenly showed character

The focus of forex traders yesterday was unexpectedly the Swiss currency. The franc significantly strengthened against a basket of major currencies, and paired with the euro reached an almost three-year high. As a rule, the Swiss currency is quite quiet and phlegmatic - especially in the cross EUR/CHF. Therefore, yesterday's price impulse attracted the interest of market participants. In addition to the reasons for this impulse, another question is of interest - is this price dynamics the beginning of the downward trend, or are we only dealing with a temporary phenomenon? The cross has already shown a slight correction during the Asian session on Wednesday, which may indicate the likelihood of a larger scale price pullback. But if we consider a longer period, the situation here does not look so clear - especially when you consider the reasons why the franc began to rise in price.

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As you know, the Swiss currency has the status of a defensive instrument, adding a headache to the central bank of Switzerland, which is trying to reduce the attractiveness (and therefore demand) for the "chief". SNB introduced negative rates a few years ago and conducts currency interventions with some regularity. Despite a certain devaluation of the franc, the Swiss regulator still considers it overvalued. SNB Head Thomas Jordan never tires of reiterating the thesis that the negative rate is still relevant and therefore will be valid for a long time. He also assures investors that the central bank will continue to conduct foreign exchange interventions, while maintaining an ultra-soft monetary policy.

In general, after the historic decision not to keep the Swiss currency at the lowest level of 1.20 (against the euro), the meetings of the Swiss central bank do not cause much interest. The market simply takes note of the comments of the head of the SNB on the current situation in the country's economy, not expecting any additional real action. Indeed, the regulator has already managed to use many levers of influence. Not only are interest rates already in the negative zone, the list of beneficiaries exempted from negative rates has also been significantly reduced.

However, the United States is still concerned about the actions of the SNB. In a semi-annual report published yesterday, the US Treasury Department accused the Swiss monetary authorities of significantly increasing purchases of foreign currency - according to them, the corresponding volumes began to sharply grow from the middle of last year. Apparently, the Swiss regulator thus began to prepare for the "hard" Brexit, the probability of which began to increase just in the summer of 2019. However, in previous years, the Swiss central bank carried out similar actions, trying to weaken the demand for the national currency. That is why the US Treasury Department has added Switzerland to the list of currency manipulators. The above report states that Washington is worried about the foreign exchange practices of the SNB, thus putting the Swiss central bank on a par with the German Bundesbank, the Bank of Japan and the South Korean central bank. Also, the US Ministry of Finance indicated that SNB maintains the "lowest" interest rates in the world.

It is worth noting that the very fact that Washington rebuked Bern for manipulating the course does not have any immediate consequences. Nevertheless, the franc reacted violently to this news, having strengthened, in particular, against the euro to 30-month highs. In this case, in my opinion, we are dealing with the so-called "crowd psychology." According to many traders, SNB will now review its policy - at least in terms of the frequency of use of foreign exchange interventions. These expectations increased demand for the Swiss currency, although the Swiss central bank itself, firstly, rejected the above allegations, and secondly, announced that it would not change anything in its policy. The SNB recalled that the regulator's actions are aimed at ensuring price stability while taking economic changes into account, therefore it intends to continue to "follow this mandate".

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In other words, the hopes of many traders are illusory. If the franc will continue to rise in price against the euro, the Swiss regulator will simply be forced to intervene, without any regard to the opinion of the US Ministry of Finance. Moreover, the SNB has officially voiced a similar position. Thus, the EUR/CHF cross-pair can by inertia reach the bottom of the 7th figure, however, further development of the downward trend seems an unlikely scenario.

From a technical point of view, the pair is currently under significant pressure, and on all the higher timeframes. On charts H4, D1, W1 and MN, the pair is on the lower line of the Bollinger Bands indicator, which also indicates the priority of the downward movement. The pair shows a pronounced bearish trend, which is confirmed by the main trend indicators - Bollinger Bands and Ichimoku, which formed the strongest bearish Parade of Lines signal on all the above timeframes - all indicator lines are above the price chart, thereby demonstrating pressure on the pair. To determine the main goal of the downward movement, let's move on to the monthly timeframe: here we focus on the lower line of Bollinger Bands - this is the price of 1.0705. The next level of support is much lower (1.0490 - the lower boundary of the Kumo cloud on MN) - the Swiss regulator will certainly take a response if the bears try to conquer this price target.

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Technical analysis of EUR/USD for 15/01/2020:

Technical Market Overview:

The EUR/USD bounce has been capped at 38% Fibonacci retracement at the level of 1.1144 and since then the bears are trying to push the prices back under the short-term trendline resistance. The momentum is neutral already and the market is in overbought conditions, but if bulls will make the next wave up anyway, then the next target is seen at the levels of 1.1162 and 1.1174. The larger timeframe trend remains down to sideways with a possibility of a rally after the Ending Diagonal triangle termination around the level of 1.0877.

Weekly Pivot Points:

WR3 - 1.1297

WR2 - 1.1248

WR1 - 1.1178

Weekly Pivot - 1.1129

WS1 - 1.1052

WS2 - 1.1011

WS3 - 1.0932

Trading Recommendations:

Not much has changed since the last week in a bigger perspective. Still, 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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Indicator analysis: Daily review on GBP/USD for January 15, 2020

Trend analysis (Fig. 1).

The price may continue to move up today with the target of 1.3080, the retracement level of 38.2% presented in a red dashed line. If this line is reached, a continuation of work up with the target of 1.3159, 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 - up;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

The price may continue to move up today.

A downward scenario is unlikely but quite possible. From the level of 1.3033, the retracement level of 23.6% presented in a red dashed line, work down with the target of 1.2954, the lower fractal in a red dashed line.

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Indicator analysis: Daily review on EUR / USD for January 15, 2020

The pair continued to move in the side channel on Tuesday and initially moved up the market and re-tested the pullback level of 38.2% which is equivalent to 1.1146 presented in a blue dashed line. After that, the market rolled back down reaching the pullback level of 50% which is at 1.1112 presented in a red dashed line. Strong calendar news for the dollar is expected today at 13:30 and 15:30 UTC. Expected to continue to work up.

Trend analysis (Fig. 1).

The price may continue to move up today with the first target 1.1146, the retracement level of 38.2% presented in a blue dotted line. Upon reaching this line, the next goal will be a pullback level of 50.0% equivalent to 1.1164 presented in a blue dashed line.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

An upward trend is possible today.

An unlikely, but quite possible scenario is from level 21 of the average EMA which is at 1.1132 presented in a black thin line, the price goes down to the support line 1.1094, presented in a white bold line.

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Elliott wave analysis of GBP/JPY for January 15 - 2020

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Key resistance at 143.50 continues to cap the upside as expected but we need a break below short-term key support at 142.34 to release the next real downside pressure towards 139.25 on the way towards the target at 137.53.

Only an unexpected break above key resistance at 143.50 will indicate that a corrective low is developing and the next impulsive swing higher towards at least 149.00 is likely to happen.

R3: 143.77

R2: 143.50

S1: 143.28

Pivot: 142.90

S1: 142.56

S2: 142.34

S3: 142.15

Trading recommendation:

We are short GBP from 143.05 with our stop paced at 143.50. We will buy GBP if 143.60 is broken.

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Elliott wave analysis of EUR/JPY for January 15 - 2020

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We continue to look for more upside pressure towards 123.84 near-term. Before the next push higher, we could see a dip into the support-zone between 121.81 - 122.09 but the consolidation already seen could be enough to push EUR/JPY higher towards the next upside target at 123.84.

R3: 123.84

R2: 123.34

R1: 122.93

Pivot: 122.43

S1: 122.14

S2: 121.84

S3: 121.43

Trading recommendation:

We bought EUR at 122.25 and we have placed our stop at 121.25

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Forecast for EUR/USD on January 15, 2020

EUR /USD

The dollar slightly strengthened on Tuesday, with the release of inflation data for the United States, but investors found the data not sufficient enough for a more decisive offensive. As a result, the euro showed a decline of only five points by the close of the day. The basic consumer price index added 0.1% for December against the expected 0.2%, while maintaining an annual value of 2.3%.

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On the daily chart, the signal line of the Marlin oscillator moves sideways directly along the boundary of the bullish and bearish trends, which creates the risk of continued correctional growth to the Fibonacci level of 110.0% at the price of 1.1155. If the potential is not realized, a planned decrease to the Fibonacci level of 123.6% will follow at the price of 1.1073, where the MACD indicator line also passes.

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On the four-hour chart, a price reversal from the MACD line was noted, but not fully realized. At the moment, the price is already above the balance line (red moving) and the Marlin oscillator is holding in the growth zone, which shows the price's intention to once again attack the MACD line. Now the condition for a further decrease is overcoming the price of yesterday's low.

In general, the situation is neutral and the euro may cheer up today's data on industrial production for November (forecast 0.3%), but tomorrow retail sales in the US for December will be released, the forecast for which is 0.5% for basic sales and 0.3% for general . It is likely that investors are planning more active actions for this data.

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Forecast for GBP/USD on January 15, 2020

GBP/USD

The British pound slightly grew on Tuesday, on track for closing the gap open on Monday. About 40 points remain until the task is completed. There is data on inflation for December in the UK. The basic and general CPIs are projected unchanged at 1.7% YOY and 1.5% YOY, retail prices may rise from 2.2% YOY to 2.3% YOY, residential property price index is expected to grow from 0.7% YOY to 1.1% YOY. If the indicators come out better than expected, the pound may overlap the gap to some extent. The retail sales forecast for basic sales of 0.5% and 0.3% for the general market will be released in the US tomorrow. The data may trigger the pound into a new wave of decline, where the first target is the Fibonacci level of 138.2% at the price of 1.2820. The margin of the Marlin oscillator signal line to the boundary with the growth territory allows the price to safely complete the correction.

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The Marlin convergence worked on a four-hour chart - the price went up. The signal line of the indicator is already in the growth zone, which provides strength to the price to continue growth with a temporary exit above the MACD line....

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Forecast for AUD/USD on January 15, 2020

AUD/USD

The Australian dollar has not shown initiative in a calm market for the past two days. The price on the daily chart is between the resistance of the price channel and the support of the MACD line. You need a good driver in order to move in any direction here. Today, pressure on the aussie can continue from the commodity markets (unless oil changes its mind to decline, as iron ore did yesterday, which jumped 1.19% on China's trade balance data, which showed an increase from 274 billion yuan in December to 329 billion), and tomorrow, the US dollar can take control of the situation, using data on retail sales for December, the forecast for which is 0.3%.

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The immediate goal is to support the MACD line (0.6870). The second goal is the embedded line of the red price channel in the region of 0.6818. The signal line of the Marlin oscillator is already turning from the boundary with the growth zone.

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The situation is neutral on the H4 chart. The price between the indicator lines of the balance and MACD, Marlin slowly decreases in the growth zone following the price.

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USD/CAD bounce in progress above support!

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Trading Recommendation

Entry: 1.30425

Reason for Entry:

50% and 38.2% Fibonacci retracement, graphical swing low

Take Profit : 1.30950

Reason for Take Profit: 161.80% Fibonacci extension, 61.8% Fibonacci retracement, horizontal swing high

Stop Loss: 1.30052

Reason for Stop loss:

78.6% Fibonacci retracement

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

EUR/USD bouncing off support, potential for further rise!

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Trading Recommendation

Entry: 1.10952

Reason for Entry: horizontal overlap support, 78.6% fibonacci retracement, 100% Fibonacci extension

Take Profit : 1.12047

Reason for Take Profit:

78.6% Fibonacci retracement, horizontal swing high resistance

Stop Loss: 1.10700

Reason for Stop loss:

horizontal swing low support

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USD/JPY potential bounce coming!

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Trading Recommendation

Entry:106.71

Reason for Entry: 61.8% Fibonacci extension

Take Profit :108.42

Reason for Take Profit: 61.8% Fibonacci retracement

Stop Loss: 105.06

Reason for Stop loss:

Horizontal swing low support

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Fractal analysis for major currency pairs on January 15

Forecast for January 15:

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: 1.1177, 1.1151, 1.1132, 1.1087, 1.1058, 1.1031 and 1.1015. Here, we continue to monitor the local descending structure of January 6. The continuation of the movement to the bottom is expected after the breakdown of the level of 1.1087. In this case, the target is 1.1058. Price consolidation is near this level. The breakdown of the level of 1.1056 will lead to movement to a potential target - 1.1015. Price consolidation is in the range of 1.1015 - 1.1031, and from here, we expect a rollback to the top.

Consolidated movement is possibly in the range of 1.1132 - 1.1151. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 1.1177. This level is a key support for the downward structure.

The main trend is the local descending structure of January 6

Trading recommendations:

Buy: 1.1153 Take profit: 1.1175

Buy: 1.1178 Take profit: 1.1204

Sell: 1.1085 Take profit: 1.1060

Sell: 1.1056 Take profit: 1.1034

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For the pound / dollar pair, the key levels on the H1 scale are: 1.3113, 1.3073, 1.3027, 1.2937, 1.2874 and 1.2838. Here, the continuation of the development of the downward cycle of December 31 is expected after the breakdown of the level of 1.2937. In this case, the target is 1.2874. For the potential value for the bottom, we consider the level of 1.2838. Upon reaching this level, we expect consolidation, as well as a rollback to the top.

It is possible that the correction can be avoided after the breakdown of the level of 1.3027. Here, the first goal is 1.3073. The level of 1.3113 is the key support for the downward structure. Its passage in price will have the potential to form the initial conditions for the upward cycle. In this case, the potential goal is 1.3178.

The main trend is the descending structure of December 31

Trading recommendations:

Buy: 1.3027 Take profit: 1.3073

Buy: 1.3074 Take profit: 1.3113

Sell: 1.2935 Take profit: 1.2875

Sell: 1.2872 Take profit: 1.2838

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9727, 0.9704, 0.9687, 0.9662, 0.9641, 0.9623 and 0.9597. Here, the price registered the expressed initial conditions for the downward movement of January 10. The continuation of the movement to the bottom is expected after the breakdown of the level of 0.9662. In this case, the target is 0.9641. Short-term downward movement, as well as consolidation is in the range of 0.9641 - 0.9623. For the potential value for the bottom, we consider the level of 0.9597. Upon reaching this level, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 0.9687 - 0.9704. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.9727. This level is a key support for the bottom.

The main trend is the initial conditions for the bottom of January 10

Trading recommendations:

Buy : 0.9687 Take profit: 0.9702

Buy : 0.9706 Take profit: 0.9725

Sell: 0.9661 Take profit: 0.9642

Sell: 0.9639 Take profit: 0.9624

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For the dollar / yen pair, the key levels on the scale are : 111.38, 110.78, 110.39, 109.81, 109.58 and 109.23. Here, we are following the development of the upward cycle of January 8. At the moment, we expect a movement to the level of 110.39. The breakdown of which will allow us to count on movement to the level of 110.78. Price consolidation is near this value. The breakdown of the level of 110.80 should be accompanied by a pronounced upward movement. Here, the potential target is 111.38.

Short-term downward movement is possibly in the range 109.81 - 109.58. The breakdown of the latter value will lead to an in-depth correction. Here, the goal is 109.23. This level is key support for the top.

The main trend: the upward cycle of January 8.

Trading recommendations:

Buy: 110.40 Take profit: 110.76

Buy : 110.80 Take profit: 111.35

Sell: 109.80 Take profit: 109.58

Sell: 109.55 Take profit: 109.25

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3157, 1.3126, 1.3112, 1.3090, 1.3062, 1.3040 and 1.3015. Here, we are following the development of the upward cycle of January 7. The continuation of the movement to the top is expected after the breakdown of the level of 1.3090. In this case, the target is 1.3112. Price consolidation is in the range of 1.3112 - 1.3126. For the potential value for the top, we consider the level of 1.3157. Upon reaching this level, we expect a pullback to the bottom.

Short-term downward movement, as well as consolidation are possible in the range of 1.3062 - 1.3040. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3015. This level is a key support for the top.

The main trend is the upward cycle of January 7, the correction stage

Trading recommendations:

Buy: 1.3090 Take profit: 1.3112

Buy : 1.3126 Take profit: 1.3155

Sell: 1.3062 Take profit: 1.3042

Sell: 1.3038 Take profit: 1.3015

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6972, 0.6955, 0.6933, 0.6915, 0.6887, 0.6871, 0.6851, 0.6827 and 0.6793. Here, the price forms the potential for the upward movement of January 9 in the correction of the downward cycle of December 31. Short-term movement to the top is expected in the range of 0.6915 - 0.6933. The breakdown of the last value will lead to a pronounced movement. Here, the target is 0.6955. For the potential value for the top, we consider the level of 0.6972, upon reaching this value we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement is expected in the range 0.6887 - 0.6871. The breakdown of the last value will have the subsequent development of the downward structure. Here, the first goal is 0.6851. As a potential value for the bottom, we consider the level of 0.6793. The movement to which is expected after the breakdown of the level of 0.6825.

The main trend is the descending structure of December 31, the formation of potential for the top of January 9

Trading recommendations:

Buy: 0.6915 Take profit: 0.6930

Buy: 0.6935 Take profit: 0.6955

Sell : 0.6887 Take profit : 0.6873

Sell: 0.6870 Take profit: 0.6852

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For the euro / yen pair, the key levels on the H1 scale are: 123.89, 123.32, 123.06, 122.33, 122.09 and 121.80. Here, we monitor the development of the upward cycle of January 8 and currently, a movement to the level of 123.06 is expected. Short-term upward movement, as well as consolidation is in the range of 123.06 - 123.32. The breakdown of the level of 123.35 will lead to a movement to a potential target - 123.89. We expect a pullback to the bottom from this level.

Short-term downward movement is possibly in the range of 122.33 - 122.09. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 121.80. This level is a key support for the upward structure.

The main trend is the upward cycle of January 8

Trading recommendations:

Buy: 122.70 Take profit: 123.05

Buy: 123.06 Take profit: 123.30

Sell: 122.33 Take profit: 122.10

Sell: 122.07 Take profit: 121.84

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For the pound / yen pair, the key levels on the H1 scale are : 145.11, 144.53, 143.68, 142.34, 141.87, 141.31 and 140.66. Here, we are following the development of the upward structure of January 3, after the abolition of the downward trend. We expect further upward movement after the passage at the price level of 143.70. In this case, the target is 144.53. Price consolidation is near this value. For the potential level for the top, we consider level 145.11, from which we expect a pullback to the bottom.

Short-term downward movement is possible in the range of 142.34 - 141.87. The breakdown of the latter value will lead to an in-depth correction. Here, the goal is 141.31. This level is a key support for the upward structure.

The main trend is the upward structure of January 3

Trading recommendations:

Buy: 143.70 Take profit: 144.50

Buy: 144.55 Take profit: 145.10

Sell: 142.34 Take profit: 141.90

Sell: 141.85 Take profit: 141.35

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

Dollar: collapse is just around the corner?

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The current situation in the financial markets at first glance is favorable for the US currency. The upcoming signing of the first phase of a new trade agreement between Washington and Beijing, scheduled for this Wednesday, January 15, inspires optimism. However, experts note a number of factors that can undermine the credibility of the greenback.

One of the reasons experts consider the slowdown in economic growth in the United States. Despite the power of the US economy, it is still present, being a fly in the ointment in a barrel of financial honey. An illustration is the indicator of employment in the non-agricultural sector of the United States, which amounted to 145 thousand people in December 2019, and over the past year, employment increased by 2.08 million people, which is less than the indicator of 2.51 million people recorded in 2018. Another factor in the slipping of the dollar may be data on the consumer price index for December. Experts have a double opinion on this score: current information can both support the US currency and push it down. The situation will depend on whether the current index value matches the previous forecast or the discrepancy with it.

An additional driver of the greenback's potential fall may be the actions of the Federal Reserve. Recall that since the fall of 2019, the regulator has been implementing a quantitative easing (QE) program, skillfully disguised as other economic measures. However, the Fed's actions, which is not recognized in the conduct of QE, indicate the opposite, experts said

A positive moment for the greenback was the attenuation of the Middle East conflict, the risk of further revelation of which was very great. The absence of a negative background from the Asian side contributed to a partial recovery of markets and increased investor risk appetite. However, the greenback was again under pressure, although it radiated confidence during the escalation of the Middle East crisis. The reason for this, in addition to the general slowdown in US economic growth, analysts believe the disappointing data on the number of new jobs for December 2019 recorded in the US economy. Recall that the number of new jobs amounted to 145 thousand compared to the forecast of 164 thousand. Low rates of average hourly wages added fuel to the fire. It fell to 0.1% in December, although economists had expected it to rise by 0.3%. On an annualized basis, the growth in average hourly wages decreased to 2.9% from the previous 3.1%. In this regard, many investors believe that the US economic growth rate will also decline. Such a situation could force the Fed to return to lower interest rates, analysts warn.

The implementation of such a scenario will become a significant negative for the dollar, fueling its downward trend. The weakening of the greenback will be facilitated by the signing of an agreement between Washington and Beijing, while the demand for risky assets will increase. An additional factor of pressure on the greenback will be the current negative effect of macroeconomic statistics in the US, although its impact can not greatly undermine the dollar, experts said.

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Subsequently, the pair subsided to 1.1119, making desperate attempts to get out of this pit. However, its efforts were not rewarded as soon as expected.

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On Tuesday morning, January 14, the EUR/USD pair rose to the level of 1.1139, having won back yesterday's loss. Nevertheless, the pair failed to gain a foothold at this level.

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Currently, the EUR/USD pair runs near 1.1134, having slightly lost previous achievements, but still remaining in a relatively acceptable range.

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According to experts, the EUR/USD pair expects a difficult period. The euro will slow down the eurozone economy and the situation around Brexit, and the dollar will have to overcome the negative from the Fed stimulus measures and weak data on the number of new jobs in the US labor market. However, the pair will be able to cope with the situation and wrap the negativity to its advantage, experts said.

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

EUR/USD. US inflation was not in favor of the dollar, but the market is still busy with other problems

The euro-dollar pair reacted minimally to conflicting data on the growth of US inflation. Almost all components reached the forecast level, but some of the nuances of the release are nevertheless alarming, especially with regard to the dynamics of wage growth. In general, nothing catastrophic happened: the indicators were not impressive, but at the same time they didn't particularly disappoint. Immediately after the publication of the data, the pair fell to the bottom of the 11th figure, as they say, "seizing the moment." But since there were no obvious reasons for optimism, sellers were not able to push the price into the area of the 10th figure. By and large, the pair remained almost at the same positions as before the release. What is the reason for such apathetic traders? In my opinion, such price dynamics are due to several fundamental factors.

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Firstly, the inflation release as a whole turned out to be at the expected level. The monthly average consumer price index slowed down to 0.2%. The negative dynamics here can be traced for the second month in a row, after the index reached 0.4% in October. The indicator has grown in annual terms, thereby continuing the positive trend, which has been recorded for the third consecutive month. If the indicator reached 1.7% in September, then it rose to 2.3% in December. Most experts expected to see it slightly higher (2.4%), but the trend itself is important here.

If we talk about the core consumer price index (that is, excluding food and energy prices), then the situation here is also "neutral-contradictory" in nature. On a monthly basis, the index did not reach the forecast values (+0.1% instead of the planned +0.2%), but in annual terms, it completely coincided with the expectations of most experts (an increase of up to 2.3%, as in the previous two months).

Salaries significantly disappointed. This component probably kept the EUR/USD pair from falling into the 10th figure. After the publication of rather weak Nonfarms, today's figures only supplemented the negative picture in this area. The growth rate of the real average weekly wage came out at zero, while in the previous month this indicator came out at 0.8%. The growth rate of the real average hourly wage also turned out to be lower than forecasts - the growth was 0.6%, while analysts had expected a jump to 1.1%. According to some experts, there is no need to panic - during the pre-Christmas and New Year period, the employment of seasonal workers increased in the US, and this factor of a seasonal nature, apparently, was not taken into account with appropriate adjustments. On the other hand, the Nonfarms inflation component entered the red zone: the average hourly wage was at 0.1% on a monthly basis (the worst result since September last year, when it dropped to zero) and 2.9 % per annum (the weakest figures since July 2018).

Thus, the EUR/USD bears had no good reason for the downward dynamics. On the one hand, the release could have been much worse (taking into account the dynamics of indirect inflation indicators), on the other hand, today's figures may have a corresponding effect on the position of the Federal Reserve members regarding monetary policy prospects, especially against the background of sluggish Nonfarms. Jerome Powell has repeatedly said that the regulator will begin to raise interest rates only if inflation demonstrates "dynamic and steady growth." Obviously, today's data does not meet the specified criteria.

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Nevertheless, the dollar is still holding the defense. Traders seem to be nervous about tomorrow's events. Let me remind you that on Wednesday, the first phase of the trade deal between the United States and China should be signed in Washington. The first details of this agreement appeared in the Chinese press. According to them, it includes Beijing's reassurance that China will acquire US goods in four industries for a total of $200 billion over two years. In addition, the Chinese side pledged to purchase a substantial amount of US industrial products ($75 billion), energy - $50 billion, agricultural products - $40 billion. China also agreed to spend 35 billion on purchases in the US services sector. The signing ceremony will take place at the White House, although Trump said yesterday that she could be postponed "to a later date."

In anticipation of this historic event, the market is clearly nervous, and this fact is reflected in the dynamics of the US currency. Nevertheless, short positions in the pair now look extremely risky. After the first emotions about the conclusion of the deal settle down, the focus of the market will again shift to macroeconomic statistics. This means that the dollar continues to be vulnerable, despite certain outbursts of interest in this currency.

Technically, the EUR/USD pair continues to be on the middle line of the BB indicator on the daily chart, although today the bears tried to pull down the price. However, the downward movement is accompanied by oncoming resistance, and now it is impossible to talk about the prospects for the downward impulse. The situation remains in limbo, so at the moment it is advisable to take a wait-and-see attitude in view of the increased uncertainty in anticipation of tomorrow's events.

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

GBP/USD: despite the decline, the pound retains ambition to regain lost ground

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The GBP/USD pair sank below 1.30, reaching its lowest level since late December. The fall of the pound followed the disappointing economic data for the United Kingdom and the comments of representatives of the Bank of England, indicating the regulator's readiness to lower interest rates.

It seems that the example of the Federal Reserve, which resorted to three cuts in the interest rate for preventive purposes, was contagious. Any central bank has a choice: either wait for the recession to occur, the arsenal of tools to combat which may be limited (as is the case with BoE), or act ahead of time to prevent a recession. Judging by the latest comments, more and more representatives of the Bank of England Monetary Policy Committee are leaning toward the second option. BoE Governor Mark Carney argues that easing monetary policy is virtually on the table, with MPC members Gertjan Vlieghe and Silvana Tenreyro associating monetary expansion with a weak British economy. Is it any wonder then that after these statements in just a week, the chances of lowering the BoE interest rate in January increased from 5% to 52%, and in May - from 30% to 85%.

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Recall that at the last meeting of the BoE, they decided to maintain the interest rate at 0.75% with seven votes to two. If three more votes are added to these two votes, then we can expect changes in BoE's monetary policy in January. In addition, macrostatistics in the UK recently have not been pleasing to the eye. In November, national GDP fell by 0.3% in monthly terms. In order to grow by the end of the quarter, the economy needs to accelerate by 0.2% in December.

It should be noted that the pound's fall might not have been so swift if it were not for the excessive optimism of speculators. By the end of the week, by January 7, they had increased their net bullish rates on GBP/USD to the highest level in a year and a half. However, the opposite process began - long positions began to actively close, which caused the British currency to fall below $1.3.

If London and Brussels succeed in resolving relations until January 31, and the BoE refrains from lowering rates in January, then the holiday will very soon return to GBP/USD.

"Investors must take advantage of any further depreciation of the pound to buy it, because concerns about weak economic data in the UK look excessive," BMO Capital Markets said.

"Economic data for the UK is already old news, and even a potential interest rate cut by the BoE means that the pound's recovery at any increased budget spending will be even greater," said BMO strategist Stephen Gallo.

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EUR/USD: thaw in US-China trade relations lends a helping hand to the euro

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The EUR/USD pair pushed off the 1.11 mark in response to expectations about the acceleration of the eurozone economy and the signing of the first phase of a trade agreement between the United States and China.

The thaw in Washington-Beijing trade relations, as well as signs that the Chinese economy was groping for the bottom, were good news for the euro. In addition, the geopolitical risks in the Middle East quickly came to naught. Obviously, headwinds for global and European GDP are gradually weakening, which allows the bulls to return to the game at EUR/USD. Further disappointing data on inflation and US retail sales for December and the publication of a minutes from the last meeting of the ECB Governing Council can contribute to the main currency pair's further growth.

In addition, not even a few months have passed since Christine Lagarde took the helm of the ECB, and relations between the European regulator and the Bundesbank have noticeably improved. Earlier, the head of the German central bank, Jens Weidmann, took all the decisions of the French predecessor, Mario Draghi, with hostility, but now he supported her with a statement about the need for fiscal stimulus from Berlin. This is possible if the positions of politicians are close. The fact that Lagarde wants to be a "wise owl" and not a dove is a favorable factor for the euro.

While the bulls on EUR/USD are trying to storm the resistance at 1.1135, however, to regain confidence in their abilities, they need to push quotes above 1.1155.

It should be noted that the level of 1.1150 acts as a strong area of resistance, where the weekly high and support for the downward trend converge.

It is expected that growth above 1.1150 will introduce resistance levels of 1.1170, 1.1205, 1.1230 and 1.1240, which have shown themselves on the eve of the New Year.

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