Technical analysis of ETH/USD for 16/01/2020:

Crypto Industry News:

The United Nations warned that participation in a North Korean cryptocurrency conference in February could be a violation of sanctions.

The report tracks last week's indictment of Ethereum Foundation researcher Virgil Griffith accusing him of plotting to violate the International Economic Allowances Act.

Griffith went to North Korea for the first Blockchain and cryptocurrency conference in April last year. He and other conference participants allegedly discussed cryptocurrencies and Blockchain technologies. The US government claims that Griffith's presence may have helped North Korea bypass international sanctions.

Prosecutors in the Griffith case say he encouraged other US citizens to attend the conference this year. The conference website states that people from any country except South Korea, Japan and Israel have permission to visit, adding that guest passports will not be stamped.

North Korea has been subject to UN sanctions since 2006 for conducting nuclear and missile programs. These sanctions oblige, inter alia, countries to prevent "financial transactions, technical training, advice, services or assistance" if they could contribute to the implementation of missile programs or help to avoid sanctions.

The alleged "clear discussions about cryptocurrencies to avoid sanctions and money laundering" appear to be a direct violation of this sanction.

Technical Market Overview:

After the new high was made at $170.42, the ETH/USD pair has been consolidating the recent gains in a narrow range located between the levels of $170.42 - $156.77. Nevertheless, 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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Technical analysis of BTC/USD for 16/01/2020:

Crypto Industry News:

The form from January 14 submitted by the US Securities and Exchange Commission (SEC) confirms that Bitwise Asset Management has demanded to withdraw its application for the Bitcoin ETF. This is the second major ETF withdrawal in recent months after similar VanEck activities.

Bitwise submitted an application for ETF registration in January 2019. In March of the same year, he published the Bitwise Report on the stock volume, claiming that 95% of the trading volume was fabricated. The findings were used by the company as an argument for the SEC to accept the ETF. Apart from most of the volume, the company maintained that BTC prices were mainly on regulated exchanges.

The reasoning did not convince the committee, which rejected the offer in October 2019. However, a month later the regulator decided to revise its decision.

This is another step towards our long-term goal of introducing Bitcoin ETFs to the market, and Bitwise plans to resubmit the application in a timely manner.

Technical Market Overview:

Despite the Shooting Star candlestick pattern made at the top of the wave up at the level of $8,836, the Bitcoin bulls are still making pressure in the price. The local technical support has been tested already. 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.

analytics5e200d845817b.jpg

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Overview of GBP/USD on January 16. UK-EU trade agreement: There is no smoke without fire

4-hour timeframe

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Technical data:

The upper channel of linear regression: direction - upward.

The lower channel of linear regression: direction - sideways.

The moving average (20; smoothed) - sideways.

CCI: 37.3376

The British pound resumed its corrective movement and worked out the moving average line during the last trading day. Thus, the future of the pound-dollar pair will be decided today. If traders manage to overcome the moving average line, the strengthening of the British currency may continue although statistics from the UK continue to upset all market participants. If the bears hold the initiative in their hands, then a more attractive downward trend will resume. On Thursday, January 16, there will be no important macroeconomic publications in the UK. Thus, the attention of traders will be focused only on the most important report on retail sales in the United States.

We have already listed several times the reasons why the British pound may continue to fall in price in 2020, despite the seemingly end of the Brexit epic. Now the issue of a trade agreement with the European Union is on the agenda. Most of the world's experts say almost in unison that it is simply impossible to agree and ratify such a large agreement in 11 months, or it will be extremely superficial. Only Boris Johnson remained optimistic about this issue. However, today, it was reported that the British Prime Minister himself doubts that London will be able to reach an agreement with Brussels in 2020. During the November-December election campaign, Boris Johnson said that "a deal with the EU will be concluded in almost any case." Now his rhetoric is slowly beginning to change. The Prime Minister began to have doubts. Well, if even Boris Johnson is in doubt, then it's time for UK business, which is already going through its worst times, to start worrying even more. After all, if the UK does not agree with the EU, then from January 2021, Britain will trade with the Alliance under WTO rules, that is, with duties, checks, and paperwork. However, Boris Johnson continues to stand by his position, which does not imply an extension of the "transition period". He said this last week to the head of the European Commission, Ursula von der Leyen. In turn, Ms. von der Leyen said that the probability of a deal being concluded in 11 months is extremely low and that both sides need to consider extending the period during which negotiations will be conducted. Later, the head of the European Commission also repeated that the UK's access to the single European market will depend on how London is ready to comply with EU rules and regulations. Earlier, Brussels also said that London cannot rely on the same terms of trade as the other EU Member States.

Is it necessary to say that such information is only a source of new potential problems for the UK and the British pound? We have already said what problems the UK business is experiencing now, many large international corporations are moving their production outside the Kingdom. If there is no trade deal, there will be even more problems in the economy of Albion. The Bank of England, which is due to lower its key rate soon, will then have a very meager set of tools to influence monetary policy in the future. In general, as we have stated more than once, Brexit has not started yet, and the UK economy is already experiencing serious problems. Yesterday, for example, the inflation report showed another drop in this indicator, and retail sales for December will be published tomorrow.

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The average volatility of the pound-dollar pair over the past 5 days is 80 points and continues to decline. According to the current volatility level, the working channel on January 16 is limited to the levels of 1.2955 and 1.3115, and we still believe that the pair will seek to work out the lower limit of the volatility channel. The Heiken Ashi indicator can signal the end of the current correction by turning down.

Nearest support levels:

S1 - 1.3000

S2 - 1.2939

S3 - 1.2878

Nearest resistance levels:

R1 - 1.3062

R2 - 1.3123

R3 - 1.3184

Trading recommendations:

The GBP/USD pair continues to be adjusted. Thus, traders are advised to wait until the correction is completed and sell the pound again with the goals of 1.3000 and 1.2955, provided the price is located below the moving average line. It is recommended to buy the British currency not before the pair returns above the moving average with the first goal of 1.3115, but even in this case, it should be remembered that the fundamental background is not on the side of the pound.

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

Explanation of the illustrations:

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

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

CCI - the blue line in the indicator regression window.

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

Murray levels - multi-colored horizontal stripes.

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

Possible variants of the price movement:

Red and green arrows.

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Overview of EUR/USD on January 16. Donald Trump and Liu He signed the first phase of the trade agreement

4-hour timeframe

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Technical data:

The upper channel of linear regression: direction - upward.

The lower channel of linear regression: direction - upward.

The moving average (20; smoothed) - up.

CCI: 130.5286

On Thursday, January 16, the EUR/USD currency pair begins a new round of upward movement. The pair's quotes have successfully overcome the moving average line and can now continue to move up since the initiative in the market is now concentrated in the hands of the bulls. At the same time, we still doubt that the euro will be able to continue its strengthening. The problem is that the fundamental background remains not in favor of the euro. This applies to the general fundamental background (ECB - Fed monetary policies, the current state of the US and EU economies), and the local macroeconomic background. Recent macroeconomic reports have again shown that the US economy continues to grow and strengthen, while the European Union remains in recession. Moreover, the signing of a trade agreement between China and the United States can lead to even greater growth of the American economy, while it can only help the European economy to stop shrinking. Anyway, the US economy looks much stronger and more stable than the European one, and the US dollar has a much better chance of strengthening.

Today, several macroeconomic reports will be published at once, which may have an impact on the movement of the euro-dollar pair. First, it is inflation in Germany. The consumer price index in December may reach 1.5% y/y, however, bearing in mind how inflation failed in the UK yesterday, we can assume that the German indicator is unlikely to show an acceleration. And if there is no acceleration, then there will be no new reasons for traders to buy the European currency. Second, the States will publish data on retail sales for December today. This is not the most important and significant indicator, the forecasts for it are relatively neutral, however, it can have a certain impact on the market. Retail sales are expected to have increased by 0.3% m/m in December. Third, the head of the European Central Bank, Christine Lagarde, will give a speech late in the evening. And we also don't expect anything optimistic for the European currency from this event. What can Lagarde say if she touches on monetary policy at all? The EU economy is still in a state of declining growth. Some industries (business activity, industrial production) are frankly declining. In such circumstances, Ms. Lagarde cannot even theoretically say anything "hawkish". Of course, the head of the ECB may try to calm the markets by saying something that does not quite correspond to the truth, but market participants must also believe in her words. Thus, we believe that the best balance for the euro today is inflation in Germany, which is 1.5% y/y, and Christine Lagarde, who does not touch the topic of monetary policy or chooses the most neutral rhetoric.

Meanwhile, US President Donald Trump and Vice Premier of the State Council of China Liu He signed the documents of the first stage of the trade deal. As previously reported, duties of 25% on imports from China totaling $250 billion remain in force. President Trump noted that he decided to keep these duties, as otherwise "America would have lost all the trumps in the negotiations on the second phase." Chinese President Xi Jinping called the deal a sign that the parties can resolve their differences through dialogue. He called the agreement beneficial for Beijing, Washington, and the world. Meanwhile, the European Chamber of Commerce started sounding the alarm over the signing of the agreement between China and the United States. According to the head of the organization, Jorg Wuttke, "regulated trade" between China and America will hit exporters and manufacturers of other countries, since now Beijing will buy those goods that America will prescribe, respectively, excluding other manufacturers and suppliers from the market, as well as leveling the principle of "best price and best conditions". Another potential blow to the European economy?

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The average volatility of the euro-dollar currency pair is currently 39 points and continues to decline. Thus, we have volatility levels on January 16 - 1.1110 and 1.1187. A reversal of the Heiken Ashi indicator will indicate a downward correction. We still expect the downward movement to resume.

Nearest support levels:

S1 - 1.1139

S2 - 1.1108

S3 - 1.1078

Nearest resistance levels:

R1 - 1.1169

R2 - 1.1200

R3 - 1.1230

Trading recommendations:

The euro-dollar pair broke the moving average line. Thus, long positions with goals of 1.1169 and 1.1187 have become relevant at the moment. However, a downward reversal of the Heiken Ashi may signal the end of the entire upward momentum. It is recommended to return to the pair's sales with the goal of 1.1110 not earlier than the reverse overcoming of the moving average.

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

Explanation of the illustrations:

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

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

CCI - the blue line in the indicator window.

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

Murray levels - multi-colored horizontal stripes.

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

Possible variants of the price movement:

Red and green arrows.

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

Technical analysis of GBP/USD for 16/01/2020:

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. The pair has broken through the local technical resistance at the level of 1.3017 already. 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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Technical analysis of EUR/USD for 16/01/2020:

Technical Market Overview:

The EUR/USD bounce has been capped at 50% Fibonacci retracement at the level of 1.1161 as anticipated and since then the bears are trying to push the prices back under the short-term trendline resistance. The momentum is just above the neutral level 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 level of 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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Hot forecast for EUR/USD on 01/16/2020 and trading recommendation

Oddly enough, the long-awaited signing of the first phase of a comprehensive trade agreement between China and the United States has not changed anything. Surprisingly, there was nothing new in the full text of the agreement, except that everyone already knew. China allegedly pledges to increase imports of goods and services from the United States by $ 200 billion over two years. But more importantly, at least all tariffs and customs duties remain unchanged until the presidential election in the United States. That is, there will be no new restrictions on Chinese goods on the American market, which means that the existing imbalance in mutual trade between China and the United States will continue. Moreover, this is an imbalance in favor of China and you can talk as much as you like about that Beijing's commitments to increase imports from the United States will supposedly close this imbalance. In fact, the agreement itself does not contain any specifics as to what will happen if China does not fulfill this promise. Moreover, the agreement does not have an extremely important point, which has remained practically without the attention of the general public. The United States Department of the Treasury has excluded China from the list of countries manipulating its national currency. Technically, this means that all sorts of transactions and cash transactions between the United States and China are simplified and cheapened. It's just that if a country falls into the list of countries that manipulate the national currency, then all trade and financial transactions with that country automatically impose a number of restrictions. In other words, The United States Treasury Department's actions overlooked in the first phase of the agreement offset China's potential increase in imports from the United States. In relation to, Chinese companies instantly gained additional advantages in the American market, which means they will increase their exports. As a result, this alignment was the reason for the weakening dollar. Let it be purely symbolic. Since in any case, the signing of this agreement at least reduces the tension and uncertainty of international trade issues. Thus, the dollar becomes cheaper when the world becomes calmer.

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Meanwhile, the single European currency was waiting until the last, and ignored data on industrial production in Europe. The decline of which slowed down from -2.6% to -1.5%, which turned out to be slightly worse than forecasts that predicted a slowdown in recession to -1.4%, or even to -1.1%. But in any case, European industry has been declining for more than a year.

Industrial Production (Europe):

analytics5e20044a61146.png

In addition, data on producer prices in the United States, whose growth rate accelerated from 1.1% to 1.3%, remained almost unaddressed. But, in this case, the data turned out to be worse than forecasts, since they expected acceleration to 1.4%. However, this indicates that inflation does not have a potential for decline, and is likely to continue to grow. Consequently, the Federal Reserve will soon think about the possibility of raising the refinancing rate.

Manufacturer Prices (United States):

analytics5e20045abeef7.png

Today, the situation will be quite quiet and calm before the opening of the American session. The United States only publishes at least some significant macroeconomic data. However, they will not bring the dollar anything good. Of course, on the one hand, a decrease in the number of applications for unemployment benefits is expected, but only by 6 thousand. And even then, the number of which should be reduced by 11 thousand thanks to repeated applications and then the number of primary ones may increase by 5 thousand. However, data on retail sales are also published. The growth rate of which should slow down from 3.3% to 2.9%. A marked decline in consumer activity is offsetting the recent rise in inflation, and the dollar is losing its advantages.

Retail Sales (United States):

analytics5e20046b2b121.png

From the point of view of technical analysis, we saw that the quotes still managed to locally break through the periodic level of 1.1145, drawing out impulse candles in the market, but the joy of the market was temporary, and a deceleration process almost immediately occurred. In fact, quotes remained at a value of 1.1145, with an amplitude of just under 20 points.

In terms of a general review of the trading chart, we see a preserving correction phase in the structure of the two-week downward movement, where the pivot point is the range level of 1.1080.

It is likely to assume that the quotes will not linger above the level of 1.1145 for a long time and will already go down under it today, having an amplitude fluctuation with average volatility.

Concretizing all of the above into trading signals:

- Long positions are considered in the case of keeping the rising mood and fixing the price higher than 1.1165, which is in the direction of 1.1180.

- Short positions are considered in the case of a clear fixation of prices lower than 1.1145.

From the point of view of a comprehensive indicator analysis, we see a variable downward interest, where only intraday sections restraint keep a buy signal, displaying the same correction.

analytics5e20047cbd37c.png

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Indicator analysis: Daily review on GBP/USD for January 16, 2020

Trend analysis (Fig. 1).

The price may continue to move up today with the target of 1.3080, the pullback level 38.2% presented in a red dashed line. If this line is reached, a continuation of work up with the target 1.3105, the resistance line presented in a red bold 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 level 1.3067, the 21 average EMA in a black thin line, work down with the target 1.2997, the support line presented in a white bold line.

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Indicator analysis: Daily review on EUR / USD for January 16, 2020

Trend analysis (Fig. 1).

In order to continue moving up today, the price must overcome the upper fractal 1.1164 presented in a blue dashed line. Only after this can the market continue to move up with the target 1.1182, the retracement level of 61.8% presented in a blue dashed line. Upon reaching this line, the next goal will be at 1.1205, the retracement level of 76.4% presented in a blue dashed line.

analytics5e1ff9bfb3793.png

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 a pullback level of 50.0% which is equivalent to 1.1164 presented in a blue dashed line, the price will go down to a pullback level of 50.0% equivalent to 1.1112 presented in a red dashed line.

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EUR/USD IPDA Projection HOD/LOD For Thu Jan 16, 2020.

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The High Of The Day (HOD) and Low Of The Day (LOD) base IPDA (Interbank Price Delivery Algorythm) FLOUT Range are usually formed at STDV 2-STDV 4 under the normal market conditions but sometimes can reach the STDV 5-STDV 6. Here are today's levels:

STDV 10 - 1.1219.

STDV 9 - 1.1213

sSTDV 8 - 1.1207.

STDV 7 - 1.1201.

STDV 6 - 1.1195.

STDV 5 - 1.1189.

STDV 4 - 1.1183.

STDV 3 - 1.1177.

STDV 2 - 1.1171.

STDV 1 - 1.1169.

FLOUT - 1.1159.

==================

FLOUT - 1.1148.

STDV 1 - 1.1143.

STDV 2 - 1.1138.

STDV 3 - 1.1133.

STDV 4 - 1.1128.

STDV 5 - 1.1123.

STDV 6 - 1.1118.

STDV 7 - 1.1113.

STDV 8 - 1.1108.

STDV 9 - 1.1103.

STDV 10 - 1.1098.

Please pay attention to STDV 7 1.1113 below the FLOUT Range because of the confluence with the Previous Day STDV 3 below the FLOUT Range.

(Disclaimer)

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

GBP/USD IPDA Projection HOD/LOD For Thu Jan 16, 2020.

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The High Of The Day (HOD) and Low Of The Day (LOD) base IPDA (Interbank Price Delivery Algoryhtm) CBDR (Central Bank Dealer Range) usually form at STDV 2-STDV 4 in the normal condition sometimes can reach to STDV 5-STDV 6. Here's today level:

STDV 10 - 1.3280.

STDV 9 - 1.3257.

STDV 8 - 1.3234.

STDV 7 - 1.3211.

STDV 6 - 1.3188.

STDV 5 - 1.3165.

STDV 4 - 1.3142.

STDV 3 - 1.3119.

STDV 2 - 1.3096.

STDV 1 - 1.3073.

CBDR - 1.3050.

CBDR - 1.3027.

STDV 1 - 1.3004.

STDV 2 - 1.2981.

STDV 3 - 1.2958.

STDV 4 - 1.2953.

STDV 5 - 1.2912.

STDV 6 - 1.2889.

STDV 7 - 1.2866.

STDV 8 - 1.2843.

STDV 9 - 1.2820.

STDV 10 - 1.2797.

Please pay attention for STDV 4 1.3004 bellow the CBDR because the confluence with the Previous Day STDV 2 bellow the FLOUT Range.

(Disclaimer)

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

Forecast for EUR/USD on January 16, 2020

EUR/USD

Yesterday, unfavorable news came out for the euro. First of all, the US and China signed the first part of the trade agreement, under which China pledged to further increase purchases of US goods and services (+$77 billion), for which Washington lowered duties to 7.5% on the volume of Chinese goods worth $120 billion. Several observers noted that the main terms of the agreement are unlikely to be fulfilled by China. The parties agreed to involve the IMF as a verification observer in disputes. Industrial production in the euro area in the November estimate increased by 0.2% against the forecast of 0.3% and the trade balance decreased from 28.0 billion euros to 20.7 billion.

Today, data on retail sales for December is published in the United States: the forecast for the core retail sales index is 0.5%, and total sales are expected to grow by 0.3%. The index of business activity in the manufacturing sector in Philadelphia can also show growth - the forecast for January is 3.7 against 0.3 in December.

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The price yesterday reached the expected level of 110.0% Fibonacci. Today, on the retail trade data, we are waiting for the price to turn down. The nearest goal, in the two-day perspective, is 1.1073 - the Fibonacci level of 123.6% and support for the MACD line.

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As seen on the four-hour chart, the price came out with a fix over the MACD line, having worked out 50.0% of the fall on December 31-January 10. The return of the price under the MACD line (1.1140) will be the first signal to the intention of the price to turn around.

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Forecast for GBP/USD on January 16, 2020

GBP/USD

On Wednesday, the pound grew (by 18 points) under the influence of the general weakening of the dollar. As seen on the daily chart, the price is held for the third day by the resistance of the balance line, which indicates that the market's mood is still declining. The Marlin oscillator is also in the negative trend zone. Today, on the US retail sales data, we are waiting for the correction to be completed and the price to return to the Fibonacci level of 161.8% at 1.2968. The forecast for the core retail sales index is 0.5%, and total sales are expected to grow by 0.3%.

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As seen on the four-hour chart, the price stayed at the corrective level of 23.6% from the decline range on December 13-23. The level also coincides with the minimum of December 12. Fixing the price below the MACD line (1.3032) will indicate the completion of the correction.

analytics5e1fcc9a70151.png

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Forecast for USD/JPY on January 16, 2020

USD / JPY

The dollar against the yen suspended growth in front of the strong linear resistance of the price channels - upward (green) and downward (red). The price is supported by the MACD presented in a blue moving line at a price of 109.62. Yesterday the S&P500 grew 0.19%, and today Nikkei225 is adding only 0.08%, if the stock market does not rise in today's retail sales data then the correction may go deeper into this line. In general, potential growth remains. Overcoming the red price channel line at 110.25 opens the way for the price to the target range 110.83 / 98, to the Fibonacci level of 123.6%.

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On the four-hour chart, the growing potential looks strong. The price is above the lines of balance and MACD, the Marlin oscillator is in the decline zone, but can easily go into the growth zone. Weak divergence may already be worked out.

analytics5e1fcbf4c740c.png

The critical level that unfolds the trend is 109.29, which is October 30's maximum and the MACD line of a four-hour scale is located at the same level.

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Fractal analysis for major currency pairs on January 16

Forecast for January 16:

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: 1.1204, 1.1177, 1.1151, 1.1115, 1.1087, 1.1058, 1.1031 and 1.1015. Here, the price is close to the cancellation of the downward structure from January 6, for which we expect a breakdown of the level of 1.1177. In this case, the first potential target is 1.1204, while we expect a short-term upward movement, as well as consolidation in the range 1.1151 - 1.1177. The continuation of the movement to the bottom is possibly after the breakdown of the level of 1.1115. Here, the first goal is 1.1087. The breakdown of which will allow counting on the movement to 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,

The main trend is the local descending structure of January 6, the potential for the top of January 10

Trading recommendations:

Buy: 1.1153 Take profit: 1.1175

Buy: 1.1178 Take profit: 1.1204

Sell: 1.1058 Take profit: 1.1090

Sell: 1.1085 Take profit: 1.1060

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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 price is in correction from the downward structure on December 31. The continuation of movement to the bottom 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.

Short-term upward movement, as well as consolidation, are expected in the range 1.3027 - 1.3073. The breakdown of the latter value will lead to an in-depth correction. Here, the goal is 1.3113. This level is a key support for the bottom, its passage through the price will have the formation of initial conditions for the upward cycle. Here, the potential target is 1.3178.

The main trend is the descending structure of December 31, the correction stage

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: 0.9691, 0.9667, 0.9650, 0.9623, 0.9597, 0.9581 and 0.9551. Here, we are following the development of the downward cycle of January 10. The continuation of the movement to the bottom is expected after the breakdown of the level of 0.9623. In this case, the target is 0.9597. Price consolidation is in the range of 0.9597 - 0.9581. For the potential value for the bottom, we consider the level of 0.9551. Upon reaching which, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 0.9650 - 0.9667. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.9691. 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: 0.9650 Take profit: 0.9665

Buy: 0.9668 Take profit: 0.9690

Sell: 0.9621 Take profit: 0.9598

Sell: 0.9580 Take profit: 0.9551

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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. We consider the level 1.3157 to be a potential value for the top; 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 1.3040 - 1.3015. The breakdown of the latter value will lead to the formation of initial conditions for the downward cycle. In this case, the potential target is 1.2988.

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: 1.3038 Take profit: 1.3017

Sell: 1.3013 Take profit: 1.2990

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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, we are following the formation of the ascending structure of January 9. 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 are following the development of the upward cycle of January 8. The continuation of the movement to the top is expected after the breakdown of the level of 122.70. In this case, the first target is 123.06. 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 latter 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 ascendant structure of January 3. The continuation of the movement to the top is expected 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 possibly in the range of 142.34 - 141.87. The breakdown of the last 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

Soaring on a scandal: the Swiss franc has reached heights

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In relation to the national currency of Switzerland, the saying "there would be no happiness, but misfortune helped" has fully justified itself. The Swiss franc soared to a 33-month high after adding Switzerland to the list of potential currency manipulators. Experts believe, however, that the rise of this currency will be short-lived.

On Tuesday, January 14, the Swiss currency, previously behaving calmly in the market, showed a strong character unexpectedly. Its growth against the euro was the strongest in the last three years. Against the franc, euro fell to 1.0760 francs, or almost 0.5%. The Swiss currency took advantage of the moment and rose upwards, having significantly strengthened since April 2017.

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Meanwhile, in the USD/CHF pair, the situation was different: the franc fell against the dollar. On the morning of Wednesday, January 15, the tandem was trading within 0.9677.

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The dollar sank slightly against the franc by 0.4%, up to 0.9669 francs earlier, but then regained its positions. Later on, the USD/CHF pair entered a downward spiral, slipping to 0.9658. At the same time, the Swiss franc strengthened significantly in the European session.

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The reason for the rise of the Swiss national currency was the actions of the United States, which added this European country to the list of possible manipulators of exchange rates. According to experts, this inclusion can significantly affect the further actions of the Swiss National Bank (SNB). As a result, the regulator may refuse currency interventions that slow the growth of the franc, which is similar to an escape from potential problems. The country's Finance Ministry, however, denies the negative impact of the US authorities' decision on the national currency.

Recall that on Monday, January 13, the US Treasury Department added Switzerland to the list of countries whose currency practices are causing concern in Washington. The country is accused of actively increasing purchases of foreign currency, starting in mid-2019. Note that in the past few years, the SNB has purchased foreign currency on a huge scale in order to weaken the demand for the franc.

The Swiss regulator denies America's accusations of gaining a trading advantage over other currencies. The department emphasizes that the current interventions were aimed at eliminating the fortress of franc. The SNB also notes that a very high exchange rate negatively affects inflation and the country's export-dependent economy. Analysts emphasized that the Swiss Finance Ministry does not intend to change its currency policy with respect to the franc. They believe that currency interventions serve as a powerful fuel for the "Swiss".

Currently, investors who use the Swiss franc as a safe haven asset during periods of uncertainty are focusing on the currency. The advantage of investing in this asset is the fact that the SNB has set the lowest interest rates in the world to deter investors.

Representatives of the Swiss regulator emphasize that the goal of the country's financial policy is to stabilize prices and control current economic changes. Experts summarize that the Swiss financial authorities strive to achieve a balance in the implementation of this strategy, and most often, they succeed.

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

Gold has come to life

The storm continues to rage in the gold market. Despite the fact that only two weeks have passed since the beginning of the year, the precious metal has already managed to go to 7-year highs, collapse like a stone, and then begin to recover thanks to bad news about the trade war. Bloomberg is actively spreading rumors that tariffs on $360 billion of Chinese imports will remain in force, at least until the US presidential election, because the White House needs to assess how Beijing is fulfilling its obligation to increase purchases of American agricultural and other products. The trade war, which has lasted just under two years, does not seem to be going to stop, which means that demand for safe-haven assets will remain high.

The conflict in the Middle East is gradually fading. The market is dominated by the view that the current XAU/USD correction is due to the mass closure of long speculative positions. Hedge funds in the week of January 7 increased them to the highest level since the end of September, probably hoping that the confrontation between US and Iran will be long-lasting. Some are still hoping for it. The Standard Chartered Bank notes that the price movement due to geopolitics was stronger than previously expected. HSBC raised its forecast for gold for 2020 from $1560 to $1613 per ounce.

In my opinion, the reasons for the strengthening of the precious metal should not be found in geopolitics, but in the activities of central banks, in politics and in trade disputes instead. The Fed has made it clear that even exceeding the 2% inflation target will not force it to abandon passive behavior. The regulator is ready to endure the acceleration of consumer prices during the period of economic expansion, which is good news for the "bulls" on XAU/USD. The precious metal is traditionally perceived as a tool for hedging inflation risks, asits dynamics have a lot in common with the changes in the US CPI.

The dynamics of gold and American inflation:

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The dog is buried in the increased sensitivity of gold to the real yield of US Treasury bonds. In December, inflation in the United States grew by 2.3%. This is the second best indicator for a calendar year since 2011, when its growth rate was at 3%. In 2018, consumer prices rose by 1.9%, and by 1.6% on average for 10 years.

Another factor supporting XAU / USD is the propensity of the world's leading central banks to ultra-soft monetary policy, which keeps global debt market rates close to historical lows. At the same time, a large-scale monetary stimulus contributes to the devaluation of currencies, which increases the attractiveness of gold. If global GDP does not recover as quickly as expected, regulators will further weaken monetary policy. With tariffs on $360 billion of Chinese imports still in place, this is more than likely.

Technically, after reaching the target of 113% for the "Shark pattern", a natural pullback to the 38.2% Fibonacci correction level followed. Important Pivot levels are also located here. The fact that the "bulls" managed to hold support at $1545-1548 per ounce, the hopes of restoring the upward trend remains.

Gold, daily chart

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

What did Putin say on his speech at the Federal Assembly on January 15?

Vladimir Putin delivered his annual address to the Federal Assembly.

This time, it is a record early, at the very beginning of the year.

What's good?

Real assistance will be given to families with children, mainly to the poorest families:

a) Benefits for low-income families with children have been extended from 3 to 7 years, starting from January 1, 2020.

b) All students up to grade 4 will be given free hot meals in school from September 1, 2020.

C) Matkapital will be already on the first child (!) - on the second increase of 150 thousand rubles.

This, unfortunately, is almost everything.

But what about income and GDP growth?

a) For income growth, GDP growth is needed, which is fortunately promised on 2021. For GDP growth, we need an investment growth of +5% to the current level. Thus, all in all, we need first an investment growth, then GDP growth, then income growth.

This will take a very long time and in my opinion, is unlikely to work. The economy is not developing, as it is pinned down by low incomes of citizens and high taxes. No demand, no growth.

b) Positively, it is promised that the government's reserves will amount to 7% of GDP by mid-2020, and that which will be higher will be sent to the economy.

Politics.

A change in the system of power and the Constitution is promised. The role of the parliament will be strengthened, while the President's role will be weakened. The parliament will be the one to appoint the Prime Minister and Ministers, and the President will not be able to approve the decision of the parliament. The President though, can send Ministers and the Prime Minister to resign. Putin said that he does not consider it necessary to increase the term of office of the President.

Conclusions: It seems that Putin is not going to keep his presidency after 2024. The role of the parliament is growing. The significance of the State Duma elections in 2021 is increasing dramatically. A large transit of power begins.

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

GBP/USD. January 15. Results of the day. Boris Johnson officially refused to allow Scotland to hold a second independence

4-hour time frame

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Amplitude of the last 5 days (high-low): 118p - 89p - 111p - 55p - 79p.

Average volatility over the past 5 days: 86p (average).

The British pound sterling tried to resume the downward movement at the European trading session on Wednesday, January 15. However, the bearish mood of the traders ended very quickly and the pair has now returned to the Kijun-sen critical line, and the Bollinger bands are narrowing and turning sideways again. Thus, the further downward movement is still in question, as traders are clearly not willing to sell the pound again and even ignore quite important macroeconomic statistics from the UK. Today's inflation report showed that the consumer price index fell to 1.3% y / y by December, while traders expected inflation to remain unchanged at 1.5%. Thus, this is another slowdown in inflation in Britain. In monthly terms, the consumer price index was 0.0%, although market participants were expecting + 0.2%. In general, we can state that the data from the Foggy Albion failed once again. Formally, traders reacted to these statistics, since the pound still declined by 40 points early in the morning. However, we believe that this is too little for yet another confirmation of the weakness of the UK economy. This week, a retail sales report will be published in the UK, which will not save the situation for the British pound in any case.

The most important thing in the current situation is to find out why the British pound has stopped declining. Maybe the reasons lie not in the pound, but in the dollar? However, there have been no pessimistic events recently in the States. The signing of a trade deal in the first phase between Beijing and Washington with all the desire could not cause a sell-off of the American currency. Thus, we are now inclined to believe that traders again consider the current level of the pound / dollar pair unattractive for new sales.

Not so long ago, we listed a list of reasons why the pound will continue to fall in price in 2020. The main reason, of course, was Brexit, and this reason brings with it a number of other reasons. For example, we said that London could have serious problems with Scotland, which wants to remain in the European Union, with Ireland, where clashes between various separatist and nationalist movements may begin, with Gibraltar, which Spain claims, and so on. Of course, the most pressing issue remains the issue with Scotland, whose Prime Minister Nicola Sturgeon has repeatedly stated her intention to initiate a second referendum on independence. Yesterday, January 14, Boris Johnson sent an official letter to Mrs. Sturgeon which refused to allow her to hold an independence referendum. Boris Johnson recalled the results of the previous referendum in 2014, when most Scots decided to stay in the United Kingdom. He also recalled that Nicola Sturgeon and her predecessor, Alex Salmond, promised last 2014 that the referendum would be the last "in a generation." In principle, Johnson's failure was predicted by everyone. Why would the Prime Minister endorse the possible loss of an entire country in such difficult times for Britain? Moreover, there is really an iron argument in the form of the 2014 referendum. However, the problem is that Scotland is unlikely to give up so easily. It's good (for London) if the Scottish National Party simply continued to act "by law", requiring official permission from London. But then this process will simply drag on for many years and will not have any serious consequences. However, it can be assumed that Edinburgh may not follow a completely legal path given the truly serious attitude of Nicola Sturgeon, for example, to hold a referendum not agreed with London. Potentially, this could be a source of global conflict between England and Scotland. After all, Scotland remains under the jurisdiction of London and is obliged to obey. However, Nicola Sturgeon has repeatedly stated that her country does not want to be under the leadership of Boris Johnson. In general, Brexit will only begin on January 31, 2020, and the UK has already faced so many problems: financial losses and a political crisis that it becomes scary at the expense of the near future of the country. Thus, the future of the pound is no less vague and we continue to expect a decline in the British currency in the medium and long term.

Trading recommendations:

GBP / USD remains downside. Thus, traders are advised to stay on the pound / dollar pair with targets at 1.2975, 1.2931 and 1.2894 as long as the pair is below the critical line. It is recommended that purchases of British currency be returned no earlier than the price fixing above the Kijun-sen and Senkou Span B lines with the first target of 1.3175.

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: weak PPI report, rumors around the deal, and dollar's overall vulnerability

The euro-dollar pair shows amazing durability at the beginning of this year. The bears of EUR/USD put pressure on the pair with an enviable regularity, however, buyers always return the price to previous levels. For two weeks in January, sellers could not gain a foothold in the area of the 10th figure, although such attempts were made repeatedly. Nevertheless, the overall vulnerability of the US currency does not allow the bulls of the dollar to develop a downward trend for the pair.

Moreover, the events of the current week logically fit into the general outline of the latest trends. The bears of EUR/USD made another attempt to decline to the area of the 10th figure after the release of conflicting data on the growth of American inflation, but they were able to only reach the level of 1.1104 instead, after which they began to actively buy the pair. Today, the upward dynamics has continued again, thanks to the general weakening of the dollar. On the other hand, the European currency has recently behaved modestly, due to the lack of information lines. In almost all cross-pairs, the euro is weak. With the exception of the euro / franc pair, which declined to three-year lows. But in this case, we are only talking about the rise in price of the Swiss, and the euro only follows the quoted currency.

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The same can be said about the EUR/USD pair. Here, a mirror situation has only developed, since the price is rising only due to the devaluation of the dollar. The American currency came under pressure from several fundamental factors. Firstly, in anticipation of the signing of the first phase of the U.S.-China trade deal, rumors appeared in the market that Washington did not intend to lower tariffs imposed on Chinese goods previously, at least until the presidential election in November this year. Yet, it is worth noting immediately that this information is unofficial in nature - it was distributed by reporters of the Bloomberg agency. Nevertheless, the currency market took this signal quite seriously: the yuan slowed down the strengthening process, and the dollar index began to show a downward trend. The euro-dollar pair, respectively, rose to the level of 1.1160.

In turn, US macroeconomic statistics added fuel to the fire. Disappointing retail sales were released today after slurring non-farms and conflicting data on inflation in the United States. Meanwhile, the Producer Price Index is an early signal of changes in inflationary trends – the negative dynamics of this indicator. Therefore, its decline was negatively perceived by dollar bulls, especially against the background of other inflationary releases.

Thus, the December producer price index on a monthly basis increased by only one tenth of a percent, after falling to zero (experts predicted growth to 0.2%). In annual terms, this figure rose to 1.3%, which coincided with the forecasts of most analysts. The basic PPI, that is, the producer price index without taking into account the prices of foodstuffs and energy carriers, has completely entered the "red zone" - both in annual and monthly terms. For example, the indicator has been consistently decreasing for the past four months on an annualized basis - if the index was at around 2.9% in August last year, then it has reached 1.1% today. This indicator fell to many-year lows - the it was on such bottoms only in August 2016 last time.

However, long positions in the pair still look risky despite such disappointing reports, as well as short ones. Toward the close of the American session, a ceremony of signing the first phase of the deal between the United States and China should be held. The head of the White House and Vice Premier of the State Council of the PRC Liu He will certify with their signatures an almost 90-page document at the reception, where hundreds of high-ranking guests from business, government and diplomatic circles will be present. In such an environment, the parties are unlikely to voice any negative signals. Therefore, the dollar may receive some support, amid peace-loving rhetoric. On the other hand, a newsletter will be published on the text of the trade agreement a bit later (obviously tomorrow or the day after tomorrow). This document may return a certain negativity to the market.

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According to rumors, Beijing has made only vague obligations in terms of protecting intellectual property and liberalizing the financial services market. In addition, the negotiators decided to discuss the most complex and strategically important issues in the course of further negotiations, which will begin (most likely) in February. In other words, the parties managed to postpone the conflict for a while, putting the trade war on hold. However, the euphoria about this fact will quickly come forward. Beijing and Washington have not been able to solve key problems, taking the issue of structural reforms in China out of the negotiations.

All this suggests that the EUR/USD pair may demonstrate false price movements in the near future. The current price increase should also be rather skeptical, in view of the above reasons. At the moment, it is worthwhile to maintain a wait-and-see attitude until the market acquaints itself and renders its "verdict" to the first phase of the trade transaction.

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

EUR/USD. January 15. Results of the day. Euro is growing amid signing trade deal between US and China

4-hour time frame

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Amplitude of the last 5 days (high-low): 67p - 28p - 44p - 34p - 41p.

Average volatility over the past 5 days: 43p (average).

The third trading day of the week for the EUR / USD pair ends with a corrective movement again, which may move into a new upward trend in the near future. During today, traders ignored macroeconomic statistics, being at the mercy of optimism regarding the signing of a trade deal between China and the States in the White House. Oddly enough, such news supports the European currency, although a trade conflict seems to be between China and America. Thus, it is clear that the conflict also affects European countries to one degree or another. But why then the US dollar does not go up, which also gets rid of one of the negative factors? Moreover, a report on industrial production was published today in the European Union itself, which very predictably showed a 1.5% drop in the indicator, which is worse than the forecast value (-1, 1% g / g). Mostly, this report is another in a series of weak or failed macroeconomic statistics from the European Union. Nevertheless, the reduction in industrial production is not surprising given the weak business activity in the manufacturing sector of the EU countries. But the growth of the European currency - causes. Once again, we have to return to the topic of justice and the validity of strengthening the euro. It is clear that one currency (in our case, the dollar) cannot grow constantly. We need corrections, pullbacks and if we look at the whole picture in this context, then everything is logical. The dollar regularly rises in price, and corrections of euro currency are justified simply on the need to adjust and do not correlate with macroeconomic statistics. Well, at least such a picture was just observed today. During the day, the euro / dollar pair reached the upper border of the Ichimoku cloud. So now, the bears, which obviously have fundamental support, have new good chances for the pair to decline. On the other hand, the price rebound from the Senkou Span B line is a strong signal. However, we will be able to see whether traders will be able to return the downward trend to the currency market only tomorrow and the day after tomorrow.

Meanwhile, today is January 15, and the markets are still waiting for the signing of the "first phase" agreement and the official announcement of this. And while time goes on, we would like to note once again that it is still very, very early to talk about the victory of Donald Trump and the end of the trade war. According to many experts, the signing of the "first phase" agreement is nothing more than Trump's political move in order to somehow smooth out the electorate's displeasure. It's no secret that Trump and China are fighting in fact, but American consumers and American business are paying for this war, for which goods from China have become more expensive due to duties. Moreover, Donald Trump, as often happens among confident leaders, clearly counted on a quick victory. Those are: introduction of duties - China is afraid of monetary losses - makes concessions - countries sign an agreement that is beneficial to the States, - peace, friendship, chewing gum. However, China turned out to be a "tough nut", and the parties in total negotiated for almost two years. And now, when the first step towards reconciliation seems to have been taken, many experts note that the current agreement is the easiest part of the general trade agreement. Thus far, the simplest questions have been resolved, and most of the duties have remained in effect. However, Trump will now be able to announce his next victory and count on raising his political ratings. and the parties in total negotiated for almost two years. And now, when the first step towards reconciliation seems to have been taken, many experts note that the current agreement is the easiest part of the general trade agreement. Thus far, the simplest questions have been resolved, and most of the duties have remained in effect. However, Trump will now be able to announce his next victory and count on raising his political ratings. and the parties in total negotiated for almost two years. And now, when the first step towards reconciliation seems to have been taken, many experts note that the current agreement is the easiest part of the general trade agreement. Thus far, the simplest questions have been resolved, and most of the duties have remained in effect. However, Trump will now be able to announce his next victory and count on raising his political ratings.

In the light of the trade war, I would like to note the actions of the Fed to flood the US economy with cash in very large amounts. Many experts called it a full-scale program of quantitative easing, but the Fed disallows QE and calls such injections temporary measures aimed at maintaining liquidity. However, we find it strange that the US economy suffers much less from a trade war with China than the EU economy, for example. Most likely, the Fed just hides the fact of a rather impressive stimulation of the American economy and Jerome Powell can do this for only one reason - the US president should not be shown in a negative light to voters less than a year before the presidential election . It can be noticed, how did any criticism of Jerome Powell and the Fed by Donald Trump cut short, which failed to reach a rate reduction to 0%? Perhaps the parties agreed, as they say, "amicably"? The Fed will stimulate the economy secretly, with cash injections so that the negative effects of the trade war are not visible. In turn, Trump will negotiate with Beijing from a position of strength, and in the eyes of the electorate - look like an invincible leader, whose actions did not lead to a fall in the economy, but, on the contrary, will lead to its even greater growth.

The Euro currency is still showing growth, but high chances remain for the resumption of the downward trend until the Ichimoku cloud is overcome. Even in the case of overcoming the Senkou Span B line, it is unlikely that the euro will be able to rise in price too much. European statistics upset European bulls with alarming regularity.

Trading recommendations:

The pair EUR / USD continues to adjust. Thus, now, it is recommended for traders to wait for the pair to consolidate back below the Kijun-sen line and resume trading for a decline with goals 1.1084 and 1.1067. Moreover, it will be possible to consider purchases of the euro / dollar pair not earlier than the traders of the Senkou Span B line overcome with the first goal the resistance level of 1.1188.

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

GBP/USD: Bank of England seems tired of doing nothing, so the pound is not bored now

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The British currency lost about 2% in weight during the first two weeks of 2020.

Last Monday, the GBP/USD pair fell below $ 1.30 for the first time this year amid growing expectations that the Bank of England could lower its interest rate this month.

Specialists at NatWest Markets expect a rate cut by 25 basis points on January 30, although they previously thought it would happen in May.

At the same time, Credit Agricole analysts believe that more than half of the members of the Bank of England's Monetary Policy Committee can support the reduction if the UK macro statistics does not improve.

The chances that the Bank of England will reduce the cost of borrowing increased after data released on Monday showed that the British economy contracted in November by 0.3%. This casts doubt on the fact of whether there was any growth at all in the fourth quarter. The sales of the pound strengthened, triggered by comments by Mark Carney, Gertyan Wlige and Sylvanas Tenreiro, who signaled that they supported interest rate cuts.

"There is an undeniable decline in economic data for the United Kingdom. We were pessimistic about the fundamental indicators of Great Britain for a long time, but we expected a temporary improvement in the data at the beginning of 2020. This view has not yet been confirmed," said Ross Walker, an economist at NatWest Markets.

On the other hand, consumer prices in the UK rose by 1.3% in December year on year, at the lowest pace since November 2016. This is evidenced by the data published today by the National Statistical Office (ONS) of the country.

On Wednesday, Michael Saunders, a member of the Bank of England's Monetary Policy Committee, citing a weak labor market and a sluggish economy, said interest rates should be cut immediately so that Britain does not fall into the trap of low inflation, like the eurozone.

As a result, the GBP / USD pair noted local lows around 1.2990 against this background.

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"We are wary of the pound because of the risk that disappointing statistics in the UK in the coming weeks may increase the chances of easing monetary policy by BoE," Goldman Sachs said.

"Weak UK economic data means the pound will struggle to stay above $ 1.30 for the next three to six months if progress is not made in the London-Brussels talks on Brexit," Rabobank said.

"GBP/USD may decline to 1.2905, the lowest level since December 12, when early elections in the UK took place if economic data remains weak," said Rabobank expert Jane Foley, citing increased speculation about the Bank's interest rate cut England at a meeting on January 30.

According to her, January can be considered BoE as attractive for changes in monetary policy, since there is a calmer background now.

"The election results may not last long if negotiations on a trade deal between the UK and the EU prove difficult," said J. Fowley.

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

What to watch out for Bitcoin? Will it rise?

The cost of the first cryptocurrency has grown by more than $ 2000 since the beginning of the year. So, are we really seeing the first signs of a recovery in the trend? The question is actually interesting, but it's worth starting with the details, and so, a very dull downward move lasted for about 190 days, which cut the Bitcoin rate by half. The base point was designated in the range level of $ 6550, where a peculiar flat 6900/7750 was formed above it, and the clock component changed only on January 6 of this year, reflecting to us a series of pulsed rising candles and fixing above $ 8000.

What is the reason for the change of interest? There are quite a lot of theories here, one of the most interesting ones says that the stage of fear that has taken place since the beginning of autumn 2019 has waned. This theory has the basis of law, where the period of the end of 2018 is taken as a basis, having in some way a similar model for the development of prices.

In terms of fundamental data, they are inclined to believe that 2020 has good growth prospects. Therefore, many believe that Bitcoin halving can significantly increase the demand for the first cryptocurrency due to a conditional deficit that will be caused by an adjustment in the complexity of the development of BTC. Let me remind you that in the history of halving with the first cryptocurrency, it happened twice already, where the BTC rate increased 200 times for the first time, and in the second process of the development complication, the growth was 700%, which, of course, says a lot.

However, I don't think we should expect a similar repetition, because the times are not the same, and a kind of excitement is gone. In any case, this event [halving], which is scheduled for May 2020, will attract special attention and, possibly, new market participants, due to which local growth will occur.

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Current development and prospects

This week, a quite significant event for the crypto industry, the launch of Bitcoin options on the Chicago Mercantile Exchange [CME Group]. Trading volumes left 55 contracts at the start, or 275 BTC [$ 2 million (call option)], which is many times more than at the start of Bakkt. Moreover, volume data delighted many experts, dubbing what was happening as an important event for market development and a signal for investors

[1 option contract of the European type corresponds to 5 BTC. The minimum price step is 5 index points corresponding to $ 25]

The reaction of the market was positive, in particular, to Bitcoin. The upward pace was set, and the BTC rate has gained more than $ 500 in weight since the beginning of the week.

It is likely to assume that the current stumbling block is the psychological level of $ 10,000, which still needs to be reached, but also to break through. But, it is extremely early to talk about growth until this moment comes, as well as about changing the clock component.

It is worth considering such a moment that a kind of fear of further weakening of bitcoin is still preserved in the minds of traders and this may inhibit possible growth. Thus, you need a kind of engine and at least a clear fixation of prices higher than $ 10,000.

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The general background of the cryptocurrency market

Analyzing the total market capitalization, we see a gradual recovery, where volume indicators have already reached the values of November last year, and currently amount to $ 240 billion

If we consider the volume chart in general terms, then the current ceilings are 254 ---> 272 ---> 281 ---> 320 ---> 356 ---> 385 billion $.

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The index of emotions, aka "fear and euphoria" of the cryptocurrency market, is surprisingly at a very comfortable level for this season at 54p. For example, the index was 24p on a similar date last year, which was an extremely low rate.

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Indicator analysis

Analyzing a different sector of timeframes (TF), we see that indicators relative to all the main time intervals are literally unanimously inclined towards a further ascent, which confirms the current market sentiment.

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