Overview of the EUR/USD pair on January 17. Is US manufacturing sector starts to experience problems that the fed is smoothing

4 hour timeframe

analytics5e215e44ab5d3.png

Technical details:

Senior linear regression channel: direction - upward.

Junior linear regression channel: direction - upward.

Moving average (20; smoothed) - sideways.

CCI: 25.1866

On Friday, January 17, the EUR / USD currency pair begins with a downward correction against the upward trend, since the pair recently managed to overcome the moving average line. However, during the upward movement, traders failed to overcome the Murray "6/8" level of 1.1169, from which there was a rebound, and now the pair is quoted near the moving average, again deciding what to do next: to rebound and resume growth or to return to a more justified downward movement, from a fundamental point of view. Yesterday's daytime news reaffirms that point of view, which does not particularly need proof in recent months. The American statistics showed another very good value and exceeded forecasts, while European statistics (German CPI) showed no positive dynamics, again. Thus, the Euro currency fell anew, which is quite logical,

Also, over the past day, a protocol was published from the last meeting of the ECB, which was the first for Christine Lagarde. No one doubted that at her first meeting as head of the Regulator, Lagarde would not initiate a change in the key rate. In principle, she herself stated that it would take several months to evaluate all the possibilities and the need for structural changes in the Central Bank, as well as monetary policy. The minutes of that meeting confirmed that the European Central Bank is currently taking a wait and see attitude. At the same time, most members of the monetary committee considered certain optimistic signs in the current state of things.

According to the members of the monetary committee, political risks began to decline, and the inflationary pressure is to decrease, at the same time, the manufacturing sector began to show signs of recovery. According to members of the ECB, this is the first sign that the situation has begun to improve. Since we do not sit at the ECB, it is difficult for us to draw a similar conclusion, because we only see specific macroeconomic statistics. And these statistics do not indicate, for example, that business activity in the manufacturing sector of the EU countries which begun to grow. Nevertheless, ECB chief economist Philip Lane said:

"The data from the last meeting on monetary policy indicated the continuing weak but stabilizing growth dynamics of the Eurozone."

It should also be noted that in the coming months, the ECB should decide on a strategy that will be applied in the work in the coming years.

The publication of the December inflation is scheduled on the last day of the European Union trading week. We will then be able to make sure that the ECB is right in speaking of some signs of economic recovery or to verify the opposite. Considering the fact that German inflation remained unchanged in December and British inflation slowed down to 1.3% y / y, and acceleration of European inflation, on the other hand, can hardly be expected. According to experts, inflation in the EU will remain unchanged at 1.3% y / y. We believe that this is the most optimistic forecast. In the best case, inflation will indeed be 1.3%, in the worst, it will start to slow down again. Thus, the euro can today be under pressure from market participants.

Separately, it is also worth considering the report on industrial production in the USA. If everything is clear in the European Union, the business activity in the manufacturing sector has long been in the "red zone", industrial production itself is declining, and in the case of the States, everything is not so obvious. Business activity in the manufacturing sector by the ISM index is also in the "red zone" of 47.1, however, the Markit index indicates that "everything is in order", amounting to about 52. But a report on industrial production today may show a decrease in volumes in December by 0.2% m / m. What is it? An accident? Or the consequences of a trade war with China? Will there be a reflection on other economic indicators or will the Fed skillfully smooth out the negative effect of Trump's trade wars? One way or another,

The technical picture on January 17 indicates that the pair is preparing to resume a downward trend. If the Murray "5/8" level of 1.1139 is overcome, then the trend will again become downward.

analytics5e215e7a9622f.png

The average volatility of the EUR/USD currency pair is currently 42 points. Thus, we have volatility levels on January 17 at 1.1101 and 1.1185. A turn of the Heiken Ashi indicator up will indicate the resumption of the upward movement. However, we still expect a resumption of the downward movement.

Nearest support levels:

S1 - 1.1139

S2 - 1.1108

S3 - 1.1078

The nearest resistance levels:

R1 - 1.1169

R2 - 1.1200

R3 - 1.1230

Trading recommendations:

The EUR/USD is currently being adjusted again. Thus, long positions (formally) with goals 1.1169 and 1.1185 are relevant now, however it is recommended to open them very carefully with small lots. It is recommended that returning to sales of the pair with a target of 1.1108 is not earlier than the reverse overcome by moving traders.

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

Explanations for illustrations:

The oldest linear regression channel is the blue unidirectional lines.

The smallest linear regression channel is the purple unidirectional lines.

CCI - the blue line in the indicator window.

Moving average (20; smoothed) - a blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Haiken Ashi is an indicator that colors bars in blue or purple.

Possible price movement options:

Red and green arrows.

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

Technical analysis of BTC/USD for 17/01/2020:

Crypto Industry News:

The Russian Prime Minister urged the country to prioritize the development of the digital economy. According to the national daily, Mikhail Mishustin - who took office as prime minister today - highlighted some of the key priorities of his work and pointed to the need for institutional reforms in Russia.

Mishustin said the country should implement modern information technologies, including the development of a national digital economy program, adding:

"The state should become a digital platform made for people."

Mishustin issued a statement after that former prime minister of Russia, Dmitry Medvedev, announced that he was resigning. The decision was made in connection with the message of Russian President Vladimir Putin addressed to the Federal Assembly, in which he presented a number of fundamental changes to the country's constitution.

Large Russian companies, including some in which the state has a significant share, are beginning to test and apply Blockchain technology to various aspects of their business. Last December, Russian energy network operator Rosetti began testing the Blockchain payment solution in the electricity retail sector to automate and increase transaction transparency between energy producers, suppliers and consumers.

Last November, Russia's largest bank, Sberbank, pioneered the Blockchain solution for repurchase agreements. The bank has received a patent for a solution that uses smart contract technology to automate transactions between parties.

Major players in the cryptocurrency and Blockchain space also praised Russia's role in the development of the industry. Last year Binance cryptocurrency exchange president Changpeng Zhao praised programming talent coming out of the country and called Putin the most influential person in the Blockchain industry.

Technical Market Overview:

The BTC/USD pair has broken through the key technical resistance located at the level of $8,836 and made a local high at the level of $8,938 at the time of writing the analysis. Please notice, that this high was again made on lower momentum than the previous one, so there is another negative divergence present. Before, the pair har tested the technical support located at the level of $8,573 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 key support at the level of $7,601 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.

analytics5e215fe1b5004.jpg

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

Technical analysis of BTC/USD for 17/01/2020:

Crypto Industry News:

The Russian Prime Minister urged the country to prioritize the development of the digital economy. According to the national daily, Mikhail Mishustin - who took office as prime minister today - highlighted some of the key priorities of his work and pointed to the need for institutional reforms in Russia.

Mishustin said the country should implement modern information technologies, including the development of a national digital economy program, adding:

"The state should become a digital platform made for people."

Mishustin issued a statement after that former prime minister of Russia, Dmitry Medvedev, announced that he was resigning. The decision was made in connection with the message of Russian President Vladimir Putin addressed to the Federal Assembly, in which he presented a number of fundamental changes to the country's constitution.

Large Russian companies, including some in which the state has a significant share, are beginning to test and apply Blockchain technology to various aspects of their business. Last December, Russian energy network operator Rosetti began testing the Blockchain payment solution in the electricity retail sector to automate and increase transaction transparency between energy producers, suppliers and consumers.

Last November, Russia's largest bank, Sberbank, pioneered the Blockchain solution for repurchase agreements. The bank has received a patent for a solution that uses smart contract technology to automate transactions between parties.

Major players in the cryptocurrency and Blockchain space also praised Russia's role in the development of the industry. Last year Binance cryptocurrency exchange president Changpeng Zhao praised programming talent coming out of the country and called Putin the most influential person in the Blockchain industry.

Technical Market Overview:

The BTC/USD pair has broken through the key technical resistance located at the level of $8,836 and made a local high at the level of $8,938 at the time of writing the analysis. Please notice, that this high was again made on lower momentum than the previous one, so there is another negative divergence present. Before, the pair har tested the technical support located at the level of $8,573 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 key support at the level of $7,601 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.

analytics5e215fe1b5004.jpg

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

Positive economic data from USA and China support the risk appetite in the markets (we expect USDJ/PY pair to grow and USD/CHF

The US dollar gained some support on Thursday, but for now, it still remains in a lateral and quite narrow range according to the dynamics of the ICE index.

The reason for the strengthening the American currency was the publication of data on retail sales in the United States and the index of manufacturing activity from the Federal Reserve Bank of Philadelphia. Both indicators showed a noticeable increase in values compared with the figures of the previous reporting period.

The base retail sales index rose sharply in December by 0.7% compared to the November increase of 0.1% and growth expectations of 0.5%, which may indicate that US GDP in the fourth quarter may show growth above 2.0%, and this, in turn, will be a strong incentive to increase demand for risky assets in world markets in general and in the US stock market in particular. This probability is underscored by yesterday's publication of data on the index of industrial activity from the Federal Reserve Bank of Philadelphia. The indicator rose sharply in January to 17.0 points, while an increase of only 3.5 points was expected from 2.4 points in December. This news also fits well into the forecast for higher fourth quarter GDP, as previously anticipated.

In addition to this news, the data on China's GDP for the fourth quarter, presented early this morning, are good. Both the annual value of the indicator and its quarterly figures showed that the growth rate remained at 6.0% and 1.5%, respectively. However, the data on the volume of industrial production and retail sales turned out to be more impressive, which added in annual growth to 6.9% and 8.0%, respectively.

As a result, Asian markets reacted to this news by the rapid growth of stock indices. On the currency exchange market, the Japanese yen, which received an impulse to grow on Thursday in the wake of positive data on the US economy, continues to rally, and it looks like this trend will continue on Friday.

As for the behavior of the main euro / dollar currency pair, it is consolidating in a quite narrow range. A factor constraining its growth is the lack of certainty about what the ECB policy will be in the near future. The published protocol of the December meeting of the regulator clearly demonstrated this. In addition, an additional constraining factor is the topic of Britain's exit from the EU. The Parliament will vote on this issue on January 31.

We expect that a similar situation will be observed in the pound / dollar pair before voting in the British Parliament. We believe that the final decision on the country's exit from the EU, as well as the increase in expectations of interest rate cuts by the Bank of England will have a noticeable negative impact on the pair.

As for the dynamics of commodity and commodity currencies, they will still fully depend on the demand for oil and commodity assets. We believe that the Canadian, Australian, and New Zealand dollars will move in the ranges soon.

Forecast of the day:

The USD/JPY pair remains in a short-term upward trend. It is trading above the level of 110.10 in the wake of strong data on the US economy. Fixing the price above this level may stimulate its further growth to 111.00.

The USD/CHF pair is consolidating in the range of 0.9630-0.9650. It will continue to decline to 0.9575, if it does not grow above the level of 0.9650 and, conversely, decline below the level of 0.9630.

analytics5e215d2b59648.png

analytics5e215d5f213d8.png

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

Technical analysis of GBP/USD for 17/01/2020:

Technical Market Overview:

The GBP/USD pair has broken out from the main descending channel around the level of 1.3055 and made a local high at the level of 1.3085 (at the time of writing the analysis). Due to the strong momentum, the next target for bulls is seen at the level of 1.3101 or even at 1.3121 - 1.3131. Nevertheless, the nature of the current move up is still corrective, so when it is completed, another wave down is being anticipated.

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.

analytics5e215e1731434.jpg

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

Technical analysis of EUR/USD for 17/01/2020:

Technical Market Overview:

The EUR/USD pair has made a Shooting Star candlestick pattern around the level of 1.1174 which is a technical resistance for the price. Since then the bears have taken control of the market and pushed the price towards the lower channel boundary at 1.1128. The momentum is just above the neutral level yet 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.

analytics5e215cc4a9a5a.jpg

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

Hot forecast for EUR/USD on 01/17/2020 and trading recommendation

The development of events yesterday was a complete surprise, because the dollar did not decline, but strengthened contrary to all forecasts. The reason for such behavior lies in American macroeconomic statistics, which turned out to be much better than forecasts. Moreover, it is surprising that the dollar strengthened only slightly, as the statistics turned out to be so good that it would be worth waiting for a much more significant increase.

analytics5e215908ac862.png

So, the total number of applications for unemployment benefits declined by 46 thousand, while the expected reduction was only 6 thousand. In particular, the number of repeated applications for unemployment benefits decreased by 36 thousand instead of 11 thousand. However, the number of initial applications for benefits unemployment, which declined by 10 thousand, was supposed to increase by 5 thousand. But what is much more important is retail sales, whose growth rates did not slow down from 3.3% to 2.9%, but accelerated to 5.8% . Combined with the recent rise in inflation, such an impressive increase in consumer activity is simply an incredibly positive factor. Therefore, it really seems that the dollar is somehow modest.

Retail Sales (United States):

analytics5e215922cd025.png

The most important news of the day will probably be the data on inflation in Europe, where it should accelerate from 1.0% to 1.3%. This in itself is a positive factor. However, there is every reason to believe that the data will turn out to be even better, and this is indicated by recent inflation data in the largest countries of the euro area. And if this is so, then the European Central Bank will have no reason to search for new ways to mitigate monetary policy parameters. In other words, the single European currency has all the prerequisites for strong growth.

Inflation (Europe):

analytics5e215933935b8.png

At the same time, the dollar will most likely lose its positions throughout the day, since it will have nothing to oppose European inflation. Its own statistics are not encouraging. Thus, the volume of new construction projects may be reduced by 2.6%, but the worst thing is that the number of issued permits for new construction should be reduced by 1.6%. Consequently, the current reduction in construction will continue in the near future. In addition, it is expected to deepen the pace of decline in industrial production, from -0.8% to -1.2%. Due tot this, the only thing that can save the dollar is that the statistics will turn out to be completely different than expected. However, in all respects, the probability that there will be growth instead of a decrease is almost zero.

Industrial Production (United States):

analytics5e215944879cf.png

From the point of view of technical analysis, we saw an unusual attempt to break through the periodic level of 1.1165, but as a result, we got punctures with shadows, without a clear point of price fixing. The subsequent actions were in terms of a reverse stroke, based on impulse candles and a price return to the 1.1135 area. In fact, we got a local change in trading interest, where a stagnation of 1.1130 / 1.1140 formed when emotions faded.

In terms of a general review of the trading chart, we see that the correction phase from the range level of 1.1080 is still preserved in the market, where there are not many points left to key levels.

It is likely to assume that the existing stagnation of 1.1130 / 1.1140 may serve as a kind of platform for the continuation of long positions, where attractive positions will open in the direction of 1.1165 in case of price fixing higher than 1.1145. At the same time, subsequent actions are considered in case of a clear fixation of the price higher than 1.1165, where the finishing move is located in the area of 1.1180 / 1.1200.

From the point of view of a comprehensive indicator analysis, we see that indicators have changed from rising interest to neutra due to the recent chatter. Thus, it is worth considering that the indicators of technical instruments will return to their original course in case of price fixing higher than 1.1145.

analytics5e2159555609c.png

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

Indicator analysis: Daily review on GBP/USD for January 17, 2020

Trend analysis (Fig. 1).

The price may continue to move up today with the target of 1.3064, the resistance line presented in a red bold line. If this line is reached, the market may start working down with the target of 1.3026 in the lower fractal.

analytics5e215abeb1a4e.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:

Today, the price may continue to move up.

An upward scenario is unlikely, but quite possible, where, from the resistance line 1.3064 presented in a red bold line, a continuation of work up with the target 1.3120, the retracement level of 50% presented in a red dashed line.

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

EU and US argued over China

analytics5e21540bcd0e1.png

Terms of Trade is a daily newsletter that unravels those involved in trade wars.

The European Union said that a preliminary trade agreement between US and China could violate the rules of the World Trade Organization, and lead to a legal action.

The trip to Washington of the EU trade commissioner, Phil Hogan, coincided with a ceremony at the White House on Wednesday, when US and China signed the first phase of their trade agreement. In separate comments at an event in the US capital, Hogan said that the two trading partners should stop "beating each other up."

For the past three days, Hogan, while in Washington, has been trying to convince the Trump administration to roll back its protectionism and work with EU to strengthen the WTO. He said that the first-phase agreement between US and China is a "result of managed trade" and is not a free trade agreement backed by the WTO.

The commissioner also said that his team will carefully examine whether it is mandatory for China to increase purchases of US goods and services by at least $ 200 billion over the next two years.

"We have not analyzed the document in detail, but we will do it, and if, of course, there is a problem with compliance with the WTO requirements, we will have to file lawsuits and defend our own economic interests, despite the fact that we did not want to develop the conflict," Hogan said at a conference on Thursday in Washington.

These comments suggest that any strain on US relations with China affect the rest of the world.

The US and EU are entering a trade dispute after Trump's deal with China.

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

Trading plan 01/17. EURUSD. Situation in favor of the dollar, euro tries to resist

analytics5e215b6ee9d61.jpg

Latest news - in favor of the dollar:

Trump has signed a trade deal with China. At the same time, trade disagreements between the US and France escalated. Trump threatens with the introduction of duties on French wines, cheeses.

Economic news is also in favor of the dollar: strong data on US retail sales came out on Thursday.

EURUSD: sellers are trying to push the euro to 1.1100, but buyers are resisting.

We still keep euro purchases from 1.1035.

We buy from 1.1180.

We sell from 1.1085.

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

Indicator analysis: Daily review on EUR/USD for January 17, 2020

The pair continued to move up on Thursday, testing the 50% retracement level for the second time at 1.1164 presented in a blue dotted line. But the news that came out at 13:30 UTC forced the market to go down. Strong calendar news for the euro is expected today at 10:00 UTC, and for the dollar at 13:30 and 15:00 UTC. Expect a continuation of work up.

Trend analysis (Fig. 1).

In order to continue moving up today, the price must overcome the pullback level of 50.0% which is equivalent to 1.1164 presented in a blue dotted line. Only in this case can the market continue to move up with the target 1.1182, the pullback level 61.8% presented in a blue dotted line. Upon reaching this line, the next goal will be at 1.1205 which is a retracement level of 76.4% presented in a blue dashed line.

analytics5e2156d6bb061.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 38.2% which is equivalent to 1.1146 presented in a blue dashed line, the price goes down to the lower fractal at 1.1105.

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

NZD/USD 60 Day IPDA Premium-Discount Array For Fri Jan 17, 2020

analytics5e21399a23834.jpg

The kiwi is now moving between the Premium Array to the Equilibrium level. It is trying to reach and test the Daily Chart SELL Side Liquidity Pool at 0.6581 (near the Equilibrium level), as long this pair does not break out and close above the 0.6662 level. The NZD/USD pair is attempting to overcome the Daily SELL Side Liquidity Pool near its position now.

(Disclaimer)

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

Control zones USDCHF 01/17/2020

The test of the important support of the WCZ 1/2 0.9639-0.9628 led to a sharp increase in demand. To continue the growth, it is enough to hold the pair above the WCZ 1/2. This will allow you to purchase the tool. The first target of the upward model will be the WCZ 1/4 0.9675-0.9670. Further growth will depend on the reaction of the price to the specified zone.

analytics5e2157953a5b0.jpg

Work in the upward direction may become the main one next week. However, it is necessary to understand that the growth is still a correction to the December fall of the pair, which amounted to more than 400 points.

An alternative model for continuing the fall is less likely since the pair will go beyond the zone of the weekly average move. Therefore, sales are not profitable at current levels. It is not necessary to consider the option of reducing today, but at the beginning of next week, there will be no barrier in the form of a middle course zone.

analytics5e2157a7a69a2.jpg

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

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

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

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

Control zones of GBPUSD on 01/17/2020

The upward movement of the pair continues for the fourth day. This indicates the interest of large players in either obtaining more favorable selling prices, or in changing the medium-term direction of momentum. The main goal of growth at the end of the week is WCZ 1/2 1.3164-1.3145. The probability of growth to this zone is 70%.

analytics5e2155c5bd15b.png

A decrease within yesterday's low will be a correction to the latest growth and will make it possible to enter the purchase with a low stop, which will make it possible to obtain a favorable risk-to-profit ratio.

An alternative fall model will be developed if today's trading closes below yesterday's low. This will make it possible for us to mention the absorption pattern at the daily level. Sales will again come to the fore on Monday.

analytics5e2155db86a67.png

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

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

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

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

Control zones of EURUSD on 01/17/2020

The opening of today's European trading may occur below the close of yesterday's session. This will indicate a high probability of continued downward movement. Keeping a sale open yesterday is the main trading plan. Repeated sales are possible after testing yesterday's low of the European session.

analytics5e2153cf3759a.png

When working in a downward direction, it is necessary to take into account that the last decline was impulsive, which will make it possible to maintain a short position in the medium term.

An alternative growth model has a probability of realization below 30%, which makes it auxiliary. Purchases from current marks are not profitable. Cancellation of the downward model will occur if the closing of today's trading occurs above the WCZ 1/2. This will make it possible to consider purchasing the instrument at the beginning of next week.

analytics5e2153e5291c9.png

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

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

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

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

Elliott wave analysis of GBP/JPY for January 17 - 2020

analytics5e214a72322cc.png

GBP/JPY broke above key resistance at 143.50 indicating that a premature bottom has been found at 140.82 and renewed upside pressure should be expected towards 149.00 as the minimum target for wave v. This rally should complete the first impulsive rally from the August 2019 low at 126.52 and pave the way for the largest correction in this uptrend. The first target to look for is the bottom of wave iv at 140.82, but an even larger correction can not be excluded, but for now, we will stay focused towards the upside for a rally towards at least 149.00.

R3: 145.75

R2: 145.43

R1: 145.04

Pivot: 144.23

S1: 143.90

S2: 143.50

S3: 143.20

Trading recommendation:

Our stop at 143.50 was hit for a 45 pip loss. We bought GBP at 143.60 and have placed our stop at 143.20.

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

Elliott wave analysis of EUR/JPY for Janaury 17 - 2020

analytics5e21480ac6fd3.png

EUR/JPY continues to move higher towards our ideal target near 123.84. EUR/JPY is currently testing the former high at 122.6. It should be a matter of time before this high is conquered for more upside pressure towards 123.35 on the way to the ideal target at 123.84. That said, we do see the possibility of short-term exhaustion for a corrective dip to 122.15 before the next upside pressure sets in.

R3: 123.84

R2: 123.34

R1: 122.93

Pivit: 122.43

S1: 122.14

S2: 121.84

S3: 121.43

Trading recommendation:

We are long EUR from 122.25 and we will move our stop higher to 122.40.

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

AUD/USD 60 Day IPDA Premium-Discount Array For Fri Jan 17, 2020

analytics5e2138dbb492d.jpg

As We see at the 4 Hour Chart from AUD/USD this pair now in the zone between the Premium Array and the Equilibrium Level from the 60 Day IPDA (Interbank Price Delivery Algorithm) Premium Discount Array and below that level. There is a Clean Low 0.6851 and 0.6840 as long as this pair does not break out and close above the 0.6935 they will try to attack the Liquidity Pool at those two Clean Low.

(Disclaimer)

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

Forecast for EUR/USD on January 17, 2020

EUR/USD

US retail sales turned out to be good in December. Total sales added the expected 0.3%, and the November figure was revised to increase from 0.2% to 0.3%. The base index (excluding car sales) increased by 0.7% while expecting 0.5%. The index of business activity in the manufacturing sector of Philadelphia increased from 0.3 to 17.0 points in January and weekly applications for unemployment benefits showed 204 thousand - the lowest since September. As a result, the euro closed the day down by 13 points.

analytics5e21341389b1e.png

Reversal signs have not yet formed on the daily chart, the signal line of the Marlin oscillator lingered on the boundary with the territory of the bears. We are still waiting for the strengthening of down moods. US data will be released today on housing starts for December (forecast 1.38 million YOY versus 1.37 million YOY in November) and on industrial production, the forecast for which is not so optimistic: -0.2/0.0% versus 1.1% in November. But during the week, business activity indices in the regions of New York and Philadelphia turned out to be better than forecasts, which provides a chance for the December industrial output to be better than expected. We are waiting for the euro at the previous first goal of 1.1074.

analytics5e21342914ece.png

On a four-hour chart, the price managed to gain a foothold under the MACD line (blue indicator), the Marlin oscillator is trying to penetrate into the negative trend zone. We are waiting for the consolidation of falling market sentiment.

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

Forecast for GBP/USD on January 17, 2020

GBP/USD

The British pound managed to withstand the pressure of the dollar yesterday, the pound grew by 41 points. The price went above the red indicator line of the balance on the daily chart, which shifted the situation of the last three days in the direction of growth. The Marlin oscillator in this context holds back this trend, remaining in the zone of negative values.

analytics5e2133c80840a.png

A more convincing strengthening is required to pull down the pound from the dollar. It might not happen today, since the forecast for industrial production for December is -0.2/0.0%. Industrial Production should still show a positive value in the region of about 0.2% for valued growth of the dollar.

analytics5e2133ddad061.png

On the H4 chart, the price is higher than the indicator lines of balance and MACD, Marlin in the growth zone. The situation may still change, but we need reinforcement from today's US data. Consolidating the price under the MACD line (1.3040) opens the way to an attack on the Fibonacci level of 161.8% of the daily timeframe at the price of 1.2968. Fulfillment of this goal will practically solve the medium-term direction of the British pound.

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

Forecast for AUD/USD on January 17, 2020

AUD/USD

Yesterday, the Australian dollar made a false exit over the resistance of the embedded line of the price channel and the correction level of 38.2% (61.8% on the daily chart), which strengthened the potential for its own fall. With overcoming the support of the MACD line at 0.6875, we are waiting for the price on the line of the price channel at 0.6816, near the Fibonacci level of 123.6%. The Marlin oscillator has shown a qualitative downward reversal from the boundary of the growth territory.

analytics5e21337e555f2.png

On a four-hour chart, yesterday's jump in prices formed a reversal convergence. Price is developing on the MACD line. The Marlin oscillator does not dare to go to the territory of the bears.

analytics5e21339434d3d.png

A constraining factor was today's data on the Chinese economy: GDP for the fourth quarter showed the expected 6.0%, industrial production in December increased by 6.9% YOY against the expectation of 5.9% YOY, growth in investment in fixed assets increased from 5.2% YOY to 5.4% YOY. Retail sales were at November 8.0% YOY against forecasts of a decline to 7.9% YOY. Now it's up to US data on industrial production and construction. And since this week business activity indicators in New York and Philadelphia turned out to be better than expected, there are likelihood of better data on Industrial Production. The forecast is not very optimistic: -0.2/0.0%.

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

Prospects and trends for gold in January and February 2020

The consolidation in the gold market ended with the New Year holidays as well as rocket salvos in Iraq, where the United States killed the commander of the Kudes Iranian unit, Qassem Soleimani. Thank God, the global war did not happen, but the nerves of the investors completely lost, and they rushed to buy gold in full accordance with the forecast published in early December 2019. However, the time has come to look at the prospects of the precious metal and make adjustments to the assessment of the situation.

As we know, the position of traders in futures contracts traded on the CME exchange has the greatest impact on the price of gold. The latest data from the Traders Obligations Report - Commitments of Traders (COT) Reports, published by the US Commodity Futures Commission - CFTC, indicates an increase in the volume of new money entering the market. In addition, the Open Interest of the gold futures contract grew from 926 thousand to 1197 thousand contracts, or almost one third between November 29 and January 10.

analytics5e1f72bdee0ed.jpg

Such an increase in the interest of market participants in gold, which took place against the backdrop of a rise in stock indices, suggests that the departure of the price of gold to the level of $ 1,600 per troy ounce was not an accident caused by the geopolitical situation. The assassination of the general was just an excuse for the precious metal to begin to rise again after a period of consolidation that lasted until the end of the fourth quarter.

Moreover, it is very important that the increase in the price of gold was supported by speculators Managed Money, whose long positions during the period from December to January grew from 225 thousand to 300 thousand contracts. According to the CFTC classification, Managed Money are a priori net buyers. Thus, the demand for gold from buyers was accompanied by the opening of new positions in the futures contract, which suggests fundamental reasons for the continuation of the current trend. Due to this, exchange traders felt the potential and began to increase positions.

If the increase in the price of gold was caused only by the development of events in the Middle East, then, firstly, we would not see a constant influx of new money that occurred in December, and secondly, Managed Money, which are speculators, could simply not react on the events that are happening.

So, for example, what happened in September 2019 and January 2020 in the oil market. The attack on the Saudi oil infrastructure was not supported by the influx of new money into the market, and speculators were in no hurry to open new long positions, which subsequently led to a decrease in oil prices. No demand - no price increase. In December, speculators bought oil, but almost no new positions were opened in the futures, which led to a decrease in oil prices as soon as the situation in the Persian Gulf area stabilized.

However, we have an increase in Open Interest in gold and an increase in purchases by speculators at the same time, which qualitatively distinguishes this situation from the situation in the oil market. On the other hand, the price of gold declined slightly after the crisis between Iran and the United States was resolved, and this is natural, but do not be fooled by the possibility of a potential reversal, since most likely there will not be a deep decline in the gold market.

We will analyze the positioning of traders in option contracts. The most liquid option contract now is the February contract OGG0 with the closure on January 28 (Fig. 1).

analytics5e1f72f1c1320.jpg

Figure 1: Open Interest in an OGGO Option Contract.

First of all, the significant predominance of "call" options over "put" options is noteworthy. The Put / Call Ratio coefficient is 0.71. This means that there are only 71 Put options for every 100 Call options. In the context of the growth of Open Interest, optional barriers may not withstand and miss the price higher. With this ratio, the importance of the Max Pain point located at 1500 also decreases, and returning to this point at the time the option contract expires is becoming less and less likely. This must be taken into account when opening gold sales positions. Option barriers hold the price well, but only when there is no trend on the market.

In this regard, it can be assumed that the levels of optional support are at 1510 and 1500. There are also graphic levels of price support, where gold can return by the end of the month for purely technical reasons. After that, there is a possibility of further price growth over the next three to six months, which implies a rise in gold to the level of $ 1,750 per troy ounce. Thus, sales to the levels of 1,500-1,510 dollars will be inappropriate, but such a price can be an ideal point for buying gold, unless, of course, by that time there will be a change in the mood of buyers in the futures market. Short-term goals for such purchases may be levels 1500, 1575 and 1600, formed by options such as "Call".

Today, the World Gold Council - published its forecast for 2020. The forecast indicates the main factors that, in the opinion of the Council, will affect the price of gold this year. It is assumed that financial uncertainty and low interest rates in most developed economies will support the price of gold, as investors will seek new sectors to protect investments and generate income. As a result, demand from central banks will also remain high. This, combined with investor interest, will allow gold to be added back to its value in all currencies.

According to WGC experts, the price impulse and positioning of traders will also support the price of gold. At the same time, volatility and expectations of weaker economic growth in the short term may lead to softer consumer demand, but structural economic reforms in India and China will support consumer demand in the long term.

Thus, traders trading can earn on price fluctuations by selling and buying precious metals on the best trading conditions, but investors should not forget that gold has provided them with a yield higher than the US dollar over the past twenty years, while performing a protection function risk investment.

By investing in gold and trading it in the short term, an investor can not only profit from fluctuations in price quotes, but also insure himself against unforeseen market risks. Be very careful and follow the rules of money management.

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

EUR/USD. January 16. Results of the day. Euro slumped due to strong US retail sales data

4-hour timeframe

analytics5e20f662985be.png

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

Average volatility over the past 5 days: 39p (weak).

The EUR/USD pair ends the penultimate trading day of the week with a decline. From our point of view, this fall is simply obliged to receive development. Again, we are forced to list a whole list of factors that argue that the euro should decline. Let's start with the technical ones. The euro/dollar pair with grief in half overcame the critical line, formed a weak Golden Cross, hardly entered the Ichimoku cloud and was unable to overcome the Senkou Span B. line. At the moment, the pair's quotes have returned to the critical line. All this speaks in favor of the fact that the bulls do not have enough strength to form a new upward trend. We add average volatility here that has decreased to the value and it becomes clear that traders are slowly leaving the market, and not the other way around. We have listed the fundamental factors a great many times. The general fundamental background remains unchanged, clearly in favor of the dollar. To some extent, it can be noted that the signing of the first phase of the trade agreement between China and the United States plays into the hands of the euro currency, but this is a very subtle and ambiguous factor.

In any case, given the average volatility, we can say with more confidence that the signing of the deal did not help much of the currencies. Macroeconomic data also continues to delight buyers of the US currency, and upset investors in euros. Today in Germany the consumer price index for December was published, which has not changed compared to November and amounted to 1.5% YOY. There was no particular market reaction to it since there were no changes in this indicator. At the same time, NOT improving the situation in the locomotive of the European economy speaks in favor of the fact that pan-European inflation is unlikely to accelerate in December. The consumer price index in the EU will be published tomorrow, forecast +1.3% YOY. What do we have on the basis of inflation indicators? Inflation is weak in Germany, while it is extremely weak in the EU (and this is even taking into account the acceleration in recent months from 0.7% to 1.3%). What do we have in the United States? Inflation accelerated to 2.3% YOY. It seems that the only factor that restrains the euro from a new sharp fall is the fact that one of the currencies cannot constantly fall in price. Pullbacks, corrections are required, even if the fundamental background does not change. This is what the euro is saving now, as it was saving throughout 2019. A report on retail sales was also published in the United States today, which exceeded forecast values and amounted to +0.3% MOM. The "retail control group" increased by 0.5%, as well as retail sales excluding automobiles by 0.7%. It remains only to wait for the speech of Christine Lagarde and evaluate her rhetoric ...

Meanwhile, many analysts and experts continue to analyze the agreement between Beijing and Washington, trying to understand many issues. One of these questions is: "Can we assume that China has succumbed to American oppression?" To some extent, the answer is yes. However, this concession will benefit China, the United States, and the whole world. Now, traders need to focus their attention on pressing issues, and not on signing the "first phase", discussing the "second phase". It should be recognized that the topic of the trade war practically had no direct effect on the foreign exchange market for a year and a half . It had an impact through the economic indicators of the European Union and the United States (if we talk about the euro/dollar pair). As a result of this period of time, the European economy weakened, and the US sustained a blow thanks to three reductions in the Federal Reserve's key rate. Thus, the US currency has excellent reasons to continue to rise in price, and traders need to pay more attention to macroeconomic statistics.

Trading recommendations:

The EUR/USD pair continues to adjust and has failed to overcome the Senkou Span B. line. Thus, now it is recommended for traders to wait for the pair to consolidate back below the Kijun-sen line and resume trading on the decline with targets at 1.1109 and 1.1067. It will be possible to consider purchases of the euro/dollar pair no earlier than when traders of the Senkou Span B line have overcome 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 movements:

Red and green arrows.

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