Chinese SARS began to affect financial markets (we expect a downward correction of the USD/JPY pair and a rise in the price

The final decision of the Japanese Central Bank was predictable. The central bank kept the monetary policy unchanged. The key interest rate remained unchanged at -0.1%, as well as the target level of return on 10-year government bonds of about 0%. At the same time, everything also remained unchanged regarding the prospects of monetary policy. In a statement, the bank said that the level of interest rates will remain at the current or lower. In general, there were no surprises as expected.

Moreover, the Japanese stock market declined, responding already to the news about Chinese SARS, from which 4 people had already died in the "under heaven". This reaction of the local market, as well as the fall of the Chinese stock market can be explained by the growing fears that a prolonged celebration of the Chinese New Year, and, in general, the New Year's Eve holidays, could cause a massive infection of the population of many Asian countries against the backdrop of the traditional growth of tourism in this period of the year.

The Japanese yen responded to the decision of the Central Bank and the weakening of the local stock market with an increase in the rate, which can be described as a reaction not only to the predictability of the central bank, but also to the fear of the spread of the "Chinese SARS virus."

In turn, the negative reaction in Asian stock markets led to an increase in demand for gold, which resumed growth, having previously found support at 1539.40. The single currency paired with the US dollar is growing slightly ahead of the ECB meeting on monetary policy. As expected, it will not bring any changes in rates. As a result, investors are only waiting for the announcement of the new strategic plan of the regulator by its head C. Lagarde.

A similar picture is observed in the dynamics of the British currency, which remains hostage to the denouement of Britain's exit from the EU. A vote on which is scheduled for January 31 this year. Thus, we expect some revival of the sterling movement in the market amid the publication of data on employment and average wages, which will be released today. According to the forecasts, the unemployment rate should remain at around 3.8%, the number of applications should decline to 22,600 from 28,800 while the average wage level should drop from 3.2% to 3.1%.

In general, evaluating the overall picture in the markets, we believe that there will be no noticeable changes in the dynamics of assets today.

Forecast of the day:

The USD/JPY pair is correcting down amid the outcome of the meeting of the Central Bank of Japan and the decline in the local stock market. Thus, we expect that the pair can adjust to a strong support level of 109.65.

Gold on the spot continues to climb after a recent correction. We expect that moderate demand for the "yellow" metal will continue and it will resume growth by 1577.00 after a slight correction down to 1561.77. But for this to happen, the price should stay above this level.

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Overview of EUR/USD on January 21. Trump's Senate hearing begins today and could last two weeks

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) - down.

CCI: -82.3221

Today, the EUR/USD currency pair starts in a weak downward correction. The pair's quotes rebounded yesterday from the Murray level of "3/8" - 1.1078, and we expected a correction at the beginning of the day due to the semi-exit status of Monday. No important and interesting macroeconomic reports were published yesterday. Thus, the volatility value of 25 points is normal for such a day. Now, traders are advised to wait for the current correction to complete to resume trading on the downside. The correction target is the moving average line.

Meanwhile, yesterday, January 20, was the anniversary of the inauguration of the American President. On such a day, Donald Trump has already managed to sum up the results of his three-year work as President, and, of course, he highly appreciated the results of his activities. In particular, Trump noted the lowest unemployment in the country in the last 50 years, as well as the lowest unemployment among African-Americans. While Trump is resting on his laurels and traveling around America with campaign speeches (although the election is still about 9 months away), the Senate today begins considering the case for the impeachment of the President of the United States. "The Senate should speedily reject these defective articles of impeachment and acquit the President," Trump himself said. The US leader also once again accused the Democrats of falsifying the entire impeachment process, saying that attempts to remove him from the post of President have been dragging on since he took office. According to experts, the entire procedure for reviewing the case in the Senate will take no more than two weeks. Moreover, the Democrats are interested in a detailed study of the case, with the statements of absolutely all the witnesses and consideration of all the testimony, while the Republicans want to complete the process as quickly as possible, in a few days. In general, the whole process will simply be a confrontation between Democrats and Republicans.

Over the next two weeks, traders' attention will certainly be focused on the impeachment process in the United States, but do not forget that macroeconomic statistics are more important. However, unfortunately, it is with macroeconomic statistics that there will be problems in the coming days. No important macroeconomic publications are planned in the United States and the European Union today or tomorrow. Today, traders will have to settle for only the ZEW index of sentiment and assessment of current economic conditions in Germany and the EU. And tomorrow we will see statistics on sales and prices in the US housing market. These reports are unlikely to cause at least some reaction from traders, so the low volatility of the euro-dollar pair may continue for several days.

In such a situation, when there are no news and reports, we can only wait and consider the general fundamental background, which for the euro-dollar pair remains unchanged. We still believe that the fundamental background speaks eloquently in favor of a further appreciation of the US currency, but we believe that for successful trading, the fundamental background and the technical picture must coincide. Accordingly, the location of the price below the moving average line can be considered a favorable factor for selling the pair. The US and EU Central Banks are unlikely to change their monetary policies soon, so we should not expect any changes in the imbalance between the US and the EU. Monetary policy and the US economy remain much stronger, and only industrial production, which has declined significantly in the past year and a half, is causing concern for the future of the US economy. However, the Fed has so far been very successful in leveling the losses of the industrial production sector by lowering rates and stimulating the economy with cash.

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The average volatility of the euro-dollar currency pair is currently 43 points and is declining again. Thus, we have volatility levels of 1.1052 and 1.1138 as of January 21. Turning the Heiken Ashi indicator down will indicate the completion of the corrective movement. On Tuesday, given the zero macroeconomic background, the continuation of the correction is possible.

Nearest support levels:

S1 - 1.1078

S2 - 1.1047

S3 - 1.1017

Nearest resistance levels:

R1 - 1.1139

R2 - 1.1169

R3 - 1.1200

Trading recommendations:

The euro-dollar pair started to adjust. Thus, sales of the European currency with the goals of 1.1078 and 1.1052 are relevant now after the Heiken Ashi indicator turns down. It is recommended to return to the pair's purchases with the goal of 1.1139 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.

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Technical analysis of BTC/USD for 21/01/2020:

Crypto Industry News:

The Bitcoin hash rate has reached a new one by marking the latest technical achievement of cryptocurrency. A new hash rate analysis by Glassnode shows that on January 7, the average has reached 119 hash quintillions per second - the best result ever.

Hash rate refers to the amount of computing power used by miners to validate Bitcoin's Blockchain chain. The more power, the more hypothetically secure Blockchain is. The high hash rate can also be considered as an expression of mining attractiveness for participants.

Glassnode reading comes from calculating the moving average hash rate in one day. Although the hash rate cannot be measured accurately, the data supports other estimates showing that the metric has reached a new record in recent weeks and months.

Progress was rapid. According to Glassnode, an average low hash rate of 36 hash quintillions per second - which was the basis for the last increase - occurred at the end of April 2019.

This year, Bitcoin has already shown many signs of renewed bullish transformation. In addition to the hash rate, commentators highlighted increased trading activity among investors interested in Bitcoin futures.

Technical Market Overview:

After the BTC/USD pair has made a new local high at the level of $9,130, the bears reaction for a new high was to push the prices lower again and they have managed to hit the level of $8,405 on the way down. This level has been tested before and it is clear that the bulls will treat this level as an important short-term key support, so it is worth to keep an eye on the current situation on this market. Any violation of the level of $8,405 will lead to the sell-off extension towards the next technical support at $8,298 and below. For now the market is consolidating in a narrow range between the levels of $8,405 - $8,693, but the breakout can happen any time now.

Weekly Pivot Points:

WR3 - $10,362

WR2 - $9,728

WR1 - $9,214

Weekly Pivot - $8,735

WS1 - $8,034

WS2 - $7,406

WS3 - $6,911

Trading recommendations:

There is a possibility that the wave 2 corrective cycles are completed at the level of $6,345, so the market might be ready for another impulsive wave up of a higher degree and uptrend continuation. This strategy is valid as long as the level of $7,582 is not violated. Nevertheless, the larger timeframe trend is still down and all the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend until the level of $10,278 is cleary broken.

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Technical analysis of ETH/USD for 21/01/2020:

Crypto Industry News:

The new Chainalysis study shows that terrorists are improving their financial operations using cryptocurrencies.

Blockchain analysts identified the Izz ad-Din al-Qassam (AQB) Brigade, a Hamas military arm, and noted that the terrorist organization is the first confirmed case when terrorists use cryptocurrencies to support their activities.

AQB used the website to generate a new Bitcoin address for each donor to deposit funds. The site also contained an instructional video on donations with maximum anonymity. Compared to similar previous campaigns, AQB has collected the same amount of money from more donors, but almost half the rate.

Cryptocurrencies have previously been associated with crime, including Ponzi schemes and hate crimes. In other recent studies, Chainalysis has tracked down $ 2.8 billion in Bitcoins from criminal enterprises to stock exchanges. Over 50% - $ 1.4 billion in Bitcoins - went through the major Binance and Huobi exchanges.

Cryptocurrency crimes have caught the attention of regulators and government officials who would like more oversight of digital currencies. Last year, Treasury Secretary Steve Mnuchin, speaking at a meeting of the Special Group on the Prevention of Money Laundering (FATF), praised global regulatory standards that would combat cryptographic crimes.

The FATF, whose 200 countries, including the United States, are promoting measures to combat financial crime, are now demanding that exchanges know more about customers and transactions. More data will help identify money laundering and terrorist financing on stock exchanges that largely do not have the oversight needed to combat this growing problem.

Technical Market Overview:

The ETH/USD has reversed from the level of $178.12 after the Pin Bar candlestick pattern was made. The bears have broken out form the local consolidation zone located between the level of $178.12 - $172.91 and managed to hit the technical support at the level of $163.11 and the low was made at the level of $159.93. Currently, the market has bounced slightly and is consolidating around this level because the bounce is very shallow so far. If the bearish pressure intensifies again, then the next target for bears is seen at the level of $157.37 and $151.37. Please notice that this is a quite strong technical support zone due to the short-term ascending trendline presence around these levels.

Weekly Pivot Points:

WR3 - $219.38

WR2 - $198.31

WR1 - $181.78

Weekly Pivot - $161.46

WS1 - $144.93

WS2 - $123.85

WS3 - $107.13

Trading recommendations:

There is a possibility that the wave 2 corrective cycles are completed at the level of $115.05, so the market might be ready for another impulsive wave up of a higher degree and uptrend continuation. This strategy is valid as long as the level of $146.94 is not violated. Nevertheless, the larger timeframe trend is still down and all the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend until the level of $196.61 is cleary broken.

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Trading plan for GBP/USD and trading recommendation on 01/21/2020

The market was quiet and calm, while the United States was resting on the occasion of Martin Luther King's Day. No one wants to take risks and take early steps during the absence of American traders, who control most of the money circulating in the market. Moreover, there weren't any reasons that could set markets in motion. Thus, yesterday can safely be called a day off.

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Today, there is something to work on, since the United Kingdom publishes labor market data for the release of the rested and amassed Americans. However, they are unlikely to be able to impress market participants, as the unemployment rate should remain unchanged. At the same time, other indicators of the state of the labor market will show some changes. In particular, employment can increase by 95 thousand, against 24 thousand in the previous month. In addition, the number of applications for unemployment benefits is likely to decline from 28.8 thousand to 26.0 thousand. So in general, the expectations are relatively positive. However, the growth rate of average wages, excluding premiums, should slow down from 3.5% to 3.3%, which will level the positive nature of employment data and applications for unemployment benefits. So in general, expectations on the data can be described as neutral.

Unemployment Rate (UK):

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In terms of technical analysis, we see that the quote found a foothold in the region of the psychological level of 1.3000 after a significant inertial move, forming a pullback. In fact, we have already seen a similar development a week earlier, where the control level was not broken, but served as a deceleration range. Thus, the initial return of the price above the psychological level confirms the pattern.

Looking at the trading chart in general terms, we see a kind of compression of the quote, where the amplitude becomes narrower with each subsequent convergence with the range-psychological level.

It is likely to assume that the oscillation along the control level will continue, with a local move in the direction of 1.3050-1.3060, where subsequently the reverse move is not excluded.

Concretizing all of the above into trading signals:

- Long positions are considered in the form of local operations in the direction of 1.3050-1.3060.

- Short positions are considered in case of price fixing lower than 1.2955-1.2950.

From the point of view of complex indicator analysis, we see that the main signal flow is descending, but neutral interest appears due to ambiguous fluctuations along the psychological level.

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Technical analysis of GBP/USD for 21/01/2020:

Technical Market Overview:

The GBP/USD pair has broken below the lower channel boundary located at the level of 1.3055 and the bears continued the move lower. After the channel breakout was done, the price fell to the level of 1.2988 which is a part of a demand zone located between the levels of 1.2939 - 1.3017 and then another lower low was made at the level of 1.2962. It looks like the downtrend is still continued as new lower lows are still being made, but currently, the local bounce form the level of 1.2962 has hit the technical resistance a the level of 1.3017 and market is trading sideways. Any violation of the level of 1.2939 will directly lead to the sell-off extension towards the level of 1.2904 and 1.2786. The weak and negative momentum supports the short-term bearish outlook.

Weekly Pivot Points:

WR3 - 1.3247

WR2 - 1.3172

WR1 - 1.3080

Weekly Pivot - 1.3013

WS1 - 1.2913

WS2 - 1.2847

WS3 - 1.2749

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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Trading plan on EUR/USD for January 21, 2020.

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Euro tested the support at 1.1080, and bounced around quite a bit. Perhaps, this was due to the low volume of trading because of the weekend in the US.

Because of this, the question of breaking the lower border of the euro corridor remains open. If we see a break down to the 1.1070 mark, a strong fall in the euro becomes very likely. If it was a false break down, we will first face a growth and a turn upwards at 1.1135, and then attempt to break up to 1.1175.

EUR/USD:

Sell when the price breaks 1.1075 downwards.

Buy when the price breaks 1.1175 upwards.

In the news: Tesla's capitalization has surpassed US auto industry giants such as Ford and GM.

Other than that, the market is quiet. It is waiting for the start of a correction in the US market.

Furthermore, the currency market is waiting for the ECB's monetary policy meeting on Thursday.

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Technical analysis of EUR/USD for 21/01/2020:

Technical Market Overview:

The EUR/USD pair has made a Hammer candlestick pattern at the level of 1.1076 which is below the last local low made at the level of 1.1086. The market is in oversold conditions, so the odds for a bounce or even a trend reversal are high. The nearest target for bulls is seen at the level of 1.1106. The momentum remains weak and negative, so the current move up might be just a bounce or a local counter-trend correction. To reverse the downtrend, the bulls would have to break through the level of 1.1174.

Weekly Pivot Points:

WR3 - 1.1216

WR2 - 1.1193

WR1 - 1.1130

Weekly Pivot - 1.1046

WS1 - 1.1042

WS2 - 1.1019

WS3 - 1.0955

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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USD/CAD. Double test for the loonie: strong volatility expected tomorrow

At the beginning of this year, the US-Iranian conflict made it possible for the Canadian dollar to become stronger along with the greenback until the middle of the 29th figure. The pair has not been at such price lows since October 2018. The Canadian followed the dynamics of the oil market, which in turn became more expensive due to the panic sentiment of oil traders. At the moment, the situation has stabilized, while "black gold" is still at high levels - a barrel of Brent crude is trading at around $68 and WTI - at $58. The USD/CAD pair also moved away from multi-year lows and consolidated in the middle of the 30th figure. The loonie has been trading at almost the same level for almost two weeks, although the bulls and bears of the pair are trying to develop an upward or downward trend. But after the price impulses, the pair returns home, waiting for the next news drivers.

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Tomorrow could shift the Canadian dollar to a different price niche - either higher, in the region of the range 1.3150-1.31190, or lower, in the region of the 29th figure. The fact is that on January 22 the first meeting of the Bank of Canada will be held this year, whose members will determine the fate of monetary policy. In addition, key data on inflation will be published tomorrow. This combination of fundamental factors can seriously affect the mood of USD/CADtraders.

It is worth noting that the latest macroeconomic reports are controversial. For example, in late December, data on the growth of the Canadian economy for October were published. According to the general forecast, this indicator was expected to grow minimally on a monthly basis (+0.1%) and slightly slow down in annual terms (+1.4%) after a two-month growth. But the real numbers were much worse. On a monthly basis, the key indicator fell to the negative area (for the first time in eight months), reaching -0.1%. In annual terms, the indicator slowed down more than expected - up to 1.2%. The release structure suggests that 13 out of 20 sectors of the economy showed negative dynamics. In particular, the production of durable goods decreased to -2.3%. The slowdown of this component is recorded for the fourth time in the last six months.

Retail sales also greatly disappointed. The latest release came out at -1.2%, while experts expected growth to 0.5%. This is the weakest result since November 2018. Excluding car sales, the indicator also declined (to -0.5%), while positive dynamics was expected - to 0.2%. The release structure suggests that sales fell in 8 out of 11 categories.

But the labor market in Canada was pleasing due to its growth. The increase in the number of employees jumped by 35 thousand, although the forecast was at the level of +25 thousand. It is noteworthy that this indicator significantly disappointed in the previous month, collapsing to the level of -72 thousand. December figures are also good in that the increase occurred only due to growth in full employment (+38 thousand jobs). But, on the contrary, part-time employment decreased by three thousand. The unemployment rate in December also showed a positive trend, falling to 5.6%, with a forecast of growth of up to 5.8% and the previous value of 5.9%.

According to the consensus forecast, Canadian inflation should also show a relatively good result. After a decline in the negative area, the overall consumer price index on a monthly basis should rise to zero. In annual terms, the indicator can rise to 2.3% - this is the strongest result since May last year. Unfortunately, core inflation should not reach November level (-0.2% m/m 1.9%y/y), although according to some analysts, the core index will still demonstrate a more impressive result.

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Thus, given the dynamics of the oil market and the "thaw" in US-China trade relations, the Bank of Canada can afford to take a wait-and-see attitude. Let me remind you that the December meeting of the Bank of Canada ended in a positive way: according to members of the regulator, the global economy is showing "signs of stabilization." And although the regulator listed the remaining risks, in general, the meeting was held on a major note.

According to the majority of economists surveyed by Bloomberg, the results of the January meeting will be of a similar nature. Moreover, more than half of the interviewees said that the regulator would keep the interest rate at 1.75% until the middle of next year. Also, many of the analysts are confident that the recent weakening of the Canadian economy is a temporary phenomenon, and the GDP indicator is seen to show a positive result in the first half of 2020.

Thus, the Bank of Canada is likely to show "cautious optimism" at its January meeting. The forecast of the central bank for the current and next years will remain unchanged. Regulator members may note weaker household spending, but other factors (in particular, easing trade tensions) will play in favor of the Canadian dollar. This will allow USD/CAD bears to test the nearest support level of 1.3030 (the lower line of the Bollinger Bands, which coincides with the lower boundary of the Kumo cloud on the four-hour chart). If sellers gain a foothold below this target, they will open their way to entering the 29th figure.

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EUR/USD IPDA Projection HOD/LOD For Tue Jan 21, 2020

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

STDV 10 - 1.1150.

STDV 9 - 1.1145.

STDV 8 - 1.1140.

STDV 7 - 1.1135.

STDV 6 - 1.1130.

STDV 5 - 1.1125.

STDV 4 - 1.1120.

STDV 3 - 1.1115.

STDV 2 - 1.1110.

STDV 1 - 1.1105.

FLOUT - 1.1100.

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

FLOUT - 1.1089.

STDV 1 - 1.1143.

STDV 2 - 1.1077.

STDV 3 - 1.1071.

STDV 4 - 1.1065.

STDV 5 - 1.1059.

STDV 6 - 1.1053.

STDV 7 - 1.1047.

STDV 8 - 1.1041.

STDV 9 - 1.1035.

STDV 10 - 1.1029.

(Disclaimer)

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Indicator analysis: Daily review on GBP/USD for January 21, 2020

Trend analysis (Fig. 1).

Expect an upward movement today with the first target 1.3032, presented in a red dashed line. If it is achieved, the continuation of work upwards with the target of 1.3081 is a retracement level of 38.2% presented in a red dashed line. The final target is at 1.3093, 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:

Today, the price may continue to move up.

A downward scenario is unlikely, so, from the level of 1.3010, yesterday's closing candle, work down with the target of 1.2954, the lower fractal presented in a red dashed line.

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Indicator analysis: Daily review on EUR/USD for January 21, 2020

Trend analysis (Fig. 1).

Expect an upward movement today with the first target of 1.1117, the pullback level of 23.6% presented in a blue dashed line. Upon reaching this level, the next goal will be a retracement level of 38.2% equivalent to 1.1141, presented in a blue dotted line.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

An upward trend is possible today.

An unlikely scenario is from the support line of 1.1095, presented in a white bold line, the price goes down to a retracement level of 61.8% equivalent to 1.1081, in a red dashed line. If it breaks further down, the target will be at 1.1043, the retracement level of 76.4% presented in a red dashed line.

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Elliott wave analysis of GBP/JPY for January 21 - 2020

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GBP/JPY is trading in a very narrow range between 142.82 and 143.38. We expect a final move to just above 143.38 and then a turn lower through support at 142.82 for the next downside pressure to 140.81 on the way lower to 139.25.

Short-term support at 142.82 is key for the next larger mover.

R3: 144.53

R2: 143.91

R1: 143.71

Pivot: 143.36

S1: 143.09

S2: 142.82

S3: 142.65

Trading recommendation:

We will sell GBP at 143.65 or upon a break below 142.82

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Elliott wave analysis of EUR/JPY for January 21 - 2020

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EUR/JPY remains pressured and has broken below support at 122.04 indicating more downside pressure towards 121.77 and maybe even closer to the 50% corrective target at 121.47 before starting to turn higher in wave 3.

In the short-term, a break above minor resistance at 122.33 will confirm that wave 2 has completed and wave 3 higher is in motion towards 123.84 and 125.65

R3: 122.55

R2: 122.33

R1: 122.11

Pivot: 121.00

S1: 121.91

S2: 121.77

S3: 121.47

Trading recommendation:

Our stop at 122.00 was hit for a small 27 pip loss. We will re-buy EUR at 121.85 or upon a break above 122.33.

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USD Index IPDA 60 Days Premium-Discount Array For Jan 21, 2020

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If we see the USD Index at the Daily Chart, we know exactly this asset position in Discount Array Zone area. This means that the USD Index could be taken as Long Position although there is a small correction to the bullish orderblock at 97.36 because they're attract with the Daily SELL Side Liquidity Pool at 97.09 who want to be purge but as long the USD Index does not break out and close bellow the 96.98 level, this asset still in bullish condition especially for test the Daily Bearish Fair Value Gap Main Threshold at 98.09.

The bias for USD Index is still bullish.

(Dsiclaimer)

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Forecasts for EUR/USD on January 21, 2020

EUR/USD

On Monday, the euro traded for the support of the MACD line and the Fibonacci level of 123.6%. Trading volumes were not high as a result of the lack of American players on the market due to a national holiday in the United States. Today, the market has the task to gain a foothold under yesterday's low, under the Fibonacci line 123.6% (1.1073). This will lead to the opening of the nearest target of 1.1033 - to the embedded line of the price channel. Overcoming support opens the second target of 1.0986 - the Fibonacci level of 138.2%. The Marlin oscillator is going down in the territory of the bears.

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The downward trend is not broken on the H4 chart - the price is developing under the indicator lines, the Marlin oscillator is also in the negative zone.

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Forecasts for GBP/USD on January 21, 2020

GBP/USD

Yesterday, the pound spent supporting the Fibonacci level of 161.8% (price 1.2968). The most active American players on the market were not present due to a national holiday, and today they can show increased activity. With the overcoming of support at 1.2968, the first target of the bears at 1.2820 opens - the Fibonacci level of 138.2% of the base branch of the movement on September 3-20, 2019. The level almost coincides with the low of November 22 of last year. Even lower is another target level of 1.2758 - a high of June 12.

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On the four-hour chart, the price did not go above the red indicator line of the balance sheet yesterday, thereby preserving the falling market balance. Also, the Marlin oscillator remained in the declining trend zone. We are waiting for the price to move towards the first target of 1.2820.

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Forecast for AUD/USD on January 21, 2020

AUD/USD

On the daily chart, the price was consolidated under the blue indicator line of MACD, which is an indicator of the trend and acts as an independent support/resistance. The Marlin oscillator is going down in the negative trend zone. The purpose of the movement is to support the embedded line of the price channel in the region of the Fibonacci reaction line of 123.6% at the price of 0.6816. The target level is at the lows of October 2019. Consolidation under the first target opens the second target at 0.6737 - the Fibonacci reaction level of 161.8%.

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On a four-hour chart, the price is moving in a downward direction under the indicator lines of balance and MACD, Marlin is also falling. We look forward to further price movement towards the designated goal.

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Control zones of NZDUSD 01/20/20

The bearish movement of the pair is still a priority, which makes it possible for you to keep sales open last week. The first goal of the decline is WCZ 1/2 0.6561-0.6555. Reaching this zone will close most of the sales, and also transfer the rest to breakeven.

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The positioning of the Asian sessions of the last three days indicates pressure on the course from the major players. This must be used to re-enter a short position in case of obtaining favorable prices.

An alternative model will be developed if the closure of today's trading occurs above yesterday's high. This will make it possible to form an absorption pattern at the daily level, which will open the way for renewed growth to WCZ 1/2.

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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.

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Control zones of GBPUSD 01/20/20

The probability of continued downward movement is estimated at 75%, which allows you to keep sales open at the end of last week. To obtain favorable selling prices, the WCZ test 1/4 1.3066-1.3057 may be required. This will provide an opportunity to enter a short position again.

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The first target of the decline is the January low formed last week, which makes sales profitable in terms of risk/reward ratio.

An alternative model will be developed if the closing of today's trading occurs above the WCZ 1/4. This will open the way for further growth and a retest of last week's high. The main goal of the upward corrective movement will be WCZ 1/2 1.3164-1.3145.

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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.

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Fractal analysis for major currency pairs on January 21

Forecast for January 21:

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: 1.1131, 1.1115, 1.1102, 1.1079, 1.1064 and 1.1031. Here, we are following the descending structure of January 16. Short-term downward movement is expected in the range of 1.1079 - 1.1064. The breakdown of the last value will lead to a pronounced movement. Here, the potential target is 1.1031. We expect a pullback to the top from this level.

Short-term upward movement is possibly in the range 1.1102 - 1.1159. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.1131. This level is a key support for the downward structure.

The main trend is the descending structure of January 16

Trading recommendations:

Buy: 1.1102 Take profit: 1.1113

Buy: 1.1116 Take profit: 1.1130

Sell: 1.1078 Take profit: 1.1065

Sell: 1.1063 Take profit: 1.1034

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For the pound / dollar pair, the key levels on the H1 scale are: 1.3116, 1.3056, 1.3020, 1.2953, 1.2901, 1.2838 and 1.2801. Here, we are following the formation of the descending structure of January 17. The continuation of the movement to the bottom is expected after the breakdown of the level of 1.2953. In this case, the target is 1.2901. Price consolidation is near this level. The breakdown of the level of 1.2900 will lead to the development of pronounced movement. Here, the goal is 1.2838. For the potential value for the bottom, we consider the level of 1.2801. Upon reaching which, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 1.3020 - 1.3056. The breakdown of the latter value will lead to the formation of initial conditions for the upward cycle. Here, the potential target is 1.3116.

The main trend is the descending structure of January 17

Trading recommendations:

Buy: 1.3020 Take profit: 1.3053

Buy: 1.3057 Take profit: 1.3114

Sell: 1.2952 Take profit: 1.2904

Sell: 1.2898 Take profit: 1.2838

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9778, 0.9758, 0.9725, 0.9699, 0.9668, 0.9654, 0.9632 and 0.9610. Here, the price forms the expressed initial conditions for the top of January 16. The continuation of the movement to the top is expected after the breakdown of the level of 0.9700. In this case, the target is 0.9725. Price consolidation is near this level. The breakdown of the level of 0.9725 will lead to pronounced movement. Here, the target is 0.9758. For the potential value for the top, we consider the level of 0.9778. Upon reaching this level, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.9668 - 0.9654. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.9632. This level is a key support for the top.

The main trend is the formation of initial conditions for the top of January 16

Trading recommendations:

Buy : 0.9700 Take profit: 0.9725

Buy : 0.9727 Take profit: 0.9756

Sell: 0.9667 Take profit: 0.9655

Sell: 0.9652 Take profit: 0.9635

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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 to reach 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 last value will lead to an in-depth correction. Here, the goal is 109.23. This level is a 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 except after the breakdown of the level of 1.3090. In this case, the target is 1.3112. Price consolidation is in the range of 1.3112 - 1.3126. For the potential value for the top, we consider the level of 1.3157. Upon reaching this level, we expect a pullback to the bottom.

Short-term downward movement, as well as consolidation are possible in the range of 1.3040 - 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 : 0.6933, 0.6901, 0.6885, 0.6853, 0.6820, 0.6803 and 0.6780. Here, we are following the development of the descending structure of January 16. The continuation of movement to the bottom is expected after the breakdown of the level of 0.6853. In this case, the target is 0.6820. Price consolidation is in the range of 0.6820 - 0.6803. For the potential value for the bottom, we consider the level of 0.6780. Upon reaching this level, we expect a pullback to the top.

Short-term upward movement is expected in the range of 0.6885 - 0.6901. The breakdown of the latter value will lead to the formation of initial conditions for the top. In this case, the potential target is 0.6933.

The main trend is the descending structure of January 16

Trading recommendations:

Buy: 0.6885 Take profit: 0.6900

Buy: 0.6904 Take profit: 0.6930

Sell : 0.6851 Take profit : 0.6823

Sell: 0.6820 Take profit: 0.6804

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For the euro / yen pair, the key levels on the H1 scale are: 123.89, 123.32, 123.06, 122.68, 122.09, 121.80 and 121.47. 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 122.68. 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, from this level, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 122.09 - 121.80. The breakdown of the latter value will lead to an in-depth correction. Here, the goal is 121.47. This level is a key support for the upward structure.

The main trend is the upward cycle of January 8, the correction stage

Trading recommendations:

Buy: 122.70 Take profit: 123.05

Buy: 123.06 Take profit: 123.30

Sell: 122.07 Take profit: 121.84

Sell: 121.80 Take profit: 121.50

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For the pound / yen pair, the key levels on the H1 scale are : 146.41, 145.55, 144.93, 144.53, 143.98, 143.07, 142.59 and 142.11. Here, we are following the development of the ascending structure of January 3. At the moment, the price is in correction. The resumption of movement to the top is expected after the breakdown of the level of 144.00. In this case, the first goal is 144.53. Short-term upward movement is expected in the range of 144.53 - 144.93. The breakdown of the latter value will lead to a movement to the level of 145.55, and near which, we expect consolidation. For the potential value for the top, we consider the level of 146.41, from which we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 143.07 - 142.59. 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 142.11.

The main trend is the upward structure of January 3, the correction stage

Trading recommendations:

Buy: 144.00 Take profit: 144.51

Buy: 144.53 Take profit: 144.91

Sell: 143.05 Take profit: 142.65

Sell: 142.54 Take profit: 142.11

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Confidence above all: yen competes with the dollar

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The Japanese currency behaves with restraint at the beginning of the week, but confidently, avoiding excessive volatility. Nevertheless, experts believe that serious changes are brewing in the USD/JPY pair. They will affect the positions of both the greenback and the yen, analysts said.

The pair is currently moving towards consolidation near 109.99. Experts predict a price increase to 110.53, and then its collapse to 109.77. However, this is now far away.

Monday morning, January 20, the USD/JPY pair started at 110.16-110.17. The pair continues to currently run in this range, sometimes beyond its scope.

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According to analysts, the upward trend in the USD/JPY pair, continuing from January 8, 2020, is due to increased risk sentiment, and not fundamental factors. At the same time, the current strengthening of the dollar in the Asian pair may reach its limit amid an extremely slow recovery of the global economy. In the coming year, the greenback will be traded within the current range, namely 105–115 yen per US dollar. Experts believe the preservation of a long pause in the monetary policy of the Federal Reserve as the reason for this.

In the near future, State Street analysts expect a shift in the base range of the USD/JPY pair to rise to 110-115 yen against the US dollar. Experts believe that the driver of such growth is the increase in investor risk appetite after the trade truce of Washington and Beijing.

Note that the USD/JPY pair rose to 114.55 since October 2018, which indicates a high probability of a change in the current trend. Experts do not exclude that the greenback can find support at 110 yen per unit of the US currency, but this is possible only in case of a breakout of 110.20. At the moment, the USD/JPY pair is trying to overcome this bar, but it does not go beyond 110.19.

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According to preliminary calculations, the market volatility will be low in 2020, as in the past year. Until the end of the first half of the year, the USD/JPY pair will remain in the range of 106–112, consolidating at these levels. Leading strategists of the Asset Management One financial group adhere to this forecast. Most analysts share their opinion.

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Weekly forecast for EUR/USD on January 20-24, 2020

"Everyone chooses his own path. And the more obvious the goal, the easier the path."

Good morning, dear colleagues!

As always with you, here is the forecast for the likely movement of the EUR/USD currency instrument.

Let's start by summing up the results of the past week, after which we will smoothly move on to the current week and end with the report and basic definitions. So here we go!

The trading session of the previous week, January 13-17, 2020, presented an "unusual" surprise - the price rose in the first half of the trading week, and after which it formed a "false breakdown" (the price closed just a couple of points above the local maximum, and subsequent testing which is already the support level, turned out to be successful. After which, the price already tested it as a resistance level and could be sold at Fibo 50% -61 / 8%), began to decline, breaking the local weekly lows at 1.1105. The price is now located below which. Why did I write an "unusual surprise"? It is all because I believe that a false breakdown is formed again at the moment and ...

And now it is time to talk about the prospects of the EUR / USD currency instrument for the current trading week. Since I wrote a little earlier that, in my opinion, the price formed a "false breakdown" again, and we will proceed from the forecast for the current week:

1. The strategic level is located in the region of 1.1150, which tells us about the likely growth of EUR / USD.

2. The medium-term trend is still upward.

3. A large cluster of levels with high open interest and high volumes is located at 1.1180 and above.

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Well, dear colleagues, it would seem that you would not want to buy. But oh, if everything were so simple...

In fact, it is now necessary to determine the level-range to enter long positions. And here, there are 2 options:

1. The first option, as always, is the most common: entry when the price returns above the level of 1.1105. It is desirable that the return be on an increased volume, which will tell us that, the price will most likely knock down sellers' stops and they may well "roll over" in position.

2. The second option is not so obvious, since you can try to enter long positions only after a downward movement of prices in the area of high open interest and volumes. And such an area exists at 1.1035-1.1060, and you will not believe it - it also coincides with the line of the upward medium-term trend, and, as we well know, the classic signal to buy is testing the price of the line of the upward trend.

So, in fact, I explained my point of view on the issue of the likely "false breakdown" of the support level and the return of the price "for the pen with the bulls" to strategic goal 1.1150.

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The previous forecast for EUR/USD on 01/10/2020 worked perfectly well!

"EUR/USD. BUY priority based on melon CME and classic VSA"

IMPORTANT! Remember that you should enter the market exclusively by patterns - by graphic patterns that are often repeated on the market. As a result of which, there is a certain pattern of price behavior in the future.

In my trading, I use patterns consisting of candlestick analysis and volume analysis. My favorite pattern is absorption on a sharply increasing volume, followed by testing up to 50% -61.8% Fibo.

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