EUR/USD: positive from ZEW, negative from Trump

The euro-dollar pair made another attempt at corrective growth yesterday, rising to the area of the 11th figure. Magnificent reports from the ZEW Institute allowed buyers to spread their wings, thereby lowering the downward impulse. However, the fundamental picture for the pair changed dramatically in the afternoon of Tuesday, and bearish sentiment began to prevail again.

Blame it all to Donald Trump, who switched from China to the European Union in the context of trade claims. Due to this, the optimistic mood in the market instantly worn out, and the pair EUR/USD, in turn, returned to its previous position. At the moment, the situation is frozen in the air, as traders do not dare to open large positions in anticipation of the ECB January meeting. The growth of key macro indicators in the eurozone does not allow us to play against the euro with confidence, so the "on-duty" threats of the US president could not provoke a large-scale decline in the price of EUR/USD. In other words, the pair is now at a crossroads - either the bears will lead it to the region of the 9th figure, or the bulls will be able to return the single currency to the region of 11-12 figures.

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Let's start with the positive (for the euro) news. ZEW Institute business sentiment indices came out in the green zone, although preliminary forecasts were also very optimistic. But real numbers exceeded forecasts. In addition, positive dynamics were recorded both in Germany and in the whole Eurozone. The German index came out of the negative area (for the first time since May last year), reaching 10.7 points last month. In January, it rose to 26.7 points with a forecast of growth of up to 15 points. Likewise, the pan-European indicator left the territory of negative values in December, rising to 11 points. The January index rose to 25.6 points (with a forecast of growth to 16.3 points). This dynamics is primarily due to a pause in the trade war between the United States and China. The slowdown in the Chinese and global economies negatively affected the German economy in particular, and the entire eurozone as a whole. Moreover, the German economy was able to avoid a recession, but, the negative scenario would most likely come true if the trade conflict escalated further.

However, traders are now worried about another problem. For two years, a trade conflict has been smoldering between the US and the EU, which could well develop into a full-scale trade war. The fact is that Donald Trump returned to the agenda the issue of introducing duties on European cars and spare parts again. This "Damocles Sword" hangs over Europe for a long time, since the year before last. The automotive industry not only in Germany, but also in France and Italy is under attack - according to preliminary estimates, the total cost of the indicated duties is $ 300 billion. According to experts, the "domino effect" will follow in the case of the introduction of US duties: the business climate in the eurozone countries will again deteriorate significantly, thereby slowing down the growth of key indicators and the economy as a whole.

Let me remind you that, Jean-Claude Juncker, who then headed the European Commission, prevented the onset of a trade war during the summer of 2018 - during his visit to the States, he agreed with Trump to create a working group to resolve the problem. At the beginning of last year, Trump announced again that he was ready to introduce 20 percent duties on cars and auto parts imported from EU countries if the EU does not reduce or eliminate trade barriers against US companies. However, after weeks of deliberation, the American president postponed the matter. Meanwhile, China played an important role in this - another escalation of the trade war in the summer of 2019 turned the attention of the White House to Beijing.

However, the problem itself did not go away, and the US president reminded the financial world of this, putting pressure on the European currency. In an interview with The Wall Street Journal, he announced his "serious intentions" to impose duties on car imports from the EU if the parties fail to conclude a trade agreement - moreover, under the conditions "which Washington is satisfied with." It is noteworthy that Trump did not talk about the "deadline this time. According to him, "Europeans themselves know what the deadline is set." This nuance has caused even greater concern in the market, due to growing uncertainty.

Thus, Donald Trump threatened Brussels to open another "front" of the trade war again. The open question is whether his threats are real or not. Opinions of experts on this subject vary. According to some analysts, the US president will not resort to real action (although it may increase verbal pressure) until the end of the election and the final end of the US-Chinese conflict. After all, Brussels will impose retaliatory duties on American goods in this case, for a total amount of 20 to 40 billion euros. Nevertheless, other experts admit this scenario, given the EU's quite tough position on this issue.

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All this suggests that the European currency will be under pressure, although the attention of traders of the EUR/USD pair will switch to the ECB meeting in January tomorrow. The topic of possible fees will directly affect the euro only if Donald Trump reiterates his threats. From a technical point of view, the pair is located in the Kumo cloud (on the daily chart) and between the middle and lower lines of the Bollinger Bands indicator. The support level is at 1.1050 (the lower line of Bollinger Bands), while the resistance level is 1.1140 (the middle line of this indicator). At the moment, the vector of price movement depends on the outcome of tomorrow's meeting of the European Central Bank.

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There are no reasons to resume NZD's growth; Prospects for AUD are slightly better

The absence of important statistics from the United States and a decrease in panic about the spread of the virus contributed to corrective growth on Asian exchanges. Nevertheless, the general background remains neutral on Tuesday morning.

On the other hand, the demand in dollars is growing as a result of increasing uncertainty. The date of negotiations for the second phase of the US-China trade agreement has not yet been determined, the day of official registration of Brexit is approaching, and there are practically no positive signals of a macroeconomic nature. So today, the demand for protective assets is likely to increase.

NZD/USD

The RBNZ cut the rate three times in 2019 and steps to soften financial conditions were supposed to revive the economy. However, opinions on how these expectations are met are markedly different.

As an example, ANZ Bank is changing its rhetoric following a pessimistic scenario last year. According to them, forecast indicators have improved, the government has announced an increase in spending, the housing market has strengthened, and inflation looks as if it is approaching the target. As a result, there is no need to further reduce the rate, and if the market considers this position reasonable, then the kiwi will receive a strong impulse to continue growth.

At the same time, recent business reports show that stabilization is still out of reach. Production PMI declined to 49.3p in December, and the average level in 2019 amounted to only 50.9p against 53.8p in 2018. Moreover, the trend is negative, despite a stable labor market. Accordingly, there are no signs that in the first half of 2020, but we can expect improvement will come.

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In addition, PMI in the services sector sharply slowed down. It declined to 51.9p in December versus 53.3p a month earlier, and there were no signs of acceleration in the services sector either.

On the other hand, quarterly inflation report will be published on Friday, rising to 1.8% y / y, it is now one of the few factors holding back the decline. If the expectations are met, short-term growth is possible to 0.6625 / 35 or to 0.6650 / 60, where sales will begin again. It is more likely that NZD/USD will continue to decline, due to the fact that support 0.6570 / 75 is weak while support 0.6552 is slightly lower, which will not stand if inflation data turn out to be worse than expected.

AUD/USD

The Australian dollar looks somewhat more confident, since there are no obvious signals to slow down Australia's economy, but not everything is as good with the Aussie as we would like. Westpac consumer confidence index fell again in January, the trend is negative, and it is unclear what can stop it.

The main explanation is large-scale forest fires, as some subcomponents of the index look confident - optimism has grown regarding the state of global financial markets, the housing market is stable, and a decrease is observed only in the spectrum of economic components of the index.

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The NAB retail sales index declined 0.1% in December, while the November indicator was revised from + 0.9% to + 0.5%, and even then, its growth is a result of Christmas sales, and not an increase in consumer activity. Judging by the survey, the mood is quite dull - unemployment is expected to increase, on the contrary, wages will grow slowly, and lower interest rates do not have any positive effect.

On Thursday, data on employment in December and January inflation expectations, forecasts are neutral with a slight margin of negativity.

AUD/USD dropped to important support 0.6837, where it may try to find a basis if panic in global markets due to coronavirus does not spread. There are no internal reasons for AUD growth. Growth is possible only due to the general revival of business activity and the apparent weakness of the US dollar.

Additionally, you can pay attention to the fact that the AUD/NZD pair is too low relative to the average Asian PMI, with which it has a good correlation. Two ways out of this are possible: either an outstripping growth of AUD, if a general increase in optimism begins, or a sharp decline in PMI, if the panic develops and the threat of a global recession intensifies.

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Technical analysis of BTC/USD for 22/01/2020:

Crypto Industry News:

Central banks of Canada, Great Britain, Japan, the European Union, Sweden and Switzerland formed a group with the Bank for International Settlements (BIS) to jointly study the central bank's digital currencies (CBDC).

According to a press release published by the Bank of England, these institutions will share their experiences with other members of the group, investigating the potential use of CBDC in their jurisdictions.

"The group will assess the use of CBDC; economic choices, economic, functional and technical design, including cross-border interoperability, will also share knowledge about new technologies. It will closely coordinate cooperation with relevant institutions and fora - in particular the Financial Stability Board and "Payments and Market Infrastructures Committee (CPMI)" - we read in a statement.

The research group will be co-chaired by the head of BIS Innovation Hub, Benoit Coeure, and Jon Cunliffe, deputy governor of the Bank of England and chairman of the Payments and Market Infrastructure Committee. The group will include senior representatives of participating central banks and BIS.

Many central banks around the world have begun researching, piloting and actively implementing various forms of digital currencies, including CBDC. As previously reported, the president of the European Central Bank, Christine Lagarde, supports the institution's efforts to develop the CBDC. Lagarde said there is an urgent need for fast and cheap payments, and that the ECB should take a leading position instead of remaining an observer of the changing world.

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. The long lower shadows of the candles that are visible on the H4 chart indicated an increased bullish activity: they are still defending this support level. 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 clearly broken.

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Trading plan on EUR/USD for January 22, 2020.

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The market is generally calm. From the news, the US market showed the first signal of a downward turn.

IBM has shown a slowdown in sales, which signals that the tech sector has started to stop.

EUR/USD: the euro is still waiting for the ECB on Thursday, January 23.

Tuesday was marked by a fierce struggle between buyers and sellers. Buyers won the first half of the day, raising the euro to almost 1.1120. However, by the evening, sellers completely took away all the growth.

Nonetheless, the 1.1070-1.1080 zone remains controversial.

Buy when the price breaks 1.1075 upwards.

Sell when the price reached 1.1070 or downwards.

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Technical analysis of ETH/USD for 22/01/2020:

Crypto Industry News:

The situation in the cryptocurrency space in Thailand is still developing - the country recently received another licensed cryptographic exchange, which increases the total number of exchanges to six. According to the announcement of the Thai SEC, the latest trading platform that has received the Bitcoin trading license is known as Zipmex.

The emergence of Zipmex on the Thai cryptographic scene has brought even greater competition to the developing cryptographic sector in this country. The SEC's new move came after the regulator recently announced that it plans to update the list of companies that have obtained a license to trade in digital assets.

The regulator's website shows that Zipmex is now officially on the list of licensed cryptographic trading services. This is the sixth stock exchange that received such a license, after BX, Satang Pro, Bitkub, Bitherb and Huobi.

The company's website has not yet disclosed when the service may start, although the message "Get ready for a meeting with Zipmex" suggests that the stock market may start working in the near future.

Mentioned earlier, Bx was the oldest Bitcoin trading platform in Thailand, although it is no longer operational. The platform announced the closure on September 30, 2019, giving its clients a month to withdraw funds before the stock exchange closes on November 1.

The company allegedly decided to "focus on other business opportunities", which is why it announced that it would not demand a license to continue operating in 2020. However, its closure has left a serious hole in the Thai cryptographic market, which has led to strong competition in the country's cryptographic sector.

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. There is a visible Bearish Flag price pattern at the H4 chart (thick orange line). 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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Hot forecast for GBP/USD on 01/22/2020 and a trading recommendation

Yesterday, the pound was able to strengthen quite well, and it even kept the gains made. The most interesting thing is that this happened thanks to British macroeconomic statistics, which in recent times has been extremely rare.

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So, the reason for the pound's growth was the data on the labor market in the UK, which turned out to be significantly better than the most optimistic forecasts. Thus, the unemployment rate and the growth rate of average wages, taking into account premiums, remained unchanged. Also, at the previous value of 14.9 thousand, the number of applications for unemployment benefits remained. But the growth rate of the average wage, but without taking into account premiums, although it slowed down, but not from 3.5% to 3.3%, but to 3.4%. So the slowdown in wage growth is weaker than predicted. But what exactly inspired the market participants was employment, which grew by 208 thousand, while even the most daring forecasts predicted its growth by 104 thousand. As a result, we must admit that the data on the labor market were purely positive. This has already become a reason for talk that the Bank of England has no reason to lower the refinancing rate.

Unemployment Rate (UK):

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If you look at the single European currency, which first grew after the pound, and then returned, we can assume that the pound will face the same fate. However, during the European session, there was no reason to weaken the pound. Only data on public sector borrowing in the UK will be published, the total amount of which should be reduced by 4.6 billion pounds. A decrease in the debt burden will be perceived as a positive factor, which will support the pound.

Net public sector borrowing (UK):

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But during the US session, the pound will still have to give up its positions. Data on the real estate market in the United States will add pressure. In particular, housing sales in the secondary market should increase by 1.1%. In addition, housing prices may rise by another 0.3%. That is, sales growth is expected, combined with rising prices, which is an extremely optimistic factor and will help strengthen the dollar.

Secondary Home Sales (United States):

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In terms of technical analysis, we see another rebound from the psychological level of 1.3000, which leads to the area of variable resistance of 1.3080. In fact, we have a repeating series of patterns that took place at the previous measure. There were no cardinal changes; quotes still retain a downward interest, where the interacting level is 1.3000.

Considering the trading chart in general terms, we continue to consolidate a kind of compression of the quote, at the conditional peak of the medium-term upward trend [09/03/19-13.12.19].

It is likely to assume that the existing stagnation of 1.3035/1.3080 will not last long, where work should be carried out on the principle of breaking the borders. At the same time, if we focus on quotation fluctuations from the beginning of January, we will see that the probability of a return trip to the area of the psychological level of 1.3000 is still high.

Concretizing all of the above into trading signals:

- Long positions, we consider in case of price consolidation higher than 1.3085, local positions.

- Short positions, we consider in case of price consolidation lower than 1.3030, the main positions.

From the point of view of a comprehensive indicator analysis, we see that the indicators of technical instruments relative to minute and hour intervals have temporarily turned in the upward direction, having a local buy signal. The medium-term time span remains downward in the market.

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Technical analysis of GBP/USD for 22/01/2020:

Technical Market Overview:

The GBP/USD pair has bounced from the short-term technical support located at the level of 1.2962 as anticipated and moved higher towards the upper channel line located around the level of 1.3082. The line has not been violated yet, although the bulls are still trying as any violation will lead to the test of the zone of 1.3101 - 1.3131. Nevertheless, 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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Technical analysis of EUR/USD for 22/01/2020:

Technical Market Overview:

The EUR/USD pair has made a bounce as anticipated but the bounce was short-lived. Just after the local technical resistance was violated and the new local high was made at the level of 1.1118, the bounce was capped and bears has once again pushed the price towards the level of 1.1076 which is the key short-term technical support. 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, otherwise, the next target for bears is seen at the level of 1.1065 and 1.1040.

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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Indicator analysis: Daily review on GBP/USD for January 22, 2020

Trend analysis (Fig. 1).

Expect an upward movement today with the target of 1.3076, the resistance line presented in a red bold line. In case of breaking through this level, there is a continuation of work upwards with the target of 1.3120, the pullback level of 50.0% presented in a red dashed line.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

The price may continue to move up today.

A downward scenario is unlikely but quite possible. That is, from the level of 1.3076, the resistance line in a red bold line, work down with the target of 1.2994, the support line in a red bold line.

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Indicator analysis: Daily review on EUR/USD for January 22, 2020

The pair moved up on Tuesday and tested the pullback level of 23.6% equivalent to 1.1117 presented in a blue dotted line, but there were not enough bulls for more, and the price went down. Strong calendar news for the dollar is expected today at 15:00 UTC. Also, according to the news, work down is possible. The market will be narrow in anticipation of tomorrow's European interest rates.

Trend analysis (Fig. 1).

An upward movement is expected today with the first target of 1.1102, the retracement level of 14.6% presented in a blue dashed line. Upon reaching this level, the next goal will be the retracement level of 23.6% equivalent to 1.1117, presented in a blue dashed line.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

An upward trend is possible today.

An unlikely, but possible scenario is from the support line of 1.1083, presented in a white bold line, the price goes down to 1.1043, the pullback level of 76.4% presented in a red dashed line.

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Elliott wave analysis of GBP/JPY for January 22 - 2020

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GBP/JPY spiked to a high of 143.97 before turning towards the downside again. We will look for a break below minor support at 143.19 and more importantly below support at 142.82 as confirmation that the final decline into target-zone between 139.29 - 139.83 is unfolding. Only an unexpected break above 143.97 will keep the correction from 142.77 alive, but resistance at 144.53 should not be broken under this scenario.

R3: 144.53

R2: 143.97

R1: 143.67

Pivot: 143.40

S1: 143.09

S2: 142.82

S3: 142.65

Trading recommendation:

We sold GBP at 143.65 and has placed our stop at 144.60.

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Elliott wave analysis of EUR/JPY for January 22 - 2020

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EUR/JPY dipped to test the 38.2% corrective target at 121.77 which should be correction enough for wave 2 and could set the stage for a new impulsive rally in wave 3 towards 123.89 and 125.65 as the next upside targets.

A break above resistance at 122.37 will confirm wave 2 has completed and wave 3 is in motion.

R3: 122.83

R2: 122.55

R1: 122.37

Pivot: 122.00

S1: 121.77

S2: 121.47

S3: 121.16

Trading recommendation:

We bought EUR at 121.85 and we have placed our stop at 121.65.

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Trading plan for GBPUSD for January 22, 2020

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Technical outlook:

GBPUSD is still retracing lower and might drop below 1.2900 to find support before rallying further. The expected price support zone is between 1.2550 and 1.2750/1.2800 respectively, highlighted in a rectangle here. Please note that Fibonacci 0.618 retracement of the entire rally between 1.1950 and 1.3515 is seen around 1.2550 levels. Also note that channel support accompanied by the past resistance turned support zone is also converging around 1.2550. A bullish bounce around above levels remain high probability. GBPUSD is seen to be trading around the 1.3050 levels at this point in writing and might drop lower towards at least 1.2850 before reversing. The overall bullish structure is expected to remain intact until prices stay above 1.1950 levels. GBPUSD remains a good buy on dips towards 1.2850 and further to 1.2550 levels for an extended rally towards 1.4200.

Trading plan:

Remain long and buy more between 1.2550/1.2750, stop at 1.1950 and target is 1.4200.

Good luck!

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

EUR/USD IPDA Projection HOD/LOD For Jan 22, 2020.

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

STDV 10 - 1.1276.

STDV 9 - 1.1258.

STDV 8 - 1.1240.

STDV 7 - 1.1222.

STDV 6 - 1.1204.

STDV 5 - 1.1186.

STDV 4 - 1.1168.

STDV 3 - 1.1150.

STDV 2 - 1.1132.

STDV 1 - 1.1114.

CBDR - 1.1096.

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

CBDR - 1.1078.

STDV 1 - 1.1060.

STDV 2 - 1.1042.

STDV 3 - 1.1024.

STDV 4 - 1.1006.

STDV 5 - 1.0988.

STDV 6 - 1.0970.

STDV 7 - 1.0952.

STDV 8 - 1.0934.

STDV 9 - 1.0916.

STDV 10 - 1.0898.

Please pay attention for the today's STDV 1 @ 1.1060 & STDV 2 @ 1.1042 bellow the CBDR (Central Bank Dealer Range) because they're confluence with the Previous day STDV 5 at 1.1059 & STDV 8 at 1.1041 below the previous Flout Range Pay attention too for the confluence level above today's CBDR STDV 1 at 1.1114 and STDV 3 at 1.1150 with the previous day above the Flout Range STDV 3 at 1.1114 and STDV 10 at 1.1149, usually the confluence level will be a significant level turning back point for the price.

(Disclaimer)

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

Trading plan for EURUSD for January 22, 2020

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Technical outlook:

EURUSD is approaching the support zone around 1.1050/70 as we have been discussing the same here since the last several trading sessions. Also note that the trend line support for the last 4 months is passing close to the above levels. Furthermore, EURO trades near the Fibonacci 0.618 support of the recent upswing between 1.0980 and 1.1240 respectively. Lastly, the channel support comes in around 1.1038 at this point in writing. All the above convergences are pointing towards a high probable bullish reversal between 1.1010 and 1.1050/70 levels as marked in a rectangle here. With the overall bullish structure intact, EURUSD bulls are poised to find support sooner than expected to resume its rally past 1.1500 level. Immediate support is at 1.0980 followed by a major low/support at 1.0879 respectively. EURUSD remains a buy on dips candidate until it stays above 1.0879 level.

Trading plan:

Remain long, stop at 1.0879, target above 1.1500/1.1800.

Good luck!

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

Gold IPDA 60 Days Premium-Discount Array For Jan 22, 2020

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If We see the Gold chart base Interbank Price Delivery Algorithm (IPDA) 60 Days Premium-Discount Array now this asset already at the Premium Array one, this condition ideally is for Short Position for Gold with the target at 1544.51(Premium Array) as the first target and the 1535.52 (4 Hour Chart SELL Side Liquidity Pool). The secondary target is at 1568.16 as long as gold does not breakout and close above the 4 Hour Chart BUY Side Liquidity Pool.

(Disclaimer)

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

Forecast for EUR/USD on January 22, 2020

EUR/USD

ZEW Institute showed excellent business sentiment on Tuesday in the eurozone: the ZEW Economic Sentiment index in Germany grew from 10.7 to 26.7 in January while 15.2 was expected; in the eurozone as a whole, the index grew from 11.2 to 25.6 against the forecast of 16.3. According to the first reaction, the euro climbed, but the day ended with a decrease of 12 points, which confirms the intention of investors not to change their strategy and continue to buy the dollar in the medium term.

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On the daily chart, today opened below the MACD (blue moving) line, which also indicates the market's intention to continue to move down today. The goal of supporting the embedded line of the price channel 1.1033 is open. The direct signal to open a position will be the price overcoming the Fibonacci level of 123.6% at the price of 1.1073.

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On the four-hour chart, yesterday's short-term growth was stopped by the red indicator line of balance, which can be read as growth "within the permissible limits". The signal line of the Marlin oscillator has turned from the boundary with the territory of growth. Overcoming the first goal by price opens the second at the Fibonacci level of 138.2% (1.0986).

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Forecast for GBP/USD on January 22, 2020

GBP/USD

Optimistic employment data came out in the UK yesterday: 14.9 thousand applications for unemployment benefits were filed in December against the forecast of 22.6 thousand, total employment increased by 208 thousand (in November) against the forecast of 110 thousand, the average level of wages increased by 3.2% in November against the expectation of 3.1%. The overall unemployment rate remained at 3.8%. The data are optimistic primarily in the light of monetary policy - investors have an opinion that the Bank of England will not lower the rate at the next meeting on January 30th.

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On the daily chart, the price is exactly on the line of balance and the signal line of the Marlin oscillator, remaining in the zone of negative values, is still near the boundary - the situation is neutral. If the market decides to move down from current levels, then the immediate target will be the Fibonacci level of 161.8% at the price of 1.2968. Overcoming of which, in turn, will open the second target 1.2820 - the low of November 22 at the Fibonacci level of 138.2%.

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On a four-hour chart, the price is located on the MACD line, Marlin in the zone of positive values - in the growth zone. Overcoming yesterday's high price opens a bullish local target 1.3137 at a correction level of 28.2% of the December 13-23 movement. Consolidating the price under the MACD line, below 1.3037, will return to the market a downward mood relative to the British currency.

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Forecast for USD/JPY on January 22, 2020

USD/JPY

The dollar lost 30 points against the yen on Tuesday following the fall of the stock market (S&P 500) by 0.27%. The reason was a certain Chinese virus that caused the death of several people. We are very far from the perception of the local outbreak of the flu for the global epidemic, but, as it has been more than once in the last decade, pharmaceutical companies may well make a fuss and pull down markets using another cause of the disease. Today, the Chinese China A50 is down 1.21% in the Asian session, while the Japanese Nikkei225 is up 0.31%. The stability of the Japanese market helps the yen stay in the range of Fibonacci levels of 100.0-110.0% on the daily chart.

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Consolidating the price under yesterday's low formally opens 108.50 at the Fibonacci level of 76.4%, but there are many obstacles to it from earlier record levels, 109.00 looks the most powerful - July 10 last year high and May 13 low. Overcoming the price peak on January 17 (110.30) may delay or stop the panic and send the price to the range of 110.83/98.

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On a four-hour chart, the price is above the MACD line. Consolidating under it, which will automatically mean also consolidating below the MACD line of a higher scale, will unfold a complex, multivariant scenario of pulling down.

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GBP/USD. January 21. Results of the day. Defeat of Brexit bill in British House of Lords

4-hour timeframe

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Amplitude of the last 5 days (high-low): 79p - 58p - 57p - 115p - 52p.

Average volatility over the past 5 days: 73p (average).

The British pound on Tuesday, January 21, as well as the euro, adjusted most of the day. The pound/dollar pair managed to enter the Ichimoku cloud and work out its upper boundary, which could not be overcome the first time. At the moment, we can state a rebound from the Senkou Span B line, which can return the pair to a downward channel. The upper line of the volatility channel was also worked out - the level of 1.3077, from which a rebound also occurred. As a result, at the moment, we can say that the prospects for upward movement in the British currency remain very vague. Bulls remain extremely weak. Quotes fail to overcome key resistance levels on their way up. Thus, if the pair regains consolidation below the critical Kijun-sen line, we can conclude that the downward trend will resume. Or downward movement, at least to the lower Bollinger band.

Today's macroeconomic statistics came down to publications in the UK. Here, three macroeconomic reports were published immediately, from which traders finally expected not disastrous values. Despite the current weakness of the British economy, wages have shown steady growth since 2017, so this indicator did not cause much concern. And so it turned out in practice. The average salary including bonuses showed an increase of 3.2% with a forecast of 3.1%. Without premiums - 3.4% with a similar forecast. More attention was focused on the unemployment benefit application rate, which was also "on top", amounting to only 14,900 with expert forecasts of 22,600. The unemployment rate was expected to remain unchanged at 3.8%. Thus, today's package of macroeconomic statistics turned out to be positive for the first time in a long time. The pound has received the support of market participants, but we believe that key indicators of the British economy remain extremely weak, reports on wages and unemployment are clearly not enough to count on an upward trend for the pound.

Meanwhile, the pun in the British Parliament continues, however, this time without consequences. Immediately after the party of Boris Johnson won the election in December, the fate of Brexit was considered decided. The Conservative party won a majority in the Lower House of Parliament, respectively, no longer depended on the opposition forces and voted for the "deal" between Boris Johnson and the EU without problems. It would seem that only formalities remained: the approval of the same deal by the European Parliament (which there is no point in blocking this agreement) and its approval by the House of Lords. And it turned out that the House of Lords, in which Johnson does not have a majority, refused to accept the agreement with the EU, making amendments to some points. In particular, we are talking about the need for a physical document for EU residents to legally reside in the UK, as well as for depriving ministers of the right to decide which decisions of the European Court will be rejected by local courts. In general, the bill returns to the House of Commons, where another vote will take place, which may block the demand of the House of Lords by a simple majority.

The technical picture of the currency pair remains essentially the same. The pair failed to gain a foothold above all the lines of the Ichimoku indicator, therefore, upward prospects are still absent. We expect the resumption of the downward movement to the support level of 1.2933. Only overcoming the Senkou Span B line and the first resistance level of 1.3098 can contribute to the formation of a new upward trend, however, fundamental factors remain not on the side of the British pound. The country is still moving into the future without the EU and is already suffering enormous financial losses due to this gap. In 2020, the situation is unlikely to change. Although Donald Trump announced a trade agreement with Great Britain during his speech at the Davos International Economic Forum, while calling Johnson "smart," this does not mean that this deal will be signed in the near future. The Bank of England is still looking to lower the key rate, and its head Mark Carney resigns.

Trading recommendations:

GBP/USD remains downside. Thus, traders are advised to resume sales of the pound/dollar pair with the target of 1.2933, after the correction is completed and the pair is consolidated below the Kijun-sen line. It is recommended that purchases of British currency be returned no earlier than the price consolidation above the Senkou Span B line and the level of 1.3098 with the first target of 1.3191.

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 dashed 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

Technical analysis recommendations for USD/JPY and its crosses

USD / JPY

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The yen began in 2020 with the realization of what did not work out last year. So far, the pair closed the week in the bullish zone of the relative weekly cloud. Now, the main task of the players is fixing in this zone to increase in the near future. After that, monthly resistance will follow 110.70 - 110.83 - 111.40. However, breaking through the monthly boundaries is a more difficult task, since this will eliminate the monthly dead cross and mark the exit to the bullish zone of the relative Ichimoku cloud at the most upper time. In this situation, support is located at 109.50 (weekly cloud + monthly medium-term trend + daily short-term trend) - 109 (weekly Tenkan and the lower border of the cloud + daily Kijun and the upper border of the cloud) - Fixing below 108.08-30 can move players away from their goals for a long time.

EUR / JPY

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At the beginning of the year, the pair attempted a new test of important resistance, but the first target of the daily target for breakdown of the cloud (122.55), now strengthened by the lower border of the weekly cloud (122.71), withstood the defense again. As a result, we observe the next development of a downward correction. The nearest support is the daytime cross of Ichimoku, first Tenkan (121.96), then Kijun (121.48), as well as the most protected area 121.24 (weekly Tenkan + daytime cloud + final line of the daytime cross of Ichimoku). At the same time, securing below can significantly affect the current balance of power, opening up new prospects for players to decline.

GBP / JPY

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The pound / yen is trying to gain a foothold and stay in the bullish zone relative to the weekly cloud, using the cloud as support. Now, the main attention of the players to increase is aimed at breaking through the weekly short-term trend (143.65) and eliminating the dead crosses of Ichimoku at the daily (144.38 - 145.21) and monthly (145.07) time intervals. Moreover, breaking through these resistance forms new horizons and opportunities before the players to increase. The nearest support, in turn, can now be identified at 141.54 (monthly medium-term trend + daily cloud) and 140.34 - 139.12 (weekly levels + lower border of the daily cloud). Fixing below will change the existing balance and can lead to an active recovery of bearish sentiment.

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

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EUR/USD. January 21. Results of the day. Most Americans favor Trump's removal from office

4-hour timeframe

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Amplitude of the last 5 days (high-low): 41p - 44p - 45p - 57p - 25p.

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

The second trading day of the week ends for the EUR/USD pair with a rapid rise and the next no less rapid fall following it. At least that's how it looks in the graph, but in fact the pair went as much as 25 points up and now down. Thus, the current total volatility of the day is 32 points. Needless to say, this is the lowest value of volatility, which means that, in fact, no trading was conducted today, and the emptiness of the calendar of macroeconomic events can be stated without even looking at the calendar itself. The main thing is that the euro/dollar pair has made a correction and can now resume the downward movement, which, as we are tired of repeating, has all the necessary fundamental and macroeconomic reasons. The bulls remain extremely weak, and now only the bears, which regularly increase their shorts, and from time to time take profits, are trades, which leads to corrections. Thus, now we expect the resumption of the downward trend.

As we have already said, there were few macroeconomic publications today. There were no important ones at all. Information was received from the ZEW Institute that the index of moods in the business environment of Germany rose to 26.7, although the forecasts were significantly lower (15.0), the index for assessing current economic conditions in Germany was -9.5 (with the forecast - 13.5), and the index of economic sentiment in the eurozone was 25.6 with a forecast of 5.5. Thus, it turns out that the current economic conditions are assessed as negative, but investor sentiment is growing, which perhaps means that the business climate is starting to improve in the EU countries. Although it is too early to draw such conclusions, it is better to look at the indices of business activity and draw conclusions on them.

Meanwhile, the European Central Bank conducted a study according to which the demand for loans from an EU enterprise decreased in the fourth quarter of 2019 for the first time since 2013. Interest rates in the European Union, of course, remain ultra-low. Banks continue to expect that in 2020 the demand for bank loans will remain stable, we also believe that one decrease over six full years is not an indicator of decline. However, there is a bad call in itself. If in 2020 the demand for loans begins to fall at such low rates, then the EU economy may begin to suffer even more. And the central bank will have to further lower the key refinancing rate. But the demand for housing loans, as well as for consumer loans, continues to increase, which is good for the EU economy. But since any economy is repelled from the production of goods and services in the first place, corporate loans are, of course, more important.

Meanwhile, Christine Lagarde, the head of the ECB, according to many experts, is preparing to conduct the most ambitious revision of the central bank's strategy since 2003. This process can last about a year, and many landmarks will be revised in accordance with new realities and changes in the world in recent years and even decades. Most experts are skeptical of the revision of the strategy, as officials have not been able to accelerate inflation over the past ten years, despite the fact that the ECB does not abandon the quantitative stimulus program and uses a policy of ultra-low rates. Despite the fact that macroeconomic indicators of the eurozone remain rather weak, and business activity indexes in the manufacturing sector, as well as industrial production itself, continue to decline and lose growth, experts do not expect a revision of monetary policy parameters at the next ECB meeting, which will take place this Thursday . It is expected that the main topic during the two-day meeting of the ECB will be inflation, the reasons for its low value, the reasons for the failure to stimulate economic growth through all the same inflation.

At the same time, a poll was conducted in the United States regarding Donald Trump and his impeachment. About 1,200 Americans over the age of 18 were interviewed over the phone. The error of the study is not more than 3-4%. The main questions asked by the Americans were:

1) Do they support the impeachment of Trump? 51% were in favor, 45% were against.

2) Should the Senate sitting include the testimonies of new witnesses? 69% were in favor.

3) 58% of Americans believe the evidence, which indicates that Trump really took advantage of his official position to put pressure on Ukraine.

4) 57% believe that Trump impeded Congress.

These are the results that, despite Trump's statements at the international economic forum, which takes place at the same time in Davos, about "America's prosperity as never before," suggests otherwise. As before, a fairly large number of Americans do not support Trump's policies and do not want him to be re-elected for a second term. It remains to wait for the results of the Senate meeting.

The technical picture of the euro/dollar pair implies the resumption of the downward movement. At the moment, the correction has reached the pivot level of 1.1116 and this may end safely.

Trading recommendations:

EUR/USD may resume a downward movement. Thus, it is recommended that you either hold open shorts with targets 1.1060 and 1.1052, or open new ones with new signals (MACD turn down or a rebound from the Kijun-sen line). It will be possible to consider purchases of the euro/dollar pair no earlier than the traders of the Senkou Span B line overcome with the first goal the resistance level of 1.1203.

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 dashed 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

GBP/USD. British labor market has pleased, but do not rush with purchases

Before traders of the GBP/USD pair had time to get used to the idea that the Bank of England would soon resort to a preventive rate cut, the British labor market was surprised by an unexpected increase. The British economy has recently regularly surprised investors, though, as a rule, in a negative context. The country's GDP is declining, inflation has been growing at the slowest pace since 2016, retail sales have completely collapsed into the negative region, despite the pre-holiday December period. With each report of this kind, the probability of a decrease in the interest rate naturally increased, all the more so as the dovish sentiment was fueled by the relevant comments of the representatives of the English regulator. Today's release on the growth of the British labor market could complement the general fundamental picture for the GBP/USD pair - the puzzle finally developed if the numbers came out in the red zone.

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However, British labor market data supported the pound. Despite a significant increase in applications for unemployment benefits, the pair adjusted almost to the boundaries of the 31st figure. Traders drew attention to the positive aspects of the release: firstly, the unemployment rate remained at a record low value of 3.8%, and secondly, the level of salaries (including premiums) remained at 3.2% in annual terms, although experts predicted a decline to a three percent level. As for the number of applications for unemployment benefits, the situation here is as follows. According to forecasts of many economists, this figure was supposed to exceed multi-year highs in December. According to some estimates, it could jump to 40 thousand, while others said it could reach up to 55 thousand. But in reality, this indicator came out at the level of the previous month, that is, at around 14 thousand. In other words, the result itself is not positive, however, given previous expectations, it fully satisfied the bullish appetite. All this made it possible for the pair to demonstrate a small correctional growth.

By and large, GBP/USD buyers became active only for one reason - market participants doubted that members of the BoE would lower their interest rates at the January meeting, which will be held next Thursday. Three members (out of nine) of the Committee are guaranteed to vote for a cut in the rate - from among those who have publicly stated the need for easing monetary policy (Vlieghe, Saunders and the recently joined Tenreyro). But most of their colleagues can still give the British economy another chance to independently get out of this situation. At least this logic guides the buyers of the GBP/USD pair. Last week, the likelihood of monetary easing on January 30 was almost 80%. At the moment, the chances are down to 65%.

And yet, in my opinion, the position of the British currency looks precarious. Traders of the pair were too emotional about the release of data on the labor market, as it was the only one of many releases that supported the pound. Nevertheless, the rest of the statistical reports cannot be saved - the members of the English regulator will either have to "close their eyes" to them or react accordingly. And even if members of the Bank of England do not dare to lower their rates next Thursday, they can take an extremely soft position - right up to the announcement of easing monetary policy at one of the next meetings. Therefore, the euphoria of GBP/USD bulls is unlikely to be long.

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Also, remember that the pound remains vulnerable due to the Brexit factor. Let me remind you that recently the pair plunged into the region of the 29th figure not only because of a series of disappointing statistics. The British finance minister, Sajid Javid, also had an influence on the Briton. He also said that after Brexit "there will be no trade agreements with the EU." According to the minister, large companies "had three years to prepare for a change in trade relations with the European Union." Such harsh statements worried market participants, after which the pound lost its foothold and fell into the 29th figure.

It is worth noting that during the transition period, officials and (especially) politicians (both British and European) will voice a variety of speculative statements, as the negotiations between Brussels and London promise to be difficult. And each such speech will exert strong pressure on the British currency, slowing the upward trend of GBP/USD or strengthening the downward one.

Thus, the pair's traders got a reason for corrective growth today, however, it is impossible to speak about long-term upward movement. After the first emotions from today's release come to naught, the price will return to the bottom of the 30th figure with a possible test of 29 price levels. The negative macroeconomic reports that were published earlier this year will continue to crush the pair - until January 30, when the BoE does not reach a verdict.

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