GBP/USD: The House of Lords, Javid's speech and growing business optimism

The pound is once again "on the horse" after the release of data on the growth of the British labor market. The GBP/USD pair has risen to the middle of the 30th figure, and yesterday's events pushed it further to increase by another hundred points. However, despite the two-day impulse growth, the position of the Briton remains shaky, due to a rather contradictory fundamental picture.

Brexit has traditionally been the main driver of pound's growth. Just a week before the border deadline, the House of Lords still approved the law on Britain's exit from the European Union. The agreement did not go as smoothly as the Boris Johnson government would have liked, since initially, the Lords did not approve of the bill. They made several changes to it and sent it back to the Lower House of the British Parliament. This fact made traders of the currency market excited. In theory, the House of Lords and the House of Commons could endlessly play the so-called "legislative ping-pong", as the Upper House has the right to make its own amendments, and the Lower House has the right to reject or approve them.

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In this case, the Lords spoke out against granting the ministers of the British government the right to decide which EU court orders can not be implemented after the country leaves the European Union. They also made four more amendments to the Brexit bill, which the House of Commons is expected to reject. Traders were concerned about the "ping-pong regime", as there was not enough time for such bickering. The "x-hour" was getting closer, and the position of the Upper House of Parliament had a special role for the pound.

That is why, when members of the House of Lords finally approved the bill, the British currency "shot" up, breaking the boundaries of the 31st figure. Now, the fateful document must be signed by Queen Elizabeth II. Afterwards, on January 29, the European Parliament must ratify this agreement.

The pound did not only rose in the market because of the breakthrough in the Brexit issue. The British Finance Minister Sajid Javid also contributed to the currency's growth. Following his "boss", Boris Johnson, Sajid repeated the thesis that a trade agreement with Brussels can be concluded before the end of this year, or before the end of the transition period. Participating in a panel discussion in Davos (together with the American Finance Minister and the head of the IMF), he assured those present that the parties will be able to agree on a deal on both trade in goods and trade in services. Although this optimism was not supported by any specific arguments, the self-confident optimism of the British minister supported the growth of the GBP/USD pair.

It is noteworthy that the strengthening of the British currency was also due to secondary macroeconomic statistics. Traders of the pair usually react poorly to the results of industrial trends in Britain conducted by the Confederation of British Industrialists. This time, however, it was different. First, the index jumped to almost 6-year highs, with the business optimism index rising to +23 points in December, compared to its -44 points in the previous month. The last time that this level of optimism was observed was in April 2014, and such record of growth pleasantly surprised buyers of the GBP/USD pair. Second, the growth of this indicator once again led to talks about the Bank of England taking a wait-and-see position on January 30, even though earlier, traders were almost 80% sure that the regulator will reduce the interest rate at the January meeting.

After a series of negative releases, quite good data on the growth of the labor market were published on Monday. Britain's unemployment rate remained at a record low of 3.8%, and the level of wages (including bonuses) remained at around 3.2% in annual terms, contadicting experts' prediction of a 3% decline. As for the number of applications for unemployment benefits, its figure has increased to 14 thousand. This result is in fact, negative, but according to the forecasts of many experts, it should have exceeded the long-term highs in December. Some estimates said that it could've jumped to 40 thousand to 55 thousand, but what actually happened was that this indicator came out at the level of the previous month, placing it in the "green zone", despite the de facto negative dynamics.

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The growth of the British currency is explained by two key points. First, the Brexit, where the verdict of the House of Lords gave "green light" to the implementation of a soft Brexit scenario, since all other procedural points are now formal. Second, market participants once again doubted that members of the British regulator will reduce the interest rate next Thursday.

The above factors allowed the GBP/USD pair to rise to the middle of the 31st figure, however, further growth is again in question. This is because members of the British regulator can also focus on the negative aspects of the British economy, since the UK GDP figure is declining, inflation is growing at the slowest pace since 2016, and retail sales have fallen into negative territory, despite the pre-holiday December period. All these factors will certainly be discussed by the members of the English regulator. As for Brexit, there are stil twists and turns on the transition period ahead. Most experts, as well as representatives of the European Commission, unanimously assure that the parties will not have enough of an 11-month period to approve the deal. Therefore, the "Brexit factor" will haunt the British currency for a long time.

To sum it all up, traders of the GBP/USD pair are showing somewhat premature optimism. In the wake of rumors about the Bank of England's wait-and-see position, the pair may grow to the nearest resistance level of 1.3210 in the medium term (the upper border of the Kumo cloud coincides with the upper line of the Bollinger Bands indicator on the daily chart). Further growth is a big question though as after all, if the members of the English regulator disappoint with their rhetoric and actions, the pair will return to the area of 28-29 figures in a flash. These risks will keep investors bullish until at least January 30.

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Unexpected forecast for the Canadian economy brought down local currency (growth of USD/CAD pair is still possible, we buy

The Canadian dollar came under strong pressure following a meeting of the Central Bank of Canada, despite maintaining the key interest rate at the same level of 1.75%. The reason for this was the "dovish" comment from the bank.

At first, the "Canadian" received support before the decision of the regulator on monetary policy because all market expectations came down to the fact that a decision would be made to maintain interest rates and that his statement about the prospects for the national economy would be optimistic. On this wave, the USD/CAD pair declined to the level of 1.3040, but after a press conference announced that weaker economic growth or a progressive slowdown in inflation could give reasons for lowering interest rates, the situation changed sharply. The USD/CAD pair began to grow, adding more than one figure at a time.

Moreover, additional pressure on the Canadian currency on Wednesday also had a fall in crude oil prices, triggered by the International Energy Agency (IEA) forecast for an excess of the crude oil market, which turned out to be stronger than concerns about interruptions in the production of "black gold" in Libya. Against this general negative background for the "Canadian", it continues to decline before the opening of trading in Europe.

Today, attention of the investors will be focused on the final decision of the ECB on monetary policy. The monetary policy of the regulator is expected to remain unchanged. But the attention of the market will be drawn specifically to the speech of its head C. Lagarde. They expect from her coverage of plans for the future. Earlier last fall, a marked weakening of the single European currency stopped, due to a signal from Lagarde that monetary policy could be adjusted. This led to an appreciation of the euro, although, to be sure, it did not become so noticeable, since the bank has not made its plan publicly available during that time, but only flickering statements contradictory to each other. Thus, some that soft policy should continue, while others contradicted this.

It is difficult to say what Lagarde will say today, as she previously made it clear that she would try, as they say, to join forces and direct them towards a more constructive solution to the region's economic problems. If we will set out a "roadmap" today for resolving this problem and it will show a promising change in the monetary rate, although not by much, but in the direction of tightening it, this will undoubtedly support the single currency rate, but if everything remains in a state of discussion of regional problems, the euro is likely to be under pressure.

Forecast of the day:

The EUR/USD pair is consolidating in anticipation of the ECB's final monetary policy decision. We believe that the pair needs to be sold with a possible decline in price to 1.0975 on C. Lagarde's negative speech for the euro or, conversely, to buy on the sound of the regulator's exchange rate with a probable target of 1.1250.

The USD/CAD pair is trading below the level of 1.3165. It can continue to grow to 1.3235 if it breaks through this level, but does not fall below the level of 1.3140.

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Technical analysis of ETH/USD for 23/01/2020:

Crypto Industry News:

Ethereum developers have presented a way of communication between individual blockchains. This solution is called the interface standard for transaction transfers. Multichain Ethereum is becoming a fact, and this is how the whole process is explained by the developers of the second most popular cryptocurrency network in the world:

"The process of verifying the transaction sender's address by verifying the signed transaction in every Ethereum compatible wallet is the same. The enforcement of smart contracts by posting gas to relays using the signed meta-transactions in the standard Ethereum portfolio looks the same on the main chain and chains compatible with Ethereum. "

In this case, they use a centralized relay - Klaytn Service Provider, however, anyone can act as a message relay as long as it supports both chains. Interestingly, a test version of the Enterprise Ethereum Alliance private blockchain was also selected. Combining private and public blockchain would be a big step towards creating decentralized and objective side chains, which would help to solve scalability problems.

Technical Market Overview:

The ETH/USD has broken out form the local consolidation zone located between the level of $178.12 - $172.91 and managed to hit the 38% Fibonacci retracement at the level of $161.38 again ( the low was made at the level of $159.93). There is a visible Bearish Flag price pattern at the H4 chart (thick orange line), so 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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Technical analysis of BTC/USD for 23/01/2020:

Crypto Industry News:

AB InBev, the company behind the Budweiser brand, helps local African farmers prove their income using Blockchain technology. The Blockchain-based system developed in cooperation with BanQu tracks all local AB InBev suppliers, replacing the paper version.

AB InBev is an international conglomerate resulting from the merger of several recognized beer producers. One of the most recognizable brands are Budweiser, Stella Artois and Corona.

The company has adopted a strategy of using local suppliers, thanks to which they receive tax breaks for their additional contribution to the country's economy. However, this proved more difficult in Africa, a continent on which the banking infrastructure remains underdeveloped and it is difficult for farmers to obtain paper documents.

Working with BanQu, a company specializing in Blockchain supply chain solutions, AB InBev introduced a distributed accounting system that tracks all local farmers who supply barley and malt to the company. This allows them to prove their income to local banks and thus open bank accounts and credit lines.

Access to banking allows local farmers to finance more efficient farming tools, increasing yields and getting more money. The system also helps reduce corruption introduced by brokers who have consolidated shipments to breweries.

Technical Market Overview:

After the BTC/USD pair had made a swing high at the level of $9,130, the supply side has taken temporary control of the market and have managed to push the prices towards the key short-term technical support level located at $8,405. 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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Technical analysis of GBP/USD for 23/01/2020:

Technical Market Overview:

The GBP/USD pair has moved towards the upper channel line located around the level of 1.3082 and clearly broke through it. Moreover, the bulls have managed to break through the technical resistance located at the level of 1.3121 and 1.3131(as anticipated) before the bears have reacted. Nevertheless, it looks like the downtrend is still might be continued as new lower lows are still being made, but before that happens, the bulls might have a test of the weekly Fibonacci retracement seen at the level of 1.3247. On the other hand, 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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Today Jan 23, 2020 AUD/USD will try to reach the Orderblock and Fair Value Gap Zone level.

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At the 4 hour chart, AUD/USD is now in discount area zone level, after this pair purge all the SELL Stop Order at the Liquidity Pool level (Clean Low) at 0.6851 and 0.6840 AUD/USD form the Double Bottom Eve-Adam Pattern. Presently, this pair is trying to re-balance situation trying to reach the area zone level between the 4 Hour Chart Orderblock at 0.6896 to the Fair Value Gap area, especially at the Fair Value Gap Main Threshold at 0.6910 (Maroon Rectangle) as long this pair does not break out and close bellow the 0.6828 level (4 Hour Chart BUY Side Liquidity Pool) the Aussie is likely to grow to the zone level between 0.6896-0.6910.

(Disclaimer)

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GBP/JPY approaching resistance, potential drop!

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Trading Recommendation

Entry: 144.432

Reason for Entry: 50% fibonacci retracement, 100% fibonacci extension

Take Profit : 141.280

Reason for Take Profit: Horizontal overlap support, 76.4% fibonacci retracement

Stop Loss: 146.546

Reason for Stop loss:

78.6% fibonacci retracement, Horizontal swing high resistance

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Technical analysis of EUR/USD for 23/01/2020:

Technical Market Overview:

The EUR/USD pair has been trading sideways for the last 24 hours, but in the meantime, the bears have managed to make a new local low at the level of 1.1070. 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 have 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 last move up was 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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Hot forecast for EUR/USD on 01/23/2020 and trading recommendation

The single European currency can not escape from an incredibly narrow range for several days in a row. Even fairly good real estate market data in the United States could not budge it and there is no doubt that this is due to the expectation of today's meeting of the Board of the European Central Bank. It is worth paying attention to the fact that the pound has been much more active lately and is showing quite strong movements unlike the single European currency. Therefore, the single European currency resembles more and more a compressed spring, which can fire at any moment. The only question is in which direction and what will be the reason for this?

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It is awesome that the occasion will be the outcome of today's meeting of the Board of the European Central Bank, around which countless rumors and speculations revolve. At the same time, the European Central Bank itself raises the level of nervousness and tension, which becomes the reason for all kinds of speculation. The single European currency, in fact, froze after it became known that Christine Lagarde had almost forbidden the representatives of the European Central Bank to give any comments on the upcoming meeting, as well as on issues of the monetary policy pursued by the regulator. Why was this done? Does the European Central Bank plan to make significant changes to its policies? Will there be a turn towards monetary tightening? Should we expect a reduction in the refinancing rate to a negative value in the near future? Investors have no answers to these and many other questions and there is not even an understanding of the direction in which everything will move. So one can only guess.

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Probably, the only thing in which there is no doubt is that no changes in the current parameters of the current monetary policy will follow according to the results of today's meeting of the European Central Bank. From today's meeting, only the announcement of the path along which the European Central Bank intends to move forward is expected and there are not so many options. There are only two of them.

The European Central Bank may continue to pursue its current policy, the logical development of which is to lower the refinancing rate to negative values. In fact, this is not just an overly soft monetary policy, it is precisely a movement towards a further reduction in interest rates. At the same time, the currently dominant economic theory says that if the economic situation worsens, it is necessary to reduce interest rates. So, if we look at this very economic dynamics, then it does not cause any other feelings except sadness. Moreover, only inflation can probably at least somehow please, while all the main macroeconomic indicators look extremely weak. What is the cost of industrial production which has been declining for more than a year? Even retail sales show extremely low growth rates and this is in conditions of incredibly low inflation. Also, based on these facts, it is quite possible that the European Central Bank will not only announce the continuation of the current policy, but even announce some approximate terms for further reduction of interest rates.

Refinancing Rate (European Central Bank):

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On the other hand, the same inflation suggests that there is no point in lowering the refinancing rate, since it is growing steadily. Although weak, but still, this is growth. In addition, many years of conducting superfluous monetary policy have not produced the desired results. Rather, on the contrary, you may get the feeling that it is precisely this policy of real negative interest rates that causes the stagnation of the general economic situation. Therefore, you need to somehow change the monetary policy. But, you can change it only in one direction - towards a gradual tightening. And if today, Christine Lagarde declares that the European Central Bank is working on an option to gradually normalize monetary policy in the foreseeable future, then this will produce the effect of an exploding atomic bomb.

Deposit rate (European Central Bank):

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So, there are two options for the development of events. Moreover, one will lead to a further gradual weakening of the single European currency, and the other, its sharp rise up. After all, the progressive easing of the parameters of monetary policy and the European Central Bank has been spending almost a decade, during which the single European currency weakened step by step. A change of course in monetary policy will lead to the exact opposite, that is, a long-term strengthening of the single European currency. However, the very fact of a policy change, if it happens, will lead to panic at first, which will cause the explosive growth of the single European currency. And given the diametrically opposite scenarios, the risks are simply off the scale, so it is better to remain cautious, and first wait for the outcome of the meeting of the Board of the European Central Bank.

From the point of view of technical analysis, we see a kind of accumulation, along the range of 1.1080, the amplitude of which is slightly more than 30 points. In fact, the process of slowdown has been observed since the beginning of the trading week, which signals the indecision of market participants to action, forcing them to temporarily take a waiting position. This kind of behavior of quotes often signals an impending surge in activity, which many expect.

In terms of a general review of the trading chart, we see that downward interest prevailed in the market from the beginning of the year, having a rebound from a local maximum of more than 150 points. This current development is actually a minimum, which reflects the regularity of the period 12/20/19-26/12/19.

It is likely to assume that the amplitude fluctuation in the range of 1.1070 / 1.1100 will still persist for some time, but with the slightest change in the mood of market participants, a surge in activity will occur, which will be expressed by pulsed candles. Tactics work selected by the method of breakdown of control values of accumulation.

Concretizing all of the above into trading signals:

- Long positions are considered in case of price fixing higher than 1.1120.

- Short positions are considered in case of price fixing lower than 1.1070, not a puncture shadow.

From the point of view of complex indicator analysis, we see a kind of neutral interest caused by the horizontal course. At the same time, indicators are still more likely to decrease than to increase, possibly having a residual signal.

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Trading plan on EUR/USD for January 23, 2020.

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Today, January 23, is the d-day for the euro, as decision on rates and ECB head Christine Laggarde's press conference will be tackled at today's ECB meeting.

At the moment, the ECB rate is 0%, while the deposit rate for banks is minus 0.4%. There is also an existing QE program of buying bonds from the market on the ECB's balance sheet to reduce rates on the market.

Key question: Will the ECB say something about changing the monetary policy?

Arguments for and against: On one hand, GDP growth in the Eurozone countries is generally very moderate. We must leave everything as it is.

On the other hand, many big experts have already said that an ultra-low rate and a negative deposit rate will no longer have any positive effect on the economy, but create significant risks in the event of a new crisis instead.

We will see the ECB's decision at 13:45 London time, and the ECB head's press conference at 14:30 London time.

EUR/USD: tight consolidation continues over the resistance zone of 1.1070 - 1.1080.

Be ready to sell euros from 1.1070.

Be ready to buy euros from 1.1120.

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Indicator analysis: Daily review on GBP/USD for January 23, 2020

Trend analysis (Fig. 1).

Expect a downward movement today, with the target of 1.3106, the retracement level of 23.6% presented in a blue dashed line. In case of testing this line, work up with the target and the upper fractal at 1.3153.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

The price may move down in the side channel today towards the level of 1.3106 and up.

A downward scenario is unlikely but quite possible. That is, from the level of 1.3106, the pullback level of 23.6% presented in a blue dashed line, work down with the target 1.3062, the support line presented in a red bold line.

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Indicator analysis: Daily review on EUR/USD for January 23, 2020

The pair moved down on Wednesday and tested the support line 1.107, presented in a white bold line, after that the price went up. Strong calendar news for the euro is expected today at 12:45 and 13:30 UTC and for the dollar at 16:00 UTC. The market will be narrow in anticipation of interest rates. It is very likely that interest rates will not change and the market may win back on this news.

Trend analysis (Fig. 1).

Before the news, there will be a downward side-channel today to the support line 1.1074 presented in a white bold line. We expect an upward movement, on the news with the first target 1.1102, the retracement level of 14.6% presented in a blue dashed line. Upon reaching this level, the next goal will be a 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 - down;

- Fibonacci levels - up;

- Volumes - down;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger lines - down;

- Weekly schedule - up.

General conclusion:

There will be a downward side-channel today, before the news hits. We expect an upward movement forecast. An unlikely, but possible scenario is from the support line 1.1074, presented in a white bold line, the price goes down to a pullback level of 76.4% equivalent to 1.1043, presented in a red dashed line.

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Elliott wave analysis of GBP/JPY for January 23 - 2020

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GBP/JPY has broken resistance at 144.53 (the high has been seen at 144.61) which has forced us to review our counts. We don't think the sideways price-action from 141.14 is the start of a new impulsive rally but rather an expanded flat wave b and more downside pressure should be expected in wave c towards the target-zone between 139.29 - 139.83 and maybe even closer to equality with a wave a which would take wave c lower to 137.86.

To confirm the wave b is complete, we need a break below 142.77 but a break below minor support at 143.70 will be a strong indication that wave b has completed and wave c lower to at least 139.83 is unfolding.

R3: 144.61

R2: 144.15

R1: 143.95

Pivot: 143.70

S1: 143.38

S2: 142.77

S3: 142.355

Trading recommendation:

Our stop at 144.60 was hit for a 95 pip loss. We will re-sell GBP at 143.95 or upon a break below 143.70 with our stop placed at 144.65

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Elliott wave analysis of EUR/JPY for January 23 - 2020

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The correction from 122.88 has continued lower to the 50% corrective target at 121.46 and as long as resistance at 122.02 is able to cap the upside, we could see a continuation lower to the 61.8% corrective target at 121.17 too.

It will take a break above minor resistance at 121.77 and more importantly a break above resistance at 122.02 to confirm that the correction in wave 2 finally is complete and wave 3 higher towards 123.89 and 125.65 is unfolding.

R3: 122.37

R2: 122.02

R1: 121.77

Pivot: 121.65

S1: 121.46

S2: 121.17

S3: 120.72

Trading recommendation:

Our stop at 121.65 was hit for a small 20 pip loss and we will re-buy EUR at 121.25 or upon a break above 121.80.

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GBP/USD Projection HOD/LOD For Jan 23, 2020.

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The High Of The Day (HOD) and Low Of The Day (LOD) 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 - 1.3340.

STDV 9 - 1.3321.

STDV 8 - 1.3302.

STDV 7 - 1.3283.

STDV 6 - 1.3264.

STDV 5 - 1.3245.

STDV 4 - 1.3226.

STDV 3 - 1.3207.

STDV 2 - 1.3188.

STDV 1 - 1.3169.

CBDR - 1.3150.

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

CBDR - 1.3131.

STDV 1 - 1.3112.

STDV 2 - 1.3093.

STDV 3 - 1.3074.

STDV 4 - 1.3055.

STDV 5 - 1.3036.

STDV 6 - 1.3017.

STDV 7 - 1.2998.

STDV 8 - 1.2979.

STDV 9 - 1.2960.

STDV 10 - 1.2941.

Please pay attention for the today's STDV 10 @ 1.2941 bellow the CBDR (Central Bank Dealer Range) because they confluence with the Previous Day STDV 6 at 1.2941 below the previous CBDR Range, usually the confluence level will be a significant level for turning back of the price when this level is hit.

(Disclaimer)

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Forecast for EUR/USD on January 23, 2020

EUR/USD

Yesterday, the euro rose by 11 points due to the strong growth of the British pound by 92 points after the House of Lords approved the Brexit bill. In the ongoing impeachment process of the US President, the Senate rejected the Democrats' demand to conduct the procedure under an expanded program, that is, with the questioning of witnesses and consideration of documents. The decision will be made on the reduced program, which will mean the early acquittal of President Trump. For the dollar, this is not a reason to strengthen, but for the euro, there is no incentive to grow.

The results of the two-day ECB meeting will be announced today. The regulator's immediate topic of discussion is the issue of repurchasing so-called "green" bonds on the Central Bank's balance sheet, that is, the debt of those companies that invest in environmental projects. This is a banal extension of the QE program, and if any decisions are made in this direction, the euro will noticeably weaken.

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As seen on the daily scale chart, the price received support from the Fibonacci level of 123.6%. Today, we are waiting for the overcoming of this support and the movement of the euro to 1.1030. Overcoming the support of the embedded line of the price channel will open the second target - the Fibonacci level of 138.2% (1.0986).

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As seen on the H4 chart, no changes have occurred over the past day, and the price is also consolidating before the level of 1.1073.

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Forecast for GBP/USD on January 23, 2020

GBP/USD

On Wednesday, the House of Lords of the British Parliament passed the Brexit bill. The UK, as planned, will officially leave the EU on January 31. Then England and the EU countries will have 11 months to prepare trade agreements. The pound once again rose on the news of Brexit, adding 92 points yesterday. We once again believe that the growth of the pound is speculative since the divorce agreement does not give any advantages to the UK with the state that it had before leaving the EU.

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As seen on the four-hour chart, the price yesterday overcame the signal level of 1.3083, choosing an upward direction, as we assumed in yesterday's review, and reached the target of the corrective level of 38.2%. From the current level, the price may turn down, however, the Marlin oscillator, as a leading indicator, is in no hurry to turn around, so another growth impulse is possible to the area of the corrective level of 50.0% (1.3200).

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On the daily chart, there is a Fibonacci level of 200.0% near the price of 1.3200, which the MACD line is aiming for. The resistance is strong and it is likely to cause the price to turn down.

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Forecast for AUD/USD on January 23, 2020

AUD / USD

The Australian dollar absorbed a positive market sentiment relative to the British pound yesterday, and just this morning, this news was actively played back on the positive employment data. By December, about 29 thousand people got a job, this is contrary and higher than the 15 thousand on the forecast. This makes the overall unemployment rate fell from 5.2% to 5.1%. In the Asian session, the growth of the "Australian dollar" graduated to 34 points, and the price exactly reached the MACD line on the daily chart. In the European session, exit above the line 0.6880 with consolidation above it and on Friday, the growth may extend to the price channel line 0.6903.

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The price exceeded the MACD line on the four-hour chart but is still under the balance line, which means that the situation is developing mainly according to the older chart. For this day, everything will depend on whether the price can fix itself above the MACD line on the daily chart. The signal line of the Marlin oscillator in the zone of positive values is already a sign of the price's intention to overcome the resistance of the senior TF, but in any scenario this growth is corrective.

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Fractal analysis of the main currency pairs for January 23

Forecast for January 23:

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: 1.3251, 1.3207, 1.3174, 1.3128, 1.3108, 1.3080 and 1.3035. Here, we continue to follow the upward cycle of January 20. Short-term upward movement is expected in the range 1.3174 - 1.3207. The breakdown of the latter value will lead to movement to a potential target - 1.3251. We expect a pullback to the bottom from this level.

Short-term downward movement is possibly in the range of 1.3128 - 1.3108. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.3080. This level is a key support for the top, its passage at the price will lead to the formation of initial conditions for the downward movement. In this case, the goal is 1.3035.

The main trend is the upward structure of January 20

Trading recommendations:

Buy: 1.3175 Take profit: 1.3205

Buy: 1.3208 Take profit: 1.3250

Sell: 1.3128 Take profit: 1.3109

Sell: 1.3106 Take profit: 1.3080

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9809, 0.9778, 0.9758, 0.9727, 0.9686, 0.9667 and 0.9643. Here, we are following the development of the ascending structure of January 16. The continuation of the movement to the top is expected after the breakdown of the level of 0.9727. In this case, the target is 0.9758. Short-term upward movement, as well as consolidation is in range of 0.9758 - 0.9778. We consider the level of 0.9809 to be a potential value for the upward movement; upon reaching this level, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.9686 - 0.9667. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.9643. This level is a key support for the top.

The main trend is the upward cycle of January 16

Trading recommendations:

Buy : 0.9727 Take profit: 0.9756

Buy : 0.9758 Take profit: 0.9776

Sell: 0.9665 Take profit: 0.9645

Sell: 0.9640 Take profit: 0.9616

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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, the price holds the downside potential of January 20. Short-term downward movement, as well as consolidation are possible in the range 109.81 - 109.58. The breakdown of the latter value will lead to an in-depth correction. Here, the goal is 109.23. This level is a key support for the top.

The continuation to the top is possibly after a breakdown of the level of 110.39. In this case, the first target is 110.78. The breakdown of the level of 110.80 should be accompanied by a pronounced upward movement. Here, the potential target is 111.38.

Main trend: potential downward structure of January 20

Trading recommendations:

Buy: 110.40 Take profit: 110.76

Buy : 110.80 Take profit: 111.35

Sell: Take profit:

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: 1.3234, 1.3193, 1.3178, 1.3159, 1.3126, 1.3109 and 1.3083. Here, the price registered the local upward structure of January 22. The continuation of the movement to the top is expected after the breakdown of the level of 1.3160. In this case, the target is 1.3178. Price consolidation is near this level. Passing at the price of the noise range 1.3178 - 1.3193 will lead to a movement to a potential target - 1.3234. We expect a pullback to the bottom from this level.

Short-term downward movement is possibly in the range of 1.3126 - 1.3109. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3083.

The main trend is the local ascending structure of January 22.

Trading recommendations:

Buy: 1.3160 Take profit: 1.3178

Buy : 1.3194 Take profit: 1.3234

Sell: 1.3126 Take profit: 1.3110

Sell: 1.3107 Take profit: 1.3085

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6885, 0.6867, 0.6853, 0.6820, 0.6867 and 0.6885. Here, we are following the development of the descending structure of January 16. Short-term downward movement is expected in the range 0.6820 - 0.6803. The breakdown of the last value should be accompanied by a pronounced downward movement. Here, the target is 0.6781. For the potential value for the bottom, we consider the level of 0.6763. Upon reaching which, we expect consolidation, as well as a rollback to the top.

Short-term upward movement is expected in the range of 0.6867 - 0.6885. The breakdown of the latter value will lead to the formation of initial conditions for the top. In this case, the potential target is 0.6910.

The main trend is the descending structure of January 16, the correction stage

Trading recommendations:

Buy: Take profit:

Buy: 0.6868 Take profit: 0.6883

Sell : 0.6820 Take profit : 0.6804

Sell: 0.6802 Take profit: 0.6784

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For the euro / yen pair, the key levels on the H1 scale are: 122.68, 122.27, 122.00, 121.47, 121.06 and 120.59. Here, we are following the descending structure of January 16. The continuation of movement to the bottom is expected after the breakdown of the level of 121.45. In this case, the goal is 121.06. Price consolidation is near this level. For the potential value for the bottom, we consider the level of 120.59. Upon reaching which, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 122.00 - 122.27. The breakdown of the last value will lead to the formation of initial conditions for the top. In this case, the potential target is 122.68.

The main trend is the descending structure of January 16

Trading recommendations:

Buy: 122.00 Take profit: 122.25

Buy: 122.30 Take profit: 122.65

Sell: 121.45 Take profit: 121.10

Sell: 121.04 Take profit: 120.60

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For the pound / yen pair, the key levels on the H1 scale are : 146.41, 145.92, 144.99, 144.53, 143.92, 143.51 and 143.09. Here, we determined the next goals for the top from the local structure on January 21. Short-term upward movement is expected in the range of 144.53 - 144.99. The breakdown of the last value should be accompanied by a pronounced upward movement. Here, the target is 145.92. For the potential value for the top, we consider the level of 146.41. Upon reaching this level, we expect consolidation, as well as a pullback to the bottom.

A short-term downward movement is possibly in the range of 143.92 - 143.51. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 143.09. This level is a key support for the top.

The main trend is the local ascending structure of January 21

Trading recommendations:

Buy: 144.53 Take profit: 144.95

Buy: 145.00 Take profit: 145.90

Sell: 143.90 Take profit: 143.54

Sell: 143.50 Take profit: 143.10

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GBP/USD. January 22. Results of the day. UK's losses from Brexit are almost equal to contributions to the EU over 47 years

4-hour time frame

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Amplitude of the last 5 days (high-low): 58p - 57p - 115p - 52p - 89p.

Average volatility over the past 5 days: 75p (average).

The British pound unexpectedly increased for everyone and grew significantly on Wednesday, January 22. During the third trading day of the week, the pound / dollar currency pair managed to rise by 75 points. But the reason for such a strengthening of the British currency is difficult to say. There was not a single important macroeconomic publication in the UK or the States during the day. Donald Trump did not particularly touch upon Great Britain in his speeches in Davos, although we have heard promises of a deal with Boris Johnson more than once. In general, we believe that the pound has taken up its favorite thing again - to rise in price on rumors or unverified information or perhaps, the second option is another technical correction before a new, even stronger decline. It is most likely that the second option will be fulfilled, although at the moment most of the indicators already signal an upward trend, so now it is recommended to wait for the trend to change to a downward one and only then resume selling the British currency.

As for the fundamental background, it remains the same for obvious reasons. The House of Lords rejected a bill by Boris Johnson on a deal with the European Union and Brexit, but this will not change anything. Brexit can no longer be canceled, and Boris Johnson will rule the country almost single-handedly in the coming years. Thus, the "Damocles sword" still hangs over the pound in the form of uncertainties related to the consequences of Brexit, with negotiations with the European Union on trade relations. However, all this is lyrics so far. Now, the pound needs to be afraid of macroeconomic statistics, as well as the meeting of the Bank of England, which will be held next week. Macroeconomic statistics, as well as simple finances, only indicate that the UK economy continues to lose money, continues to lose investment. The experts counted first, how much Brexit will cost the UK - the figure was more than 200 billion pounds. And a little later it was estimated that she paid contributions in the amount of 215 billion pounds for 47 years of British membership in the EU. That is, the last three years of "divorce" with the Alliance cost the British about the same as 47 years of membership in the European Union. So, dear traders, Jjdge for yourself about these numbers.

What is positive for the British pound? There is little positivity. Macroeconomic data on wages and unemployment cannot level all the losses that Britain has already suffered and will continue to suffer. It cannot level the losses of the rest of the failed statistics, where inflation and GDP are. Therefore, every time we see a strong strengthening of the pound, we look at this phenomenon with skepticism, realizing that it will be followed by a 90% probability drop. In principle, the current growth of the pair may not mean that the pound began to grow in the literal sense of the word. It may mean that some of the short positions were closed in the currency market, or some bank entered the market with a major transaction, which caused a bias in supply and demand for the pound on January 22. In any case, pullbacks and corrections are needed, but traders can use them for more profitable sales of the British currency.

From a technical point of view, we are expecting a correction at the moment against the upward trend that has formed in recent days. We also assume that the upward movement in the last few days will end today. However, we still do not recommend "catching reversals" . We consider it more advisable to wait until the quotes of the pound / dollar pair are fixed below the critical line, and then resume selling the British currency.

Trading recommendations:

GBP/USD has temporarily postponed the downward trend option. Thus, traders are advised to resume sales of the pound / dollar pair with targets at 1.2971 and 1.2933 after completing the correction and fixing the pair below the Kijun-sen line. The pair's purchases are formally relevant now with the goal of the resistance level of 1.3191. However, we do not see logical reasons for continuing the strengthening of the British currency.

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

EUR/USD. January 22. Results of the day. Positive effect of lowering the rate and restarting QE program is temporary and

4-hour time frame

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Amplitude of the last 5 days (high-low): 44p - 45p - 57p - 25p - 38p.

Average volatility over the past 5 days: 42p (average).

The third trading day of the week ends with an absolute flat for the EUR / USD pair. The daily volatility of the currency pair is minimal again - only 28 points and no distinct upward movement or downward movement was observed during the day. At the same time, the calendar of macroeconomic events is completely empty. Well, traders seem to have decided to wait for tomorrow's results of the meeting of the European Central Bank. Today, we will not repeat once again that the fundamental and macroeconomic background remains entirely on the side of the American currency. Perhaps, these moments will change tomorrow, when the results of the meeting become known and a press conference will be held with representatives of the ECB. In addition, another speech by ECB President Christine Lagarde is scheduled for Friday, so we will definitely find out any new information from the lobby of the European regulator by the end of the week.

Most experts agree that no change in the parameters of the monetary policy of the ECB should be expected. A number of factors speak in favor of this. Firstly, the easing of monetary policy in September 2019 yields certain results (then the regulator lowered its key rate and resumed redemption of assets from the open market). Although inflation remains at low values far from the target, it has accelerated in recent months from 0.7% y / y to 1.3% y / y. Secondly, there were no hints of possible changes from members of the ECB's monetary committee. However, from our point of view, the first factor is absolutely ambiguous, and it can be interpreted in different ways. It turns out that the ECB went on easing monetary policy in September, and we saw the absolutely minimal inflation rate in October while inflation dropped to 0. 7% y / y which is already at ultra-low rates on deposits and loans. However, the ECB lowered the rate to -0.4% even earlier, respectively, respectively, past measures to soften monetary policy had only a temporary positive effect and it could be exactly the same this time. Moreover, inflation will be at more or less decent levels for some time, but all the factors that negatively affect it have not disappeared. The United States-China trade war continues, and it is not known whether it will escalate during 2020. On the other hand, US President Donald Trump openly stated at the international economic forum in Davos that he was preparing to impose sanctions on products of the European Union's engineering industry if "Europeans do not want to sign a trade agreement." The European Union, of course, answered Trump that he would introduce mirror duties on imports from the US. However, absolutely everyone understands that the EU-US trade war will put new pressure, primarily on the economy of the European Union. It turns out that the rate has been reduced and inflation has "risen", but a new blow may be dealt to the EU economy in the near future, and inflation and other macroeconomic indicators may fall down again. Furthermore, the industrial sector is now in extremely poor condition in the eurozone even if you do not take into account the potential trade war. Business activity in all EU countries is at extremely weak values, industrial production is declining. Thus, this phenomenon itself already requires additional stimulation of the economy, additional investments in the economy. We believe that the ECB, approximately, like the Bank of England, may not go for another easing of monetary policy right tomorrow, but the fate of the key rate is almost decided. The only question is when will the regulator go for another reduction?

Separately, it is worth noting the speech of Christine Lagarde, as it is she who can confirm the market concerns or, conversely, dismiss them or at least it can bring market participants up to date, as it previously announced structural changes to the ECB. According to Christine Lagarde, the ECB can revise its policy, which has not changed since 2003. Accordingly, its new goals will be set, and depending on ways to achieve them will be evaluated through all the same monetary policy instruments. Thus, in essence, it is Christine Lagarde's speech on Thursday and Friday that will become the key events of the week for the euro / dollar pair.

Based on the previously mentioned, we believe that the euro can fall under the pressure of traders again, since nothing optimistic is simply not expected. Of course, more accurate conclusions should be drawn after the speech of the head of the ECB, but now, it is becoming clear that even hypothetical positive points may be few.

The technical picture of the pair shows a downward trend. Therefore, we believe that sell orders remain relevant. All indicators are directed downward, only the average volatility remains low, and it has completely dropped to its minimum values in recent days.

Trading recommendations:

EUR/USD continues to move down. Thus, it is recommended that you either hold open shorts with targets 1.1060 and 1.1040, 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 not earlier than the traders of the Senkou Span B line break through 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

EUR/USD: is the dollar on the path of war?

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Those who seriously hoped that Donald Trump would not start a new trade war before the next presidential election in the United States seemed to be mistaken. The World Economic Forum in Davos has confirmed this. During his public speech, the head of the White House emphasized the dignity of the American economy. On the sidelines of the forum, he expressed dissatisfaction with the huge deficit in US foreign trade with the European Union and announced his intention to introduce duties on car imports to America from the Old World if Washington and Brussels fail to reach a trade agreement. Against this background, a single European currency, barely able to find the ground under its feet thanks to reports of a trade ceasefire between the United States and France before the end of 2020, was sent to another knockdown.

Apparently, the trade conflict between the US and the EU is not included in the plans of the bulls for EUR/USD. The trade war between Washington and Beijing dealt a serious blow to the export-oriented economy of the eurozone. What will become of it if large-scale American duties on European products are introduced? Brussels promises to introduce $ 60 billion in fees for delivering goods and services from the United States in response to an increase in US import tariffs for cars and parts from the EU of $ 60 billion. So, we have already seen what the increase in duties for international trade and world GDP can turn out to be.

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Trump did not just praise the American economy at the Davos forum. He stated that her power allowed the United States to celebrate victory in a trade war with China.

"America is growing, America is thriving and winning like never before," the American leader proclaimed.

The dollar reacted to the fiery speech of the US president with growth, primarily due to the principle of "strong economy - strong currency".

However, the World Bank, the IMF and the OECD do not count on the rapid recovery of the global economy in 2020. The White House promises to lower taxes for the middle class once again, which contributed to the acceleration of US GDP growth rates to almost 3% in 2018. If the divergence between global and US GDP does not expand, then the USD index will continue to confidently go upwards, and a new trade war will be in the hands of the "bears" in EUR/USD.

On the other hand, recovery of the introduction of US import duties on European cars forced investors to turn a blind eye to the positive from the German economic sentiment index ZEW. The figure rose to its highest level in more than 4 years, thanks to the trade truce of Washington and Beijing and the optimism of the Bundesbank, which said that German industry had touched the bottom. If it weren't for the threat of a US-EU trade war appearing on the horizon again, the euro would have reacted to strong data with growth against major currencies.

Meanwhile, the first decline in demand for bank loans in the eurozone in the last 6 years is an alarming bell for the currency block economy, as well as for the ECB, which is trying to increase this demand by reducing deposit rates and renewing QE. If ECB President Christine Lagarde and her colleagues express concerns about a new trade war and a further slowdown in the European economy instead of moderate optimism at the regulator's meeting on January 23, then support at 1.1070 and 1.1055 may not resist the pressure of the "bears" in EUR / USD.

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

EUR/USD. Preview: ECB's January meeting

The euro/dollar pair froze in anticipation of the January meeting of the European Central Bank, which will be held tomorrow. After a sharp decline in the area of the 10th figure, the price has consolidated today, while demonstrating weak movements within the 20-point range. At the same time, the negative effect of yesterday's statement by Donald Trump gradually became unsuccessful - partly due to his subsequent comments.

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Let me remind you that after a long pause, the US president threatened Brussels again with the introduction of duties on European cars and spare parts - "if the parties do not conclude a trade agreement on the terms of Washington." After this statement, currency exchange traders were seriously worried - and quite reasonably, given the possible consequences of a new trade war. Indeed, the key macroeconomic indicators of the eurozone have just begun to show signs of growth after a significant decline in the second half of last year. Obviously, the bulls of the EUR/USD pair are completely unnecessary for the trade conflict between the USA and the EU, especially against the backdrop of recent trends in the European economy. Therefore, the threats of the head of the White House acted on the pair accordingly - the price interrupted its growth and returned to the 10th figure.

Nevertheless, Trump's subsequent comments didn't sound so "warlike" anymore. He also said that the deadline for the negotiation process between Washington and Brussels has not yet been determined while at the Davos Economic Forum. At the same time, he expressed the hope that the parties will conclude an agreement with the European Union before the presidential election in the United States, that is, until November of this year. Yesterday, he also did not talk about any deadlines - according to him, Europeans themselves "know what dates are in question." In other words, judging by the rhetoric of the American leader, a trade war, if it does, doesn't come in the coming days (although the initial threats sounded that way) - the negotiation process between Washington and Brussels is still ongoing.

Thus, the EUR/USD pair suspended its decline against the background of the changed fundamental picture - the bears lost weighty arguments for a "trip to the downside". However, buyers are not in a hurry to open long positions since they are still waiting for the main interest of this week to be resolved - will Christine Lagarde appreciate the latest "achievements" of the European economy or does the rhetoric of the head of the ECB remain just as soft?

According to the general forecast of economists, the European Central Bank will keep the monetary policy parameters in the same form tomorrow, but at the same time, more optimistic about the prospects for economic growth in the eurozone. The implementation of this scenario will support the euro. Firstly, it will be possible to say with confidence that in the foreseeable future (at least until the middle of this year) the regulator will take a wait-and-see attitude, that is, the risk of monetary policy easing will be practically zero. Secondly, it will be possible to discuss the issue of raising the rate in such a fundamental scenario - so far hypothetically, but still.

If European inflation will continue to show growth, and industrial production in key EU countries will "revive", then the probability of tightening monetary policy at the end of the current or early 2021 cannot be excluded. Moreover, there are already certain prerequisites for the implementation of such a scenario. The growth of the oil market, the pause in the trade war between the US and China, and the "soft" Brexit - all these factors play in favor of the overall growth of the European economy. Recent ZEW reports eloquently testify to this, while key macroeconomic releases show a positive trend. First of all, we are talking about inflation. The general consumer price index in December reached 1.3% from the previous value of 1.0%. Core inflation also showed growth - the core index was at the same level as in November, that is, at around 1.3%.

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In addition, Christine Lagarde may appeal to the governments of European countries again to use the surplus of their budgets. Over the past months, she has repeatedly called on some EU countries (primarily Germany and the Netherlands) with their "chronic budget surpluses" to increase investment and government spending. Tomorrow, she can convey a veiled "hello" to these countries once again. In addition, the head of the ECB may respond positively to the implementation of the European Green Rate investment program, which sums up to one trillion euros.

Thus, the European Central Bank is unlikely to announce any concrete theses regarding the prospects of monetary policy tomorrow. At the same time, Lagarde may take a more "hawkish" position relative to the December meeting. This will allow the bulls of the EUR/USD pair to return to the area of the 11th figure. The nearest resistance level is located at 1.1140 (the middle line of the Bollinger Bands on the daily chart). Now, if the head of the ECB maintains a cautious look at the current situation, voicing pessimistic arguments, then the pair will continue its downward movement, declining to the base of the 10th figure.

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