EUR/USD: plan for the European session on January 27. Ifo report will help euro buyers return to the market. Problem with

To open long positions on EURUSD you need:

Euro buyers will expect a return of resistance at 1.1035, which may coincide with the release of the Ifo report on the business environment indicator, providing bulls with confidence after Friday's divergence, which was formed on the MACD indicator. Consolidation above 1.1035 will lead to an upward correction to the area of 1.1063 and 1.1088, where I recommend taking profit. In the event of EUR/USD decline in the morning, and this option is possible only on condition of weak reports, it is best to look at long positions after updating support at 1.1004 or buy immediately on the rebound from the lows 1.0982 and 1.0964.

To open short positions on EURUSD you need:

Despite all the efforts of the bulls, the euro sellers managed to keep the market on their side last Friday. Today, the bears need to keep the pair below the level of 1.1035, and the formation of a false breakout together with the Ifo report will only increase the pressure on the pair, which will maintain a downward trend and lead to an update of the lows 1.1004 and 1.0982, where I recommend taking profit. If market activity in the direction of euro sales does not follow even after weak data from the German institute, then in this case I recommend that you postpone short positions in EUR/USD until an update of resistance at 1.1063 or sell immediately for a rebound from a high of 1.1088.

Signals of indicators:

Moving averages

Trade is conducted below 30 and 50 moving average, which indicates the preservation of the market on the side of sellers.

Bollinger bands

A break of the upper boundary of the indicator in the region of 1.1035 will lead to a sharp increase in the euro, while the downward trend may be limited in the area of the lower level of the indicator in the area of 1.1015.

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Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - Moving Average Convergence / Divergence). Fast EMA period 12. Slow EMA period 26. SMA period 9.
  • Bollinger Bands (Bollinger Bands). Period 20.
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Trading plan on EUR/USD for January 27, 2020. FRS and other important news.

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In the new week, the market will receive a package of important data:

Wednesday, January 29 - the Fed's decision on rates.

Thursday, January 30 - the first report on US GDP for the 4th quarter.

Friday, January 31 - new data on income/expenses and inflation.

All these data can either strengthen the movement of EUR/USD downwards, or stop and reverse it.

EUR/USD: Euro opened the week in a "downward" state - the decline began after the ECB meeting.

Sell: From 1.1070.

In case of a reversal, buy on the break through of 1.1110.

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Technical analysis of ETH/USD for 27/01/2020:

Crypto Industry News:

According to media reports, the rulers of the ruling party in Japan are working on a proposal to release a national digital currency, which seems to be a response to the fear of Chinese digital yuan.

The planned digital yen would be jointly developed by government and private companies and would be in line with many similar initiatives around the world.

A parliamentary group of 70 legislators from the Liberal Democratic Party is working on the proposal. The group plans to submit a proposal to the government in February.

The implementation of the digital yen will take some time due to the late start of Japan. The decision is a fundamental change for the country - representatives of the central bank did not see "demand" for the central currency of the central bank (CBDC) in December 2019.

Facebook Libra's announcement and the Chinese digital yuan forced central banks around the world to consider issuing their own CBDC. This was the main topic of discussion at the panel of the World Economic Forum on January 23.

However, each initiative aims to solve various problems. Libra is primarily offered as a global and trouble-free payment network, and the goal of the digital yuan is to increase China's financial strength, according to former Bank of Japan board member Takahide Kiuchi.

Japanese Finance Minister Taro Aso expressed concerns that the yuan would become a common accounting currency, which might have partly motivated the creation of the Japanese CBDC. However, Kiuchi believes that the main motivation for the Japanese CBDC is the exclusion from the use of cash. As a country that has already introduced negative interest rates, cash flow prevents this policy from expanding further.

Technical Market Overview:

The ETH/USD pair has bounced from the level of 50% of Fibonacci retacement after the low was made at the level of $154.32 and Bullish Engulfing candlestik pattern was made. So far the bulls have managed to test the short-term trendline form below, but no breakout occured just yet. If bulls will sucesfully break through this trendline, then the swing high located at the level of $178.12 might be tested soon. It is worth to keep an eye on the current developings on the Ethereum market, 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.

Weekly Pivot Points:

WR3 - $187.66

WR2 - $177.62

WR1 - $172.55

Weekly Pivot - $163.44

WS1 - $158.80

WS2 - $148.63

WS3 - $143.46

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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Upcoming week will be full of events and important economic statistics (we expect further decline in EUR/USD and USD/JPY

The coming week will be full of important events, as well as the publication of economic data that will have a direct impact on financial markets.

The most striking event is expected to be the UK's announcement of its withdrawal from the European Union. It is expected that January 31 will be officially announced. It seems that this quite annoying soap opera is finally ending after the three and a half years that have passed since the referendum on the so-called Brexit, as well as the long and difficult confrontation between the parties for the country's exit from the EU and against it. However, it will be difficult to say how the British economy and sterling will feel after that. All the emotional movements in connection with this topic have long since passed. But it's hard to say how the real picture will turn out.

The second most important meeting will be the Fed and the Bank of England on monetary policy, which will be held on Wednesday and Thursday, respectively. From which, in fact, they do not expect anything special, but they can simply confirm the current monetary rates with their decisions, which will either have a supportive effect on the US dollar and the British currency, or not. Thus, everything will depend on the general alignment of forces in the currency exchange markets, where the dollar is currently receiving support against major currencies in the wake of a fall in demand for risky assets due to the Chinese "snake flu" epidemic, or coronavirus. On this wave, there is also an appreciation of the Japanese yen, Swiss franc and gold, which resumed growth again to a local maximum of January 8 of this year.

On the other hand, the publication of the forecast for the US economy from the Congressional Budget Office will be one of the important events this week. This agency faces the challenge of raising funds to pay off America's bloating budget deficit.

From economic data, first of all, it will be necessary to pay attention to the publication of the values of basic orders for durable goods in the States, which are supposed to grow 0.2% in December against a 0.1% decrease in November. You should also pay attention to the data of the Conference Board consumer confidence index. In addition, the values of consumer and industrial inflation in Australia, the report on inflation in Britain and employment data in Germany will attract attention. Of course, you should also pay attention to the press conference of J. Powell and M. Carney and the outgoing figures of US GDP for the 4th quarter of last year and the index of business activity in the manufacturing sector of China, where the indicator is expected to drop to 50 points in January against the December value at 50.2 points.

Forecast of the day:

EUR/USD remains under pressure in the wake of an inarticulate signal from the ECB about the prospects of monetary policy, as well as expectations of Britain's exit from the EU. We believe that the pair still has prospects for continuing the decline to 1.0980 after breaking through the level of 1.1020.

USD/JPY is trading above the level of 108.95. A decrease in risk demand under the influence of fears of the spread of Chinese "snake flu" may continue to put pressure on the pair. We consider it possible to resume its sales after falling below 108.95 with a local target of 108.45.

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Hot forecast for GBP/USD on 01/27/2020 and a trading recommendation

The media once again broke the picture of the day, and forced the market to go against the wind. Despite the fact that preliminary data on business activity indexes in the UK turned out to be significantly better than forecasts, which already predicted the growth of indexes, the pound fell. The reason lies in reports that appeared in a number of media that the Bank of England may well lower the refinancing rate, already at the end of the next meeting. Although more recently, all forecasts have been revised, and even interest rate futures indicate that this will happen no earlier than mid-summer of this year. Nevertheless, given that the information was distributed by quite influential media, investors were seriously worried, and contrary to common sense, they began to actively get rid of the pound.

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At the same time, there were no reasons to weaken the pound, at least before the US session begins. After all, preliminary data on business activity indices, as mentioned above, turned out to be much better than the most daring forecasts. Thus, the index of business activity in the service sector grew from 50.0 to 52.9, with a forecast of 51.0. The index of business activity in the manufacturing sector, which was supposed to grow from 47.5 to 48.9, increased to 49.8. As a result, the composite business activity index grew from 49.3, not to 50.6, but to 52.4. So the pound, at least before the publication of similar data in the United States, was supposed to grow. Well, or at least not to decline. However, another panic organized by the media confused all the cards.

Composite Business Activity Index (UK):

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If we talk about preliminary indices of business activity in the United States, then they are not so unambiguous, although they are more likely to be positive. The index of business activity in the manufacturing sector, which was supposed to grow from 52.4 to 52.5, unexpectedly dropped to 51.7. But the index of business activity in the service sector, which has a much greater weight, rose to 53.2 instead of falling from 52.8 to 52.7. This is what made it possible for the composite business activity index to grow from 52.7 to 53.1. Initially, it was expected to decrease to 52.5. So for good, the pound should slightly grow, and then go back. But everything turned out somewhat differently due to external factors.

Composite Business Activity Index (United States):

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Today, we can even see the continuation of the Friday scenario, although the pound will support the fact of a rather serious and sudden oversold. The assumption that the pound may continue to decline is based on data on approved mortgages, the number of which may decrease from 43.7 thousand to 42.5 thousand. Given the extremely high importance of the condition of the real estate market for the UK's investment attractiveness, at least reasons for growth, the pound simply will not.

Mortgages Approved (UK):

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Another factor that will work against the pound is the expected 0.8% increase in new home sales in the United States. The number of sales should be 725 thousand, against 719 thousand a month earlier.

New Home Sales (United States):

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In terms of technical analysis, we see that alternating stagnation gave way to a sharp rally, where the quote showed volatility exceeding that of the previous day in just a few hours. In fact, the quote again took a downward position, as a result of which it fell to the area of 1.3055, where it all started.

Considering the trading chart in general terms, we see a characteristic amplitude fluctuation [daily chart], where each subsequent measure is less than the previous one, which signals stagnation.

It is likely to assume that the variable support point of 1.3055 will try to temporarily restrain the ardor of sellers, where, against the background of local oversold, stagnation of 1.3040/1.3065 may form. The best tactic is a wait-and-see attitude regarding price consolidation points.

Concretizing all of the above into trading signals:

- Long positions, we consider in case of price consolidation higher than 1.3065.

- Short positions, we consider in case of price consolidation lower than 1.3035-1.3040.

From the point of view of a comprehensive indicator analysis, we see a continuing downward interest due to the recent impulsive move. In fact, hourly and daily periods signal selling, but minute intervals reflect a slowdown, having a variable signal.

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Technical analysis of BTC/USD for 27/01/2020:

Crypto Industry News:

The World Economic Forum (WEF) has created, he claims, the first-ever global consortium to develop a framework for transnational management of digital currencies, including stablecoins.

A press release made available to the media reveals that the newly created Global Consortium for Digital Currency Management will focus on developing interoperable, transparent and inclusive policy approaches to regulating the digital currency space and supporting public-private cooperation in both developed and emerging economies.

WEF says the impulse to create a consortium is recognizing that well-designed global governance remains the key to delivering such a glorified promise that digital currencies will be conducive to financial inclusion by extending access to financial services to populations around the world who currently do not have access to them .

The consortium will bring together international companies, traditional financial institutions, government representatives, technical experts, scientists, international organizations, NGOs and WEF community members.

In addition to the current fragmentation of the state of global regulation of digital currencies, WEF says that it will focus on building trust and encourage innovative thinking about regulatory policies that can support public and private entities in the global cryptocurrency space.

Many famous personalities supported this initiative, including Bank of England Governor Mark Carney, WEF founder and executive president, Klaus Schwab, senior minister and chairman of the Monetary Authority of Singapore, Tharman Shanmugaratnam, as well as officials from the Ministry of Finance and central bankers from Egypt and Bahrain.

Technical Market Overview:

The BTC/USD pair has bounced from the level of $8,153, which is just below the 38% Fibonacci retracement located at the level of $8,236. The bulls have managed to push the price towards the level of $8,616 at the time of writing the analysis, but the target seems to be little higher, at the level of $8,693. If, however, this technical resistnace is violated as well, then the bulls might test the recent swing high at the level of $9,130 and continue the up trend.

Weekly Pivot Points:

WR3 - $9,339

WR2 - $9,028

WR1 - $8,796

Weekly Pivot - $8,458

WS1 - $8,222

WS2 - $7,890

WS3 - $7,647

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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Indicator analysis: Daily review on GBP/USD for January 27, 2020

After the top test of the resistance line presented in a black bold line, the pair made a pullback downward movement on Friday and tested the pullback level of 50.0% equivalent to 1.3064, presented in a blue dashed line. Today, strong calendar news for the dollar is expected at 15:00 UTC. A possible continuation of work down.

Trend analysis (Fig. 1).

A downward movement is expected today with the target of 1.3033, the support line in a red bold line. In case of testing this line, work up with the target of 1.3072, the 21 average EMA presented in a black thin line.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - down;

- Bollinger lines - down;

- Weekly schedule - down.

General conclusion:

The price may continue to move down today.

A downward scenario is unlikely but quite possible, where, from the level of 1.3075, Friday afternoon's closing candle, work up with the target at 1.3177, the resistance line in a black bold line.

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EUR/USD. Preview of the week: Fed meeting, European inflation and passions on Coronavirus

The euro-dollar pair continues to show negative dynamics. Buyers made a weak attempt at corrective growth during the Asian session on Monday, but these efforts did not bring any results - the pair continues to be under pressure from the dollar, amid a general increase in anti-risk sentiment. Coronavirus continues to walk the planet, instilling fear not only with ordinary people, but also with market participants. At the moment, more than two thousand people have already been infected with the new virus, while the death toll has exceeded fifty. Obviously, the main theme of the current week will be the fight against new misfortune - if the pace of the epidemic spreads, the defensive instruments as well as the dollar will gain momentum along the way, regardless of the dynamics of other fundamental factors. Although the macroeconomic calendar of the last week of January is eventful.

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If we ignore the Coronavirus theme, then the central event of the week for the EUR/USD pair is the January meeting of the Federal Reserve, which will be held this Wednesday. Let me remind you that the outcome of the December meeting was mixed. On the one hand, the members of the Fed removed the phrase "uncertainty regarding further forecasts" from the text of the accompanying statement. In addition, all members of the Committee voted to maintain the status quo unanimously - there has not been such cohesion in the Committee since May last year. Regulator members also focused on the positive aspects of the US economy: they noted the "strength" of the US labor market and moderate economic growth, while expressing confidence that inflation will reach the target two percent level in 2020. All other aspects of the December meeting were negative in one way or another. Firstly, the regulator stated that consumption growth has significantly slowed, while the decline in investment has significantly intensified. Company investments and exports remain weak. Inflation also inherited. Jerome Powell stated that inflation remains below the target two percent level, and if this trend continues, this may lead to an "unhealthy dynamics" in the country's economy.

Macroeconomic reports have not supported the dollar since the last meeting. The release of data on inflation growth was controversial, but Nonfarm disappointed, especially the inflation component. The average hourly wage was at around 0.1% on a monthly basis - this is the worst result since last September, when it dropped to zero. In annual terms, the indicator rose by only 2.9% - this is the weakest growth rate since July 2018.

Such trends may alarm Fed members. But in light of recent events, the Fed may be worried about a possible slowdown in the global economy. By the way, Beijing has already recognized that the 2019-nCoV virus epidemic will become "a serious obstacle to economic growth". China already suffers significant losses - for example, the total volume of traffic within the country decreased by almost 30% compared to last year. Other sectors of the economy that are somehow related to tourism and passenger traffic also suffer. Given these events, Fed members may shift their focus. But here it is necessary to understand that the dovish theses of the US regulator in the current circumstances can only foster interest in the dollar, amid increasing panic. Therefore, playing against the greenback is dangerous today - there are too many uncertainties in this equation.

If we talk about macroeconomic statistics, then EUR/USD traders will focus their attention on two reports - data on US GDP growth (Thursday, January 30) and data on growth of European inflation (Friday, January 31). According to the general consensus forecast, the US economy should show positive dynamics in the fourth quarter, rising to 2.1% (whereas in the third quarter, the GDP indicator rose to a two percent level). In turn, European inflation should please the single currency - according to general forecasts, this key indicator for the ECB should rise to 1.4% (the strongest growth rate since April last year). Core inflation may slightly slow down - up to 1.2%. In addition, data on GDP growth in the eurozone will be released this week. According to general expectations, the indicator in the fourth quarter will be released at the same level as in the third.

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Less important, but no less significant for EUR/USD macroeconomic data will be published on other days of the week. So, on January 28, we will find out the significance of the US indicator of consumer confidence and the volume of orders for durable goods; January 29 - preliminary assessment of the balance of international trade in goods (the Fed meeting will be held on the same day); January 30 - data on the labor market in Germany and the entire eurozone (inflation indicators will also be published in Germany); January 31 - in addition to data on the growth of European inflation, we will find out the US index of expenditures on personal consumption. In addition, the Chinese PMI for the manufacturing sector will be published on Friday, which may also affect the dynamics of the pair (especially with strong deviations from the forecast values).

But in general, the theme of the spread of the Coronavirus will be the "red thread" of the current week. Most likely, the anti-risk sentiment will only intensify in the coming days. This will make it possible for the bears to push the EUR/USD price into the ninth figure area. The support level now stands at 1.0940 - this is the bottom line of the Bollinger Bands indicator on the weekly chart.

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Forecast of EUR/USD before Central Bank's meetings

It would seem that the policy of Donald trump is getting results. Stock markets are breaking records, the US population is close to full employment and getting richer, and China has signed the first phase of the deal on conditions that are humiliating for itself. However, something in this all reminds me of a TV show beloved by Americans. Indeed, what the American president has definitely succeeded in is creating external effects; in all other respects, experts have many doubts and questions.

It is one thing when these questions are raised by a well-known narrow-minded analyst who does not have public authority, and quite another when questions to Trump's economy arise among the luminaries of American economic thought. I follow a number of well-known economists close to the Democrat camp on Twitter, such as David Rosenberg, Nassim Taleb, Nuriel Rubini, Joseph Stiglitz. This saves me a lot of time in searching for information, and reading the opinion of Nobel laureates in economics is more useful than listening to the profane from every iron. So, even taking into account the democrats' dislike for Trump as an extrasystemic politician and anti-liberal, their opinion on "trumponomics" is unambiguous – Trump's economy is an information bubble, only partially supported by real results.

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However, the US economy has a direct impact on many financial assets with tremendous liquidity, primarily in the public debt trading sector. The connection between the stock and bond market, gold and the Japanese yen does not need additional advertising, but if you have not heard about it, it looks like this – a decrease in US stock indices is usually accompanied by a decrease in government bond yields, an increase in the dollar and Japanese yen, as well as an increase in the price of gold. Therefore, in the context of this connection, I will analyze the market situation in the EUR/USD pair, which is the antagonist of the US dollar and was actively declining last week, precisely because of the growth of the dollar.

First of all, the technical picture of the European currency exchange rate should be considered. As you can see from the presented chart, the EUR/USD rate in December 2019 formed a local upward trend in the "H-4" time frame, with the base located at 1.0980 and rising lows at the levels of 1.1040, 1.1065 and 1.1085. After which, the euro began to decline having reached a maximum of 1.1240, and it overcame the above-mentioned highs from top to bottom in January 2020, thereby confirming the trend reversal and the beginning of a new trend, but already a tendency to decline. (Fig. 1). Frequent change of direction; this is a normal situation for the band formation, which the EUR/USD formed in 2019.

Due to the traded volumes, the key was the minimum of 1.1080 in the structure of the previous rising trend, for which there was a struggle, and where buyers made an attempt to stop the decline in the EUR/USD pair. However, that took place over the past week after a slight consolidation. This level was broken through and turned from support to resistance, which is a classic of technical analysis.

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Fig. 1: Technical picture of the EUR/USD course

As follows from diagram 1, the European currency is no longer holding back anything as it is on the way to lowering to the lows of 1.0975 and 1.0950. In turn, the EUR/USD course is closed at the level of 1.1080 as seen from above, consisting of volume and technical support. Therefore, based on the rules of technical analysis, we should wait for the euro to return to the zone of values of 1.1050 or 1.1075, and after which, we can open EUR/USD sales in the direction of 1.0975 and 1.0950 if there are signals from our trading systems.

However, we will check our plan for compliance with the levels of optional support, where when considering you should take into account the difference (forward point) of +34 points between the contract in the InstaForex terminal and the futures. As follows from the CME data, at the moment, the price of the futures contract is significantly lower than the maximum pain point for MP options buyers located at 1.1150, the "last '' significant barrier hindering the European currency from freefall.

The current February option contract will be the second of three March futures option contracts, and the significance of this contract is not as high as that of the final EUH0 contract expiring before the futures close. However, the current option contract EUG0 is the most liquid, which makes it an important tool for analyzing the situation.

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Figure 2: Open Interest in EU G0 Contract

First of all, the Put / Call Ratio = 0.71 ratio is noteworthy, which means that for 71 Put options, there are 100 Call options. The interpretation of this ratio is that the "crowd" is now counting on the growth of the euro, which means options sellers will not suffer significant losses if the price continues to decline downward. However, despite this, during the close of this contract, which will happen on February 6, option sellers would prefer to see EUR/USD between the values of 1.1125 and 1.1175.

Based on the current situation in the option market, it is quite possible to assume a decrease in the EUR/USD cash rate to the levels of 1.0950 and 1.0925. Thus, we may very well consider the possibility of selling the euro to the above values in the long term from one to four weeks, but whether the euro will be able to overcome them and fall below, while it causes me some skepticism.

It was not for nothing that I started talking about "trumponomics" at the beginning of this article. Relatively high interest rates in the US and negative rates in the eurozone led to currency arbitrage operations in the direction of exchanging euros for dollars, followed by the placement of dollars on the US market. Now, institutional investors have in the purchases of futures of the European currency - 8.8 billion euros of long positions. This does not reflect the general picture of what is happening, but is an absolute historical record.

Therefore, it can be assumed that in the event of a deep decline in the US stock market, investors with a short position in euros will be forced to close this position through purchases of European currency, which will cause demand for EUR/USD. In addition, you can be almost sure that Donald Trump will demand from the Fed a further rate cut, and especially insist on this if the stock markets are under pressure.

According to the CME exchange, 63% of participants now in trading futures for federal funds suggest that the rate will remain unchanged in June 2020, but not the fact that it will. If the Fed decides to lower the rate, then the first hints of a further weakening of monetary policy will be heard in March, during a press conference by Jerome Powell. Perhaps, hints will be made at the next Fed meeting, which will be held on Wednesday, January 29. Although, from my point of view, the head of the US Federal Open Market Committee has no reason to make such statements yet.

What conclusions can be drawn? In the short term, the euro will most likely make attempts to decline to the 1.0925 - 1.0950 zone from one to four weeks, gaining liquidity and trying to form negative moods for traders where speculators will take profits from their sales. The dollar will grow against a basket of foreign currencies. Moreover, statements by the new head of the ECB, Christine Lagarde, are likely to contribute to a further depreciation of the EUR/USD, which will occur against the backdrop of the British exit from the Eurozone. However, it is not yet clear whether the euro will be able to gain a foothold below the value of 1.09.

Then, by the beginning of March, the cash euro will most likely restore its lost positions and return to the zone 1.1125 - 1.1175, after which EUR/USD will begin to grow, which will occur against the backdrop of a decline in the stock market, and there will be statements by Donald Trump and hints of the Fed to further reduce rates. Be careful and follow the rules of money management.

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Technical analysis of GBP/USD for 27/01/2020:

Technical Market Overview:

The GBP/USD pair has managed to test the technical resistance at the level of 1.3168, but the rally was capped around this level and bears once again took control of the market by printing the Pin Bar candlestick pattern. Since then, the bears have managed to push the price below the short-term trendline support around the level of 1.3075 and made a new local low at the level of 1.3051. The next target for bears is seen at the level of 1.3017, 1.2988 and 1.2962. If the last support is clearly violated, then the sell-off will continue towards the level of 1.2939. The weak and negative momentum supports the bearish outlook.

Weekly Pivot Points:

WR3 - 1.3380

WR2 - 1.3270

WR1 - 1.3179

Weekly Pivot - 1.3070

WS1 - 1.2967

WS2 - 1.2843

WS3 - 1.2751

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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Indicator analysis: Daily review on EUR/USD for January 27, 2020

Trend analysis (Fig. 1).

There will be a downward movement today with the first target 1.0998, the lower fractal presented in a red dashed line. Upon reaching this level, it is possible to work upward with the goal of 1.1020, the retracement level of 14.6% presented in a blue dashed line.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - down;

- Bollinger lines - down;

- Weekly schedule - down.

General conclusion:

A downward movement is expected today with the first target and the lower 1.0998.

An unlikely but possible scenario is from the level of 1.1027, Friday afternoon's closing candle, the price will go up to the resistance line 1.1064, presented in a white bold line.

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

Technical analysis of EUR/USD for 27/01/2020:

Technical Market Overview:

The EUR/USD pair has been continuing the move down towards the level of 1.1024 and there is no sign of any bounce yet. The market conditions are extremely oversold on the H4 timeframe chart, but due to the weak and negative momentum that is still hovering below its fifty level, the odds for another leg down are still high. The next target for bears is seen at the level of 1.0990 - 1.0981 zone. The immediate technical resistance is seen at the level of 1.1040 and 1.1065.

Weekly Pivot Points:

WR3 - 1.1171

WR2 - 1.1139

WR1 - 1.1072

Weekly Pivot - 1.1044

WS1 - 1.0977

WS2 - 1.0946

WS3 - 1.0872

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.

analytics5e2e851fe42fe.jpg

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

Demand for USD increases while EUR and GBP remain under pressure

Monday morning did not bring a weakening of panic, February gold futures rose to $ 1,580, Brent was trading below $ 60 a barrel for the first time since November, the Japanese Nikkei225 was losing more than 2%, and the stock exchanges in Australia, South Korea, and Singapore were decreasing. On the other hand, investors are selling assets, fearing that the spread of coronavirus will inflict a severe blow on both world trade and tourism, and the economy as a whole.

The demand for the dollar remains high. CFTC data showed an improvement in overall positioning in US dollars after six weeks of decline. In addition, the markets did not ignore the message of the Minister of Finance Mnuchin that the Treasury is considering the possibility of increasing the daily cash balances in the crisis account, which means a decrease in liquidity. This is a bullish factor for the dollar that will dominate in the coming days.

EUR/USD

Eurozone PMIs were mixed and did not give the euro any support. Meanwhile, while Germany's PMI showed steady growth, rising to highs since August last year, the data for France and a number of other countries turned out to be significantly worse, which led to weak growth in the eurozone in general. The final figures also did not differ much from December - 47.8p in production and 50.9p in the services sector versus 46.3p and 50.9p. a month earlier.

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The euro is affected by another factor, the strength of which is not yet very clear. There is a high probability that the Trump administration will turn its eyes to the second key trading partner - Europe, since the US and China have signed the first phase of the trade agreement. At a forum in Davos, Trump has already announced his plans to reach a trade deal with the EU before the election and voiced a threat to raise tariffs.

Moreover, the ECB meeting last Thursday was in line with expectations. Therefore, attention was mainly focused on the new strategy, the adoption of which, according to Lagarde, was "a bit late" - the previous strategy was written back in 2003 and has long been outdated. At the same time, there are three factors that dictate the need for a revision of the strategy - inflation has been lower than the target since 2013, inflation expectations are too low, and of course, the lack of real opportunities for the ECB to get out of unconventional politics - all three factors have a negative aftertaste for the euro and affect the European currency bearish pressure.

Technically, EUR/USD has no reason to resume growth, except for a little oversold. The key support of 1.1075 / 90 has been lost and turned into resistance, the base of the ascending channel has been broken since October. Now the support is the psychological barrier 1.10 and further 1.0980, growth attempts will be used for new sales.

GBP/USD

UK PMI indices improved significantly in January. Growth exceeded forecasts composite index was 52.4p versus 49.3p in December, which is the highest level since September 2018. The index growth allows us to count on a 0.2% GDP growth, which is consistent with the Bank of England forecast.

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The strongest growth was noted in the services sector, the number of new orders increased noticeably, and now, the chances that the Bank of England will raise the rate at a meeting on January 30 have decreased to 45%. Formally, the pause is beneficial for everyone - the outgoing Carney gets the opportunity to calmly complete his cycle, the incoming Bailey gets the opportunity to prepare for the March meeting, collecting the necessary data on the state of the economy after the elections and the peak fears associated with Brexit.

In addition, no significant releases are expected anymore prior to the meeting of the Bank of England. The pound was expected to rise after the publication of the PMI, but then rolled back amid strong demand for the dollar.

Technically, GBP/USD remains under weak bearish pressure. The resistance is 1.3100, then further 1.3120/50, support is 1.3050 and 1.3005 / 20, which is the lower border of the channel.

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

Elliott wave analysis of GBP/JPY for January 27 - 2020

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GBP/JPY has followed the expected path lower through support at 142.94. This adds renewed downside pressure towards 140.80and towards support in the 139.29 - 139.83 target-zone.

In the short term, we could see a minor correction to retest the former support at 142.94 which is now acting as resistance before renewed downside pressure towards 140.80 and the way lower.

R3: 143.53

R2: 143.20

R1: 142.94

Pivot: 142.56

S1: 142.19

S2: 141.61

S3: 141.08

Trading recommendation:

We are short GBP from 143.95 and we have moved our stop lower to 144.45.

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

Elliott wave analysis of EUR/JPY for January 27, 2020

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EUR/JPY has broken key-support at 120.14 which has forced us back to the drawing-board, looking for alternate counts. The best count shows that the correction in wave 2 is larger, than first expected and we only are in wave c of 2 and not in the early start of wave 3 higher as we originally expected.

This means more downside pressure towards support in the 118.85 - 119.24 zone should be expected. We are likely close to the low of wave iii near 119.75 and should expected a minor corrective rally towards 120.97 before the final dip into the 118.85 - 119.24 target-zone.

R3: 120.97

R2: 120.60

R1: 120.41

Pivot:120.29

S1: 119.90

S2: 119.75

S3: 119.50

Trading recommendation:

Our stop at 120.10 has been hit and we will step aside for now.

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

GBP/USD Projection HOD/LOD For Jan 27, 2020

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The High Of The Day (HOD) and Low Of The Day (LOD) CBDR Range (Central Bank Dealer Ranges) are usually formed at STDV 2-STDV 4 under the normal market conditions, but sometimes they can reach the STDV 5-STDV 6. Here are today's levels:

STDV 10 - 1.3291.

STDV 9 - 1.3270.

STDV 8 - 1.3249.

STDV 7 - 1.3228.

STDV 6 - 1.3207.

STDV 5 - 1.3186.

STDV 4 - 1.3165.

STDV 3 - 1.3144.

STDV 2 - 1.3123.

STDV 1 - 1.3102.

CBDR - 1.3081.

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

CBDR - 1.3060.

STDV 1 - 1.3039.

STDV 2 - 1.3018.

STDV 3 - 1.2997.

STDV 4 - 1.2976.

STDV 5 - 1.2955.

STDV 6 - 1.2934.

STDV 7 - 1.2913.

STDV 8 - 1.2892.

STDV 9 - 1.2871.

STDV 10 - 1.2850.

(Disclaimer)

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

GBP/USD will test the nearest Support level For Jan 27, 2020.

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At the 4 hour chart, we can see cable trying to test the 4 hour chart support level at 1.3034-1.3025. Until the pair does not break out and close above the 4 Hour Chart Resistance at 1.3174, GBP/USD will try to go down to test the next support level at 1.2953.

(Disclaimer)

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

Forecast for EUR/USD on January 27, 2020

EUR/USD

On Friday, the euro completed the intended task of developing support for the price channel. The target for the Fibonacci level 138.2% at the price of 1.0986 is open. We believe that with the achievement of the goal, the euro will not weaken the desire for a further decline and will fulfill the second goal of 1.0925 - the lows of September 9 and 12 of last year.

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On the four-hour chart, the Marlin oscillator slowed down, forming weak convergence. This is probably a signal that market activity will appear only in the evening, when data on sales of new homes in the US for December will be published. The forecast is good - 730 thousand against 719 thousand in November.

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Forecast for GBP/USD on January 27, 2020

GBP/USD

The British pound fell by 50 points on Friday. The price went below the red indicator line of the balance and Marlin moved to the zone of negative values - the trend on the daily scale became completely lower. The closest target at 1.2968 Fibonacci level of 161.8% at the lows of January is open. Next, we expect a decrease to the Fibonacci level of 138.2% (a November 22 low) at the price of 1.2820.

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On a four-hour chart, the price has consolidated below the MACD line, the Marlin oscillator is moving deeper into the territory of the bears. We look forward to further movement towards the designated goals.

analytics5e2e63d762227.png

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

Forecast for AUD/USD on January 27, 2020

AUD/USD

It is a national holiday in Australia and China today. Asian currencies fell in the thin market. The Australian dollar worked out the Fibonacci reaction level of 123.6% on the daily chart with the intention to go deeper under the embedded price channel line.

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The immediate goal is the reaction level of 138.2% at the price of 0.6780. After it, the price will follow to the level of 161.8% at the price of 0.6737.

The price is falling below both indicator lines on the H4 chart, the Marlin oscillator is going down in the negative zone.

Sales of new homes in the US for December will be published today. The forecast is optimistic - 730 thousand against 719 thousand in November. The data will make it possible for investors to boldly continue buying the US dollar.

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

Fractal analysis of the main currency pairs on January 27

Forecast for January 27:

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: 1.1102, 1.1079, 1.1064, 1.1031, 1.1018, 1.0995 and 1.0964. Here, we are following the descending structure of January 16. Short-term downward movement is expected in the range of 1.1031 - 1.1018. The breakdown of the latter value will lead to a pronounced movement. Here, the target is 1.0995. Price consolidation is near this level. For the potential value for the bottom, we consider the level of 1.0964. Upon reaching which, we expect a rollback to the top.

Short-term upward movement is possibly in the range of 1.1064 - 1.1079. The breakdown of the latter value will lead to an in-depth correction. Here, the goal is 1.1102. This level is a key support for the downward structure.

The main trend is the descending structure of January 16

Trading recommendations:

Buy: 1.1065 Take profit: 1.1077

Buy: 1.1082 Take profit: 1.1100

Sell: 1.1031 Take profit: 1.1018

Sell: 1.1016 Take profit: 1.0996

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For the pound / dollar pair, the key levels on the H1 scale are: 1.3251, 1.3207, 1.3174, 1.3120, 1.3080, 1.3048 and 1.2999. Here, we continue to follow the upward cycle of January 20. The continuation of the movement to the top is expected after the breakdown of the level of 1.3120. In this case, the first target is 1.3174. 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 1.3080 - 1.3048. The breakdown of the latter value will lead to the formation of a downward structure. In this case, the potential target is 1.2999.

The main trend is the upward structure of January 20, the correction stage

Trading recommendations:

Buy: 1.3120 Take profit: 1.3172

Buy: 1.3176 Take profit: 1.3207

Sell: 1.3046 Take profit: 1.3000

Sell: Take profit:

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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; We expect a pullback to the bottom upon reaching this level.

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 : 109.43, 109.20, 109.01, 108.65, 108.47 and 108.25. Here, we are following the downward cycle of January 17. Short-term downward movement is possible in the range of 108.56 - 108.47. The breakdown of the last value will lead to a movement to a potential target - 108.25, and upon reaching this level, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 109.01 - 109.20. The breakdown of the last value will lead to an in-depth correction. Here, the target is 109.43. This level is a key support for the downward structure.

Main trend: potential downward structure of January 17

Trading recommendations:

Buy: 109.01 Take profit: 109.20

Buy : 109.23 Take profit: 109.40

Sell: 108.65 Take profit: 108.48

Sell: 108.45 Take profit: 108.25

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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, 0.6856, 0.6834, 0.6820, 0.6803, 0.6781 and 0.6763. Here, we are following the development of the descending structure of January 16. The continuation of movement to the bottom is expected after the breakdown of the level of 0.6803. In this case, the target is 0.6781. Price consolidation is near this level. 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 0.6820 - 0.6834. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.6856. This level is a key support for the bottom, its passage in price will lead to the formation of initial conditions for the upward cycle. Here, the potential target is 0.6885 .

The main trend is the descending structure of January 16

Trading recommendations:

Buy: 0.6801 Take profit: 0.6781

Buy: 0.6779 Take profit: 0.6765

Sell : 0.6820 Take profit : 0.6833

Sell: 0.6835 Take profit: 0.6855

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For the euro / yen pair, the key levels on the H1 scale are: 120.90, 120.59, 120.37, 119.93 and 119.44. 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 119.90. In this case, the potential target is 119.44. We expect a pullback in correction upon reaching this level.

Short-term upward movement is possibly in the range of 120.37 - 120.59. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 120.90. This level is a key support for the downward structure.

The main trend is the descending structure of January 16

Trading recommendations:

Buy: 120.37 Take profit: 120.57

Buy: 120.61 Take profit: 120.90

Sell: 119.90 Take profit: 119.48

Sell: Take profit:

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For the pound / yen pair, the key levels on the H1 scale are : 143.28, 142.85, 142.53, 142.11, 141.74, 141.21, 140.92 and 140.30. Here, we are following the development of the downward cycle of January 22. Short-term downward movement is expected in the range of 142.11 - 141.74. The breakdown of the last value should be accompanied by a pronounced downward movement. Here, the goal is 141.21. Price consolidation is in the range of 141.21 - 140.92. For the potential value for the bottom, we consider the level of 140.30. We expect a pullback to the top upon reaching this level.

Short-term upward movement is expected in the range of 142.53 - 142.85. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 143.28. This level is a key support for the downward movement.

The main trend is the descending structure of January 22

Trading recommendations:

Buy: 142.53 Take profit: 142.85

Buy: 142.87 Take profit: 143.28

Sell: 142.10 Take profit: 141.76

Sell: 141.72 Take profit: 141.25

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

GBP/USD. UK after Brexit: waiting for collapse?

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The UK will officially leave the European Union in five days. More precisely, the so-called "transition period" will begin, with which many identify the beginning of the real Brexit. Over the next 11 months, little will change for Great Britain. The country will cease to take part in the decision-making of the European Union, the British deputies will leave the European Parliament, however, the established trade relations and other rules and regulations by which the UK has lived in recent years will remain in force. Now, a month and a half after Boris Johnson's victory in the election, when passions and euphoria subsided, many experts conclude that the victory of the Conservatives is a result of the fragmentation of the political views of the opponents of Brexit, and not the excessive popularity of Conservatives among the people. In other words, there was only one option with the end of Brexit - vote for the Conservatives, and there were much more options against Brexit. At the same time, both the Scots, the Northern Irish, and the Welsh, supporting Brexit, had to vote not for "their" parties, but all for those Conservatives. For those who reject Brexit, they voted for the Scottish National Party, for the Labour Party, and for other political forces. As a result, all the voices of the opponents of Brexit were divided into 3-4 parties, all the voices of the supporters of Brexit left the party of Boris Johnson. However, now all this is not important. It's important - what the odious prime minister and his ruling party will lead the country to.

In fact, in the coming year, all questions to Johnson's team come down to whether he will be able to agree with the U on a new trade deal that will operate after the end of the transition period? According to many experts, the main thing that is required of Johnson is to sign such a deal that does not harm the UK economy as much as possible, which has been losing huge amounts over the past three years due to Brexit and, in any case, will continue to lose them in 2020. Nobody believes that the deal will be the way Johnson himself sees it. Johnson is not Trump, but the European Union is not China. The biggest question that causes skepticism among all market participants is the timing of negotiations on trade relations with the EU. Eleven months is very little to conclude such a comprehensive deal. Thus, either Johnson will be able to conclude a "surface" agreement in a short time, or he will have to extend the transition period for two years (which Johnson does not want) and conduct more meaningful negotiations, without forcing events and slowly.

Well, the biggest danger for London now comes from Edinburgh. Nicola Sturgeon, the first Minister of Scotland, has repeatedly stated that "London will not be able to lock us up and hope that everything will work out." Scotland opposes an exit from the EU, but advocates an exit from the UK if its interests are not taken into account by the government of Johnson. "If the UK continues to exist, it is only on the basis of universal consent," said Sturgeon. A formal request for a second independence referendum has already been sent to Johnson and has been rejected. However, it is unlikely that Edinburgh will so simply dwell on the refusal of permission to referendum. In the best case for Britain, the Scots will regularly put this issue on the agenda. At worst, separatism, refusal to subordinate to London, and unauthorized referendum are possible. I don't even want to think about what awaits Britain in the second case. Riots, a military conflict and a host of other "unpleasant things" are possible. Thus, all those who, following Johnson's victory in the elections, exhaled and considered that all the troubles are now behind, all that can be said is that all the troubles are still ahead, and Brexit now looks like the smallest of the problems of Great Britain.

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

EUR/USD. Preview of the new week. Fed passage meeting. EU, US GDP data

4-hour timeframe

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Amplitude of the last 5 days (high-low): 25p - 38p - 28p - 73p - 42p.

Average volatility over the past 5 days: 41p (average).

The last trading week for the EUR/USD pair ended with the resumption of the downward movement. From our point of view, what happened was inevitable in almost any case. The euro/dollar has consolidated below the Ichimoku cloud, and now nothing prevents it from continuing to move down. As we have repeatedly said, the fundamental background and the macroeconomic background are the main drivers of the pair's fall. Due to technical factors, the euro-currency manages to adjust from time to time, and since trends are not only short-term, but also long-term, then corrections happen for several days, and for several months. However, the essence remains the same. The EU economy still looks much weaker than the US. The monetary policy parameters of the Federal Reserve look much stronger than the ECB. On the eve of the new trading week, we propose to look at such images with what macroeconomic events and publications await us.

Monday, as often happens, will be completely empty in terms of macroeconomic events. However, on Tuesday we are waiting for the publication of orders for durable goods in the United States. This is a rather important report, since the goods of this category are quite expensive, respectively, their growth or vice versa, a fall can reflect current trends in the economy. Recall that the main concerns associated with the US economy are currently in the falling business activity index in the manufacturing sector of Markit, in the PMI ISM index, which has fallen into the "recession zone", as well as in the continued decline in industrial production. Other macroeconomic indicators are still at a decent level, but the industrial sector may begin to pull other indicators down as well. According to expert forecasts, the main indicator of orders will show an increase of 0.4% in December. A month earlier, the growth was negative -2.0%. That is, the number of orders decreased by 2%. If we take into account orders excluding defense, then an increase of 0.5% is expected, excluding transport - an increase of 0.1%, and excluding defense and aviation - an increase of 0.2%. Thus, experts expect an improvement in the situation compared to November, which, in principle, is not difficult. This data may support the US dollar.

On Wednesday, the United States will hold an absolutely passing Fed meeting. Passing - because the probability of changing the key rate is 0%. The Fed took a firm wait-and-see position, which has already informed the markets several times. Thus, traders will be able to gather important and interesting information from the Fed's accompanying statement or from a press conference. It hardly makes sense to predict anything here, however, since there have not been any major changes in macroeconomic statistics in the United States recently, there is nothing to worry about for the members of the monetary committee. Moreover, the signing of the "first phase" trade deal between China and the United States 11 days ago, should inspire optimism in the Fed.

Insignificant reports on unemployment and changes in the number of unemployed will be published in the European Union on Thursday. Traders rarely respond to this data with purchases or selling the pair. In Germany, the preliminary value of the consumer price index for January will be published on this day, and, as before, this indicator is interesting from the perspective of forecasting the future value of inflation in the EU, which remains at an extremely low value. Furthermore, data on GDP for the fourth quarter (also a preliminary value) will be published on this day, with a forecast of +2.1% and an index of expenditures on personal consumption with a forecast of 2.1%. On this day, of course, much will depend on the real value of GDP, although it will not be final.

Well, on Friday, the eurozone GDP for the fourth quarter will be published, as well as a change in the levels of income and expenses of the US population in December 2019. GDP in the European Union remains much lower than in the United States. Forecasts predict an increase of the indicator compared to the fourth quarter of 2019 by only 1.2%.

In general, the following can be said. Most macroeconomic statistics remain stronger in the US. You should not expect any action from the Fed and the ECB in the near future. More attention now needs to be paid to a possible trade war between the EU and the US, however, it is unlikely to start right tomorrow. Since, from a technical point of view, we already have a downward trend, it will be difficult for the bulls to show something more than just a correction, even if macroeconomic statistics are strong in the EU and weak in America.

Trading recommendations:

EUR/USD continues to move down. Thus, it is recommended that you either hold open shorts with targets of 1,1008 and 1,0973, until the start of the corrective movement (rebound from any target or turn the MACD indicator up). 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. All goals will be specified at the beginning of a new trading week.

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. Trump impeachment: fair trial or political process?

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While the new Coronavirus virus broke out in the world, from which several dozen people have already died in China, processes that are of much greater importance to the foreign exchange market, the global economy and politics are also continuing. Today we will talk about the impeachment of Donald Trump, the hearing of which began on January 24 in the Senate. The indictment voiced its arguments in favor of the fact that the US president should be removed from his post. In principle, all of them have already been voiced several times, even before the Senate meeting. Abuse of power, obstruction of the Congress, blackmail of Ukraine in order to influence the results of future presidential elections in November 2020. According to one of the prosecutors, chairman of the intelligence committee of the House of Representatives Adam Schiff, "the country cannot trust a leader who acts in his personal interests, and not in the interests of the country." "Such a person simply does not fit his position," summed Schiff. At the same time, Trump's lawyers did not sit idle and already presented their evidence of the lack of guilt of the US president. On Saturday, deputy attorney team Mike Purpura presented his list of evidence:

1) The Trump team has provided assistance to Ukraine more than the team of Barack Obama, has strengthened sanctions against Russia.

2) The Government of Ukraine has repeatedly stated that there is no pressure on it.

3) A telephone conversation between Trump and Vladimir Zelensky does not indicate that the US leader used military assistance as a means of pressure.

4) during a conversation between the two presidents, Zelensky did not know at all that military assistance would be delayed.

5) No investigations were launched against Joe Biden in Ukraine, although this is exactly what Trump "demanded" from Zelensky.

6) Ukraine received military assistance.

Such arguments were made by Trump's lawyers, and most of these arguments look, to put it mildly, "far-fetched". The most interesting thing in this whole process is not what arguments will be voiced by the parties, but whether the Senate will go to the first in US history to directly dismiss the president? President odious and uniquely memorable. Recall that in the Senate most of the seats are occupied by the same party members of Trump - the Republicans. As for the defense arguments, at least three of them are broken up into commonplace logic. 1) what is the difference how much military assistance was provided to Ukraine by the Obama administration? 2) If Ukraine had announced pressure on it, it could have ruined relations with Trump. Is it worth recalling how Trump likes to respond most to those whose actions do not meet his expectations? 3) A telephone conversation can be interpreted in completely different ways. 4) What difference did Zelensky know about whether they would delay military aid or not? 5) If investigations against Biden began in Ukraine, this would mean that the scheme of political blackmail worked.

In addition to all Trump's earlier accusations, many experts and political analysts believe that Trump, in other words, decided to use Ukraine for his personal purposes, neglecting America's foreign policy interests. Experts believe that, given the situation in the east of Ukraine, Ukraine in no case could be considered as a source of assistance in the elections. Ukraine remains an ally of the United States and needs help, not political pressure and blackmail. Most of the experts who have spoken out believe that Trump deserves impeachment.

Also, most experts believe that the impeachment procedure will not have a special effect on the 2020 elections. Americans will elect a president based on a wide variety of opinions and opinions. Roughly speaking, the American people are more interested in the quality and standard of living under this or that president, and the violation of the principles of democracy because of personal interests interests him much less.

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

EUR/USD. Equal - Coronavirus 2019-nCoV: panic still dominates the market

The euro-dollar pair ended the trading week on a minor note, updating almost two-month lows. The cautious stance of Christine Lagarde and the significant increase in panic about the spread of coronavirus put pressure on the pair. Conflicting data on the growth of PMI indices in the eurozone countries could not save the situation - the price slumped, up to the last minute of the trading week. Unfortunately, panic is still prevailing in the foreign exchange market: macroeconomic reports and comments by central bank representatives have faded into the background, while traders are focusing on the news flow about the spread of the deadly coronavirus.

The prevailing fundamental picture does not make it possible to make any long-term (however, as well as medium-term) forecasts. The situation is changing every day, and so far for the worse, determining the growth of anti-risk sentiment. If we draw an analogy with the spread of SARS in 2003, then sooner or later the situation will reach its climax, after which a downward trend will manifest itself. When exactly this will happen this time is unknown. At the moment there is no consensus on the prospects for the development of the situation. For example, according to the director of the State Laboratory for New Infectious Diseases at the University of Hong Kong, the magnitude of the 2019-nCoV pneumonia epidemic could be ten times greater than SARS. Here it is worth noting that this opinion is not of an ordinary specialist, but of a very authoritative one - in particular, in 2005, Time magazine included him in the list of 18 best specialists in the fight against viruses in the world. Some other experts adhere to more optimistic scenarios, pointing to the first case of a cured patient.

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In turn, currency strategists agree on one thing: the further spread of panic will hit not only the Chinese economy, but also global economic growth as a whole. Speaking directly about the Asian region, tourism, retail and civil aviation will be affected first (for example, during the SARS epidemic, most Hong Kong hotels are only 15% full). This will be followed by the "domino effect" - a decrease in air transportation will reduce the demand for jet fuel, which will affect the dynamics of the oil market. This fact, in turn, will affect the dynamics of commodity currencies. The general slowdown in the global economy and the growth of anti-risk sentiment will strengthen the dovish intentions of the central banks of the leading countries of the world, influencing the position of their currencies.

Such prospects are pushing up defensive assets. The US currency, which is in demand during periods of general nervousness and uncertainty, also joined them. The dollar index jumped to a month and a half highs on Friday, while the debt and stock markets plunged. After the first case of coronavirus infection 2019-nCoV was recorded in the United States, the profitability of 10-year-old Treasuries fell to 1,686. There was no such downward trend even during the recent escalation of the US-Iran conflict.

The bulls of the EUR/USD pair have been defending for a relatively long time around the support level of 1.1050, but still could not restrain the bearish onslaught - the trading week ended at around 1.1024. Most likely, on Monday the downward impulse will not fade, judging by the latest news. Today it became known that the number of people infected with the 2019-nCoV virus exceeded the thousandth mark, and the death toll reached the 41st. With a high degree of probability, we can assume that by Monday these deadly indicators will only increase. This fact will put additional pressure on EUR/USD, as a result of which the pair can gain a foothold in the region of the 9th figure.

It is also worth recalling that the European Central Bank last week was not able to provide support for the single currency. Summarizing the January meeting, Lagarde said that monetary policy will remain stimulating "for a long period of time", despite some signs of stabilization of the situation in the eurozone. At the same time, Lagarde rather modestly commented on the growth of European inflation. But her colleague, a member of the Board of Governors of the ECB, Olli Rehn, said that inflationary expectations in the eurozone were "stuck at a low level."

PMI figures released on Friday left a controversial impression. German indicators (both in the manufacturing sector and in the services sector) showed positive dynamics, exceeding forecast values. But the French indices disappointed. The pan-European composite index PMI, which ended up in the red zone, was also disappointing. In other words, the Friday release balanced optimism, which was maintained by data from the ZEW research institute. This factor put additional pressure on the pair.

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From a technical point of view, the EUR/USD pair shows signs of further decline on all the higher timeframes. In particular, the daily chart tells us that the Ichimoku Kinko Hyo indicator has formed a strong bearish "Parade of Lines" signal, while the price is testing the lower line of the Bollinger Bands indicator. In order to determine the goals of the downward movement, let's move on to the weekly schedule. So, the nearest resistance level is 1.0940 - this is the bottom line of the Bollinger Bands trend indicator.

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