Hot forecast for EUR/USD on 01/28/2020 and a trading recommendation

In fact, the single European currency stood still yesterday. Fluctuations in quotations were so insignificant that it was just right to examine them under a microscope. Even fairly weak data from the United States did not affect the market. This is largely due to the fact that the data was published quite late, and for many European traders, the hand was already reaching for the button to turn off the trading terminal. They were clearly not going to think and do something there at such a late hour. The data is not so crucial. Just one of the components of the real estate market.

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However, new home sales in the United States were down 0.4%. From 697 thousand to 694 thousand. At the same time, the previous data was also revised downward, from 719 thousand. So, in general, the picture is rather sad. Nevertheless, these data are still not as significant as housing sales in the secondary market, where the bill goes not to hundreds of thousands of objects, but to millions. Moreover, just the secondary market is growing.

New Home Sales (United States):

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Today, again, only US statistics will interest investors. Unlike yesterday, as the data themselves are somewhat more interesting, they are also published much earlier, so that all traders will still be in their places. The greatest interest is caused by orders for durable goods, the volume of which, after a decrease of 2.0%, should increase by 0.6%. Such growth makes it possible for us to argue that the recession in industry will be short-term, and soon we will see its growth. Also, this indicates that there are no prerequisites for a significant decrease in consumer activity. In addition, S&P/ CaseShiller data on housing prices should compensate for the negative nature of yesterday's data on sales of new homes. The fact is that the growth rate of real estate prices can accelerate from 2.2% to 2.6%. So it's worth waiting for a positive reaction to US data. However, the reaction will still be moderate, since no one intends to take any risks before the meeting of the Federal Open Market Committee.

Durable Goods Orders (United States):

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From the point of view of technical analysis, we see a narrow amplitude fluctuation within the psychological level of 1.1000. In fact, the control level puts pressure on the quote, where due to patterns waiting for a rebound. It is worth considering that at the current beat, the inertial component set by the market at the beginning of the year is preserved.

In terms of a general review of the trading chart, we see quotes recovering by more than half relative to an oblong correction, which is a good signal for sellers.

It is likely to assume that the pressure from the psychological level of 1.1000 will still remain on the market, which will lead to a temporary fluctuation within 1.0990/1.1040, where trading tactics are selected by the method of breaking specified boundaries. It is worth considering that in the case of considering the lower limit, we need not just to puncture the set value, but consolidated below, while maintaining the inertial course.

Concretizing all of the above into trading signals:

- Long positions, we consider in case of price consolidation higher than 1.1045, local transactions.

- Short positions, we consider in case of price consolidation lower than 1.0990, not a puncture in the shadow of a candle.

From the point of view of a comprehensive indicator analysis, we see that the downward interest in the hourly and daily periods remains, which cannot be said about the minute intervals, which occupy a neutral position.

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Trading plan on EUR/USD for January 28, 2020. Markets and the virus: not a panic yet, but a serious concern already

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Everything in the world repeats itself. Vladimir Vysotsky even sang "the Hong Kong flu has been defeated..." - and here, at the beginning of 2020, the flu virus from China threatens humanity again...

On Monday, January 27, the US market finally reacted sharply to the virus - the S&P500 index fell by 1.5%.

Oil fell heavily a few days ago as well.

So far, the markets are still hoping that the Chinese authorities will be able to stop the spread of the epidemic. But in any case, markets are beginning to prepare for the worst. It is already clear that a large epidemic in China (if it happens) will cause huge damage to both China and the world.

In other aspects, the market is also waiting for news on the US in the evening (orders for durable goods), and the Fed's decision on Wednesday, January 29.

EUR/USD:

Keep selling from 1.1084.

Selling from 1.1050 is possible.

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NZD/USD trying to test the 0.6520. Technical analysis for Jan 28, 2020

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Today as we see on the 4-hour chart, the NZD/USD pair seems to be still under downward pressure now. The pair has got hold on the 4-hour chart where the Fair Value Gap Main Threshold at 0.6535 seems to be the support level at 0.6520 (as 4-Hour Chart Liquidity Pool) which is still viewed as the target level for this currency pair. If 0.6520 level is not violated until February 2020, then the setup will fail on the grounds of the seasonal trend for NZD/USD. Each February, this pair makes a retracement going up first before the price goes back down to reach the bottom on the 2nd week of March.

(Disclaimer)

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

Everything remains the same: asset sales are increasing; NZD and AUD do not find a way to stop the decline

On Monday, US stock exchanges lost from 1.5% to 2% due to the threat of the spread of coronavirus, the number of countries where patients are officially recorded, is increasing. On the other hand, the sales wave is expected to spread to the Asia-Pacific countries, the Japanese Nikkei 225 index is losing 0.65% at 6.00 Universal time after a strong decline on Monday, the Australian S & P / ASX 200 1.35%, and the Korean KOSPI all at 3.3%.

At the same time, uncertainty has increased dramatically; the global economic recovery is in danger of ending without ever starting. In the short term, there is no reason to expect a recovery in demand for risky assets, the US dollar, yen, gold and government bonds will remain the favorites. Oil, in turn, has not yet experienced a reduction in demand, but a drop in demand will become inevitable, which will drag prices even lower if the panic persists.

NZD/USD

Consumer inflation in the Q4 rose to 1.9% YoY and the result was 0.1% which was better than forecasted and provided grounds for revising prospects for the rate and, as a result, for the kiwi exchange rate.

It was assumed that the rate will decline to 0.5% at the beginning of this year until recently. Now, expectations are changing and RBNZ is likely to take a break. Moreover, ANZ Bank released its next quarterly forecast this morning. ANZ sees New Zealand's economic outlook positively positive - GDP growth in 2021 to 2.6% against 2.3% in the current, unemployment decline from 4.2% to 3.8%, inflation at 2%, and believes that the NZD/USD rate will drop to 0.65 at the same time. Such optimism is based on two assumptions - firstly, an improvement in the global economy, and secondly, faster growth of the United States.

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These forecasts do not yet take into account the probability of a global crisis from the threat of the spread of the virus. Thus, they can show a strong discrepancy with reality in the short-term.

In any case, we must proceed from the fact that the assessment of the economic situation in New Zealand has become more positive, and will push the kiwi to increase if panic sales stop. Bearish pressure will remain strong until this happens. Strong support is located in the zone of 0.6470 / 90, and its decline will open the way to 0.6420. This is possible if the panic is not stopped. The momentum is strong at the moment and there is no reason to wait for a reversal.

AUD/USD

In light of the upcoming RBA meeting, the two releases are of particular importance - the NAB Business Survey for January and tomorrow's December CPI. The first of these was published this morning and was unexpectedly worse than expected. As a result, both components are steadily declining.

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Forecast indicators do not suggest a significant improvement in the near future. Capacity utilization is below average, capital expenditures in 2019. decreased, retail and wholesale trade, despite slight growth, are deep in negative territory, and this have not yet been reflected in the research results, despite the fact that large-scale forest fires.

The Australian economy does not look very confident, and monetary stimulus is expected to increase this year, although a strong employment report last week means that a decrease in the RBA rate in February has become less likely. Moreover, ANZ changes its forecast and expects one decline in April, another one in the fall. As a result of which, the RBA rate will drop to an unprecedented level of 0.25%. Alan Oster, chief economist at NAB Group, believes that more incentives will be needed in 2020. In turn, ANZ Bank has a similar assessment.

The weakness of the economy, combined with panic in the financial markets, does not leave Aussie traders the choice of bearish pressure remains strong, despite oversold. Support 0.6753 was reached as a result of a rapid decline. Technically, we can expect a correction to 0.6799 / 6805, but any attempt to grow will be used for new large-scale sales. Thus, Australian currency is targeting 0.6669 - a minimum since 2009.

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AUD/USD. Aussie suffers from virus and awaits inflation report

The Australian dollar is among those currencies that have been hit hardest by the spread of the Chinese coronavirus. It would seem that the AUD/USD pair consolidated above the key resistance level of 0.7000 at the beginning of the year, however, subsequent events again returned the aussie to its previous positions. Now the pair's bulls will again have to start a crusade to conquer an indescribable level - but only after the hysteria about 2019-nCoV comes to naught.

In the meantime, AUD/USD is testing multi-month lows - during the Asian session, the pair touched the 0.6750 mark. The pair was on such lows for the last time in mid-October, after which it began to gradually recover. The Australian dollar is becoming cheaper not only because of the panic about the virus, although this factor is the main driving force. But the bears' asset, AUD/USD, has other arguments that support the downward momentum.

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First, the probability of interest rate cuts at the RBA's first meeting this year (to be held on February 4) remains quite high. After the release of data on the labor market, this probability slightly decreased due to exceeding forecast indicators - but in my opinion, these conclusions look too hasty. Of course, at first glance, the Australian labor market showed a positive trend - unemployment fell to 5.1%, while the increase in the number of employees jumped immediately to 29 thousand (with a forecast of growth of up to 12 thousand). And although de facto this is really a good result, it is separately necessary to dwell on the structure of this indicator.

The fact is that the positive dynamics of the growth of employed in December was mainly due to the growth of part-time employment - this component jumped by 29.3 thousand. But full employment, on the contrary, showed negative dynamics, decreasing by 0.3 thousand. This trend may negatively affect the dynamics of wage growth, as regular positions, as a rule, offer a higher level of wages and a higher level of social protection. Therefore, in the context of recent statements by Philip Lowe, published data on the growth of the Australian labor market do not reduce the likelihood of further measures to mitigate monetary policy by the RBA. The unemployment rate just below the forecast level (5.1%) should not inspire AUD/USD bulls. Let me remind you that unemployment was at the level of five percent at the beginning of last year, it dropped to 4.9% in February, but then stabilized in the region of 5.2-5.3%. And all these results are quite far from the RBA target level of 4.5%.

Thus, the Australian labor market data released last week is of little help to the AUD/USD bulls. In this context, tomorrow's release plays a special role in determining the prospects of the pair. We are talking about the publication of data on the growth of Australian inflation. Over the past year, the consumer price index gradually increased in annual terms. It reached 1.3% in the first quarter of 2019, 1.6% in the second, and 1.7% in the third. The inflation indicator should also reach 1.7% in the fourth quarter - at least, most analysts are sure of this. The index should reach 0.6% on a quarterly basis, which is slightly higher than the result of the third quarter.

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Obviously, if inflation indicators come out worse than forecasted values, the Australian dollar will again lose ground - in this case, the likelihood that the RBA eases its monetary policy will increase again. Even if the regulator does not reduce the rate in February, it can transparently hint about such intentions - this fact will also put strong pressure on the AUD/USD pair.

Do not forget that China is Australia's main trading partner, so the problems of the Chinese economy are automatically reflected in the quotes of the AUD/USD pair. Recent events suggest that it is too early for the Chinese to calculate the damage from the spread of the virus. Yesterday, the number of infected was a little more than two thousand people - today, the number of people in China infected with the new coronavirus exceeded 4,500. Most deaths (100 out of 106) occur in Hubei Province. The current situation will continue to exert pressure on the position of the Australian currency, regardless of the results of macroeconomic reports and comments of RBA representatives.

It is noteworthy that the strongest level of support for AUD/USD is relatively close - below the level of 0.6700 (the lower line of the Bollinger Bands indicator on the weekly chart), the pair did not fall for many years. And although there were impulsive price movements, but over the next few days, the pair necessarily returned. Therefore, if the price is at the bottom of the 67th figure, short positions should be treated with extreme caution. In general, the technical picture speaks of a further downward trend in the aussie - if panic about 2019-nCoV continues to grow, and Australian inflation comes out worse than expected, then the pair will be able to test the above support level by the end of the week.

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

Elliott wave analysis of GBP/JPY for January 28 - 2020

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GBP/JPY is consolidating before pushing lower towards 140.80 and ideally into the target-zone between 139.29 - 139.83 to complete wave C of iv and setting the stage for the new impulsive rally to above 147.95.

In the short term, we should expect resistance near 142.94 capping the upside for renewed downside pressure towards 140.80 and likely closer to the target-zone between 139.29 - 139.83.

R3: 143.53

R2: 143.20

R1: 142.94

Pivot: 142.56

S1: 142.19

S2: 141.61

S3: 141.08

Trading recommendation:

We sold GBP at 143.95 and have our stop placed at 144.45

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

Elliott wave analysis of EUR/JPY for January 28 - 2020

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EUR/JPY could move a bit closer to support at 119.75 before completing wave iii. Then, it is likely to set the stage for a correction in wave iv towards 120.97 and a final dip into the target-zone between 118.85 - 119.24 to complete wave v and C of 2.

In the short term, a break above minor resistance at 120.40 will indicate that wave iii has completed and wave iv is developing towards 120.97.

R3: 120.97

R2: 120.60

R1: 120.40

Pivot: 120.29

S1: 119.90

S2: 119.75

S3: 119.50

Trading recommendation:

We will wait for a buying opportunity at 119.30.

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

EUR/USD Projection HOD/LOD For Jan 28, 2020.

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The high of the day (HOD) and low of the day (LOD) from the FLOUT range 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 - 1.1076.

STDV 9 - 1.1071.

STDV 8 - 1.1066.

STDV 7 - 1.1061.

STDV 6 - 1.1056.

STDV 5 - 1.1051.

STDV 4 - 1.1046.

STDV 3 - 1.1041.

STDV 2 - 1.1036.

STDV 1 - 1.1031.

FLOUT - 1.1026.

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

FLOUT - 1.1016.

STDV 1 - 1.1011.

STDV 2 - 1.1006.

STDV 3 - 1.1001.

STDV 4 - 1.0996.

STDV 5 - 1.0991.

STDV 6 - 1.0986.

STDV 7 - 1.0981.

STDV 8 - 1.0976.

STDV 9 - 1.0971.

STDV 10 - 1.0966.

Pay attention for the level of confluence between today and the previous range such : 1.1071, 1.1056, 1.1051, 1.1036, 1.1001, 1.0986, 1.0981, 1.0966 this confluence level can be a potential tunring point level.

(Disclaimer)

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

Forecast for EUR/USD on January 28, 2020

EUR/USD

Unexpectedly weak data on new home sales in the US came out on Monday - the December report showed only 694 thousand against the forecast of 730 thousand, November data was revised down from 719 thousand to 697 thousand. Against the backdrop of general fears of the Chinese coronavirus, the stock index S&P 500 decreased by -1.57%, yield on 10-year US government bonds fell from Friday 1.8686% to 1.612%. The dollar is now strengthening as a safe haven currency. The euro fell by six points.

Today, US data has a second chance to appear at its best: the forecast for durable goods orders for December is 1.2%, the Conference Board consumer confidence index for January is expected to grow from 126.5 to 128.2 points.

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On the daily chart, the price consolidated below the blue line of the price channel, the path to the target 1.0986 at the Fibonacci level of 138.2% is free. Overcoming the level opens the second target of 1.0925 - the lows of September 9 and 12 of last year.

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On the H4 chart, the growing Marlin indicator does not cause any concern so far, without the risk of a price growth, it can rise to the neutral line, which corresponds to a price increase to about 1.1038 or a little higher.

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

Forecast for GBP/USD on January 28, 2020

GBP/USD

The pound fell by 16 points on Monday, gaining a foothold on the daily chart below the balance line indicator. The signal line of the Marlin oscillator has been staying in the negative zone since yesterday. The goals remain the same: 1.2968 for the Fibonacci level of 161.8% and 1.2820 - the Fibonacci level of 138.2%.

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On a four-hour chart, the price consolidated below both indicator lines - the balance and MACD lines, staying at the correction level of 23.6%. The market has only one reason for its reluctance to sell the pound - to wait for the Bank of England's decision on monetary policy on Thursday, or rather, Mark Carney's explanation of the regulator's intentions, since a possible rate cut in the near future has already been mentioned. Here an unexpected positive (rejection of such an intention) can raise the price to the Fibonacci level of 200.0% on a daily scale (1.3207).

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

Forecast for USD/JPY on January 28, 2020

USD/JPY

Due to the Asian nature of the observed market fears, the Japanese yen may not completely fulfill the role of a safe haven currency. Since cases of new coronavirus diseases have appeared in Japan, the yen may weaken against the dollar. Yesterday, the USD/JPY pair fell by 37 points, the price overcame the balance line support on the daily chart, but the price has not fully consolidated below it, for this the current day should also close below it. The Marlin oscillator is in the decline zone.

The immediate goal of 108.50 as a strong record level remains relevant, but the technical picture on the lower chart warns of a likely reversal.

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The price has formed a consolidation on H4, causing an ambiguous interpretation. Visually, this formation indicates the intention of the price to continue to decline, but its internal structure, based on high trading volumes (only January 8 was higher), indicates the probable closure of short positions, and when some positive, or vice versa, strong negative news arrives, investors will start to purchase the dollar. The daily target of 109.85 on the MACD line coincides with the MACD level of the lower H4 chart. Uncertainty for this currency pair is strong.

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Medium-term cross-EUR/AUD growth outlook

EUR/AUD

On the weekly chart, the price has overcome strong resistance at the point where the MACD line coincides with the Fibonacci level of 110.0%. The base branch for the grid is defined by the movement from August 2012 to January 2014.

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The signal line of the Marlin oscillator broke through the boundary with the zone of predominance of the bulls. Growth targets: 1.6830 - the Fibonacci reaction level is 123.6%, 1.7450 - the Fibonacci level is 138.2%, which coincides with the peak of August 2007:

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On the daily chart, the price broke above the line of balance and MACD. Marlin in a strong growing position:

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There is also a clear increase in all indicators on the H4 chart:

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

USD/CAD further push up expected!

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Trading Recommendation

Entry: 1.31717

Reason for Entry:

23.6% Fibonacci retracement, Exponential Moving Average resistance.

Take Profit : 1.32313

Reason for Take Profit: 78.6% Fibonacci retracement, 127.20% Fibonacci extension.

Stop Loss: 1.31214

Reason for Stop loss:

50% Fibonacci retracement

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

USD/CHF approaching support, potential bounce!

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Trading Recommendation

Entry: 108.73

Reason for Entry: Horizontal swing low support, 78.6% fibonacci extension, 61.8% Fibonacci retracement

Take Profit :109.31

Reason for Take Profit:

Horizontal pullback resistance

Stop Loss: 107.99

Reason for Stop loss:

Horizontal swing low support

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

EUR/USD approaching support, potential bounce!

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Trading Recommendation

Entry: 1.10362

Reason for Entry: 78.6% fibonacci retracement, 100% fibonacci extension, horizontal swing low support

Take Profit : 1.12465

Reason for Take Profit: Horizontal swing high resistance, 78.6% fibonacci extension

Stop Loss: 1.09813

Reason for Stop loss:

horizontal swing low support

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

Fractal analysis of the main currency pairs on January 28

Forecast for January 28:

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: 1.1084, 1.1052, 1.1035, 1.0995, 1.0964 and 1.0945. Here, we are following the descending structure of January 16. The continuation of the movement to the bottom is expected after the breakdown of the level of 1.0995. In this case, the target is 1.0964. For the potential value for the bottom, we consider the level of 1.0945. Upon reaching this level, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 1.1035 - 1.1052. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 1.1084. This level is a key support for the downward structure. We expect the initial conditions for the upward cycle to be formed before it.

The main trend is the descending structure of January 16

Trading recommendations:

Buy: 1.1035 Take profit: 1.1051

Buy: 1.1054 Take profit: 1.1082

Sell: 1.0995 Take profit: 1.0970

Sell: 1.0964 Take profit: 1.0947

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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: 1.3312, 1.3271, 1.3238, 1.3198, 1.3178, 1.3157 and 1.3126. Here, we are following the development of the upward cycle of January 22. The continuation of the movement to the top is expected after the breakdown of the level of 1.3198. In this case, the target is 1.3238. Price consolidation is near this level. There is a short-term upward movement in the range of 1.3238 - 1.3271. Hence, a reversal to a correction is also possible. The potential value for the top is considered to be the level of 1.3312.

Short-term downward movement is possibly in the range of 1.3178 - 1.3157. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.3126. This level is a key support for the top.

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

Trading recommendations:

Buy: 1.3198 Take profit: 1.3236

Buy : 1.3240 Take profit: 1.3270

Sell: 1.3178 Take profit: 1.3158

Sell: 1.3155 Take profit: 1.3130

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6803, 0.6781, 0.6768, 0.6750, 0.6737 and 0.6716. Here, we are following the development of the descending structure of January 16. Short-term downward movement is expected in the range 0.6750 - 0.6737. The breakdown of the latter value will lead to movement to a potential target - 0.6716. We expect a pullback to the top from this level.

Short-term upward movement is expected in the range of 0.6768 - 0.6781. The breakdown of the last value will lead to an in-depth correction. Here, the target is 0.6803. This level is a key support for the bottom and before it, we expect the initial conditions for the upward cycle to be formed.

The main trend is the descending structure of January 16

Trading recommendations:

Buy: 0.6768 Take profit: 0.6780

Buy: 0.6783 Take profit: 0.6800

Sell : 0.6750 Take profit : 0.6737

Sell: 0.6736 Take profit: 0.6716

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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

Dangerous epidemic swept the markets

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Good evening, dear traders! Congratulations on the start of a new trading week. The most discussed news last weekend was the new data on the dynamics of the spread of coronavirus in China and other countries. There are already thousands of people who are infected. Therefore, the head of the PRC, Xi Jinping himself, gave comments, and they were joyless: "The spread of the new coronavirus in China is accelerating..." And so, emergency mode was introduced in 25 regions including Shanghai and Beijing. There were 41 deaths, while more than 1300 people were infected.

The peak of news declined on the weekend, when they showed falling people right on the streets on the television channels. I remind you that it is New Year's holidays in China.

In the currency exchange market, the most affected pair was USD/JPY, which lost half a dollar in the declining market over the weekend, opening upside down and so on in the falling market. This movement is caused by the departure of investors in the yen amid fears of the uncertainty of the Chinese economy in connection with a new bacteriological threat.

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Gold on fears is always in demand. Over the weekend, a troy ounce added 1750 p:

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At the same time, impressive losses were suffered by the declining oil. China is the largest energy consumer. Over the weekend, the barrel also lost another $ 2 and is now trading at around $ 52:

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The SNP500 index lost an incredible 10,000 points in two days:

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In these conditions, I recommend that you refrain from opening large positions, as no one knows how the situation will develop. Moreover, staying at your own in such a market is far from the worst option.

Have a successful trading and control risks!

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

EUR/USD. Alarmists a main ally of the US currency

Panic sentiment continues to dominate the foreign exchange market. The deadly coronavirus from China has become the main topic of discussion in the world press - the news flow resembles a report from the front - today there are so many dead, so many in critical condition, so many "wounded", that is, infected. All these indicators are growing almost exponentially, complementing the already dismal fundamental picture. And if some "crosses" still ignore the current situation, then dollar pairs - all without exception - succumbed to panic.

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Of course, there are also differences here. For example, the pairs: AUD/USD, NZD/USD, and USD/JPY reacted most strongly. The euro-dollar pair "holds the defense" throughout the day, not allowing the bears to pull down the price in the region of the ninth figure. But sellers continue to put pressure, and if the situation with the virus epidemic does not change in the coming hours/days, the pair will probably come to the nearest support level of 1.0940 (this is the bottom line of the BB indicator on the weekly chart).

Macroeconomic reports today only strengthened the bearish sentiment for the pair. In particular, the IFO indicator of the business environment in Germany came out in the red zone, not reaching the forecasted values - instead of rising to the level of 97.1, the indicator slowed to 95 points in January. The decline itself is low, but amid conflicting PMI data and the dovish comments of ECB representatives (Christine Lagarde and Olli Rehn), today's figures also had a negative impact on the single currency. It is worth noting that, according to the comments of IFO experts, the fact of a deadly virus epidemic in China was not reflected in this report. Therefore, it can be assumed that the next report will be even more disappointing, putting pressure on the euro.

It is noteworthy that EUR/USD traders ignored the fact that the German government revised its forecast for GDP growth for the current year upward (to 1.1% of one percent). This fact could support the pair, but not in the circumstances. It is also worth adding that even the political factor did not help the European currency today. It became known that the right-wing populist party Matteo Salvini, whose representatives speak for Italexit (in one form or another), lost the local elections. In two key regions, the right did not find support from Italians. Against the background of the rally of Italian bonds, the EUR/USD pair slightly corrected, but the single currency was again under pressure during the US session.

But the dollar, on the contrary, demonstrates "resistance to stress" to weak macroeconomic reports. For example, sales in the primary US housing market collapsed to five-month lows in December: with a forecast of growth of up to 730 thousand, the indicator fell to 694 thousand real estate properties. However, the US currency is now completely ignoring macroeconomic statistics, taking advantage of significant demand from investors throughout the market.

Given recent events, it can be assumed that the dollar will ignore the January meeting of the Fed, which will be held this Wednesday. If the situation with the spread of the virus does not decline (which is unlikely in the near future), the market will not pay attention to the possibly dovish theses of the representatives of the US regulator. But optimistic estimates may provide additional support to the greenback.

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In other words, until the panic in the currency market subsides, the dollar will "skim the cream": negative factors regarding the US currency will be ignored by traders, and positive factors will increase greenback growth. But in such a situation, there is also the flip side of the coin: as soon as the situation reaches its climax and the downward dynamics begins (as it was during the SARS epidemic), the "tension spring" will bounce in the opposite direction, and all the negative fundamental factors that are currently ignored by the market, immediately turn against the dollar. The main difficulty of the situation is that no one knows when exactly this will happen. To date, anti-risk sentiment is still growing - in proportion to the number of infected and dead from the 2019-nCoV virus. The latest news from world exchanges (primarily in the Asian region) is adding fuel to the fire. Companies associated with tourism and passenger transportation suffer significant losses. Among the victims - and Asian civil aviation companies. In China, the construction market is slowing, as well as the services market and the entertainment industry. Copper and iron ore prices are falling, as China is the world's largest consumer of raw materials, including metals.

Thus, the situation in the foreign exchange market is both predictable and unpredictable. On the one hand, it is safe to say that panic will push the dollar up, and the EUR/USD pair, respectively, down. But on the other hand, it is impossible to predict how long panic will prevail in the market. In such conditions, it is advisable for the pair to take a wait-and-see attitude - at least until the bears gain a foothold in the region of the 9th figure.

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

EUR/USD: euro threatened by the epidemic

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According to a consensus estimate by Bloomberg analysts, the euro will rise to $1.14 against the US currency by the end of June. The increasing geopolitical risks in the Middle East, the outbreak of coronavirus in China and the threat of a trade war between Washington and Brussels made investors doubt the realism of this forecast.

Although many believe the new virus is less dangerous than SARS in 2003, the worst is probably yet to come. Globalization, more developed than at the beginning of the century, the infrastructure of China and the tendency of the latter to travel to the Lunar New Year are factors that can contribute to the rapid spread of coronavirus throughout the planet.

The world economy did not have time to recover from a trade conflict between the United States and China, as it is already threatened by a new scourge. The fact that in November, global trade fell by 0.6% in monthly terms and 1.1% in annual terms does not please the bulls in EUR/USD.

The problems of the export-oriented economy of the eurozone do not end there. The United States, under the threat of imposing duties on importing cars from the European Union, may demand that American companies expand their access to the European agricultural market. Moreover, Washington could avenge Brussels on its carbon tax. Turning a blind eye to environmental issues, the White House regards the introduction of tariffs by other states as a manifestation of protectionism.

Meanwhile, the US economy is still on its feet. According to IHS Markit, the US composite purchasing managers index reached a ten-month high in January due to increased business activity in the services sector. The data on PMI in the non-manufacturing sector of the eurozone, on the contrary, disappointed, which makes it possible for the EUR/USD bears to win back the divergence factor in US and EU economic growth.

The external background is extremely unfavorable for the euro bulls, so the main currency pair's decline to seven-week lows appears quite logical. Neither the January meeting of the ECB's Governing Session, nor the data on European business activity, could provide adequate support to fans of the euro. Whether the Federal Reserve wants to do this, a meeting of which, along with releases on US and European GDP for the fourth quarter, is one of the key events of this week, is unknown.

The goal of EUR/USD bears at 1.1000 is just around the corner, and then support at 1.0960 will appear on the horizon. As for the bulls, their immediate task is to overcome the powerful resistance of 1.1065, then the resistance of 1.1100 and 1.1175.

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

GBP/USD. January 27. Results of the day. Analysts are certain: the Bank of England will leave the rate unchanged at 0.75%

4-hour timeframe

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Amplitude of the last 5 days (high-low): 52p - 89p - 118p - 54p - 118p.

Average volatility over the past 5 days: 87p (average).

The British pound tried to start an upward correction on Monday, January 27, but "the music was not playing for long." The pound/dollar pair managed to adjust to the Kijun-sen critical line, however, it was not possible to go above it and the downward movement was resumed, which continues at the moment. In the coming hours, the Ichimoku cloud can be overcome, which will amplify the current dead sell signal from Ichimoku. Volatilityis extremely low today and does not exceed 55 points, which, in principle, is not surprising, since no macroeconomic publications were planned for today, and there will be plenty of important events and publications this week, so as not to force events on the first trading day of the week.

A meeting of the Bank of England will take place this Thursday, at which a decision on the rate will be made. Most of the analysts interviewed believe that the monetary committee will approach the decision to lower the rate, but the number of members of the monetary committee supporting this decision will be insufficient. Michael Saunders and Jonathan Haskell, who voted in favor of lower rates at two previous meetings, may be joined by Gertjan Vlieghe and Silvana Tenreyro, who previously said they could support the decision to soften monetary policy in January. It turns out that four members of the committee can speak in favor. Four out of nine, which is not enough to lower the bid by majority opinion. Moreover, the latest macroeconomic statistics from the UK may lead some committee members to consider it a reason to wait another month or two, hoping that the economy will accelerate without the intervention of the British regulator. Experts noted that amid a temporary truce between the United States and China, the global economy has ceased to show signs of slowdown and may begin to recover in 2020. Accordingly, the negative impact will stop on the British economy. Additional negative impact for the impact from Brexit and its consequences will remain. And although we believe that it is time for the BoE to stimulate the British economy by lowering the rate, it may again remain unchanged. Moreover, the UK will officially begin the Brexit procedure on January 31. According to many economists, the management of the BoE can wait to assess how the economy will respond to all events after Brexit.

Meanwhile, Mark Carney's replacement at the helm of the BoE was named. The new chairman will be Andrew Bailey, who is now acting as head of the British regulator for financial markets. Bailey himself said: "It is a great honor for me to be the governor of the Bank of England and to be able to serve the people of the United Kingdom, especially at such a critical moment for the country when we leave the EU. The bank has a very important role, and as the manager, I will continue the work that Mark Carney did. It is important for me that the bank continues to work for society, maintaining monetary and financial stability, and guaranteeing the integrity and security of financial institutions. "

From a technical point of view, the pound/dollar pair failed to overcome previous highs of January 7 and December 31. Thus, we believe that the pair has much more chances to continue the downward movement than vice versa. The general fundamental background, from our point of view, remains in favor of the US currency, since there are a sufficient number of topics related to the United States, the White House, and Donald Trump, but all of them have an extremely weak effect on the position of the greenback. The dollar continues to feel great as the US economy continues to feel the same. The Federal Reserve will also hold its meeting this week, in which we can learn about the plans of the US regulator in the near future, as well as track changes in the rhetoric of its representatives.

Trading recommendations:

GBP/USD is trying to resume a downward trend. Thus, traders are advised to resume sales of the pound/dollar pair with targets at 1.2984 and 1.2963 after the pair consolidates below the Ichimoku cloud. The pair's purchases can be considered if the price returns to the area above the Kijun-sen line with targets at 1.3158 and 1.3176.

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 27. Results of the day. Boring Monday, Trump's new accusations, overblown Coronavirus

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: 42p (average).

As we expected this morning, the EUR/USD currency pair spent a quiet and calm Monday and only resumed some semblance of a downward movement at the US trading session. The upward correction has not yet begun, which indicates a lack of desire on the part of the bears to take profit on dollar positions, as well as the absence of bulls on the market. Today's volatility is low and is only 27 points at the moment. However, it can still reach average values of about 40 points by the end of the trading day. Not a single important macroeconomic report was published on the first trading day of the week. Thus, the fundamental background of today is reduced only to information coming from the White House, from the US Senate and personally from Donald Trump.

Perhaps the topic of the US president's impeachment is absolutely uninteresting for some of the traders. Someone might consider it a farce, and, as Trump himself puts it, "a witch hunt." Everyone has different opinions, but one cannot but note the importance and significance of this process, even if it was fabricated by Democrats. As we have repeatedly noted, the main omission of Trump in this matter is that he was "framed". He gave a chance and a reason for the Democrats to begin an investigation of their illegal actions. He gave reason to start the impeachment proceedings. And if the evidence of the accusatory side were "weak", then the Democrats would hardly have begun the whole procedure, realizing that through the Senate, in which the majority belongs to just the Republicans, it will not be possible to push the accusation, and Trump's political ratings could rise thanks to such "cheap" evidence. In this case, the chances of winning the presidential election will increase precisely with Trump, and not with any Democratic candidate. The evidence and testimony of witnesses close to Trump's people is very strong. For example, as we said in the morning, John Bolton, a former national security adviser to Donald Trump, claims that Trump personally froze aid to Ukraine and refused to "defrost" it. Naturally, Trump needed something to answer these accusations, and immediately followed a post on Twitter in which the US leader said "no, it wasn't, Bolton is lying to increase sales of his book." By and large, this situation looks like a game of tennis, where opponents throw the ball over the net. First, the Democrats or someone from the accusatory side presents his opinion that Trump is to blame for a crime against the people and democracy, after which Trump immediately says that this was not the case and throws the ball back over the net to the opponent's side.

In general, this topic should not be overlooked, especially in those days when, as today, there are no important macroeconomic publications. In those days when no new information is at the disposal of traders. Now the trade war between China and the United States has been put on hold, it is not known when new negotiations on the "second phase" are set to begin, the trade war with the European Union has not yet started, the parties only exchanged mutual threats to introduce duties. The situation with the coronavirus, from which several dozen people have already died in China, is, of course, a serious threat to world security, especially at a time when everyone can buy a plane ticket and go anywhere in the world, but 50 dead are fewer than the death toll in one plane crash of a Ukrainian plane over Iran. Tens of thousands of people die every day in the world from cancer, from AIDS, from various disasters, from natural disasters and even from simpler diseases and misfortunes. Why does no one sound the alarm over AIDS, which cannot be overcome in any way? Thus, coronavirus is, of course, unpleasant, but so far this is not a problem of the scale to sound the alarm and so that it can affect the currency or stock markets.

From a technical point of view, a recoilless downward movement continues. The MACD indicator turned up, however, the price does not rise, respectively, the indicator began to discharge, being at its lowest positions. Thus, the downward movement may continue, and we recommend reducing short positions in the event of a price rebound from any support or volatility level or in case of an increase in the quotes of the euro/dollar pair.

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 with a parallel increase in price). It will be possible to consider purchases of the euro/dollar pair not earlier than the traders of the Kijun-sen line overcome in small lots with the goals of resistance level 1.1088 and Senkou Span B. line

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

Oil and EURUSD: OPEC tries to stop the fall of oil. Optimism for German economic recovery earlier this year is gradually

The euro reacted negatively to a report from Ifo Institute, which indicated that the German business sentiment index had declined, reflecting problems and is a warning to those investors and economists who spoke about the restoration of the German economy in the near future at the end of 2019. As the first reports show, it will hardly be possible to count on a serious breakthrough in growth rates in the first quarter of 2020. Back in November-December, when a trade agreement was reached between the US and China, or rather its first phase, traders perked up, expecting that the problems in the manufacturing sector of the eurozone countries would disappear on their own. Britain was also optimistic about its orderly exit from the EU. However, the report of some experts says that these global changes only reduce downward risks, but in no way create new incentives for growth, since both the trade agreement and the resolution of the Brexit situation are only partially resolved.

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According to recent data, the activity of the manufacturing sector in Germany only slightly increased, but the decline continues. Equally important, both the service sector and the construction sector also showed weaker growth rates earlier this year.

As I noted above, sentiment in German business circles deteriorated in January. This is evidenced today by published data from the Ifo Institute. Thus, the mood index in German business circles fell to 95.9 points in January from 96.3 points in December 2019. Economists had expected the index to rise to 97.0 points. It is clear that companies' expectations regarding their prospects worsened at the end of the year, which is unlikely to have a favorable effect on the country's economic indicators. The current conditions index in January 2020 rose to 99.1 points from 98.8 points in December 2019, but the expectations index also fell to 92.9 points from 93.9 points. Economists had expected index growth to 99.3 and 94.9, respectively.

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The service sector, which is so far emphasized, also shows the first signs of weakening. Thus, the indicator of sentiment in the service sector in January of this year significantly dropped after reaching its six-month high in December. However, this did not put strong pressure on risky assets, and the EURUSD pair remained trading at around its morning levels, showing very low activity. The prospects for the recovery of the euro will continue to depend directly on the data on the US real estate market and on the level of 1.1040, since only through the return of this range will buyers of risky assets be allowed to return to 1.1070 and update 1.1110. If the pressure remains and there is no activity among major players in the area of 1.1040, we can expect a bearish trend to continue to the lows of 1.1000 and 1.10960.

Oil

Oil quotes slightly rebounded from their daily WTI lows near $52 per barrel after news of intense negotiations within OPEC and Russia on cutting production levels by the end of 2020 appeared. Let me remind you that at the end of the year the OPEC+ coalition, consisting of a cartel, Russia and other oil-producing countries, agreed to further reduce production by 500,000 barrels per day to 1.7 million barrels per day. The next meeting was scheduled for March, but, apparently, will take place earlier. A serious drop in oil quotes from $59 to $52 last week is due to the deadly virus that hit China. We are talking about the spread of Coronavirus, which may affect the consumption of oil by the Chinese side in the future. According to representatives of the cartel, they are already discussing response anti-crisis measures that could lead to a larger reduction in production, or to extend the term of restrictions until the end of 2020.

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

GBP/USD: Great Britain remains attractive for investors, bulls and bears on the pound eager to fight

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The beginning of the year was difficult for the pound. The market had not really managed to wake up from the holidays, and the GBP/USD rate fell from above 1.32 to less than 1.30.

After the collapse of 2%, the British currency firmly settled in the bottom of the main currency ratings. Since the beginning of the year, only its Australian and New Zealand namesakes showed lower results against the US dollar.

What explains the similar dynamics of the pound?

Firstly, the British currency made a staggering leap at the end of last year. As soon as the conditions for the UK's exit from the European Union became known in the fall, the pound took off, and the results of the early parliamentary elections held in December spurred its rally. However, it is difficult to imagine what could help the GBP/USD pair to return above the 1.35 mark for the first time in almost two years. It is unlikely that a country's exit from the world's largest trading bloc guarantees its immediate economic growth.

Good news has already been taken into account in quotes, at the same time, alarming calls for the pound began to appear.

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Recently, officials of the Bank of England, including Mark Carney, Michael Sanders, Gertjan Vlieghe, said they support monetary easing.

As data this month showed, the British economy slowed down in November, and inflation turned out to be unstable.

Against this background, the chances of easing monetary policy in the United Kingdom at the end of January increased to 70%.

However, GBP/USD bulls do not intend to give up.

Judging by the latest data, speculators in the futures market made the biggest bets on the pound since April 2018.

"The UK remains attractive to the markets: bulls and bears are eager for battle," said Keith Joux, an analyst with Societe Generale.

What is this speculators see that the rest of the market does not notice?

"I consider the pound to be the best main currency to buy against the US dollar this year. Uncertainty over Brexit has declined, investment in Great Britain has resumed, and data on the state of business in the country, including purchasing managers' indices, is likely to recover, "said Kamakshya Trivedi, Goldman Sachs strategist.

According to IHS Markit, in January, the UK services sector returned to growth for the first time since August, while the decline in production slowed. The business activity index in the country's manufacturing sector jumped to a nine-month high of 49.8 points this month, with a forecast of 48.9 points. The PMI in the service sector has reached its highest value over the past 16 months (52.9 points).

After the initial strengthening amid the release of positive data on British business activity, the pound fell against the US dollar, as some investors still expect the BoE to cut interest rates at the next meeting, which will be held on Thursday, January 30.

"The rebound in business activity indices in the services and production sectors of Britain turned out to be stronger than forecasts. This may make it harder for BoE to choose this week," TD Securities analysts said.

"We maintain our forecast that the regulator will lower the rate by 25 basis points, but we believe that the likelihood of such a scenario is approximately 50%. There is practically no doubt that the Monetary Policy Committee of the BoE will disagree, as its members attach different importance to fundamental indicators and research on sentiment," they added.

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Another significant event will take place on Friday, January 31 - the UK parting with the EU. However, at the moment, this event will put moral pressure on the market: the relatively smooth process of Great Britain's exit from the block significantly reduces investment risks.

If Brexit does not have any unexpected surprises, then the pound may feel relatively calm, and its certain growth against the US dollar is not excluded. In this case, we should expect the continuation of the GBP/USD pair's movement upward - first to the resistance of 1.3160, and then to the level of 1.3200.

An alternative scenario suggests the pair to fall further, especially if at the next meeting of the BoE, there is at least a hint of a possible reduction in the interest rate sounds. In this scenario, GBP/USD has every chance to continue moving down. Having broken through the support of 1.3040, 1.3000 and 1.2960, the pair can reach the lows of December 2019 at around 1.2900.

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