Trading plan on EUR/USD for January 29, 2020

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The news that came out on Tuesday regarding the US economy came out in favor of the dollar. The consumer optimism index came out at 131, above the forecast, and orders for durable goods showed a good growth of + 2.4%, higher than the forecast as well. However though, orders for transport decreased by 0.1%.

This evening, the Fed is the major economic event of the week; however, there's still the issue of the new epidemic flu in China, where, over the past days, have counted 25 new deaths. Overall, 132 people have died already.

Markets are monitoring the situation in China.

EUR/USD: Euro is slowly declining.

Keep selling from 1.1084.

Selling is possible from a rebound to the top, or from 1.1050 and above.

The signal for the cancellation of the downward movement is the level of 1.1110.

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Technical analysis of EUR/USD for 29/01/2020:

Technical Market Overview:

After the low at the level of 1.0998 had been made, the EUR/USD pair has bounced in order to break out from the Ending Diagonal pattern seen at the H4 timeframe chart. The market conditions are extremely oversold on this timeframe, 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 bulls, if the breakout is genuine, is seen at the level of 1.1040, but the real gamechanger is seen at the level of 1.1076. Please notice that the downside is limited by the lower channel line as well, so the support might help the price to move higher.

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.

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GBP/USD: plan for the European session on January 29. Pound buyers are preparing a new lower boundary of the rising channel?

To open long positions on GBP/USD you need:

Buyers released the pound yesterday, which led to an update of quite important support levels, but the bulls rehabilitated very quickly in the afternoon, creating the first prerequisites for the formation of a new lower boundary of the rising channel. The primary task for them today will be to maintain the support range of 1.2997-90, where the formation of a false breakout will be the first signal to open long positions. It is also possible to build the lower boundary of the rising channel in this area. An important point will be a break and consolidation above the resistance of 1.3030, which will lead to the demolition of stop orders of sellers and a larger upward correction to the area of highs 1.3065 and 1.3102, where I recommend taking profits. If the bulls do not have enough strength to cope with the pressure of sellers in the area of 1.2997, then in this scenario, it is best to postpone purchases until the lows of 1.2963 and 1.2939 are updated, which will mean a bearish trend.

To open short positions on GBP/USD you need:

The bears clearly did not expect such a rebuff and now their task in the first half of the day will be to protect resistance at 1.3030, a little above which the moving average also goes. The formation of a false breakout in this range will be a signal to sell GBP/USD, which will return the pound to the support area of 1.2997-90, near which the main struggle for the further direction will unfold. Consolidation below this area will quickly push the pair to the lows of 1.2963 and 1.2939, where I recommend taking profits. If pressure from sellers in the resistance area of 1.3030 will not be formed, then in this case, short positions are best postponed to the test of highs 1.3065 and 1.3102.

Signals of indicators:

Moving averages

Trade is conducted around 30 and 50 moving average, which indicates a possible change of direction in the near future.

Bollinger bands

A break of the upper boundary of the indicator at 1.3035 will lead to a surge in pound purchases. In case the pair declines, the lower border in the 1.2985 area will provide support.

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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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Euro and pound will remain bearish in anticipation of Fed's result and Bank of England meetings

Today, the Fed will hold its first meeting on monetary policy this year. According to the CME futures market, the probability of maintaining the rate is 87.3% - after the rate was reduced three times last year, and then, in response to the crisis in the repo market, an incentive program was launched that "is not at all like QE4". Thus, the Fed has no reason to continue weakening financial conditions.

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Nevertheless, the Fed will provide some comments on its further actions. As follows from CME forecasts, markets expect a rate cut in September. These expectations reflect an assessment of the state of the US economy; the need for reinforcing stimulus measures is regarded as low.

At the same time, the US congressional budget Committee (CBO) forecasts that the Federal budget deficit will exceed 1 trillion dollars which is already in the current fiscal year, and public debt growth will become exponential. On the other hand, NWO proceeds from the fact that the US economy is far from a recession. GDP growth in 2020 will be 2.2%, that is, a record increase in budget deficits and public debt - this is a natural course of events for a growing economy.

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However, the crisis is only beginning despite the fact that stock indices won back part of the losses due to the panic associated with the coronavirus. January data on consumer spending may decline, which will entail a chain reaction and may provoke a reassessment of the prospects for unsustainable recovery and the return of fears of the global economy slipping into recession.

Under these conditions, the demand for protective assets will remain dominant.

EUR/USD

The euro continues to decline. An attempt was made yesterday to break through the psychological level of 1.10, which ended in failure, but another attempt should be expected in the very near future, given the continued bearish sentiment.

Today, a more pronounced euro movement is possible after the publication of data on the labor market in Germany. The publication of ZEW indexes, which showed some recovery, should receive confirmation from similar studies by Gfk on Friday and IFO on Monday, so that the euro could rely on rising expectations.

Technically, EUR/USD remains under pressure and has every chance to move below 1.10, which can be prevented by a noticeable oversold. On Wednesday, markets have somewhat recovered after active sales at the beginning of the week. This factor is in the hands of the euro. Now, support level is 1.0980 and its testing is probably earlier than corrective growth.

GBPUSD

On Wednesday, the United Kingdom announced its decision on Huawei access to the country's 5G network. At stake are the already unstable trade relations with the United States, especially after disagreements over the digital tax. Moreover, Huawei will be given limited access to the network (that is, there will be no "critical national infrastructure") and market share will be limited.

In addition, Michel Barnier, the EU negotiator for Brexit, continues to argue that it is unrealistic to complete a trade within an 11-month period. He said that both sides would need "much more" time in light of the UK government's insistent statement on "deviating" from EU rules.

In the absence of significant macroeconomic data, the pound continues to follow the market background, losing ground against the dollar. In turn, markets still assess the probability of a rate cut at a meeting on Thursday as relatively high, despite the fact that PMI indices improved markedly in January.

Technically, GBP/USD remains bearish, support 1.2950 / 60 has not yet been broken, and if the Bank of England presents a surprise tomorrow, then exit from the current unstable equilibrium will take place down to the target of 1.29.

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EUR/USD: plan for the European session on January 29. Euro gains strength before the Fed meeting. Buyers' aim for resistance

To open long positions on EURUSD you need:

Yesterday's data on the growth of the consumer confidence indicator in the United States made it possible for major players to take profits in the US dollar ahead of the Federal Reserve meeting, which led to the formation of an upward correction in the EUR/USD pair, which, judging by the divergences in the MACD indicator, has been asking for quite some time. At the moment, the bulls have the task of overcoming the resistance of 1.1030, since on this level it depends whether the pair will continue to grow further and whether the downward trend will be broken. Consolidation above 1.1030 will lead to the renewal of highs in the region of 1.1060, but a larger bullish impulse is formed only if the Fed declares that the policy of low interest rates will be maintained. In case the pair declines in the morning, you can still return to long positions after a false breakout is formed in the support area of 1.1000, but I recommend buying the euro immediately for a rebound only after updating the lows of 1.0982 and 1.0964.

To open short positions on EURUSD you need:

Bears coped with the task of updating support of 1.1004 yesterday, which has now transformed to the level of 1.1000, but failed to break below this range even amid good statistics, which indicates a wait-and-see attitude of large players before the Fed's decision on interest rates. The task of euro sellers is to form a false breakout in the resistance area of 1.1030 today, which will be the first signal to open short positions. Consolidation below the level of 1.1000 will push the pair to the lows of 1.0982 and 1.0964, where I recommend taking profits. In the EUR/USD growth scenario above the resistance of 1.1030, short positions are best postponed until the highs of 1.1060 are updated, or sell immediately for a rebound in the resistance area of 1.1088.

Signals of indicators:

Moving averages

Trade is conducted in the region of 30 and 50 moving average, which indicates the formation of a side channel in the short term ahead of important data.

Bollinger bands

A break of the upper boundary of the indicator in the region of 1.1030 will lead to an increase in demand for the euro. Support will be provided by the lower boundary in the area of 1.1000.

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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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Elliott wave analysis of GBP/JPY for January 29 - 2020

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After a minor corrective rally to 142.73, GBP/JPY is likely to move lower to 140.80 and ideally into the 139.29 - 139.83 target-zone to complete wave C of iv. It is expected also to set the stage for a new rally to above 147.95.

Minor support is now seen at 141.90 and this support will protect the downside for the expected push to 142.73 from where it will decline to 140.80.

R3: 143.00

R2: 142.73

R1: 142.48

Pivot: 142.05

S1: 141.79

S2: 141.46

S3: 141.22

Trading recommendation:

We are short GBP from 143.95 and we will move our stop to break-even.

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Elliott wave analysis of EUR/JPY for January 29 - 2020

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EUR/JPY dipped to a low of 119.78 just above our target at 119.75. We are now looking for a corrective rally towards the 120.79 - 121.09 target-zone before renewed downside pressure towards 118.85 - 119.24 should be expected.

In the short term, a break above 120.40 will confirm the expected rally higher to the 120.79 - 121.09 target-zone.

R3: 121.09

R2: 120.79

R1: 120.40

Pivot: 120.20

S1: 119.90

R2: 119.75

R1: 119.50

Trading recommendation:

We will sell EUR at 120.95 for a final dip to 119.24.

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EUR/USD Projection HOD/LOD For Jan 29, 2020

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Today's high (HOD) and low (LOD) from the Central Bank Dealer Range (CBDR) usually form at STDV 2-STDV 4 in the normal condition market but sometimes can reach the STDV 5-STDV 6. Here's today level:

STDV 10 - 1.1178.

STDV 9 - 1.1163.

STDV 8 - 1.1148.

STDV 7 - 1.1133.

STDV 6 - 1.1118.

STDV 5 - 1.1103.

STDV 4 - 1.1088.

STDV 3 - 1.1073.

STDV 2 - 1.1058.

STDV 1 - 1.1043.

CBDR - 1.1028.

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

CBDR - 1.1013.

STDV 1 - 1.0998.

STDV 2 - 1.0983.

STDV 3 - 1.0968.

STDV 4 - 1.0953.

STDV 5 - 1.0938.

STDV 6 - 1.0923.

STDV 7 - 1.0908.

STDV 8 - 1.0893

STDV 9 - 1.0878.

STDV 10 - 1.0863.

(Disclaimer)

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

EUR/GBP testing resistance, potential drop!

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Trading Recommendation

Entry: 0.84847

Reason for Entry: 50% Fibonacci retracement, horizontal pullback support

Take Profit : 0.84008

Reason for Take Profit: Horizontal swing low support

Stop Loss: 0.85252

Reason for Stop loss: 61.8% Fibonacci retracement, horizontal pullback resistance

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USD/JPY approaching resistance, potential drop !

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Trading Recommendation

Entry: 109.31

Reason for Entry: Horizontal overlap resistance

Take Profit :108.73

Reason for Take Profit: Horizontal swing low support

Stop Loss: 109.79

Reason for Stop loss: Horizontal pullback resistance

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Forecast for the EUR/GBP cross rate for February

EUR/GBP

On the daily chart of the EUR/GBP pair, the price shows growth for the fourth session after its reversal from the MACD line. A month earlier, on December 31, the price made the first rebound from the same line, after which it formed a wide-range correction. A repeated price reversal from the MACD line according to data leads to a trend movement. At the same time, a long convergence was formed by the Marlin oscillator from October to December last year, which has not yet been realized in a trendy or deep corrective movement.

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The growth target is the 0.8722/86 range, formed by the extremes on March 21 and September 20, 2019. The line of the rising price channel lies in this range. The deadline for reaching the target range, taking into account the weekend of March 12.

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The price is held by the MACD line on the four-hour chart, the pair could possibly begin to grow from it in the near future. The Marlin oscillator in the growth zone.

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USD/CAD approaching support, potential bounce!

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Trading Recommendation

Entry: 1.31472

Reason for Entry: 23.6% Fibonacci retracement, 78.6% Fibonacci extension

Take Profit : 1.31767

Reason for Take Profit: Horizontal pullback resistance, 50% Fibonacci retracement

Stop Loss: 1.31334

Reason for Stop loss: 38.2% Fibonacci retracement.

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Forecast for EUR/USD on January 29, 2020

EUR/USD

Expectations of investors on good US data came true yesterday. The volume of orders for durable goods increased by 2.4% in December against the forecast of 1.2%, the root index (excluding vehicles) still showed negative -0.1%. But then everything is fine: the business activity index in the manufacturing sector of Richmond amounted to 20 points in January against expectations of -3 and -5 in December, consumer confidence from the Conference Board increased from 128.2 to 131.6 in January. The US stock index S&P 500 grew 1.01%. Also yesterday it was reported that a vaccine was developed in Hong Kong against the Wuhan coronavirus. If clinical trials are suspiciously fast, in a few weeks, then this topic can be considered exhausted. Note that the former chief state sanitary doctor of the Russian Federation Gennady Onishchenko previously reported that this coronavirus is successfully treated with existing drugs.

Today, the main event will be the Federal Reserve meeting. The meeting is passing, that is, without making any decisions and without publishing the Fed's economic forecasts. But there is one caveat - during Jerome Powell's press conference, the issue of the duration of the current program for repo operations may be discussed. Rumor has it that the program will be diluted with the repurchase of longer-term securities, which in fact will no longer be hidden by QE. This could put pressure on the dollar.

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On the daily chart, the price did not exactly fulfill the target level of 138.2% Fibonacci, but the price tested the November support range. The signal line of the Marlin oscillator is turning up, the price is near the embedded line of the price channel. Consolidation above it will lead to corrective growth of the euro, to the area of the Fibonacci level of 123.5% (1.1080).

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On the four-hour chart, the Marlin oscillator formed a convergence with the price. Here, the 1.1080 level is a support for the January consolidation. The probability of correction is 70%.

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Forecast for GBP/USD on January 29, 2020

GBP/USD

The pound showed increased volatility on Tuesday - lost 77 points and sharply grew and closed the day with 29 points. The price as a whole worked out the area of the first target at the Fibonacci level of 161.8%, but showed a sign of correction from it. The correction can be deep, to the Fibonacci level of 200.0%, where the blue line of MACD develops. Consolidation at 1.2968 will allow the price to continue to decline to the Fibonacci level of 138.2% (1.2820). Much will depend on today's Fed meeting.

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There are no obvious reversal signs on the four-hour chart. But there is a free space both for the price - to the MACD line (1.3080), and for the Marlin indicator to the boundary with the growth territory, which in the current situation roughly corresponds to the level of the MACD line on the price chart.

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On the day of the Fed meeting, the range of free wandering (1.2068-1.3080) attracts increased attention of speculators. Consolidating the price above the upper limit of this range will entail further growth in a deeper correction. Consolidating the price under the Fibonacci level of 161.8% on daily (1.2968) opens the target for the next Fibonacci level of 138.2% at the price of 1.2820.

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Forecast for AUD/USD on January 29, 2020

AUD/USD

Yesterday, the Australian dollar worked exactly the first target of 0.6737, adopted at the Fibonacci reaction level of 161.8% on the daily chart. A sharp enough rebound occurred from the level, which visually indicates the price's intention to continue the correction, the immediate goal of which is 0.6807 - the Fibonacci level of 123.6%.

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Consolidating the price under yesterday's low opens the target at the Fibonacci level of 223.6% at the point of intersection with the embedded line of the price channel (magnetic point) - 0.6624. The Fibonacci level of 200.0% looks weak in this case, as the price tends to a stronger point of attraction. If we assume that the price will continue to decline without preliminary correction, then the movement to the 0.6624 target will follow a gentle path, which is uncharacteristic for the trend. After completion of the expected short-term correction, the decrease to the magnetic point will occur at a traditional speed.

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Fractal analysis of the main currency pairs for January 29

Forecast for January 29:

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: 1.3080, 1.3050, 1.3029, 1.2967, 1.2934, 1.2890 and 1.2867. Here, we are following the development of the downward cycle of January 24. The continuation of the movement to the bottom is expected after the breakdown of the level of 1.2967. In this case, the target is 1.2934. Price consolidation is near this level. Its price passage should be accompanied by a pronounced downward movement to the level of 1.2890. For the potential value for the bottom, we consider the level of 1.2867. Upon reaching which, we expect consolidation, as well as a rollback to the top.

Short-term upward movement is possibly in the range of 1.3029 - 1.3050. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3080. This level is a key support for the bottom.

The main trend is the descending structure of January 24

Trading recommendations:

Buy: 1.3029 Take profit: 1.3050

Buy: 1.3052 Take profit: 1.3080

Sell: 1.2965 Take profit: 1.2936

Sell: 1.2932 Take profit: 1.2890

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9809, 0.9778, 0.9758, 0.9743, 0.9715, 0.9699 and 0.9673. Here, we are following the development of the ascending structure of January 16. Short-term upward movement is expected in the range of 0.9743 - 0.9758. The breakdown of the latter value will lead to a movement to the level of 0.9778. Price consolidation is near this level. We consider the level of 0.9809 to be a potential value for the upward movement; upon reaching this level, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.9715 - 0.9699. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.9673. This level is a key support for the top.

The main trend is the upward cycle of January 16

Trading recommendations:

Buy: 0.9743 Take profit: 0.9756

Buy: 0.9758 Take profit: 0.9776

Sell: 0.9715 Take profit: 0.9700

Sell: 0.9697 Take profit: 0.9675

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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.

Consolidated 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 goal is 109.43. This level is a key support for the downward structure.

Main trend: potential downward structure of January 17, correction stage

Trading recommendations:

Buy: Take profit:

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.

Consolidated movement is possibly in the range of 1.3178 - 1.3157. The breakdown of the latter 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, the correction stage

Trading recommendations:

Buy: 1.3198 Take profit: 1.3236

Buy: 1.3240 Take profit: 1.3270

Sell: Take profit:

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

GBP/USD. Pound to the slaughter: prospects look gloomy

The pound paired with the dollar is slowly but surely sliding to the support level of 1.2950. After a sharp jump in the middle of the 31st figure, the price began to decline gradually, yielding also to the strengthening of the US currency. The temporary strengthening of the pound was due to the growth of the UK labor market. A relatively good report supported the pair, which was under pressure from disappointing releases. But this support was of a short-term nature, since all other (almost all) fundamental factors played against the pound. It is even amazing how the pound stayed within 30-31 pieces for such a long time, given the negative fundamental background for GBP/USD. Only relatively rare news regarding the implementation of the "soft" Brexit fueled interest in the pound. In general, the prospects for the pair look rather gloomy - even if the Bank of England takes a wait-and-see attitude the day after tomorrow.

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Let me remind you that the last surge in interest in the British currency was due to two factors. First, the House of Lords, after a brief "bickering," approved the Brexit bill. On the one hand, this decision was expected, but on the other hand, there was a risk of "legislative ping-pong" - the bill would be considered several times by the Lower and Upper Houses of Parliament. There are no time limits for such a ping-pong, but the time allotted for negotiations was gradually drawing to an end. Therefore, when the peers nevertheless approved the deal, the pound received substantial support. Further procedural aspects (the signing of the document by the queen, ratification by the EU authorities, Boris Johnson's signing of the deal) were practically ignored by the market, despite their historical importance. But from the point of view of the foreign exchange market, Brexit has already taken place de facto, therefore ceremonial events have already slightly worried traders.

The GBP/USD pair was further supported by the British labor market. Firstly, unemployment remained at a record low level of 3.8%, and secondly, the level of salaries (including premiums) remained at 3.2% in annual terms, although experts predicted a decrease to a three percent level. The growth rate of applications for unemployment benefits reached 14 thousand, but analysts expected it at higher values (from 40 to 50 thousand), so the actual result met the demands of investors. After this release, rumors appeared in the market that the English regulator would take a wait-and-see attitude at the January meeting, thereby giving the British economy a chance to independently get out of this situation - without additional help from the central bank.

The Bank of England may indeed maintain the status quo in monetary policy this Thursday. But at the same time, if the regulator's members do not announce a rate reduction at the next meetings, they will probably take an extremely dovish position, thereby putting additional pressure on the pound. In addition, it can be said with almost certainty that the number of those who voted for the rate cut will increase to three - these are Vlieghe, Saunders, and Tenreyro recently joined them. If at least one other member of the Committee joins the dovish wing, then the pound will again fall under the wave of sales (after all, in this case four out of nine members of the regulator will vote for a rate cut).

By the way, some currency strategists do not exclude the option of reducing the rate as early as January 30. Their arguments sound convincing - the UK GDP indicator has been steadily declining, inflation has been growing at the slowest pace since 2016, retail sales have completely collapsed into the negative area, despite the pre-holiday December period. All of these factors can push members of the BoE to decisive action. Mark Carney did not exclude the likelihood of easing monetary policy (by the way, this will be his last meeting as the head of the English regulator). And although his position is accompanied by a multitude of "ifs," he is generally ready to support the British economy.

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Thus, the British currency, in my opinion, is in any case in a disadvantageous position. The pound will instinctively jump across the entire market if the BoE leaves the interest rate unchanged. But the subsequent comments by the head of the central bank, which are likely to be of a dovish character, offset the initial optimism. If the regulator lowers the interest rate, then the pound will dive further, since this scenario is not taken into account in prices by 100%. Also, one should not forget about the pressure of the US currency, which is growing due to panic in the market. This combination of fundamental factors will make it possible for GBP/USD bears to reduce the price not only to the nearest support level of 1.2950 (the lower line of the Bollinger Bands is at D1), but also to approach the next support level, which is 100 points lower (i.e. 1.2850 - this is the lower boundary of the Kumo cloud on the same timeframe).

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Donald Trump caught in a lie. Video proves the insincerity of the US president

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The impeachment case of Donald Trump continues to be considered in the US Senate. It is still unknown and incomprehensible when the verdict will be issued, however, the fact that the case is overgrown with new details cannot be denied. John Bolton's testimony can still be qualified as false information that has no evidence. However, what then can be generally considered evidence of Trump's guilt, even if the testimony of his former national security adviser is not regarded as the truth? Immediately after Bolton's testimony, a two-year-old video hit the net. Video of a dinner at the Trump Hotel in Washington, in which the US President, Lev Parnas, Igor Fruman (businessmen, business partners of Trump's personal lawyer Rudolph Giuliani) took part. Who filmed this dinner remains a mystery. It was also attended by several other minor characters who have no significance in the whole matter. So, as you can clearly see and hear from the video, Trump, Fruman and Parans discussed the activities of the US ambassador to Ukraine Marie Yovanovitch, as well as Ukraine itself. Fruman and Parnas thanks Ukraine for the help and can hold out for some time (meaning the situation in the Donbass), and it is better to get rid of Ambassador Yovanovitch, as she says to everyone that Trump will soon be impeached, after which Trump gives the order "Get rid of her." A year later, Marie Yovanovitch will be recalled from Kiev, and she will become one of the main witnesses in the Trump case on abuse of authority. Trump's defense has already commented on this review. According to Giuliani, the US president has every right to appoint and remove ambassadors from office at any time, and even without explanation.

However, this is not the most interesting. Trump said earlier that he was not familiar with Parnas and Fruman, but the record proves the opposite. Not only knew, but also talked and conducted business. Trump previously stated that he is doing business with hundreds of people, some of whom he can really forget. It seems that approximately such an explanation is preparing to be voiced now.

Thus, the situation at the moment looks like this. Democrats insist on inviting Bolton to testify at the Senate. However, in order to do this, they need the votes of at least four Republicans, since their own number in the Senate is 47. If these four votes cannot be obtained, they will not be involved in Bolton. At the same time, Republicans want to see Joe Biden or Hunter Biden in the Senate to testify about their activities in Ukraine. For obvious reasons, the Democrats do not want this. In general, the whole thing still resembles more political games, a political conspiracy, a redistribution of power in the US government. Obviously, Joe Biden and his son are clearly not suspected of crossing the street at a red light. But Trump's fault is obvious. It's not even Yovanovitch's matter, but Trump's desire through Ukraine to denigrate his main rival in the fight for the presidency or even eliminate him. Thus, it is impossible to say that Democrats are 100% right, and Republicans are not. In the same way, the opposite conclusion cannot be made. Thus, we, ordinary citizens and traders, can only watch the process and wait for it to end. In fact, now it all comes down to getting the answer to the question: "Whose ratings will decline after the Senate, Joe Biden or Donald Trump? It is unlikely that the Senate will indeed approve of impeachment to the president. At the same time, experts note that the rating of the current president of the United States is now at its highest values, but will the American people want to vote for Trump a second time?

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GBP/USD. Passion rate: will the Bank of England soften monetary policy?

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The first meeting of the Bank of England this year attracts much more attention than the January meeting of the Federal Reserve. This is not surprising. For all the time Mark Carney has been at the helm of BoE, the chances of the regulator cutting the interest rate have not been as high as they are now.

Recall that the Bank of England rate has remained unchanged at 0.75% since August 2018. Its last decline occurred in 2016.

For the first time since August, the business activity index in the UK services sector rose above 50, indicating a sector expansion. The composite PMI has peaked since September 2018. Recent data on employment and wage growth indicate a relatively healthy labor market in the country. At the same time, reports on GDP, industrial production, inflation and retail sales were disappointing.

Thus, the BoE has reason to lower the interest rate, and this circumstance pulls the GBP/USD pair to the lower boundary of the medium-term range of consolidation of $1.3000-1.3350.

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Since the political upheavals associated with Brexit have so far receded into the background, the pound is vibrantly responding to macro statistics across the United Kingdom. Even the roller coaster of the GBP/USD pair against the background of the release of the British indices of purchasing managers look quite understandable. When everyone buys, there is a great opportunity to take profits on long positions.

The pound is also sensitive to changes in the chances of easing BoE's monetary policy, which, prior to the publication of January business activity data, soared above 70%, then dropped to 52%, and then rose to 60%.

Whatever decision the CB makes at the upcoming meeting, the GBP/USD pair is unlikely to remain in place.

According to the consensus forecast of Bloomberg analysts, the Bank of England Monetary Policy Committee will vote six times against three to keep the interest rate at 0.75%. This circumstance and the fact that speculators are skeptical about the idea of weakening BoE's monetary policy (by the end of the week by January 21, bullish positions in the British currency on the derivatives market fell quite slightly) can play a trick on the pound.

If BoE lowers the interest rate by 25 basis points, then the GBP/USD pair can easily go down to 1.2900 amid large-scale pound sales by hedge funds and asset managers. In the meantime, they prefer to stand aside and not force things.

Keeping the rate at the current level may result in the growth of the pound to 1.3100–1.3140.

As for the long-term prospects, fans of the British currency say that even the BoE's easing of the monetary rate will not put an end to the bullish trend in GBP/USD. According to them, improving the political landscape in Great Britain will contribute to the influx of foreign capital into the country. The bears are betting on difficulties in trade negotiations between London and Brussels, which may lead to increased uncertainty and a drop in business activity in the UK.

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Swiss franc: feast during the plague?

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The Swiss currency is actively gaining momentum, surprising the market with rapid growth. According to analysts, the rise of the Swiss franc is due to world markets' fears over the spread of the Chinese coronavirus.

Most investors who are seriously worried about the epidemic that came from China go into defensive assets, one of which is the Swiss franc. In relation to the European currency, the Swiss has reached the highest level that has not been recorded over the past three years. In the USD/CHF pair, the growth of this currency is not so impressive: it is restrained by the negative attitude of the American authorities to the policies pursued by the Swiss National Bank (SNB). Recall that previously Washington accused the country's monetary authorities of manipulating the national currency.

The intervention of US authorities provides additional support to investors. Currently, Swiss franc sellers have stepped up, taking advantage of the fact that the USD/CHF pair is in a bearish trend. Last week, experts recorded its correction, and now recommend opening short positions on the USD/CHF pair.

On Tuesday, January 28, the dynamics of the USD/CHF pair remains unchanged. The pair froze at 0.9683, not wanting to move up or down.

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Now the Swiss currency is contemplating where it should direct the vector of its movement. Earlier, the franc was rapidly growing in price in relation to other European currencies. However, the threat of the spread of coronavirus has made adjustments. Together with the Norwegian krone, the Swiss franc may yield to its competitor, experts said.

On Monday, January 27, the highest growth was recorded in the CHF/NOK pair, which is only 2.3% lower than the record for 2015. Recall that in that period the pair reached the level of 9.5538. The reason for the dizzying takeoff was the sudden abolition of the SNB limit of strengthening the national currency at 1.20 francs for a euro.

Analyzing the situation with the current explosive growth of the Swiss franc, many experts draw a parallel with the feast during the plague. It turns out that the Swiss currency took advantage of the difficult situation on world markets, not missing a chance to rise. However, the taste of victory was mixed with bitterness and anxiety for the future. At the same time, the tense external background does not allow the franc to turn around, holding back further growth. In the short term, the Swiss currency will maintain its current dynamics, experts said.

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Trading idea for gold

Good evening, dear traders! I present to you the trading idea for gold.

So, the fears around the Chinese coronavirus drove the price of the precious metal to the region of $ 1,580 per troy ounce. Gold was only more expensive in early January during the Iranian attack on US military bases in Iraq after the assassination of General Soleimani:

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D1's price action picture:

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Analysis of H1:

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In this situation, priority is in sales, because a pinbar with a gap in the bottom remained on the highs yesterday. At the same time, the base of this pin-bar coincides with the mirror level of 1575, behind which now stands all the stops of buyers for Monday and part of the environment.

I remind you that gold should be traded exclusively at the American session (green areas).

The intrigue is that the sellers were not touched yesterday, and this is not very good for moving down. Therefore, I recommend 2 scenarios. The first is to work on the profit from sales on the fact of signals from smaller TF. The second one is for a false breakdown of 1586-1588, I recommend to catch sales with a take profit at the level of 1575.

If these events do not happen today, I recommend waiting for the news tomorrow night at the interest rate of US dollar, as well as the Fed press conference:

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Have a successful trading and control the risks!

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EUR/USD. January 28. Results of the day. US macroeconomic statistics supported the dollar

4-hour timeframe

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

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

The first trading day of the week was completely empty in terms of macroeconomic events. However, today traders already had something to turn their attention to. The volatility during the day, however, has not grown much and is currently at least 28 points, but given the fundamental background of today, there is still reason to believe that the indicator will still reach an average of 42 points. Bears continue to hold the market in their hands, there is no talk of any correction, although the MACD indicator has turned up. But since there was no parallel increase in price, we believe that the indicator simply started to discharge, since it has nowhere to decline further - the downward movement of the euro/dollar pair, although weak, is recoilless. The immediate goals for the euro are levels 1,0990 and 1,0977, each of which can trigger the beginning of an upward correction, which has been brewing for two days. However, at the same time, we would like to note that if the movement is very weak and at the same time trendy, then it can continue for a very long time and without corrections. It is best to pay attention to the Kijun-sen line, which in such cases follows the trend well and is the reference line for this trend itself.

In fact, traders were interested in only one macroeconomic report today and it was extremely controversial. Now it's easy to guess that the reaction of traders to this report was to sell the euro/dollar pair, respectively, it was at least not a failure. Although, as we have said, it can be interpreted in different ways. This report is for durable goods orders. It is important because the production of durable goods (for example, automobiles) requires serious investments, and the goods themselves are expensive, respectively, their sales volumes significantly affect the economy. So, the most significant indicator showed an increase of 2.4% in December against the previous value of -2.0% and the forecast of + 0.5%. It seems that it was precisely on this indicator that traders paid the most attention, which is completely logical. The second most important indicator is orders for capital goods, excluding the defense and aviation sectors. These goods are intended for the production of other goods and services with a service life of at least three years. This indicator decreased by 0.9% in December, although the forecast predicted a zero change compared to the previous month. Next, orders were published excluding transport (decreased by 0.1% with higher forecasts) and excluding the defense sector (decreased by 2.5%). In general, all derivatives of the main report were reduced, some by very impressive values. This is probably why the strengthening of the US currency is quite restrained.

What conclusions can be drawn from this report? Twofold. On the one hand, the main indicator - did not disappoint. On the other hand, other indicators disappointed. Once again, we are forced to think about a possible new slowdown in the US economy, as the latest macroeconomic statistics indicate a decline in some indicators, such as industrial production or business activity in the manufacturing sector. Of course, this is still not enough to make louder conclusions, however, these figures may cause concern not only for ordinary traders, but also the Federal Reserve, which previously announced that there might not be any changes in monetary policy parameters until mid-2020. Tomorrow will be the summing up of the January meeting of the Fed. The probability of a rate cut is zero. However, in light of the latest macroeconomic statistics, new information may be heard at a press conference by the Federal Open Market Committee. No other important events or reports are contained in the calendar for tomorrow; the very announcement of the results of the Fed meeting will take place late in the evening.

Based on the foregoing, calm trading is expected almost tomorrow evening until tomorrow. In the evening, the source of the imbalance in the market might come from Jerome Powell's speech, and then only if he expresses his fears or notes the worsening statistics.

Trading recommendations:

EUR/USD continues to move down. Thus, it is recommended to hold open short positions with the targets of 1.0990 and 1.0977, until the start of the correctional movement (rebound from any target or the MACD indicator upward with a parallel increase in price). It will be possible to consider purchases of the euro/dollar pair not earlier than the Kijun-sen line in small lots with the goals of the resistance level of 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.

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GBPUSD: Pros and cons of UK interest rates

If tomorrow's meeting of the Federal Reserve is more or less clear, then how the Bank of England will behave remains a mystery. Different analytical agencies and large management funds look at the situation with interest rates differently, which divides them into two camps. Some are convinced that lowering the BoE interest rate this Thursday would be too premature a decision. This argument is supported by a recent report by the Organization for Economic Co-operation and Development, which points to the stabilization of UK economic data. However, problems persist with retail sales, not to mention the uncertain prospects for a Brexit deal and the development of the situation in this direction, which many have already forgotten about.

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Those who expect interest rates to remain unchanged focus on recent data on services and manufacturing activity, where real improvements have been noted, which may also affect the BoE's decision.

Another camp believes that the English regulator will actively reduce interest rates in the near future, and it is necessary to wait for this, perhaps not on Thursday, but in the coming months. Here the emphasis is placed on the likely deterioration of the economic situation in the UK at the beginning of this year, which will force the BoE to consider a more serious rate cut, as well as stimulating the economy in other ways. Let me remind you that at present the key interest rate is at the level of 0.75%. Meanwhile, the yield on 10-year UK government bonds is at 0.503%.

Today's report from the Confederation of British Industry CBI, which pointed to the lack of growth in retail sales in the UK in January this year, is unlikely to affect the BoE's decision on interest rates, but adds even more uncertainty. According to the data, about 40 retailers noted a lack of growth in retail sales. However, despite the fact that the data reflects only the report for the first half of January, the British pound did not miss the moment and fell against the US dollar. Although the downward movement of the GBPUSD pair is more connected with the demand for the US dollar due to the aggravation of the situation with coronavirus infection in China than with the weakness of the pound itself.

Regarding the technical picture of the GBPUSD pair, most likely, an intermediate stop of the downward trend will be noted at 1.2985, while a larger support level can be seen at the January 20 low at 1.2960. It will be possible to talk about buyers returning to the market only after the BoE has assessed further prospects for the economy and the publication of a decision on interest rates and monetary policy. The bulls need an urgent return of resistance 1.3035, from which it will be possible to successfully build an upward momentum to the highs of 1.3130 and 1.3175.

EURUSD

Although the data on the moods of German exporters are not very important, the lack of other fundamental statistics makes us pay attention to them. The weakening of the euro and other risky assets is quite obvious, as I spoke in more detail in my morning review.

According to Ifo, the sentiment of German exporters deteriorated in January this year, as a result of which the index of expectations of exporters in the manufacturing sector fell to 0.9 in January from 2.0 in December. However, Ifo expects that the recent easing of uncertainty and the signing of the first phase of the trade agreement between the US and China will have a positive impact on global markets and will affect the situation with export orders in Germany.

As for the technical picture of the EURUSD pair, the bears pushed the euro to support 1.1000, but that was all. It will be possible to talk about the restoration of the euro only after consolidating above the high of 1.1040, and for now, the trend is on the side of sellers of risky assets, which opens a direct path to the lows of 1.0980 and 1.0960.

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