EUR/USD: plan for the European session on February 10. Bears are trying to put pressure on the euro, but it's getting harder

To open long positions on EURUSD, you need:

Good Friday data on the labor market in the United States did not lead to a major collapse of the euro, and only after an active confrontation on the background of closing profits by major players, the pair went down to the area of 1.0943, which now represents a very important level of support. Buyers need to achieve the formation of a false breakdown in this area, which will be a signal to open long positions in the expectation of a breakout and consolidation above the resistance of 1.0975. Only such a scenario will allow you to see a larger upward correction in the area of highs of 1.1002 and 1.1022, where I recommend fixing the profits. If we reach the level of 1.0943 without volume, it will probably break through. In this case, it is best to postpone new long positions until the test of a larger minimum of 1.0905.

To open short positions on EURUSD, you need:

Sellers will wait for the next weak data on industrial production in the eurozone and continue to put pressure on the euro. However, opening short positions on the breakout of the lows is quite dangerous. A better option today for sales in the first half of the day will be the formation of a false breakdown in the resistance area of 1.0975, which will be the first signal to open short positions with the main goal of returning to the minimum of 1.0943, on which the further downward movement depends. A breakout and consolidation under this range will quickly push EUR/USD down to the lows of 1.0905 and 1.0887, where I recommend fixing the profit. If there is no activity on the part of sellers in the resistance area of 1.0975, then it is best to return to short positions on the rebound from the maximum of 1.1002.

Signals of indicators:

Moving averages

Trading is conducted below the 30 and 50 moving averages, which indicates the predominance of sellers in the market.

Bollinger Bands

In the case of growth in the first half of the day, the upper limit of the indicator 1.0968 will act as a resistance. Support will be provided by the lower border that coincides with the level of 1.0940.

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Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - Moving Average Convergence / Divergence) Fast EMA Period 12. Slow EMA Period 26. SMA Period 9
  • Bollinger Bands (Bollinger Bands). Period 20
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Trading plan for February 10, 2020. All is in favor of the US dollar

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On the morning of February 10, 908 deaths and 40 thousand infected (an increase of + 10% in two days), of which almost 4,000 are in serious condition, are recorded regarding the epidemic situation in China.

The growth rate of infection is still high, at about 10% increase per day or two.

Meanwhile, the positive news is that on Saturday, experts said that the peak of the virus has passed, and the rate of spread in February is much lower than that of January. This is a positive news for the markets as well.

Arguments in favor of the dollar:

1. Trump won the impeachment case, becoming significantly stronger.

2. The epidemic situation in China is pushing investors into the dollar.

3. The US employment report showed a strong job increase in January: +225 K.

EUR/USD:

Keep selling from 1.0990.

When a rebound happens, sell from 1.0990.

The signal to cancel is 1.1035.

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Technical analysis of ETH/USD for 10/02/2019:

Crypto Industry News:

The Swiss Financial Market Authority (FINMA) has adopted a law on anti-money laundering. Citing additional risk, the threshold for unidentified cryptocurrency exchanges has been lowered from 5,000 to 1,000 Swiss francs.

The provision appeared after the Act on financial services and the Act on financial institutions, which entered into force on January 1. FINMA has submitted a revised regulation in response to these laws and will continue to consult on further regulations until April 9.

One of the key changes is the normalization of Swiss national laws through the Anti-Money Laundering Special Group or FATF directives since June 2019. The international body has set a maximum transaction limit of 1,000 francs for unidentified cryptocurrency exchanges.

All financial service providers involved in cryptocurrencies will have to collect data on all persons initiating transactions in excess of 1,000 Swiss francs.

This initiative is part of a global trend seeking to tighten anti-money laundering regulations. By implementing the directive, according to a press release, FINMA recognizes the increased risk of money laundering in cryptocurrency transactions.

The European Union has also implemented the Fifth Anti-Money Laundering Directive (5 AMLD), which entered into force this year. The new regulation applies primarily to certain types of cryptocurrency transactions, in particular those requiring strict reporting of customer information.

Technical Market Overview:

The ETH/USD pair has been trading above the $200 level over the weekend. The recent swing high had been made at the level of $229.61 and since then the price started a corrective cycle to the downside and a Shooting Star candlestick pattern has been made around the top. Currently, the price is trading above the local technical support located at the level of $215.30, but if the bearish pressure intensify, then the price might get back to the channel zone around the level of $200. That would be the first indication of a deeper corrective cycle to come soon.

Weekly Pivot Points:

WR3 - $294.29

WR2 - $261.49

WR1 - $246.98

Weekly Pivot - $213.30

WS1 - $200.82

WS2 - $167.15

WS3 - $155.55

Trading Recommendations:

There is a possibility that the wave 2 corrective cycles are completed at the level of $115.05, so the market might be ready for another impulsive wave up of a higher degree and uptrend continuation. This strategy is valid as long as the level of $146.94 is not violated. Nevertheless, the larger timeframe trend is still down and all the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend until the level of $196.61 is clearly broken.

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Technical analysis of BTC/USD for 10/02/2019:

Crypto Industry News:

The Bitcoin network has exceeded half a billion transactions since the launch of the cryptocurrency over 11 years ago.

The first Bitcoin transaction took place on January 12, 2009. Satoshi Nakamoto and the late Hal Finney were the first participants in the project. Nakamoto sent Finney 10 Bitcoins as a test, after which the IT specialist himself began to extract cryptocurrency.

Ten months later, on October 5, 2009, the New Liberty Standard set the initial Bitcoin exchange rate against the dollar. At that time, $ 1 was worth 2,300.03 Bitcoins.

The first transaction in the history of exchanging Bitcoin for physical goods took place on May 22, 2010. On the famous Bitcoin Pizza Day for 10,000 Bitcoins, Laszlo Hanyecz bought pizzas. The developer offered Bitcointalk Bitcoin users in exchange for two pizzas. A teenager named Jeremy Sturdivant, nicknamed Jercos, took Bitcoin and sent Hanyecz two pizzas from Papa John's restaurant. This is the first commercial transaction for Bitcoin. After 11 years, Bitcoin reaches another important milestone in handing over half a billion transactions.

Technical Market Overview:

The BTC/USD pair has made another higher high over the weekend and hit the level of $10,133. Since then the market has made a Bearish Engulfing candlestick pattern at the H4 timeframe chart. Some traders have taken profit off the table ad the level of $10k was hit, but now the price is bouncing right back up. The trend is still up despite the extremely overbought market conditions on H4 and Daily timeframes. The nearest important short-term technical support is seen at the level of $9,508 and only if this level is clearly violated the deeper correction can be made.

Weekly Pivot Points:

WR3 - $11,600

WR2 - $10,823

WR1 - $10,568

Weekly Pivot - $9,731

WS1 - $9,416

WS2 - $8,639

WS3 - $8,335

Trading Recommendations:

The market might have made the first impulsive wave up of a higher degree. This strategy is valid as long as the level of $7,582 is not violated. Nevertheless, the larger timeframe trend is still down and all the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend until the level of $10,278 is clearly broken.

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Hot forecast for EUR/USD on 02/10/2020 and trading recommendation

Over the past week, the single European currency has been doing nothing but getting cheaper. But to be honest, just on Friday it became clear that something incredible was needed to further weaken it.

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Everyone expected that the market would be quiet and calm before the publication of the report of the United States Department of Labor; however, the single European currency rushed down from the very opening of the European session. The reason was the extremely weak data on industrial production in Germany and France. So, in the largest economy of the euro area, the decline in industrial production accelerated from -2.5% to -6.8%, which can be called a complete disaster. In France, industrial production growth of 0.9% gave way to a decline of -3.0%. Nevertheless, things are a little better in Spain, where industrial production is still increasing, although it slowed down from 1.6% to 0.8%. On the other hand, retail sales in Italy, whose growth rates slowed down from 1.0% to 0.9%, only added to this terrifying picture. As a result, everything is bad in Europe, and this is visible to the naked eye, which caused the further decline of the single European currency.

Industrial production (Germany):

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At the same time, the market practically did not react to the content of the report of the United States Department of Labor, which turned out to be incredibly good. Yes, the unemployment rate increased from 3.5% to 3.6%, but the share of physically fit in the total population increased from 63.2% to 63.4%. Thus, the unemployment rate was supposed to increase stronger. The whole point is 225 thousand new jobs created outside agriculture, while they were expected to be only 148 thousand. In addition, the growth rate of average hourly wages accelerated from 3.0% to 3.1%. However, the average working week remained unchanged. So, the content of the report is really very, very good, but the dollar could not develop its success.

Unemployment Rate (United States):

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Apparently, the reason lies in the fact that the market was already preparing for the fact that the labor market data would turn out to be pretty good, but European statistics came as a complete surprise, although the content of the report was better than expected. Nevertheless, it was no longer enough that the dollar continued to strengthen further. This means that its growth potential is extremely limited. So now, any negative news for the dollar will be a great reason for correction. However, only politicians will be able to give the market a similar reason today, since the macroeconomic calendar is completely empty. And if there is no scandalous news, then the single European currency will either stand still or grow slowly, almost insignificant at least because of the overbought dollar.

From the point of view of technical analysis, we see a continuous downward interest, which led to a breakdown of the psychological level of 1.1000 and consolidation of quotes within the level of 1.0950. In fact, we managed to return to the autumn 2019 region, while the downward move has been held for more than five weeks.

In terms of a general review of the trading chart, we see not just an attempt to restore quotes, relatively elongated correction, but a full-fledged process, with a value of more than 80%.

It is likely to assume that downward interest will continue in the market, but due to local overheating of short positions, a rebound towards 1.0980-1.0990 may occur. Further downward trades will be considered if prices are fixed lower than 1.0940.

Concretizing all of the above into trading signals:

- Long positions are considered in case of price fixing higher than 1.0960, with the prospect of a movement to 1.0980-1.0990.

- Short positions are considered in case of fixation lower than 1.0940, with the prospect of a movement to 1.0890.

From the point of view of a comprehensive indicator analysis, we see a downward interest in hold, where a buy signal began to appear for relatively shorter periods against the background of local stagnation.

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Technical analysis of GBP/USD for 10/02/2019:

Technical Market Overview:

The GBP/USD pair has broken through the key short-term technical support located at the level of 1.2904. This support was important because it was a lower boundary of a narrow horizontal zone located between the levels of 1.2904 - 1.3226. The breakout had been done in oversold market conditions, but no bounce in momentum was made as it still is weak and negative. This breakout might be the beginning of a larger correction to the downside and the next target for bears is seen at the level of 1.2823. The immediate technical resistance is seen at the level of 1.2939.

Weekly Pivot Points:

WR3 - 1.3353

WR2 - 1.3269

WR1 - 1.3041

Weekly Pivot - 1.2956

WS1 - 1.2722

WS2 - 1.2624

WS3 - 1.2379

Trading Recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is up, so all downward market moves will be treated as local corrections in the uptrend. In order to reverse the trend from up to down in the longer term, the key level for bulls is seen at 1.2756 and it must be clearly violated. The key long-term technical support is seen at the level of 1.2231 - 1.2224 and the key long-term technical resistance is located at the level of 1.3512.

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Technical analysis of EUR/USD for 10/02/2019:

Technical Market Overview:

The EUR/USD pair has been trading inside of the descending channel since the beginning of February and is currently trading just above the key shoer-term technical support located at the level of 1.0940. All the bounces after the sell-offs had been shallow, so the bearish pressure is still high despite the oversold market conditions. The momentum is still weak and negative and there is no indication of any trend reversal yet. The next target for bears is seen at the level of 1.0905 and the immediate technical resistance is seen at the level of 1.0981.

Weekly Pivot Points:

WR3 - 1.1168

WR2 - 1.1131

WR1 - 1.1018

Weekly Pivot - 1.0976

WS1 - 1.0860

WS2 - 1.0819

WS3 - 1.0703

Trading Recommendations:

The best strategy for current market conditions is the same as it was for recent months: 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 larger timeframes like weekly, which indicates a possible downtrend termination soon. The key short-term levels are technical support at the level of 1.0981 and the technical resistance at the level of 1.1267.

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EUR and GBP remain under weak bearish pressure, corrective growth will be temporary

The report on the US labor market for January was expected to be strong, with 225 thousand new jobs created in the non-agricultural sector of the economy (an increase of 160 thousand was forecast), and data for November-December were slightly revised upward.

Despite the fact that unemployment increased from 3.5% to 3.6%, this indicator did not add negativity, since the level of participation in the workforce increased from 63.2% to 63.4% at the same time. In addition, the salary level showed an increase in January of 0.2%, which is worse than the forecast + 0.3%, but the annual growth was 3.1%, due to the fact that the data for December were revised upwards.

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The report should contain at least 2 important conclusions:

The first of these concerns the Fed rate. The probability that the regulator will take a break before the election increases, and therefore, the markets reacted by selling bonds and falling their yields. Stocks were also sold, which was somewhat unexpectedly amid a strong report, but may indicate the need to fix the level reached earlier. The reversal of the ISM indices is clearly related to the Fed's reaction to the repo crisis last fall; a powerful stimulus package gives results.

The second conclusion is even more obvious - the US economy is growing steadily despite the fact that the rest of the world is closer to stagnation than to growth. Does this growth count on the growth of the dollar? The report on this issue is far from obvious.

The Congressional Budget Committee published a review of the US federal budget for January. According to it, the deficit for the first 4 months of the current fiscal year amounted to 388 billion, which is 78 billion, or 25% more than a year ago. Revenue growth is significantly offset by rising costs, while the difference is 40 billion in January alone compared to January 2019, that is, the deficit growth tends to accelerate.

Moreover, the Treasury will add $ 200 billion to the US banking system over the next month, which will increase liquidity and, in general, play in favor of increased demand for risky assets. On February 13, some decisions on repurchase transactions will be made public and the Fed's Treasury purchase schedule will be published, estimated at 60 billion a month. These measures will contribute to the growth of the dollar supply, which may lead to its corrective decline, especially if the general macroeconomic background shows an increase in positive. As a result, demand for risky assets is likely to increase this week. At the same time, the long-term trend in the dollar index remains bullish, while the CFTC report showed an increase in the total long position in the dollar for the week.

EUR/USD

France and Germany presented extremely poor data on industrial production in December (-2.8% m / m and -3.5% m / m, respectively), which turned out to be noticeably worse than forecasts and cast doubt on the ability of the eurozone to overcome industrial failure.

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The euro still looks vulnerable, and it is still too early to expect a reversal. The speculative position on the euro has become even more bearish, the net short has grown again, and now the maximum advantage since October.

Technically, EUR/USD remains under bearish pressure. The support at 1.0935 / 45 may provide a technical rebound to 1.0965 / 75, but a stronger growth is in doubt.

GBP/USD

Net shorts declined at the end of the week according to the CFTC report, which indirectly indicates a change in sentiment in favor of slowing the fall of GBP. In the absence of significant macroeconomic data, the pound follows the market. Now, strong movements are possible on Tuesday, data on industrial production and the trade balance in December, investments in the 4th quarter, and an estimate of the GDP growth rate from NIESR in January will be published.

On the other hand, the confrontation between the UK and the EU on a future trade agreement intensifies, which will put pressure on the pound. The support at 1.2881 is weak, if risk appetite in global markets is confirmed, then growth is possible to 1.2945 / 50. However, the trend remains bearish for a long time and there is no reason to wait for a reversal.

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GBP/USD Projection HOD/LOD For Feb 10, 2020

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

STDV 10 - 1.3087.

STDV 9 - 1.3068.

STDV 8 - 1.3049.

STDV 7 - 1.3030.

STDV 6 - 1.3011.

STDV 5 - 1.2992.

STDV 4 - 1.2973.

STDV 3 - 1.2954.

STDV 2 - 1.2935.

STDV 1 - 1.2916.

CBDR - 1.2897.

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

CBDR - 1.2878.

STDV 1 - 1.2859.

STDV 2 - 1.2840.

STDV 3 - 1.2821.

STDV 4 - 1.2802.

STDV 5 - 1.2783.

STDV 6 - 1.2764.

STDV 7 - 1.2745.

STDV 8 - 1.2726.

STDV 9 - 1.2707.

STDV 10 - 1.2688.

Pay attention to the level of confluence between today's & yesterday range at 1.3068, 1.3030, 1.3055 & the previous Day High of 1.2958 together with the Previous Day Low of 1.2878. All these levels can be a potential turning point.

(Disclaimer)

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Elliott wave analysis of GBP/JPY for February 10, 2020

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GBP/JPY has followed the expected path lower and should now respect short-term key resistance at 142.38 for the next part for the decline towards 140.80 on the way lower to at least 139.24 and possibly even closer to the equally target at 137.86.

An unexpected break above key resistance at 142.38 will indicate that a premature low already was found at 140.80 and a new impulsive rally is developing to above 147.94.

R3: 142.38

R2: 142.05

R1: 141.75

Pivot: 141.71

S1: 141.48

S2: 141.21

S3: 140.80

Trading recommendation:

We are short GBP from 142.80 and we will lower our stop+revers to 142.50

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Elliott wave analysis of EUR/JPY for February 10, 2020

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EUR/JPY has followed the expected path lower and should now stay below short-term key resistance at 120.56 for a continuation lower to 119.79 on the way towards the ideal target-zone between 118.85 -119.24 where we expect wave v of C of 2 to complete.

A break above short-term key resistance will indicate that a premature bottom has been found at 119.79 and the next impulsive rally already are in motion.

R3: 120.83

R2: 120.56

R1: 120.39

Pivot: 120.18

S1: 120.00

S2: 119.79

S3: 119.50.

Trading recommendation:

We sold EUR at 120.40 and we will move our stop+reverse lower to 120.65. We will take profit at 119.35

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Control zones of GBP/USD on 02/10/20

The closing of last week's trading occurred outside the middle course. This indicates a 90% probability of a return to the level of 1.2944. This makes it possible to obtain favorable sales prices with a high probability. On the other hand, sales from current marks are not profitable. The goal of the decline remains the weekly short-term limit of 1.2824-1.2786.

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The return level of 1.2944 is near Friday's high, which makes this zone an excellent resistance. The test of this level must be considered for the appearance of the pattern of "absorption".

An alternative model will be developed if today's trading closes above Friday's high. This will allow you to form a deeper correction and the pair will go into the accumulation phase. The defining resistance will be Weekly Control Zone 1/2 1.3089-1.3070. The downward movement will remain a medium-term impulse as long as the pair is trading below the specified zone.

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Daily CZ - daily control zone. The zone formed by important data from the futures market that changes several times a year.

Weekly CZ - weekly control zone. The zone formed by the important marks of the futures market, which change several times a year.

Monthly CZ - monthly control zone. The zone that reflects the average volatility over the past year.

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Overview of the GBP/USD pair. February 10. Boris Johnson is predicted to fall in political ratings in the event of a failure

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower channel of linear regression: direction - sideways.

Moving average (20; smoothed) - down.

CCI: -158.3364

The GBP/USD currency pair also continues its fall on February 10 and the pound may continue its fall on Monday, Tuesday, and Wednesday. No important macroeconomic reports or publications are scheduled for Monday in the UK. However, from our point of view, the pound remains overbought, given the current macroeconomic and fundamental backgrounds. Thus, on the first trading day of the week, the fall of the British currency may continue, and on Tuesday, data on GDP, industrial production, and retail sales will be published in Britain, which is likely to provoke even greater sales of the British currency, as forecasts predict another fall in the British economy.

Meanwhile, a growing number of experts are inclined to believe that London and Boris Johnson should not expect generous gifts from the European Union. Brussels is also interested in profitable trade with Britain but it is less dependent on it. So if anyone should be looking for a deal, it is London. However, Boris Johnson immediately showed that he was waiting for the agreement to be signed on the terms of London, and otherwise he could withdraw from the negotiations altogether. In this situation, many experts believe that the popularity of Boris Johnson in the UK will begin to decline sharply. If in the case of Brexit, he looks almost like a national hero, then in the case of the absence of an agreement with the European Union (which will mean a "hard" Brexit), he can become a national enemy. The problem is that the European Union is not going to discuss the same agreement with London as with Canada. Michel Barnier made an official statement in which he clearly presented the points that will be discussed with London. First, of course, economic and trade issues. According to Barnier, the EU is ready to provide an "extremely ambitious" agreement if London guarantees the absence of trade barriers and quotas for all goods that will enter the single European market. Second, the EU wants to work with London on terrorism, organized crime and cybercrime. Third, Barnier wants to develop a clear mechanism for managing all agreements and resolving disputes to resolve differences. In other words, London and Brussels will have to agree in which and whose court all disputed points will be considered. Naturally, the EU wants it to be the European Court of Justice, which Boris Johnson opposed. "If certain obligations are not met by one of the parties, the other party should be able to act quickly and effectively, including by autonomous measures in case of violation of the main provisions of the agreement," Barnier said. In other words, the European Union fears that London will not fully adhere to the agreement and wants to have tools at its disposal to influence London. Brussels also wants a comprehensive agreement that will define relations with Britain in almost all areas of life.

From a technical point of view, the fall in the British pound continues and there are no signs of the beginning of correction now. By the way, none of the linear regression channels is directed downwards. Nevertheless, the pound/dollar pair overcame the important support level of 1.2975, from which it previously made at least 6 rebounds. Thus, the chances of a downward movement have increased significantly.

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The average volatility of the pound/dollar pair has increased to 120 points over the past 5 days. According to the current volatility level, the working channel on February 10 will be limited to the levels of 1.2760 and 1.3000. The continued downward movement would be very logical. A reversal of the Heiken Ashi indicator to the top will indicate a round of corrective movement.

Nearest support levels:

S1 - 1.2878

S2 - 1.2817

S3 - 1.2756

Nearest resistance levels:

R1 - 1.2939

R2 - 1.3000

R3 - 1.3062

Trading recommendations:

The GBP/USD pair continues to move down. Thus, traders are now advised to stay in the sales of the pound with targets of 1.2817 and 1.2756 until the Heiken Ashi indicator turns up. It is recommended to return to buying the British currency after the pair reverses above the moving average line with the first targets of 1.3062 and 1.3123.

In addition to the technical picture, you should also take into account the fundamental data and the time of their release.

Explanation of the illustrations:

The highest linear regression channel is the blue unidirectional lines.

The lowest linear regression channel is the purple unidirectional lines.

CCI - blue line in the indicator window.

Moving average (20; smoothed) - blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.

Possible price movements:

Red and green arrows.

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Overview of the EUR/USD pair. February 10. Corrective Monday and preparation for Jerome Powell's speech in Congress

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - sideways.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - down.

CCI: -138.7153

At the end of the last trading week, the euro fell even more, and hopes for a correction finally collapsed when macroeconomic statistics were published in the United States, which showed the excellent state of the labor market. Thus, the fall of the EUR/USD currency pair continues, at least this is what the Heiken Ashi indicator signals, painting the bars blue. On Monday, February 10, there will be no important macroeconomic publications either in the European Union or in the United States. However, during the rest of the week, there will be quite a large number of important statistics and events. Thus, traders can use Monday to partially fix profits on short positions. After all, on Tuesday, Jerome Powell will make his first speech to Congress, which will clearly address the issues of the economy, monetary policy, and global risks. Thus, if the markets receive any new information, the reaction can follow immediately. We do not expect "dovish rhetoric" from Jerome Powell, respectively, and the fall of the US currency on the basis of this event – either. However, it should be understood that such a high-profile event can be used to manipulate the dollar exchange rate. Recall that in the first two years of his cadence, Donald Trump regularly stated that he did not need an "expensive dollar" and would make every effort to devalue the national currency. It failed to depreciate because other central banks also worked synchronously to reduce the exchange rate of their currencies, so the following events began: criticism of Jerome Powell, "hawkish" monetary policy, and regular calls to lower the key rate, which, according to Trump, would lead to a cheaper US currency in the foreign exchange market. The Fed lowered the rate three times, however, this did not lead to a special fall in the dollar. The US economy was stimulated and began to accelerate again. Also, the rise in the price of the dollar resumed. Thus, there may be surprises in Jerome Powell's speech, although the probability of this is extremely low. We believe that Powell will simply repeat in Congress all the theses that he regularly repeats after the Fed meetings, respectively, no new information will be available to traders.

Thus, a correction may begin today, which is likely to continue on Tuesday. Of course, we recommend not to guess the possible reversals of the currency pair but to react to the readings of the fastest indicator – Heiken Ashi. Moreover, there are no macroeconomic publications scheduled for Monday, which means that there will be no influence on the fundamental background. In general, we still recommend working out all sell signals, since the general fundamental background clearly remains on the side of the US currency. Keeping in mind only the "paradoxical situation", that only 60 points remain to the pair's two-year lows. But even in the case of another difficult-to-explain reduction in dollar positions on the approach to the minimum level of 1.0879, the Heiken Ashi indicator will turn up and indicate a round of corrective movement.

Meanwhile, trade tensions between the United States and China are slowly easing. It is reported that China is lowering duties on several goods from America for a total of $75 billion from February 14. However, as in the case of American duties, most of the restrictive measures continued to operate. However, the countries are gradually moving towards the point of a complete truce. Instead, Washington expanded duties on imports of steel, aluminum from other countries, as well as many products from this raw material, including nails, paper clips, wire, and cables. Contrary to the effect that Trump wanted to achieve by imposing duties on these categories of raw materials, imports to the United States only increased. This time, Trump has accused absolutely all countries importing steel and aluminum into the United States, allegedly they bypass duties and deliver goods not included in the initial list to the United States. Well, Trump is only confirming the opinion that sooner or later he will start trade wars with all his trading partners. The European Union is next...

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The average volatility of the euro/dollar currency pair has decreased slightly but is stable at 50 points per day. For the euro currency, this is an average and absolutely normal indicator. Thus, on Monday, we expect movement between the borders of the volatility range of 1.0896-1.0992. However, most likely, a correction will begin, which can be determined by the reversal of the Heiken Ashi indicator to the top.

Nearest support levels:

S1 - 1.0925

Nearest resistance levels:

R1 - 1.0956

R2 - 1.0986

R3 - 1.1017

Trading recommendations:

The euro/dollar pair continues to move down. Thus, sales of the euro currency with the targets of 1.0925 and 1.0896 remain relevant now, until the Heiken Ashi indicator turns up. It is recommended to return to buying the EUR/USD pair not before the bulls cross the moving average line, which will change the current trend to an upward one, with the first targets of 1.1047 and 1.1078.

In addition to the technical picture, you should also take into account the fundamental data and the time of their release.

Explanation of the illustrations:

The highest linear regression channel is the blue unidirectional lines.

The lowest linear regression channel is the purple unidirectional lines.

CCI - blue line in the indicator window.

Moving average (20; smoothed) - blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.

Possible variants of the price movement:

Red and green arrows.

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

Forecast for EUR/USD on February 10, 2020

EUR/USD

Friday's data on employment in the United States exceeded even optimistic forecasts; 225,000 jobs were created outside the agricultural sector in January against expectations of 163,000, the December figure was revised up to 147,000 from 145,000, the November Non-Farm Employment Change increased by 5,000, and the average hourly wage increased for the month by 0.2%. At the same time, the volume of consumer lending almost doubled – from 11.8 billion dollars to 22.1 billion. As a result, the euro fell by 36 points.

The reduction targets remain: 1.0925 - minimum on September 3 and 12, 2019, and 1.0880 - minimum on October 1.

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On the four-hour chart, the signal line of the leading Marlin oscillator is directed upwards, which indicates that the indicator is likely to discharge and consolidate the price before a further decline.

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

Forecast for GBP/USD on February 10, 2020

GBP/USD

On Friday, the British pound fell by 45 points under pressure from the overall strengthening of the dollar with the release of good labor data in the US. Non-Farm Employment Change for January amounted to 225,000 against the expectation of 163,000. Today, a large block of British economic data will be released. Expectations are mixed: GDP for the 4th quarter may show zero growth, the trade balance for December may deteriorate from -5.3 billion pounds to -10.0 billion, and the volume of production in the construction sector for December is expected to be -0.4% against 1.9% a month earlier. Industrial production is expected to grow by 0.3%, however, the previous fall was -1.2%. Also, manufacturing production may show an increase of 0.5%, but against the background of November's -1.7% growth does not look very optimistic. In part, the pound may grow slightly today (depending on the released data), but in the short term, there are no events that could return the pound to medium-term growth or deep short-term growth, as the main factor (the topic of Brexit) is becoming more and more unpleasant for British negotiators. Negotiations on the deal will begin in March, and the EU is already putting forward conditions for the UK to reduce sanitary standards for agricultural products and continue the primacy of European law. All this shows that the upcoming negotiations are definitely difficult.

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The nearest targets for the pound remain: the Fibonacci level of 138.2% at the price of 1.2820, the range of 1.2728/58 formed by the Fibonacci level of 123.6% and the maximum on June 12, 2019.

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There are no graphical or indicator reversal patterns on the four-hour chart.

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

Control zones of USD/CHF on 02/10/20

he main direction of trading for the current week is upward. The reversal pattern was formed on Friday. On the other hand, closing trades occurred above the Weekly Control Zone 1/2 0.9753-0.9741, which led to the cancellation of the bearish medium-term model. The probability of growth has increased to 75%. The main goal of the upward impulse is the weekly control zone 0.9884-0.0860.

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Meanwhile, purchases from current levels are not profitable, as the pair is trading at the extreme of last week, which increases the probability of the formation of a correctional model.

To obtain favorable prices for the purchase of this instrument, a reduction to one of the support zones will be necessary. The first zone is the Weekly Control Zone 1/4 0.9721-0.9715. Testing this zone will allow you to enter a long position with a growth prospect of more than 130 points. On the contrary, if you set a stop of no more than 30 points, you can get a risk-to-profit ratio that significantly exceeds the required 1 to 3.

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Daily CZ - daily control zone. The zone formed by important data from the futures market that changes several times a year.

Weekly CZ - weekly control zone. The zone formed by the important marks of the futures market, which change several times a year.

Monthly CZ - monthly control zone. The zone that reflects the average volatility over the past year.

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

Forecast for AUD/USD on February 10, 2020

AUD / USD

On Friday, the Australian dollar lost 55 points, reaching a minimum of the day of the Fibonacci reaction level of 200.0% on the daily chart. Today, the "Australian" currency is slightly correcting upward during the Asian session, but this growth was enough to show the first signals of the convergence formation on the Marlin oscillator on the daily scale. However, the convergence is not strong, so we do not expect a price above the Fibonacci level of 161.8% (0.6737) in the main scenario.

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On the four-hour chart, an extended double convergence was formed, which is a stronger signal than on the daily chart. Perhaps, the price will decline into a wide range for a week. The potential of the upper boundary of this range of 0.6780 is the Fibonacci level of 138.2%. On the other hand, we are waiting for the development of the price range 0.6313 / 37 (the resistance of the MACD line is the Fibonacci level of 161.8%) in the local situation.

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

Fractal analysis for major currency pairs on February 10

Forecast for February 10:

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: 1.1015, 1.0988, 1.0969, 1.0938, 1.0909 and 1.0889. Here, we are following the development of the descending structure of January 31. The continuation of the movement to the bottom is expected after the breakdown of the level of 1.0938. In this case, the target is 1.090. Price consolidation is near this level. For the potential value for the bottom, we consider the level of 1.0889. After which, we expect a correction.

Short-term upward movement is possibly in the range 1.0969 - 1.0988. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.1015. This level is a key support for the downward structure.

The main trend is the descending structure of January 31

Trading recommendations:

Buy: 1.0969 Take profit: 1.0987

Buy: 1.0989 Take profit: 1.1015

Sell: 1.0936 Take profit: 1.0910

Sell: 1.0908 Take profit: 1.0890

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For the pound / dollar pair, the key levels on the H1 scale are: 1.3070, 1.3013, 1.2970, 1.2932, 1.2889, 1.2847 and 1.2754. Here, we are following the development of the descending structure of January 31. Short-term downward movement is expected in the range of 1.2889 - 1.2847. The breakdown of the last value should be accompanied by a pronounced movement to the bottom. In this case, the potential target is 1.2754. We expect consolidation, as well as a pullback to the top near this level.

Short-term upward movement is possibly in the range of 1.2970 - 1.3013. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3070. This level is a key support for the downward structure.

The main trend is the descending structure of January 31

Trading recommendations:

Buy: 1.2970 Take profit: 1.3011

Buy: 1.3015 Take profit: 1.3070

Sell: 1.2889 Take profit: 1.2848

Sell: 1.2845 Take profit: 1.2756

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9858, 0.9826, 0.9810, 0.9781, 0.9759, 0.9744 and 0.9719. Here, we are following the development of the ascending structure of January 31. The continuation of the movement to the top is expected after the breakdown of the level of 0.9781. In this case, the target is 0.9810. Price consolidation is in the range of 0.9810 - 0.9826. For the potential value for the top, we consider the level of 0.9858. We expect a pullback to the bottom upon reaching this level.

Short-term downward movement is possibly in the range of 0.9759 - 0.9744. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.9719. This level is a key support for the upward structure.

The main trend is the upward cycle of January 31

Trading recommendations:

Buy : 0.9782 Take profit: 0.9810

Buy : 0.9826 Take profit: 0.9858

Sell: 0.9759 Take profit: 0.9745

Sell: 0.9742 Take profit: 0.9720

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For the dollar / yen pair, the key levels on the scale are : 110.80, 110.47, 109.99, 109.62, 109.41 and 109.07. Here, we are following the development of the ascending structure of January 31. The continuation of the movement to the top is expected after the breakdown of the level of 110.00. In this case, the target is 110.47. Price consolidation is near this level. For the potential value for the top, we consider the level 110.80. Upon reaching which, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 109.62 - 109.41. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 109.07. This level is a key support for the top.

Main trend: upward structure of January 31

Trading recommendations:

Buy: 110.00 Take profit: 110.45

Buy : 110.49 Take profit: 110.80

Sell: 109.60 Take profit: 109.42

Sell: 109.38 Take profit: 109.10

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3389, 1.3337, 1.3312, 1.3271, 1.3240 and 1.3195. Here, we are following the development of the upward cycle of January 22. Short-term upward movement is expected in the range of 1.3312 - 1.3337. Hence, there is a high probability of a turn to the bottom. For the potential value for the top, we consider the level of 1.3389. We expect movement to this level after the breakdown of the level of 1.3337.

Short-term downward movement is possibly in the range of 1.3271 - 1.3240. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.3195. This level is a key support for the top.

The main trend is the local ascending structure of January 22

Trading recommendations:

Buy: 1.3313 Take profit: 1.3335

Buy : 1.3337 Take profit: 1.3387

Sell: 1.3370 Take profit: 1.3242

Sell: 1.3238 Take profit: 1.3195

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6731, 0.6707, 0.6688, 0.6654, 0.6618, 0.6574, 0.6545 and 0.6505. Here, we are following the formation of the descending structure of February 5. The continuation of movement to the bottom is expected after the breakdown of the level of 0.6654. In this case, the target is 0.6618. Price consolidation is near this level. The breakdown of the level of 0.6618 will lead to the development of pronounced movement. Here, the target is 0.6574. Short-term downward movement, as well as consolidation is in the range of 0.6574 - 0.6545. For the potential value for the bottom, we consider the level of 0.6505. Upon reaching which, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 0.6688 - 0.6707. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.6731. This level is a key support for the downward structure.

The main trend is the descending structure of February 5

Trading recommendations:

Buy: 0.6688 Take profit: 0.6706

Buy: 0.6708 Take profit: 0.6730

Sell : 0.6654 Take profit : 0.6620

Sell: 0.6616 Take profit: 0.6576

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For the euro / yen pair, the key levels on the H1 scale are: 120.72, 120.45, 120.21, 119.91, 119.75, 119.38 and 119.12. Here, we are following the formation of the descending structure of February 5. The continuation of movement to the bottom is expected after the price passes the noise range 119.91 - 119.75. In this case, the target is 119.38. For the potential value for the bottom, we consider the level of 119.12. Upon reaching this value, we expect consolidation, as well as a rollback to the top.

Short-term downward movement is possibly in the range of 120.21 - 120.45. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 120.72. This level is a key support for the downward structure.

The main trend is the descending structure of February 5

Trading recommendations:

Buy: 120.21 Take profit: 120.43

Buy: 120.47 Take profit: 120.70

Sell: 119.75 Take profit: 119.40

Sell: 119.36 Take profit: 119.12

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For the pound / yen pair, the key levels on the H1 scale are : 142.42, 141.87, 141.55, 140.97, 140.62, 140.10 and 139.81. Here, we are following the development of the descending structure of February 5. Short-term downward movement is expected in the range of 140.97 - 140.62. The breakdown of the last value should be accompanied by a pronounced downward movement. Here, the target is 140.10. For the potential value for the bottom, we consider the level of 139.81. Upon reaching which, we expect consolidation, as well as a rollback to the top.

Short-term upward movement is possibly in the range of 141.55 - 141.87. The breakdown of the latter value will lead to an in-depth correction. Here, the goal is 142.42. This level is key support for the descending structure of February 5.

The main trend is the descending structure of February 5

Trading recommendations:

Buy: 141.55 Take profit: 141.85

Buy: 141.90 Take profit: 142.40

Sell: 140.95 Take profit: 140.65

Sell: 140.58 Take profit: 140.10

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

GBP/USD. Preview of the new week: Britain's GDP data, Boris Johnson's attitude and US statistics may bury the pound

24-hour time frame

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The British pound remains at the mercy of a huge number of factors that put pressure on it. Last week, the decline of the British currency resumed, as Boris Johnson very "successfully" started commenting on negotiations that had not yet begun with Brussels, immediately declaring that London could withdraw from negotiations at any time if it realized that it could not get the "deal that wants". As a result, traders immediately rushed to sell the pound, as the UK economy continues to experience quite serious problems, which Mark Carney and the Bank of England tried to refute inappropriately at their last meeting in January, and if there is no deal with the European Union, it will just be sentence for the entire British economy. Essentially, this will mean Brexit without a deal, i.e. unordered. That is, that which the Parliament, and in particular the Labor Party, feared over recent years. The fact that the opposition forces diligently blocked, trying to prevent a destructive scenario for Britain. However, all power is now in the hands of conservatives and nothing can stop Boris Johnson from leading the country as he sees fit although it is difficult to assume what it is. Is the Prime Minister just bluffing to get the best possible deal with the EU? What is the real position of Johnson, who is ready to withdraw the country without an agreement? In any case, the pound began to decline and will continue it with virtually no options.

Now as for macroeconomic statistics in the coming week, everything regarding American statistics has already been said in the next article on EUR / USD. Here, we will focus on British publications. On Monday, no important and interesting information will be received from the UK. But on Tuesday, traders will witness the publication of monthly GDP reports for December, quarterly and annual terms for the fourth quarter in a preliminary estimate, according to NIESR GDP growth rates, industrial production, and also the volume of commercial investments. What are our forecasts? Industrial production is projected to decline by 0.8% in annual terms, GDP in the fourth quarter may add 0%, and in annual terms, growth may decline from 1.1% to 0.8%, and commercial investment is likely to decline 1.3% y / y. So, investments are declining, industrial production is declining, GDP growth is falling, the UK economy continues to lose 70 billion a year. At the same time, Boris Johnson is ready to complete the transition period without a deal. Analysts believe that negotiations with Brussels and Washington will be extremely difficult and Foggy Albion may soon face problems of a geopolitical nature (Scotland, Gibraltar, Ireland). So, what are the options for the pound with such a set of fundamental grounds?

No data is expected from the UK on Wednesday, Thursday and Friday. However, in order for the pound to continue to decline, there should be enough data from Tuesday, as well as the general fundamental background. Moreover, do not forget about American statistics, most of which are projected to increase. Do not also forget that the British currency spent the last few months either in growth or in unreasonably high positions for itself. Thus, even technical factors now speak in favor of the decline of this currency.

From a technical point of view, the Bollinger Bands began to expand down on the 24-hour chart, and the sell signal from Ichimoku "dead cross" continues to be relevant. Thus, we can see a new fall in the British currency by 500-600 points in the future, unless the UK economy suddenly and unexpectedly pleases, and Boris Johnson does not begin to do everything in order not to finish off the British economy.

Trading recommendations:

In the 24-hour timeframe, the pound / dollar pair resumed its downward movement. Thus, at the moment, sales of the pound are recommended with targets of 1.2838 and 1.2724.

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.

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

EUR/USD. Preview of the new week: Jerome Powell's speeches in Congress, inflation and industrial production

24-hour time frame

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In the past few weeks, we have questioned that the US economy continues to "feel good," as Fed Chairman Jerome Powell assured us in a recent speech. However, recent macroeconomic reports from across the world have indeed confirmed that most of the key indicators have increased compared to the previous period. Thus, these indicators can now begin to pull up and the rest, which cause the greatest number of questions. Last week, business activity indices in the US services and manufacturing sectors showed an increase, two labor market reports significantly exceeded expert forecasts, wages remained at a good level, and only the unemployment rate rose slightly to 3.6%, which, however, did not change the general picture of things. Thus, industrial production, GDP and inflation are still indicators that raise certain questions. However, the first indicator may begin to increase in the coming months, as business activity in this industry has recovered. On the other hand, inflation is already at a value of 2.3% y / y and the questions on it are only in what period of time the indicator will be able to maintain such values. The Fed wants to see inflation at around 2% over a long period of time. The most questionable indicator of GDP, which has been slowing down in the past year and a half and is now 2%. It can be recalled that the US dollar was growing "leaps and bounds' for the entire previous week, and next week, important data will be published in the United States, which will support the US currency again in case that it is strong. Moreover, several more or less important reports will be published in the European Union.

On Monday, the calendar of macroeconomic events of the European Union will be completely empty. There will be absolutely nothing to pay attention to, so we believe that this is a good day and a good opportunity for the euro / dollar pair to roll back a bit and begin an upward correction.

On Tuesday, Fed Chairman Jerome Powell will make a speech at the US Congress on economics and monetary policy. If we are wondering whether the topic of monetary policy will be affected before each speech of the head of the Central Bank, then in this case, it will be affected with a probability of 100%. As usual, Powell's rhetoric will be of great importance to the dollar, although after the latest macroeconomic reports it is unlikely to be a "dovish". Most likely, Powell will note the "good" state of the economy again, the strength of the labor market (especially against the background of ADP and NonFarm Payrolls reports), as well as a good state of inflation. And, of course, he is unlikely to avoid global risks, such as the "coronavirus". Thus, we potentially believe that Powell's speech may provide little support to the dollar.

On Wednesday, Jerome Powell will make another speech all in the same Congress, during which he, for example, can discuss the topic of lowering / raising rates in 2020 and the issue of completing the Fed's securities buyback program ("non-QE"). Also on this day, industrial production for December in the European Union will be published with a forecast of -0.8% y / y. Even if this forecast just comes true, it is still negative for the euro. However, it can be assumed that industrial production in the Eurozone will decrease much more than by 0.8%, bearing in mind a similar report in Germany, which showed a decrease of 6.8% y / y. Naturally, this is another factor potentially putting pressure on the euro.

On Thursday, we will find out the final January inflation figures for Germany and the United States. In Germany, the consumer price index may accelerate to 1.7% y / y, in the United States - up to 2.5%. From the point of view of forecasting, Thursday will be the most difficult day, since it is extremely difficult to predict what the real value of the CPI will be. Perhaps, American inflation will not reach the value of 2.5% y / y and on this day, the euro will receive a slight delay.

Well, data on retail sales will be published on the last trading day in the United States, as well as the most important indicator of industrial production for January. It can be recalled that the last value of production was also negative, but it may recover in January due to increased business activity in this sector. Thus, in general, almost all the news from overseas may turn out to be positive, which may provoke new purchases of the American dollar by traders. In this regard, the euro currency can only hope that the statistics from overseas will not be as strong as we expect, and the "paradoxical situation". Quotes of the EUR / USD pair are now only 60 points from two-year lows, so theoretically, traders can stop buying the dollar at any time, despite the macroeconomic background.

Trading recommendations:

The trend for the euro / dollar pair remains downward. Thus, on the 4-hour timeframe, it is recommended to continue to consider short positions until signals about the beginning of an upward correction appear, which is also very likely in the following week. On a 24-hour timeframe, the pair may also begin to adjust, but it will be much more difficult to "catch" the correction here.

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.

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

GBP/USD. February 8. Results of the week. The first quarrel between Johnson and Trump; Disagreement with Brussels

4 hour time-frame

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Amplitude of the last 5 days (high-low): 217p - 106p - 114p - 79p - 80p.

Average volatility over the past 5 days: 120p (high).

The pound, which has been somewhat afloat over the past few months against the US currency, continued to decline on Friday, February 7, and seems to have finally returned to a downward trend. Actually, we talked about this in recent months almost every day. The British currency has no reason for growth. The optimistic state in which traders were for several months before the parliamentary elections in the UK last year cannot be called justified. Yes, Boris Johnson's party won and yes, Brexit went to the final stage, which would not have happened if, for example, the Labor Party had won. But what has changed for the UK economy in connection with the victory of the conservatives? Nothing. What has changed for the British economy from that the country has finally stepped into the "transition period" and will now officially leave the EU in 11 months? Nothing. The country, as it lost business, companies, money in connection with this process, which began three and a half years ago, continues to do so. If the US and EU economies are affected by trade wars, the slowdown in global economic growth, and possibly the "coronavirus" in the near future, then Britain will be affected by the same factors and Brexit. As a result, the euro against the dollar continues to fall in price in "equal conditions". Now, what to expect from the pound, which has at least one reason to become cheaper? It is still unknown. Moreover, many analysts and experts believe that the pound is too cheap, that is, in other words, it is oversold. We believe that the pound is now overbought, since it significantly and unreasonably rose in price at the end of last year, which can no longer mean that it is oversold. Thus, in any case, the British currency will continue to become cheaper in the long run.

Do not forget about such a factor as trade negotiations with the European Union and the States on free trade agreements will be concluded by Boris Johnson in 2021. The chances of this were initially few. Now, when Bloc and the Kingdom began to slowly comment on this matter, it became clear that the chances were not only not growing, but also diminishing. At the same time, there is already a lot of disagreement between Brussels and London. Boris Johnson wants a deal "the same as with Canada or Australia," with which negotiations were held for 7-8 years, for 11 months. The British Prime Minister only wants a negotiation, not a comprehensive one. The European Union wants to tie Britain to itself as much as possible, wants London to guarantee fair competition between European and British companies, and wants the UK adheres to European standards and norms in the areas of labor protection, the environment and government subsidies. In addition, Brussels also wants the European Court to be the highest court in resolving all disputed issues between the Alliance and Britain. As you can see, the negotiations have not even begun, and there are already so many disagreements that they are unlikely to be resolved in 10 months. 10 months because official negotiations will begin only in March. It should also be noted the lines once and the position of Boris Johnson himself, who has already stated that London will easily exit any negotiations if it does not get the agreement it wants. That is, Johnson is easily ready to return his country to the "tough" Brexit, which the Parliament has carefully blocked in recent years. We said right after Johnson's victory in the December election that it's very bad, when all the power in the country is concentrated in the hands of one person. In these conditions, opposition forces cannot block any Johnson's decision and cannot impose their proposals on him.

We have also said that the optimism regarding a trade agreement between the United States and Britain is also not justified at this time. The fact that Donald Trump promised Johnson a "huge trade agreement" does not mean anything. We all know how the American president likes to give and take his words back. Therefore, there can be even more obstacles than in the case of Brussels when it comes to formal negotiations. Meanwhile, certain disagreements are already beginning to arise between the US and UK. For example, Trump criticized "his friend" because Johnson allowed the Chinese company Huawei to develop 5G networks in the UK. Trump had previously tried to convince Johnson not to partner with a Chinese company, but Johnson dared to disobey.

From a technical point of view, the British pound continues to decline and overcame the second support level of 1.2894. There is no signal of the start of correction at the moment. It may start on Monday, but before receiving correction signals, closing short positions is not recommended.

Trading recommendations:

The GBP/USD pair continues to move down. Thus, sales of the British pound with a target support level of 1.2815 remain relevant today. On the other hand, purchases of a pair by small lots can be considered if the price returns to the area above the Kijun-sen line with the first targets 1.13049 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

EUR/USD. February 8. Results of the week. NonFarm Payrolls and industrial production in Germany "buried" the eurocurrency

4 hour time-frame

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Amplitude of the last 5 days (high-low): 58p - 31p - 54p - 50p - 43p.

Average volatility over the past 5 days: 48p (average).

The EUR/USD currency pair completed the next trading week, and this week has become one of the most disastrous for the European currency in recent times. Throughout the entire week, traders got rid of the Euro currency. There was not a single correction or rollback and the total loss of the European Union currency amounted to 150 points. Perhaps, this is not very much at first glance, but we want to remind you that the euro has lost 550 points over the past 15 months, with the continuous downward trend. Therefore, 150 points of losses per week is still not a little. As for the reasons for the decline of the Euro, they generally remain the same. The European economy still looks much weaker than the US, the Fed's monetary policy is much stronger and more hawkish than the European one, and macroeconomic reports continue to come stronger from overseas than from the EU. That's all the reasons. Nevertheless, there were certain hopes for the growth of the euro, thanks to the "paradoxical situation", which saved the euro from new falls and collapses more than once, but this week, traders, in particular bears, sold the euro currency no matter what. The week ends at 62 points from two-year lows of the euro / dollar pair.

On the last trading day of the week, quite several important macroeconomic reports were published. It all began, as usual, with Europe, and more precisely with Germany. Industrial production in the locomotive country of the entire European Union decreased by 6.8% in annual terms and by 3.5% in monthly terms. But a month ago, we believed that a decrease of 2.5% y / y is a lot and much worse. It turns out that there is room for this indicator to decline, and December is a confirmation of this. Actually, it was already possible to clearly realize on this report that the euro had no special prospects on Friday, February 7. If production in Germany is reduced, it means that it will decrease in the European Union with a high degree of probability. And many other indicators, such as, for example, GDP and economic growth, now depend on production. Thus, we can expect further deterioration from the next reports from the Eurozone, which is unlikely to add optimism to buyers of the Euro currency.

However, more important macroeconomic data were expected from overseas. The first report (formally the first, since they were all published at the same time) turned out to be weak. The unemployment rate in January unexpectedly increased from 3.5% to 3.6%; however, this is not an indicator that can cause serious movements in the market. Moreover, the value of 3.6% is still an extremely low value for America, so this report is "weak" only formally. But the next report - NonFarm Payrolls showed a significant excess of the forecasted values (163,000) and amounted to as much as 225,000. It is clear that after such strong data on the state of the labor market (we add here the report from ADP on the change in the number of employees in the private sector), traders had no choice but to continue buying American currency.

This is all that can be said on Friday's macroeconomic background. What else could happen to the euro on this day if the only report in the Eurozone failed miserably, and all the data from across the ocean turned out to be strong? Based on the general picture of things, we continue to lean towards the option in which the euro continues to slide towards price parity with the US dollar. In the past two years, we can say nothing else, except that the American economy looks much stronger than the European one. Yes, the US economy is also under pressure due to a slowdown in global growth rates, because of trade conflicts, and it can also respond to the "coronavirus" in the near future, which will reduce business activity in China, and therefore in many countries - partners of China. However, the European economy is slowing down in the same way and its rates are much lower than the US. Therefore, the euro can be adjusted in the long run and it can rebound to new areas of support. More so, it can even be in demand from time to time, but the general trend will remain downward. Accordingly, the trading strategy for the EUR / USD pair remains the same: working out all the sell signals.

From a technical point of view, the pair overcame the second support level of 1.0956 this week, and on Monday, may finally begin to correct. However, we recommend waiting for a specific signal to identify the beginning of the correction. For example, the MACD indicator will turn up with a parallel price increase (the indicator is already at its minimum values and may just start to discharge).

Trading recommendations:

The EUR/USD pair continues to move down. Thus, it is recommended to remain in euro-currency sales with targets at levels 1.0920 and 1.0896, until the MACD indicator reverses or a rebound from any of the targets. It will be possible to consider the purchase of the euro / dollar pair with the goals of 1.1024 and 1.1060, if traders manage to gain a foothold above the Kijun-sen line, which is not expected in the near future.

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