Technical analysis of ETH/USD for 11/02/2019:

Crypto Industry News:

In a large-scale Ask-Me-Anything (AMA) session that took place on February 7, CEO of Binance Changpeng Zhao announced major plans for the cryptocurrency exchange in 2020. One of the least explained plans was the emergence of a new product called Binance Cloud, which apparently will be presented in the next 10 days.

The exact use of Binance Cloud was not explained because Zhao remained laconic during AMA. The company is currently looking for a Senior Cloud Engineer to join the cloud engineering and architecture team.

The stand describes "large-scale, massive parallel and highly available computing systems on an advanced cloud computing platform" and requires someone who can "improve, scale and automate this business-critical cloud-based architecture."

The way it translates into a consumer product remains unclear, although the answer will be given in a few days. After AMA, Zhao continued on Twitter, publishing cloud GIFs to increase speculation.

Earlier, however, we will see BNB futures contracts with a 50x leverage launched on February 10. Binance is also opening gates for fiat currencies, including Russian rubles, Norwegian krone, and Croatian kuna, while purchases using cryptocurrencies are now available with Russian credit cards.

Technical Market Overview:

The recent swing high on the ETH/USD pair had been made at the level of $229.61 and since then the price started a corrective cycle to the downside. This wave down had been made after the Shooting Star candlestick pattern has been made around the top. Currently, Ethereum has been trading above the level of $215.30, close to the upper channel line, which provides support for the price, but if the bearish pressure intensifies, 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 11/02/2019:

Crypto Industry News:

Many cryptocurrency conferences in Asia are delaying in response to an outbreak of coronavirus outbreak in the region.

Token2049, the main cryptographic event organized annually in Hong Kong, is the latest event that will postpone the date. Originally scheduled for mid-March 2020, Token2049 will now take place from October 7-8, 2020.

Hong Kong, which reportedly announced plans to close its border crossing points with mainland China to further combat the deadly virus, is experiencing even greater uncertainty due to local anti-government protests.

Token2049 is not alone in postponing his event. On January 3, Binance's popular global cryptocurrency market announced the delay of Binance Blockchain Week in Vietnam, which was originally scheduled for February 29 - March 4, 2020. Binance said it would return registered visitors, noting that the new event date will be announced later.

At the end of January, another major conference, Hong Kong Blockchain Week 2020, announced that it would suspend the March 2020 event. The event organizer said it would publish a new date as soon as it was set.

Technical Market Overview:

Since the Bitcoin market has made a Bearish Engulfing candlestick pattern at the H4 timeframe chart at the level of $10,133, some traders have taken profit off the table and the price has been pushed lower towards the technical support located at the level of $9,645. Nevertheless, the trend is still up despite the extremely overbought market conditions on H4 and Daily timeframes, but the bears might try to test the nearest important short-term technical support at the level of $9,508 soon. Only if this level is clearly violated the deeper correction can be made towards the levels of $9,123 and $9,013.

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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Euro continues to "lose" to the US dollar (we expect the resumption of decline in EUR/USD and GBP/USD pairs)

The US dollar remains in favor in the global currency market, reaching a four-month high against a basket of major currencies.

As we have previously indicated, the reason for the strengthening of the dollar is, on the one hand, an optimistic outlook on the US economy, which is confirmed by the latest positive economic statistics, and on the other, it receives support in the wake of some reduction in fears of a significant spread of the Chinese coronavirus. Moreover, an additional positive its course was the termination of the topic of impeachment around D. Trump.

On the other hand, the ICE dollar index has been increasing steadily for the second week now, testing the 98.75 point mark and approaching the maximum values of October last year.

At the same time, the problems for the euro are not impressive values for the region's economy unlike the dollar. The risks of falling industrial production and the obvious long-term preservation of the current soft exchange rate of the ECB. So, on Monday, the presented data on industrial production in Italy was extremely disappointing. However, this is the third economy of the euro area. The annual industrial output in Italy declined by 4.3% against a 0.8% decrease a year earlier and a forecast of a decrease of only 0.2%. In December, the indicator declined 2.7% against weak growth in January by 0.1% and expectations for a decrease of 0.5%.

In addition to the risk of a slowdown in economic growth in the region, the negativity is the increasing pressure from the United States and, as a consequence, the high probability of increasing duties on car imports to America, as Trump has repeatedly stated earlier.

The clear negative outlook of market participants regarding the near future prospects for the single currency is clearly reflected in the dynamics of the Euro currency futures, which, according to the latest data from the Commitments of Traders (COT) report last Friday, reflecting the mood of market players is biased towards a short net position. An important aspect is the generally stable and constantly growing recently short (bearish) position of large market players (Large Traders). The degree of such sentiments is fully reflected in the behavior of the euro in the spot market.

This can be explained not only by fears of the prospective weakness of the eurozone economy, but also by a clear softening of the position of the ECB, which, although it does not openly demonstrate this, confirms this with all its actions, including the latest statements by Lagarde, the Bank's President.

Given this state of affairs, we believe that the main euro / dollar currency pair will remain under general pressure in the near future.

Forecast of the day:

EUR/USD is trading above the level of 1.0905. We consider it possible to resume sales of the pair after it crosses this level with the local target of 1.0880 and 1.0840.

GBP/USD is trading below the level of 1.2920. This may lead to a resumption of the pair's decline to the level of 1.2835, if the UK's GDP data confirms the decline of the indicator.

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Technical analysis of GBP/USD for 11/02/2019:

Technical Market Overview:

After the GBP/USD pair has broken through the key short-term technical support located at the level of 1.2904 (lower boundary of a narrow horizontal zone located between the levels of 1.2904 - 1.3226) the new low was made at the level of 1.2871, but this low was made on Pin Bar candlestick pattern. Moreover, the breakout occurred 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 and it was tested and rejected already.

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 11/02/2019:

Technical Market Overview:

The EUR/USD pair has broken below the key short-term technical support located at the level of 1.0940 and made a new local low at the level of 1.0907, just above the technical support at the level of 1.0905. 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 1.0885 and the immediate technical resistance is seen at the levels of 1.0940 and 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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Elliott wave analysis of GBP/JPY for February 11, 2020

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GBP/JPY is still trading lower towards 140.80 and 139.24 as the next targets as long as short-term key resistance at 142.38 is able to cap the upside. An unexpected break above key resistance at 142.38 will indicate a premature bottom has been found for wave iv and wave v higher already is in motion for an ultimate break above the peak of wave iii at 147.94.

Our preferred count calls for a a break below minor support at 141.29 to add downside pressure towards 140.80 and 139.24.

R3: 142.38

R2: 142.11

R1: 141.96

Pivot: 141.86

S1: 141.68

S2: 141.50

S3: 141.29

Trading recommendation:

We are short GBP from 142.80 with our stop+revers at 142.50.

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Elliott wave analysis of EUR/JPY for February 11, 2020

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EUR/JPY has made a new low for the correction in wave 2 (low has been 119.65) which confirms our count and that more downside pressure into the 118.85 - 119.24 target-zone still should be expected. Short-term, we should see a minor pop to 120.17 before the final dip into the target-area.

Only a direct break above key-resistance at 120.56 will indicate that wave 2 already has completed and wave 3 is ready to unfold.

R3: 120.38

R2: 120.17

R1: 119.98

Pivot: 119.79

S1: 119.65

S2: 119.50

S3: 119.24

Trading recommendation:

We are short EUR from 120.40 and we will keep our stop+revers at 120.65. We will take profit at 119.35

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GBP/USD: plan for the European session on February 11. Pound buyers hope for good GDP and Mark Carney speech. Bears wait

To open long positions on GBP/USD you need:

The British pound bounced yesterday after the divergence that formed on the MACD indicator, which made it possible for buyers to slightly recover after the pair's major fall, observed since the beginning of this month. At the moment, the bulls' important task is to maintain the support of 1.2906, however, only the formation of a false breakout in this range will be a signal to buy the pound, since a lot depends on how the UK economic growth report comes out in the fourth quarter of last year. If the data turn out to be better than economists' forecasts, and a zero increase is expected, then the bulls will try to break above the resistance of 1.2942, which will lead to continued growth of GBP/USD to the highs of 1.2976 and 1.3007, and the lower boundary of the new rising channel will be formed in the area of 1.2906. If the report disappoints traders, then after breaking through support for 1.2906, it is best to pay attention to long positions only after an unsuccessful consolidation below 1.2870, or buy the pound immediately to rebound from a low of 1.2830.

To open short positions on GBP/USD you need:

Sellers will rely on data on the UK economy, although a bad report may not provide much help to the bears, since few people believe in a good end to last year. The only thing that can positively affect the indicator is the results of general elections in the UK. A break and consolidation below 1.2906 will increase the pressure on the pair, which will lead to a sharp movement of the pound down to the support area of 1.2870, on which the further direction will depend. A breakout of this area will cause a larger drop in GBP/USD to the low of 1.2830 and 1.2799, where I recommend taking profits. In case the pair grows, one can look at short positions only after a false breakout in the resistance area of 1.2942, but I recommend selling the pound immediately for a rebound only after testing the highs of 1.2976 and 1.3007.

Signals of indicators:

Moving averages

Trade is conducted in the region of 30 and 50 moving averages, which indicates market equilibrium in front of important data.

Bollinger bands

A break of the upper boundary of the indicator in the area of 1.2934 will lead to a new wave of pound growth. The fall of GBP/USD will provide a breakthrough of the lower boundary of the indicator in the area of 1.2900.

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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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EUR/USD: plan for the European session on February 11. No buyers of the euro, but there is a divergence option on the MACD

To open long positions on EURUSD you need:

Yesterday's disappointing report on Italy's industrial output and the Federal Reserve's confident statements on growth in the US economy this year have kept demand for the US dollar, which led to another decline in the EUR/USD pair to a new support level of 1.0907. The first priority of buyers is to keep this area and to form a low in the area. A false breakout will be the first signal to open long positions, which will cause the pair to return to the area of a large resistance level of 1.10936, where I recommend taking profits. However, this should happen all with a surge in volume. If there is no volume, the market will go down further. In this scenario, it is best to open new long positions after testing a low of 1.0878, or immediately to rebound from the 1.0840 area. Statements by European Central Bank Chief Christine Lagarde may help the euro in the afternoon, but we'll talk about this later. It is also necessary to pay attention to the high probability of divergence, which can occur on the MACD indicator after an update of yesterday's low at 1.0895.

To open short positions on EURUSD you need:

Sellers will wait for the next weak data on the European economy, however, opening short positions on yesterday's low breakout is quite a dangerous occupation, since the pair has been declining for six trading days in a row since the beginning of February without any upward correction. A better option for sales in the morning will be the formation of a false breakout in the resistance area of 1.0936, which will be a signal to open short positions with the main goal of returning to a low of 1.0907, on which the further downward movement depends. A break and consolidation below this range will quickly push EUR/USD down to the lows of 1.0878 and 1.0840, where I recommend taking profits. If the activity on the part of sellers, as well as good volume, is not in the resistance area of 1.0936, then in this case it is best to return to short positions to rebound from a high of 1.0975.

Signals of indicators:

Moving averages

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

Bollinger bands

In case of growth in the first half of the day, the upper boundary of the indicator at 1.0950 will act as resistance. Support will be provided by the lower boundary at 1.0895, where divergence may also form.

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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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Forecast for EUR/USD on February 11, 2020

EUR/USD

The euro lost 34 points on Monday, it was helped by a pessimistic indicator of Italian industrial production, which showed -2.7% in December, which, after negative data on Germany and France last week, completes the faded picture of the eurozone core. Now Europe-US relations for the euro are becoming more important than Europe-England. The US looks brilliant compared to the eurozone, the prospects for new trade relations with the EU are more beneficial to Washington. President Trump announced yesterday that he had begun work with the EU to prepare negotiations on a free trade area.

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On the daily chart, the price confidently surpassed the support of the first target of 1.0925, now it faces the second target - 1.0880 - a low on October 1. The likelihood of a moderate correction from this level increases. An even stronger support is the underlying target of 1.0840 - in terms of reaction level of 161.8%.

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On a four-hour chart, the price has consolidated at an early target level, the Marlin oscillator is slightly growing, but it does not predict any dangers for a decrease.

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Forecast for GBP/USD on February 11, 2020

GBP/USD

The pound grew by 32 points on Monday as a correction to the previous three-day one and a half figure decline. The correction to this decrease was 38.2%. Today a large block of British economic data will be released. Mixed expectations: GDP for the fourth quarter may show zero growth, the trade balance for December is expected to worsen from -5.3 billion pounds to -10.0 billion. Production in the construction sector in December is expected to be -0.4% against 1.9% a month earlier. Industrial production may show an increase of 0.3%, but the previous decline was -1.2%. Manufacturing, which is expected to grow by 0.5%, against the background of November -1.7%, does not look optimistic. As a result, we expect the British pound to fall.

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The first target is the Fibonacci level of 138.2% on the daily chart (1.2820). Behind it lies the second target - the 1.2728/58 range, formed by the Fibonacci level of 123.6% and the peak on June 12 of last year.

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On the H4 chart, the signal line of the Marlin oscillator is near the boundary with the growth trend territory. It is likely that the line will move down from this boundary.

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Forecast for EUR/USD on February 11, 2020

USD/JPY

Last Friday, the USD/JPY pair failed on the first attempt to overcome the resistance of the trend line of the red descending channel. This was prevented by the stock market - Friday's decline in the S&P 500 was 0.54%. Yesterday, the stock market grew 0.73% with a new record of 3352.26. The price is staying in the range between the indicator lines on the daily chart.

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The resistance of the MACD line coincides with the embedded line of the price channel at 110.00. Overcoming this level will open 110.24 - the resistance of the green price channel of the higher TF. Exit above 110.24 opens the way to the range 110.83/98.

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On a four-hour chart, the price is above all indicator lines, but the Marlin oscillator was in the negative zone. Of course, for the development of the main scenario, it needs to return to the growth zone as soon as possible. This will happen with price consolidation above yesterday's high.

The negative scenario suggests a fall in prices to the MACD line, to the area of 109.30. The likelihood of such a decrease of 10-15%.

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Overview of the GBP/USD pair. February 11. Today could be a black day for the pound

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - up.

Lower linear regression channel: downward direction.

Moving average (20; smoothed) - down.

CCI: -79.5400

The GBP/USD currency pair continues to adjust on February 11. After the pair worked the Murray level "3/8" - 1.2878, there was a rebound, which provoked the beginning of the correction. Also there weren't any important publications or speeches by top officials in the United Kingdom and the United States on the first trading day of the week. Thus, traders were deprived of fundamental recharge on February 10. Therefore, Monday was, in principle, a good option for a correction, although we expected that the downward movement will continue. However, the Heiken Ashi indicator turned up and signaled a temporary break in the downward movement. It should also be noted that on Tuesday, that is, today, information from the UK that is of a very important degree of significance will come from the UK. Therefore, before such an important block of macroeconomic data, traders recorded part of the profit on short positions previously opened.

Now we turn directly to macroeconomic statistics. The most significant indicator, of course, will be the indicator of GDP. However, you should immediately make a reservation that tomorrow there will be at least four variations of this indicator, moreover, with different values. For example, GDP for December will be published, that is, in monthly terms with a forecast of +0.2%. An estimate of GDP growth rates from NIESR for January will also be published with a forecast of +0.2%. Preliminary data on Gross Domestic Product for the fourth quarter in annual and quarterly terms with forecasts of +0.8% and +0.0% from the National Statistics Office will be published. We believe that it is the last two indicators that are the most significant. Take a look at the chart.

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Over the past three years, UK GDP has shown even more or less strong GDP growth. That is, each quarter there was an increase in comparison with the same quarter of the previous year by no less than 1.1%. 1.1% is, of course, not much, however. GDP forecasts for the fourth quarter of 2019 indicate that growth rates may decline to 0.8% y/y. That is, for the first time in the last three years (and in fact for the first time since 2010), the growth rate will be less than 1% y/y. This is what we have repeatedly said when we covered the problem of a slow down in Great Britain's economy. The economy continues to lose money, problems associated with Brexit and the uncertainty surrounding the trade deal with the European Union continue to negatively affect the business climate and the desire of entrepreneurs to invest. Moreover, certain companies are leaving the UK, some are cutting production on its territory, some are moving their financial centers outside of Great Britain. Of course, all this negatively affects the economy.

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The next indicator is industrial production. Here things are even worse than with GDP. In annual terms, industrial production has been declining for a year and a half almost every month. Tomorrow it is expected that this indicator will lose its regular 0.8% in annual terms, and will add 0.3% in monthly terms. It is clear that even if the annual indicator is slightly better than expected, it is still unlikely to get out of the negative zone. Thus, both main indicators of tomorrow should significantly exceed forecast values in order to trigger purchases of the British pound.

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We would also like to draw the attention of traders to the indicator of the volume of commercial investments, which, although not as important as the first two indicators, still reflects the essence of what is happening. Judging by the data for the last 12 months, investment volumes are also more often declining than growing. For tomorrow, the forecast is -1.3% in the fourth quarter on an annualized basis. And what do we have in the end? The three most significant indicators for the UK economy over the past year and a half have only been doing so, which are declining. For tomorrow, all three indicators have negative forecasts. What growth of the British pound in the long run can be discussed with such macroeconomic statistics? We are still wondering why the Bank of England didn't soften monetary policy at the last meeting and where did it see "economic recovery after the December elections"? We notice only an even greater reduction in key indicators. And again, it is worth noting that all this happens before the official breakdown of all ties between London and Brussels, which is scheduled for December 31, 2020. That is, in fact, Brexit has not even begun. Now only preparations are underway for him.

From a technical point of view, all indicators show a downward movement, except for the higher linear regression channel. Thus, the overall trading strategy remains the same - downward trading, especially since there are not even any corrections now.

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The average volatility of the pound/dollar pair has dropped to 91 points over the past five days, and the volatility illustration clearly shows that in the last 6 days it has been reduced. According to the current level of volatility, the working channel on February 11 will be limited by the levels of 1.2821 and 1.3003. The resumption of the downward movement would be very logical on Tuesday, given the fundamental background. A turn of the Heiken Ashi indicator down will indicate the completion of a round of corrective movement.

Nearest support levels:

S1 - 1.2878

S2 - 1.2817

S3 - 1.2756

The nearest resistance levels:

R1 - 1.2939

R2 - 1,3000

R3 - 1.3062

Trading recommendations:

GBP/USD is adjusted. Thus, traders are now advised to wait until the correction is completed and resume selling the pound with goals of 1.2878 and 1.2821. It is recommended to consider purchases of the British currency after the price is consolidated above the moving average line with the first objectives of 1.3062 and 1.3123.

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

Explanation of illustrations:

The highest linear regression channel is the blue unidirectional lines.

The smallest linear channel is the purple unidirectional lines.

CCI - blue line in the indicator regression window.

Moving average (20; smoothed) - a 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 11. Industrial production slows down eurozone economy. Powell's speech can be neutral

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - sideways.

Lower linear regression channel: downward direction.

Moving average (20; smoothed) - down.

CCI: -148.5069

The EUR/USD currency pair did not start a highly anticipated upward correction on Friday or Monday. Instead, it continues to retreat for the seventh day in a row and came close to two-year lows near the level of 1.0879 yesterday. Since the fall in this price area was rapid and recoilless, it is most likely that these lows will be updated the other day. However, now we would like to note the groundlessness of the euro's fall on Monday, February 10. There was no important news that day. No macroeconomic publications or speeches by top officials of the United States or the European Union. Why, instead of a very logical correction, did the fall continue? Yes, we have repeatedly said that the fundamental background remains entirely on the side of the US dollar. But the euro is "now empty, then thick." Either the currency pair stomps on the spot when there is every reason for the trend movement, then it tumbles down when more calm trading can be expected. In any case, despite some strangeness of the current downward movement, from a fundamental and macroeconomic point of view, it is fully justified.

The only macroeconomic report of the past day was industrial production in Italy. We believe that this is far from the most significant indicator, however, let us examine in more detail the indicators of industrial production in other EU countries.

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The graph clearly shows the state of industrial production in Italy over the past two years. Eight out of 24 months showed a decrease compared to the same period last year. Moreover, it should be understood that the current -4.3% y/y refers to the period of the previous year, in which a decrease of 0.8% y/y was also recorded. That is, a decrease of 0.8% was recorded in December 2018 and 2019 - a decrease of another 4.3%. Accordingly, the decline in industrial production is now no longer relative, but absolute. Let's look at the pictures in other EU countries.

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France. The situation is a little better; there is no monthly income reduction as certain as in Italy. However, there are few reasons for joy. The values of the indicator over the past two years signal stagnation, that is, the absence of a clear increase.

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Spain. The situation is a little better than in France. In the last year, almost all months closed with minimal, but still growth. Although, a fall of 5.5% was suddenly recorded in November 2018.

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In the case of Germany, everything is not just bad, but is actually a failure! The rate of decline in industrial production is huge, the last month with a value of -6.8% is evidence of this. We can say with confidence that it is precisely the German indicator that pulls down the pan-European indicator of industrial production to the greatest extent.

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The indicator of industrial production throughout the eurozone. Everything is in the red in the last thirteen months. Is it worth it to once again make a correlation between industrial production and GDP, the main indicator of the state of any economy? GDP in the eurozone has slowed to 1.0% y/y in recent months, while it remains at a very decent level of + 2.1% in the United States. Maybe this is the reason for the continued fall of the European currency?

No important macroeconomic publications are planned in the European Union on the second trading day of the week. Traders will have to focus on the speech of Fed Chairman Jerome Powell in Congress, the essence of which, by and large, is already known and understood. But now what to expect from the euro is very difficult to say. Given the groundlessness of the new fall of the euro on Monday, this movement may continue on Tuesday and Wednesday. Very much like an uncontrolled collapse. Thus, the overall trading strategy for the euro/dollar pair remains the same - selling before the appearance of signals for correction.

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The average volatility of the euro/dollar currency pair again fell slightly and is now 46 points per day. Despite the decrease in volatility, the downward movement continues completely without corrections. Thus, on Tuesday we expect movement between the boundaries of the volatility band of 1.0863 - 1.0955. We are still expecting a correction, but earlier we did not recommend shortening shorts before the Heiken Ashi indicator reversed upwards.

Nearest support levels:

S1 - 1,0864

S2 - 1,0803

S3 - 1.0742

The nearest resistance levels:

R1 - 1,0986

R2 - 1.1047

R3 - 1,1108

Trading recommendations:

The euro/dollar continues to move down. Thus, selling the euro while aiming for 1.0864 and 1.0803, until the Heiken Ashi indicator is up, are still relevant. It is recommended to return to buying the EUR/USD pair no earlier than the bulls overcoming the moving average line, which will change the current trend to an upward one, with the first goals of 1.1047 and 1.1108.

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

Explanation of illustrations:

The highest linear regression channel is the blue unidirectional lines.

The smallest linear regression channel is the purple unidirectional lines.

CCI - blue line in the indicator window.

Moving average (20; smoothed) - a 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.

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

GBP/USD: under pressure from Scottish question and in anticipation of data on GDP growth

Bears of the pound-dollar pair could not keep the price in the area of two-month lows, that is, within the 28th figure. Today, buyers tried to take revenge, but corrective growth was rather uncertain. The pair got stuck around 1.2930, drifting in anticipation of tomorrow's data. Almost all fundamental factors now play against the British currency (as well as technical factors, however), so the current price rebound is temporary.

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The "civilized" Brexit did not bring the long-awaited relief to GBP/USD traders. On the contrary, uncertainty only increased, and negotiations between London and Brussels are conducted in the language of ultimatums. Johnson threatens to end the dialogue on the conclusion of a trade deal, the Europeans, in turn, promised Madrid to support Spain's territorial claims over Gibraltar. This start of the negotiation process disappointed investors, after which the pound began to slowly but surely slide down. Although certain events still kept the GBP/USD pair afloat. For example, the Bank of England, contrary to numerous rumors, did not lower the interest rate at its January meeting. In addition, the pound received support from UK labor market data. In particular, traders were pleased with the growth rate of salaries, which exceeded the expectations of most experts. But in general, the fundamental background for the pair is bleak. Therefore, tomorrow's release of data on the growth of the British economy can either increase pressure on GBP/USD, or even out the downward momentum - for a while.

According to preliminary forecasts, in the fourth quarter the UK economy grew by only 0.8% on an annualized basis and by 0.1% on a quarterly basis. This is a rather weak result (for example, in annual terms, the indicator last time was at such a low level at the end of 2018). If we talk about the growth of the British economy in December, then a very weak growth is also expected here - only 0.2% on a monthly basis. Data on the growth of industrial production in Britain will also be published tomorrow. Here the forecast is also quite pessimistic: in annual terms, the indicator will remain in the negative area, confirming the slowdown of key economic indicators. Thus, releases can put additional pressure on the pound, increasing the strength of the downward movement. Even if the indicators come out at a forecasted level, the pound still will not be able to take revenge, as the market will again talk about the fact that the English regulator will decide to lower the interest rate at its next - March - meeting.

Let me remind you that in January, the BoE made it clear that it was ready to continue to maintain a wait-and-see attitude, but subject to the restoration of key parameters of the British economy. Recent trends did not go unnoticed - the regulator lowered its forecast for economic growth, while recognizing that inflation would remain below target level until the end of next year. In addition, the central bank excluded the wording that it was ready for "moderate gradual tightening of monetary policy." But at the same time, the alignment of forces among the members of the Committee did not change - only Saunders and Haskel voted for the interest rate cut. On the eve of the January meeting, rumors were circulating in the market that Gertjan Vlieghe and Silvana Tenreyro would join them, voicing the dovish comments. If these rumors were confirmed, four out of nine members of the Committee supported the easing of monetary policy. That is, the decision to lower the rate would depend on one member of the English regulator.

According to a number of experts, tomorrow's data can push the skeptics Vlieghe and Tenreyro to cast their vote in favor of easing monetary policy. In any case, a further slowdown in the British economy will increase the likelihood of such a scenario.

It is also worth noting that the pound is under the background pressure of the "Scottish Question". The first minister of this region of Great Britain, Nicola Sturgeon, announced that Scotland intends to return to the European Union "as an independent nation." She specified that she would continue to seek a second referendum on independence, despite the categorical refusal of London. Let me remind you that in 2014 the Scots refused to leave the UK, but at the same time in 2016 more than 60% of the region's population voted against Brexit. In other words, if a second referendum on independence is held, Scotland will most likely leave Britain and join the EU in the future. Obviously, the prospects for political instability are also putting pressure on the pound.

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From a technical point of view, the pair on the daily chart is on the lower line of the Bollinger Bands indicator, under all the lines of the Ichimoku indicator, which also formed a bearish "Parade of Lines" signal. This indicates the potential for further decline. The nearest support level is located quite far - at around 1.2740 (this is the Kijun-sen line on the weekly chart). If tomorrow's numbers come out in the red zone, the pound will be able to test this price target this week - especially if Powell does not put significant pressure on the dollar.

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

GBP/USD. February 10. Results of the day. Pound slightly grew ahead of a significant day. New collapse could follow tomorrow

4-hour timeframe

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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 sterling paired with the US currency on February 10 began a weak upward correction. We expected exactly the same development of events from the EUR/USD pair, but only the pound/dollar pair began to adjust. Although, from our point of view, the British currency is generally quite overbought, despite the fact that in recent years it has only become cheaper. The first trading day was rather boring and uninteresting, since no macroeconomic publications were planned for that day. Thus, traders decided to consolidate part of the position before an extremely important Tuesday, when a large amount of important macroeconomic information will be published. By and large, the pound will depend on tomorrow. If, on the whole, macroeconomic statistics turn out to be at least not a failure, then perhaps the upward correction will continue. There is very little hope of Jerome Powell in Congress. It is unlikely that out of the blue, following strong reports on the US labor market, the Fed chief will change his rhetoric to a dovish one. Thus, Powell's speech at best will simply not trigger new purchases of the US dollar.

But it is extremely difficult to expect the same effect from UK statistics. In principle, only one indicator of GDP is enough, which according to preliminary estimates should slow down from 1.1% to 0.8% in the fourth quarter. Of course, GDP can be, for example, 1.0%, which will still be worse than the previous value and above the forecast. Traders can decide that not everything is so bad, and not continue to sell the pound. Thus, it is not a fact that tomorrow we will definitely see a fall in the British currency. But all market participants are well aware that in the long term, the pound will still be subject to decline, since nothing in the UK is changing for the better. All risks relating to Brexit remain. All risks relating to negotiations with the European Union on a trade agreement remain. The economy continues to lose money. What will happen after 2020 is not known at all. Thus, our forecasts for the whole of 2020 remain the same - a fall and only a fall. It may not be a landslide, it may not be panic, it may not be quick, but it will fall.

What to expect from a currency pair in technical terms? First, the movement to the critical line. If the pair reaches this line and bounces off it, then the downward movement will resume, and traders will receive an eloquent signal for selling the pound sterling. Secondly, the preservation of a long-term downward movement, as on the 24-hour chart Bollinger bands began to expand downward, which indicates the completion of a 5-month upward trend.

Trading recommendations:

GBP/USD began to adjust against the "dead cross". Thus, selling the pound with the target support level of 1.2772 is still relevant, but after the completion of the current correction, which can be determined by the rebound from the Kijun-sen line or by turning the MACD indicator down. 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 goal of the 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

Principle: bitcoin rose above $10,000 and fell again

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Sharp ups and downs are a common thing in the cryptocurrency sphere, so many traders took for granted the sharp increase in the MTC this Sunday, February 9. However, the joy was short-lived, and the no. 1 cryptocurrency was again beginning to lose ground.

According to experts, the leading digital asset exceeded the $10,000 mark for the first time in 2020. The no. 1 cryptocurrency last traded at this level more than three months ago in October 2019.

Nevertheless, the beginning of a new week did not bring the expected positive to Bitcoin. On Monday, February 10, the leading virtual asset was unable to maintain its position and collapsed. It dropped to $9988 in the BTC/USD pair, demonstrating a tendency to a steady decline. Experts believe that the downward trend will continue in the near future.

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Hopes of most market participants after overcoming the BTC mark of $10,000 were in vain. Many in the crypto community hoped that Bitcoin would continue to grow. However, this did not happen, and the market was gripped by disappointment.

However, some crypto enthusiasts are confident that the leading digital asset will reach lost heights and even exceed them in the medium term. According to Anthony Pompliano, a partner at Morgan Creek Digital, an investment company, by the end of 2021 MTC will skyrocket to a whopping $100,000. The key factors behind this growth will be limited emissions and increased demand.

Other forecasts look more realistic. For example, Robert Slammer, an analyst with Fundstrat, claims that in the near future Bitcoin will be trading in the range from $10,000 to $11,000. Institutional and retail investors are also confident in the rise of the first cryptocurrency.

A positive note was also made by the leading rating agency Weiss Ratings, which assigned Bitcoin with an A- rating (excellent). The reasons for the rating increase were the improvement of fundamental indicators of BTC and the optimistic price dynamics of bitcoin before the upcoming halving.

However, not all market participants are positive about the leading virtual asset. According to Joe DiPasquale, CEO of Bitbull Capital, in the event of a lull in the global market, bitcoin could drop to $6,800. The expert is certain that bitcoin will increase in price only if the situation with the Chinese coronavirus worsens and if gold prices rise.

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

EUR/USD. February 10. Results of the day. Fed fears US economy slows down due to coronavirus

4-hour timeframe

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

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

The EUR/USD currency pair ends the first trading day of the new week in a downward movement. The upward correction did not start, although we expected it on Friday (but on this day strong macroeconomic statistics from across the ocean and weak from Germany did not make it possible for the euro currency to go up), and then today. The chances of starting a correction were at its highest today, since the calendar of macroeconomic events was completely empty. That is, the fundamental factor had almost no effect on the euro/dollar currency pair. It is unlikely that traders were so disappointed with the indicator of industrial production in Italy (which fell by 4.3% y/y) that they rushed to get rid of the euro on Monday. The fact that industrial production in all EU countries is experiencing serious problems is no secret. On Friday, for example, disastrous German production plus the strongest NonFarm Payrolls data resulted in just a 40-point downward movement. And the total volatility was 43 points. Today, the pair has already passed 36 with an empty calendar. Thus, it seems that this time it is not a matter of macroeconomic data. It seems that the patience of traders simply burst. We have repeatedly talked about the paradoxical situation in recent months, which, from our point of view, was the reason for the lack of a fall in the euro below 1.0900. Although at the moment this level is still not overcome, the bears' mood this time seems to be very serious. In any case, traders definitely have such a virtually recoilless movement that can last a very long time. One negative is that the MACD indicator cannot constantly fall, so it will discharge from time to time. For example, the discharge occurred this morning, when the indicator reacted by turning upward to the pair's minimal growth (only 10 points).

Tomorrow, meanwhile, the first speech by Fed Chairman Jerome Powell will take place in the US Congress. Powell will present a semi-annual report on monetary policy to the House Committee of Financial Services. This report is not a secret, and some of its details are already known. As we expected at the weekend, the general rhetoric of the head of the US regulator will not change. The Fed will note to Congress a reduction in risks for the US economy by relieving trade tensions, as well as by revitalizing global economic growth. The US economy has been growing for 11 consecutive years, which is a kind of record. The labor market is in excellent condition, as evidenced by the latest reports on NonFarm Payrolls, as well as ADP. Unemployment has even slightly increased, however, experts say that there is nothing wrong with this, since the indicator itself remains at its lowest level. However, the Fed also notes the risks associated with the coronavirus. The report notes that the epidemic in China has already led to the closure of a number of cities, the fall of the tourism industry (for obvious reasons), and can lead to a significant drop in the economic growth rate. The Chinese economy is directly and very closely connected with the American one. Thus, the further spread of the virus in China will lead to increasingly serious consequences.

From our point of view, coronavirus is dangerous, but so far it is not a global problem. We draw the attention of traders to the fact that Powell stubbornly does not want to touch on the topic of slowing GDP growth, as well as falling industrial production in the United States. The Fed has repeatedly noted that the current level of rates is sufficient to maintain the desired business climate in the country. However, industrial production continues to decline in the past year and a half. GDP fell from 3.5% to the current 2.1% over the past year and a half. Of course, this is not such a problem, as, for example, in the EU, where GDP is 1.0%, or, for example, in the UK, where GDP can drop to 0.8% altogether. But nonetheless. These factors must be taken into account.

The technical picture still signals a continuing downward movement, and now it is even difficult to imagine how a correction should be expected. This week, in addition to Powell's speech in Congress, there will also be important macroeconomic publications. It turns out that expectations will be connected precisely with these publications. We, as before, recommend trading with the trend, not trying to guess the turns up. For this, there are indicators MACD and Heiken Ashi.

Trading recommendations:

EUR/USD continues to move down. Thus, it is recommended to continue selling the euro with the target support level of 1.0893, until the MACD indicator reverses (may discharge) or a rebound from the first target. It will be possible to consider purchases of the euro/dollar pair in small lots with the goal of 1.1045 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

Comprehensive analysis of movement options for #USDX vs EUR/USD vs GBP/USD vs USD/JPY (DAILY) on February 10

Here's a variation of movement of the main currency instruments - #USDX, EUR / USD, GBP / USD and USD / JPY - DAILY in a comprehensive form from February 10, 2020

Minor (daily time frame)

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US dollar index

The US dollar index #USDX will determine the development of its movement from February 10, 2020, depending on the breakdown direction of a fairly narrow range :

- resistance level of 98.75 - lower boundary of the ISL38.2 equilibrium zone of the Minor operational scale forks;

- support level of 98.65 - the upper boundary of the 1/2 Median Line Minor channel.

The breakdown of ISL38.2 Minor - resistance level of 98.75 - will make the development of #USDX movement in the equilibrium zone (98.75 - 99.40 - 100.00) of the Minor operational scale forks relevant.

The breakdown of support level 98.65 - the development of the dollar index movement will continue within the 1/2 Median Line channel (98.65 - 98.25 - 97.85)of the Minor operational scale forks and the equilibrium zone (98.20 - 97.95 - 97.65) of the Minuette operational scale forks.

The markup of #USDX movement options from February 10, 2020 is shown on the animated chart.

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Euro vs US dollar

The development of the single European currency EUR/USD from February 10, 2020 will be determined by the development and direction of the breakdown of the channel boundaries 1/2 Median Line (1.0900 - 1.0950 - 1.1000) of the Minor operational scale forks. We look at the animated chart for the details.

The breakdown of the support level of 1.0900 on the lower boundary of the 1/2 Median Line Minor channel and the update of minimum 1.0879 will confirm the continuation of the downward movement of the single European currency to the warning line LWL38.2 (1.0755) of the Minor operational scale forks.

On the other hand, in case of breakdown of the resistance level of 1.1000 (upper boundary of the 1/2 Median Line Minor channel), the development of the EUR / USD movement will continue in the equilibrium zone (1.1000 - 1.1035 - 1.1070) of the Minuette operational scale forks with the prospect of reaching the boundaries of the 1/2 Median Line Minuette channel (1.1130 - 1.1155 - 1.1188).

The details of the EUR / USD movement options from February 10, 2020 are shown on the animated chart.

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Great Britain pound vs US dollar

The development of Her Majesty's GBP/USD currency movement from February 10, 2020 will continue depending on the breakdown direction of the range :

  • resistance level 1of .2965 (the upper boundary of the 1/2 Median Line channel of the Minuette operational scale forks);
  • support level of 1.2870 (the lower boundary of the 1/2 Median Line Minor channel).

In case of breakdown of the lower boundary of the 1/2 Median Line channel (1.2870) of the Minor operational scale forks, the downward movement of Her Majesty's currency can continue to 1/2 of the Median Line Minuette (1.2790), and in case of breakdown it will become possible to reach GBP / USD boundaries of the equilibrium zone (1.2645 - 1.2420 - 1.2200) of the Minuette operational scale forks.

On the contrary, in case of breakdown of the upper boundary of the 1/2 Median Line Minuette channel (1.2965), the development of GBP / USD movement in the 1/2 Median Line channel (1.2870 - 1.3150 - 1.3435) of the Minor operational scale forks will be confirmed.

The details of the GBP / USD movement options from February 10, 2020 are shown on the animated chart.

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US dollar vs Japanese yen

The development of the currency movement of the "country of the rising sun" USD / JPY and from February 10, 2020 will be determined by the development and the direction of the breakdown of the range :

  • resistance level of 109.90 (start line SSL of the Minuette operational scale forks);
  • support level of 109.05 (reaction line RL38.2 Minuette).

The breakdown of the initial SSL Minuette line - resistance level of 109.90 - will lead to the continuation of the development of the upward movement of USD / JPY to the control line UTL (110.50) of the Minuette operational scale forks with the prospect of reaching the boundaries of the equilibrium zone (111.65 - 113.00 - 114.20) of the Minor operational scale forks.

Successive breakdown of support levels :

- 108.50 - reaction line RL38.2 Minute;

- 109.55 - the upper boundary of the 1/2 Median Line Minor channel;

will make it possible for the currency of the "land of the rising sun" to continue to develop in the 1/2 Median Line channel (108.70 - 107.75 - 106.90) of the Minor operational scale forks with the prospect of reaching the upper boundary of ISL38.2 (106.40) equilibrium zone fof the Minuette operational scale forks.

We look at the details of the USD / JPY movement options from February 10, 2020 on the animated chart.

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The review was compiled without taking into account the news background. Thus, the opening trading sessions of major financial centers does not serve as a guide to action (placing orders "sell" or "buy").

The formula for calculating the dollar index :

USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.

where power factors correspond to the weights of the currencies in the basket:

Euro - 57.6% ;

Yen - 13.6% ;

Pound Sterling - 11.9% ;

Canadian dollar - 9.1%;

Swedish krona - 4.2%;

Swiss franc - 3.6%.

The first coefficient in the formula leads the index to 100 at the starting date - March 1973, when the main currencies began to be freely quoted relative to each other.

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

Comprehensive analysis of movement options for AUD/USD vs USD/CAD vs NZD/USD vs #USDX (DAILY) on February 10

US dollar index

The dollar index #USDX will determine the development of its movement from February 10, 2020, depending on the breakdown direction of a quite narrow range: resistance level of 98.75 - lower boundary of the ISL38.2 equilibrium zone of the Minor operational scale forks;

- resistance level of 98.75;

- support level of 98.65 - the upper boundary of the 1/2 Median Line Minor channel.

The breakdown of ISL38.2 Minor - resistance level of 98.75 - will make the development of #USDX movement in the equilibrium zone (98.75 - 99.40 - 100.00)of the Minor operational scale forks relevant.

On the other hand, the breakdown of the support level of 98.65 - the development of the dollar index movement will continue within the 1/2 Median Line channel (98.65 - 98.25 - 97.85) of the Minor operational scale forks and the equilibrium zone (98.20 - 97.95 - 97.65) of the Minuette operational scale forks.

The markup of #USDX movement options from February 10, 2020 is shown on the animated chart.

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Australian dollar vs US dollar

The movement of the Australian dollar AUD/USD from February 10, 2020 will be determined by developing the boundaries of the equilibrium zone (0.6666 - 0.6720 - 0.6780) of the Minuette operational scale forks. We look at the animated chart for the details.

The breakdown of the lower boundary of the JSL61.8 equilibrium zone of the Minuette operational scale forks - support level of 0.6666 - will lead to the continuation of the downward movement of the Australian dollar towards the targets:

- local minimum 0.6607 ;

-ultimate Shiff Line Minuette (0.6565).

On the contrary, the breakdown of the resistance level of 0.6780 at the upper boundary of the ISL38.2 equilibrium zone of the Minuette operational scale forks - an option for the development of the upward movement of AUD / USD to the targets:

- upper boundary of the 1/2 Median Line Minuette channel; (0.6835);

- the lower boundary of ISL38.2 (0.6875) equilibrium zone of the Minor operational scale forks.

We look at the layout of the AUD / USD movement options from February 10, 2020 on the animated chart.

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US dollar vs Canadian dollar

The development of the movement of the Canadian dollar USD / CAD from February 10, 2020 will also depend on the development and direction of the breakdown of the boundaries of the equilibrium zone (1.3225 - 1.3275 - 1.3335) of the Minuette operational scale forks. The markup of movement inside this equilibrium zone is presented on an animated chart.

In case of breakdown of the upper boundary of ISL61.8 (resistance level of 1.3335) of the equilibrium zone of the Minuette operational scale forks, it will be possible to continue the upward movement of USD / CAD to the warning UWL38.2 (1.3385) and UWL62.8 (1.3495) to the lines of the Minor operational scale forks with the prospect of reaching the final line FSL Minuette (1.3530).

Meanwhile, in case of successive breakdown of the lower boundary of ISL38.2 (support level of 1.3225) of the equilibrium zone of the Minuette operational scale forks and the initial SSL line (1.3200) of the Minor operational scale forks, the downward movement of the Canadian dollar can continue to the boundaries of 1/2 Median Line Minuette channel (1.3080 - 1.3045 - 1.3005).

We look at the markup of the USD / CAD movement options from February 10, 2020 on the animated chart.

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New Zealand dollar vs US dollar

The development and the breakdown direction of the range :

  • resistance level of 0.6415 (1/2 Median Line Minor);
  • support level ofl 0.6390 (lower boundary of the 1/2 Median Line Minuette channel).

The breakdown of the lower boundary of the 1/2 Median Line Minuette channel - support level of 0.6390 - will lead to the continuation of the development of the downward movement of the New Zealand dollar to the boundaries of the equilibrium zone (0.6340 - 0.6240 - 0.6140) of the Minuette operational scale forks.

Alternatively, the breakdown of 1/2 Median Line Minor - resistance level of 0.6415 - it will be possible to develop an upward movement of NZD / USD to the goals:

- 1/2 Median Line Minuette (0.6460);

- the upper boundary of the 1/2 Median Line Minor channel (0.6480);

- the upper boundary of the 1/2 Median Line Minuette channel (0.6525);

with the prospect of reaching the initial SSL line (0.6630) of the Minuette operational scale forks.

We look at the layout of the NZD / USD movement options from February 10, 2020 on the animated chart.

analytics5e415bc8d314c.jpg

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The review is made without taking into account the news background. Thus, the opening of trading sessions of major financial centers does not serve as a guide to action (placing orders "sell" or "buy").

The formula for calculating the dollar index:

USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.

where the power coefficients correspond to the weights of the currencies in the basket:

Euro - 57.6%;

Yen - 13.6%;

Pound Sterling - 11.9%;

Canadian dollar - 9.1%;

Swedish krona - 4.2%;

Swiss franc - 3.6%.

The first coefficient in the formula leads the index to 100 at the starting date - March 1973, when the main currencies began to be freely quoted relative to each other.

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

Analysis and forecast of GBP/USD on February 10, 2020

Another important week for sterling

Good day to all!

As many people know (or guessed), last week the pound became the undisputed leader of the fall against the US dollar. The GBP/USD currency pair's loss amounted to 2.38%, but could have been even greater, so the pound was lucky to some extent.

I believe that in the situation with the pound, recent statistics have had minimal impact on price dynamics. Of course, besides very important and significant, such as Nonfarm Payrolls and decisions of the Federal Reserve and Bank of England.

Much more influence on the sterling had and will continue to do this news and events related to Brexit.

Let me remind you that Great Britain officially left the European Union on January 31. However, some issues in trade relations remained unresolved, and Prime Minister Boris Johnson is trying to solve them, of course, in favor of the United Kingdom.

According to market participants, the rigid Brexit and the equally tough position of Boris Johnson, which he took in negotiations with the EU on trade, and led to such a strong drop in the pound. Moreover, this is only talks and the final result is not yet known. Nevertheless, the pound was sold just in case.

Weekly

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A huge black candle just shows the full extent of the pressure that the British currency was under during the trade on February 3-7. As a result of the fall, the support for 1.2954 and the 89 exponential moving average are broken.

Usually there is a correction on Mondays, which we are observing today. If it continues, the quotation may rise to the area of 1.2950-1.2975. Returning above the psychological mark of 1.3000 and closing the current week above this significant level will make you think about changing moods in favor of the sterling.

However, the most likely scenario, in my opinion, is the continuation of the downward trend after the completion of the corrective retreat that occurs at a given point in time. If this happens, the pair's road will lie in the strong technical area 1.2775-1.2750. Here are 50 simple moving averages and several significant levels for market participants.

Daily

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89 EMA has also been broken on the daily chart of the pair, but at the moment there has been a pullback to this move, and a lot will depend on the closing price of today's trading. If the session ends above 89 exponentials, and even more so above 1.2954, we will look at the future prospects of the GBP/USD pair a little differently, since in this case the bearish sentiment will somewhat weaken. In this case, the rise in the strong technical zone 1.3040-1.3060, where the Tenkan and Kijun lines of the Ichimoku indicator are also located, is not excluded.

This appears to be a good area to open short positions on the pound/dollar pair. However, there is still a lot of incomprehensibility, it is better to wait a couple of days.

Significant events from the US were written in a review on EUR/USD, here I will highlight important data from the UK.

Tomorrow the markets are waiting for what changes have occurred in the volume of commercial investments, industrial production and GDP data. That's, in fact, everything about macroeconomic statistics from the UK. I believe that on Wednesday a couple of things may become clear, then look for interesting trading ideas and points for opening deals on the GBP/USD pair.

Good luck

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

Evening review 02/10/2020 EURUSD. Virus - or US economy?

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EURUSD: Hold sales from 1.0990, stop 1.1035, target 1.0890

Markets at a crossroads: strong optimism about the US economy is pushing markets to grow - however, a long overdue correction in the US market has a tempting reason - a virus epidemic in China.

Yes, the virus is positive - the huge efforts of the Chinese authorities to combat the epidemic have had an effect. China said that the number of new infections in all provinces, except the most affected, is declining. That is, it was possible to localize the epidemic within China. But the number of cases still grows, and the rate does not fall below +10% per day.

We are waiting for the reaction of the markets.

P.S. Who buys US stock at such high prices? Growth is going on at low volumes - the main investments are not in stocks, but in bonds - of those companies that have high chances to survive the new crisis if it happens in the coming year.

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

Dollar still on horseback, while euro and pound may continue to fall

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The EUR/USD pair fell out of the four-month range of 1.10–1.12 towards the end of the previous week. The euro reached a local low near 1.0940 against the dollar on Friday. The last time the main currency pair was spotted at this level was early October 2019. Up to a multi-year low, 1.0878 remains within easy reach. It is possible that the decline in EUR/USD, which began in early January, is the start of the trend towards strengthening the US dollar, which will lead to growth by about 10% within a few months.

Amid a worsening risk appetite in global markets, the greenback is in demand as a safe haven. At the same time, the yield on the US public debt, despite the recent decline, is still the highest among developed countries. Thus, the dollar simultaneously acts both as a highly profitable currency and as a defensive asset.

The United States remains firmly on its feet, while alarming fears for the state of the European economy are growing, expectations for an expansion of the quantitative easing (QE) policy in the eurozone are growing, and confidence is growing that the Federal Reserve interest rate will remain unchanged.

"Coronavirus has a particularly strong impact on investor confidence in Europe, as market participants are well aware of the vulnerability of the region's economy to external shocks. Such vulnerability was shown during the trade war between the United States and China, as well as amid the continuing threat hanging over its automotive sector," analysts at JPMorgan Chase noted.

"If the eurozone economy cannot escape the low growth swamp, then the inflow of foreign capital to the region's stock market may stop, or even turn into an outflow," they added.

JPMorgan revised the forecast for EUR/USD at the end of the year to the downside (from 1.14 to 1.11) and warns about the risks of an intermediate fall of the pair to 1.08.

Following the euro, it lost ground against the dollar and the pound. In addition to strengthening the greenback, pressure on the British currency is worrying that the UK will not be able to negotiate a deal with the European Union during the transitional period after Brexit.

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Last week, the GBP/USD pair completed at 1.2880 - in the area around which it revolved from the end of October to the beginning of December 2019. Therefore, the nearest boundaries of its fluctuations are likely to be the levels of 1.2800 and 1.3000. However, the drop in GBP/USD over the past week by as much as 320 points suggests that it may not be able to stay in the specified range. In this case, the next target of the bears could be the levels of 1.2400-1.2580.

The situation with Brexit and the monetary policy of the Bank of England makes the pound's prospects very vague.

"We do not consider the pound to be a structurally or fundamentally undervalued currency, as the UK is turning into a country with prospects for low growth and low rates. In addition, do not forget about the uncertainty in trade negotiations with the EU," strategists at JPMorgan said.

"The trade negotiations between London and Brussels will inevitably create a news buzz that could pull down the pound," they said.

The bank lowered its forecast for GBP/USD for the first quarter from $1.32 to $1.27, and at the end of the year from 1.33 to 1.30.

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