Hot forecast for EUR/USD on 02/14/2020 and a trading recommendation

If you look at the general results of the past day, at first glance, everything happened exactly as it should, since the single European currency fell against the dollar. However, not everything is so simple, since everything happened long before US inflation data was published. This situation raises many questions, so it's worth sorting everything out in order.

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It is not strange, but the euro completely ignored European macroeconomic statistics, which were extremely positive. In particular, the unemployment rate in France, which decreased from 8.5% to 8.1%, was ignored. Not only did it drop significantly, but it turned out to be much better than forecasts predicted a decrease in unemployment to 8.4%.

Unemployment Rate (France):

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The market ignored inflation data in Germany, which fully coincided with forecasts, and rose from 1.5% to 1.7%. But inflation growth in the largest economy of the euro area automatically indicates its growth potential throughout Europe. So investors had enough reasons for optimism. But no reaction followed.

Inflation (Germany):

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A few hours later, the euro fell amid absent information background. Certain news from the United Kingdom slightly excited investors, but only in relation to the pound. Since the news itself does not apply to the euro area. However, the weakening of the single European currency stopped shortly before the publication of US inflation data. The most interesting thing is that when it was announced that inflation growth in the United States went from 2.3% to 2.5%, and not up to 2.4%, as expected, the euro stood rooted to the spot. Looking at such a development of events, it is impossible to get rid of the idea that someone very large, knew in advance what the inflation data would be. At least, all euro's movements are fully justified, except when exactly they occurred.

Inflation (United States):

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Nevertheless, an extremely busy day awaits us, and it is impossible to single out one specific piece of news that will determine the course of events. On the one hand, the euro is obviously excessively oversold, and it only needs a reason. However, this will have to wait, as the data on the GDP of the euro area for the fourth quarter should show a slowdown in economic growth from 1.2% to 1.0%. At the same time, there is a likelihood that the data will turn out to be much worse, because recent data on industrial production indicates this. So the European statistics themselves will certainly not give rise to the growth of the single European currency.

GDP growth rate (Europe):

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But there is still hope, since US retail sales data is set to be published today, which should show a slowdown in growth from 5.8% to 4.9%. Such a significant slowdown cannot be ignored, especially since we are talking about the main engine of the US economy. At the same time, one should not exclude the possibility that the data will turn out to be slightly better than forecasts. It is not strange, but this is indicated by the latest report of the United States Department of Labor, as it reflected a noticeable increase in the growth rate of the average hourly wage. So income growth can support consumer demand.

Retail Sales (United States):

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From the point of view of technical analysis, we see a stable downward move, which managed to overcome the low of the previous year 1.0879, as well as to consolidate below the level of 1.0850. In fact, the downward trend has resumed, and recent price takings confirm this, but in view of such a sharp decline, where there were no corrections, we were faced with overheating of short positions, which could put additional pressure.

In terms of a general review of the trading chart, we see the price movement in the region of 2017, which means that the oblong correction has been left behind and is considered developed.

It is likely to assume that the overall downward mood will remain in the market, but in order to acquire new branches, a retreat is needed, or a local correction.

Concretizing all of the above into trading signals:

- Long positions, we consider in the event of a price increase higher than 1.0850, towards 1.0885-1.0925.

- Short positions, we consider in the absence of correction and consolidating the price below 1.0815.

From the point of view of a comprehensive indicator analysis, we see that technical tools at hourly and daily intervals signal a sale. At the same time, minute intervals due to alternating stagnation changed interest to ascending, neutral.

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Euro finds no reason to resume growth, pound bulls are expecting a stimulus package in March

Despite the fact that inflation growth in January was slightly higher than forecasts, stock markets closed in the red zone, as inflation data are not regarded as significant at the moment. On the other hand, the threat of coronavirus leads to an increase in deflationary risks, and they are currently considered the main ones.

Today, data on import and export prices in January, a report on industrial production and consumer confidence index from the University of Michigan will be published. Forecasts are neutral, while the dollar is losing internal momentum for growth.

On the other hand, the sudden outbreak in the Covid-19's disease statistics led to a short-term increase in panic, but markets calmed down after a clarification from WHO, so there may be attempts to increase commodity currencies and a general decrease in the demand for protective assets. Oil, in turn, will be traded with a slight increase, gold will remain in the lateral range, and demand for the yen will decline.

EUR/USD

The euro came close to a 3-year low, with no obvious reason for such a massive decline.

The European Commission has maintained its forecast for growth in the eurozone at 1.2% for 2020 and 2021, that is, the threat of a slowdown in the spread of COVID-19 is not yet considered significant.

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At the same time, the European Commission surprisingly recounted its growth forecast for Germany from 1% to 1.1% in 2020/21, that is, directly economic prospects are not the reason for the EUR/USD decline. Perhaps, the reason for the sales is the rumors that appeared literally before, citing sources at the ECB that the chances of lowering the rate are growing, and the reason for the possible reduction is called coronavirus and weak data.

Moreover, the European Commission lists the vulnerabilities of the European economy and suggests that investment growth will be very moderate, the risks of rising trade tension remain high, but public investment in a number of countries, on the contrary, will increase significantly, which means there are plans to expand incentives.

The loss of support at 1.0878 provides an opportunity to strengthen the downward momentum; however, the technical oversoldness of the euro holds back the decline. Meanwhile, corrective growth is possible to the resistance level of 1.0878, or even 1.0970 / 90, but bearish pressure will only increase in the long term.

GBP/USD

The British pound rose on Thursday after Treasury Secretary Sajid Javid resigned. Markets win back the increased probability of new government incentives, as succeeding Javid Sunak is considered a close ally of Boris Johnson.

Javid convinced Johnson to limit budget spending and make it more balanced before the December elections, but now, investors expect an increase in fiscal stimulus in March, and these expectations support the demand for the pound.

At the same time, the resignation of Javid is not a complete surprise - the day before, NIESR, commenting on the state of the British economy, noted that it expects changes in the March budget, which will focus on increasing spending. Now, Britain is preparing to expand the stimulus package, which will lead to a 1.5% increase in GDP and a 2% increase in inflation.

Meanwhile, RICS data on housing prices in January show significant growth, which indicates positive expectations after Brexit in housing construction.

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As for industrial production, the January data are not yet available, and the December data indicate a continuation of the deceleration rather than growth. NIESR expects that the economy will still be growing at zero in January, so the strengthening of the pound is largely preventative based on expectations, and not on the real economic situation.

Testing support for 1.2920 is still likely for GBP/USD, although there are no long-term reasons for strengthening the pound. Resistance zone is at 1.3085 / 3125. Thus, growth attempts will most likely be stopped in this zone.

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Is USD/CAD Correction Complete?

The USD/CAD minor correction was somehow expected after the impressive rally and after the failure to reach the 1.3344 major static resistance. The question is: could the pair make a deeper correction?

You should be ready for some volatility today as the US is due to release Retail Sales data, the Industrial Production, Capacity Utilization Rate, Prelim UoM Consumer Sentiment, and the Business Inventories. Some poor data will attract more sellers which will force USD/CAD to drop deeper, while better than expected numbers will boost the price.

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USD/CAD has failed to stay above the median line (ML) of the ascending pitchfork and now it has decreased as low as 23.6% retracement level after the bearish divergence signaled by the MACD and Stochastic indicators.

A valid breakdown below the SL2 and below the 23.6% level will confirm a further drop towards the 38.2% level. The first inside sliding parallel line (SL) could represent a target as well. Another lower low, a drop below the 23.6% and below the 1.3235 will signal a larger corrective phase.

  • Trading Recommendations

We may have a selling opportunity after a valid breakdown below the 23.6% retracement level with a first target at the SL and lower at the 38.2% level, Stop Loss should be placed right above a former highs such as 1.3270.

A potential larger drop could be invalidated by another false breakdown below the 23.6% level, so a pin bar or a bullish engulfing on the near-term static support could signal another bullish momentum towards the 1.3344 major resistance, a valid breakout above it will validate a further increase on the medium to the long term.

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GBP/USD: plan for the European session on February 14. Pound is showing growth amid changes in the UK cabinet. Bulls are

To open long positions on GBP/USD you need:

The upward trend continues, and yesterday's news about the resignation of the UK Treasury Secretary, a tough opponent of the trade agreement between England and the EU, only strengthened the pound. Buyers managed the level of 1.2967, and also made their way above the 1.3007 range, which now acts as a serious support. The main objective of the bulls in the first half of the day will be a break and consolidation above the resistance of 1.3052, which will open a direct road to the area of highs 1.3093 and 1.3133, where I recommend taking profits. However, buyers may have problems after updating yesterday's high when forming divergence on the MACD indicator. A more optimal scenario for opening long positions would be a downward correction to the support area of 1.3010, provided that there is a false breakout there, or a rebound purchase after the support test of 1.2967, where the lower boundary of the new ascending channel formed on February 10 is also passing.

To open short positions on GBP/USD you need:

Sellers are in no hurry to return to the market, and slight pullbacks are just profit-taking on long positions. The bears need to achieve the formation of a false breakout in the first half of the day, which can happen after an unsuccessful update of yesterday's high with confirmation of divergence on the MACD indicator. If sellers are unable to implement this scenario, it is best to postpone short positions until the 1.3093 level is updated, or sell GBP/USD immediately to rebound from the resistance of 1.3133. An equally important goal for the bears will be the pound's return to a support of 1.3010, as its breakthrough will increase the pressure on the pair, which will lead to a fall to the low of 1.2967, where I recommend taking profits.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 moving average, which indicates the continuation of the upward correction in the pair.

Bollinger bands

If the pair decreases, support will be provided by the lower boundary of the indicator at 1.3000, while growth may be limited by the upper level at 1.3077.

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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 14. COT reports show increase in short positions in euros. Bears not going

To open long positions on EURUSD you need:

Another unsuccessful attempt to grow amid the report of the European Commission, which revised the forecast for inflation in the eurozone upward, which caused the euro to fall, and a breakout of the level of 1.0867 pulling down the pair to the area of 1.0840, under which trade is now being conducted. There is no one willing to buy the euro, as evidenced by the constant breakdown of emerging divergences. I have not seen this for quite some time. Therefore, you need to be careful, and only returning to 1.0840 with good reports on GDP in Germany and the eurozone will allow the bulls to return to the market and reach the resistance of 1.0867, a breakthrough of which will lead the pair to a high of 1.0896, where I recommend taking profit. In case the euro falls further to long positions, you can look at the rebound from a low of 1.0804, or even deeper, in the support area of 1.0773.

To open short positions on EURUSD you need:

Sellers formed a false breakout in the resistance area of 1.0892 and achieved a breakout of 1.0867, which led to the next sale of the euro according to the trend, since after breaking through the lows of last year, judging by the schedule, there are no more buyers in the market. The increase in short positions in the European currency and the sharp gap between those who want to buy and sell in a non-profit net position also confirms the prevalence of bears in the market. It can be seen from the COT report that long non-profit positions decreased from 180,653 to 166,925, while short non-profit positions, on the contrary, increased to 242,005 from 239,515. I recall that long nonprofit positions represent the total long open position of nonprofit traders, and short non-profit positions represent the total short open position of non-profit traders. The gap and difference between these positions (net position) indicates market sentiment and trend direction. Euro sellers only need to maintain the level of 1.0840 and the formation of a false breakout on it, which will lead to further sale of EUR/USD to the low of 1.0804 and 1.0773, where I recommend taking profits. In case bulls return to the level of 1.0840 in the morning after good statistics, it is best to return to short positions for corrections from a high of 1.0867, or sell the euro immediately for a rebound near 1.0896.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 moving average, which indicates a continuation of the bearish trend.

Bollinger bands

A break of the lower boundary of the indicator at 1.0820 will lead to selling the euro. Growth will be limited by the upper level of the indicator in the area of 1.0870.

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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 Technical Overview and Trading Tips For 14.02.2020

EUR/USD has decreased as deep as 1.0827, but now it seems a little oversold according to the H4 chart. The outlook is bearish despite a minor rebound, the price could come back to test and retest the near-term resistance levels. Support turned into resistance before it resumes the downside movement.

EUR/USD plunged while the dollar index has climbed higher. I've said in the previous analysis that the dollar could drive the pair towards new lows if the USDX maintains strength. USDX is trading at 99.13 level, above the 98.91 static support. It could still try to approach and reach the 99.37 static resistance on the short term.

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If the USDX jumps higher in the upcoming hours, EUR/USD could reach the next downside obstacle represented by the 150% Fibonacci line of the minor descending pitchfork. The pair is trading right below the S2 level (1.0841), it could drop further if it stays below this level.

The bias is bearish as the price is located much below the minor downtrend line. EUR/USD has registered an impressive drop after retesting 1.1084 and after the failure to retest the upper median line (uml) of the descending pitchfork.

EUR/USD has ignored the 1.0879 static support and also the lower median line (lml), so the price remains under massive selling pressure as long as it is traded below these levels and below the downtrend line.

  • Trading Tips

Personally, I'm expecting the price to come back to reach the lower median line (lml) of the descending pitchfork after the current drop. However, the next downside target is seen at 150% Fibonacci lin. A valid breakdown below it will send the price towards the first warning line (wl1).

It's too early to talk about a potential reversal of EUR/USD. Indeed, only a reversal pattern like a pin bar, bullish engulfing or another pattern could signal an important rebound from this point. A fasle breakdown below the S2 (1.0841) level could signal that the downside movement is complete.

Stochastic is oversold on the H4 chart, on the H1 it shows a bullish divergence, but as I've said higher, you should be careful because the price could drop anytime as the eurozone and the US data could bring volatility today.

If the US Retail Sales, Capacity Utilization Rate, Industrial Production, and the Prelim UoM Consumer Sentiment come in better than expected, EUR/USD should reach fresh new lows till the end of the day. The German Prelim GDP, the eurozone GDP, and the Trade Balance data could shake the pair soon. I believe that some poor US data and better eurozone figures could push EUR/USD higher on the short term.

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EUR/GBP still on way to reach 0.8276

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Since the EUR/GBP pair touched the 60-minute Bearish Propulsion Block at 0.8429, the pair has already gained bearish momentum, although the Weekly SELL Side Liquidity Pool acts as a magnet area too for EUR/GBP. As long as the pair does not retrace above 0.8416, the bias remains bearish.

(Disclaimer)

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Could be GBP/CHF reach 1.2852 ?

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After a breakout and closure above the 1.2755 level, GBP/CHF seems to have gained momentum, aiming to reach the upward target at 1.2852. As we know, almost every week before the weekend the market comes to a turning point. As long as GBP/CHF does not break out and closes below 1.2648, the bullish momentum is going on. There are still odds that the target of 1.2852 will be reached soon.

(Disclaimer)

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Technical analysis of ETH/USD for 14/02/2019:

Crypto Industry News:

Blockchain Education Alliance initiated by MouseBelt Blockchain Accelerator has gained several noteworthy new members.

Ashlie Meredith, director of the University program for MouseBelt, said the new members include Mastercard dealing with payment processing, innovative support of the leading cryptographic exchange Binance, Binance X, Ripple accelerator - Xpring and cryptocurrency exchange KuCoin. The NEO smart contract platform, the IoTeX internet startup, and Blockchain security company - Quantstamp and Constellation Labs have also joined the alliance.

According to its official website, the Blockchain Education Alliance aims to support education to provide students with the skills and knowledge necessary to participate and contribute to the development of the Blockchain ecosystem.

During its premiere in October 2019, the alliance included the following companies as members: Stellar Development Foundation, Tron, Hedera, Icon, Ontology, Wanchain, Harmony One, Nervos, Orbs, LTO Network, Emurgo, Nem and ETC Labs.

In August 2019, MouseBelt launched the Blockchain educational initiative on three campuses in the University of California system.

The Blockchain and cryptocurrency industries have long suffered from a lack of specialized workforce. At the end of August 2019, Ripple's head of social impact, Ken Weber, said universities around the world should expand their educational programs to offer Blockchain technology and digital content training.

Technical Market Overview:

The ETH/USD pair has made a couple of bearish candlesticks at the end of the rally: Pin Bar ad Bearish Engulfing. The uptrend is still active despite extremely overbought market conditions and the next target for bulls is seen at the round level of $320. Only a sustained breakout below the level of $229.81 might result in a larger counter-trend corrective cycle. Currently, the market is consolidating in a triangle located around the level of $265, just above the technical support at the level of $259.81.

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:

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. This might be a wave 3 in developing in the overall long-term Elliott wave scenario.

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Elliott wave analysis of GBP/JPY for February 14, 2020

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GBP/JPY only staged a minor dip to 142.12 before starting a new rally above 142.75 towards important resistance at 143.38. Once this resistance breaks, there is no more doubt that wave iv completed prematurely at 140.80 and wave v higher towards at least 149.11 is in progress.

Support is now seen at 142.75 and again at 142.42. Ideally the later will protect the downside or a new dip to 142.12 should be expected before a new attack on important resistance at 143.38 is launched.

R3: 144.12

R2: 143.67

R1: 143.38

Pivot: 143.12

S1: 142.87

S2: 142.51

S3: 142.12

Trading recommendation:

We bought GBP at 142.76 and have placed our stop at 141.20 but expects to raise it soon

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Elliott wave analysis of EUR/JPY for February 14, 2020

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EUR/JPY is now testing the lower part of our target zone between 118.85 - 119.24 and we see a clear loss of downside momentum. To indicate that a bottom could be in place, we need a break above 119.15 and more important a break above resistance at 119.90 that confirms wave iv is complete and v to above 122.88 is developing.

As long as minor resistance at 119.15 stays intact, we could see more downside pressure, but the potential downside from here should be limited.

R3: 119.75

R2: 119.58

R1: 119.49

Pivot: 119.15

S1: 118.85

S2: 118.78

S3: 118.55

Trading recommendation:

We are long EUR from 119.35 and we have our stop placed at 118.35

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Technical analysis of BTC/USD for 14/02/2019:

Crypto Industry News:

Bitcoin would benefit from global central banks issuing their own cryptocurrencies, says the founder of the world's largest digital asset manager.

Barry Silbert, founder and CEO of Grayscale Investments and venture capital companies Blockchain Digital Currency Group (DCG), has again expressed his position on Bitcoin.

Silbert spoke about many important issues related to digital assets, including the role of Bitcoin in the generational change of wealth, stablecoins, decentralized financing and central bank digital currencies (CBDC).

CBDC are virtual currencies issued and controlled by a federal regulatory authority. Unlike cryptocurrencies such as Bitcoin, CBDC apparently represents fiat currency in digital form. Although no global jurisdiction has yet launched CBDC, many governments are increasingly researching and building such projects, with China reportedly preparing to release the first true CBDC test.

According to a new study by the Bank for International Settlements, at least 10% of central banks are likely to spend CBDC for the general public in a short time.

Silbert, who claims to have bought his first Bitcoin in 2012, which is about three years after the creation of the first block on Bitcoin Blockchain, argued that central banks that develop their own fiduciary digital currencies can provide more power for Bitcoin. According to Grayscale CEO, Bitcoin and other non-central bank cryptocurrencies could ultimately use the same infrastructure that is widely used by CBDC.

Technical Market Overview:

The BTC/USD pair has made some interesting candlestick patterns at the end of the rally. Around the last swing high at the level of $10,440 the market has made a Pin Bar candlestick, then a Bearish Engulfing Pattern and another Pin Bar. All the upper shadows are long, so the bearish pressure is no clear and the market had tested the $10000 level already. It is worth to notice, that since the 50% Fibonacci retracement had been violated at the level of $10,046, then the next target for bears is seen at 61% Fibonacci retracement at the level of $9,953.

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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Technical analysis of GBP/USD for 14/02/2019:

Technical Market Overview:

The GBP/USD pair has retraced more than 50% of the last wave down, but the corrective bounce was capped at the level of 1.23068, just below the level of 61% retracement at 1.3079. Since then the price has been consolidating in a narrow range, using the support from the upper channel line. Nevertheless, the move upwards looks corrective so far, and the breakout from the recent range 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. In the meantime, the next technical resistance for the bouncing price is seen at the level of 1.3068 and the local support is seen at the level of 13017.

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 14/02/2019:

Technical Market Overview:

For the last 10 days and almost two weeks, the EUR/USD pair has been moving is of the descending channel and had been making consecutive lower lows every day. The last one was made at the level of 1.0830 as anticipated. All the bounces after the sell-offs had been shallow, so the bearish pressure is still high despite the extremely 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 1.0778 and the immediate technical resistance is seen at the levels of 1.0879 and 1.0885. Beware of short-squeeze.

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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Overview of the GBP/USD pair. February 14. The pound is once again dominated by political intrigues, while the economy remains

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) - up.

CCI: 238.0248

The GBP/USD currency pair continued its upward movement on February 13 and broke the moving average line, which changed the trend to an upward one. Quite an unexpected turn, given the fact that macroeconomic statistics from overseas continue to come quite strong, and from the UK – quite weak. However, the pound seems to have taken over the disease of the euro, which in recent months has regularly bounced up without any reason, approaching important support levels. Now the picture is similar for the pound – all the fundamental and macroeconomic factors speak in favor of a new fall in the British currency. But instead, traders react to the most significant and frankly political news and as a result, the pound shows growth again. If you carefully examine all the periods of growth of the British currency over the past two years, it becomes clear that each time this was either political events, or favorable expectations of the markets regarding some political event, or simple rumors, which in most cases were not even confirmed. Yesterday, we witnessed another batch of political upheavals in the UK government, to which traders reacted as if Boris Johnson had signed a trade agreement with the European Union, and then immediately personally with Donald Trump. Although in practice, what happened was that Finance Minister Sajid Javid resigned from his post. What is surprising if more than a dozen Ministers have already resigned during the "Brexit period", the government has changed several times, the Prime Minister who started Brexit was David Cameron, then Theresa May came to power, after her - Boris Johnson? That is, three Prime Ministers have changed in the UK in three years, and more recently there were rumors that Johnson would not last in this post for long. Especially if you remember the court proceedings of last autumn, when Johnson openly blocked the work of Parliament, hoping that this will help him to implement a "hard" Brexit without hindrance. Thus, the voluntary resignation of the Finance Minister is not out of the ordinary, even amid disagreements with the Prime Minister (Boris Johnson insisted that Javid dismiss all his advisers). Just ordinary and regular political changes in the British government and that's it. In addition to Javid, legal adviser Geoffrey Cox, Northern Ireland Secretary Julian Smith, Business Minister Esther McVey, Housing Minister Andrea Leadsom and Environment Minister Theresa Villiers were dismissed. Thus, the Prime Minister began a global reshuffle. According to experts, Boris Johnson took this step in order to reduce the number of participants in Cabinet meetings, which are attended not only by Ministers themselves but also by their deputies, which complicates the decision-making process. And of course, Johnson wants to fill the Cabinet with his supporters. Whatever it was, even such information does not solve the UK's problems in any way, does not make its economy more powerful, does not level its costs associated with Brexit, does not solve issues with Scotland, Gibraltar and Ireland, does not advance the country in negotiations on trade agreements with the European Union and the States. Thus, from our point of view, the composition of the Cabinet of Ministers has changed, but, in fact, nothing has changed.

Today, February 14, traders will have to focus on American macroeconomic statistics, but it is likely that the political background will overshadow the fundamental one. At least yesterday, inflation in the United States provoked a new fall in the euro currency, but the pound simply ignored this report. Something similar may happen on Friday when no economic data is expected from the UK, and important information will again arrive from overseas. Thus, it is still not necessary to lose sight of technical indicators that are still signaling an upward trend, however, only in the short term. At the moment, the pound/dollar pair rose to the Murray level of "6/8" - 1.3062 and failed to overcome it. Tomorrow, we will expect a downward correction, unless the US statistics fail.

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The average volatility of the pound/dollar pair has decreased to 80 points over the past 5 days. According to the current volatility level, the working channel on February 14 will be limited to the levels of 1.3120-1.2960. A downward correction would be very logical on Tuesday, but in any case, it is recommended to wait for the Heiken Ashi indicator to turn down.

Nearest support levels:

S1 - 1.3000

S2 - 1.2939

S3 - 1.2878

Nearest resistance levels:

R1 - 1.3062

R2 - 1.3123

R3 - 1.3184

Trading recommendations:

The GBP/USD pair continues its upward movement. Thus, it is formally relevant to buy the pound with the target of 1.3120, if a downward correction does not begin in the near future. However, we still do not see what the British currency can do for growth now. It is recommended to return to more reasonable sales of the British currency after fixing the price below the moving average line with the first targets of 1.2939 and 1.2878.

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

Overview of the EUR/USD pair. February 14. An important Thursday for the euro turned into another collapse. What to expect

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - down.

CCI: -174.0366

The European currency ended with a fall for the ninth day in a row. The recoilless downward movement continues for almost two weeks and there is no sign of the beginning of an upward correction. Just a couple of weeks ago, it was hard to imagine that the euro would so easily update two-year lows. After all, before that, it had been hovering around them for several months, having all the necessary factors at its disposal to continue falling against the US dollar. However, the ever - "paradoxical situation" could not save the EU currency and collapse followed in February. Now the main question is, when will the depreciation of the European currency end? The euro/dollar pair is steadily losing 40 points every day, and all macroeconomic reports are either unequivocally in favor of the US currency, or neutral for the euro. Thus, bears that have gained momentum do not have a fundamental reason to abandon their trading strategy.

On Thursday, February 13, all the attention of market participants was focused on German and American inflation. If there was little hope for the German consumer price index, then the American CPI was the hope of the euro bulls, since this indicator has been growing continuously in recent months, and any growth sooner or later ends. Moreover, once again forecasts predicted a new acceleration of inflation in the United States, which according to them was supposed to accelerate to 2.4% y/y. You will agree since Jerome Powell's uncertain comments about the Fed's desire to achieve a stable "about 2%" of inflation looked very optimistic. However, all the macroeconomic data turned out to be terribly prosaic. The consumer price index in Germany fully coincided with the forecast values and amounted to 1.7% y/y and -0.6% on a monthly basis. In the United States, inflation exceeded the forecast of 2.4% per annum, amounting to 2.5% y/y. No one was interested in the weaker-than-expected monthly growth rate. The consumer price index excluding volatile food and energy products was 2.3% y/y, which was also higher than the forecast values. Thus, once again, we have a situation in which European statistics were neutral and American statistics were strong. Therefore, from the point of view of fundamental analysis, what happened today is what should have happened – another strengthening of the dollar.

Now the last trading day of the week remains: the last chance for the euro to change something for the better. Obviously, the correction will start sooner or later. This may not even require strong statistics from the eurozone or weak statistics from the United States. Nevertheless, today may be the tenth day in a row in terms of the fall of the euro currency. And since a lot of important macroeconomic information will be published on this day, the fundamental factor will prevail in the markets.

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Today, the least significant report will begin the publication - GDP in Germany for the fourth quarter in a preliminary value. As you can see from the illustration, the most important indicator of the state of any economy in Germany in the last 7 quarters is only slowing down. The growth of the economy is still present, however, the last values are already very close to zero, which will mean the stagnation of the country's economy - the locomotive of the entire European Union. Forecasts predict another slowdown in growth, this time to 0.4% y/y. Compared to the previous quarter, an increase of 0.1% is expected.

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Next, a more significant GDP for the fourth quarter of the eurozone will be published, also in a preliminary value. The picture here is approximately the same as in Germany. The last 8 quarters - a slowdown in growth, the forecast for tomorrow - the preservation of 1.0% y/y and +0.1% in quarterly terms. Both of these GDP indicators should be higher than the forecast values for the euro to finally receive fundamental support. Given the fact that the rate of decline has been observed for 2 years in Germany and the EU, what are the chances that tomorrow we will see an acceleration? Especially, given that industrial production throughout the European Union continues to decline (that is, not to lose the growth rate, namely, to decline).

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In the United States, the retail sales indicator will be published today, which is interesting but is not of the highest importance. According to experts, the indicator will grow by 0.3% in January, which is fully consistent with the values of the last three months, and excluding car sales, the increase will be the same 0.3% m/m.

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Much more important will be the indicator of industrial production in the United States, which confuses us along with the GDP indicator in recent weeks. Jerome Powell, the head of the Fed, also noted weak production in his last speech to the US Congress, although he did not show more global concerns about this. We believe that a further slowdown in production will inevitably lead to a drop in the growth rate, at least in GDP, and possibly in other indicators. This indicator is expected to lose between 1.2% and 1.4% in January. That is, if the forecasts come true, the rate of decline in industrial production will increase and, perhaps, this is the chance of the euro currency today. Although, of course, the GDP indicator in the European Union will be more important.

What is the result? As a result, a large number of statistics will be published on the last trading day of the week, which can be quite versatile. Support for both the dollar and the euro currency. Thus, we still recommend that traders do not miss the publication of important reports, but at the same time pay attention to fast indicators, such as Heiken Ashi, which can be the first to indicate the beginning of a correction, even if the actual values of the reports will not signal this. From a technical point of view, the drop continues, and the Heiken Ashi indicator continues to color the bars blue. Absolutely all indicators turned down.

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The average volatility of the euro/dollar currency pair has increased to 49 points per day, but in general, all recent volatility changes are minimal. On average, the pair passes 40-50 points per day. On Friday, we expect movement between the borders of the volatility range of 1.0792-1.0890. It doesn't make sense to close short positions before the Heiken Ashi indicator turns up.

Nearest support levels:

S1 - 1.0803

S2 - 1.0742

S3 - 1.0681

Nearest resistance levels:

R1 - 1.0864

R2 - 1.0925

R3 - 1.1047

Trading recommendations:

The euro/dollar pair continues to move down. Thus, sales of the euro currency with the targets of 1.0803 and 1.0742 remain relevant now, which can be kept open until the Heiken Ashi indicator turns up. It is recommended to buy 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 target of 1.0986.

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

EUR/USD: dollar hegemony and the search for a price low

The euro-dollar pair continues to sink: the price has reached multi-month lows - the last time it was at such lows was in April 2017. Bears overcame the support level of 1.0850, after which the next price reference was the 1.0810 mark - the lower line of the Bollinger Bands indicator on the monthly chart. The US currency confidently demolished all other barriers, opening the way to the seventh figure. Today's release may push EUR/USD sellers to storm the last support level before the 7th figure. We are talking about the publication of data on German GDP growth. If the German economy disappoints, the single currency will weaken again, strengthening the pair's downward movement. However, the lower the euro falls, the higher the risk of catching the low. Now EUR/USD is at 33-month lows, and this fact should alert the supporters of short positions.

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In general, the euro-dollar pair is falling due to the strengthening US currency, while the euro is moving in the wake of the quoted currency. The greenback received support from relatively good data on inflation growth yesterday, amid growing panic about the spread of coronavirus. The dollar index confidently took a 99-point mark, thus rising to three-year highs. Unlike the pound, the single currency could not restrain the onslaught of dollar bulls, after which the bears of the EUR/USD pair discovered new price horizons.

US inflation came out at the forecast level. The basic consumer price index rose to 2.3% in annual terms and by 0.2% in monthly terms. The general index strengthened to 2.5% on an annualized basis (the highest since October 2018) and slightly slowed down on a monthly basis (to 0.1%). Such figures are quite satisfactory for market participants - and although inflation has not shown any radical breakthrough, the published figures allow the Federal Reserve to maintain a wait-and-see attitude.

By and large, Jerome Powell confirmed such intentions during his speeches in Congress. The coronavirus is still the dark horse in this context (the Fed chief hinted that the regulator may lower the rate if unforeseen circumstances intensify), but ironically, the coronavirus factor also supports the dollar's position, as traders use it as a defensive asset. In other words, in any situation, the US currency wins - especially when paired with the euro, which received the next batch of heavy lifts yesterday, pulling it down.

First of all, German inflation disappointed. And although only the final CPI estimate for January was published yesterday, the figures released reminded traders of a slowdown in European inflation. Let me remind you that the consumer price index in Germany on a monthly basis fell back into the negative area, showing deflationary processes. In addition, this week it became known that industrial production in the eurozone countries fell to -2.1% on a monthly basis and to -4.1% on an annualized basis. Both indicators came out in the red zone, not significantly reaching the forecast values. Such dynamics put additional pressure on the euro, which is still weak following the slowdown in inflation growth and soft comments of ECB members.

This week, Christine Lagarde was unable to support the European currency, even with her thesis that soft monetary policy negatively affects savings income, increasing the value of assets. Speaking within the walls of the European Parliament, she once again called on governments of the eurozone countries to take measures to stimulate economic growth. However, this rhetoric has been ignored by the market. Firstly, these theses have already been heard - Lagarde has not voiced anything new. Secondly, traders are skeptical that in the foreseeable future the ECB will tighten the terms of monetary policy, against the backdrop of the difficult situation in the European economy.

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In other words, the downward dynamics of the EUR/USD pair is fully justified from the point of view of the fundamental background. But here a logical question arises: at what price level will the pair form a low? The price has been falling almost without a break for more than ten trading days, that is, within two weeks. Sooner or later, the "boiling point" will be reached, and the pair will attract buyers, at least because it's oversold.

In my opinion, sellers should be careful at the bottom of the 8th figure. The lower line of the Bollinger Bands indicator on the monthly chart is passing at around 1.0810. This is a fairly strong level of support, which can a) contain the onslaught of bears; b) - to attract buyers. It is also worth recalling that US data are on focus today: retail sales data will be published. The overall figure rose by 0.3% in December and January figures should also show positive dynamics - both the total retail trade, and excluding car sales. All these indicators should go above zero (0.4% and 0.6%, respectively).

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

Forecast for EUR/USD on February 14, 2020

EUR/USD

On Thursday, the euro fell slightly more than 30 points and reached the next target of 1.0840 at the Fibonacci level of 161.8% on the daily chart. The euro shows its intent to decline further today in the Asian session. We believe this with pleasure since data on US retail sales will be released in the evening - the forecast is 0.3%. Data will also be released on industrial production: the forecast is -0.2%, but an indicator output of even -0.1% can strengthen the dollar simply because the US economy is much better than the European one.

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Now the target of the euro is the Fibonacci level of 200.0% at the price of 1.0745. Perhaps the goal will be achieved on Monday or even on Tuesday, since Monday is a public holiday in the US and ZEW indices in Germany are expected to worsen on Tuesday.

On a four-hour chart, the Marlin oscillator is turning down. We are waiting for price consolidation below 1.0840.

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

Forecast for GBP/USD on February 14, 2020

GBP/USD

On Thursday, Sajid Javid left the post of the Minister of Finance of Great Britain, and Deputy Rishi Sunak moved into his chair. He is considered to be an associate of Prime Minister Johnson and investors believe that together they will raise government spending through an increase in public debt. The pound grew 85 points.

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The pound's growth stopped at the Fibonacci level of 76.4%, the balance line provided additional resistance. The signal line of the Marlin oscillator came close to the upper boundary of its own channel. From current levels, we are waiting for the price to turn down. Help can come from today's data on retail sales and industrial production in the United States. The forecast for January retail sales is 0.3%. Industrial production is seen at -0.2%, but we expect it to be slightly better than expected. Even a -0.1% indicator can inspire traders to buy dollars for the simple reason that the US economy remains significantly better than the European one. We look forward to the pound's fall to the Fibonacci level of 110.0% at the price of 1.2845, which approximately corresponds to the lower boundary of the channel of the Marlin oscillator.

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But on the way to 1.2845, strong support can be found at 1.2960/70, which is formed by January lows. On the H4 chart, the MACD line (1.2964) is in this range. Consolidation under it, respectively, will strengthen the downward trend.

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

Forecast for AUD/USD on February 14, 2020

AUD/USD

As a result of yesterday, the Australian dollar fell by 17 points, reversing from the Fibonacci level of 161.8% on the daily chart. The Marlin oscillator is still in a growing position, which warns of a momentary reversal, even if it occurs.

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Trading was conducted in the 0.6710/45 range on the four-hour chart, most likely, the sideways mini-trend in this range will continue. The price of H4 is higher than both indicator lines, Marlin is in no hurry to penetrate into the negative zone. The consolidation of the falling trend will occur only after the price goes below the MACD line (0.6700). We are waiting for the price at the intersection of the Fibonacci level of 223.6% with the price channel line at the price of 0.6624 (daily).

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

Comprehensive analysis of movement options of #USDX vs Gold & Silver (DAILY) from February 14, 2020

People are dying for metal. So, here's Comprehensive analysis of movement options of #USDX vs Gold & Silver (DAILY) from February 14, 2020

Minor (daily time frame)

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US dollar index

The movement of the #USDX dollar index from February 14, 2020 will depend on the direction of the breakdown range :

- resistance level of 99.15 - of the Minuette operational scale forks;

- support level of 98.80 - the lower boundary of the ISL38.2 equilibrium zone of the Minor operational scale forks. .

The breakdown of the lower boundary of the ISL38.2 (support level of 98.80) equilibrium zone of the Minor operational scale forks with subsequent breakdown of the upper boundary of the 1/2 Median Line Minor channel (98.70) will determine the development of the movement of the dollar index within the channel 1/2 Median Line Minor (98.70 - 98.25 - 97.85) and equilibrium zones (98.25 - 98.00 - 97.70) of the Minuette operational scale with the prospect of reaching the SSL Minor start line (97.15) and the SSL Minuette start line (96.80).

On the other hand, the breakdown of the resistance level of 99.15 on the final line of the FSL forks of the operational scale Minute will make the continuation of the upward movement of #USDX to the targets relevant:

- median line Median Line Minor (99.40);

- maximum 99.67 ;

- the upper boundary of ISL61.8 (99.95) of the equilibrium zone of the Minor operational scale forks;

- the final Shiff Line Minor (100.05).

The markup of #USDX movement options from February 14, 2020 is shown on the animated chart.

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Spot Gold

The development of the Spot Gold movement from February 14, 2020 will be determined by the development and direction of the breakdown of the boundaries of the 1/2 Median Line channel (1540.00 - 1557.00 - 1573.00) of the Minuette operational scale forks. See the details on the animated chart.

In case of breakdown of the resistance level of 1573.00 (upper boundary of the 1/2 Median Line Minuette channel), the upward movement of Spot Gold will continue to the goals:

- the initial line SSL Minuette (1600.00);

- UTL control line (1610.95) of the Minor operational scale forks;

- control line UTL (1630.00) of the Minuette operational scale forks.

Alternatively, in case of a breakdown of the support level of 1540.00 on the lower boundary of the 1/2 Median Line Minuette channel, it will direct the movement of this instrument to the boundary of the equilibrium zone (1529.00 - 1507.00 - 1485.00)of the Minuette operational scale forks and 1/2 of the Median Line channel (1507.00 - 1475.00 - 1444.00) of the Minor operational scale forks.

The details of the Spot Gold movement options from February 14, 2020 are shown in the animated chart.

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Spot Silver

The movement of Spot Silver from February 14, 2020 will continue to be determined by working off the boundaries of the equilibrium zone (16.950 - 15.550 - 18.100) of the Minor operational scale forks. Look at the details on the animated chart.

In case of breakdown of the upper boundary of ISL38.2 forks of operational scale Minor - resistance level 18.100 - the upward movement of Spot Silver can be continued to the goals:

- control line UTL ( 18.550 ) of the Minuette operational scale forks;

- local maximums (18.810 - 19.610);

- SSL start line (20.100) of the Minor operational scale forks.

On the contrary, the breakdown of the lower boundary of the ISL61.8 (support level of 16.950) of the equilibrium zone of the Minor operational scale forks will confirm the further development of the movement of the instrument which will begin to occur already in the equilibrium zone (17.050 - 16.650 - 16.300) of the Minuette operational scale forks with the prospect of reaching the final Schiff Line Minuette (16.000).

The details of the Spot Silver movement from February 14, 2020 can be seen on the animated chart.

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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

GBP/USD. Pound is back on horseback: Boris Johnson revamped the government and ousted Javid

The pound turned out to be a "tough nut": despite the general hegemony of the US dollar, the sterling in the GBP/USD pair is showing character. The bulls of the pair were even able to update the high of the week after reaching multi-month lows. Such "stress resistance" of the currency looks rather abnormal, given the burden of negative fundamental factors. But the fact remains: buyers of the pair use any reason to return in the region of 30 figures. Today, the round ended with the GBP/USD bulls - but this does not mean that they will be able to just as easily reverse the trend, offsetting the pressure of sellers.

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The fundamental background for the British currency has recently been controversial. In late January, the Bank of England made it clear that it was ready to maintain a wait-and-see attitude, but subject to the restoration of key parameters of the British economy. This plot twist turned out to be in favor of the pound, as most market participants expected an announcement of a rate cut at the next meetings. But the euphoria of the pair's buyers did not last long - after a few days the pound again fell under the wave of sales against the backdrop of political uncertainty. This time the "Scottish Question" emerged. 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. Prospects for political instability put pressure on the pound, and the pair plunged below the 1.3000 mark.

At the beginning of this week, the pound again received a reason for its growth: data on the growth of the UK economy were slightly better than expected. Instead of falling to the level of 0.8% in the fourth quarter, the GDP growth indicator (in annual terms) reached 1.1% - that is, practically at the same level as in the third quarter. Speaking directly about the December growth, here the indicator also exceeded experts' expectations - the indicator left the negative area and reached 0.3%. But investors are not pleased with the volume of industrial production - in annual terms, the indicator remained in the negative area, while in monthly terms, although it crossed the zero line, it grew weaker than forecasts (up to 0.3% instead of 0.5%). But in general, the published figures made it possible to count on maintaining a wait-and-see position on the part of the English regulator. This fact extinguished the downward momentum of the pair, turning the pair 180 degrees.

Today, the pair's growth has continued. The pound not only returned to the 30th figure, but also updated the high of the week. But in this case, macroeconomic statistics have nothing to do with it. The British currency reacts again to Downing Street's policy, which provokes more significant volatility than macro reports. The fact is that Boris Johnson revamps his Cabinet of Ministers today. In particular, Finance Minister Sajid Javid resigned.

Initially, the pound reacted with caution to this fact. Javid previously voiced a rather controversial rhetoric regarding the prospects of the negotiation process with Brussels. For example, in Davos, he said that a trade deal with the EU could be concluded before the end of this year, that is, before the end of the transition period. The minister assured those present that the parties will be able to agree on a deal in both trade in goods and services. However, later he rather harshly and categorically assessed the prospects for negotiations. In other words, his departure was not a big loss for GBP/USD traders - neither for bulls, nor for bears. The participants in the foreign exchange market were interested in another question: in which direction does the pendulum of sentiment swing at Downing Street? Why did Johnson decide to "shuffle the cards"?

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As a result, the market came to the conclusion that the renewed team will work more closely, and this fact will increase the "negotiability" of the government in talks with the Europeans. It also turned out that Johnson had a personal conflict with Javid - for example, the head of the Ministry of Finance rejected the prime minister's request to remove his advisers and replace them with candidates proposed by the government. This incident allegedly became the "last straw", after which Johnson invited him to voluntarily leave the Cabinet. Treasury Secretary Rishi Sunak has been appointed the new Minister of Finance. Previously, he served as chief secretary, but was not a member of the cabinet. Sunak was not caught in "aggressive anti-European" rhetoric, although as a conservative and supporter of Johnson, he adhered to his political course.

In general, the market came to the conclusion that Johnson's renewed team will be able to resolve the differences both in the Conservative Party and in the country as a whole. In addition, despite the dismissal of five cabinet ministers, key figures retained their posts. In particular, Foreign Minister Dominic Raab, Minister of the Interior Prity Patel and Minister Michael Gove remained in their posts.

Thus, news from the British political front strengthened the pound, although these fundamental factors are short-term. Ahead are very difficult negotiations, which will continue to be accompanied by harsh comments by politicians, both from Brussels and from London. Therefore, the current growth of the pair is just a correction, which at the time of writing these lines has already stalled. Buyers could not overcome the resistance level of 1.3050 (the middle line of the Bollinger Bands indicator on the daily chart), therefore, a retreat to the bottom of the 30th figure is likely in the next day.

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

EURUSD: euro not pleased with the European Commission's future outlook for eurozone inflation. US inflation report will return

The European currency was not very happy with the fact that consumer prices in Germany fell again in January, having justified all the forecasts of analysts, who put on another decline. The main decline in prices was due to a sharp drop in demand for tourism services, and there are reasons for this. According to the statistics agency Destatis, the final CPI of Germany in January 2020 fell by 0.6% compared to December and increased by 1.7% compared to the same period of the previous year. The data fully coincided with the expectations of economists. As for inflation harmonized by EU standards, the index decreased by 0.8% in January compared to December and increased by 1.6% compared to January 2019.

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As I noted above, the main reason is the sharp decline in prices for travel packages that occurred due to the outbreak of coronavirus in China. After a series of bad indicators released this and that week on the eurozone countries, many economists no longer consider future forecasts for Europe to be too optimistic. However, today, in the first half of the day, after a breakdown of the year's low in the region of 1.0865, the European Commission kept a report from a larger fall of the euro, in which a number of experts expected to see revised forecasts for economic growth and inflation.

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Let me remind you that the European Commission's previous forecast was presented in November 2019.

So, in today's report, the European Commission continues to forecast eurozone GDP growth in 2020 at 1.2% and at a similar level in 2021. But the inflation forecast, on the contrary, was revised for the better. Now economists expect that inflation in the eurozone will be at 1.3% in 2020 against the previous forecast of 1.2%. For 2021, growth is expected at 1.4% against the previous forecast of 1.3%.

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So far, the main concern that will negatively affect the eurozone economy is coronavirus, which represents a new bearish risk. There is also a fairly high degree of uncertainty surrounding US trade policy, which is an obstacle to improving sentiment. And if the trade agreement between the US and China has somewhat reduced the bearish risks, what will happen when the White House again raises the issue of duties with the eurozone is still a question.

The European Commission expects that economic growth will remain stable, and all emphasis is placed on domestic demand, while easing fiscal policies may support the economy in the future. The report also called for eurozone countries to pursue structural reforms aimed at boosting economic growth.

As for the technical picture of the EURUSD pair, buyers of risky assets continue to actively fight for the level of 1.0865, having missed that on inflation data in the US, one can only hope for lows in the areas of 1.0840 and 1.0800. If the scenario of profit taking on short positions by large players justifies itself after the data, then the upward correction will be limited by the first intermediate resistance level of 1.0890, but larger highs are seen in the areas of 1.0925 and 1.0950.

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