Trading plan for EUR/USD on February 17, 2020

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The epidemic in China remains to be a major nuisance to the markets.

On the morning of February 17, 71 thousand people were infected, 1,770 have died, and 10.6 thousand have recovered. The epidemic is still localized in one province of China, Hubei, and its capital, Wuhan.

Chinese authorities have imposed a death penalty to those who violate the quarantine, cause the virus to spread, and infect other people intentionally.

Chinese authorities also introduced a quarantine for banknotes. New banknotes worth $ 80 billion have been issued, while the potentially infected ones have been sent to quarantine.

Outside of China, the maximum number of infected people does not exceed 1000.

The rate of the increase of the number of cases seems to be decreasing. However, there is no certainty that this decline in the rate of the spread of the virus will continue.

Other than that, everything is calm in the markets. US indices closed the week at historical highs, while oil drew a strong bottom at $ 50. Moreover, it seems that it's not going to fall.

EUR/USD: the euro remains under pressure from the sellers.

It looks very weak, and seems to be ready for a new fall.

Keep selling from 1.0990.

From 1.0900 and above, sales with rebounds to the top are possible.

The correction can reach 1.0945 in the afternoon.

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Indicator analysis. Daily review of GBP / USD on February 17, 2020

The pair continued to move up on Friday, breaking through the pullback level of 50.0% equivalent to 1.3041 (red dotted line). Strong calendar news is not expected today. Also, the market in the US will be narrow. Perhaps the upward movement will continue with the first target 1.3081, the retracement level of 61.8% (red dashed line).

Trend analysis (Fig. 1).

From the pullback level of 50.0% equivalent to 1.3041 (red dashed line), an upward movement is possible today with the target 1.3081, the rollback level of 61.8% (red dashed line). If this level is reached, there is a roll back down with the target 1.3007, the support line (red bold line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

Today, the price may continue to move up.

An unlikely but quite possible scenario is from a pullback level of 50% equivalent to 1.3041 (red dashed line), work down with the target 1.2944, the lower fractal (red dashed line).

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

EUR/USD: The US Economy is going according to economists' forecasts. Euro has no hopes for a strong rebound.

The US dollar failed to get the necessary support on Friday, as the release of a number of versatile fundamental statistics, which largely coincided with economists' forecasts, did not lead to significant changes in the market.

Although the report on US spending in January seems to be good news, the growth coincided with analysts' expectations, so it did not allow the bulls to increase their long positions in the US dollar. This indicator is a key driver of economic growth, so the data is very often subject to high volatility. According to a report from the US Department of Commerce, retail sales in January of this year increased by 0.3% compared to the previous month, which was what economists had expected. Moreover, compared with the same period the previous year, spending in January increased by 4.4%, indicating the strength of the indicator.

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Meanwhile, data indicating a decline in the US industrial production in January did not lead to a sharp closing of short positions in the US dollar. On the contrary, it gradually pushed the EUR/USD pair to an annual low. Most likely, this is due to the lack of buyers of risky assets, as there is a sharp deterioration in the state of the Eurozone economy. According to the report of the US Federal Reserve, industrial production in January decreased by 0.3% compared to the previous month, fully coinciding with the forecasts of economists. Meanwhile, manufacturing production declined by only 0.1%, due to a slowdown in civil aircraft production.

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The preliminary report from the University of Michigan reflected well on the US dollar. According to the data, many Americans viewed the economic outlook more positively at the beginning of February this year. The calculated consumer sentiment index was 100.9 points compared to 99.8 points at the end of January, while economists had forecasted the index to decline to 99.5 points. Moreover, the respondents' personal finances and the state of the national economy were generally positive. The effects of the coronavirus did not significantly affect the estimates.

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Meanwhile, data on US inventory was ignored by the market. According to a report from the US Department of Commerce, inventories rose by 0.1% in December, and amounted to $ 2.04 billion. This coincided with the forecast of economists.

At the same time, the report on prices for foreign-made goods, which remained unchanged in January 2020, did not also arouse interest among investors. According to the data from the US Department of Labor, import prices in US remained unchanged in January as compared to December, while economists had expected a 0.2% drop in prices. On the other hand, comparing it to January 2019, import prices increased by 0.3%.

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As for the technical picture of the EUR/USD pair, we need to buy the euro with great caution, as there are no signals yet regarding the ending of the downward trend. Of course, we can talk about the prospects of an upward correction, however, it is likely to be short. Only the return of the bulls in 1.0860 will lead to the recovery of risky assets in the area of 1.0900, and quite possibly, to the update of 1.0930. If the pressure on the euro continues at the beginning of this week, the next lows will be found in the area of 1.0800, or even lower, near the level of 1.0770. A break in these ranges will open a direct path to the psychological level of 1.0500.

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Dollar still has space for growth (we expect EUR/USD pair to decline; gold prices may also roll back down)

The investors turned their full attention again to the situation with the Chinese coronavirus, after attempts to increase demand for risky assets at the beginning of last week towards its end.

The absence of any global positive news that would help market participants to distract from the topic of coronavirus forced markets to turn to this topic again. The reason was the revision of the number of people infected with the virus in China according to the new methodology, which showed that there turned out to be much more of them. This led to the fact that in the United States began to doubt the accuracy of information coming from the "Middle Kingdom", which affected the dynamics of financial markets and caused the resumption of some demand for shelter currencies and gold.

As a result of the week, the dollar rose against the basket, consisting of major currencies. Moreover, this quite confident growth continues for the second week in a row. There are several reasons for this. We single out the main ones. The first is mostly positive news on the American economy, the second is the end of impeachment in America against D. Trump, and the last is the growth in demand for the dollar as an asset for refuge and the currency for which shares of American companies can be purchased, which has been manifested in recent years. rarely. Of course, it is also necessary here to take into account the apparent weakness of the single currency, which has significant weight in the basket, which has lost support over the past few months on the expectation that the ECB, represented by its new leader C. Lagarde.

In turn, the weakness of the single currency, as well as the strength of the dollar, is fully confirmed by the distribution of the net positions of futures contracts in both the euro and the dollar. According to the latest COT report (Commitments of Traders) on February 14, demand for dollars remains, and the number of long positions is much higher than short ones. Moreover, this state of affairs is also supported by small investors (Small Traders) which is typical, following large investors (Large Traders). With regard to the euro, the picture is the opposite. We believe that this situation may continue this week if data on industrial inflation in the US show its growth, as well as other indicators on the US economy coming out this week, and the published protocol of the last Fed meeting will demonstrate not only the regulator's desire to maintain the current monetary course, but the Council's positive assessment of the economy, which Jerome Powell gave earlier.

In general, we believe that the prevailing trends in the currency exchange markets in the coming week will continue.

Today is a holiday in the States, so we expect traditionally noticeably lower activity in the markets.

Forecast of the day:

EUR/USD is trading above the level of 1.0840. We are still holding a view on maintaining the bearish trend for the pair, so we leave our target levels of 1.0800 and 1.0735, to which the pair will rush after falling below the level of 1.0825.

Gold on the spot reached a local maximum of 1584.00 on the wave of the topic of coronavirus, but today, it can be adjusted to 1577.50 due to the holiday in the USA, although we expect its growth to resume to the level of 1592.70 this week, but only after breaking the level of 1584.00.

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EUR/USD. Preview of the week: Fed and ECB minutes, PPI and ZEW and PMI indices

The battle for the seventh figure will unfold between the bulls and bears of the EUR/USD pair this week. Sellers were able to get close enough to the support level of 1.0810 (the lower line of the Bollinger Bands indicator on the monthly chart) last Friday, but did not have time to test it. The Asian session traditionally began Monday with a slight correction, although today is not indicative: Presidential Day will be celebrated in the US today, so American trading floors will be closed.

This means that the market will start operating in full force tomorrow - although the economic calendar for the pair is not eventful on Tuesday. Major macroeconomic news will come from Europe, where the February ZEW indices will be published. Negative dynamics are expected both in Germany and the eurozone as a whole- although indicators should still remain above zero. So, for the first time since May last year, the German index the year before the previous one has left the negative area by reaching 10.7 points. It continued the positive trend in January by rising to 26 points. Experts are pessimistic today: the coronavirus factor, dovish rhetoric of Lagarde, slowdown in inflation, weak German data - all these circumstances cannot help but affect the mood of buyers. Therefore, according to experts, the indicator will reach 20 points. The pan-European indicator likewise left the territory of negative values in December, rising to 11 points, and in January to 25 points. The February index should rise to 21 points. But here it is worth noting that if the real numbers coincide with the forecast values, the European currency will stay afloat, because the indices will still remain above zero. But if the downward trend is of a larger scale, the EUR/USD pair will get another reason for its decline.

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The US will publish the Producer Price Index (PPI) on Wednesday, February 19, which is an early signal of changes in inflationary trends. Recently, it has been showing contradictory dynamics - in October it jumped to 0.4%, it dropped to zero in November, and rose again to 0.1% in December. A slight increase in the indicator is expected again in January - both in monthly and in annual terms. Excluding food and energy prices, this indicator should also remain above zero (0.1% m/m and 1.6 y/y).

The minutes of the January meeting of the Federal Reserve will be released on Wednesday, which is another important document. Here, first of all, it is necessary to focus on Jerome Powell's latest comments, which were announced after the January meeting. Speaking in the US Congress, the Fed chief focused on the spread of coronavirus, which, he said, could lead to a slowdown in the Chinese economy in the first quarter of this year. Powell said the Fed is closely monitoring this topic, especially in the context of a slowdown in the global economy. He also acknowledged that coronavirus can affect the US economy, but at the same time it is too early to talk about the degree of this influence. In addition, Powell voiced other risks. For example, he was worried about productivity gains. Key indicators in this area are low and this fact reduces corporate profit in the United States. The current situation, according to the head of the Fed, could negatively affect the labor market, taking into account the reduction in capital costs.

It is likely that the general rhetoric of the minutes of the January meeting will be of a similar nature. In general, despite the stated risks, Powell assured Congressmen that the Fed intends to maintain a wait-and-see attitude, unless "unforeseen circumstances" force the regulator to make appropriate decisions. With a high degree of probability, it can be assumed that the members of the Committee came to the same conclusion during the January meeting. This fact will support the US currency.

The ECB minutes will be released on Thursday, February 20. We will find out the details of the regulator's report from the meeting on monetary policy, which took place almost four weeks ago. This document is unlikely to have a strong impact on the pair. Christine Lagarde made it clear enough that the regulator did not intend to change its monetary policy in the near future, while she expressed concern about the slowdown in inflation and industrial production. I believe that the minutes will reflect her opinion, only in a more expanded form.

The PMI indices will be the final chord of the trading week. If these releases follow the ZEW trajectory, the euro will come under additional pressure. In general, experts expect negative dynamics - especially in the provision of services. As for the manufacturing sector, a slight slowdown is forecasted relative to the previous month - the indices will still remain below the key 50-point level (except for the French). The fact of a negative trend can increase pressure on the single currency.

The situation is as follows from a technical point of view. On almost all the higher timeframes (with the exception of MN), the EUR/USD pair is located on the lower line of the Bollinger Bands indicator under all the lines of the Ichimoku indicator, which generated a strong bearish Parade of Lines signal. This indicates a clear advantage of the downward movement. The bearish momentum is so strong that it is too early to talk about a price correction. The coronavirus factor can radically affect the pair - if panic disappears, interest in the dollar will weaken. Otherwise, priority will remain downwards. The main target of the downward movement is located on the lower line of the Bollinger Bands indicator on the monthly chart, that is, at around 1.0810.

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Indicator analysis. Daily review of EUR / USD on February 17, 2020

Trend analysis (Fig. 1).

The market may begin to move up today with the target of 1.0889, the pullback level of 14.6% (red dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger Lines - down;

- Weekly schedule - up.

General conclusion:

An upward movement is expected today with the target of 1.0889, the retracement level of 14.6% (red dashed line).

An unlikely but possible scenario is from the resistance line 1.0829 (blue bold line), continued downward movement with the target of 1.0765, the lower border of the Bollinger line indicator (blue dashed line).

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

CFTC report confirmed the course to strengthen the dollar, USD/CAD may continue to decline as part of the correction, and

Last Friday's CFTC report showed that the dollar has been consistently increasing its combined long position against major currencies. The growth amounted to 1.6 billion and the advantage reached 10 billion.

On the other hand, several currencies have lost their positions. The long position on the Canadian dollar declined, the franc, the yen, the euro and the New Zealand dollar increased their aggregate short positions. In turn, the British pound was the best per week and, oddly enough, the Australian dollar, which markedly reduced the predominance of short contracts.

In general, the changes reflect a decrease in global risk. Short positions in oil have decreased, which gives a chance for continued recovery, gold remains stable, while changes by the end of the week are insignificant.

The main stock indices of the Asia-Pacific region on Monday morning traded in different directions and there is no uniform dynamics. The Shanghai Composite is gaining 1.6% as of 5.30 Universal time, while the Nikkei 225 is losing 0.6% after a negative 4Q GDP report in 2019

At the same time, recent statistics from the United States should be recognized as weakly positive, which also supports the dollar. Import and export prices finally resumed growth after a protracted declined, which generally plays into the hands of inflation expectations.

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The University of Michigan's consumer confidence index increased to 100.9p with a forecast of 99.5p, but there was a spoiler in the situation - retail sales in January turned out to be weaker than expected, and industrial production declined again, by 0.3% this time, which is worse than the forecast of -0.2%.

The dollar is also supported by the development of the political situation in the United States in the light of the upcoming presidential elections in autumn. Donald Trump's chances of retaining his post for another 4 years are considered high, which has a beneficial effect on both stock indices and the dollar.

Today, US exchanges are closed due to the holiday, so volatility is likely to be low in the afternoon.

USD/CAD

The lack of significant macroeconomic data last week led to the fact that the Canadian currency reacted mainly to global factors, such as the slowdown of the distribution rate of Covid-19, a marked correlation with oil prices can also be noted.

According to CFTC, Loonie has been holding the lead for long positions for 33 consecutive weeks since July 2019, which ultimately led to a decrease in USD/CAD from the peak of 1.3663 reached on December 31, 2018. However, the aggregate short position has been growing rapidly in recent weeks, which may indicate completion trend and resumption of growth of the dollar.

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The key day for the Canadian currency will be on Wednesday this week. The consumer inflation data will be published in January, and a retail sales report will be released on Friday. In addition, the meeting of the Bank of Canada will be held on March 4, data on inflation and GDP for the 4th quarter. (will be published next week, forecasts are negative) will serve as the basis for expectations on the rate, which will determine the direction of USD/CAD.

After five weeks of growth, USD/CAD slowed down strictly at the resistance of 1.3327, but the rollback is only 23.6% (or a little more) at the moment and looks like consolidation, not a reversal. Overbought dollar suggests that the correctional decline may reach the level of 1.3217, where support can be found for another attempt to overcome 1.3327 and go higher.

USD/JPY

Statistics on Japan's GDP and industrial production in December, published on Monday morning, were a failure. The decline in GDP was 1.6% against the forecast of -0.9%, on an annualized basis, GDP is reduced by 6.3%, this is the maximum decline in 5.5 years, and directly indicates a recession has begun.

Moreover, industrial production growth in December was 1.2%, but year-on-year decline was -3.1%. USD/JPY continues to trade in a narrow range and taking into account the CFTC data, the general decrease in tension and the strengthening of the dollar as well as the chances to exit the range up are still preferred.

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Growth is constrained by market uncertainty that this risk demand trend will not end as suddenly as it started.

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Technical analysis of ETH/USD for 17/02/2020:

Crypto Industry News:

Russia is apparently becoming an increasingly attractive market for cryptocurrency companies, as another large cryptocurrency platform adds Russian language support. Poloniex, a popular crypto exchange based in the United States, began offering Russian on its platform just three months after leaving the US market.

Announcing the news on the blog, Poloniex stated that he began to introduce a "partially local" version of Poloniex for Russian-speaking users.

The stock exchange noticed that the currently presented Poloniex interface in Russian is just a starting point, because the team translated only a small part of the platform. At the moment, the Russian Poloniex interface is indeed Russian, but only partially, because the main sections of the website, including ads, are still written only in English.

Many services, such as crypto exchange, margin trading and loans, have been translated along with the registration page. However, the main pages, including information such as Poloniex fees, user agreement, privacy policy and others are still presented in English in the Russian version of Poloniex.

In addition, the company also presented "local communities" along with Poloniex Poloneers on Twitter. The Poloniex Poloneers account on Twitter published the last posts before the announcement in Russian. The introduction of Russian on Poloniex Poloneers complements the already supported social posts in French, Spanish, German, Hindi and others.

Technical Market Overview:

The Ethereum market has finally made a move down over the weekend. After the Shooting Star candlestick pattern had been made at the H4 timeframe chart around the level of $288.01, the bears took control over the market and pushed the prices towards the levels of $259 first and then $235 next. Currently, the market is trading around the level of $251 after the shallow bounce has occurred. Only a sustained breakout below the level of $229.81 might result in a larger counter-trend corrective cycle as this is the key short-term technical support.

Weekly Pivot Points:

WR3 - $358.03

WR2 - $324.90

WR1 - $285.60

Weekly Pivot - $248.62

WS1 - $213.91

WS2 - $176.19

WS3 - $141.12

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. The current move up might be a wave 3 in developing in the overall long-term Elliott wave scenario and so far the top at the level of $288.01 might be the wave 1 of the overall wave 3.

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Technical analysis of BTC/USD for 17/02/2020:

Crypto Industry News:

China leads the way when it comes to digital payments made by average consumers in the country. While payment methods such as Apple Pay in the United States are becoming more and more accepted, such methods are still relatively rare in nearby Japan. Alipay offers Chinese residents the chance to use fiat currency for everyday transactions, apparently acclimatizing them to the day when both payments and currency become 100% digital.

Although recently China has taken a slightly more liberal position on online and digital payments, the vast majority have responded to the increase in the number of cryptocurrencies by more authoritarian means. After it became clear that Chinese citizens were mining millions of Bitcoins, the government responded by banning the trade in all cryptocurrencies in the country from September 2017.

Despite the Chinese government's firm stance on cryptocurrencies, the country has also shown interest in Blockchain technology and the development of the central currency of the digital bank. It becomes clear that he has his own plans thanks to additional regulation.

According to media reports, the People's Bank of China has recently filed for more than 80 patents, paving the way for the introduction of a new digital currency. Virtually all of these patent applications relate to the integration of the digital currency system with existing banking infrastructure.

Technical Market Overview:

The anticipated correction on the Bitcoin has finally arrived as the BTC/USD market fell over 5% during the weekend. The price has tested the technical support located at the level of $9,555 after the Bearish Engulfing candlestick pattern was made around the level of $10,430. The momentum remains weak and negative so there is still a chance for another wave down. If the level of $9,555 is clearly violated, then the next target for bears is seen at the level of $9,508 and $9,123.

Weekly Pivot Points:

WR3 - $11,039

WR2 - $10,715

WR1 - $10,112

Weekly Pivot - $9,845

WS1 - $9,424

WS2 - $8,941

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 $10,433 is clearly broken.

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Technical analysis of GBP/USD for 17/02/2020:

Technical Market Overview:

The GBP/USD pair has been trading around the level of 1.3039 over the weekend, so no major gap down or gap up had occurred. Moreover, the odds for a move up are now quite higher than for a move down and the target is seen at the level of 61% Fibonacci retracement. 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 - 1.3333

WR2 - 1.3194

WR1 - 1.

Weekly Pivot - 1.3006

WS1 - 1.2943

WS2 - 1.2804

WS3 - 1.2739

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 17/02/2020:

Technical Market Overview:

Not much has changed over the weekend at the EUR/USD market as the pair is still going down in a descending channel. 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 - 1.1027

WR2 - 1.0991

WR1 - 1.0896

Weekly Pivot - 1.0858

WS1 - 1.0763

WS2 - 1.0726

WS3 - 1.0633

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 17, 2020

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A clear break above 143.38 will be the final nail in the coffin and confirm that a premature low was seen at 140.80 in wave iv and wave v towards 149.11 is developing. Short-term support is seen at 142.98 with strong support seen at 142.75. We expect the former resistance now acting as support will be able to protect the downside for a clear break above 143.38 confirming the expected rally towards 149.11 in wave v.

R3: 144.61

R2: 144.35

R1: 144.12

Pivot: 143.38

S1: 143.09

S2: 142.87

S3: 142.75.

Trading recommendation:

We are long GBP from 142.76 and we have our stop at 141.20 but expects to be able to move it higher soon.

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

Elliott wave analysis of EUR/JPY for February 17, 2020

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EUR/JPY has seen a low at 118.78 which is just below the lower part of our target zone between 118.85 -119.24. We are now looking for a break above minor resistance at 119.27 as the first good indication that wave 2 is complete and wave 3 is in motion for a rally above the 122.88 peak.

That said we also need to be aware, that as long as minor resistance at 119.27 stays intact slightly more downside pressure could be seen, but the potential downside from here should be limited.

R3: 119.75

R2: 119.58

R1: 119.49

Pivot: 119.27

S1: 118.85

S2: 118.78

S3: 118.55

Trading recommendation:

We are long EUR from 119.35 with our stop placed at 118.35.

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Can round number of 0.8300 hold EUR/GBP today on Feb 17, 2020?

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This week, EUR/GBP seems to be ready to reach the Weekly Sell Side Liquidity Pool at 0.8276 after in the previous week it touched the 4-hour chart Bearish Fair Value Gap (Magenta). If we look at the chart, the round number 0.8300 looks to be acting as strong support for this pair. If this level can hold firmly, the odds are that EUR/GBP will rebound. However, as long this pair does not break out and closes above 0.8350, the Weekly Sell Side Liquidity Pool at 0.8276 is still going to be the target for this pair.

The overall bias for EUR/GBP is bearish.

(Disclaimer)

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1.0820-1.0777 still EUR/USD target for today, Feb 17, 2020

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The Fiber still continues its down movement to reach the Weekly BIVI (Buy side Imbalance Volume Imbalance) area at 1.0820 - 1.0777 after in the previous week the pair touched the 4-hour chart Bearish Fair Value Gap area (Magenta). The EUR/USD pair has been trading with the bearish trend for a few weeks. As long the pair not made a significant pullback to the upside and not does break out and closes above 1.0892, EUR/USD is set to trade downwards aiming to fill the BIVI area.

Overall the bias for EUR/USD is Bearish.

(Disclaimer)

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

GBP/USD: plan for the European session on February 17. Small correction confirms the presence of those who wish to buy the

To open long positions on GBP/USD you need:

Buyers coped with a false breakout being formed in the support area of 1.3010 on Friday in the afternoon, which has already led the pound to a resistance of 1.3052, thus, determines the further direction of the pair. The main task of the bulls in the first half of the day will be a breakthrough and consolidation above this level, which will open a direct path to the area of highs 1.3093 and 1.3133, where I recommend taking profits. The more optimal scenario for opening long positions is the support of 1.3010, but, as at the end of last week, an important condition will be for a false breakout to form there. Buying for a rebound can only be considered at a support test of 1.2967. The lack of important fundamental statistics will help when buying the pound in order to push the pair upwards.

To open short positions on GBP/USD you need:

Sellers have already declared themselves on Friday, but failed to achieve a breakdown of 1.3010. This morning, the bears need a false breakout to form on the range of 1.3052, which can happen after an unsuccessful update of the previous week's high. If sellers are not able to implement this scenario, it is best to postpone short positions until the level 1.3093 is updated, or sell GBP/USD immediately to rebound from a resistance of 1.3133. An equally important goal for the bears will be for the pound to return to a support of 1.3010, as its breakthrough will raise the pressure on the pair, which will lead to a decrease to the low of 1.2967, where I recommend taking profits.

Signals of indicators:

Moving averages

Trading is conducted slightly above 30 and 50 moving averages, which saves the likelihood of continued upward correction of the pound.

Bollinger bands

In case the pair declines, support will be provided by the lower boundary of the indicator at 1.3010, while growth may be limited by the upper level at 1.3052.

analytics5e4a247ec2745.png

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

EUR/USD: plan for the European session on February 17. US Presidential day and low trading volume

To open long positions on EURUSD you need:

What awaits us today throughout the day is the Presidential day holiday in the United States and low trading volume. At the end of last week, weak data on industrial production in the US did not allow the bears to build up their short positions. However, it is unlikely that the situation with purchases of the euro will somehow improve, so all the attention again needs to be focused on the level of 1.0830, which I revised from Friday 1.0840. It is advised to be careful, bulls will only return to the market if a return to 1.0830 occurs with a false breakdown being formed there, thereby allowing them to reach the resistance of 1.0860, the break of which will lead the pair to a high of 1.0886, 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 lower, in the support area of 1.0773.

To open short positions on EURUSD you need:

The sellers formed a false breakout in the resistance area of 1.0860, not reaching the 1.0864 level, which only confirms the absence of those who wish to buy euros in the current conditions. However, the bears did not manage to break below the support of 1.0830, only having smeared the level of 1.0840, to which I paid attention last Friday. Today, euro sellers need a breakthrough of 1.0830, which will lead to further sales in the area of lows 1.0804 and 1.0773, where I recommend taking profits. However, given the lack of important fundamental statistics today, the Eurogroup meeting and US Presidential Day, we can expect a slight upward correction in EUR/USD to the resistance area of 1.0860, where an unsuccessful attempt to consolidate above this range will be the first signal to open short positions. You can sell the euro immediately for a rebound from a high of 1.0886.

Signals of indicators:

Moving averages

Trading is carried out in the region of 30 and 50 moving average, which indicates the likely formation of an upward correction.

Bollinger bands

Volatility has decreased, which does not provide signals on entering the market.

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

Forecast of EUR/USD on February 17, 2020

EUR/USD

Mixed data on the euro area and the US came out last Friday; Eurozone trade balance increased from $19.1 billion to $22.2 billion in December, GDP for the fourth quarter amounted to the expected 0.1%, but German GDP showed a zero increase against the expected 0.1%, which was interpreted by the market as a signal for further deterioration of the economy and the entire eurozone. In the US, industrial production fell by -0.3% in January against the forecast of -0.2% and capacity utilization fell from 77.1% to 76.8%, but retail sales for the same month showed a good increase of 0.3 %

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As a result, the euro fell 12 points, breaking the support of the Fibonacci reaction level of 161.8%. The next target is the Fibonacci level of 200.0% at the price of 1.0745, then we are waiting for it to be conquered and for the euro to fall to the second target of 1.0680, at the intersection of the price channel line and the Fibonacci level of 223.6%.

analytics5e4a187250ad1.png

On the four-hour chart, the signal line of the Marlin oscillator turned down, not reaching the territory of the bulls. We are waiting for the price to fall, but it will probably be calm today since it is a public holiday in the US.

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Forecast for GBP/USD on February 17, 2020

GBP/USD

The British pound closed at the opening level on Friday. There was a struggle at the Fibonacci level of 76.4% on the daily chart. It took place under the indicator line of balance, which implies the predominance of sellers. The signal line of the Marlin oscillator is turning down, not reaching the upper boundary of its own channel. In the event of a price reversal, we expect a quote at 1.2845 - at the Fibonacci level of 110.0%.

analytics5e4a14af08dc7.png

On a four-hour chart, the price stays above the indicator lines of balance and MACD, Marlin is falling, but remains in the growing trend zone. Accordingly, a signal that the pound can decrease further will be a price fall below the MACD line (below 1.2945) and the introduction of the Marlin indicator signal line into the zone of negative values. Both of these conditions can occur simultaneously. We are waiting for this signal.

analytics5e4a14c46e9a4.png

If the price consolidates above the Friday high (respectively, and above the Fibonacci level of 76.4%), growth is likely to continue to 1.3140 (61.8%) and even to 1.3210 (50.0%), to the MACD line. But this is an alternative scenario.

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Forecast for USD/JPY on February 17, 2020

USD/JPY

On Thursday and Friday last week, the price failed to gain a foothold over the important level of 110.00, which is formed by the point of intersection of the MACD line and the line of the price channel on the daily chart. The signal line of the Marlin oscillator remains in the growing trend zone, which still retains hope for the pair to grow. The task of USD/JPY, as before, is to consolidate above 110.00. In this case, growth is possible to 110.26, and after overcoming this level it will be possible to consider further growth in the range of 110.83/98.

analytics5e4a12dd246c1.png

On the four-hour chart, the hope for growth is maintained by price development above the MACD indicator line (blue moving), consolidating the price below it, that is under 109.57, will inspire the bears, their goal is big - 107.93 - support the trend line of the green price channel. The Marlin oscillator is already in the negative zone. Within two days, the yen will finally decide on the choice of direction.

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Fractal analysis of the main currency pairs for February 17

Forecast for February 17:

Analytical review of currency pairs on the scale of H1:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.0938, 1.0910, 1.0888, 1.0864 and 1.0827. Here, the price is near the limit values for the downward cycle, and therefore, we expect a correction. Short-term upward movement is expected in the range of 1.0864 - 1.0888. The breakdown of the last value will lead to the development of correction. Here, the goal is 1.0910. This level is a key support for the downward structure and its passage at the price will lead to the formation of expressed initial conditions for the upward cycle. In this case, the potential target is 1.0938.

The main trend is a downward structure from January 31, we expect a correction

Trading recommendations:

Buy: 1.0864 Take profit: 1.0887

Buy: 1.0888 Take profit: 1.0910

Sell: Take profit:

Sell: Take profit:

analytics5e49ed886eb55.png

For the pound / dollar pair, the key levels on the H1 scale are: 1.3182, 1.3157, 1.3114, 1.3082, 1.3045, 1.2990, 1.2961 and 1.2928. Here, we are following the development of the ascending structure of February 10. The continuation of the movement to the top is expected after the breakdown of the level of 1.3045. In this case, the target is 1.3082. Short-term upward movement, as well as consolidation is in the range of 1.3082 - 1.3114. The breakdown of the level of 1.3114 will lead to a pronounced movement. In this case, the potential target is 1.3157. Upon reaching which, we expect a consolidated movement in the range 1.3157 - 1.3182, as well as a correction.

Short-term downward movement is possibly in the range of 1.2990 - 1.2961. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.2928. This level is a key support for the upward structure.

The main trend is the ascending structure of February 10.

Trading recommendations:

Buy: 1.3045 Take profit: 1.3080

Buy: 1.3083 Take profit: 1.3112

Sell: 1.2990 Take profit: 1.2962

Sell: 1.2959 Take profit: 1.2930

analytics5e49eda653161.png

For the dollar / franc pair, the key levels on the H1 scale are: 0.9858, 0.9826, 0.9810, 0.9787, 0.9771, 0.9743 and 0.9719. Here, we are following the local ascendant structure of February 12. Short-term upward movement is expected in the range of 0.9810 - 0.9826. The breakdown of the latter value will lead to movement to a potential target - 0.9857. We expect a pullback to the bottom from this level.

Short-term downward movement is possibly in the range of 0.9787 - 0.9771. The breakdown of the latter value will lead to the development of a downward structure. In this case, the first potential target is 0.9743. We expect expressed initial conditions for a downward cycle to the level of 0.9719.

The main trend is the local potential for the top of February 12

Trading recommendations:

Buy : 0.9810 Take profit: 0.9824

Buy : 0.9827 Take profit: 0.9856

Sell: 0.9787 Take profit: 0.9773

Sell: 0.9769 Take profit: 0.9745

analytics5e49edc17809a.png

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

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

Main trend: upward structure of January 31

Trading recommendations:

Buy: 110.00 Take profit: 110.45

Buy : 110.49 Take profit: 110.80

Sell: 109.60 Take profit: 109.42

Sell: 109.38 Take profit: 109.10

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3303, 1.3281, 1.3267, 1.3228, 1.3201 and 1.3165. Here, the descending structure of February 10 is considered medium-term. The continuation of movement to the bottom is expected after the breakdown of the level of 1.3228. In this case, the target is 1.3201. Price consolidation is near this level. The breakdown of the level of 1.3200 will lead to the development of pronounced movement to the bottom. Here, the potential target is 1.3165. We expect a pullback to the top from this level.

Short-term upward movement is possibly in the range of 1.3267 - 1.3281. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3303. This level is a key support for the downward structure.

The main trend is the formation of medium-term initial conditions for the downward movement of February 10

Trading recommendations:

Buy: 1.3267 Take profit: 1.3281

Buy : 1.3283 Take profit: 1.3303

Sell: 1.3226 Take profit: 1.3203

Sell: 1.3199 Take profit: 1.3167

analytics5e49ee0187153.png

For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6810, 0.6776, 0.6761, 0.6739, 0.6703, 0.6684 and 0.6660. Here, we are following the development of the ascending structure of February 7. The continuation of the movement to the top is expected after the breakdown of the level of 0.6740. In this case, the target is 0.6761. Short-term upward movement, as well as consolidation is in the range of 0.6761 - 0.6776. For the potential value for the top, we consider the level of 0.6810. Upon reaching which, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.6703 - 0.6684. Hence, a high probability of a reversal to the top. On the other hand, the breakdown of the level of 0.6684 will lead to the formation of a downward structure. Here, the potential target is 0.6660.

The main trend is the upward structure of February 7

Trading recommendations:

Buy: 0.6740 Take profit: 0.6761

Buy: 0.6762 Take profit: 0.6775

Sell : 0.6703 Take profit : 0.6687

Sell: 0.6682 Take profit: 0.6660

analytics5e49ee27a239e.png

For the euro / yen pair, the key levels on the H1 scale are: 119.85, 119.51, 119.26, 118.80, 118.36 and 118.13. Here, we are following the descending structure of February 5. The continuation of movement to the bottom is expected after the breakdown of the level of 118.80. In this case, the goal is 118.36. For the potential value for the bottom, we consider the level of 118.13. Upon reaching which, we expect consolidation, as well as a pullback to the top.

Short-term upward movement is possibly in the range of 119.26 - 119.51. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 119.85. This level is a key support for the downward structure.

The main trend is the descending structure of February 5

Trading recommendations:

Buy: 119.26 Take profit: 119.50

Buy: 119.55 Take profit: 119.85

Sell: 118.80 Take profit: 118.38

Sell: 118.34 Take profit: 118.14

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For the pound / yen pair, the key levels on the H1 scale are : 145.19, 144.57, 144.12, 143.50, 142.75, 142.47 and 142.08. Here, we revised the key objectives for the upward structure of February 10. The continuation of movement to the top is expected after the breakdown of the level of 143.50. In this case, the target is 144.12. The breakdown of this value will lead to short-term upward movement in the range 144.12 - 144.57. Hence, there is also a high probability of a reversal to correction. For the potential value for the top, we consider the level of 145.19. Upon reaching this level, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 142.75 - 142.47. Hence, the high probability of a reversal to the top. The breakdown of the level of 142.47 will lead to an in-depth correction. Here, the goal is 142.08. This level is a key support for the top.

The main trend is the rising structure of February 10

Trading recommendations:

Buy: 143.50 Take profit: 144.12

Buy: 144.15 Take profit: 144.50

Sell: 142.75 Take profit: 142.50

Sell: 142.44 Take profit: 142.10

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GBP/USD. Preview of the new week. Pound to closely monitor inflation and business activity in the industry

24-hour timeframe

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The British pound began to form a new downward trend, but a turn up and a round of upward correction began this trading week against the current weakest downward trend. Bollinger Bands are directed down, which so far retains the likelihood of a resumption of a downward trend. Also, the pound/dollar pair has not yet been able to cross the Kijun-sen line on the 24-hour chart, although it is very close to it. As we have already said, this week traders reacted not to macroeconomic statistics, but to political news from the British Parliament. And we believe that the pound once again shows growth when there is no reason at all for this. Over the past two years, this situation has been repeated regularly, the pound regularly rises in price on rumors that are not confirmed, on expectations, on various kinds of political messages. But macroeconomic statistics are just regularly ignored, as it was this week. The upcoming week will be much more interesting for the GBP/USD currency pair than for the EUR / USD pair, since there will be a sufficient amount of important data from Great Britain.

Monday will be completely empty in terms of macroeconomic statistics. There is absolutely nothing to pay attention to. President's Day will be celebrated in the United States on Monday. Therefore, you can proceed to Tuesday. On this day, the UK will publish average wage for December with and without bonuses, the unemployment rate for December, as well as the number of applications for unemployment benefits. No major changes in these indicators are expected. The unemployment rate is likely to remain at a fairly low level of 3.8%, the number of new applications for unemployment benefits will amount to 22,600, and the growth rate of wages can only slightly slow down. Thus, everything will depend on how much the real values of the indicators differ from the predicted ones.

A much more important consumer price index in the UK will be published on Wednesday, which, according to experts, could accelerate from 1.3% y/y to values ranging from 1.4% - 1.6% y/y. However, in monthly terms, inflation is likely to slow down by 0.5% - 0.6%, which, in fact, eliminates almost any positive effect from the annual value. Recall that the annual value is calculated relative to the same month last year. Thus, it turns out that the annual value can be at least +5%, but if negative inflation is recorded in monthly terms, this will mean that it will continue to slow down, and in the case of Great Britain, deflation can already be observed in monthly terms.

Great Britain will release retail sales reports for January, as well as a CBI report on changes in industrial orders. It is expected that the first indicator will show an increase of 0.4% in annual terms and in monthly terms. This is a good increase for the monthly, while it is very weak for the annual. The second industrial order indicator, presented by the Confederation of British Industrialists, is expected to remain in the negative zone, since the British industry continues to experience serious problems.

Britain is set to publish indices of business activity in the fields of services and production in the last trading week of the next week. In recent months, the index in the manufacturing sector has risen and returned to the area of 50.0 and higher, however it may again fall to the area below the key level of 50 by the end of February. According to forecasts, this indicator will decrease to the value 49.6 in February. As for the service sector, everything is more stable and positive here - forecasts for February are 53.2 - 53.4 with the previous value of 53.9. As you can see, a decline is expected everywhere.

In general, we believe that the British currency will have no supporting macroeconomic factors next week. Having studied all the macroeconomic reports, we came to the conclusion that most of them could fail again. Of course, special attention should be paid to inflation, if it accelerates, this can cause a wave of purchases of the British currency, but in general we do not see the prerequisites for the UK economy to accelerate and macroeconomic indicators to recover. From time to time, individual indicators grow (for example, the index of business activity in industry), but this looks like a correction, after which a new decline will inevitably follow. Thus, the Bank of England has many questions about the current state of the British economy, as well as to monetary policy, which, in our opinion, should have already been softened.

Trading recommendations:

The pound/dollar pair started an upward correction on the 24-hour timeframe. Thus, at the moment, for the 24-hour timeframe, it is recommended that you aim for 1.2838 and 1.2724 for the pound, if the bulls fail to overcome the Kijun-sen critical line. Shorts are still more relevant on the 4-hour timeframe, but there you should now wait until a dead cross forms before resuming to trade down.

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.

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EUR/USD. Preview of the new week. Dull week - euro's chance to move away from three-year lows?

24-hour timeframe

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The euro has been falling non-stop in the past two weeks. Last week, the pair overcame the second support level of February at 1.0870 on the 24-hour timeframe and indicated a desire to continue the downward trend. We have already said that the euro's depreciation is absolutely logical from a fundamental point of view. We have been talking about this non-stop in the last few months, since the euro has no fundamental and macroeconomic growth factors. From time to time, purely technical corrections (different in strength) occur, after which the downward movement resumes. Actually, this situation has not changed at all last week. Only one important assumption can be made: the paradoxical situation has finally ceased to keep the euro from falling further. The pair immediately updated its two-year lows and reached the values on April 17, 2017, that is, in fact, it will now move to the lows for the last 17 (!!!) years, which are around 1.0339. About 500 points remain until this level is reached - the task is absolutely feasible for bears for 2020, especially if macroeconomic statistics from the European Union continue to deteriorate further.

The new trading week may finally become a correction for the European currency. However, I immediately want to warn traders that until you receive specific signals about the beginning of the correction, you should not rush to close short positions. Such a not too strong movement can last a very long time. In terms of macroeconomic data, the coming week will be extremely scarce. It is precisely in this, we believe, that the chance of the euro currency lies. In the last two weeks, weak reports were regularly received from the EU, and strong reports from the US, which supported the desire of traders to continue selling the euro. There will be practically no important planned publications or events next week in the first four trading days.

The EU calendar is simply empty on Monday and Tuesday, except for a secondary indicator - the ZEW Institute economic sentiment index. President's Day will be celebrated in the United States on Monday. Secondary data will also be published on Tuesday, such as the index of the market value of housing and the index of business activity in the manufacturing sector of the Federal Reserve Bank of New York. Traders are also unlikely to turn their attention to this data. The EU news calendar will remain equally empty on Wednesday, and secondary data will again come from across the ocean, such as a producer price index and data from the construction market on changes in the dynamics of construction projects and building permits. A more or less significant event will take place in the evening. The event with a loud sign is the publication of the minutes of the meeting of the Fed Open Market Committee. However, we consider this event to be equally secondary. Firstly, in 95% of cases, all the necessary information becomes available to the market on the day the results of the Fed meeting are announced, of which there are eight in a year. Therefore, the minutes become a simple formality that lists the main points of the regulator regarding the economy and monetary policy. Secondly, at this time, even surprises from the Fed or Jerome Powell should not be expected. Judging by the recent speeches of Fed chief in the US Congress, Powell is more concerned about the "coronavirus" than any internal problems, such as GDP or industrial production. Thus, the release of the minutes may remain, if not without attention, then almost certainly without reaction from traders.

On Thursday, the macroeconomic background for the EUR/USD pair will not change, more or less, there will not be any significant report in the EU and the US there will again be secondary publications of applications for unemployment benefits and the production index of the Federal Reserve Bank of Philadelphia. Finally, Germany, the EU and the US will publish business activity indices for February (preliminary values) on Friday, February 21, as well as the consumer price index in the euro bloc for January. As we have already said many times, business activity in the manufacturing sector is of most interest now, moreover, in Germany, the EU, and the US. According to forecasts, no special changes in the business activity of the EU are planned. Both indicators will remain below the key level of 50.0, which will continue to indicate a decline in production. Moreover, in Germany and the EU, business activity indices are again expected to decline to 44.8 and 47.5, respectively. As for inflation, according to experts' expectations, this indicator can grow to 1.4% in annual terms, but in monthly terms it can drop immediately by 1.0%. Thus, as we see, even based on forecasts, next week we should not expect strong macroeconomic support for the euro. The situation in the US is much better, as usual. Business activity in production may slightly fall, but it will remain above 50.0. We are talking only about the Markit index, and we remember that there is also the ISM index, which is more important. As for business activity in the service sectors, a slight fall is expected in Germany and the EU, but both indicators will remain above 50, and no changes are expected in the US, the forecast is 53.4.

As a result, we can say that next week there will be extremely few significant events, so it is likely that the start of an upward correction is still the same, this is one, a decrease in volatility, these are two. As for the support of the euro, it is likely to continue to be absent.

Trading recommendations:

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

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicators window.

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