Wave Analysis from InstaForex

Discussion in 'Technical Analysis' started by InstaForex Gertrude, Apr 1, 2016.

  1. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    Technical analysis of USD/JPY for Jan 17, 2018

    [​IMG]

    In Asia, Japan will release the Core Machinery Orders m/m data, and the US will release some Economic Data such as TIC Long-Term Purchases, Beige Book, NAHB Housing Market Index, Industrial Production m/m, and Capacity Utilization Rate. So, there is a probability the USD/JPY will move with a low to medium volatility during this day.

    TODAY'S TECHNICAL LEVEL:
    Resistance. 3: 110.97.
    Resistance. 2: 110.76.
    Resistance. 1: 110.54.
    Support. 1: 110.27.
    Support. 2: 110.06.
    Support. 3: 109.84.

    Analysis are provided byInstaForex.
     
  2. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    Four drivers of gold growth

    Precious metals became the main beneficiary of the weakness of the US dollar. The impressive growth of the world economy allowed palladium to hit record highs near $1,140 per ounce. From the beginning of the year, platinum added almost 8% and is one of the leaders of the commodity market. Gold managed to break through to the September peaks, and it appears that the bulls are determined to continue the rally. However, the EUR/USD movement stalled near the 1.23 mark against the backdrop of the ECB's "dovish" rhetoric, so it's too early to talk about the final defeat of the dollar.

    Dynamics of precious metals and gold

    [​IMG]

    Source: Financial Times.

    The fact that the "greenback" is not at ease and does not react to the growing likelihood of the US GDP being dispersed under the influence of tax reform, or to strong macroeconomic data for the United States, is of paramount importance for the XAU/USD. However, it would be wrong to only talk about a single driver of growth.

    The rapid rally in Brent and WTI increases the risks of accelerating consumer prices in the US and other countries. At the same time, central banks, including the Fed, prefer a slow normalization of monetary policy. These circumstances pose serious obstacles to the real yield of treasury bonds, which is a "bullish" factor for gold.

    Let's not forget about political and geopolitical risks. On January 19, the US government could be temporarily shut down. More than four years ago, this resulted in a serious slowdown in the US GDP. Yes, the Republicans prepared a draft of its interim financing until February 16, but it looks raw and leads to an emergence of new enemies, which creates problems in the Senate voting. In Germany, negotiations between the bloc of Angela Merkel and the Social Democrats are unlikely to be as easy as initially intended. The Berlin wing of the SPD protested against the coalition, and until the party's congress on January 21-22, uncertainty will loom in the markets. Once again, US Secretary of State Rex Tillerson reiterated the threat of North Korea and urged China and Russia to implement sanctions more actively.

    Thus, a weak dollar, growing risks of accelerating inflation and a fall in the real yield of US Treasury bonds, political uncertainty in the United States and Germany, as well as the possibility of an escalation of the conflict over North Korea lay a powerful foundation for the continuation of the XAU/USD rally. Positions of "bears" look hopeless, however history shows that the trends often unfolded at a time when the crowd firmly believed in their continuation.

    In my opinion, the "bulls" for EUR/USD brought the pair too far. Its long-term prospects appears positive, but it is not yet time to win back the factor of normalization of the monetary policy of the ECB, and the presence of political risks in Germany and Italy raises doubts about the validity of current levels. If the euro goes into a correction, the growth of the USD index will help lower the price of gold.

    Technically, reaching a target of 88.6% for the "Shark" pattern enhances the risks of pullback in the direction of 23.6%, 38.2% and 50% of the CD wave. Gold, daily chart

    [​IMG]

    Analysis are provided byInstaForex.
     
  3. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    Technical analysis of EUR/USD for Jan 19, 2018

    [​IMG]

    When the European market opens, some Economic Data will be released such as Current Account and German PPI m/m. The US will release the Economic Data too, such as Prelim UoM Inflation Expectations and Prelim UoM Consumer Sentiment, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

    TODAY'S TECHNICAL LEVEL:
    Breakout BUY Level: 1.2420.
    Strong Resistance:1.2404.
    Original Resistance: 1.2377.
    Inner Sell Area: 1.2350.
    Target Inner Area: 1.2286.
    Inner Buy Area: 1.2222.
    Original Support: 1.2195.
    Strong Support: 1.2168.
    Breakout SELL Level: 1.2152.

    Analysis are provided byInstaForex.
     
  4. IFX Yvonne

    IFX Yvonne Well-Known Member Trader

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    CAD/JPY testing major support, prepare for a bounce!

    The price is testing major support at 88.52 (Horizontal swing low support, bullish price action, bullish harmonic formation) and we expect to see a nice bounce above this level to push the price up to at least 88.87 (Fibonacci retracement, horizontal pullback support) before 89.02 (Fibonacci retracement, horizontal overlap resistance).

    Stochastic (55,5,3) is seeing major support above 1% where we expect a corresponding bounce from.

    Buy above 88.52. Stop loss at 88.24. Take profit at 88.87 and 89.02.

    [​IMG]
     
  5. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    The trading plan for the US session is EUR/USD and GBP/USD

    EUR/USD
    To open long positions for EURUSD, it is required:
    Buyers are trying to get ahold of the level of 1.2252, and while the trade is higher, a chance remains for continued growth of the euro with an update of 1.2294 and the main purpose of a test at 1.2342, where I recommend locking in profits. In the event of a decline below the level of 1.2252 in the afternoon, consider new purchases of the euro after a test at the level of 1.2215, or immediately towards a rebound from 1.2169.
    To open short positions for EURUSD, it is required:
    A return to the level of 1.2252 would be a good signal to increase short positions on the euro for the purpose of a breakdown and consolidation below the support of 1.2215, which opens a direct road to the area of 1.2169, where I recommend locking in profits. In case the euro further grows, it is possible to look for short positions after the formation of a false breakout at 1.2294 or on a rebound from 1.2342.

    [​IMG]

    GBP/USD
    To open long positions for GBP/USD, it is required: Buyers are trying to work out a scenario in the morning in order to consolidate above 1.3886, and while the trade is at this level, you can count on continuing an upward trend with an exit towards a resistance of 1.3940. The main target remains in the area of 1.4018. In the event of a return below the level of 1.3886, I recommend that you pay attention to long positions on the pound only after a test at 1.3839.
    To open short positions for GBP/USD, it is required:
    The return at 1.3886 will signal an opening of short positions for the pound, which will lead to the renewal of daily lows in the area of 1.3839 and will likely reach a new support level of 1.3797, where I recommend locking in the profit. In case of continued growth in the pound during the afternoon, short positions can be considered for a rebound from 1.3940.

    [​IMG]

    Indicator description
    Moving Average (average sliding) 50 days - yellow
    Moving Average (average sliding) 30 days - green
    MACD: fast EMA 12, slow EMA 26, SMA Bollinger Bands 20

    Analysis are provided byInstaForex.
     
  6. IFX Yvonne

    IFX Yvonne Well-Known Member Trader

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    USD/CHF right on major support, prepare for a bounce

    The price is now testing major support at 0.9569 (Fibonacci extension, horizontal swing low support) and we expect a bounce above this level to push the price up to at least 0.9699 resistance (Fibonacci retracement, horizontal pullback resistance).

    Stochastic (21,5,3) is seeing major support above 3.7% where a corresponding bounce could occur.
    Buy above 0.9569. Stop loss at 0.9501.
    Take profit at 0.9699.

    [​IMG]

    *The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
     
  7. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    Pound updates annual highs on the background of the report on the labor market

    The euro managed to strengthen against the US dollar in the morning against the backdrop of data indicating the likely retention of the euro zone's economic growth rates earlier this year. However, a serious breakthrough in important levels of resistance has not occurred, indicating a restrained demand for risky assets.

    According to the IHS Markit report, Germany's economy continues to show good results in early 2018 due to the growth of activity in the services sector. So, the index of supply managers for the German services sector in January 2018 increased to 57.0 points against 55.8 points in December. Economists, on the contrary, expected a decline in the index. The index for the manufacturing sector in January fell slightly, to 61.2 points.

    In the eurozone, there are also signs of stable growth, as evidenced by the data.

    According to the IHS Markit report, the preliminary composite index of supply managers of the eurozone in January 2018 increased to 58.6 points against 58.1 points in December. It should be noted that the index values above 50 indicate an increase in activity. This growth in the index corresponds to a quarterly growth of the economy by 1%.

    [​IMG]

    In France, the preliminary index of supply managers for the manufacturing sector in January this year dropped to 58.1 points against the December value of 58.8 points. But the preliminary index of supply managers for the services sector, on the contrary, increased in January to 59.3 points against 59.1 points in December. Economists had expected that the service sector index would drop to a level of 58.9 points.

    As for the technical picture of the EURUSD pair, there have been no significant changes. The main objective of euro buyers today will be to keep above the 1.2300 area, which will make it possible to count on continuing the upward trend, with the update of the new significant highs of 1.2390 and 1.2430.

    The British pound continued its growth against the US dollar, after it became known that the employment rate in the UK from September to November 2017 reached a record high. Meanwhile, wages in the UK declined, which indicates a worsening of the financial situation of consumers after the referendum on Brexit.

    According to a report by the National Bureau of Statistics, the employment rate in the UK was 4.3%, which fully coincided with the forecasts of economists. The average earnings in the UK for the period increased by 2.4%, while real wages fell by 0.5%.

    Analysis are provided byInstaForex.
     
  8. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    NZD/USD right on major support, time to go long

    [​IMG]

    The price is testing major support at 0.7312 (Fibonacci retracement, horizontal overlap support, long-term ascending support, bullish price action) and a bounce could occur at this level to push the price up to at least 0.7436 resistance (major swing high resistance, Fibonacci extension). RSI (55) sees a long-term ascending support line since November 2017 hold up our bullish momentum really well. We're starting to see a possible break of this long-term support line but our major support remains at 51% and only a clean break of that level would be a precursor that a drop is coming. Buy above 0.7312. Stop loss at 0.7256. Take profit at 0.7436.

    Analysis are provided byInstaForex.
     
  9. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    Nobody wants currency wars

    Eurozone

    Markets continue to assess under the microscope the results of the ECB meeting on Thursday. Mario Draghi's press conference started with a few dovish statements, as Draghi focused on the slowness and austerity, indicating that it is not necessary to wait for surprises and, especially, some severe steps from the ECB.

    Draghi called for dividing the expectations for the rate and the regulation of the asset purchase program. Regarding the rate, Draghi spoke directly, he said, the chances of an increase this year are small. With regards to the repurchase of assets, the position is more hawkish, as Draghi had to declare sustainable economic growth, which could mean confirmation of plans to curtail the repurchase program.

    The ECB's lending report released on Friday showed that in December the growth rate of lending to the private sector and non-financial organizations slowed somewhat, but annual rates remain firmly strong, which confirms the conclusion about the sustainability of economic growth in the euro area.

    [​IMG]

    A member of the ECB Executive Board, Benoit Coeure, commented on US Treasury Secretary Munchin's previous statements, saying that attempts to target exchange rates could provoke a currency war, and this is the last thing the world needs. On Thursday, indicating a similar tone, Draghi spoke out, as the issue for the euro is important - excessive strengthening can put downward pressure on inflation, as imports cheapen.

    On Tuesday, a preliminary GDP report will be released for the fourth quarter, with a forecast of a 2.6% growth, which is no worse than in the US, which means it will support the euro, all other things being equal. On Wednesday, the report on inflation in January will be released, the forecast is negative, the euro could be under pressure. In general, the reasons for the euro to continue growth without a correction are few, likely a decrease to 1.2323 and consolidation just below the peaks that were reached.

    United Kingdom

    The UK economy grew slightly stronger in the fourth quarter than forecast, which had a limited support for the pound, which once again renewed its peak after Brexit. However, NIESR forecasted the possibility of growth up to 0.6%, so the market was not very surprised by the result.

    [​IMG]

    The head of the Bank of England, Mark Carney, made an attempt on Friday to knock down a wave of demand for the pound, which, however, proved unsuccessful. Answering a question in an interview with the BBC about quantifying damage from Brexit, Carney said that the country's GDP lost 1% of its growth rate, and by the end of 2018 these losses will grow to 2%. To date, the result of Brexit has been a decline in economic activity of tens of billions of pounds, and it takes time to achieve a higher growth potential.

    Carney highlighted the main point - companies are cutting back on investments, as they are waiting for clarity on the UK's trading positions after it leaves the EU.

    On Tuesday, the Bank of England will report on consumer and mortgage lending in December. On Wednesday, the Gfk index on consumer confidence will be released. The pound looked very strong last week, and went far into the overbought zone, but the momentum is still strong, and therefore the highs will likely be updated, the nearest support is 1.3995.

    Oil

    Oil adheres to the most likely scenario, once again the peak is updated, the trends remain the same. Saudi Energy Minister Khaled al-Faleh said in Davos that $25 from its current price is secured by the OPEC + deal, confirming the cartel's position to adhere to the plan to stabilize the market. There is no reason to expect that the OPEC + countries will voluntarily give up the mechanism that fills the scarce state budgets of the oil-producing countries.

    Analysis are provided byInstaForex.
     
  10. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    Gold forming a cup and handle reversal, prepare for a strong drop!

    [​IMG]

    Gold has formed a really strong reversal of a cup and handle formation. We look to sell below major resistance at 1344 (Fibonacci retracement, horizontal overlap resistance, cup and handle breakout level) where a strong drop is expected to push the price down to at least 1325 support (Fibonacci retracement, horizontal overlap support, Fibonacci extension).

    Stochastic (34,5,3) is seeing descending resistance hold it down really well which corresponds to the drop we're expecting.

    Sell below 1344. Stop loss at 1353. Take profit at 1325.

    Analysis are provided byInstaForex.
     
  11. IFX Yvonne

    IFX Yvonne Well-Known Member Trader

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    NZD/USD starting to show signs of a bounce, remain bullish

    The price continues to test our buying area and ascending channel support. We think that it might be doing a fake breakout now because RSI has not broken below 50% yet. We remain bullish above major support at 0.7312 (Fibonacci retracement, horizontal overlap support, long-term ascending support, bullish price action) for the price to continue its push up to at least 0.7436 resistance (major swing high resistance, Fibonacci extension).

    RSI (55) major support remains at 50% and only a clean break of that level would be a precursor that a drop is coming.

    Buy above 0.7312. Stop loss at 0.7256. Take profit at 0.7436.

    [​IMG]

    *The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
     
  12. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    Inflation did not please investors

    The European currency managed to strengthen its positions against the US dollar in the first half of the day, but riskier assets did not receive more powerful support from the large players, as the inflation data in the euro zone fully coincided with the forecasts of economists.

    The situation in the German labor market is excellent. According to the data, the number of applications for unemployment benefits decreased, and unemployment reached a record low level.

    Thus, the number of unemployed in January this year fell by 25,000 compared to December 2017. Economists had expected a reduction of 16,000. In January, the Federal Labor Agency of Germany registered 736,000 vacancies, which is 89,000 more than in January 2017.

    The unemployment rate in Germany fell to 5.4%.

    Not surprisingly, after such data, and based on past reports, the German Ministry of Economy raised the forecast for GDP growth in 2018 to 2.4% from 1.9% after growing by 2.2% in 2017. It is expected that such a strong growth will be due to good external and internal demand, as well as good labor market conditions.

    The inflation data did not cause any serious changes in the market, as investors expected more serious changes in the dynamics.

    According to the report, in January this year, compared with the same period of the past, the consumer price index rose by 1.3%, which fully coincided with the forecasts of economists. As you can see, the current level is far from the level set by the European Central Bank, which is slightly below 2%. Core inflation rose to 1% from 0.9%.

    [​IMG]

    As for the euro-zone labor market, according to the statistics agency's report, the unemployment rate in the eurozone in December 2017 remained unchanged at 8.7% against 8.7% in November. Economists also forecast the current level of unemployment.

    Data from ADP did not strongly support the US dollar, although they were much higher than economists' forecasts, which indicates the good position of the US labor market.

    According to the report, the number of jobs in the private sector in the US increased by 234,000 in January this year, while economists forecast an increase of 193,000. The ADP noted that there was a strong hiring of medium and large companies.

    A serious breakthrough of the level of 1.2450 did not happen. Most likely, traders took a wait-and-see attitude before the Fed decision on interest rates, and the publication of the accompanying statement. Only a real breakthrough of the range 1.2445-1.2455 will lead to continued growth in risk assets with an update of 1.2500 and a new high at 1.2560.

    Analysis are provided byInstaForex.
     
  13. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    The buyers of the euro are ready

    [​IMG]

    Despite weak performance in the manufacturing sector, the European currency continues to make attempts to grow against the US dollar. It is maintaining an upward price channel.

    It was only in Italy where there was an increase in the index of production while in France and Germany, the similar index slowed slightly.

    According to the report of the statics agency, the index of supply managers for the manufacturing sector in Italy for the month of January this year rose to 59.0 points, compared to 57.4 points in December last year. Economists predicted the index at the level of 57.3 points.

    In France, there is a marked decrease in activity in the manufacturing sector. According to the report, the index of supply managers for the manufacturing sector in January fell to 58.4 points against the December index of 58.8 points. Economists and market participants did expect a decline to the level of 58.1 points.

    In Germany, the index of supply managers also slowed its growth. According to the data, PMI for Germany's manufacturing sector in January fell to 61.1 points against 63.3 points in December 2017. Economists had expected the index to fall to the level of 61.2 points.

    If we talk about the euro area as a whole, then there is also a slight decline. According to the statistics agency, the index of supply managers PMI for the production area of the eurozone in January dropped to 59.6 points, compared to 60.6 points in December. The data fully coincided with the forecasts of economists.

    It is important to note that finding the index above the level of 50 points indicates an increase in activity.

    The current data that's at a rather slight decline in indicators at the beginning of this year will not likely affect the data on GDP seriously in the first quarter of 2018, which is confirmed by the market reaction to the data.

    As for the technical picture of the EURUSD pair, so far the situation is developing in favor of buyers as it managed to keep the trade in an upward price channel. The lower limit of this level is at the January 30 low. The breakthrough of resistance at the level of 1.2470 opens up good prospects for the EURUSD pair for further growth of the trading instrument in the area of annual maximums at 1.2540.

    A similar index that's already in the UK, also did not put pressure on the British pound, even despite its slowdown to a 6-month low.

    According to a report by research company IHS Markit Ltd., the index of supply managers for the UK manufacturing sector in January was 55.3 points compared to 56.2 points in December. The value of the index above 50 indicates an increase in activity. Economists had expected the index to be 56.5 points.

    Analysis are provided byInstaForex.
     
  14. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    Daily analysis of GBP/USD for February 05, 2018

    The pair is struggling to consolidate the price action above the resistance level of 1.4280 and it seems that the 200 SMA could act, once again, as a dynamic support. If that happens, GBP/USD could resume the overall bullish bias and can skyrocket towards the 1.4393 level. MACD indicator remains in the negative territory, calling for a leg lower.

    [​IMG]

    H1 chart's resistance levels: 1.4280 / 1.4393
    H1 chart's support levels: 1.4060 / 1.3937

    Trading recommendations for today:
    Based on the H1 chart, buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.4280, take profit is at 1.4393 and stop loss is at 1.4168.

    Analysis are provided byInstaForex.
     
  15. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    Technical analysis of EUR/USD for Feb 06, 2018

    [​IMG]

    When the European market opens, some Economic Data will be released such as Retail PMI, French Gov Budget Balance, and German Factory Orders m/m. The US will release the Economic Data too, such as IBD/TIPP Economic Optimism, JOLTS Job Openings, and Trade Balance, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

    TODAY'S TECHNICAL LEVEL:
    Breakout BUY Level: 1.2444.
    Strong Resistance:1.2437.
    Original Resistance: 1.2425.
    Inner Sell Area: 1.2413.
    Target Inner Area: 1.2384.
    Inner Buy Area: 1.2355.
    Original Support: 1.2343.
    Strong Support: 1.2331.
    Breakout SELL Level: 1.2324.

    Analysis are provided byInstaForex.
     
  16. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    The deficit of foreign trade in the US at record highs

    Despite the good data for Germany, which came out in the morning, demand for the US dollar remained.

    According to the report of the German Ministry of Economics, orders in the manufacturing sector of Germany in December last year grew due to strong demand from abroad. Thus, the total volume of production orders in December 2017 increased by 3.8% compared with the previous month, while economists expected that the growth in December will be 0.6%.

    As I noted above, the leaders were export orders, which grew by 5.9%, while internal orders increased by only 0.7% compared to the previous month.

    The US dollar has ignored the data on the next wave of growth of foreign trade deficit in the US, which peaked in nine years. This happened as a result of growth in imports due to strong consumer demand.

    According to the report of the US Department of Commerce, the foreign trade deficit in December 2017 increased by 5.3% compared to the previous month and amounted to 53.12 billion US dollars. Economists had expected a deficit of $52.0 billion.

    [​IMG]

    Import to the US grew by 2.5% to $ 256.5 billion. The increase in imports of goods during the holiday season had a negative impact on the indicator. There was also an increase in imports of cars and capital goods. Export grew by only 1.8% to $ 203.4 billion.

    Speech by Fed official Bullard was generally ignored by the market.

    Fed President St. Louis James Bullard said today that the relationship between the employment market and inflation has disrupted, and inflation expectations have risen. First of all, he was referring to the latest report of the US Department of Labor, which pointed to a serious increase in labor forces and an increase in wages, which would definitely spur inflation in early 2018, giving it a serious upward momentum along with economic growth.

    Bullard also noted that the tax bill will promote investment growth, but the monetary policy is currently close to neutral and does not need to be adjusted.

    It is worth paying attention to the fact that his opinion is at odds with the recent statements of his colleagues, in which it was clearly indicated that the Federal Reserve will raise interest rates this year.

    The deficit of Canada's foreign trade in December grew due to the fact that imports prevailed over exports, which slowed significantly compared to the previous month.

    According to the Bureau of Statistics of Canada, the foreign trade deficit in December 2018 increased by 3.19 billion Canadian dollars. Economists forecast a deficit of C$ 2.25 billion in December. Imports in December rose by 1.5%, to a record level of 49.70 billion Canadian dollars, while exports increased by 0.6%, to 46.51 billion Canadian dollars.

    Analysis are provided byInstaForex.
     
  17. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    Daily analysis of USDX for February 08, 2018

    The index managed to do a rebound above the 200 SMA and gathered momentum towards the 90.30 level. A higher continuation is expected once USDX does a break above 90.63. To the downside, the 200 SMA continues to provide dynamic support but if it gives up, the bearish side could get again another breath.

    [​IMG]

    H1 chart's resistance levels: 90.63 / 91.75 H1
    chart's support levels: 89.36 / 87.88

    Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USD Index breaks with a bearish candlestick; the support level is at 89.36, take profit is at 87.88 and stop loss is at 90.81.

    Analysis are provided byInstaForex.
     
  18. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    Technical analysis of EUR/USD for Feb 09, 2018

    [​IMG]

    When the European market opens, some Economic Data will be released such as Italian Industrial Production m/m and French Industrial Production m/m. The US will release the Economic Data too, such as Final Wholesale Inventories m/m, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

    TODAY'S TECHNICAL LEVEL:
    Breakout BUY Level: 1.2314.
    Strong Resistance:1.2307.
    Original Resistance: 1.2295.
    Inner Sell Area: 1.2283.
    Target Inner Area: 1.2254.
    Inner Buy Area: 1.2225.
    Original Support: 1.2213.
    Strong Support: 1.2201.
    Breakout SELL Level: 1.2194.

    Analysis are provided byInstaForex.
     
  19. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    Euro and Pound Test Key Support

    Eurozone
    The euro makes weak attempts to stay above 1.22, but success is possible only if the wave of panic in the stock and debt markets goes down, taking the form of correction, although deeper.
    On Wednesday, the consumer inflation index will be published in Germany in January. It is expected to show a decline from 1.6% to 1.4% relative to December, but according to the forecast, the HICP index should remain unchanged at 1.4%. Also on Wednesday, Eurostat will publish an estimate of the eurozone's GDP in the fourth quarter, and there are no reasons for concern either - the PMI Markit and ESI economic activity indicators calculated by the European Commission are growing at a record pace, which, given the high correlation between PMI and GDP, which makes it possible to look at economic growth with optimism.

    [​IMG]

    The problem for the eurozone is something different - the growing surplus of foreign trade leads to the need to seek the use of surplus capital. At the same time, the growth of inflation in the eurozone is not sufficient to force the ECB to begin the unwinding of its monetary policy. The spread between the yields of European and American securities is growing, and the capital from the eurozone will be in demand by investors in the US if rates in US banks continue to grow, especially since the threat of four rate hikes in the current year suddenly became real.

    Monetary authorities of the eurozone will not prevent the outflow of excess capital, since this process will allow the euro to be controlled, but if the panic in the markets continues and it comes to a serious crisis, the euro may significantly weaken. Correction of the EUR USD pair is not yet completed, it is possible to decrease to 1.21, but the chances to stay above this support are still high. On Monday, the euro could return to zone 1.2305 / 20, further dynamics will be determined by whether a wave of panic that has covered the markets will develop.

    United Kingdom
    The pound last week has undergone multidirectional pressure. On Wednesday, the Bank of England supported the pound, leaving the rate unchanged and at the same time hinting that it could accelerate the process of raising rates due to higher economic growth rates.

    Updated forecasts suggest GDP growth in 2018 at 1.8%, which, however, is below the growth rates in the US and the euro area, the equilibrium unemployment rate is reduced from 4.5% to 4.25%, and inflation by 2020 will be 2.2%, which is higher than the target 2%, which means an increase in the rate is required.

    At the same time, as can be seen from the report, the growth of inflation occurred due to other goods, that is, most likely due to imports. The strengthening of the pound eliminates this factor in the coming months.

    [​IMG]

    However, on Friday, the pound's declined resumed after the EU negotiator Michel Barnier stated that the Brexit agreement might not be reached. It is obvious that Brexit still remains the main factor of influence on the pound rate.

    On Tuesday, data for January on retail sales and consumer inflation will be published. The forecasts are neutral and meet the expectations of the Bank of England. Determining the dynamics of the pound will continue to be based statements on Brexit, as well as the development of the situation with sales in the stock and debt markets. At the level of 1.3700/30 is the key support level, the pound has a chance to stay higher, the breakdown will worsen the technical picture and will contribute to a rapid decline on the background of flight from risk.

    Oil
    The weakening of oil looks like a rout, which is expected, based on the development of the situation in the markets. Oil reacts to the threat of slowing the growth of global GDP and the development of a full-scale crisis, and this is the main driver of decline.

    Another factor contributing to the decline is the production growth in the US. In addition, Baker Hughes reported a sharp increase in the number of drilling last week by 29 pcs, which indicates an increase in investment in the industry.

    Support for Brent resisted until 60.98, the channel is still up, so growth attempts after the formation of the bottom are not ruled out.

    Analysis are provided byInstaForex.
     
  20. InstaForex Gertrude

    InstaForex Gertrude Well-Known Member Trader

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    Elliott wave analysis of EUR/NZD for February 13, 2018

    [​IMG]

    Wave summary:
    The rally from 1.6854 is not yet convincing, but if support at 1.6897 is able to protect the downside for a new rally above minor resistance at 1.7023 the correction in wave ii should be complete and wave iii developing for a rally to and above resistance at 1.7479 on the way higher to 1.7777.

    A break below 1.6897 will risk a new decline to 1.6853 and maybe even closer to 1.6830 before wave ii is complete.
    R3: 1.7045
    R2: 1.7023
    R1: 1.6966
    Pivot: 1.6897
    S1: 1.6878
    S2: 1.6853
    S3: 1.6830

    Trading recommendation:
    We are long EUR from 1.6977 with our stop placed at 1.6845.

    Analysis are provided byInstaForex.
     

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