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  • Elliott wave analysis of EUR/NZD for August 22, 2018

    EUR/NZD once again failed to break above important short-term resistance at 1.7355 and instead turned around to make a small new low at 1.7211. This is a disappointment and keeps red wave ii alive, but it does not change our larger bullish count calling for more upside pressure above 1.7484 longer-term. To confirm that red wave ii has completed, we still need a break above resistance at 1.7355 and as long as this short-term important resistance remains able to cap the upside, red wave ii could dip closer to 1.7196, but the potential downside should be limited to here for a break above minor resistance at 1.7327 and more importantly a break above 1.7355 confirming red wave iii is developing for a rally above 1.7484.

    R3: 1.7355
    R2: 1.7327
    R1: 1.7275
    Pivot: 1.7255
    S1: 1.7221
    S2: 1.7196
    S3: 1.7162

    Trading recommendation:
    Ous stop was hit for a small loss of 20 pips. We will re-buy EUR at 1.7205 or upon a break above 1.7327 and place our stop at 1.7200.

    Analysis are provided by InstaForex

    Comment


    • Elliott wave analysis of EUR/JPY for August 23, 2018

      EUR/JPY still has not broken important short-term resistance at 128.48, but then it has not started to move strongly lower as we normally should expect at the completion of an expanded flat.

      Therefore we are shifting our preferred count in favor of wave C and II having completed with the test of 124.86 and wave III now in its infancy. Under this count EUR/JPY should make a small downward correction towards 127.23 - 127.33 area in red wave iv and then move higher towards the 128.92 - 129.32 area in red wave v.

      This will complete black wave i/ and should set the stage for a corrective decline in wave ii/ towards the 125.76 - 126.44 area before the next impulsive rally higher. That said, the possibility of a final dip closer to 124.62 remains possible, but time is running out fast.

      R3: 128.92
      R2: 128.48
      R1: 128.24
      Pivot: 127.93
      S1: 127.72
      S2: 127.50
      S3: 127.33

      Trading recommendation:
      We are 50% long EUR from 126.26 with our stop placed at 126.84. We will take profit on the final 50% at 128.75. *The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

      Analysis are provided by InstaForex

      Comment


      • Elliott wave analysis of EUR/NZD for August 24, 2018

        EUR/NZD has finally broken above short-term important resistance at 1.7355. This former resistance should now act as support if a re-test is needed.

        The break above resistance at 1.7355 should have paved the way for a continuation higher towards 1.7484 on the way towards 1.7924 and 1.8369 as the next important upside targets. EUR/NZD is now in a position where it could start accelerate quiet powerfully higher, but we think a clear break above 1.7484 will be needed to see the expected upside acceleration.

        R3: 1.7668
        R2: 1.7578
        R1: 1.7484
        Pivot: 1.7366
        S1: 1.7355
        S2: 1.7325
        S3: 1.7281

        Trading recommendation:
        We bought EUR at 1.7330 and we have placed our stop at 1.7275.

        Analysis are provided by InstaForex

        Comment


        • The dollar declined, but it did not last long

          The speech of Fed Chair J. Powell at the economic symposium in Jackson Hole, Wyoming, confirmed that the selected course was during the period of J. Yellen to gradually increase interest rates.

          The head of the Central Bank was optimistic about the prospects for further growth of the country's economy, pointing out that "he does not see signals of accelerating inflation much higher than the 2.0% target, as well as the risks of overheating of the US economy." Investors took his words optimistically, despite the fact the continuation of the cycle of raising interest rates in general. It seems that market participants believe that the process of a smooth increase in interest rates gives them the opportunity to "have time" to buy risky assets, making a profit until the moment when rates reach absolute neutral values, which can already be perceived as a signal for large-scale profit-taking.

          Investors completely switched to Powell's speech, ignoring the failure of the negotiations between the US and China on customs duties. On other hand, this can be explained by the fact that, very few people in general hoped that they would be positive, and on the other is their influence is already taken into account in market sentiments and quotations. Although Friday was positive, we consider it a temporary phenomenon. Markets will pay attention again to trade wars, and probably, this will push up the US dollar rate again. But at the same time we pay attention to the fact that, the overall lateral dynamics of the dollar paired with major currencies will most likely continue in the short term.

          The dollar will be bought for a number of reasons. The first and foremost process is the method of capital transfer to the States from emerging markets and from Europe, where the likelihood of a large-scale financial crisis that raged in Turkey has increased significantly, putting European banks at high risk and investing considerable capital in the country's economy. The next problem is Italy, which can get into the debt "bag" on the background of high public debt. The dollar will also receive support in the wake of the trade war between Washington and Beijing as a currency refuge. And, of course, the Fed's position to smoothly continue, as the process of raising interest rates will be a good incentive for its purchases.

          Forecast of the day:

          After reaching the local maximum on Friday on the wave of J. Powell's speech, the EUR/USD pair may turn down again if it hover below the 1.1620 level. Against this background, it can adjust to 1.1535 after overcoming the 1.1600 mark.

          The AUD/USD pair is trading above the 0.7315 mark. It may continue to adjust down to 0.7255 after overcoming this level. The reason is still the continuing tension between the US and China on customs duties.

          * The presented market analysis is informative and does not constitute a guide to the transaction.

          Analysis are provided by InstaForex

          Comment


          • Confidence in the short-term growth of the euro is gradually declining

            The euro continues to rise against the U.S. dollar, which was formed in the middle of this month. It looks like investors are planning to end the month on a positive note, getting close to the large monthly resistance levels.

            Data on lending in the eurozone and confidence in France supported the euro in the first half of the day, but a number of international economic agencies predict a slowdown in the euro in the short term.

            For many technical indicators, risky assets are in the overbought zone, and a good downward correction has not been observed for a long time. Also, the EUR/USD pair got close to fairly large levels of resistance, from which a strong bearish trend was formed in the middle of summer of this year. This is another signal to the fact that there is no need to hurry with the purchase from the current levels.

            As I noted above, bank lending in the euro area continued to grow in July this year.

            According to the report of the European Central Bank, lending to non-financial companies increased by 4.1% compared to the same period last year. Good indicators were also noted in household lending, which in July 2018 increased by 3.0%, as in the previous month.

            As for the M3 money supply indicator, it turned out to be slightly worse than forecasts. According to the data, the annual growth of M3 monetary aggregate slowed to 4.0% from 4.5% in June. Economists had expected the indicator to grow by 4.3 percent.

            Good data on consumer morale in France maintained confidence in further economic growth. According to the report of the statistics agency, the consumer confidence index in France in August this year remained at 97 points against 97 in July. Economists had also forecast the index to be 97 points.

            An important report on consumer confidence in the US will be published on Tuesday in the afternoon, which can significantly affect the US dollar. It is expected that the indicator of consumer confidence in the US will decrease to 126.6 points in August against 127.4 points in July this year.

            As for the technical picture of the EUR/USD pair, the prospects for the movement of the euro remained unchanged. The failure of breaking the resistance of 1.1700 for today could lead to the decline of the European currency against the background of profit taking and return to the area of the lows of 1.1625 and 1.1590.

            News are provided by InstaForex

            Comment


            • Gold threw "bears" overboard

              The fastest intraday gold gain over the past five months, against the backdrop of Jerome Powell's speech in Jackson Hole, forced the market to rack his brains over the question: from what level will the speculators start fixing profit in short positions en masse? Their net shorts by the end of the week by August 21 increased to 90 thousand contracts. Commerzbank notes that over the past few weeks, long positions have remained virtually unchanged, while short positions grew. The speech of the FRS chairman squeezed a part of the "bears" from the market.

              From what levels will the others run? From January's highs, gold lost about 11% of its value and speculators continued to actively sell in April-August against the backdrop of the strengthening of the US dollar. The latter took away from the precious metal the function of the asset-refuge and grew rapidly during the escalation period of trade conflicts between the US and other countries. At the same time, the divergence in economic growth and the monetary policy of central banks played into the hands of the "bulls" at the USD index. The Fed raised the federal funds rate, and the US GDP grew by 4.1% in the second quarter. Gold fans found it difficult to counter something to their opponents, which led to the growth of net shorts to record highs.

              Dynamics of speculative positions on gold

              It did not receive support from the precious metal from the side of physical demand. Along with the drop in ETF stocks to the lowest level since 2016 and the reduction of Chinese net imports from Hong Kong to 44 tonnes in July, which is the worst monthly indicator since the beginning of the year, bad news came from India. Heavy rains and floods inflicted $ 3 billion damage to local farmers, which is this class of buyers that is most active in the Diwali wedding season.

              Since mid-August, the situation began to change. Donald Trump confused the dollar bulls with comments about his dissatisfaction with the activities of Jerome Powell as chairman of the Fed, to which the latter responded with "dovish" rhetoric in Jackson Hole. The head of the Central Bank is confident that inflation will not go far above the 2% target, and therefore it is not necessary to raise the federal funds rate aggressively. After his speech, the dollar fell out of favor, marking the worst weekly dynamics since February. On the contrary, the bulls on XAU/USD came to their senses after the knockdown.

              I do not think that the dollar's positions are hopeless. The extent of the trade conflict between the US and China did not declined entirely. The chances of the four monetary restrictions in the FRS this year are still high (74%), the leading indicator from the Federal Reserve Bank of Atlanta signals a 4.6% increase in US GDP for the third quarter. The market turned out to be too emotional for the performances of the White House and the chairman of the Federal Reserve, but gradually calmed down. According to RBC Wealth Management, only a break of $ 1225 ounce will launch an avalanche of mass closure towards speculative short positions.

              Technically, the necessary condition for continuing the rally is the ability of the bulls to gain a foothold above the 1209 mark.
              Gold daily chart

              * The presented market analysis is informative and does not constitute a guide to the transaction.

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


              Analysis are provided by InstaForex

              Comment


              • GBP/USD. Trading system "Regression channels". The growth of the pound sterling may be temporary

                4-hour timeframe

                Technical data:
                Higher channel of linear regression: direction - down.
                The lower channel of linear regression: direction - down.
                The moving average (20; flattened) is up.
                CCI: 159.4805

                Yesterday, the GBP/USD currency pair showed impressive growth, after Michel Barnier, the main negotiator for Brexit from the EU, announced the forthcoming special offer for London. But according to the European Union, he did not mentioned the proposal's essence and how it will be resolved all disagreements with Britain. However, the markets reacted with strong purchases of the British pound. We believe that this market reaction is short-term and impulsive. So far, even the essence of the proposal is unclear. It is likely that Theresa May will not agree with this proposal, but almost nobody doubts that the negotiations will drag on beyond October. Thus, the pound sterling will remain under market pressure, and even Trump's desire to weaken the dollar may not prevent further strengthening of the pound/dollar, while with other currencies paired with the dollar may decline. The data on personal income adjustments and expenditure of the population in the United States will be publish today. Possibly, this data can affect the traders' mood but the most important agenda for today is about global topics, so these reports are unlikely have a significant effect to the trading course. From a technical point of view, a correction is brewing, as there was a very strong growth yesterday, and the last bar is painted in blue today.

                Nearest support levels:
                S1 = 1.2939
                S2 = 1.2817
                S3 - 1.2695
                Nearest resistance levels:
                R1 = 1.3062
                R2 = 1.3184
                R3 = 1.3306

                Trading recommendations:
                The GBP/USD pair may start to adjust. Correction can be worked out (if a second blue bar is formed in a row), since the descending sentiment of the pair remains. The target for short positions is the moving average line in small lots.
                Buy-positions are recommended to resume in case of a reversal of the Heiken Ashi indicator above or overcoming the 1.3062 level. The next target for the bulls will be the Murray level of 1.3184.
                In addition to the technical picture, one should also take into account the fundamental data and the time of their release.
                Explanations for illustrations:
                The upper channel of linear regression is the blue lines of unidirectional motion.
                The junior channel is linear-violet lines of unidirectional motion.
                CCI - the blue line in the regression window of the indicator.
                Moving average (20; smoothed) - the blue line on the price chart.
                Murray Levels - multi-colored horizontal stripes.
                Heiken Ashi is an indicator that color bars in blue or purple.
                * The presented market analysis is informative and does not constitute a guide to the transaction.

                Analysis are provided by InstaForex

                Comment


                • Elliott wave analysis of EUR/JPY for September 3, 2018

                  EUR/JPY has declined nicely and is now hovering just below our 128.78 - 129.00 target zone. We are looking for a recovery towards 129.85 next and from there it will be decided, whether more corrective downside pressure is needed or not.

                  In the short-term, a break above resistance at 129.14 will confirm the expected rally towards 129.85 and maybe even a continuation towards 130.87 and beyond.

                  If support at 128.54 gives away first, then a minor dip to support at 128.30 should be expected before a recovery is seen, but the potential downside should be limited for now.

                  R3: 129.85
                  R2: 129.32
                  R1: 129.14
                  Pivot: 128.83
                  S1: 128.54
                  S2: 128.30
                  S3: 127.94

                  Trading recommendation:
                  We took profit on our short position at 129.10 for a nice little profit of 58 pips and at the same time bought EUR. We have placed our stop at 128.10.

                  Analysis are provided by InstaForex

                  Comment


                  • Pound: we only dream of peace

                    Political risks throw the British pound into the heat, then in the cold. The statement of the chief negotiator from the EU Michel Barnier that Brussels is ready to offer London an unprecedented deal, allowed quotes of the GBP/USD to soar above the psychologically important mark of 1.3. Alas, a few hours later Barnier declared a categorical disagreement with Theresa May's plan. At the same time, former Brexit Secretary David Davis said that he would vote against the Prime Minister's program, which involves significantly worse conditions than there were.

                    Theresa May will have a daunting task - first to find a compromise within the country, and then to reach an agreement with the EU. The situation is aggravated by the Congress of the Conservative party in September. And if in June the prime minister managed to maintain her leadership, now she will have to undergo a new test. As a result of the aggravation of political risks, the volatility of the sterling may come out of the trading range and go up, which will negatively affect the positions of the bulls on the GBP/USD. Britain has the highest ratio of the negative current account to GDP in the G20 countries, its financing requires an inflow of investments, and it is difficult to lure non-residents to the local market in conditions of increased volatility of the pound.

                    The dynamics of the volatility of the pound

                    The pressure on sterling is exerted by disappointing macroeconomic statistics. The index of purchasing managers in the manufacturing sector in August was marked by the worst dynamics in the last two years. Export orders fell below the critical level of 50 for the first time since April 2016. As Bloomberg research shows, British companies preferred to save money instead of taking advantage of the devaluation and increase investment. Now, in the face of fears about the slowdown of the world economy, the decline in external demand creates serious problems for them.

                    It should be recognized that the fall of the GBP/USD contributed to the gradual recovery of the US dollar. Difficulties in negotiations between the United States and Canada lead investors to the idea that the settlement of the dispute between Washington and Beijing may take even longer, and the truce between the US and the EU will end very soon. As a result, the risks of escalation of trade conflicts have increased, which provides support to the US dollar.

                    The pound will have a rather difficult week, because after the release of data on business activity in the manufacturing sector, the indices of purchasing managers in the construction sector and in the service sector will be published. The last indicator is very important, as the non-production sector accounts for around 80% of British GDP. Add to this the continuing political risks, and it will become clear that the purchase of sterling should be treated very carefully. The aggravation of tensions between the EU and the UK and Theresa May's problems with retaining leadership in the Conservative party and with the vote in Parliament will become a catalyst for GBP/USD sales.

                    Technically, a breakthrough of support at 1,2835 and 1,2775 will increase the risks of implementing the target by 88.6% and 113% for the "Shark" pattern.

                    GBP/USD daily chart

                    News are provided by InstaForex

                    Comment


                    • Gold wings have been clipped

                      August turned out to be the fifth consecutive month of gold closing in the red zone. The precious metal lost more than 2% amid the acceleration of the US economy, increasing the chances of four acts of monetary tightening of the Federal Reserve in 2018 and tensions over trade wars. And only moderately - "dovish" rhetoric of Jerome Powell in Jackson hole allowed the "bulls" to lick some of its wounds and try to break above $1210 per ounce. Alas, the joy of buyers was short-lived. In early September, the dollar began to recover in the face of problems in the negotiations between the United States and Canada and Donald Trump's intentions to expand the size of import duties against China by $200 billion.

                      The dynamics of gold

                      According to Citigroup Global Markets, investors do not need the gold in a world where stocks and bond yields are rising. The precious metal does not bring dividends and interest as equity and debt securities, and its status as a safe-haven asset has been taken away by the US dollar. As a result, speculators are increasing net short positions on the precious metal for the fifth week in a row and brought them to record highs. The stocks of the largest specialized fund SPDR Gold Shares fell to its lowest levels since November. From the levels of April highs, the index has lost 14%.

                      However, everything in this world is relative. Silver feels much worse than gold, the loss of which is about 16% since the beginning of the year. Due to the high proportion of industrial use in aggregate demand, this metal is more vulnerable to a slowdown in the global economy than the sector leader. As a result, their ratio has soared to the highest levels since the global financial crisis.

                      Dynamics of the ratio of gold and silver

                      Further dynamics of the XAU/USD will entirely depend on the US dollar, whose position looks strong. First, the Atlanta Federal Reserve predicts that US GDP in the third quarter will accelerate to 4.6%. Secondly, the futures market estimates the probability of four Federal funds rate increases in 2018 at 75%. A month ago, the figure was only slightly higher than 60%. Third, Trump is about to expand the size of import tariffs against China, which will increase the risks of a slowdown in the Chinese economy and put pressure on the markets of developing countries.

                      What can save gold from the sixth consecutive month of closing in the red zone? Correction in the US stock market, verbal intervention of Donald Trump, the deterioration of macroeconomic statistics in the United States and, finally, a breakthrough in the relationship between Washington and Beijing. So far, three of the four above events seem unlikely, and the rhetoric of the US president tends to put pressure on the dollar only in the short term. In this regard, sales of the XAU/USD on growth remain valid.

                      Technically, the inability of the bulls to hold gold prices above $1209 per ounce indicates their weakness. The initiative moved to the "bears", which broke through the lower border of the short-term upward trading channel and intend to restore the downward trend.

                      Gold, daily chart

                      Analysis are provided by InstaForex

                      Comment


                      • EUR/JPY Testing Support, Prepare For A Bounce

                        EUR/JPY is approaching its support at 127.94 (61.8% Fibonacci extension, 50% Fibonacci retracement, horizontal pullback support) where the price is expected to bounce up to its resistance at 129.69 (61.8% Fibonacci retracement, horizontal swing high resistance).

                        Stochastic (55, 5, 3) is approaching its support at 2% where a corresponding bounce is expected.

                        EUR/JPY is testing its support where we expect to see a bounce.

                        Buy above 127.94. Stop loss at 127.01. Take profit at 129.69.

                        Analysis are provided by InstaForex

                        Comment


                        • Elliott wave analysis of EUR/NZD for September 11, 2018

                          EUR/NZD keeps making headway towards the sub-target at 1.7820. Ideally, this resistance will only make a temporary top for the next swing higher towards the more important resistance at 1.8369.

                          Support is now seen at 1.7668 and if a break below here is seen, then a corrective decline closer to support at 1.7605 could be seen, but it should be short-lived as the steady uptrend continues higher towards 1.8369. R3: 1.8016

                          R2: 1.7919
                          R1: 1.7820
                          Pivot: 1.7738
                          S1: 1.7701
                          S2: 1.7668
                          S3: 1.7605

                          Trading recommendation:
                          We are long EUR from 1.7330 and we will move our stop higher to 1.7660.

                          Analysis are provided by InstaForex

                          Comment


                          • Elliott wave analysis of EUR/NZD for September 12, 2018

                            The 1.7820 targets have now been tested. The question is whether this was the top of red wave iii and a correction in red wave iv is needed now? We have seen a quite massive negative divergence being build in the run higher to 1.7820, so it should come as no surprise if a minor correction in red wave iv is about to begin. A break below 1.7738 will indicate this is the case.

                            That said, the rally to 1.7820 only represents the minimum extension target of red wave i. Therefore, we have to be equally ready for this extension to continue towards the next extension targets at 1.7954 (the 200% extension of red wave i) or even higher to the 261.8% extension target of red wave i at 1.8184.
                            R3: 1.7954
                            R2: 1.7900
                            R1: 1.7825 Pivot: 1.7738
                            S1: 1.7678
                            S2: 1.7629
                            S3: 1.7590

                            Trading recommendation:
                            We are long EUR from 1.7330 and we will move our stop higher to 1.7730.

                            Analysis are provided by InstaForex

                            Comment


                            • Intraday technical levels and trading recommendations for GBP/USD for September 13, 2018

                              The recent bearish movement of the GBP/USD has shown signs of weakness since September 5 when an ascending bottom was established around 1.2800

                              The GBP/USD pair is currently testing the depicted downtrend line which comes to meet the pair around 1.3025-1.3090.

                              This price zone (1.3025-1.3090) corresponds to 50% and 61.8% Fibonacci levels where evident bearish rejection should be anticipated.

                              As long as sings of bearish rejection are demonstrated below 1.3020 (50% Fibo level), the short-term outlook remains bearish towards 1.2840 and 1.2780.

                              On the other hand, successful bullish breakout above 1.3090 will probably hinder the current bearish movement allowing further bullish advancement to occur towards 1.3200, 1.3250 and 1.3315.

                              Analysis are provided by InstaForex

                              Comment


                              • US again "courting" China

                                The unexpected offer of Americans to resume negotiations with China on trade duties on Wednesday evening led to a surge of optimism in the markets and a local weakening of the US dollar.

                                It seems that the US will not abandon the desire to "dent" China in the issue of the ratio of trade between countries. So far, they have not been able to do this, because the main problem of "exceptional", in our opinion, is their arrogance towards trading partners and the desire to use any methods to achieve their narrow-minded economic and political goals without taking them into account.

                                Earlier we have already mentioned that the trade balance not only, according to the latest data, has not shifted in favor of the Americans, but also fell, and the PRC's appeal to the WTO to punish the United States for their illegal actions could force the latter to resort to a new round of negotiations. Also, they may have realized that D. Trump's latest threats to expand the impact of new import tariffs by another 267 billion dollars did not have an effective impact on the leadership of "China", which was the reason for the desire to continue the negotiation process.

                                On this wave, the US and European stock indexes were supported by the results of trading on Wednesday, but already on Thursday the Chinese did not show such unambiguous optimism, which indicates that local investors are not confident in the success and perceive the proposals of the Americans as another trick and nothing more. We also believe that there will be no success in this process unless the United States engages in constructive and truly equitable negotiations.

                                Given this state of affairs, we believe that the weakening of the dollar against commodities and commodity currencies will be local, which means that after the weakening of the US currency and another disappointment in the negotiations, we can observe a turn in the interest of market players towards purchases.

                                On Thursday, from the important events of the day we will highlight the outcome of the ECB meeting on monetary policy. We do not expect any breakthrough statements and changes in the bank's policy. It is likely that it will continue with its plan and then smoothly reduce the program of quantitative easing until the end of this year, which is positive for the euro. But it is unlikely to expect its strong growth when paired with the US dollar, as the process of raising rates in the US will compensate for the pressure of the euro, so we believe that the overall sideways trend of the euro/dollar pair in the short term will continue.

                                The forecast for today:

                                The EUR/USD pair is trading in the range of 1.1530-1.1650 in anticipation of the ECB meeting. Probably, the pair will remain in this range, turning down and rushing to its lower border.

                                The AUD/USD pair is trading above 0.7170. We do not expect a strong growth of the pair, as the RBA is unlikely to decide before the end of this year to raise rates on the wave of instability in the world. A price decrease below 0.7170 may be the reason for the price to fall to 0.7100.

                                Analysis are provided by InstaForex

                                Comment

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