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  • Control zones GBP/USD 10/07/19

    The pair is trading between two significant zones. The resistance was Weekly Control Zone 1/2 1.2388-1.2372, and the weekly CZ 1.2246-1.2213 became the support. To continue medium-term growth, closing of trading above the level of 1.2388 on Monday will be required. This will pave the way for the September maximum. This model has a 50% chance of working out.

    The continuation of the medium-term growth may become the main model for the coming week, as many pairs associated with the dollar formed a reversal pattern in the direction of strengthening.

    An alternative model will be developed if the Weekly Control Zone 1/2 test leads to an increase in supply and a halt to growth. This will indicate the formation of a local accumulation zone, where the main goals will be the extremes of last week.


    Daily CZ - daily control zone. The zone formed by important data from the futures market that changes several times a year.
    Weekly CZ - weekly control zone. The zone formed by the important marks of the futures market, which change several times a year.
    Monthly CZ - monthly control zone. The zonethat reflects the average volatility over the past year.


    News are provided by InstaForex

    Comment


    • Fractal analysis of Bitcoin on October 8

      Forecast for October 8:
      Analytical review of cryptocurrency on a scale of H1:

      For the Bitcoin instrument, the key levels on the H1 scale are: 9026.00, 8811.75, 8666.36, 8379.42, 8287.60, 8039.21, 7893.53 and 7698.41. Attention! This instrument is characterized by medium-term trend trading. Here, as expected, the price formed a local structure for the top of October 7. In addition, this instrument has a good correlation with the euro / yen.

      The range for entering the market for the purchase is 7948.00 - 8380.00. We expect the development of the upward cycle after the price passes the noise range 8287.60 - 8379.42. In this case, the first goal is 8666.36. Meanwhile, price consolidation is in the range of 8666.36 - 8811.75, as well as a possible rollback to correction. The potential value for the top, where it makes sense to close the position - 9026.00. The range 8039.21 - 7893.53 is a key support for the ascending structure. Its passage at the price will lead to the cancellation of this structure. In this case, the first goal is 7698.41. However, to trade in a downward direction, it makes sense when the local initial conditions for a downward cycle are formed.

      The main trend is the initial conditions for the top of October 7.

      Trading recommendations:
      Buy: 7948.00 - 8380.00 Stop Loss: 7891.00 Take profit: 8666.36
      To continue :
      Stop Loss: 8287.60 Take profit: 9026.00

      Analysis are provided by InstaForex

      Comment


      • Forecast for AUD/USD on October 9, 2019

        AUD/USD
        the opening of the week, the Australian dollar has developed on the scale of a four-hour chart. All days, until this morning, the price was reflected from the support of the MACD line of a four-hour scale. The signal line of the Marlin oscillator penetrates into the growth zone.

        Now the aussie is ready to close the gap formed at the beginning of the week. The purpose of growth is the line of the price channel of the daily scale near the MACD line at around 0.6790. We the fall to resume from the target level.

        Analysis are provided by InstaForex


        Comment


        • Gold breaks into battle

          Gold quickly returned above the psychologically important level of $1,500 per ounce due to weak statistics on US business activity. The United States feel the pain of trade wars and may well pull the rest of the world into the abyss, as has happened in the past more than once. At the same time, neither the US labor market report nor Jerome Powell's statement about the launch of the asset-purchase program made an impression on the precious metal. Obviously, investors are waiting for something. It is easy to guess that this is news from the negotiating table of Washington and Beijing.

          Despite the fact that the Federal Reserve chairman made it clear that the upcoming program for the purchase of short-term securities is not QE, its start can be considered a positive factor for the bulls on XAU/USD. Increasing the activity of a large buyer is a good argument in favor of rising prices and falling profitability. Non-interest-bearing gold is not able to compete with bonds if rates on them rise. If they, on the contrary, decline, the precious metal begins to enjoy increased popularity. This is confirmed by the high demand for products of ETF funds. Their stocks have been increasing for 17 consecutive days, which is the longest winning streak since 2009. The total size of the indicator is only 35 tons below the record high that took place in 2012.

          Gold ETF Stock Dynamics

          The strong growth in stocks of specialized exchange-traded funds and the stability of gold against a strong dollar allow Citigroup to adhere to its bullish forecast for XAU/USD. The company believes that the precious metal will grow to $1,700 per ounce within 6-12 months. But on the side of its fans plays and increased activity of central banks! Thus, the People's Bank of China has been building up gold reserves for the 10th consecutive month. During this period, it acquired 99.8 tons. As a result, stocks rose to 62.64 million ounces. According to the World Gold Council, 14 regulators from various countries continue to diversify their reserves in favor of precious metals in order to reduce their dependence on the US dollar. In 2018, central banks from around the world bought $27 billion worth of gold, a record high.

          The dynamics of gold reserves in China

          While central banks and ETF fans are buying gold, speculators prefer to exit. In the week of October 1, their net longs fell to their lowest level since late July. It's not necessary to be frightened by it. Financial managers quite logically take profits on the eve of an important event - trade negotiations between the US and China. Most likely, their impact on financial markets will be much greater than the publication of the minutes of the September meetings of the Fed and the ECB.

          Technically, the "Splash and Shelf" pattern takes place on the daily gold chart. Breakthrough of the lower boundary of the consolidation range of $1490-1520 will launch another correctional wave in the direction of $1440-1445 per ounce. In contrast, a successful assault on the resistance at $1520 will strengthen the risks of restoring the "bullish" trend and continuing the rally in the direction of the target at 161.8% on the AB=CD pattern.

          Analysis are provided by InstaForex


          Comment


          • GBP/USD. Turns of the British currency: Johnson repeats the path of Theresa May

            Passion for Brexit reaches its zenith. In the afternoon, the pound paired with the dollar soared to the borders of the 30th figure (that is, to 5-month highs), responding to a statement by European Commission President Juncker that the deal between London and Brussels is "ready." But literally an hour later, the pair collapsed 200 points down after the first comments by representatives of the British Parliament. The opposition did not skimp on epithets: in particular, Jeremy Corbyn called the draft deal "corrupt", adding that Johnson's dealings were "even worse than Theresa May". However, despite such harsh comments, the market still expects the British prime minister to submit the draft deal to the House of Commons on Saturday.

            For the sixth consecutive day, the pound is subject to strong volatility, showing unprecedented price fluctuations, both in the direction of growth and a downward course. The last time such powerful price spurts were observed in October 2018, when the parties were one step away from signing the deal. The pair jumped from the 34th to the 42nd figure in a few weeks. But then the events did not unfold so rapidly, although in general, the situations are of a similar nature.

            At that time, Michel Barnier, the chief negotiator from the European Union, was the main newsmaker. Exactly a year ago, he said that the deal could already be concluded during the EU summit, which, like this year, was held on October 17-18. Brussels and London then were able to find a common denominator in many key issues, moreover, within the framework of Theresa May's Chequers plan, which the future Prime Minister Boris Johnson so eagerly criticized. May proposed to solve the Irish question in a different way: she agreed to establish checkpoints on the border and introduce "certain administrative procedures". EU representatives refused to consider other options, and interpreted the proposed conditions as a compromise. As you know, the deputies of the House of Commons categorically rejected the proposed conditions, failing the vote three times.

            The Irish question is still a central issue today. On the one hand, Johnson made more significant concessions from the European Union: the customs border will pass through the Irish Sea, and the same customs rules will apply in Northern Ireland as in the rest of the UK. But on the other hand, such concessions did not satisfy the Northern Irish Unionists. After a two-day political bidding, the DUP issued an official statement declining the deal. In their opinion, the proposed agreement "does not meet the long-term interests of Northern Ireland", and in the short term, residents of this region may face a significant increase in prices.

            As mentioned above, Labour also criticized Johnson's deal. And not just because of the Irish border. According to Jeremy Corbyn, the economic part of the agreement threatens the food security of Great Britain, and can also lead to "violation of the rights of workers and environmental standards." Also, according to the Labour leader, the deal will be a blow to the British health care system. Representatives of the Scottish National Party (which has 35 members of the British Parliament) have joined Johnson's critics, adding that they will not vote for the deal.

            Thus, at the moment it is not clear how the prime minister plans to "push through" the deal through the millstones of Parliament. Without the support of the Youth Democratic Party, the Labour Party and the Scottish nationalists, he will have to rely on the consolidation of Conservative deputies (20 of whom he expelled from the party for indiscipline) and representatives of other political forces.

            At the same time, according to information from the British press, Johnson in Parliament may express his readiness to violate the law, obliging him to ask Brussels to postpone Brexit. This information may be the usual "bluff" on the part of the current prime minister, but, given the odiousness of his personality, such a scenario cannot be ruled out.

            In general, according to most experts, if Johnson fails to agree on a deal in Parliament, he will initiate early parliamentary elections to bring the draft deal back to the new House of Commons.

            Thus, Johnson will have a difficult battle in the walls of Parliament. Judging by the dynamics of the pound, traders do not lose hope of agreeing on a deal this Saturday: otherwise, the GBP/USD pair will return first to the middle of the 24th figure, and then (less impulsive) to the levels of annual lows, that is, to the bottom of the 20th figure. If a "miracle" happens and the prime minister finds votes in Parliament, the pound paired with the dollar will fly up to 1.35-1.37, up to the 40th figure, after the deal between London and Brussels is officially agreed. And although these price values look abnormally high, it is worth recalling that on the eve of the 2016 referendum, the GBP/USD pair was trading in the area of 1.43-1.46, and after the announcement of the results, the plebiscite plunged to 1.25-1.27 in a few weeks, followed by a decline to the bottom of 20- x figures. "The return trip to an upward direction" may not be so impulsive, but at the same time, the resolution of many years of intrigue will allow the pair to grow by at least 500-600 points. As the saying goes, The Show Must Go On ...

            Analysis are provided by InstaForex

            Comment


            • Forecast for EUR/USD on October 21, 2019

              The euro exceeded the closest target level of 1.1155 at the Fibonacci level of 110.0% on Friday, probably on the optimism of investors on a new EU deal with the British prime minister about more favorable conditions for themselves than they were before (Theresa May's options). Today, the British Parliament begins to finalize the deal.



              On the daily chart, the price has consolidated above the line of the descending price channel, the Marlin oscillator shows a reversal only to insignificant depth, therefore the next target of 1.1215 as the Fibonacci level of 100.0% becomes relevant.



              On the four-hour chart, Marlin is expanding deeper, but it has not yet formed a divergence as a reversal formation, which also speaks in favor of the rising scenario. A trend reversal, of course, does not have to be accompanied by divergences, but then the fall of the signal line should be sharp, with the formation of a spike. So, we are waiting for the euro to grow by around 70 points, after which reversal elements may be added to the technical picture.

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


              Comment


              • Pound rushes to the clouds

                Despite the almost bare economic calendar, all the attention of investors on forex is focused on the British pound. According to Mark Carney, Great Britain marked the beginning of global uncertainty in 2016, which slowed business activity and GDP in most countries of the world. It can put an end to this by voting for a draft dissolution agreement with the EU. Boris Johnson also called for support of the document, arguing that any delay would harm the interests of the United Kingdom, its EU partners and relations between them. However, the British Parliament may have a different opinion.

                The sterling has not responded to macro statistics for a long time and is calling for political news. In this regard, an increase in unemployment from 3.8% to 3.9% and disappointing inflation statistics (fact +1.7%, forecast + 1.8% YOY) remained almost unnoticed by investors. All their attention has shifted to Brexit. The prime minister of Great Britain managed to find a common language with the EU. Now he needs 320 votes in Parliament to enter, and not get into the story. In fact, the head of the Cabinet of Ministers needs to lure 61 opponents to his side, which does not seem unrealistic.

                According to Goldman Sachs, the chance of a disorderly Brexit dropped to 5%. This circumstance makes the correction potential of GBP/USD limited. MUFG expects the pound to find haven in the range of $1.3-1.35 if lawmakers approve the deal. UBS Global Wealth Management also talks about the $1.35 level. TD-Bank believes that the pair is able to rewrite the May high near 1.3185, however, the contract rejected by the Parliament will trigger a wave of correction to 1.264-1.266. Robobank sees an even deeper low at around 1.22.

                Pound Forecasts

                The fact that the bulls continue to dominate the market was shown by the sterling reaction to the decision of MPs to vote for the proposal to postpone the approval of the deal. As a result, Boris Johnson, in order to obey the law, was forced to write a letter to the EU asking that they prolong the transition period. The prime minister did not sign this document and sent another to Donald Tusk, in which he expressed confidence that Britain would leave the EU on October 31. The opposition party believes that the head of the Cabinet of Ministers behaves childishly and threatens him with court in the event of a disorderly Brexit.

                In my opinion, everything goes to the point that the deal will be approved by the British Parliament on the falling flag. The bulls on GBP/USD believe this, pushing the pair to the psychologically important mark of 1.3. The fact that they managed to gain a foothold above 1.29 indicates the seriousness of the intentions of sterling buyers.

                Technically, after a clear combination of patterns "Shark" and 5-0, the upward trend of the analyzed pair is directed to the target of 261.8% on the AB = CD model. It is located near 1.309. A necessary condition for maintaining control over the pound by the bulls and continuing the rally is to consolidate GBP/USD quotes above the Pivot level of 1.29.

                Analysis are provided by InstaForex

                Comment


                • GBPUSD and Brexit: Brexit deal may be approved, but its opponents have one more trump card

                  The pound slightly fell in the morning after reports that the UK government may withdraw its Brexit bill. If the British Parliament votes against the deal today, official London may withdraw the bill he proposed. This will jeopardize the work of Parliament, which will lead to the next election, which may take place before Christmas. Such a situation

                  In the meantime, discussion of the bill itself has begun, and the debate may last until late at night, which will periodically exert pressure or support to the British pound. However, many lawmakers would prefer to have more time to study the conditions proposed by Johnson, which has been repeatedly stated. But here we are already talking about moving the Brexit date from October 31 to 2020, which clearly does not suit Boris Johnson.

                  Even if the prime minister succeeds this week in approving the deal in Parliament, and this happens only if the date of the deal on UK withdrawal from the EU is extended, in the future this scenario will allow amendments to the bill that could completely bury the deal.

                  Johnson now has a much better chance of making a deal than ever, since on the weekend he secured some support from the Laborites and opponents of Brexit in his Tory party. Just a few votes can allow Johnson to win. However, as I noted above, under the scenario, if Johnson's deal is not ratified, Britain will have general elections and even a referendum on the exit and the EU.

                  As for the technical picture of the GBPUSD pair, the pound only slightly fell against the US dollar, and this did not lead to significant changes. If the deal is approved, it is unlikely that the pound will break above resistance at 1.3040, which will lead to further growth of the trading instrument in the area of highs 1.3170 and 1.3260. If lawmakers are able to resist the government, then the pressure on the pound will increase, and the decline in GBPUSD under the support of 1.2840 will increase the pressure on the pair even more, which will lead to the demolition of a number of stop orders and a fall to larger lows of 1.2840 and 1.2670.

                  EURUSD

                  In the meantime, traders are closely following the news from the British Parliament, the euro is gradually falling against the US dollar.

                  This is due to expectations that the European Central Bank may resort to an even greater easing of monetary policy. The European Central Bank will hold its last meeting with Mario Draghi as the head this Thursday. It is expected that Draghi will "slam the door" and go for another reduction in deposit rates, or at least make direct allusions to such measures that can be implemented in December. In the case of this approach, it is not entirely correct to expect purchases of risky assets after a decision on Brexit.

                  From a technical point of view, further upward movement will occur only after the successful Brexit, otherwise the bears have already coped with the priority task and returned the pair to the support level of 1.1130, which gradually increases the pressure on buyers. Negative news will force them to close their long positions, pulling down the euro to the lows of 1.1090 and 1.1050.

                  Analysis are provided by InstaForex

                  Comment


                  • Japan Leading, Coincident Index Data Due On Thursday

                    Japan will on Thursday see final August numbers for its leading and coincident indexes, highlighting a modest day for Asia-Pacific economic activity. The previous reading suggested a score of 91.7 for the leading index and 99.3 for the coincident.

                    Japan also will see preliminary October figures for the manufacturing PMI from Nikkei and the services and composite indexes from Jibun.

                    In September, the manufacturing PMI had a score of 48.9, while the services index was at 51.5 and the composite came in at 52.8.

                    Hong Kong will release September data for imports, exports and trade balance. In August, imports were worth HKD380.78 billion and exports were at HKD352.73 billion for a trade deficit of HKD28.05 billion.

                    The central bank in Indonesia will wrap up its monetary policy meeting and then announce its decision on interest rates. The bank is widely expected to keep its benchmark lending rate unchanged at 5.25 percent.


                    News are provided by InstaForex

                    Comment


                    • USD / CAD: Sellers in business

                      Good evening, dear traders. Today, there is a small recommendation on USD / CAD, and the decline of which is now very likely.

                      The thing is that yesterday's news from Canada caused a great reaction from the market, and in the end, we see that all the news impulses from the buyer were completely absorbed, and this is a harbinger of even a local, but decline.

                      Therefore, today, I recommend trying to work on the decline of USD / CAD currency pair with a take profit at around 1.3070. Moreover, the maximum point of yesterday's loss will be considered to be the maximum of yesterday's news - the level of 1.3121. If the price updates the maximum, the scenario can be considered completely canceled.

                      I wish you success in trading and huge profits!

                      Analysis are provided by InstaForex

                      Comment


                      • Forecast of EURUSD ahead of ECB and Fed meetings

                        Key central banks will hold their meetings on Thursday, October 24, and Wednesday, 29 and 30, which will determine the dynamics of financial markets for at least the next one and a half to two months, and maybe in the longer term. Given these important events, from the point of view of trading in the foreign exchange market, we need to make assumptions cleared of information noise, and then look at how our assumptions worked out in reality. In other words, we need to create an algorithm of actions and make changes to it in accordance with newly emerging circumstances.

                        However, why did I need to mark up a roadmap before and not after the event has already happened? There are a number of reasons for this, and first of all, my deep conviction that in the current situation, meetings of central banks will only confirm decisions already made earlier. Surprises are possible only from the Fed, but this seems unlikely. Therefore, while there are still some doubts regarding the actions of the Open Market Committee, I personally have no doubts about the actions of the European Central Bank.

                        First of all, traders should know that, according to the regulations, the ECB never comments on or regulates the euro or, at least, declares it in words. However, one must be very naive to assume the detachment of the regulator in the fate of the exchange rate of the currency accountable to him. In words, the Fed and the ECB pursue an independent monetary policy, but the ability to create surplus value from the issue of money helps maintain the high standards of life for the "golden billion".

                        Therefore, it's impossible for me to imagine that the change in exchange rates has been let off by gravity of key central banks. Well, if Russia holds consultations with OPEC countries to limit oil production and thus regulates the price, then the countries that are members of the North Atlantic alliance have been doing this for a long time and quite successfully, but with regard to money. Having in its hands a tool that controls 90 percent of the world's money circulation, it is a sin not to use this tool.

                        So, what do we currently know about the policy of central banks? The European Central Bank maintains a refinancing rate of 0% and re-launched a large-scale asset purchase program worth €20 billion per month, and did so simultaneously with new long-term refinancing programs, which should not only increase the availability of liquidity in the European market, but also stimulate the development of the European economics. According to many experts, this should serve to weaken the euro, but did it?

                        Having been hit by a liquidity crisis in the repurchase market that erupted in September, the Fed, under the formal pretext of increasing reserves of commercial banks, was forced to adopt an urgent program for the purchase of short-term bills of the US government totaling $65 billion per month. This at least equalizes the chances of the dollar in the competition of printing presses, if it does not increase its advantage. However, the truth is that the quantitative easing policy does not affect the exchange rate, at least to the extent that we would like to. You can see the evidence on the chart (Fig. 1), which shows the dynamics of the trade-weighted US dollar index calculated by the Fed based on the results of trade with leading world currencies.

                        Figure 1: Relationship between US Fed assets and the trade-weighted dollar index. Source - Federal Reserve Bank of St. Louis

                        Indeed, there are periods on the chart when the dollar depreciated with an increase in the Fed balance, but there are periods when everything happened exactly the opposite. A similar picture can be obtained by comparing the euro and the change in the balance sheet of the European Central Bank. The connection between the exchange rate and the balance sheet of the central bank may exist, but it is certainly not so primitive that we could calculate it using simple methods.

                        When assessing the prospects for exchange rates, one should rather be guided by dynamic changes in the interest rate differential in the EURUSD rate, an assessment of the yield of treasury instruments with the same maturity, inflation potential, growth prospects for prices of major commodity assets, positioning of leading traders in the futures market, and seasonal factors. You and I can try to evaluate something, but most of the factors will remain unknown to us. At the same time, trading in exchange rates is doing so in probability, and the more facts we can evaluate, the higher the probability of success for the transactions we make. The main thing in these factors then is not to get confused.

                        If we talk about the dynamic prospects of rates, then the advantage here is on the side of the euro. The ECB is in no hurry to make a refinancing rate below zero, and Mario Draghi, as a downed pilot, is rather concerned about how he can eject a golden parachute. He did everything he could, which at least presupposes a period of some stability in the policy of the regulator.

                        In turn, since July of this year, the US Federal Reserve lowered the federal funds rate by half a percent, from 2.25 to 1.75, meaning the lower limit of the range established by the Open Markets Committee. Today, 94% of traders believe that the Fed will go for another rate cut in 6 days, dropping it to the level of 1.50-1.75 percent. A decrease in differential by 0.75% over three months is a serious decrease in the possibility of earning by arbitrage operations. Therefore, it is not surprising that from the beginning of August, that is, from the moment the Fed rate was lowered, institutional investors gradually refused to place investments in US dollars.

                        During this time, the long positions of institutional management funds (Asset Manager) lost about a tenth, while euro sales by this category of traders in the futures market, on the contrary, increased. At the same time, asset managers have been the main buyers of the euro in the futures market since 2016, which was due to their hedging a short position in the cash market that accompanies transactions in investments in higher-yield dollar instruments.

                        Actually, the question now is not whether there will be a reversal of the downward trend in euros, but when it will happen. Last week ended with serious technical signs of breaking the fundamental trend on the EURUSD course. However, the reversal is not yet over, and its formation may last another one or two months, which is fraught for us with problems associated with the formation of a new direction, and the meetings of central banks that we will see in the near future may accelerate or may slow down the formation of the reversal. However, the probability of a EURUSD rate reversal is becoming more and more every day, take this into account when opening your positions.

                        Analysis are provided by InstaForex

                        Comment


                        • GBP/USD. Early elections in Britain: intrigue persists - Liberal Democrats put forward a counter demand

                          The European Union granted Great Britain an extension of Brexit. Despite the "traditional" resistance of the French, Brussels agreed to prolong the negotiation process until January 31, 2020. However, the British do not have to wait for the final date: the postponement is flexible, so London can prematurely initiate the completion of the Brexit procedure. But for this, the deputies of the House of Commons need to support the proposed draft deal with the EU. Fulfillment of this condition is the most difficult stage of the negotiation process. That is why the pound almost ignored today's decision of the Europeans. If Paris continued to block the deferral agreement, the GBP/USD pair would accordingly continue the downward movement. But by and large, traders were sure that in the end Brussels would agree on this step, therefore, a positive verdict on this issue provided little support to the pair.

                          But the issue of holding early elections to the House of Commons excites the minds of traders. After all, the fate of the orderly Brexit is now completely in the hands of the British Parliament, the current composition of which, to put it mildly, is very unfavorable to the current prime minister. So, in the House of Commons there are 650 deputies, 294 of which are Conservatives. A few months ago, there were 315 Tory representatives, but Johnson expelled 21 deputies from the party for "political indiscipline" - they supported the law obliging him to ask Brussels for deferment of Brexit.

                          In order to overcome the threshold of a simple majority, the prime minister needs another 31 votes (provided that the Conservatives vote "yes"). The Tory's temporary ally is the Democratic Union Party — at the expense of their representatives, the Conservatives had a majority in Parliament. But this is in a "peaceful" time, while now the Unionists are also categorically against the approval of the deal. Other parties represented in the British Parliament - the Scottish National Party, the Greens and the Party of Wales - are long-standing opponents of the Conservatives in general and Boris Johnson in particular, so it will be extremely difficult for the prime minister to entice them to his side.

                          Meanwhile, a snap election in Britain could be called with the support of two-thirds of Parliament (434 MPs). Labour has twice blocked the government's initiative to hold elections, and this time also promised to vote in a similar way. According to the British press, Downing street is also discussing a "plan B": Johnson's supporters initiate a vote of no confidence in the government – after the completion of the two-week period, which is allotted for the formation of a new Cabinet, the Parliament "automatically" dissolves. In this case, Johnson will need a simple majority, but there are risks: for example, during the allotted 14 days, opposition parties can hypothetically unite around another leader, depriving the Conservatives of power.

                          Another way to early elections is to change the electoral law itself. However, any such bill can get bogged down in parliamentary discussions for a long time. Labour could amend the proposal to Johnson's disadvantage by adjusting the timing or procedure of the election. In addition, the opposition may delay consideration of the bill for a long time by introducing various amendments, for example, on the right to vote for 16-year-olds.

                          The first battles in the British Parliament on the issue of early elections ended in nothing today. On Monday, Labour again reaffirmed their position - they will not support Johnson's initiative. When the speaker put this issue to a vote, 299 deputies spoke in favor, which is 135 less than the required number.

                          But the Liberal Democrats announced that they would support early elections, but they did not propose holding them on December 12, but on December 9. At first glance, the difference of three days is not significant, but not in this case. The fact is that on December 9, students of most universities will still be in their educational institutions (and are more likely to take part in the elections). But on December 10-11, the Christmas holidays begin: many students may not wait for the end of the week and will leave for a vacation. Libdems are popular among young people, so this nuance has strategic importance for them. Boris Johnson announced that he would discuss the proposal of Liberal Democrats, after which the parliament would return to this issue again - most likely, on Tuesday.

                          It is worth noting that a survey conducted from Wednesday to Friday last week showed that Conservative support reached 40%, while Labour remained at the same level - 24%. Compared with the survey the week before last, Tory support grew by 3%, but the result of the Labour Party did not change. Liberal Democrats, in turn, received 15% support in the latest poll, and Nigel Farage's Brexit party received 10%. All this suggests that following the results of early elections, Johnson will be able to form a majority in the House of Commons and, accordingly, agree on a deal with Brussels.

                          Thus, the first round of the struggle for elections ended to no avail. At the same time, the intrigue in this matter still persists, especially amid the prolongation of the negotiation process until January 31 and the position of Liberal Democrats.


                          Analysis are provided by InstaForex

                          Comment


                          • Is the Canadian dollar a child of fortune? The loonie has a second wind

                            The Canadian dollar has been on the rise since the beginning of the week. However, experts suggest that the flight of the loonie can be interrupted by changes in the monetary policy of the Bank of Canada, as well as a deterioration in economic data. In this situation, the market favors the loonie, analysts emphasize.

                            The loonie was in the spotlight on Wednesday, October 30. The market is monitoring the further actions of the Bank of Canada, which is ready to hold a meeting on monetary policy. If the regulator keeps the rate at 1.75%, while the Fed reduces it to 1.50% –1.75%, then the Canadian dollar will push its American counterpart. The loonie claims to be the leader, striving to become the most profitable currency in the "Big Ten."

                            According to analysts, the rise of the Canadian dollar is possible not only in case of maintaining the same rates, but also amid optimistic comments of the regulator regarding the growth of the national economy. At the last meeting, the Bank of Canada left the interest rate unchanged. The regulator focused on strengthening the labor market, increasing wages and the positive state of the economy.

                            Analysts believe that current data on the Canadian economy will not be so rosy. The regulator should take into account a number of negative factors, such as a slowdown in retail sales, a drop in the consumer price index, a decrease in GDP growth and inflation risks. At the moment, the labor market in Canada remains strong, wage growth is quite stable, however, the weakness of the national economy along with the worsening situation in the United States may lead to a change in Bank of Canada's strategy. In such a situation, the regulator will review the current decision on rates. If this happens, a stable short-term low will form in the USD/CAD pair, analysts said.

                            The positive against the Canadian dollar is radiating from the options market. According to experts, the three-month risk reversal with a delta of 25% demonstrates the most favorable period for the growth of the loonie to the US dollar. This has not happened since 2009, experts emphasize. Reducing the risk-reversal in the USD/CAD pair for three-month option contracts is a barometer of long-term investor sentiment. Analysts record a bullish trend for the Canadian dollar, noting that over the past 10 years, investors have never been so optimistic about the loonie.

                            A similar change of mood occurred shortly before the decisions of the Bank of Canada on monetary policy and the Federal Reserve at the key rate. Currently, the loonie has been supported by both a profitable interest rate differential and increased expectations for a trade deal between the United States, Mexico and Canada in November.

                            On Tuesday, October 29, the USD/CAD pair peaked in the past four weeks. On Wednesday morning, the pair fell by 0.08% to 1.3078-1.3880.


                            Yesterday, the USD/CAD pair showed an increase of 0.3% to a high since the beginning of October. The pair hit the 1.3098 bar, but is now pulling back to its lows. Yesterday's growth of the pair from an intraday low was caused by an increase in sales, Scotiabank analysts believe. Experts are certain that the pair is normal. At the moment, the USD/CAD pair is trading in the range of 1.3077–1.3078, showing an upward trend.

                            Analysts agree that the current situation is quite favorable for the loonie. Most of them note excellent prospects for it. The Canadian dollar, which seemed to have opened its second wind, is capable of another leap forward, experts said. They expect a moderate, long rise of the loonie in the short and medium term.

                            Analysis are provided by InstaForex

                            Comment


                            • Control zones EURUSD 11/04/19

                              At the end of last week, the defining resistance was the Weekly Control Zone 1/2 1.1161-1.1153. At the same time, the closing of trading on Friday occurred above this zone. This opens up opportunities for further growth of the pair to weekly control zone 1.1249-1.1233. The euro purchases come to the fore, however, favorable prices are located just below the level of 1.1134.

                              At the moment, the pair is trading near the maximum of the last month, which increases the possibility of the proposal and the continuation of the formation of the accumulation zone. Work within the accumulation zone will be relevant until the closure of one of the active sessions occurs above the weekly maximum. If this happens, then the growth rate will increase and a weekly test will take one to two days. In the event of a major offer after updating the monthly maximum, the target will be the level of 1.1134, where a new priority will be determined.


                              Daily CZ - daily control zone. The zone formed by important data from the futures market that changes several times a year.
                              Weekly CZ - weekly control zone. The zone formed by the important marks of the futures market, which change several times a year.
                              Monthly CZ - monthly control zone. The zone that reflects the average volatility over the past year.

                              Analysis are provided by InstaForex

                              Comment


                              • Pound moved to a tactical retreat

                                If someone thought that the British pound would return to normal after reducing the chances of a disorderly Brexit to a low, then the beginning of November showed that they are wrong. The leader of the Brexit party, Nigel Faraj, fundamentally disagreeing with the main provisions of the project of Boris Johnson, said he would fight for every seat in the renewed Parliament. This can seriously complicate the position of the Conservatives and increase the risks of the victory of the party of Jeremy Corbyn. Labour promises to nationalize enterprises, raise taxes and hold a second referendum on divorce from the EU. The political landscape in Great Britain remains shaky, which allows Goldman Sachs to recommend that its client close long sterling positions as part of a "tactical retreat".

                                The dynamics of popularity of the main parties in Britain

                                Thanks to the almost zero chance of a disorderly Brexit, the pound climbed to second in the list of the best performers of G10 since the beginning of the year. Sterling's two-month volatility has fallen to September lows, however, the intensification of political struggle can lead to an increase in the indicator, which will adversely affect capital flows and the short-term prospects of the British currency.

                                Pound Volatility Dynamics

                                The pound practically did not pay attention to the rapid growth of business activity in the manufacturing sector from 48.3 to 49.6 in October. Surveys of purchasing managers were conducted during a period of general euphoria about the fact that a disorderly Brexit was avoided. In addition, the PMI continues to be below the critical mark of 50, indicating a decline in the sector. I do not think that sterling will be very sensitive to the release of data on business activity in the construction and services sectors, but a meeting of the Bank of England can make it worry.

                                Only one out of the 19 Bloomberg experts predicts that the BoE will lower the repo rate, the rest are confident that it will remain at the same level of 0.75%. At the same time, most experts believe that the central bank will lower forecasts for inflation and GDP and increase estimates of unemployment. This is a hint of monetary expansion, which will increase the risks of a GBP/USD correction. On the whole, it's a rather unexpected turn, given the fact that BoE's previous forecasts were based on the assumption that a disorderly Brexit could be avoided.

                                Assessment of changes in Bank of England forecasts

                                If you add seasonal weakness to the growing political risks and potential dovish rhetoric of Mark Carney, then the immediate prospects for sterling can begin to be drawn in gray tones. According to the results of November in 1975-2018, it closed in the red zone in 28 out of 44 cases. Nevertheless, the bullish trend looks stable, so the correction at the end of autumn made it possible to buy a cheaper pound.

                                Technically, if the bulls on GBP/USD manage to keep the pair quotes above 1.29 and update the October high, then the chances of continuing the rally in the direction of the target by 88.6% according to the Bat pattern will increase. In the opposite case, we are waiting for a correction to 1.276 and 1.272.

                                Analysis are provided by InstaForex


                                Comment

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