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  • #91
    The growth potential of the pound is limited

    The British pound declined against the US dollar following the release of a report, which indicated that the UK government in October this year was forced to borrow more money compared to the same period last year.

    This is directly related to the acceleration of inflation, which led to an increase in the costs of debt servicing.

    According to the official report of the National Bureau of Statistics, the net borrowing of the UK public sector in October 2017 had amounted to 8 billion British pounds, which is 0.5 billion pounds higher than it was in October of last year. Economists had expected that borrowings would amount to £7.5 billion.

    In case the GBPUSD pair drops to catch hold of the resistance at 1.3260, pressure on the British pound would only increase in the near future, which will lead to the renewal of 1.3180 and 1.3140.

    Data on the balance of foreign trade will positively affect the overall GDP of Switzerland for the 3rd quarter of this year. As noted in the report, the surplus increased due to the weakening of the Swiss franc in October this year, which had a positive impact on the foreign trade balance.

    Therefore, the positive balance of foreign trade in October 2017 amounted to 2.4 billion francs, while exports grew by 2.3% compared to the same period in 2016.

    The Australian dollar rose against the US dollar following a speech by the Governor of the Reserve Bank of Australia. Let me remind you that the morning minutes of the RBA, which were prepared after the last meeting, had a negative impact on the Australian dollar.

    Philip Lowe said that at the moment there is no special reason to raise interest rates in the near future, and it will be more appropriate to keep rates low for quite a long time.

    The growth of the Australian dollar could also occur due to the fact that some major players were afraid of hints from the RBA's governor about the possibility of further lowering of rates. However, Lowe said that in case of further improvement in the economic situation, the increase in rates is more likely than its decrease. According to the head of the RBA, in the economy of Australia there are unused capacities, while restrained growth of wages continues to subdue inflation.

    As for the technical picture of the AUDUSD pair, after going beyond the large support level of 0.7630, the pressure on the Australian dollar increased, which led to the renewal of new large levels of 0.7530 with the formation of the forecast for the exit at 0.7500, where a significant profit taking on short positions will occur.

    *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


    • #92
      The preparation for Brexit allocated 3 billion pounds

      The EURUSD pair spent the first half of Wednesday in a narrow lateral channel, while traders were preparing for the release of the Federal Reserve's minutes.

      Data on the US economy hurt the upward momentum of the US dollar.

      According to the report, the number of Americans who applied for unemployment benefits for the first time has declined. This indicates a recovery of the labor market after the autumn hurricanes.

      According to the US Department of Labor, the number of initial claims for unemployment benefits for the week from 12 to 18 of November fell by 13,000 and amounted to 239,000. Economists had expected the number of new applications last week to be 240,000.

      A good report on the labor market was offset by weak data on orders for durable goods in the US, which fell in October, much worse than economists predicted.

      Such data indicates that Americans are making less expensive purchases, which will negatively affect US manufacturers.

      According to the US Department of Commerce, orders for durable goods in October 2017 decreased by 1.2% compared to the previous month, amounting to 236 billion US dollars. In September, orders rose by 2.2%. Economists predicted an increase in orders by 0.2%.

      As for the technical picture of the EUR/USD pair, only a breakout of the 1.1755-60 range would lead to a larger upward wave in the trading instrument with an update of 1.1800 and a monthly peak output in the area of 1.1860. If the Fed's report contains something interesting about the prospect of tightening monetary policy in December of this year, the demand for the US dollar may rise, which will lead to a return towards the region of large levels of support at 1.1680 and 1.1640.

      The British pound strengthened its position against the US dollar following the speech of the Ministry of Finance in the UK. Hammond said that the ministry is preparing for any possible outcome of Brexit, and that the preparation allocated 3 billion pounds.

      Furthermore, the economic forecast was lowered, according to which the GDP of the UK for 2017 will grow by only 1.5%, and not by 2%, as predicted earlier. Forecast GDP growth of 1.4% in 2018 and 1.3% in 2019. As Hammond noted, lowering growth forecasts is due to weak labor productivity.

      *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


      • #93
        Euro does not have enough momentum

        The euro returned to the high of the day following the release of upbeat data for Germany and the eurozone as a whole, indicating a resurgence of economic growth in the 3rd quarter of this year.

        According to the data, Germany's economy in the third quarter of this year has expanded due to growth in exports and investments of companies. The report of the National Bureau of Statistics of Germany Destatis says that the gross domestic product in the third quarter of 2017 increased by 0.8% compared to the previous quarter. Compared to the same period in 2016, GDP grew by 3.3%.

        Germany's exports in the third quarter grew by 1.7% compared to the previous quarter, while investments increased by 1.5%.

        The Manufacturing PMI in Germany also increased significantly, reaching 62.5 points, better than the forecasts of economists, who expected growth to reach 60.4 points.

        The sentiment in the manufacturing sector of France rose in November. According to the report of the National Bureau of Statistics of France, Insee, the composite index of purchasing managers in France rose to 60.1 points in November, compared to 57.4 points in October. The Bureau of Statistics also pointed out that the broader indicator of confidence increased by two points in November, to 111 points.

        The euro zone's purchasing managers index can also provide good support to the European economy, which will lead to an increase in demand for the European currency at the end of the year.

        According to the research company IHS Markit, the index of supply managers in November 2017 rose to 57.5 points from 56.0 points in October.

        Minutes of the ECB did not lead to a new wave of growth in the euro.

        The report indicates that the ECB management at the meeting in October had differed on the timing of the completion of the quantitative easing program. However, it agreed to assess the impact of the program of buying corporate bonds. It should be noted that the European Central Bank announced that it is extending the program of bond purchasing until September 2018. However, since December of this year, the volume of monthly purchases will be reduced to 30 billion euros from 60 billion euros earlier.

        As a result of the Thanksgiving holiday in the US, market volatility remains low. The technical picture remained without significant changes.

        Buyers of risky assets are prepared to enter new monthly highs. However, in order for this to happen it is necessary to break through a large resistance of 1.1840, which may lead to an increase in long positions and an update to levels like 1.1880 and 1.1910.

        *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


        • #94
          AUD/USD testing major resistance, time to start selling

          The price is testing major resistance at 0.7629 (Fibonacci retracement, horizontal overlap resistance, channel resistance, Fibonacci extension) and we expect to see a strong drop from this level to push the price down to at least 0.7537 support (Fibonacci extension, horizontal swing low support).

          Stochastic (55,3,1) is seeing strong resistance at 96% where we expect a corresponding reaction off. Correlation analysis: NZDUSD is similarly expecting a strong drop.

          Sell below 0.7629. Stop loss isat 0.7670. Take profit is at 0.7537

          *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


          • #95
            Technical analysis of EUR/USD for Nov 28, 2017

            When the European market opens, some Economic Data will be released such as German GfK Consumer Climate, Private Loans y/y, M3 Money Supply y/y, and German Import Prices m/m. The US will release the Economic Data, too, such as Richmond Manufacturing Index, CB Consumer Confidence, S&P/CS Composite-20 HPI y/y, HPI m/m, Prelim Wholesale Inventories m/m, and Goods Trade Balance, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

            Breakout BUY Level: 1.1962.
            Strong Resistance:1.1955.
            Original Resistance: 1.1944.
            Inner Sell Area: 1.1933.
            Target Inner Area: 1.1905.
            Inner Buy Area: 1.1877.
            Original Support: 1.1866.
            Strong Support: 1.1855.
            Breakout SELL Level: 1.1848

            *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


            • #96
              Stress tests and forecast for world economic growth

              The euro continued to decline against the US dollar on Tuesday, November 28, despite good data on lending to private eurozone companies.

              According to the report, lending in October rose, indicating the recovery of the eurozone economy.

              According to the European Central Bank, lending to private sector non-financial companies in October this year had increased by 2.9% compared to the same period last year. Household lending increased by 2.7% compared to the same period of the previous year. The monetary aggregate M3 in October this year increased by 5%.

              Data on the optimism of German consumers slightly supported the euro during the afternoon. According to the report of the German institute GfK, the leading index of consumer sentiment remained unchanged in December compared to November and amounted to 10.7 points. Economists had expected that the index would rise to 10.8 points in December. As stated in the report, the sentiments of German households remain at a high level, as well as expectations about the future.

              On Tuesday, the Organization for Economic Cooperation and Development released a report, which raised forecasts for the growth of the world economy for the next year. This happened due to a good rate of growth in the US and the euro area.

              According to the data, for this year, forecasts have been raised to 2.2% for the US economy and 2.4% for the euro area economy. In 2018, it is expected that the US economy will grow by 2.5%, and the eurozone - by 2.1%. Without any changes, forecasts for the growth of China's economy remained unchanged, but the data for Canada was revised downwards.

              The OECD expects the world economy to grow by 3.6% this year, while in September it was forecasting an increase of 3.5%. In 2018, world growth should be at the level of 3.7%.

              The British pound declined after the release of stress tests from the Bank of England.

              Stress tests of the Bank of England were conducted at Barclays, HSBC, Lloyds Banking Group, Standard Chartered. It must be noted that back in 2016, Barclays and RBS failed stress tests, but then increased their capital.

              The report shows that the Bank of England decided to raise the requirements for the capital buffer to 1% by the end of 2018 from 0.5% at present. This is done primarily in order to protect the banks of the UK from the adverse effects on the part of Brexit. The Bank of England also said that the current scenario of stress tests implies risks that may be associated with Brexit, and therefore the British banking system will continue to support the economy in the event of an unorganized Brexit.

              *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


              • #97
                Daily analysis of GBP/USD for December 01, 2017

                The pair remains following a bullish structure above the 200 SMA at H1 chart and looks forward to testing the 1.3541 level, amid USD weakness against the Pound. Corrective moves might happen in the short-term, with the nearest target placed around the 200 SMA and the 1.3303 level. MACD indicator remains in the negative territory, favoring to the downside.

                H1 chart's resistance levels: 1.3440 / 1.3541
                H1 chart's support levels: 1.3303 / 1.3244

                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 1.3440, take profit is at 1.3541 and stop loss is at 1.3337.

                *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


                • #98
                  The dollar weakens against the backdrop of political threats

                  Adjusted data on US GDP in the third quarter were better than expected, the growth rate was revised to 3.3%, and by all means, the US economy is recovering successfully. This is despite the fact that the Congress has not yet approved the draft of the tax reform.

                  However, the main factor of positive growth is not so much the growth of the economy as the growing consumer activity. According to the updated data, in the third quarter, the personal consumption expenditure index was 1.4%, and not 1.3%, as previously reported. This was released the day after the data on personal incomes in October also outperformed forecasts, with growth at 0.4% against expectations of 0.3%.

                  The market reacted positively to the reports, while the data on business activity in the manufacturing sector released by ISM on Friday made it possible to revise the forecast for US GDP in the fourth quarter to reach 3.5%, reflecting generally confidently positive expectations.

                  At the same time, it should be noted that the positive dynamics of consumer activity is not due to fundamental changes. The simplest calculations show that the growth of expenses is not based on revenue growth, but on the growth of lending, which in turn reflects certain hopes associated with the future tax reform. The growth of expenses in terms of the potentially able-bodied population is growing steadily, while personal savings are falling and have already reached the pre-crisis level of 10 years ago.

                  Thus, a certain revival of the consumer sector is associated with hopes for a reduction in tax pressure. If, however, the approval of the reform program in the Congress faces difficulties, then in this case one can expect a sharp decline in consumer activity and an increase in deflationary expectations.

                  The grounds for such fears are: On Friday, the Senate postponed the vote on the tax reform, the stumbling block was the report of the Tax Committee, from which it follows that the reform will not lead to filling the budget and the deficit will remain at the level of at least $1 trillion in a 10-year perspective. The economic analysis of the tax reform plan by the Minister of Finance Mnuchin has not yet been released. Therefore, the financial effect of the reforms may not be the same as the government represents. Before the markets closed on Friday, the final vote in the Congress did not take place, which ultimately contributed to the depreciation of the dollar.

                  Another reason for the fall of the dollar is that former adviser to Donald Trump, Michael Flynn, who was accused earlier of providing false information to the FBI, is prepared to testify against Donald Trump. If this news is confirmed, the opponents of Trump will have good reasons for initiating the impeachment procedure, which will automatically put an end to the tax reform program.

                  This scenario can lead to a rapid reduction in inflation expectations and will call into question the possibility of the Fed to implement the outlined plan for the growth rate in 2018, and the dollar will drop sharply against the yen and the euro. Fears remain hypothetical, but the dollar is losing momentum.

                  On Monday, the dynamics of the dollar will be determined. First of all, by political news related to the passage of the tax plan through the Congress and the development of the situation with Flynn. Acceptance of the tax plan is of fundamental importance in the light of approaching the date of December 8. Namely, before this date, the law on financing state institutions due to borrowing is in force.

                  On Tuesday, the ISM report on business activity in the services sector will be published, after a rapid growth in August-October, a slight slowdown is expected, but the level of PMI will remain high and can support the dollar.

                  In general, the dollar remains the favorite, and any positive news can contribute to a new wave of buying. However, one must assume that the probability of a smooth phased solution of all the issues at the beginning of this week is not very high, and therefore the growth of the euro to 1.20 appears quite certain.

                  *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


                  • #99
                    Pound is selected from the politics

                    Over the past two weeks, the British pound added 2% versus the US dollar and more than 1% versus the euro, against a background of lower political risks. Popular newspaper, like The Times, reported that London and Brussels managed to agree on the amount of compensation for the divorce, as well as on the issue of the Irish border. It seems like investors are satisfied that Theresa May is paying for a mild Brexit loss of government members. The market will closely follow the phrasing from the table of her talks with Jean-Claude Juncker and Michel Barnier, in order to understand whether it is worth selling due to the fact on initial rumors of buying.

                    Weekly dynamics of the pound

                    Source: Bloomberg.
                    Positive news from Brexit, the problems of promoting tax reform in the United States, as well as the surfaced story of Russia's interference in the US presidential election, helped the GBP/USD pair to rise to a two-month high. The rate of the sterling, weighted by trade, jumped altogether to a peak record in the last six months. At the same time, some people are concerned that Britain's GDP is growing much slower than its US and European counterparts. Investors win back political risk and are ready to turn a blind eye to the long-term pessimistic prospects of the UK economy in order to obtain immediate benefits. Therefore, Credit Agricole believes that the hopes for progress on Brexit will push the GBP/USD pair to 1.4, near which it traded in the first half of 2016.

                    Commerzbank, on the contrary, is confident that investors are already sold on the factor of positive rhetoric of Brussels at the EU summit in mid-December. If they do not get what they expected, we should prepare for a selling of the sterling. On the other hand, if everything goes according to plan, then it's unlikely that the GBP/USD pair will sharply strengthen. In such circumstances, market attention can shift to macroeconomic data and not related to it, the continuation of the cycle of normalization of the monetary policy of the Bank of England. In this regard, the pound is able to respond sensitively to the release of data on business activity in the services sector, scheduled for December 5. The index of purchasing managers in the manufacturing sector has already pleased the fans of sterling. The figures from the largest sector of the economy of the UK is awaited.

                    The alignment of forces in the analyzed pair will be influenced by events in the United States. The Senate passed a tax reform project with 51 votes to 49, but now both chambers of Congress are required to find a compromise on the timing of its implementation and on other issues. The dollar could not benefit from the "bullish" news, as uncertainty persists. At the same time, the willingness of former National Security Adviser Michael Flynn to cooperate with the FBI can cast a shadow on the US president, which will negatively affect the USD index.

                    Technically, updating the November, and then the autumn peak, activates the AB = CD pattern with a target of 127.2%. It corresponds to 1.385. However, we should not rule out a retest of the upper limit of the range of the previous consolidation of 1.304-1.332.

                    GBP/USD, daily chart

                    Analysis are provided by InstaForex


                    • Fundamental Analysis of AUD/USD for December 6, 2017

                      AUD/USD has been quite corrective recently after a strong bearish pressure pushing the price off the 0.8150 price area. AUD had been quite mixed with the economic reports where negatives are more in quantity than positive reports for which the currency is currently struggling to gain over USD despite the current weak status of USD. Recently AUD Current Account report was published with negative figure of -9.1B from the previous figure of -9.7B though it is less than the previous figure but could not meet the expectation of much less deficit at -8.8B, Retail Sales report was published with an increase to 0.5% from the previous value of 0.1% which was expected to be at 0.3% and in the Rate Statement the Cash Rate of Australia was unchanged as expected at 1.50% which did not quite helped with the gains of AUD but was able to stop the impulsive bearish pressure in the pair. Today, AUD GDP report was published with a worse value of 0.6% decrease from the previous value of 0.9% which was expected to be at 0.7%. The worse economic report did affect the currency quite well which lead to impulsive bearish pressure today. On the USD side today, ADP Non-Farm Employment Change report is going to be published which is expected to decrease to 189k from the previous figure of 235k, Revised Non-Farm Productivity is expected to increase to 3.3% from the previous value of 3.0%, Revised Unit Labor Cost is expected to decrease to 0.2% from the previous value of 0.5% and Crude Oil Inventories is expected to show less deficit at -3.2M from the previous figure of -3.4M. The forecasts are quite mixed in nature where any better than expected economic report is expected to add to the gains of USD against AUD in the coming days. To sum up, AUD has been quite weak in comparison as it could not dominate USD in its weakest period which is expected to lead to further USD gains in the coming days if USD publishes better economic report results in the future.

                      Now let us look at the technical view, the price is being held by the dynamic level of 20 EMA and it has worked very well as a resistance to keep the price lower. As the price is currently quite near to the support area of 0.7500-50 the bears are expected to push the price towards the support level in the coming days and any bounce or breaks off the area will lead to further directional movement in this pair. As the price remains below the dynamic level of 20 EMA and 0.7650 price area the bearish bias is expected to continue further.

                      Analysis are provided by InstaForex


                      • Technical analysis of USD/JPY for Dec 07, 2017

                        In Asia, Japan will release the Leading Indicators and 30-y Bond Auction data, and the US will release some Economic Data, such as Consumer Credit m/m, Natural Gas Storage, Unemployment Claims, and Challenger Job Cuts y/y. 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: 113.02.
                        Resistance. 2: 113.80.
                        Resistance. 1: 112.58.
                        Support. 1: 112.30.
                        Support. 2: 112.08.
                        Support. 3: 111.86.

                        Analysis are provided by InstaForex


                        • Euro and pound will be determined with direction

                          The euro area economy continues to expand at a steady pace, GDP growth in Q3 was 0.6%, at an annual rate of 2.6%, preliminary data was revised upwards, which is consistent with the overall economic trend.

                          Growth is primarily due to increased investment and exports. Despite the fact that household expenditures have decreased somewhat, the general level of optimism continues to improve, as indicated by the recent reports of ZEW and IFO.

                          On Wednesday, a report on industrial production will be released, on Thursday - PMI Markit index. This will be the latest data ahead of the ECB meeting, they will help to predict the overall tone of the commentary and the position of Mario Draghi at a subsequent press conference.

                          On Thursday, investors do not expect the ECB to decide to make any concrete steps, since there is no reason for this yet. However, forecasts for economic growth and inflation will be updated upwards, as indicated by both growing business activity in recent months and rising oil prices.

                          The euro as a reaction to the meeting of the FOMC may decline to a support level of 1.1670, growth is limited to the level of 1.1880.

                          United Kingdom

                          The pound on the eve of the meeting of the Bank of England on December 14 is seent to be positive. According to Halifax, housing prices have stabilized after more than a year of decline and activity in the construction sector decreased. The inflation forecast published by the Bank of England rose from 2.8% to 2.9%, the trade deficit instead of expanding has unexpectedly remained virtually unchanged. Sufficiently, the industry appears much better, which was clearly facilitated by the protracted period of the weak pound, which supported the export industries.

                          The industrial sector is growing for the sixth month in a row, on an annualized basis, growth was 3.9%, which is higher than expected

                          The National Institute for Economic and Social Research (NIESR) reports that, according to their calculations, UK GDP growth for the last 3 months was 0.5%, which exceeds both the indicators of the beginning of the year and 0.4% in the third quarter.

                          These factors increase the likelihood that the Bank of England will continue to gradually raise rates, and will also contribute to the growth of the pound. Although at the next meeting, the Bank of England will not raise the bid, the general trend is in favor of an increase, which is clearly a bullish factor for the pound.

                          On Friday, there was news that the UK and the EU agreed on three key points in the first phase of the Brexit talks. The border between Ireland and Northern Ireland was agreed upon, migration policies concerning the rights of EU citizens in the UK, and, most importantly, London's payment for the withdrawal from the EU. Thus, the first phase of negotiations is completed, and at the EU meeting on December 14, it will be possible to announce the progress achieved. This news will strengthen the positions of both the euro and pound.

                          The pound, nevertheless, will still be under pressure, since there are no serious internal drivers in the coming week. Presumably, a decline towards 1.3250 as an intermediate target and 1.2850 as a long-term goal.

                          China, which is the world's major oil consumer, supported the growing trend on Friday, posting significantly higher than expected trade balance data in November. Crude oil imports increased by 19.37% in November, demand remains firmly high, which, combined with a number of restrictive measures by OPEC + and significant financial losses of shale companies in the US, contribute to the formation of a stable demand against the backdrop of stable production in the context of the price war with OPEC. Together, these factors support oil, which allows us to predict a breakthrough of resistance at 63.50 for Brent in the short term.

                          *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


                          • Pound fled from politics

                            A busy economic calendar and the departure of political risks into obscurity allows us to hope for the return of investors in actively trading the pound. Semiannual negotiations between London and Brussels, judging by the statements of the latter, were completed successfully, which makes it necessary to shift attention to macroeconomic data. In general, there is plenty of data at the beginning of the second week of the month for the UK. Inflation, the labor market, retail sales and the meeting of the Bank of England will satisfy even the highest demands of trade analysts on the news.

                            The fall of sterling in response to positive news from the negotiation table on Brexit has become a classic example of the implementation of the principle of "buy on the rumor, sell on the facts." Traders sold the GBP/USD quotes on the factor of harmonizing the conditions of the divorce between Britain and the EU, and the message that the round-the-clock work was over and the issue of the Irish border was resolved. This launched a wave of selling against the backdrop of profit taking. Moreover, popular media referring to competent sources reported that the trade deal before the spring of 2018 will not be achieved. However, the bridgehead is laid, and the bulls on sterling, including Nomura and ING, believe that the reduction of political risks of the UK will push the GBP/USD pair in the direction of 1.4 in 2018 and 1.36 in the near future.

                            On the contrary, "bears" criticize the agreement that was reached, blaming it for lack of details, and referred to the futures market, where the value of options to sell sterling is higher than the purchase. Derivatives are used for risk insurance, and the current dynamics of an indicator such as the risk of reversal (the ratio of premiums on call and put), indicates that investors still fear the sterling's collapse.

                            Dynamics of the ratio of premiums on options

                            Source: Bloomberg.

                            On the other hand, speculators in the futures market held a net long position on the pound for 6 of the last 10 weeks, although before that they acted as net sellers for 98 five-day consecutive days.

                            Lately, there have been too many news with political coloring, and it's time for the sterling to turn its focus on the economy. In general, the outlook for upcoming releases is moderately positive. Bloomberg experts do not expect inflation to exceed the critical level of 3%, while the acceleration of average wages from 2.2% to 2.5% y/y. In addition to that, the exit from the negative territory of retail sales inspires optimism for bulls in the GBP/USD pair. Moreover, it is beneficial for the Bank of England to maintain a strong pound with the help of "hawkish" rhetoric, and the dollar cannot take advantage of strong data on the US.

                            It is possible that the growth of the fiscal deficit as a result of the implementation of the tax reform, the reluctance of Donald Trump to see the US currency strong and the recovery of the economies of the competing countries will force the USD index to restore the downward trend in 2018.

                            Technically, the GBP/USD pair is preparing to retest the upper bound of the previous consolidation range at 1.304-1.332. Assuming that it, like the previous one, ends with the defeat of the "bears", the likelihood of a restoration of the uptrend in the sterling will then increase.

                            GBP/USD, daily chart

                            *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


                            • BTC/USD reacting off our selling entry perfectly, remain bearish

                              Bitcoin has reached our selling area and is reacting off it nicely. We remain bearish looking to sell below 17459 resistance (Fibonacci extension, bearish price action, bearish divergence) for a drop towards at least 14739 support (Fibonacci retracement, horizontal overlap support).

                              Stochastic (34,5,3) is seeing major resistance below 98% and also displays bearish divergence vs price, signaling that a reversal is impending.

                              Reason for the trading strategy (fundamentally):

                              Bitcoin January futures (which are contracts that let investors buy or sell something at a specific price in the future) price are about $17,800 which is rather close to where we forecast major resistance. This is in line with the immediate resistance we're seeing on the technical side so it would be safe to start looking to short Bitcoin for a correction.

                              Sell below 17459. Stop loss is at 18770. Take profit is at 14739.

                              *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


                              • British income levels drop

                                The British pound did not pay attention to data on pay cuts in the UK from August to October of this year, and this could negatively affect retail as well as GDP growth.

                                Let me remind you that the fall in real incomes of citizens started last year, when the UK decided on a vote to leave the EU. According to the report, from August to October 2017 compared with the same period of last year, real wages fell by 0.4%. The unemployment rate in the UK for the same period remained unchanged at 4.3%. Economists expected a drop in the unemployment rate by 0.1 percentage points.

                                As for the pound's immediate prospects, much of it will depend on the decision of the Bank of England on Thursday. Although it is projected that the regulator will leave interest rates unchanged. It will be important to know how the members of the Committee on Monetary Policy will vote for constant interest rates and quantitative easing.

                                If the Bank of England mentions good progress in Brexit talks during the comments, it will also benefit the British pound, which can significantly strengthen its positions against the US dollar.

                                As for the technical picture of the GBP/USD pair, further growth is directly dependent on the breakthrough of a large resistance located in the area of 1.3375. Levels that are above 1.3425 and 1.3480 are considered good. In the event of a channel breakout in the lower limit of 1.3300, one can expect an increase in pressure on the pound with a decline towards 1.3225 and 1.3150.

                                Inflation data in Germany slightly affected the quotations of the European currency during the first half of Wednesday, as it coincided with the forecasts of economists.

                                According to a report of the statistics agency, the final consumer price index of Germany in November this year increased by 0.3% compared with October. Economists also expected the index to increase by 0.3%. As for the same period for 2016, prices have increased by 1.8% overall.

                                As for the important events in the afternoon, attention should be focused on the Fed hiking the interest rate, as well as a signal about what will be the acceleration of the normalization of monetary policy next year.

                                As for the technical picture of the EUR/USD pair, the bulls managed to win back Tuesday's euro decline in the afternoon and returned to the intermediate level of support 1.1740 without much difficulty. While the trade is going above this range, we can count on a further upward trend for the euro with an update of 1.1775 and an exit to weekly highs around 1.1810.

                                *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



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