Instaforex Analysis

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Re: Instaforex Analysis

Postby IFX Gertrude » Fri Oct 12, 2018 1:30 am

GBP / USD pair: plan for the American session on October 11. Speech by Mark Carney supported the pound

To open long positions on GBP/USD pair, you need:

Buyers managed to stay above the support level of 1.3184, which I mentioned in the morning review, and the comments of the Governor of the Bank of England allowed traders to increase their long positions. The main task for the second half of the day is to break through and consolidate above resistance 1.3220, which will lead to the formation of a new upward movement in the pound with a maximum of 1.3269, where taking profits are recommended. In the case of a decline in GBP / USD in the afternoon, long positions can return immediately to the rebound from the support of 1.3147.

To open short positions on GBP / USD pair, you need:

Sellers will try to keep the pair below the resistance of 1.3220 and the formation of a false breakdown on it will lead to a larger downward trend with repeated support test of 1.3184. A break of 1.3184 will allow us to expect an increase in short positions in the GBP / USD pair by updating the lows in the area of 1.3147 and 1.3098, where taking profits are recommended. In the case of the pound rising above the resistance of 1.3220 in the second half of the day, it is best to return in short positions on a rebound from a high of 1.3269.

Indicator signals:

Moving Averages

The price is above the 30-day and 50-day moving average, which indicates continuous growth of the pound.

Bollinger bands

The upside potential is limited by the upper line of the Bollinger Bands indicator around 1.3236. The breakthrough of which will lead to a new wave of pound growth.

Image

Description of indicators

MA (moving average) 50 days - yellow
MA (moving average) 30 days - green
MACD: fast EMA 12, slow EMA 26, SMA 9
Bollinger Bands 20

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Re: Instaforex Analysis

Postby IFX Gertrude » Tue Oct 16, 2018 3:45 am

Elliott wave analysis of EUR/JPY for October, 2018

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EUR/JPY has seen a low at 129.12 and we are now looking for a break above minor resistance at 129.80 and more importantly a break above short-term important resistance at 130.51. It will confirm that blue wave (2) has completed and blue wave (3) towards 138.10 is developing.
Support is now seen at 129.34 and then at 129.12.
R3: 130.85
R2: 130.51
R1: 130.05
Pivot: 129.80
S1: 129.34
S2: 129.12
S3: 128.99

Trading recommendation: We will buy EUR at 129.10 or upon a break above 129.80.

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Re: Instaforex Analysis

Postby IFX Gertrude » Wed Oct 17, 2018 1:26 am

GBP/USD. October 15th. Results of the day. The fate of the pound may be decided at the summit on October 17-18

4-hour timeframe

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The amplitude of the last 5 days (high-low): 105 p-117 p-79 p-66 p-111 p.

Average amplitude over the last 5 days: 96 PT (97 p). The British pound opened today with a large "gap" down, but managed to close it during the day.

In principle, the technical picture of the last two days for EUR/USD and GBP/USD pairs is the same. The only difference is that the pound is more volatile. At the moment, the price has consolidated back above the Kijun-sen line, which may mean the completion of a deep correction and the resumption of an uptrend. However, the MACD indicator is still pointing down (!!!), which is due to the formation of a "gap" at the opening of the market. Thus, the indicator readings are simply incorrect now. As for the fundamental component, in addition to the report on retail sales in the US, which slightly increased the demand for the pound during the day, there is nothing to note today. Even no new rumors about Brexit has not been received. Thus, market participants are fully focused on the summit, which will be held on 17-18 October, and which is highly likely to be either signed an agreement or negotiations will fail completely. Of course, everyone, especially traders, now believe that the "deal" will be signed. But we think the odds are about 50/50. If the parties could easily concede on the Northern Ireland border, they would have done so long ago. Nobody wants to give in, and Britain needs the "deal" first. But additional concessions to the European Union will lower Theresa May's political ratings even more. Not everyone is happy with her rule and negotiations in the UK.

Trading recommendations:

The GBP/USD currency pair seems to have completed the correction, but the breakdown of the Kijun-sen line may be false, given the nature of the next bar. Thus, now it is recommended to hurry with the opening of new longs, it is better to wait for clarification of the situation.

Sell positions are relevant as long as the price is below the Kijun-sen line. But MACD did not react to the upward correction and now can not signal its completion with a turn down.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen - the red line.

Kijun-sen - the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dotted line.

Chinkou Span - green line.

Bollinger Bands indicator:

3 yellow lines.

MACD Indicator:

Red line and histogram with white bars in the indicator window.

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Re: Instaforex Analysis

Postby IFX Gertrude » Thu Oct 18, 2018 2:00 am

GBP/USD: turned away from the pound

Wednesday's trading day is marked by uncertainty. The dollar is gaining momentum ahead of the publication of the latest minutes of the Federal Reserve, and the pound and defensive instruments are waiting for the outcome of the EU summit. General nervousness plays in favor of the US currency, especially after the recovery of the US stock market. The British currency, in turn, is not only under the pressure of negative rumors about Brexit, but also due to the slowdown of inflation indicators. There was no trace of yesterday's optimism, after which the GBP/USD pair headed towards the 30th figure.

Meanwhile, there are no results of the key summit yet: only a working dinner will be held tonight, while Theresa may is holding bilateral meetings with its participants. Therefore, the main statements will be announced or closer to the night or (most likely) by tomorrow. But the pound is already getting cheaper throughout the market, as negative forecasts regarding the Brussels meeting began to prevail in the information field. For example, German Chancellor Angela Merkel said today that Germany has begun preparations for a chaotic Brexit, as the issue of the Irish border remains an insurmountable stumbling block. The head of the European Council Donald Tusk yesterday took a similar position, adding that the probability of "hard" Brexit is high as ever.

Representatives of other countries are less categorical, but most of them are wary of the upcoming negotiations. Increasingly, there are thoughts that the parties need a time gap until November, December or even January. It is difficult to say whether the rhetoric of the Europeans is a "strategic maneuver" on the eve of the main negotiations, but, apparently, the parties do not really expect any breakthrough from the October meeting.

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According to a number of experts, there is an elementary "game of nerves": despite the fact that the parties planned to reach a compromise in September, the so-called "red line" is still relatively far away. Therefore, so far it is possible to exhaust each other with threats of chaotic Brexit with all the ensuing consequences. Such behavior is a risk, as after another failure in Brussels under Theresa May could once again stagger the prime minister's chair, not only in opposition to the labour, as there are many representatives of the Conservative Party who oppose her.

However, according to other experts, Theresa May is in no hurry to make a deal at this summit. The fact is that at the end of October, the British Parliament will adopt the country's budget for the next year, in connection with which the prime minister needs the votes of deputies. In turn, representatives of the Democratic Unionist Party (May's coalition ally) threatened the prime minister that they would not support the adoption of a financial document if it made concessions on the Irish border. Therefore, Theresa May can delicately circumvent this problem by postponing the signing of the agreement for November.

Thus, the preliminary information background does not bode well for the bulls of the GBP/USD, and today's weak data on inflation offset the positive effect of yesterday's release on the labor market (where a significant increase in wages was recorded).

The dollar, for its part, is also beginning to exert pressure: the US currency again began to be in demand against the backdrop of an uncertain geopolitical situation. Yesterday, several Republican congressmen called for sanctions against Saudi Arabia if information about Riyadh's involvement in the disappearance of an opposition journalist is confirmed.

In addition, the minutes of the September meeting, published today, can also support the dollar. Although this meeting took place before the release of rather weak inflation data in the US, the rhetoric of the document is important for the market. Here it should be recalled that the Federal Reserve in September not only raised the rate, but also excluded from the text of the accompanying statement the definition of "stimulating" in relation to the monetary policy.

Although in the future, Fed officials (including Powell) stressed that the actions of the regulator are still mild and not deterrent. The minutes of the meeting can clarify this situation, thus outlining the prospects of monetary policy next year. In other words, today's release may, firstly, increase the probability of a hike in December, and secondly, increase/decrease the probability of accelerating the pace of monetary policy tightening in 2019. If the "hawkish" notes will prevail, the dollar will get another reason for its growth.

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From a technical point of view, the situation with the GBP/USD pair has not changed: the price is still clamped in the range of 1.3105-1.3280, where the support level is the middle line of the Bollinger Bands indicator, which coincides with the Tenkan-sen line on the daily chart, and the resistance level is the top line of the Bollinger Bands on the same timeframe. Depending on the outcome of the EU summit, the pair will go to one of the boundaries of the range, followed by its breakdown.

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Re: Instaforex Analysis

Postby IFX Gertrude » Fri Oct 19, 2018 2:36 am

EUR/USD: illusive hopes and pressing problems

The euro-dollar pair has not managed to break out of the price range of 1.1460-1.1620, although today the price has approached its lower limit. But the bulls again seized the initiative and did not allow it to gain a foothold in the 14th figure. However, the upward dynamics also did not receive its continuation, so the pair was stuck in the flat in anticipation for new information impulses.

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The fundamental background of the pair is very contradictory: the events of the last day do not have an unambiguous "black and white" color, so it is difficult for traders to determine the vector of further movement. For example, the initial signals from the EU summit significantly disappointed the market, after which the pound and the euro lost their positions. But today there is information that Brussels has offered London to extend the period of the transition period - approximately one year. And the British, apparently, supported this idea - at least the rhetoric of Theresa May (which, however, allowed the prolongation "for a couple of months") eloquently testifies to this. Later, there were also unofficial comments of high-ranking officials of Britain, which also confirm such intentions.

In other words, even if the parties do not have time to agree on key positions before March 2019, Britain will remain within the single market and within the customs Union for almost three years – that is, until December 2021. Such prospects calmed the markets a bit, but it is too early to "relax" – after all, today is the second day of the summit (the most intense in the context of multilateral negotiations), so the participants of the meeting can still present surprises - both of a positive nature and vice versa.

Although the euro follows the pound in many ways (especially when the Brexit issue is discussed), the single currency is not as focused on the summit as the British. Therefore, today the bulls of the EUR/USD focused on the rhetoric of the ECB representative Olly Rehn (head of the Central Bank of Finland). He voiced his expectations about the growth of the interest rate - according to him, the European central bank will consider this issue in the fourth quarter of next year. Naturally, if the dynamics of the eurozone economy will maintain the current pace.

Despite the fact that we are talking about very long-term prospects, traders reacted with optimism to such intentions. Moreover, the position of Rehn sounded simultaneously with the rhetoric of ECB Board member Ewald Nowotny, who said that he sees Jens Weidmann, the head of the Bundesbank, as the successor of Mario Draghi. Let me remind you that Weidmann has long and consistently advocated the tightening of monetary policy. If he really will head the European Central Bank (and it is called the main candidate) next year, then the pace of the rate hike can be significantly revised.

In other words, the fundamental factors that supported the euro today relate to too distant prospects. Therefore, the reaction to them was short-term, and the pair returned to more pressing issues. In particular, the problem of the Italian budget remained in limbo. According to a number of publications, the European Commission next week will reject the draft budget with a deficit of 2.4%, and its revision will take at least a month and a half. That is, this issue may be delayed until December, thus putting background pressure on the euro.

Another factor of uncertainty is the local elections in Germany. Let me remind you that Angela Merkel's partner in the Christian-Social Union coalition suffered a serious defeat in the elections to the Bavarian Parliament. 37% of Bavarians voted for the CSU, whereas five years ago this figure was almost 50%.

For the first time in 60 years, CSU representatives lost a single-party regional government. In addition, an impressive result was shown by the far-right party "Alternative for Germany", whose representatives took 22 seats in the local Parliament. According to some experts, the elections in Bavaria reflected the current political preferences of the Germans – that is, the growth of anti-European sentiment and the decline in the popularity of Merkel. At the end of October (28th) another regional elections will be held -in Hesse, where Angela Merkel is in charge of the "Christian Democratic Union". If the far right will press the CDU there, it will be a very alarming signal for Brussels.

Thus, the euro can not count on the support of the fundamental background, since the news "with a plus sign" are long-term, and "minus sign" is more estimated. In addition, the dollar is also not losing ground – published on Wednesday, the minutes of the last meeting of the Federal Reserve showed the "hawkish" attitude of the majority of regulator members, after which the probability of a hike in December again increased to 80%. Of course, the published opinions of officials are somewhat "overdue" in time – after all, the September meeting was held before the release of the latest inflation data (very weak) and before the events in the stock markets. But in general, the regulator kept a bullish attitude and did not disappoint market participants.

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In summary, it should be noted that EUR/USD traders should closely monitor the level of 1.1460 (the lower line of the Bollinger Bands indicator on the four – hour chart) - when it breaks, the pair can sharply gain momentum and go to the bottom of the 14th figure, where the nearest support level is located (the lower line of the above indicator on the daily chart). The technical picture has a further decline (in particular, this is evidenced by the bearish "Parade of lines" signal of the Ichimoku Kinko Hyo indicator on D1).

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Re: Instaforex Analysis

Postby IFX Gertrude » Mon Oct 22, 2018 2:49 am

Elliott wave analysis of EUR/NZD for October 22, 2018

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EUR/NZD dipped to 1.7356 (just below our possible downside target at 1.7357). We will now be looking for a break above the resistance-line near 1.7495, and more importantly, a break above the resistance at 1.7557 to confirm that the red wave ii/ has completed and the red wave iii/ towards 1.8345 is developing. Support is now seen at 1.7381 and at 1.7356.

R3: 1.7598
R2: 1.7557
R1: 1.7495
Pivot: 1.7475
S1: 1.7450
S2: 1.7409
S3: 1.7381

Trading recommendation:
We will buy a break above the resistance at 1.7495, while our stop will be placed at 1.7345.

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Re: Instaforex Analysis

Postby IFX Gertrude » Tue Oct 23, 2018 1:24 am

GBP/USD. Pound stumbled over Brexit again

The pound paired with the dollar after a slight recovery has once again collapsed into the area of the 29th figure, reacting to the negative news background around Brexit.

The immediate reason for the decline in the GBP/USD was the news that the deputies from the Democratic Unionist Party (DUP) together with the conservatives (or rather – some of them) will vote for the draft law that will make the EU proposals on the Irish border illegal. In this case, negotiations on Brexit are highly complicated, and the probability of a chaotic "divorce" from the EU without a deal will increase.

Let me remind you that Brussels is lobbying for the idea of leaving Northern Ireland within the framework of a single European market and a customs union – temporarily, until the parties come to a compromise on this issue. In Britain, many do not agree with this scenario – according to some conservatives, such a decision would be contrary to the constitutional principles of the country and would de facto violate its territorial integrity. Theresa May and the deputies who support her are also not happy with this idea, but are discussing this option among others. Therefore, representatives of the most "hawkish" wing of the Parliament plan to exclude such a scenario at the legislative level. Previously, only a few dozens of conservatives were discussed, but today it has become known that the Democratic Unionist Party will support this legislative initiative.

The DUP is an ally of the conservatives in Parliament, as the Tories were forced to form a coalition after losing the majority in the early elections. The Unionist party has the so-called "golden share" : they have only ten representatives in the Parliament (out of 650), but they provide the majority that allows making legislative decisions. Therefore, May cannot ignore their opinion about the prospects of Brexit. According to one version, for this reason, the October EU summit failed – the prime minister did not rush into compromises (which one way or another, but would have to go), so that the unionists could not block the draft British budget.

Therefore, when the DUP's position on the draft law became public today, the pound collapsed throughout the market. The situation can be divided into two parts. First, the new law will significantly complicate the negotiation process, the deadline of which is December of this year. The second part of the problem is broader. The fact is that many experts again voiced doubts about whether Theresa May will be able to consolidate British politicians to make a compromise decision that is so necessary for the deal? Constant political squabbles, threats of impeachment, destructive legislative initiatives are all signs of London's "incompetence". Today, this fact again reminded itself, putting significant pressure on the pound.

By the way, talks about the possible resignation of Theresa May again began to be actively discussed in the market. One of the British journalists published a letter of a Deputy of the Conservative party, in which he urged his colleagues to express no confidence in the prime minister and to re-elect the party leadership. Similar letters have emerged before, but their authors were members of the so-called "rebel group", who have been advocating impeachment for almost a year.

But in this case, according to the journalist, the author of the appeal is a centrist who previously supported the actions of May. After that, concerns arose in the market that the centrists of the Conservative Party would also support a relatively small group of "rebels". In this case, the likelihood of a resignation will really increase – as well as the probability of Brexit without a deal, because the possible successor of Theresa May is Boris Johnson, who is an uncompromising supporter of a "hard" divorce from the European Union.

The British currency is very sensitive to the news noise regarding the prospects of Brexit. Therefore, the lack of coordination and numerous internal party conflicts against the background of the possible resignation of Theresa May led to the expected result - the pound/dollar pair turned around and tested the 29th figure again.

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But in technical terms, bears have not yet confirmed the priority of a downward movement. Now we are dealing with a impulsive price decline, but to talk about a further decline, the pair needs to consolidate below 1.2930 - at this price point, the lower line of the Bollinger Bands indicator coincides with the lower border of the Kumo cloud on the daily chart. If the price overcomes this barrier, the Ichimoku Kinko Hyo indicator will form a bearish "Parade of lines" signal – in this case, the price may fall to the level of 1.2760 (the lower line of the Bollinger Bands on the weekly chart) and even in the area of annual lows (the middle of the 26th figure).

It is worth noting that today Theresa May can encourage market participants with a statement that the deal is ready by 95% - but optimism is unlikely to be long-term. Even one inconsistent percentage can destroy all other agreements, therefore, the upward price pullbacks of the GBP/USD pair should be treated with caution.

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Re: Instaforex Analysis

Postby IFX Yvonne » Wed Oct 24, 2018 4:39 am

Technical analysis of Gold for October 24, 2018

Gold price broke above the triangle pattern as we expected and reached $1,240. Price is now pulling back down towards the break out area. Holding above it is a bullish sign. Breaking below $1,220 would confirm the end of the upward move and the start of a new down trend.

Image

Green lines - triangle pattern (broken upwards)

Black rectangle - major support

Gold price is in a bullish short-term trend. Price broke above the triangle pattern and is now trading above the break out level. Gold price could continue its move higher towards $1,250-60 as long as it does not fall below $1,220. Bulls should raise their stops to protect gains.

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

Postby IFX Gertrude » Thu Oct 25, 2018 12:52 am

Gold spreads its wings

The high demand for safe-haven assets allowed gold to break a crucial inverse correlation with the US dollar. For a long time, the precious metal was in the shadow of the US currency, but the favorable geopolitical situation and the breakthrough of the upper limit of the medium-term consolidation range of $1185-1215 per ounce allowed the bulls to resist the USD index, which still feels confident. It should show the weakness of the dollar, gold immediately go up. So it was at the auction on October 23, when Donald Trump took the old and criticized the current chairman of the Federal Reserve. The president believes that Jerome Powell is experiencing bouts of happiness when he raises the Federal funds rate. An unusual approach that made financial markets smile.

Overly inflated net shorts on the precious metal, increased demand for gold as a tool to hedge the volatility of stock indices and moderately negative medium-term prospects of the "greenback" are the key drivers of growth of XAU/USD. As the midterm elections in the U.S. are approaching, the growth of political risk is able to rein in bulls in the USD index. It is likely that the Democrats will celebrate the victory in the house of representatives, which increases the risks of impeachment. This is well understood by Donald Trump, who threw the voters a bone in the form of potential tax cuts for the middle class. I don't think that's gonna be enough to save the Republicans. Uncertainty will contribute to the growth of volatility of the US stock market and will force some speculators to withdraw from the dollar. But it was the strength of the US currency that prevented gold from breathing quietly for most of the year.

Dynamics of gold and the US dollar

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For a long time, precious metals turned a blind eye to trade wars, Brexit and the Italian political crisis. All these events are regarded as a positive external background for safe haven assets, which investors suddenly remembered in October. As a result, speculative demand for gold, Japanese yen and Swiss franc increased. At the same time, the inability of the analyzed asset to break the lower limit of the consolidation range of $1185-1215 per ounce was the reason for the closure of net short positions by hedge funds. They got rid of them at the fastest pace since March. However, the indicator is not far from the record highs, and its further reduction can raise the quotes of the XAU/USD higher.

Along with the US stock indices, the dollar and the geopolitical background, the fact that Reuters experts predict that the world economy will reach its ceiling in 2018 is important for gold. The fading effect of the fiscal stimulus will lead to a slowdown in US GDP, which will adversely affect the USD index. Slower than at present, the Fed's monetary policy normalization in 2019 also acts as a "bullish" factor for the precious metal. Technically, the "Bat" pattern continues to be implemented on the daily gold chart. Its target of 88.6% is located near $1,255 per ounce.

Gold, daily chart

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Re: Instaforex Analysis

Postby IFX Gertrude » Fri Oct 26, 2018 1:31 am

EUR and CAD: The Bank of Canada raises rates. What will the ECB answer?

The Canadian dollar significantly strengthened its position against the US dollar after the Canadian regulator decided to raise interest rates. The Bank of Canada

According to the data, the Bank of Canada raised the key interest rate by 25 basis points to 1.75%, indicating the confidence of the central bank in the prospects of the Canadian economy. Most likely, this decision was also dictated by the conclusion of a new North American trade agreement and an improvement in the situation with household debt.

During the press conference, the Bank of Canada announced the need to raise the interest rate to a neutral level in order to achieve the target level of inflation. The neutral rate range is 2.5%-3.5%. From the statements of the Bank of Canada, the word "gradually" was also removed, which the regulator used when describing further rates of rate increases.

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The central bank is confident that the new trade agreement will reduce uncertainty, increase company confidence and investment, but the trade conflict between the US and China will continue to put pressure on economic growth.

Economists predict that Canada's real GDP is expected to grow by 2.1% in 2018 and 2019, but it will slow to 1.9% in 2020. Inflation will remain near the target level of 2% until the end of 2020.

Fundamental statistics on the US, which was released yesterday afternoon, showed support for the US dollar, which managed to strengthen its position against risky assets.

According to the data, activity in the US private sector in October this year increased due to the growth of activity in the service sector. According to IHS Markit, the PMI purchasing managers' index for the manufacturing sector in October was 55.9 points against 55.6 points in September, while economists had expected the index to reach 55.4 points in October.

The PMI for services also rose to 54.7 points in October from 53.5 points in September. The composite PMI index was at the level of 54.8 points.

Although the data are still preliminary, higher growth rates of new orders and employment will continue to contribute to the growth of the overall index.

According to the U.S. Department of Commerce, sales of new homes in the US fell for the fourth consecutive month in September. Thus, sales of new homes in September decreased by 5.5% and amounted to 553,000 homes per year. Economists had expected sales to decline 0.6 percent.

The speech of the President of the Federal Reserve Bank of Dallas Robert Kaplan did not affect the quotes of the US dollar.

Kaplan said he expects less interest rate hikes next year than this year. He believes that the Fed should continue to raise rates gradually and patiently in order to prevent a slowdown in economic growth.

As for the technical picture of the EUR/USD pair, today everything will depend on the decision of the European Central Bank on interest rates, which will become known in the afternoon.

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The breakthrough of this month's lows in the area of 1.1380 will lead to the formation of a new downward wave with an update of major support levels of 1.1350 and 1.1300. In case of growth, the upward potential of risky assets will be limited by the resistance range of 1.1470 and 1.1520.

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