Instaforex Analysis

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Re: Instaforex Analysis

Postby IFX Gertrude » Fri Jan 05, 2018 2:19 am

Euro and pound win back their positions against the US dollar

Good data for the euro area and the UK in the first half of the day led to a slight strengthening of the European currency and the British pound after yesterday's decline, which was noticed after the publication of the Fed's protocols.

According to the IHS Markit report, the composite PMI of the euro zone's supply managers rose to 58.1 points in December from 58.0 points. This once again confirms the fact that economic activity in the eurozone at the end of 2017 remained at a fairly strong level. This allows you to count on excellent indicators for GDP growth. Also, it is most likely that in early 2018, the current growth rate of activity will continue due to the flow of new orders.

As for the technical picture of the EURUSD pair in the short term, the exit beyond the level of 1.2035, which I recommended to pay attention to in the morning review, led to the resumption of purchases of the European currency. The next target is a break above the monthly highs, which will lead to the renewal of new resistance levels of 1.2125 and 1.2170.

The British pound strengthened its position against the US dollar against the backdrop of good data on the service sector, which accounts for a significant portion of the UK GDP.

According to IHS Markit's report, PMI's supply managers index for the UK services sector increased to 54.2 points in December 2017 against 53.8 points in November. Economists had expected the index in December to be at 54.0 points. The IHS Markit report noted that business growth accelerated at once in all regions of the UK.

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Today, the number of approved mortgage loans in the UK was published for November which increased compared to October. Despite this, growth is gradually slowing down, indicating a decrease in activity in the housing market.

So, according to the Bank of England, the number of approved mortgage loans in the UK in November 2017 was at 65 140 against 64 890 in October. Meanwhile, the average for the last 6 months was at 66 562, indicating a likely decrease in activity. According to the Nationwide Building Society, housing prices in the UK in December last year rose by 2.6% compared with the same period in 2016.

Unsecured consumer lending in the UK also began to gradually slow down.

According to the same Bank of England, unsecured consumer lending in November 2017 grew by only 1.4 billion pounds, while economists expected a 1.6 billion pounds increase in lending. Compared to November 2016, lending grew by 9.1%.

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Re: Instaforex Analysis

Postby IFX Gertrude » Mon Jan 08, 2018 1:32 am

NZD/USD approaching major resistance, prepare to sell

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The price is testing major resistance at 0.7188 (Fibonacci retracement, horizontal overlap resistance, bearish divergence) and a strong reaction could occur at this level to push the price down to at least 0.7041 support (Fibonacci retracement, horizontal pullback support). However, we are also in a bullish ascending channel and only a break of this channel would confirm further downside move.

Stochastic (34,5,3) is seeing major resistance at 94% and also displays bearish divergence vs price signaling that a reversal is impending.

Sell below 0.7188. Stop loss is at 0.7280. Take profit is at 0.7041.

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Re: Instaforex Analysis

Postby IFX Gertrude » Tue Jan 09, 2018 2:07 am

Elliott wave analysis of EUR/NZD for January 9, 2018

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Wave summary:
EUR/NZD has declined nice and is now close to the first support near 1.6571. This support is expected to protect the downside for at least a corrective rally closer to 1.6800 and maybe even turn prices higher trough important resistance at 1.7025 for the next impulsive rally towards 1.7777.

R3: 1,6890
R2: 1.6800
R1: 1.6701
Pivot: 1.6630
S1: 1.6571
S2: 1.6447
S3: 1.6298

Trading recommendation:
We are short EUR from 1.6795. We will book half profit here at 1.6675 for a nice profit of 120 pips and we will move our stop lower from 1.7085 to 1.6835 on the rest of the position.

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Re: Instaforex Analysis

Postby IFX Gertrude » Wed Jan 10, 2018 1:58 am

Good data on the labor market did not help the euro

Good data on industrial production in Germany, as well as on the labor market in the euro area, did not provide the expected support to the European currency, which continued to decline in Tuesday's trading against the US dollar. The single currency was affected by discussions related to the increased likelihood of verbal intervention from the European Central Bank.

Let me remind you that yesterday there were rumors that the ECB could opt for an intervention in order to weaken the current high rate of the European currency, thus preventing the fall in economic growth rates and the decline in the trade surplus due to the appreciation of exports.

In the first half of the day, data showed that industrial production in Germany in November 2017 increased by 3.4% compared with October, significantly exceeding the forecasts of economists. Compared to the same period in 2016, production increased by 5.6%. Economists had expected that in November 2017 industrial production in Germany would grow by only 1.9%.

Production in the manufacturing industry of Germany in November increased by 4.3%, and in construction by 1.5%.

As expected, in 2017 the labor market in the euro area continued to strengthen.

According to the report of the statistics agency, the unemployment rate in the euro area in November 2017 decreased and amounted to 8.7% against 8.8% in October. The increase was 107,000 jobs.

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Regardless, some experts believe that an overly early winding up of the bond repurchase program by the European Central Bank could negatively affect the main factors that positively affect the euro area economy, which will lead to a slowdown in the decline in the unemployment rate. However, this forecast does not affect the first half of 2018, as, according to the results of the December survey of manufacturing companies, it is expected to increase the rate of hiring of labor.

On Tuesday, it was also announced that France's trade deficit in November increased. This happened due to the reduction of energy exports and transport equipment.

Thus, according to the report of the French government, the foreign trade deficit in November 2017 amounted to 5.7 billion euros against 5.3 billion euros in October. The current account deficit in the balance of payments in November was 3.3 billion euros against 2.6 billion euros in October.

The British pound also continued to decline against the US dollar after the release of data from the British Retail Consortium. Thus, retail sales excluding volatile categories of goods in the 4th quarter of last year decreased by 1.9%, compared to the same period in 2016, the fall was 1.4%.

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Re: Instaforex Analysis

Postby IFX Yvonne » Thu Jan 11, 2018 5:29 am

Technical analysis of EUR/USD for Jan 11, 2018

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When the European market opens, some economic data will be released such as Industrial Production m/m and Italian Retail Sales m/m. The US will present a series of economic reports such as Federal Budget Balance, 30-y Bond Auction, Unemployment Claims, Core PPI m/m, and PPI m/m. So amid the reports, EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:
Breakout BUY Level: 1.2020.
Strong Resistance:1.2013.
Original Resistance: 1.2001.
Inner Sell Area: 1.1989.
Target Inner Area: 1.1961.
Inner Buy Area: 1.1933.
Original Support: 1.1921.
Strong Support: 1.1909.
Breakout SELL Level: 1.1902.

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Re: Instaforex Analysis

Postby IFX Gertrude » Fri Jan 12, 2018 2:11 am

Protocols of the ECB helped the euro

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The euro did not receive serious support from investors after the release of good data on industrial production in the euro area. However, the publication of the minutes from the December meeting of the European Central Bank forced traders to change their view of risky assets.

In the first half of the day, it became known that Germany's economy in 2017 grew at a slower pace than expected. According to the report of the Federal Bureau of Statistics of Germany, Germany's gross domestic product grew by 2.2% last year. Despite this, economists expected a more serious growth rate in the region of 2.3%. The surplus of the country's budget in 2017 amounted to 1.2% of GDP.

Given the economic indicators demonstrated by Germany in 2017, it is not surprising that this country is the basis of the eurozone and the European Union as a whole. However, given the difficulties now faced by German Chancellor Angela Merkel in her post, it can be assumed that it is political problems that indirectly affect the main financial indicators in early 2018.

As I noted above, the industrial production of the eurozone completes the year with an excellent upward trend. According to the report of the EU statistical agency Eurostat, industrial production in November 2017 increased by 1.0% compared to the previous month and by 3.2% compared to the same period of the previous year. Economists predicted that growth will be at 0.6% compared to the previous month and 2.9% compared to the same period of the previous year.

The publication of the minutes of the meeting of the European Central Bank provided substantial support to the euro, as many investors found in them a hint of a possible curtailment of the asset repurchase program by the Central Bank this fall.

The minutes indicate that the ECB can change its attitude to the credit policy in case the state of the economy continues to improve in 2018. The leaders also agreed that the policy should change gradually so as not to affect the recovery of the euro area economy.

Weak data on the US labor market exerted even more pressure on the US dollar. According to the report of the US Department of Labor, the number of initial applications for unemployment benefits for the week of December 31 to January 6 increased by 11,000 and amounted to 261,000. Economists had expected the number of applications to be 245,000.

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Re: Instaforex Analysis

Postby IFX Gertrude » Mon Jan 15, 2018 2:00 am

Elliott wave analysis of EUR/JPY for January 15, 2018

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Wave summary:
The corrective rally from 133.09 spikes just above our upper target at 135.25 and should now be ready to turn lower again for a decline towards 131.11 before another corrective rally is expected towards 134.10.

Short-term a break below minor support at 134.79 will be a strong indicator that the corrective rally from 133.09 has completed and the expected decline to 131.11 has begun.

R3: 136.64
R2: 136.05
R1: 135.66
Pivot: 134.79
S1: 134.25
S2: 133.65
S3: 133.09

Trading recommendation:
We sold EUR at 134.74. We will place our stop at 136.75, but expect to move it lower soon. Upon a break below 134.79, we will move the stop lower to 135.75.

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Re: Instaforex Analysis

Postby IFX Gertrude » Tue Jan 16, 2018 1:03 am

Elliott wave analysis of EUR/JPY for January 16, 2018

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Wave summary:
We continue to regard the rally from 133.01 as corrective and is looking for a break below minor support at 135.36 and more importantly a break below support at 135.00 as confirmation that this correction has completed and a new decline 131.11 is developing.

At no point should a break above 136.64 be seen under this count.
R3: 137.37
R2: 136.64
R1: 136.32
Pivot: 135.36
S1: 135.00
S2: 134.80
S3: 134.35

Trading recommendation:
We are short EUR from 134.75 with our stop placed at 136.75. Upon a break below 135.00 we will lower our stop to 136.15.

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Re: Instaforex Analysis

Postby IFX Gertrude » Wed Jan 17, 2018 1:24 am

Technical analysis of USD/JPY for Jan 17, 2018

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

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

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Re: Instaforex Analysis

Postby IFX Gertrude » Thu Jan 18, 2018 1:48 am

Four drivers of gold growth

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

Dynamics of precious metals and gold

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Source: Financial Times.

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

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

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

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

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

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

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