Instaforex Analysis

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Re: Instaforex Analysis

Postby IFX Gertrude » Thu Oct 24, 2019 10:49 pm

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.

Image

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.

Image

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 byInstaForex.
Best regards, PR Manager

Learn more about InstaForex Company at http://instaforex.com
IFX Gertrude
 
Posts: 5198
Joined: Wed Nov 07, 2012 6:25 am

Re: Instaforex Analysis

Postby IFX Gertrude » Thu Oct 24, 2019 10:52 pm

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.

Image

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.

Image

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 byInstaForex.
Best regards, PR Manager

Learn more about InstaForex Company at http://instaforex.com
IFX Gertrude
 
Posts: 5198
Joined: Wed Nov 07, 2012 6:25 am

Re: Instaforex Analysis

Postby IFX Gertrude » Mon Oct 28, 2019 12:44 am

Fractal analysis of the main currency pairs for October 28

Forecast for October 28: Analytical review of currency pairs on the scale of H1:

Image

For the euro / dollar pair, the key levels on the H1 scale are: 1.1138, 1.1119, 1.1103, 1.1083, 1.1068, 1.1049, 1.1038 and 1.1013. Here, the continuation of the development of the downward cycle of October 21 is expected after the breakdown of the level of 1.1068. In this case, the goal is 1.1049. Price consolidation is in the range of 1.1049 - 1.1038 . For the potential value for the bottom, we consider the level of 1.1013. Upon reaching which, we expect a pullback to the top.

Short-term upward movement is expected in the range 1.1103 - 1.1119. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 1.1138. This level is a key support for the downward structure.

The main trend is the descending structure of October 21.
Trading recommendations:
Buy: 1.1104 Take profit: 1.1117
Buy: 1.1120 Take profit: 1.1137
Sell: 1.1068 Take profit: 1.1050
Sell: 1.1037 Take profit: 1.1014

Image

For the pound / dollar pair, the key levels on the H1 scale are: 1.3215, 1.3141, 1.3033, 1.2939, 1.2810, 1.2734 and 1.2625. Here, we are following the development of the upward cycle of October 9. At the moment, the price has expressed a pronounced potential for the downward movement of October 21. The continuation of the movement to the top is expected after the breakdown of the level of 1.2959. In this case, the first target is 1.3035. The breakdown of the level of 1.3035 will lead to a pronounced upward movement. Here, the potential target is 1.3141. Price consolidation is in the range of 1.3141 - 1.3215.

We expect consolidated movement in the range of 1.2877 - 1.2810. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.2715. This level is a key support for the top. Its breakdown will lead to the formation of potential for the downward cycle. Here, the goal is 1.2625.

The main trend is the ascending structure of October 9, the formation of the descending structure of October 21.

Trading recommendations:
Buy: 1.2960 Take profit: 1.3031
Buy: 1.3035 Take profit: 1.3140
Sell: 1.2808 Take profit: 1.2717
Sell: 1.2713 Take profit: 1.2627

Image

For the dollar / franc pair, the key levels on the H1 scale are: 0.9999, 0.9976, 0.9963, 0.9940, 0.9929 and 0.9909. Here, we are following the development of the ascending structure of October 18. Short-term upward movement, we expect in the range 0.9963 - 0.9976. The breakdown of the last value will lead to a pronounced movement. Here, the target is a potential target - 0.9999, when this value is reached, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.9940 - 0.9929. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 0.9909. This level is a key support for the upward structure.

The main trend is the upward structure of October 18.

Trading recommendations:
Buy : 0.9963 Take profit: 0.9974
Buy : 0.9978 Take profit: 0.9999
Sell: 0.9940 Take profit: 0.9931
Sell: 0.9927 Take profit: 0.9912

Image

For the dollar / yen pair, the key levels on the scale are : 109.66, 109.33, 108.90, 108.72, 108.24, 108.02 and 107.67. Here, we are following the development of the upward cycle of October 4. Short-term upward movement is expected in the range 108.72 - 108.90. The breakdown of the latter value will lead to a movement to the level of 109.33. Price consolidation is near this level. For the potential value for the top, we consider the level of 109.66. Upon reaching this level, we expect a consolidated movement, as well as a pullback to the bottom. Short-term downward movement is expected in the range of 108.24 - 108.02. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 107.67. This level is a key support for the top. Main trend: local structure for the top of October 23.

Trading recommendations:

Buy: 108.90 Take profit: 109.30
Buy : 109.34 Take profit: 109.65
Sell: 108.24 Take profit: 108.03
Sell: 108.00 Take profit: 107.70

Image

For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3160, 1.3128, 1.3101, 1.3036 and 1.2989. Here, we are following the development of the downward trend of October 10. The continuation of movement to the bottom is expected after the breakdown of the level of 1.3036. In this case, the target is the potential target 1.2989. Upon reaching this level, we expect a pullback to the top. Short-term upward movement is possibly in the range of 1.3101 - 1.3128. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3160. This level is a key support for the downward structure. The main trend is the downward cycle of October 10.

Trading recommendations:
Buy: 1.3101 Take profit: 1.3126
Buy : 1.3130 Take profit: 1.3160
Sell: Take profit:
Sell: 1.3034 Take profit: 1.3000

Image

For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6933, 0.6901, 0.6886, 0.6856, 0.6836, 0.6794, 0.6781, 0.6752 and 0.6722. Here, we are following the descending structure of October 22. At the moment, we expect to reach the level of 0.6794. Price consolidation is in the range of 0.6794 - 0.6781. The breakdown of the level of 0.6780 will lead to a pronounced movement. Here, the target is 0.6752. Price consolidation is near this level, and there is also a high probability of a rollback to the top. For the potential value for the bottom, we consider the level of 0.6722. Upon reaching which, we expect a departure in the correction.

Short-term upward movement is possibly in the range of 0.6836 - 0.6856. The breakdown of the latter value will favor the formation of an ascending structure. Here, the potential target is 0.6886.

The main trend is the descending structure of October 22.
Trading recommendations:
Buy: 0.6836 Take profit: 0.6854
Buy: 0.6858 Take profit: 0.6886
Sell : 0.6780 Take profit : 0.6752
Sell: 0.6750 Take profit: 0.6724

Image

For the euro / yen pair, the key levels on the H1 scale are: 121.95, 121.79, 121.34, 121.03, 120.61, 120.28, 119.92 and 119.64. Here, the price has entered an equilibrium state and forms the potential for the downward movement of October 21. Short-term upward movement is expected in the range 121.03 - 121.34. The breakdown of the level of 121.35 should be accompanied by a pronounced upward movement. Here, the target is 121.79. Price consolidation is in the range of 121.79 - 121.95. From here, we expect a correction.

We expect consolidated movement in the range of 120.61 - 120.28. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 119.92. This level is a key support for the top. Its passage at the price will lead to the formation of initial conditions for the downward cycle. In this case, the first goal is 119.64.

The main trend is the upward structure of October 15 and the formation of potential for the bottom of October 21.

Trading recommendations:
Buy: 121.05 Take profit: 121.34
Buy: 121.36 Take profit: 121.76
Sell: 120.25 Take profit: 119.94
Sell: 119.90 Take profit: 119.66

Image

For the pound / yen pair, the key levels on the H1 scale are : 142.82, 141.23, 139.53, 138.70, 137.79 and 137.08. Here, the price has entered an equilibrium state and currently forms a potential for the bottom of October 21. The continuation of movement to the top is expected after the breakdown of the level of 141.23. In this case, the potential target is 142.82. Upon reaching which, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement, as well as consolidation, are possible in the range of 139.53 - 138.70. The breakdown of the last value will lead to a long correction. Here, the target is 137.79. The range of 137.79 - 137.08 is the key support for the top.

The main trend is the medium-term upward structure of October 8, the formation of potential for the downward movement of October 21.

Trading recommendations:
Buy: Take profit:
Buy: 141.25 Take profit: 142.80
Sell: 139.50 Take profit: 138.75
Sell: 138.65 Take profit: 137.80

Analysis are provided byInstaForex.
Best regards, PR Manager

Learn more about InstaForex Company at http://instaforex.com
IFX Gertrude
 
Posts: 5198
Joined: Wed Nov 07, 2012 6:25 am

Re: Instaforex Analysis

Postby IFX Gertrude » Mon Oct 28, 2019 12:54 am

Fractal analysis of the main currency pairs for October 28

Forecast for October 28: Analytical review of currency pairs on the scale of H1:

Image

For the euro / dollar pair, the key levels on the H1 scale are: 1.1138, 1.1119, 1.1103, 1.1083, 1.1068, 1.1049, 1.1038 and 1.1013. Here, the continuation of the development of the downward cycle of October 21 is expected after the breakdown of the level of 1.1068. In this case, the goal is 1.1049. Price consolidation is in the range of 1.1049 - 1.1038 . For the potential value for the bottom, we consider the level of 1.1013. Upon reaching which, we expect a pullback to the top.

Short-term upward movement is expected in the range 1.1103 - 1.1119. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 1.1138. This level is a key support for the downward structure.

The main trend is the descending structure of October 21.
Trading recommendations:
Buy: 1.1104 Take profit: 1.1117
Buy: 1.1120 Take profit: 1.1137
Sell: 1.1068 Take profit: 1.1050
Sell: 1.1037 Take profit: 1.1014

Image

For the pound / dollar pair, the key levels on the H1 scale are: 1.3215, 1.3141, 1.3033, 1.2939, 1.2810, 1.2734 and 1.2625. Here, we are following the development of the upward cycle of October 9. At the moment, the price has expressed a pronounced potential for the downward movement of October 21. The continuation of the movement to the top is expected after the breakdown of the level of 1.2959. In this case, the first target is 1.3035. The breakdown of the level of 1.3035 will lead to a pronounced upward movement. Here, the potential target is 1.3141. Price consolidation is in the range of 1.3141 - 1.3215.

We expect consolidated movement in the range of 1.2877 - 1.2810. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.2715. This level is a key support for the top. Its breakdown will lead to the formation of potential for the downward cycle. Here, the goal is 1.2625.

The main trend is the ascending structure of October 9, the formation of the descending structure of October 21.

Trading recommendations:
Buy: 1.2960 Take profit: 1.3031
Buy: 1.3035 Take profit: 1.3140
Sell: 1.2808 Take profit: 1.2717
Sell: 1.2713 Take profit: 1.2627

Image

For the dollar / franc pair, the key levels on the H1 scale are: 0.9999, 0.9976, 0.9963, 0.9940, 0.9929 and 0.9909. Here, we are following the development of the ascending structure of October 18. Short-term upward movement, we expect in the range 0.9963 - 0.9976. The breakdown of the last value will lead to a pronounced movement. Here, the target is a potential target - 0.9999, when this value is reached, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.9940 - 0.9929. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 0.9909. This level is a key support for the upward structure.

The main trend is the upward structure of October 18.

Trading recommendations:
Buy : 0.9963 Take profit: 0.9974
Buy : 0.9978 Take profit: 0.9999
Sell: 0.9940 Take profit: 0.9931
Sell: 0.9927 Take profit: 0.9912

Image

For the dollar / yen pair, the key levels on the scale are : 109.66, 109.33, 108.90, 108.72, 108.24, 108.02 and 107.67. Here, we are following the development of the upward cycle of October 4. Short-term upward movement is expected in the range 108.72 - 108.90. The breakdown of the latter value will lead to a movement to the level of 109.33. Price consolidation is near this level. For the potential value for the top, we consider the level of 109.66. Upon reaching this level, we expect a consolidated movement, as well as a pullback to the bottom. Short-term downward movement is expected in the range of 108.24 - 108.02. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 107.67. This level is a key support for the top. Main trend: local structure for the top of October 23.

Trading recommendations:

Buy: 108.90 Take profit: 109.30
Buy : 109.34 Take profit: 109.65
Sell: 108.24 Take profit: 108.03
Sell: 108.00 Take profit: 107.70

Image

For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3160, 1.3128, 1.3101, 1.3036 and 1.2989. Here, we are following the development of the downward trend of October 10. The continuation of movement to the bottom is expected after the breakdown of the level of 1.3036. In this case, the target is the potential target 1.2989. Upon reaching this level, we expect a pullback to the top. Short-term upward movement is possibly in the range of 1.3101 - 1.3128. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3160. This level is a key support for the downward structure. The main trend is the downward cycle of October 10.

Trading recommendations:
Buy: 1.3101 Take profit: 1.3126
Buy : 1.3130 Take profit: 1.3160
Sell: Take profit:
Sell: 1.3034 Take profit: 1.3000

Image

For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6933, 0.6901, 0.6886, 0.6856, 0.6836, 0.6794, 0.6781, 0.6752 and 0.6722. Here, we are following the descending structure of October 22. At the moment, we expect to reach the level of 0.6794. Price consolidation is in the range of 0.6794 - 0.6781. The breakdown of the level of 0.6780 will lead to a pronounced movement. Here, the target is 0.6752. Price consolidation is near this level, and there is also a high probability of a rollback to the top. For the potential value for the bottom, we consider the level of 0.6722. Upon reaching which, we expect a departure in the correction.

Short-term upward movement is possibly in the range of 0.6836 - 0.6856. The breakdown of the latter value will favor the formation of an ascending structure. Here, the potential target is 0.6886.

The main trend is the descending structure of October 22.
Trading recommendations:
Buy: 0.6836 Take profit: 0.6854
Buy: 0.6858 Take profit: 0.6886
Sell : 0.6780 Take profit : 0.6752
Sell: 0.6750 Take profit: 0.6724

Image

For the euro / yen pair, the key levels on the H1 scale are: 121.95, 121.79, 121.34, 121.03, 120.61, 120.28, 119.92 and 119.64. Here, the price has entered an equilibrium state and forms the potential for the downward movement of October 21. Short-term upward movement is expected in the range 121.03 - 121.34. The breakdown of the level of 121.35 should be accompanied by a pronounced upward movement. Here, the target is 121.79. Price consolidation is in the range of 121.79 - 121.95. From here, we expect a correction.

We expect consolidated movement in the range of 120.61 - 120.28. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 119.92. This level is a key support for the top. Its passage at the price will lead to the formation of initial conditions for the downward cycle. In this case, the first goal is 119.64.

The main trend is the upward structure of October 15 and the formation of potential for the bottom of October 21.

Trading recommendations:
Buy: 121.05 Take profit: 121.34
Buy: 121.36 Take profit: 121.76
Sell: 120.25 Take profit: 119.94
Sell: 119.90 Take profit: 119.66

Image

For the pound / yen pair, the key levels on the H1 scale are : 142.82, 141.23, 139.53, 138.70, 137.79 and 137.08. Here, the price has entered an equilibrium state and currently forms a potential for the bottom of October 21. The continuation of movement to the top is expected after the breakdown of the level of 141.23. In this case, the potential target is 142.82. Upon reaching which, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement, as well as consolidation, are possible in the range of 139.53 - 138.70. The breakdown of the last value will lead to a long correction. Here, the target is 137.79. The range of 137.79 - 137.08 is the key support for the top.

The main trend is the medium-term upward structure of October 8, the formation of potential for the downward movement of October 21.

Trading recommendations:
Buy: Take profit:
Buy: 141.25 Take profit: 142.80
Sell: 139.50 Take profit: 138.75
Sell: 138.65 Take profit: 137.80

Analysis are provided byInstaForex.
Best regards, PR Manager

Learn more about InstaForex Company at http://instaforex.com
IFX Gertrude
 
Posts: 5198
Joined: Wed Nov 07, 2012 6:25 am

Re: Instaforex Analysis

Postby IFX Gertrude » Tue Oct 29, 2019 1:00 am

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.

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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.

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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.


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Re: Instaforex Analysis

Postby IFX Gertrude » Wed Oct 30, 2019 12:42 am

Fractal analysis of the main currency pairs as of October 30[B]

Forecast for October 30:
Analytical review of currency pairs on the scale of H1:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.1138, 1.1119, 1.1103, 1.1083, 1.1068, 1.1049, 1.1038 and 1.1013. Here, we are following the development of the descending structure of October 21. Short-term downward movement is expected in the range of 1.1083 - 1.1068. The breakdown of the latter value will lead to a pronounced movement. In this case, the target is 1.1049. Price consolidation is in the range of 1.1049 - 1.1038. For the potential value for the bottom, we consider the level of 1.1013. Upon reaching which, we expect a pullback to the top.

We expect a consolidated movement in the range 1.1103 - 1.1119. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.1138. This level is a key support for the downward structure. Its passage at the price will lead to the development of an upward trend. In this case, the potential target is 1.1173.

The main trend is the descending structure of October 21, the correction stage. Trading recommendations:
Buy: 1.1120 Take profit: 1.1137
Buy: 1.1142 Take profit: 1.1170
Sell: 1.1083 Take profit: 1.1070
Sell: 1.1068 Take profit: 1.1050

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For the pound / dollar pair, the key levels on the H1 scale are: 1.3215, 1.3141, 1.3033, 1.2939, 1.2810, 1.2734 and 1.2625. Here, we are following the development of the upward cycle of October 9. At the moment, the price has expressed a pronounced potential for the downward movement of October 21. The continuation of the movement to the top is expected after the breakdown of the level of 1.2959. In this case, the first target is 1.3035. The breakdown of the level of 1.3035 will lead to a pronounced upward movement. Here, the potential target is 1.3141. Price consolidation is in the range of 1.3141 - 1.3215.

We expect consolidated movement in the range of 1.2877 - 1.2810. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.2715. This level is a key support for the top. Its breakdown will lead to the formation of potential for the downward cycle. Here, the goal is 1.2625.

The main trend is the ascending structure of October 9, the formation of the descending structure of October 21.

Trading recommendations:
Buy: 1.2960 Take profit: 1.3031
Buy: 1.3035 Take profit: 1.3140
Sell: 1.2808 Take profit: 1.2717
Sell: 1.2713 Take profit: 1.2627

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9999, 0.9976, 0.9963, 0.9940, 0.9929 and 0.9909. Here, we are following the development of the ascending structure of October 18. Short-term upward movement, we expect in the range 0.9963 - 0.9976. The breakdown of the last value will lead to a pronounced movement. Here, the target is a potential target - 0.9999, when this value is reached, we expect a pullback to the bottom.

Consolidated movement is possibly in the range of 0.9940 - 0.9929. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 0.9909. This level is a key support for the upward structure.

The main trend is the ascending structure of October 18, the correction stage. Trading recommendations:
Buy : 0.9963 Take profit: 0.9974
Buy : 0.9978 Take profit: 0.9999
Sell: Take profit:
Sell: 0.9927 Take profit: 0.9912

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For the dollar / yen pair, the key levels on the scale are : 109.58, 109.39, 109.29, 109.13, 108.85, 108.72 and 108.53. Here, we are following the development of the upward cycle of October 23. The continuation of the movement to the top is expected after the breakdown of the level of 109.13. In this case, the target is 109.29. Price consolidation is in the range of 109.29 - 109.39. For the potential value for the top, we consider the level of 109.58, upon reaching which, we expect a pullback to the bottom.

Short-term downward movement is expected in the range of 108.85 - 108.72. The breakdown of the last value will lead to an in-depth correction. Here, the target is 108.53. This level is a key support for the top.

Main trend: local structure for the top of October 23.
Trading recommendations:
Buy: 109.13 Take profit: 109.29
Buy : 109.40 Take profit: 109.56
Sell: 108.85 Take profit: 108.74
Sell: 108.70 Take profit: 108.55

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3160, 1.3128, 1.3101, 1.3036 and 1.2989. Here, we are following the development of the downward trend of October 10. At the moment, the price forms a small potential of October 29 for the movement in correction. The continuation of movement to the bottom is expected after the breakdown of the level of 1.3036. In this case, the target is the potential target 1.2989. Upon reaching this level, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 1.3101 - 1.3128. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3160. This level is a key support for the downward structure.

The main trend is the downward cycle of October 10, the correction stage.

Trading recommendations:
Buy: 1.3101 Take profit: 1.3126
Buy : 1.3130 Take profit: 1.3160
Sell: Take profit:
Sell: 1.3034 Take profit: 1.3000

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6928, 0.6910, 0.6897, 0.6874, 0.6847, 0.6831 and 0.6810. Here, the price registered the local upward structure of October 28. The continuation of the movement to the top is expected after the breakdown of the level of 0.6874. In this case, the target is 0.6897. Price consolidation is in in the range of 0.6897 - 0.6910. For the potential value for the top, we consider the level of 0.6928. Upon reaching which, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.6847 - 0.6831. The breakdown of the latter value will lead to the formation of a downward structure. Here, the potential target is 0.6810.

The main trend is the local structure for the top of October 28.
Trading recommendations:
Buy: 0.6875 Take profit: 0.6896
Buy: 0.6910 Take profit: 0.6928
Sell : 0.6846 Take profit : 0.6831
Sell: 0.6828 Take profit: 0.6810

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For the euro / yen pair, the key levels on the H1 scale are: 121.95, 121.79, 121.34, 121.03, 120.61, 120.28, 119.92 and 119.64. Here, price has entered an equilibrium state. Short-term upward movement is expected in the range 121.03 - 121.34. The breakdown of the level of 121.35 should be accompanied by a pronounced upward movement. Here, the target is 121.79. Price consolidation is in the range of 121.79 - 121.95. From here, we expect a correction.

We expect consolidated movement in the range of 120.61 - 120.28. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 119.92. This level is a key support for the top. Its passage at the price will lead to the formation of initial conditions for the downward cycle. In this case, the first goal is 119.64.

The main trend is the rising structure of October 15 and the formation of potential for the bottom of October 21. Trading recommendations:
Buy: 121.05 Take profit: 121.34
Buy: 121.36 Take profit: 121.76
Sell: 120.25 Take profit: 119.94
Sell: 119.90 Take profit: 119.66

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For the pound / yen pair, the key levels on the H1 scale are : 142.82, 141.23, 139.53, 138.70, 137.79 and 137.08. Here, price has entered an equilibrium state. The continuation of movement to the top is expected after the breakdown of the level of 141.23. In this case, the potential target is 142.82. Upon reaching which, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement, as well as consolidation, are possible in the range of 139.53 - 138.70. The breakdown of the last value will lead to a long correction. Here, the target is 137.79. The range of 137.79 - 137.08 is the key support for the top. The main trend is the medium-term upward structure of October 8, the formation of potential for the downward movement of October 21.

Trading recommendations:
Buy: 141.25 Take profit: 142.80
Sell: 139.50 Take profit: 138.75
Sell: 138.65 Take profit: 137.80

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Re: Instaforex Analysis

Postby IFX Gertrude » Wed Oct 30, 2019 10:47 pm

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

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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.

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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.

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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.

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Re: Instaforex Analysis

Postby IFX Gertrude » Mon Nov 04, 2019 2:07 am

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.

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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.

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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.

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Re: Instaforex Analysis

Postby IFX Gertrude » Tue Nov 05, 2019 12:09 am

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

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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

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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

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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.

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Re: Instaforex Analysis

Postby IFX Gertrude » Wed Nov 06, 2019 1:33 am

Forecast for EUR/USD on November 6, 2019

EUR/USD
The euro closed the day down by 51 points yesterday. Business media point out the reason for the optimistic sentiment among investors regarding the upcoming US and China trade deal and good October ISM Non-Manufacturing PMI, which rose from 52.6 to 54.7. But with a broad view of the market, it is clear that investors are far from experiencing the interest in risk that was on Friday after the release of US employment data. The Dow Jones stock index grew just 0.11%, while the S&P 500 fell 0.12%. The general mood for dollar purchases remains, and it is characteristic that the price has not reached the levels at which the massive closing of euro purchases began on October 22 and 24, which we spoke about at the time.

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The decline in the euro stopped at the Fibonacci level of 123.6% at the lows of October 25-29. There may be a respite before the subsequent downward movement. The signal line of the Marlin oscillator penetrates into the negative trend zone. After a respite, we are waiting for prices to fall to the MACD line at around 1.1027. We admit corrective growth to the price channel line near 1.1104.

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The situation is completely declining on the four-hour chart: the price is under the lines of balance and MACD, the Marlin oscillator is developing in the territory of the declining trend.

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