Instaforex Analysis

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Re: Instaforex Analysis

Postby IFX Gertrude » Wed Sep 12, 2018 1:04 am

Elliott wave analysis of EUR/NZD for September 12, 2018

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The 1.7820 targets have now been tested. The question is whether this was the top of red wave iii and a correction in red wave iv is needed now? We have seen a quite massive negative divergence being build in the run higher to 1.7820, so it should come as no surprise if a minor correction in red wave iv is about to begin. A break below 1.7738 will indicate this is the case.

That said, the rally to 1.7820 only represents the minimum extension target of red wave i. Therefore, we have to be equally ready for this extension to continue towards the next extension targets at 1.7954 (the 200% extension of red wave i) or even higher to the 261.8% extension target of red wave i at 1.8184.
R3: 1.7954
R2: 1.7900
R1: 1.7825 Pivot: 1.7738
S1: 1.7678
S2: 1.7629
S3: 1.7590

Trading recommendation:
We are long EUR from 1.7330 and we will move our stop higher to 1.7730.

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Re: Instaforex Analysis

Postby IFX Gertrude » Fri Sep 14, 2018 2:01 am

US again "courting" China

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The unexpected offer of Americans to resume negotiations with China on trade duties on Wednesday evening led to a surge of optimism in the markets and a local weakening of the US dollar.

It seems that the US will not abandon the desire to "dent" China in the issue of the ratio of trade between countries. So far, they have not been able to do this, because the main problem of "exceptional", in our opinion, is their arrogance towards trading partners and the desire to use any methods to achieve their narrow-minded economic and political goals without taking them into account.

Earlier we have already mentioned that the trade balance not only, according to the latest data, has not shifted in favor of the Americans, but also fell, and the PRC's appeal to the WTO to punish the United States for their illegal actions could force the latter to resort to a new round of negotiations. Also, they may have realized that D. Trump's latest threats to expand the impact of new import tariffs by another 267 billion dollars did not have an effective impact on the leadership of "China", which was the reason for the desire to continue the negotiation process.

On this wave, the US and European stock indexes were supported by the results of trading on Wednesday, but already on Thursday the Chinese did not show such unambiguous optimism, which indicates that local investors are not confident in the success and perceive the proposals of the Americans as another trick and nothing more. We also believe that there will be no success in this process unless the United States engages in constructive and truly equitable negotiations.

Given this state of affairs, we believe that the weakening of the dollar against commodities and commodity currencies will be local, which means that after the weakening of the US currency and another disappointment in the negotiations, we can observe a turn in the interest of market players towards purchases.

On Thursday, from the important events of the day we will highlight the outcome of the ECB meeting on monetary policy. We do not expect any breakthrough statements and changes in the bank's policy. It is likely that it will continue with its plan and then smoothly reduce the program of quantitative easing until the end of this year, which is positive for the euro. But it is unlikely to expect its strong growth when paired with the US dollar, as the process of raising rates in the US will compensate for the pressure of the euro, so we believe that the overall sideways trend of the euro/dollar pair in the short term will continue.

The forecast for today:

The EUR/USD pair is trading in the range of 1.1530-1.1650 in anticipation of the ECB meeting. Probably, the pair will remain in this range, turning down and rushing to its lower border.

The AUD/USD pair is trading above 0.7170. We do not expect a strong growth of the pair, as the RBA is unlikely to decide before the end of this year to raise rates on the wave of instability in the world. A price decrease below 0.7170 may be the reason for the price to fall to 0.7100.

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Re: Instaforex Analysis

Postby IFX Gertrude » Tue Sep 18, 2018 1:58 am

The pound is waiting for a signal to attack

The meeting of the Bank of England was held without noise and dust, and sterling is preparing to release important statistics on inflation and retail sales, observing the development of the situation in the field of trade wars. According to the regulator, the consequences of the conflict between the US and China for the world economy may be slightly worse than initially expected. The concern of MPC is evoked by developments in emerging markets. The committee unanimously voted to maintain the repo rate at 0.75% and said that by the end of 2019 excess demand could lead to further tightening of monetary policy.

In general, the meeting was held in line with expectations, and the increase in estimates of GDP growth of the UK from 0.4% to 0.5% q/q in the third quarter provided little support to the sterling. Markets were expecting a more positive result amid the acceleration of the average wage to 2.9% y/y and the economy to 0.6% in May-July, however, the central bank cooled the offensive ardor of the bulls with the statement that these figures came in line with the forecast. According to the regulator, inflation is moving in the direction of 2%, which suggests the possibility of using the "let's sit and see" approach.

The pound continues to show increased sensitivity to politics. Rumors that Brussels and London failed to achieve progress on the Irish border, has pushed prices higher, but a statement by the Labour Party that the opposition would vote against Theresa May's plan returned the bulls from heaven to earth. The correlation between the headlines about Brexit and the volatility of the sterling reached a record 70%, which is conclusive evidence that the growth of the GBP/USD is hampered primarily by politics.

Dynamics of correlation between Brexit headlines and sterling volatility

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Unlike the volatility of the pound, the volatility of the euro fell to a 5-month low. The ECB's plans to phase out QE and hold rates until at least September 2019 make the monetary policy transparent. Given the fact that the timing of the continuation of the normalization of BoE may shift from the end of 2019 to a later or, conversely, an earlier period, investors have a great opportunity to win back macroeconomic statistics on Britain in the EUR/GBP pair. According to Nomura, the release of retail sales data for August (September 20) looks particularly attractive. A pleasant surprise will contribute to the decline of the euro in the direction of £0.85. It should be noted that the consensus forecast of Bloomberg experts for the end of 2018 is £0.89.

As for the GBP/USD pair, much will depend on the development of the situation in the field of trade wars. Donald Trump threatens to impose additional tariffs of $200 billion on Chinese imports and invites to negotiations. The Chinese media claim that Beijing will not conduct a dialogue at gunpoint. The escalation of the conflict will increase the demand for reliable assets, including the US dollar.

Technically, if the bulls on the GBP/USD pair manage to hold the quotes above the support at 1.3035 and take the resistance by 1.313, the risks of implementing the target by 88.6% on the Shark pattern will increase.

GBP/USD, daily chart

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*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 Yvonne » Wed Sep 19, 2018 3:35 am

USD/CAD Bounced Off Support, Prepare For A Further Rise

USD/CAD bounced nicely off its support level at 1.2969 (100% Fibonacci extension, 76.4% Fibonacci retracement, horizontal overlap support) where it could potentially bounce to its resistance level at 1.3010 (50% Fibonacci retracement, horizontal pullback resistance).

Stochastic (55, 5, 3) is bounced off its support level at 3.5% where a corresponding rise could occur.

USD/CAD bounced nicely off its support level where we expect to see a further rise.

Buy above 1.2969. Stop loss at 1.2937. Take profit at 1.3010.

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*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 Yvonne » Thu Sep 20, 2018 3:37 am

Technical analysis of EUR/USD for September 20, 2018

EUR/USD is below very important long-term resistance. If EUR/USD manages to break and hold above 1.17-1.1730 area, we should expect a big upward move to unfold over the coming weeks towards 1.19-1.21. A rejection however and a break below 1.1620 will be a very bearish sign.

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Red line - long-term resistance

Blue line - long-term support

Green line - short-term support

EUR/USD has managed to reach the red trend line resistance more than once but each time prices got rejected. This is a bearish sign. However all pull backs have managed to stay above the short-term support green trend line at 1.1660. A break below this level will most probably open the way for a move towards the blue trend line support at 1.1520. If that level is lost as well we should expect EUR/USD to move towards 1.13-1.14. On the other hand, if the price breaks and stays above the red trend line, I expect a move towards at least 1.19.

*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 Yvonne » Fri Sep 21, 2018 4:03 am

Technical analysis of Gold for September 21, 2018

Dollar weakness yesterday helped Gold rise towards its August highs and major short-term resistance and upper channel boundary. Longer-term trend remains bearish. Gold price is at major short-term resistance.

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Red line - resistance

Blue line - short-term support

Green lines - bearish channel

Gold price is trading near short-term resistance at $1,210. Here we also find the upper channel boundary resistance. A break above this level will open the way for a push towards $1,220-30. Support is at $1,200 and as long as price is above this level trend will remain mildly bullish.

*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 » Mon Sep 24, 2018 1:50 am

Elliott wave analysis of EUR/NZD for September 24, 2018

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EUR/NZD should stay above the peak of red wave i at 1.7488 for the next impulsive rally towards 1.8031. If an unexpected break below 1.7488 is seen, the we will have to make a recount of the rally from 1.6534 and count the rally as a series of waves ones and twos. This is not our preferred count, but it remains a possibility as long as re stay below 1.7783. A break above here will confirm that the next impulsive rally is developing higher towards 1.8030 and longer term closer to 1.8369.

R3: 1.7711
R2: 1.7680
R1: 1.7650
Pivot: 1,7620
S1: 1.7586
S2: 1.7539
S3: 1.7488

Trading recommendation:

We are long EUR from 1.7615 with our stop placed at 1.7515. If you are not long EUR yet, the wait and buy a break above 1.7680 and start by using a stop, just below the most recent low.

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

Analysis are provided byInstaForex.
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Re: Instaforex Analysis

Postby IFX Gertrude » Tue Sep 25, 2018 1:55 am

The pound has reached a dead end

Can the central bank normalize monetary and credit policy, macroeconomic statistics improve, and the currency fall? Maybe if the weight is attached to its feet by politics. It would seem that the positive signals from GDP, average wages and retail sales should have given the pound an acceleration, because the timing of the next increase in the REPO rate has shifted from early 2020 to summer 2019. Before the Austrian EU summit, everything went smoothly: the GBP/USD pair rose to a two-month high, but Theresa May's speech in Salzburg confused the "bulls" with all the cards.

On the eve of the meeting of representatives of the European Union, the parties were full of optimism. Brussels was determined to provide London with preferential conditions unknown to any other country, Michel Barnier argued that he was ready to work day and night to make the deal happen, and Germany said that it would take the plan in general terms, in order to discuss the details later on. It would seem that everything is going to ensure that, as a last resort, by November, the parties will sign an agreement. However, the EU's rejection of Theresa May's plan has caused heated criticism from the British prime minister. In her opinion, the relationship reached a deadlock, and the UK is better off left without a deal than sign a bad agreement. What is the reason for May's violent aggression? It is unlikely that she was enraged by the reluctance of Brussels to approve the program. Most likely, the head of government needed to get support within the country.

As a result of the sharp speech of the British prime minister, the GBP/USD pair lost about 1.5%, which was its worst daily dynamics in the last 15 months. National Australia Bank claims that 2.5% of the rally of the trade-weighted sterling went too far, its volatility reached its highest level since February, and MUFG notes that the trading range for the analyzed pair can be very wide – from 1.15 to 1.45 – depending on the hard, soft Brexit or lack of agreement on the divorce of the UK with the EU.

The dynamics of the volatility of the pound

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The strengthening of political risks and the growth of volatility are important factors that constrain the strengthening of the pound. The higher the volatility of quotations, the less the desire of non-residents to buy British assets. London, on the other hand, needs to finance the current account deficit, so a decrease in capital inflows should be seen as a "bearish" factor for the sterling.

It should be taken into account that there are always two currencies in any pair. And the peak of the GBP/USD pair at the end of the week to September 21 is due, among other things, to a slight recovery of the US dollar. Investors expect an increase in the federal funds rate following the September FOMC meeting, China's reluctance to negotiate with the United States speaks of the escalation of the trade conflict, while the main opponent of the dollar in the face of the euro is burdened by weak statistics on business activity and political problems in Italy.

Technically, there is a struggle for an important level of 1,312. If victory is celebrated by "bears," the risk of a pullback after reaching the target of 88.6% for the the "Bat" pattern will increase. On the contrary, the victory of the bulls will create prerequisites for the continuation of the GBP/USD rally.

GBP/USD daily chart

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Re: Instaforex Analysis

Postby IFX Gertrude » Wed Sep 26, 2018 2:19 am

Brent ignores Trump's calls

When there is no agreement in the comrades, their business will not go smoothly. Contrary to the calls of Donald Trump, OPEC did not increase oil production in order to suspend the growth of prices. Inside the cartel, there is a clear division between those who can do it, but would like to see a corresponding increase in demand, and those who are unable to expand production, and it is satisfied with the current levels of Brent. Futures on the North Sea variety, by the way, updated the four-year high. The market is amplified by rumors that the increase in global demand (according to the International Energy Agency, the figure will grow by 1.4 million b/d in 2018 and 1.5 million b/d in 2019), the reduction of Iranian exports and the reluctance of OPEC to increase production will lead to such a deficit of oil, which has not been seen for several decades.

Oil closes in the positive territory for the fifth consecutive quarter, which has not happened since the beginning of 2007, when six straight quarters of growth inflated the WTI quotes to a historic high of $147.5 per barrel. In the current situation, the expansion of the imbalance allows banks to set "bullish" forecasts for Brent and WTI. In particular, BofA Merrill Lynch and JP Morgan believe that the North Sea variety can jump up to $95 per barrel.

Not the least role in the September oil rally was played by a weak dollar. Despite the strong US economy and labor market, as well as the Fed's desire to continue the cycle of monetary policy normalization, speculators preferred to get rid of the US currency at the end of the quarter, as the escalation of trade disputes between Washington and Beijing could not provide it with the expected support. At the same time, the risks of Donald Trump's impeachment in the event of the Democrats' victory in the midterm elections to Congress in November are growing. Taking into account the existing correlation of the USD and Brent index, the growth of black gold looks quite logical.

Dynamics of Brent and USD index

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It can not be said that politics does not even consider the oil market. Rising prices have the potential to increase ordinary Americans' spending on gasoline and reduce the effectiveness of the fiscal stimulus. This is a serious trump card in the hands of opponents of Donald Trump. In this regard, the President's calls for OPEC to increase production look logical.

Despite the fact that sanctions against Iran are a pronounced "bullish" factor for Brent and WTI, there is an opinion in the market that it is unlikely to become a long-term driver of growth in quotations. Moreover, the reduction in global demand under the influence of trade wars (IMF estimates it at 150-200 thousand b/d) may limit the potential for oil growth. In my opinion, much will depend on the buyers' refusals and on the scale of hostilities between the US and China. So far, several countries have expressed their intention to reduce purchases of oil from Tehran, including India, South Korea, Japan and others.

Technically, the implementation of the target by 113% on the "Shark" pattern increases the risks of a rollback. If the bulls do not stop there, the probability of achieving the target by 161.8% for AB=CD will increase.

Brent, daily chart

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Re: Instaforex Analysis

Postby IFX Gertrude » Thu Sep 27, 2018 2:12 am

The Fed will open gold eyes

Gold continues to sleep peacefully near the $1200 per ounce mark, but it is unlikely that an experienced investor will be deceived by such calmness. The market is cyclical, trends are replaced by consolidations, trading ranges give way to new trends, so the current sleepy state will probably end soon. We need a reason to wake up. And they are quite capable of becoming the events of the end of September. The Fed meeting, the publication of the draft budget of Italy and the release of data on European inflation will directly affect the USD index, and in fact its dynamics has become the main "bearish" driver for the XAU/USD. Since the beginning of the year, the precious metal has lost about 8% on expectations of an increase in the Federal funds rate and on fears of increased trade tensions.

Despite low prices, physical demand does not support gold. Stocks of the largest specialized stock exchange fund SPDR Gold Shares fell to 742 tons, the lowest level since February 2016. Since the beginning of the year, the figure has lost 11.2%. Rumors of an increase in import duties in India from the current 10% to 12-13%, and possibly up to 20%, increase the risks of reducing demand for precious metals in the country - its largest consumer. At the same time, the People's Bank of China has not purchased gold for two years in order to increase its reserves. However, the holy place is never empty: Russia has claimed the status of the largest buyer, increasing its own reserves to 64.3 million ounces (about 2000 tons). In August, they rose by 31 tons. Bloomberg reports that the official Delhi will leave tariffs at the same level, as it fears an increase in smuggling, and ETF stocks tend to follow the price, and not vice versa.

I believe that the market conditions of the physical asset will gradually improve, and to predict the further dynamics of the XAU/USD it makes sense to look at factors such as trade wars and FOMC meetings. During the current cycle of normalization of monetary policy of the Fed, gold reacted quite clearly to the increase in the Federal funds rate: on the eve of the meetings, it fell, then quickly restored the lost positions. In my opinion, this dynamics is due to the implementation of the principle of "sell on rumors, buy on facts".

Dynamics of gold and Fed rate

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The failure occurred in June, when the tightening of monetary policy did not lead to an increase in the value of the precious metal. In summer, investors were keen on buying the US dollar amid divergence in economic growth between the United States and other countries. They believed that China and the developing countries would slow down, while Washington would not feel the pain of trade wars. Currently, the world has changed. The US economy may lose momentum, while EM assets look oversold. In this respect, the former associated with the recovery of gold prices after the FOMC meetings is quite capable of playing.

Technically, the exit of the precious metal from the trading range of $1184-1214 per ounce will allow it to determine the direction of further movement. The breakout of the upper limit will increase the risks of the rally in the direction of $1240 and $1260. On the contrary, a successful storm of support for $1184 will open the way for the "bears" to the south.

Gold, daily chart

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