Trading plan for EURUSD for May 20, 2019

Technical outlook:The EURUSD has dropped lower as discussed. The pair is now trading around 1.1155 levels. We are presenting a contrarian view today, as depicted on chart here. The pair could be carving out a complex correction since 1.1260 highs earli…

Technical analysis of Ethereum for 20.05.2019

Technical analysis of Ethereum for 20.05.2019The wave 4 cycle is still in progress.Crypto Industry News:The largest Russian bank, Sberbank, demanded from customers to provide information about their revenues from cryptocurrencies, according to the fina…

Technical analysis of Bitcoin for 20.05.2019

Crypto Industry News:Judge Joel Cohen of the Supreme Court in New York approved the request of the Bitfinex cryptocurrency exchange to change the order of the New York Attorney General.As announced, the court order will allow the Bitfinex stock exchang…

EUR / USD: China and the European Parliament are in the spotlight

Despite the abundance of macroeconomic reports and planned speeches by representatives of the ECB and the Fed, the euro-dollar pair will focus on political fundamental factors this week. The focus will be on Italy, China and the European Parliament elections. Factors such as the intentions of Italian politicians, the prospects for the US-China trade negotiations and the results of the European elections will determine the degree of anti-risk sentiment in the market.

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Let’s start with China. Let me remind you that on Friday, the Chinese state-owned media published the news that Beijing could withdraw from the negotiation process with Washington. As reported by the press, the Chinese side “does not see the sincere intentions” of the Americans to find a compromise and conclude a mutually beneficial deal. According to representatives of China, the States profess a policy of trade protectionism that impedes negotiations. Although this information was of an informal nature, it was obvious to all that the state publications of the PRC could not publish such a message without the knowledge and consent of the authorities. A bit later, the official position of Beijing appeared, which was somewhat veiled.

Thus, according to a senior Chinese diplomat, Wang Yi, China is still ready to resolve differences through negotiation “but countries must be on equal footing.” He also added that Washington should “change the direction of its actions” since China will “firmly defend its national interests.” The Chinese reaction is understandable after the introduction of additional duties while the White House introduced a state of emergency in the information and communication infrastructure in the country, which allowed the US Department of Commerce to add Huawei and 70 related companies to the “blacklist” that prohibits the use of US components and technology.

In other words, it will become clear this week on what direction the further relations between the US and China will develop. If Washington strengthens the anti-Chinese policy, Beijing will most likely come out of the negotiation process and the financial world will be on the verge of another escalation of the trade war. In this case, the dollar will again enjoy the status of “island of security”, dominating in all currency pairs. In this situation, only one exception is permissible: if the Chinese decide to withdraw from the US government debt or significantly reduce their share in this market. Given this situation, the dollar will be in the role of the victim, not the “protector.” China owns US $1.13 trillion in US Treasury bonds, therefore, any more or less large-scale actions in relation to these securities will have the effect of a bombshell in the financial world. Yet according to experts, such a scenario is unlikely at least in the context of retaliation in a trade war. At the same time, the Chinese can take this step if the yuan goes to a “steep peak” against the background of possible US actions. In this case, China can reduce investments in these assets by several tens of billions of dollars, according to experts polled by Bloomberg. However, currently, the dollar can significantly weaken only on rumors of similar intentions on the part of the PRC.

Yet, the single currency this week will respond to the results of elections to the European Parliament, which will be held from 23 to 26 May. According to surveys, the next European Parliament (which will operate until 2024) will maintain a pro-European liberal-democratic majority. Sociologists react saying that political forces “constructively and consistently advocate for strengthening European unity and oppose populism and radical ideas” will receive from 450 to 500 seats. Thus, the European People’s Party should retain its leading position while the Progressive Alliance of Socialists and Democrats is predicting the second place. Lastly, the Greens and representatives of the Alliance of Liberals and Democrats for Europe will compete for the third place.

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At the same time, the extreme right and euro skeptics (which is mostly the same) can also strengthen their presence in the European Parliament. Thus, the Europe of Nations and Freedoms Party (Marine Le Pen) can double its presence in the new parliament, gaining 60–65 seats instead of the current 37. 45-50 seats (in the current convocation 41). But left-wing political forces can weaken their positions by reducing their presence in the EP from 52 to 40 members. In general, if the real numbers differ from the above in the direction of the right (Euro-skeptics), then the euro will be under considerable pressure.

Thus, the fate of the EUR/USD pair will depend on global processes. If China finally “slam the door”, the dollar will rise in price across the entire market (unless the Chinese touch on the topic of US public debt). In addition, the downward trend of the pair will continue if the right strengthens its presence in the European Parliament, reflecting the electoral preferences of Europeans. In the event that these fundamental factors are resonating, the euro-dollar pair will test and possibly consolidate within the framework of the 10th figure. Otherwise, the price will return to the usual range of 1.1130-1.1240.

The material has been provided by InstaForex Company – www.instaforex.com

Forecast for AUD / USD pair on May 20, 2019

AUD / USD pair On Thursday and Friday last week, the Australian dollar was actively declining, but did not reach the support of the embedded line of the price channel and opened a new week from an increasing gap of 46 points this morning. Thus, conver…

Bitcoin control zones 05/20/19

Today, Bitcoin is trading at the upper limit of the flat. If this zone is broken, and the close of the trading will occur above the level of 8085.79, then further growth will become a priority again. It is important to understand that the upward impuls…

GOLD to regain bullish momentum again? May 20, 2019

GOLD has lost ground against USD recently. Hence, the price resided at the edge of 1276 support area with an impulsive bearish pressure. GOLD hit two-week lows on Friday as the US dollar surged up following the release of the data that showed US consum…

Technical analysis of GBP/USD for 20.05.2019

Technical Market Overview:The GBP/USD pair continues to move lower after the technical support at the level of 1.2772 was violated. The new local low was made at the level of 1.2709, just above the technical support at the level of 1.2705. Despite the …

Technical analysis of EUR/USD for 20.05.2019

Technical Market Overview:The EUR/USD pair has broken below the technical support located between the levels of 1.1167 – 1.1173 and made a new local low at the level of 1.1153. Despite the oversold market conditions, the bears are pushing the price low…

Elliott wave analysis of GBP/JPY for May 20, 2019

GBP/JPY dipped to a low of 139.53 and tested the 50% corrective target. We are looking for confirmation that the wave 2 has completed with the test of 139.53 and a new rally higher. A breakout above resistance at 140.69 will be a strong indication that…

Control zones for USD/JPY pair on 05/20/19

Today’s growth in the Asian session indicates the absence of a large cluster of limit orders above the a WCZ of 109.98-109.89. The probability of further growth is 70% with the first goal at the weekly CZ of 110.94-110.77. It is important to understand…

Elliott wave analysis of EUR/JPY for May 20, 2019

EUR/JPY is currently testing important resistance near 123.25 and a clear break above this resistance will confirm that the wave ii has completed with the test of 122.06 and a new impulsive rally higher to 129.35 is developing. That said, we also need …

Forecast for GBP/USD on May 20, 2019

GBP/USD

On Friday, the pound sterling fell by 80 points, moving away from the support of the embedded line of the price channel, which has now become a resistance. The signal line of the marlin oscillator on the daily and four-hour charts slightly bent up, but the opening of Monday occurred with an increasing gap, which indicates the imminent overlap of this gap with the price and its further decline. In this case, the marlin oscillator will work out the effect of discharge (voltage relief) before further downward movement.

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The first target of the decline is last year’s low on August 15 at 1.2660. Visually, the marlin oscillator on H4 will not have time to form a reversal formation by this time, so the pound’s corrective growth is more likely to be expected from the second target level – the December 14 low at a price of 1.2530.

The material has been provided by InstaForex Company – www.instaforex.com

Forecast for EUR/USD on May 20, 2019

EUR/USD

Last Friday, the euro continued to fall on expectations of an increase in opposition forces in the European Parliament after the elections of May 23-26. The price reached the first target of 1.1155 – the Fibonacci level 110.0%, and this morning it already overcame it with the intention to reach the second target of 1.1075 – the Fibonacci level 123.6%.

There are no technical reasons to prevent the euro from doing so. On the daily chart, the price has consolidated below the indicator lines of balance and MACD, the marlin oscillator is steadily declining in the negative zone.

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On the four-hour chart, the indicators also do not serve the scale of reversal signs, the downward trend is steady. In the event of overcoming the target level of 1.1075, the next target opens before the price – 1.0985 – the Fibonacci reaction level of 138.2%.

The material has been provided by InstaForex Company – www.instaforex.com

Fractal analysis of major currency pairs for May 20

Forecast for May 20:Analytical review of H1-scale currency pairs:For the euro / dollar pair, the key levels on the H1 scale are: 1.1222, 1.1212, 1.1197, 1.1184, 1.1156, 1.1144 and 1.1112. Here, we continue to follow the development of the downward stru…

Control zones USDCHF 05/20/19

The pair’s downward movement is still a medium-term impulse. As long as the pair is trading below the WCZ 1/2 1.0154-1.0145, any upward movement will fit into the correction frame. The higher the price growth, the more favorable prices can be obtained …

Control zones USDCAD 05/20/19

The formation of a medium-term flat continued last week. The upper limit formed by the WCZ 1/2 1.3490-1.3479 again acted as resistance and trade closed below it. While the pair is trading within the accumulation zone, the main deals should be made afte…

Control zones NZDUSD 05/20/19

The downward movement is a medium-term impulse, so selling is still a priority. It is not profitable to sell on Monday from current grades, since the target of the fall is the weekly CZ of 0.6470-0.6456. Any growth should be used as an opportunity to s…

GBP/USD: May’s resignation and the “shadow of Boris”

The pound paired with the dollar ended the trading week at five-month lows, that is, at around 1.2713. Taking into account the dynamics of the downward movement, the bears could easily renew the annual low, but they were forced to suspend their triumphal two-week procession due to the onset of the weekend. However, on Monday, the downward impulse of GBP/USD can get its continuation, since almost all the fundamental factors play against the British currency. “The shadow of Boris Johnson” again loomed on Britain’s political horizon, and this fact weighed down the British currency throughout the market. However, first things first.

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Last week, it finally became clear that negotiations between Labour and Theresa May’s government have failed. Although this has been mentioned before (mainly at the level of rumors), it was officially announced on Friday. Political opponents removed the masks of friendliness and again voiced a barrage of criticism, accusing each other of sabotaging the negotiation process and lobbying for anti-state ideas.

It is worth noting that many experts (or rather, the majority) were initially quite skeptical over the negotiations between Laborites and Theresa May. After all, May sat at the negotiating table with political opponents, in fact, forced – only to justify the need for further delaying Brexit. But while these negotiations were going on, GBP/USD traders had at least some foothold in this regard, especially against the background of rumors about reaching a certain compromise. Therefore, despite the multi-week silence of the parties, the pound-dollar pair either did not fall below 1.3000, or very quickly returned from the area of 28-29 figures. But as soon as the negotiators put an end to possible cooperation, the pair rolled down – and will continue to roll, to the low of 1.2450, until the market sees “the light at the end of the tunnel” regarding the prospects of the “divorce process” with the EU.

To date, these prospects look too vague. Theresa May once again drove herself into a corner: on the one hand, she announced a vote for the draft deal, but on the other hand, she lost potential allies (Labour) and did not meet the Conservatives who demanded new negotiations with the EU. As a result, the current situation is almost the same as it was back in January or December, when May submitted the deal to a vote without having made sure that the required number of votes was available. “Slamming the door” in front of the Laborites, Teresa May was left alone with the Conservatives, who, first of all, were not eager to support her draft deal, and secondly, they did not have their own majority — the support of unionists is necessary for a positive vote.

In other words, Theresa May is in full swing to another failed vote (the fourth in a row), after which her tenure as prime minister will become politically meaningless. According to the British press, May nevertheless agreed to resign before the beginning of the Parliamentary recess (which starts in July), but after voting for the deal (to be held from June 3 to 9). According to journalists, this ended the Tory negotiations at a closed meeting of the “1922 Committee”. Moreover, insider sources claim that May’s resignation will still happen regardless of the vote’s results.

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In other words, the issue regarding the current prime minister’s resignation is considered by many to be already resolved, and now Brexit prospects depend on who will stand at the helm of Britain after May. The press has already named the possible successors to May – these are Jeremy Hunt (the current foreign minister), Michael Gove (the environment minister) and David Lidington (the head of the government’s secretariat). All of them have a rather soft position in the context of further relations with Brussels, so their appointment will be positively perceived by the British currency. But a possible victory for Boris Johnson, who is also a favorite of the political race, will be an unpleasant surprise for GBP/USD traders. He is the most zealous and consistent supporter of a hard Brexit, and is also May’s opponent at the same time. This is the most undesirable candidate for supporters of maintaining close business contacts with the European Union, so his arrival will have a strong downward pressure on the pound.

Here it is worth noting that, according to a YouGov study conducted for The Times, Boris Johnson is seen by 39% of the members of the Conservative Party as the new head of the British government. The former head of the British Foreign Ministry is 13% ahead of the former minister of exit of Britain from the EU, Dominic Raab.

Thus, the pound is now not only under the pressure of weak prospects for the June vote, but also under the mercy of further prospects for the “divorce process.” Many politicians and financial analysts associate Johnson’s arrival with a hard Brexit – and until he himself denies this “logical” relationship, the sterling will continue to fall in price: the nearest, strongest, support level of GBP/USD is only around 1.2450 Bollinger Bands indicator on the monthly chart).

The material has been provided by InstaForex Company – www.instaforex.com

GBP/USD: May’s resignation and the “shadow of Boris”

The pound paired with the dollar ended the trading week at five-month lows, that is, at around 1.2713. Taking into account the dynamics of the downward movement, the bears could easily renew the annual low, but they were forced to suspend their triumphal two-week procession due to the onset of the weekend. However, on Monday, the downward impulse of GBP/USD can get its continuation, since almost all the fundamental factors play against the British currency. “The shadow of Boris Johnson” again loomed on Britain’s political horizon, and this fact weighed down the British currency throughout the market. However, first things first.

5u1jy8i5NUgbRlPUsAM9EDj811CxDq-YF8GT0E9o

Last week, it finally became clear that negotiations between Labour and Theresa May’s government have failed. Although this has been mentioned before (mainly at the level of rumors), it was officially announced on Friday. Political opponents removed the masks of friendliness and again voiced a barrage of criticism, accusing each other of sabotaging the negotiation process and lobbying for anti-state ideas.

It is worth noting that many experts (or rather, the majority) were initially quite skeptical over the negotiations between Laborites and Theresa May. After all, May sat at the negotiating table with political opponents, in fact, forced – only to justify the need for further delaying Brexit. But while these negotiations were going on, GBP/USD traders had at least some foothold in this regard, especially against the background of rumors about reaching a certain compromise. Therefore, despite the multi-week silence of the parties, the pound-dollar pair either did not fall below 1.3000, or very quickly returned from the area of 28-29 figures. But as soon as the negotiators put an end to possible cooperation, the pair rolled down – and will continue to roll, to the low of 1.2450, until the market sees “the light at the end of the tunnel” regarding the prospects of the “divorce process” with the EU.

To date, these prospects look too vague. Theresa May once again drove herself into a corner: on the one hand, she announced a vote for the draft deal, but on the other hand, she lost potential allies (Labour) and did not meet the Conservatives who demanded new negotiations with the EU. As a result, the current situation is almost the same as it was back in January or December, when May submitted the deal to a vote without having made sure that the required number of votes was available. “Slamming the door” in front of the Laborites, Teresa May was left alone with the Conservatives, who, first of all, were not eager to support her draft deal, and secondly, they did not have their own majority — the support of unionists is necessary for a positive vote.

In other words, Theresa May is in full swing to another failed vote (the fourth in a row), after which her tenure as prime minister will become politically meaningless. According to the British press, May nevertheless agreed to resign before the beginning of the Parliamentary recess (which starts in July), but after voting for the deal (to be held from June 3 to 9). According to journalists, this ended the Tory negotiations at a closed meeting of the “1922 Committee”. Moreover, insider sources claim that May’s resignation will still happen regardless of the vote’s results.

5c0DPJrSM09iT0Ep8D6ZhvRG002cxr1eU39WN2dM

In other words, the issue regarding the current prime minister’s resignation is considered by many to be already resolved, and now Brexit prospects depend on who will stand at the helm of Britain after May. The press has already named the possible successors to May – these are Jeremy Hunt (the current foreign minister), Michael Gove (the environment minister) and David Lidington (the head of the government’s secretariat). All of them have a rather soft position in the context of further relations with Brussels, so their appointment will be positively perceived by the British currency. But a possible victory for Boris Johnson, who is also a favorite of the political race, will be an unpleasant surprise for GBP/USD traders. He is the most zealous and consistent supporter of a hard Brexit, and is also May’s opponent at the same time. This is the most undesirable candidate for supporters of maintaining close business contacts with the European Union, so his arrival will have a strong downward pressure on the pound.

Here it is worth noting that, according to a YouGov study conducted for The Times, Boris Johnson is seen by 39% of the members of the Conservative Party as the new head of the British government. The former head of the British Foreign Ministry is 13% ahead of the former minister of exit of Britain from the EU, Dominic Raab.

Thus, the pound is now not only under the pressure of weak prospects for the June vote, but also under the mercy of further prospects for the “divorce process.” Many politicians and financial analysts associate Johnson’s arrival with a hard Brexit – and until he himself denies this “logical” relationship, the sterling will continue to fall in price: the nearest, strongest, support level of GBP/USD is only around 1.2450 Bollinger Bands indicator on the monthly chart).

The material has been provided by InstaForex Company – www.instaforex.com