Category: Analysis

Analysis of various instruments and fundamentals in the currency exchange market.

Gold 10.14.2019 – Sell zone on the Gold

Gold is still trading in the channel that we defined days ago. I still expect more downside and potential test of 1,460. Most recently, I found bearish flag in creation on the 4H time-frame.

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Yellow rectangle – Important support level

Down parallel line – Downward channel

Purple falling line – Expected path

Watch for potential selling opportunities if you see the breakout of the bear flag. MACD is still in the negative territory and there is potential for new momentum down on the oscillator. Selling opportunities are preferable with the target at 1.460. Resistance level is found at the price of 1.497. As long as the Gold is trading inside of the downward channel, I would watch for selling opportunities.

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

Trading recommendations for the EURUSD currency pair – placement of trade orders (October 14)

At the end of the last trading week, the EUR/USD currency pair showed high volatility of 61 points, the quotation resumed the upward movement and followed towards the next control point. From technical analysis, we see that after the breakdown of the psychological level of 1.1000, the well-known trading pattern “Breakdown/Rollback” was formed, which in this case played 100%, forming a rebound from the level of 1.1000. We saw a momentum move, returning buyers to the market, where a little more – and the peak of the previous correction of 1.1109 would have been reached, which reflects a range level of 1.1080/1.1110.

Analyzing the hourly Friday day, we see that the main movement came for the period 12:00-14:00 (time on the trading terminal), where the quote found a point of resistance in the face of the value of 1.1062 and then the recovery process began until the end of the day.

As discussed in the previous review, traders were actively working on the purchase at the time of working out the pattern “Breakdown/Rollback”, where, in principle, enough profit was taken, and waiting for further progress is extremely risky due to the location of key coordinates.

Considering the trading chart in general terms (daily period), we see a real risk of the formation of the so-called oblong correction, if the range level (1.1080/1.1110), representing the peak of the previous correction, falls under the pressure of buyers. In the case of such a scenario, the main downward trend may be delayed for more than one month.

Friday’s news background had no worthwhile statistics on Europe and the United States, but no one was upset, as all attention was focused on the information background.

The main event at the end of the week can rightly be called Brexit. The hope for a bright future in this protracted process was stirred by the statement that not all is lost and Britain and Ireland still have a solution. The pound flew first, and we described its results in a separate article. The euro, with a slight delay, also rushed up, not so actively, but nevertheless, the average daily indicator was broken. The incentive for further growth was the accompanying statement by the head of the European Council, Donald Tusk, who was optimistic about the negotiations and believes that there is still little chance of reaching an agreement between Britain and the EU. At this, the hysterical behavior of the market ends and a rollback occurs. During the partial recovery and the weekend, the information background did not stop and continued to produce quite interesting noises.

The meeting of Brexit negotiators Michel Barnier (EU) and Steve Barclay (UK) ended, in principle, nothing. Barnier said that the British Prime Minister’s proposal could jeopardize the European market, as it does not contain specifics.

In turn, German Chancellor Angela Merkel believes that the EU and the UK are in a crucial phase of the exit process. At the same time, Merkel added that the French and German sides will once again agree on their positions on Brexit.

Let’s move a little away from the trailed Brexit process and take a look at the West, and so, there the Federal Reserve decided to launch a printing press with a monthly redemption of Treasury bonds worth $ 60 billion. About 510 billion dollars will be printed in such a maneuver, but the Fed does not consider this to be the launch of the new QE series.

In turn, US President Donald Trump once again did not ignore the Fed, calling to lower the interest rate and noting that the economy is excellent.

“The Fed should lower the rate regardless of how good the deal with China will be. We have a great economy, but we have the Fed, which does not keep up with the rest of the world. I think they should keep up with the rest of the world, despite the deal with China. The deal with China is much more important than the interest rate,” Donald Trump spoke to reporters following two-day US-China talks.

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Today, in terms of the economic calendar, we had data on industrial production in Europe, where we were waiting for a deepening recession from -2.1% to -2.5%, and got an even worse picture, a decline to -2.8%. The reaction of the single currency to what is happening is surprisingly no, even a small local growth is possible on monthly data on industrial production volumes, which increased by 0.4%, but this is nothing compared to annual indicators.

Further development

Analyzing the current trading chart, we see a sluggish recovery process, where the quote froze in the area of 1.1030, forming versatile Doji candles. In turn, speculators are trying to work on the recovery stage, where the maximum target is the level of 1.1000.

It is likely to assume that the fluctuation within the available values will remain, but if the recovery process continues, we may be lowered again to the psychological level of 1.1000. Further actions are already considered depending on the points of price-fixing.

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Based on the above information, we derive trading recommendations:

  • Buying positions, if considered, in case of price-fixing is higher than 1.1062, with the prospect of a move to 1.1080 – 1.1105.
  • Sales positions are considered in terms of the recovery process in the direction of the level of 1.1000.

Indicator analysis

Analyzing different sector timeframes (TF), we see that the indicators in the short term signal a recovery process, which cannot be said about the intraday and medium-term period, where the interest of recent impulses is maintained.

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Volatility per week / Measurement of volatility: Month; Quarter; Year

Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.

(October 14 was built taking into account the time of publication of the article)

The volatility of the current time is 29 points, which is quite small for this period. It is likely to assume that in the case of a slowdown within the available coordinates, volatility will remain within the daily average.

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Key levels

Resistance zones: 1.1100**; 1.1180*; 1.1300**; 1.1450; 1.1550; 1.1650*; 1.1720**; 1.1850**; 1.2100

Support zones: 1.1000***; 1.0900/1.0950**; 1.0850**; 1.0500***; 1.0350**; 1.0000***.

* Periodic level

** Range level

*** Psychological level

**** The article is based on the principle of conducting transactions, with daily adjustments.

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

EUR/USD for October 14,2019 – Broken upward channel whithin larger upward channel

EUR/USD has been trading sideways at the price of 1.1025. I do expect downside and potential test of the support at 1.1007. Watch for potential selling opportunities.

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Yellow rectangle – Important support levels

Upper parallel line – Upward trend channels

Purple falling line – Expected path

I see that there is potential for down move and potential test of the 1.1000 level. The overall trend is still bullish but there is chance for downward correction first. Important resistance is set at the price of 1.1062. My advice is to watch for selling opportunities with the target 1.1000.

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

BTC 10.14.2019 – Sell zone for Bitcoin, bearish flag in play

BTC has been trading lower exactly what I expected last week. I still expect that BTC trades more downside towards our down targets at 8,052 and 7,742.

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Red rectangle – Important resistance levels

Green rectangle – Important support and objective

Purple falling line – Expected path

I see that watching the larger structure, BTC potentially finished ABC expanded flat upward correction. I found series of the lower lows and lower highs in recent 2 days, which his sign that sellers are in control. Important support levels are set at 8,052 and 7,742. Resistance levels is found at 8,362.

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