Tifia Forex Broker Daily Market Analytics, Analytics and trading recommendations by Tifia Company

[Tifia FX]

S&P500: US Senate approves tax reduction bill

20/12/2017

Current dynamics

As it became known at the beginning of today's European session, the US Senate approved a reduction of taxes for 1.5 trillion dollars within the tax reform by 51 votes "in favor" and 48 "against".

On Tuesday, a package of laws providing for the most significant reform of the tax system since 1986 was passed by the House of Representatives with 227 votes "in favor" and 203 "against". All the Democrats present at the meeting, which was predictable, and 12 Republicans voted "against".

The reform implies a reduction in corporate taxes from 35% to 21% (previously 20% was assumed). This will increase the profits of companies, as well as increase the wages of hired workers at an accelerated rate. This, in turn, should stimulate the growth of inflation, which will contribute to more active actions of the Fed with regard to further tightening of monetary policy in the US. Most taxes will be reduced from January, and by February many workers will teach higher salaries.

The new tax law will accelerate the growth of the US economy. The dollar has not reacted to this information in any way. However, the main US stock indices, in general, positively took the news about the adoption of the law in the Senate and continue to grow during the European trading session.

Today is weak for the publication of important macro statistics. All movement around the dollar and the US stock markets will occur against the backdrop of information on the results of the promotion of tax reform in the US Senate. Conservatives said they are still deciding whether to support the bill on short-term expenses. As expected, the House of Representatives will vote on the bill on expenditures on Thursday.

Despite the doubts of some economists regarding the positive impact of this law on the growth of the US economy, nevertheless, its adoption can be considered a major victory for US President Donald Trump.

Most likely, in full measure the market reaction to this fact can be seen as early as next year. On the eve of the Catholic Christmas and the New Year celebration, the activity of traders and trading volumes are declining.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support and resistance levels

The S & P500 index remains positive dynamics, trading in the upward channels on the daily and weekly charts since February 2016. On Monday, the S & P500 index updated its absolute high near the 2693.0 mark and today, after yesterday's declining, it again traded with a rise.

The upper limit of the ascending channel on the weekly chart runs near the 2710.0 mark, which will become the nearest goal in case of continued growth.

Since May 2016, technical indicators (OsMA and Stochastic) are on the buyers’ side, and signals for the reversal of the long-term upward trend are not yet visible.

A downward correction is possible only in the short term with targets at support levels of 2648.0 (local lows), 2627.0 (EMA200 on the 4-hour chart), 2610.0 (bottom line of the upward channel on the daily chart).

The signal to the beginning of the downward correction may be a breakdown of the short-term support level of 2669.0 (EMA200 on the 1-hour chart).

While the S & P500 is trading above the key support level of 2490.0 (EMA200 on the daily chart, the bottom line of the upward channel on the weekly chart, the Fibonacci level 23.6% of correction to the growth since February 2016), long-term upward dynamics persist.

In case of breakdown of the local resistance level of 2693.0 (December and year highs), the index's growth will continue.

Support levels: 2669.0, 2648.0, 2627.0, 2610.0, 2580.0, 2500.0, 2490.0

Resistance levels: 2693.0, 2700.0, 2710.0


Trading Scenarios

Sell Stop 2677.0. Stop-Loss 2694.0. Objectives 2669.0, 2648.0, 2627.0, 2610.0, 2580.0, 2500.0, 2490.0

Buy Stop 2694.0 Stop-Loss 2677.0. Objectives 2700.0, 2710.0

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[Tifia FX]

GBP/USD: pound remains vulnerable against the background of Brexit

21/12/2017

Current dynamics

The resignation of Deputy Prime Minister Teresa Mei Damian Green, as it became known on Wednesday, caused a decline in the pound. Damian Greene was Teresa May's companion, and his departure changes the balance of power in the Cabinet. Now this is just as bad for the conservatives, as the UK conducts the most important negotiations about Brexit. The British government still has no common opinion on further actions and future relations with the EU. The Prime Minister of Great Britain is trying to smooth the differences in the government over Brexit, but, at the same time, is looking for ways to maintain close trade ties with the EU.

According to official data released on Thursday, in November of this year, compared with November last year, the net borrowing of the UK public sector decreased and reached a minimum in ten years (8.7 billion pounds, 0.2 billion pounds less than in November last year) . The National Bureau of Statistics of Great Britain noted that in the last months of the financial year, which ends in March 2018, tax revenues are expected to slow down.

Philip Hammond, the UK finance minister, announced more gloomy forecasts for the economy in November, and on Wednesday the IMF published a forecast that UK GDP growth in 2018 will slow down to about 1.5% amid the declining consumer and company costs due to Brexit.

Meanwhile, in the financial markets, there has been a slowdown in trading activity and a decline in trading volumes ahead of the Catholic Christmas and the celebration of the New Year.

From the news for today, we are waiting for the publication of important macro data from the United States. At 13:30 (GMT), the US Department of Labor will publish a report on the number of new applications for unemployment benefits. This indicator determines the state of the labor market. The growth is expected to reach 231,000 (against 225,000 last week). The result above the expected indicates a weak labor market, which will negatively affect the US dollar.

Also at this time annual data on US GDP for the 3 quarter (updated values) and the price index (for 3 quarter), which is an indicator of inflation, will be published. Data on GDP are among the key, along with data on the labor market and inflation, for the Fed in determining its further monetary policy. A high result strengthens the USD. Forecast: GDP for the 3rd quarter increased by 3.3%. If the data prove to be better, the dollar will be strengthened.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 1.3330, 1.3300, 1.3280, 1.3210, 1.3100

Resistance levels: 1.3395, 1.3470, 1.3500, 1.3550, 1.3630, 1.3720, 1.3970, 1.4050


Trading Scenarios

Sell Stop 1.3340. Stop-Loss 1.3410. Take-Profit 1.3300, 1.3280, 1.3210, 1.3100

Buy Stop 1.3410. Stop-Loss 1.3340. Take-Profit 1.3470, 1.3500, 1.3550, 1.3630, 1.3720, 1.3970, 1.4050

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[Tifia FX]

USD/CAD: probability of rate increase in Canada increased in January

22/12/2017

Current dynamics

After yesterday, at the beginning of the US trading session were simultaneously published macro statistics on the US and Canada, the USD/CAD literally collapsed. The fall in the hour was about 100 points. Then the pair fell further, but managed to recover slightly to the end of yesterday's trading day, closing near the 1.2740 mark.

Negative factor for the US dollar was the publication of revised previously published data on US GDP for the 3rd quarter (+ 3.2% instead of + 3.3%). Despite the fact that the US GDP growth rates are record since the beginning of 2015, this did not stop the dollar from falling.

The basic index of real spending on personal consumption for November was also revised downward (1.3% in Q3, instead of 1.4%, according to the preliminary release).

The US dollar was put under pressure, despite the publication of the index of leading indicators Conference Board, which rose in November by 0.4%, to 130.9 after rising in October and September. The index of leading indicators consists of 10 components, including initial applications for unemployment benefits, production orders and changes in the S&P500 index. Economists note that the November growth of the index signals the continuation of strong economic growth in the first half of 2018.

Simultaneously with the publication of updated data on US GDP, inflation indicators were published for Canada. The total consumer price index (Total CPI) of Canada in November rose by 2.1% in annual terms (the forecast was + 2.0%). Compared to the previous month, the price increase was 0.3%.

Basic inflation in Canada also accelerated. Indicators of annual core inflation showed growth to the range of 1.5% -1.9%, while the average value of 1.7% became the maximum for more than a year.

In addition, the October report on retail sales in Canada also exceeded expectations.

At the beginning of the month, the Bank of Canada kept the interest rate at the current level of 1.0%. Prior to this, the bank twice this year raised rates - in July and September. Inflation remains below the target level of 2%. The head of the Bank of Canada, Poloz noted earlier that the target range for inflation is 1% -3%, and said that the decline in the Canadian dollar will support exports. Now, after yesterday's publication on inflation indicators and retail sales, traders estimate the likelihood of a rate hike in Canada in January at 50%.

The focus of traders today will be the publication at 13:30 (GMT) of Canada's GDP data for October. GDP is expected to grow by 0.2% compared with September. This will mean that the data generally correspond to growth in the 4th quarter at the level of 2%.

Also at the same time (13:30 GMT) we are waiting for data from the US, when important macro statistics (final values) for November will be published, including inflation indices (personal income / expenditure of Americans, personal consumption expenditure), orders for goods durable. The growth is expected in comparison with the previous month, which should positively affect the US dollar.

In this connection, once again it is worth remembering yesterday, when the dollar collapsed after the published updated data on GDP for the 3rd quarter turned out to be worse than the preliminary figures. Although in the US came out, in general, positive macro data, the fact that they were worse than the forecast, was the reason for selling the dollar.

A little later (at 15:00) will be reported on the sales of new homes in the US for November.

If today's publication of data on the US and Canada will resemble yesterday, the story of the fall of the pair USD / CAD may repeat.

In the opposite scenario, if the US data is better than forecasted values, the US dollar will partially compensate for yesterday's losses.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics

Support levels: 1.2700, 1.2620, 1.2500, 1.2430, 1.2300, 1.2170, 1.2100, 1.2050

Resistance levels: 1.2740, 1.2780, 1.2835, 1.2900


Trading Scenarios

Sell Stop 1.2690. Stop-Loss 1.2750. Take-Profit 1.2620, 1.2500, 1.2430, 1.2300, 1.2170, 1.2100, 1.2050

Buy Stop 1.2750. Stop-Loss 1.2690. Take-Profit 1.2780, 1.2835, 1.2900

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[Tifia FX]

Nikkey225: The Bank of Japan intends to continue a large-scale program of mitigation

26/12/2017

Current dynamics

As Haruhiko Kuroda said during today's press conference, the Japanese central bank will continue the large-scale mitigation program, as inflation is still far from the target level of 2%.

This is, almost traditional in recent months, the statement of the head of the Bank of Japan was addressed primarily to those investors who expect that next year the Bank of Japan may begin to wind down its extra soft monetary policy.

If earlier Kuroda spoke about "readiness for the most decisive measures to support the Japanese economy", which implies continuation or expansion of extra soft monetary policy in Japan, today he said that "we (the leadership of the Bank of Japan) will further support the cycle of revenue growth , supporting a moderate increase in wages and prices."

According to official data released today, in November, the unemployment rate in Japan fell to 2.7%. This means that the conditions on the labor market are most favorable for the growth of wages for last 24 years.

The CPI National Consumer Price Index for November, published by the Bureau of Statistics of Japan, came out today with an increase of 0.6% (in annual terms), which is better than the forecast of + 0.3% and + 0.2% in October. CPI is the most significant inflationary barometer of changes in Japan's consumer trends. The growth of the index positively affects the yen's quotations and the stock index.

The Bank of Japan and the authorities of the country are trying to overcome a long period of deflation and stagnation.

Nevertheless, the positive Japanese macro statistics and Kuroda's statement were rather restrainedly perceived on the Japanese stock market.

The yield of 10-year Japanese government bonds rose to 0.045% from 0.035%.

After the Japanese main stock index Nikkey225 jumped by about 20% in the period from September to November, the last few weeks it is just below 23000.00, and today, at the end of the Asian trading session, it was trading near 22900.00.

Today, trading volumes are low because the European stock exchanges, as well as the markets of Australia, New Zealand and Hong Kong are closed today due to the celebration of Boxing Day. However, the US exchanges are working today. Therefore, volatility with the opening of US stock exchanges will increase.

Nevertheless, the full activity of trade will be restored in the next year. On the eve of the New Year celebration, the activity of traders and trading volumes will remain low.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support and resistance levels

After in November the Nikkey225 index reached the annual maximum near the mark of 23430.00, the last weeks the index is traded in the range, the upper limit of which passes near the resistance level of 23000.00. At the same time, the Nikkey225 index keeps positive dynamics, trading in the upward channel on the weekly chart since September 2017.

The last days trading activity is low due to the upcoming New Year holidays.

In case of fastening above the resistance level of 23000.00, growth will resume.

The scenario for the decline will be related to the breakdown of the short-term support level of 22550.00 (EMA200 on the 4-hour chart). The goal of the decline is the support level of 22000.00 (November, December low and the low limit of the range formed between the levels of 23000.00 and 22000.00).

The long-term positive dynamics of the index remains in force, as long as the index trades above the support level of 20900.00 (zone of ЕМА144, ЕМА200 on the daily chart and highs of 2015).

Support levels: 22840.00, 22550.00, 22000.00, 20900.00

Resistance levels: 23000.00, 23450.00


Trading Scenarios

Sell Stop 22700.00. Stop-Loss 23100.00. Objectives 22550.00, 22000.00, 21000.00

Buy Stop 23100.00. Stop-Loss 22700.00. Objectives 23450.00, 24000.00

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[Tifia FX]

Brent: the upward trend prevails

27/12/2017

Current dynamics

The explosion of the oil pipeline in Libya caused an increase in concerns over possible interruptions in oil supplies, which led to a sharp increase in oil prices. As indicated on the site of the Libyan National Oil Co., the reduction in oil production in the country due to the accident is likely to be up to 100,000 barrels per day.

Earlier it was reported about the continued suspension of the operation of the Forties pipeline system in the North Sea, as a result of which the market will not receive 450,000 barrels of oil daily.

As a result, prices yesterday reached a maximum for two and a half years. On Tuesday, WTI futures rose above $ 60 per barrel, gaining 2.6% to a maximum since June 2015. The spot price for Brent crude at the end of yesterday's trading day was close to $ 66.20 per barrel, which is $ 1.7 higher than the opening price of the trading day. Today there is a decline in oil quotations.

On Thursday, the publication of data on oil reserves in the US is expected. It is expected that the report submitted by the US Energy Ministry will demonstrate the fifth week decrease in reserves in a row (-3.925 million barrels against -6.495 million barrels in the week before last).

As is known, at the end of November, OPEC, Russia and a number of other large oil-producing countries agreed to further reduce oil production by about 1.8 million barrels a day, or about 2% of the world's oil production. The deal was extended until the end of 2018.

Thus, several factors will support oil prices in the short term. This is the extension of the OPEC deal, the reduction of US oil reserves, the weakening of the dollar, and, again, the recently manifested factor, like the risks of oil supply disruptions in different regions of the world.

Despite the fact that the supply of oil from the United States and other countries not participating in the deal is likely to continue to grow, the positive dynamics of oil prices remains.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 65.30, 64.50, 63.00, 62.00, 61.50, 61.00, 60.00, 59.00, 58.80, 57.50, 56.00

Resistance levels: 66.20, 67.00, 68.00


Trading scenarios

Sell Stop 65.20. Stop-Loss 66.30. Take-Profit 65.00, 64.50, 63.00, 62.00, 61.50, 61.00, 60.00, 59.00, 58.80, 57.50, 56.00

Buy Stop 66.30. Stop-Loss 65.20. Take-Profit 67.00, 68.00

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[Tifia FX]

S&P500: indexes "lay down into the drift"

28/12/2017

Current dynamics

The dollar continues to scale down. The index of the dollar WSJ, which estimates its rate to the basket of 16 other currencies, fell 0.4% on Thursday. He declined during seven of the last eight sessions. Many of the trading ideas associated with the expectation of dollar growth are beginning to unfold.

The dollar is under pressure, despite the adoption of laws on tax reform, which, according to many economists, should support the growth of the US economy. Tax cuts from 35% to 21% (previously assumed to be 20%), according to supporters of reforms, will also support inflation, which will allow the Fed to accelerate the pace of tightening policies in 2018. Most taxes will be reduced from January, and by February many workers will take higher salaries.

At the same time, on the eve of New Year holidays, trading volumes remain low. American stock indexes remain in narrow ranges for the second week in a row. Investors in the stock market also continue to assess the impact of the recently adopted tax bill on the US economy. Economic indicators of the US economy are still favorable for the stock market on the eve of 2018.

The S & P500 grew in December by 1.3%, and from the beginning of the year by 20%. Overall, the S & P500 remains positive. Nevertheless, traders prefer to take a wait-and-see position in the stock market.

In the case of breakdown of the local resistance level at 2693.0 (December and year highs), the index will continue to grow.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 2675.0, 2648.0, 2640.0, 2625.0, 2580.0, 2490.0

Resistance levels: 2693.0, 2700.0, 2710.0


Trading Scenarios

Sell Stop 2670.0. Stop-Loss 2694.0. Objectives 2660.0, 2648.0, 2625.0, 2610.0, 2580.0, 2500.0, 2490.0

Buy Stop 2694.0 Stop-Loss 2670.0. Objectives 2700.0, 2710.0

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[Tifia FX]

EUR/USD: the dollar lost to the euro more than 13%

29/12/2017

Current dynamics


Today is the last trading day of the outgoing year, and the dollar remains the focus of investors' attention, demonstrating a large-scale decline. This year became worst in a decade for the index of the dollar WSJ, dropping from the beginning of the year by 7.3%.

Euro since the beginning of the year has strengthened to the dollar by 13.6%, which was the maximum growth since 2003. The British pound in 2017 rose to the dollar by 9.1%, and this happens despite the still unclear prospects for negotiations of the UK with the EU over Brexit.

In December, finally, the US Senate fully approved tax reform, which envisages an unprecedented tax cut from US corporations from 35% to 21% (previously 20% was assumed). Reform, according to its supporters, should support the growth of the US economy. It will also accelerate inflation, which will allow the Fed to accelerate the pace of tightening policies in 2018.

And, nevertheless, investors are actively selling the dollar, the fall of which does stop neither positive US macro statistics, nor adoption of new tax legislation in the US, nor the Fed's actions to tighten monetary policy. As you know, the Fed raised interest rates three times in 2017, and three more increases are scheduled for 2018.

Probably, the focus of investors' attention in 2018 will be the dynamics of wages in the US. Most taxes will be reduced from January, and by February many workers will take higher salaries. If wages are growing steadily, then, while maintaining the stability of the economy and the US labor market, interest rates can rise faster than market participants suggest.

It is possible that the actions of the Fed will still be able to reverse the situation in the new year with a deteriorating attitude toward the dollar. The reason for the reversal of the market and the bearish trend of the dollar may be the repatriation of profits earned abroad by US companies. As is known, within the framework of the tax reform, a one-time privilege for the repatriation of profits and capital to the United States is envisaged. If in the next few months US companies begin to return money to the United States, earned in other countries, it will cause an increase in demand for the dollar.

In recent months, unexpected movements and fluctuations in exchange rates have occurred on the market. Also, we should not discount the earlier statements of Donald Trump about the need for a weak dollar, including in order to increase the competitiveness of American goods abroad.

Thus, the intrigue around the dollar and its dynamics in the new year persists.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support and resistance levels

The pair EUR / USD remains positive dynamics, trading in the ascending channels on the daily and weekly charts.

Indicators OsMA and Stochastics on the 4-hour, daily, weekly charts recommend long positions.

At the beginning of the European session, the pair EUR / USD broke through the resistance level at 1.1960 (November highs) and continues to rise towards the upper border of the rising channel on the daily chart and 1.2100 mark.

You can return to consideration of short positions only after the breakthrough of the short-term support level 1.1875 (EMA200 on the 1-hour chart). And only after the price returns to the zone below the support levels 1.1800 (EMA50 and the bottom line of the upward channel on the daily chart), 1.1780 (Fibonacci level 38.2% of corrective growth from the lows reached in March 2015 in the last wave of global decline from 1.3900) you can return to consideration of short (already mid-term) positions with targets at support level 1.1550 (EMA200 on the daily chart).

So far, long positions are preferable.

Support levels: 1.1960, 1.1900, 1.1875, 1.1850, 1.1800, 1.1780, 1.1710, 1.1650, 1.1540

Resistance levels: 1.2000, 1.2100, 1.2180, 1.2320, 1.2430


Trading Scenarios

Sell Stop 1.1930. Stop-Loss. Take-Profit 1.1900, 1.1875, 1.1850, 1.1800, 1.1780, 1.1710, 1.1650, 1.1550

Buy in the market. Stop-Loss 1.1930. Take-Profit 1.2000, 1.2050, 1.2100, 1.2180, 1.2320, 1.2430

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[Tifia FX]

Brent: the rising dynamics of prices

09/01/2018

Current dynamics

With the coming of the new year, the decline in the dollar, especially noticeably observed at the end of the past year, continued. Nevertheless, the dollar is gradually beginning to win back the lost positions.

Despite the fact that the negative dynamics of the dollar is observed in relation to commodity currencies, such as Canadian, New Zealand, Australian dollars, against the euro and the assets-shelters (yen, franc, gold), the dollar is strengthening.

Meanwhile, with the coming of the new year, oil prices are also rising. During today's Asian trading session, the price of Brent crude oil was again in the zone of multi-month highs near the level of 68.00 dollars per barrel. The last time the price was at current levels in May 2015.

Cold frosty weather in the US and riots in Iran, held several days ago, provoked a sharp rise in oil prices at the beginning of the year. According to various estimates, Iran possesses about 10% of the world's proven oil reserves, being the 4th largest oil producer after Venezuela (20% of the world's reserves), Saudi Arabia and Canada. Russia, by the way, is on the 8th place with reserves of 80,000 million barrels as of 2016. Iran is the third largest in terms of oil production in OPEC. Therefore, the information received from Iran on anti-government actions, made investors fear of possible interruptions in oil supplies, which, in turn, affected the next increase in oil prices.

As the American oil service company Baker Hughes reported last Friday, the number of active oil drilling rigs in the United States fell by 5 units to 742 over the past week. This also has a positive effect on oil prices, as it indicates some decrease in oil production in the US.

Meanwhile, US oil companies have a significant prospect and an incentive to increase production while oil prices remain high. The growth of oil production in the US is one of the deterrents to the growth in oil prices.

In November 2017, OPEC and another 10 oil-producing countries that are not part of the cartel have extended the deal to reduce global oil production by the end of 2018. The surplus of oil on the world market, which exerted pressure on prices for several years, is gradually being absorbed. The positive dynamics of oil prices, in general, remains. A further price increase is likely to reach $ 70 per barrel.

Today, the American Petroleum Institute (API) at 21:00 (GMT) will report on oil and petroleum products in the US. And on Wednesday (15:30 GMT) the official weekly report of the US Energy Ministry will be presented. As expected, this agency will report a drop in oil and petroleum products by 4.1 million barrels last week (after a decline of 7.4 million barrels in the week before last). If the data are confirmed, they will further increase oil prices.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 67.00, 66.20, 64.50, 63.00, 61.50, 61.00, 60.00, 59.00, 57.00, 56.00

Resistance levels: 68.00, 68.20, 69.00, 70.00


Trading Scenarios

Sell Stop 66.90. Stop-Loss. 68.20. Take-Profit 66.20, 65.00, 64.50, 63.00

Buy Stop 68.20. Stop-Loss 66.90. Take-Profit 69.00, 70.00

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[Tifia FX]

GBP/USD: pound reacted positively to industrial production data

10/01/2018

Current dynamics

According to official data published on Wednesday, UK manufacturing production in November increased by 0.4% (forecast was + 0.3%) and by 3.5% in annual terms. Data for October were revised upwards (+ 0.3%, and not 0.1%, as previously thought). Despite the fact that industrial production accounts for about a fifth of the country's economy, with the largest contribution to the economy by the service sector and retail trade, the pound reacted positively to the data presented.

At the same time, data showed a slight increase in the UK trade deficit in November (to 12.2 billion pounds from 11.7 billion pounds in October, with a forecast of -10.7 billion pounds). Nevertheless, the pound continued to rise against the dollar after the release of the data.

The dollar is again falling today after growth in the beginning of the year.

On Tuesday, the Bank of Japan cut of 5% to 190 billion yen in buying some long-term government bonds. Market participants considered this a foreshadowing of the beginning of the curtailment of a large-scale program to stimulate the Japanese economy. Sales of the dollar against the yen against the backdrop of an increase in the yield of 10-year and 25-year Japanese government bonds provoked its decline against other currencies. By the beginning of today's European session, the dollar index DXY fell to 92.07 from the level of 92.2 on Tuesday.

In general, the positive dynamics of the GBP / USD pair remains. Nevertheless, traders who trade in the pound and GBP / USD pair are cautious ahead of the start of trade talks between the EU and the UK. Uncertainty in the prospects for economic relations between the UK and the European Union and the disagreements in the British government over Brexit put pressure on the pound. The British government still has no common opinion on further actions and future relations with the EU.

Back in November, UK Finance Minister Philip Hammond published negative forecasts for the growth of the British economy, and in December the IMF published a forecast that the GDP growth of the UK in 2018 will slow down to about 1.5% against the backdrop of declining consumer and company costs due to Brexit .

At 13:00 (GMT) the report NIESR (National Institute for Economic and Social Research of Great Britain) will be published with an estimate of GDP growth rates of the country. This indicator estimates the growth rate of the British economy during the last three months and is able to influence the monetary policy of the Bank of England. The high value of the indicator is a positive factor for GBP. Forecast: UK economic growth for the last three months was 0.5% (against + 0.5% in the previous 3-month period). If the data are confirmed, then you can expect a 2% increase in the UK economy in 2017. This is a very positive indicator, given the gloomy forecasts of economists regarding the British economy after the referendum on Brexit, held in June 2016.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics



Support and resistance levels

Short-term support level 1.3520 (EMA200 on 1-hour and EMA50 on 4-hour charts) kept GBP / USD from a deeper decline.

The pair GBP / USD remains positive dynamics, trading in the upward channels on the daily and weekly charts.

In case of consolidation above the local resistance level 1.3550, the GBP / USD growth will continue towards the resistance levels 1.3700 (EMA144), 1.3970 (Fibonacci level 38.2%), 1.4050 (EMA200 on the weekly chart).

The decline scenario will be related to the breakdown of the support level 1.3420 (EMA200 on the 4-hour chart) and the further decline of the GBP / USD to support levels of 1.3300 (the lows of December), 1.3210 (the Fibonacci level 23.6% of correction to the decline of the GBP / USD pair in the wave, which began in July 2014 near the level of 1.7200). The breakdown of the key support level 1.3150 (EMA200 on the daily chart, EMA50 on the weekly chart) will return GBP / USD in to the global downtrend began in July 2014.

Support levels: 1.3520, 1.3420, 1.3300, 1.3210, 1.3150

Resistance levels: 1.3550, 1.3630, 1.3700, 1.3970, 1.4050


Trading Scenarios

Sell Stop 1.3470. Stop-Loss 1.3590. Take-Profit 1.3420, 1.3300, 1.3210, 1.3150

Buy Stop 1.3590. Stop-Loss 1.3470. Take-Profit 1.3630, 1.3700, 1.3970, 1.4050

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[Tifia FX]

EUR/USD: euro decline is suspended

11/01/2018

Current dynamics

As the statistical agency Eurostat reported on Thursday, industrial production in the Eurozone rose by 1.0% in November (+ 3.2% in annual terms). The forecast of economists assumed an increase of 0.6% (+ 2.9% compared to the same period of the previous year).

Eurostat also raised the estimate of industrial production growth in the Eurozone for October.

In December, the purchasing managers' index (PMI) for the Eurozone's manufacturing sector reached its highest level in the history of such observations (since mid-1997).

The increase in investment costs of companies has contributed to the strongest growth in the Eurozone economy since 2007. The growth of industrial production at the moment is the strongest since August 2011.

It is worth noting at the same time that such a strong growth in industrial production of the Eurozone is provided, mainly at the expense of Germany, where in November industrial production grew by 3.6% compared to the previous month.

The data also show that the bullish economic trend persists in Germany. The surplus of the country's budget in 2017 amounted to 1.2% of GDP. The Bureau of Statistics Eurostat reported that Germany's GDP increased by 2.2% last year.

The euro reacted rather sluggishly to the data presented, and the pair EUR / USD is trading today in the range near the 1.1950 mark.

At the beginning of the year, the EUR / USD rose above 1.2070, however, subsequently fell to current levels. Investors are still cautious about buying euro against the dollar with EUR / USD rising above the level of 1.2000. ECB executives may fear that the strengthening of the euro could have a negative impact on the recovery of the Eurozone economy.

Market participants expect that the minutes of the December meeting of the ECB (will be published at 12:30 GMT) will demonstrate "fairly neutral" rhetoric of the ECB leaders.

If, however, the number of supporters of policy tightening in the Governing Council of the ECB grows, then it will exert increasing pressure on the ECB towards faster completion of monetary stimulus.

And this is a positive factor for euro buyers and its further growth. In general, we can say that the positive dynamics of EUR / USD remains. As far as leaders are tolerant with respect to the growth of the EUR / USD pair towards 1.2400, 1.2500, it is likely to become clearer from the published protocols.

Meanwhile, the US dollar rose on Thursday after the drop on Wednesday, when China denied media reports that Beijing could cut or stop purchases of US government bonds. This, in particular, was reported in the agency Bloomberg News.

The dollar index DXY rose by 0.2%, to 92.46. However, the cautious-negative attitude to the dollar on the part of investors remains; any upward correction in the DXY index is likely to be limited to 93.00 and used to build short positions in the dollar.

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Support and resistance levels

The pair EUR / USD remains positive dynamics, trading in the ascending channels on the daily and weekly charts.

At the beginning of the European session, the pair EUR / USD is trading in the range near 1.1950, below the short-term resistance level 1.1970 (EMA200 on the 1-hour chart). The reduction to support levels 1.1855 (EMA50 and the bottom line of the upward channel on the daily chart), 1.1800 is corrective.

So far, long positions are preferable. In case of breakdown of the local resistance level 1.1970, the EUR / USD pair growth will resume with the nearest target near the resistance level 1.2100 (the upper line of the rising channel on the daily chart).

Only in case of breakdown of the key support levels 1.1660 (EMA200 on the weekly chart), 1.1585 (EMA200 on the daily chart) can we speak about the reversal of the bullish trend of the EUR / USD pair.

Support levels: 1.1890, 1.1855, 1.1800, 1.1780, 1.1710, 1.1660, 1.1585

Resistance levels: 1.1970, 1.2000, 1.2100, 1.2180, 1.2320, 1.2430


Trading Scenarios

Sell Stop 1.1910. Stop-Loss 1.1975. Take-Profit 1.1890, 1.1855, 1.1800, 1.1780, 1.1710, 1.1660, 1.1585

Buy Stop 1.1975. Stop-Loss 1.1910. Take-Profit 1.2000, 1.2050, 1.2100, 1.2180, 1.2320, 1.2430

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