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Old 09-24-2018, 01:54 AM   Nav to Top  #221
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Elliott wave analysis of EUR/NZD for September 24, 2018



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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Old 09-25-2018, 01:59 AM   Nav to Top  #222
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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



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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Old 09-26-2018, 02:24 AM   Nav to Top  #223
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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



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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