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Analysis of Bitcoin for October 23, 2017

The Bitcoin has recently reached $6,000 resistance area and bounced off the area with the bullish rejection and a daily close below it. Ahead of the Bitcoin split in November the price has bounced off the $6,000 price level as expected. Though there are certain restrictions about Bitcoin trading going on in few countries which affected the growth of Bitcoin earlier but currently it has soon good recover and reached all time high which does signal that the Bitcoin is quite strong now to create more highs in the future. Currently the price is residing below $6,000 resistance area and after a strong impulsive rejection off the level last week and a retest today it is currently expected that the price will consolidate and might show some bearish pressure towards $5,000 support area before it launches up much higher in the future. As of the current scenario, the price is expected to consolidate and show some bearish pressure until Bitcoin Split happens and after that we will be getting good amount of positive push to buy the Bitcoin again.

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For the ECB meeting, the euro is too strong

Eurozone

The most important event of the upcoming week is the ECB meeting on Thursday, October 26. Investors expect that the regulator will finally announce a reduction in the asset purchase program, and the whole issue consists only in the volume of the reduction. At the moment, monthly purchases amount to 60 billion euros a month, and this regime will remain in effect until December, then the program can be reduced to 40 or even 30 billion euros a month, and the euro will react with growth or decline if the result is better or worse than expected.

At the two-day EU summit in Brussels, the leaders of European states reviewed the situation with the negotiations on Brexit. A rather tough stance was expressed by Angela Merkel- the EU will continue negotiations only if London officially confirms its obligations to the EU. This is a sum of 60 billion euros, and the EU’s rigidity regarding the matter puts pressure on the pound and supports the euro, since it calls into question London’s desire to maintain a privileged status on access to EU markets during the two-year transition period.

On Tuesday, preliminary PMI Markit data for October for the euro area will be published. Since August 2016, the index is on the rise at the level of six-year highs, which increases the probability of outperforming GDP growth relative to forecasts and gives additional arguments in favor of a more aggressive change in the ECB monetary policy.

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Also, markets should pay attention to the release of the IFO indices for Germany on Wednesday. The ZEW index published last week showed an increase in economic expectations, so the IFO outlook is favorable, and the data can support the euro.

Demand for the dollar is supported mainly by the expectations of reforms in the tax code, while in the eurozone the majority of macroeconomic indicators are on the rise. This equalizes the odds of the euro against the dollar, and, most likely, the coming week will prove to be quite dragging, but the reason for the exit from the trading range is unlikely to appear earlier than Thursday.

United Kingdom

The volume of retail sales in September unexpectedly decreased by 0.8% compared to August, year on year growth slowed from 2.3% to 1.2%. The pound reacted to the data with a decline, but it was limited, since it is unlikely to influence the plans of the Bank of England to raise the rate at the next meeting.

Looking at the dynamics of retail sales based on historical data, one can clearly see a positive result after the failure of 2015.

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On Wednesday, the first preliminary reading on GDP growth in the third quarter will be published, as well as the MBA mortgage lending report. In anticipation of the meeting of the Bank of England on November 2, the market will form expectations for the pound, and currently the high probability of a rate increase of a quarter point does not support the prices of the British currency. Inflation is largely a consequence of higher import prices than a sign of the strength of the consumer market, and therefore the actions of the Bank of England may well lead to a deterioration in financial conditions.

There is no reason to expect the pound to rise in the short term, the probability of a decline below support of 1.30 remains fairly high.

Oil

The weekly report of Baker Hughes again showed a decrease in active drilling rigs, which contributed to the growth of oil prices by the close of the week. The market is also waiting for the OPEC meeting in November in Vienna, where the issue of prolonging the agreement on limiting production to the end of 2018 will be discussed.

The formation of the peak is just below $ 60 per barrel until it is completed. Bearish factor in the form of the probability of production growth in the US against the backdrop of the growth of [roces does not work, as shale producers are experiencing serious difficulties with the growing cost price. The probability of movement is above 60 dollars per barrel for Brent looks still high.

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USD/JPY analysis for October 20, 2017

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Recently, the USD/JPY pair has been trading upwards. As I expected, the price tested the level of 113.46. According to the 15M time – frame, I found a broken pivot resistance 1 at the price of 113.03, which is a sign that buyers are in control. Stochastic is showing oversold condition on latest downward correction, which is sign that that bullish activity may resume. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 113.50 (R2) and extreme target at the price of 113.85 (S3).

Resistance levels:

R1: 113.03

R2: 113.50

R3: 113.85

Support levels:

S1: 112.17

S2: 111.80

S3: 111.32

Trading recommendations for today: watch for potential buying opportunities.

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GBP/USD analysis for October 20, 2017

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Recently, the GBP/USD has been trading sideways at the price of 1.3180. According to the 15M time – frame, I found that shooting star candle and few doji candles near the pivot level at the price of 1.3170, which is a sign that buying looks risky. The stochastic oscillator is in overbought zone, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 1.3115 (S1) and 1.3085 (S2).

Resistance levels:

R1: 1.3215

R2: 1.3270

R3: 1.3315

Support levels:

S1: 1.3115

S2: 1.3070

S3: 1.3015

Trading recommendations for today: watch for potential selling opportunities.

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Global macro overview for 20/10/2017

The headline reading, Retail Sales With Auto Fuel, was released at the level of -0.8% after 0.9% increase a month ago. The market consensus was at the level of -0.1.%. Moreover, the data indicated that the underlying pattern in the retail industry is one of growth; for the three-months on three-months measure, the quantity bought increased by 0.6%. Year-on-year, the quantity bought in the retail sector increased by 1.2% with non-food (household goods, clothing stores) and non-store retailing all providing growth. Store prices continue to rise across all store types and are at their highest year-on-year price growth since March 2012 at 3.3% (non-seasonally adjusted). Online sales values increased year-on-year by 14%, accounting for approximately 17% of all retail spending.

In conclusion, despite the weaker one-month data, there is a continuation of the underlying trend of steady growth in sales volumes following a weak start to the year, and a background of generally rising prices. These increased costs are reflected in the more rapid growth in the amount spent when compared with the quantity bought.

Earlier this week, Silvana Tenreyro, a new member of the BOE, said in her speech in the British Parliament that it is necessary to raise interest rates in the current economic climate. Tenreyro points out that the BOE is quite close to the point at which the scale of monetary stimulation should be reduced. In addition, it stresses the problem of a rather poor trajectory of economic growth, which in her opinion is a problem of temporary rank.

Let’s now take a look at the GBP/USD technical picture on the H4 time frame. The market is trading below the dashed black short-term trend line in oversold conditions. A bounce from the level of 1.3087 might indicate a correction towards the level of 1.3155 where the dashed trend line will provide a dynamic resistance. As long as the level of 1.3342 is not clearly violated, the near-term outlook remais bearish.

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Bitcoin analysis for 20/10/2017

Bitcoin analysis for 20/10/2017:

On October 16, Ilan Goldfajn, president of the Central Bank of Brazil (Banco Central do Brasil), disregarded Bitcoin. He said: “Bitcoin is a financial asset without the ballast people buy because they believe it will grow. This is a typical bubble or pyramid.” Many huge jumps in value made Goldfajna’s unfavorable statements: “The central bank is not interested in bubbles or illegal payments. This is not something that the Brazilian Central Bank would like to encourage.” Nevertheless, Goldfajn pointed out that technological innovation can be separated from unstable virtual currency. You can not blame the central bank for ignorance on this issue. In August 2017, the institution published results of a real-time gross settlement system study that tested blockchain platform prototypes, including BlockApps based on Ethereum and JP Morgan’s Quorum.

Will the position of Brazil be unstoppable? Perhaps with time, Brazil will see the potential of cryptocurrency and blockchain technology.

Let’s now take a look at the Bitcoin technical picture at the H4 time frame. The market is consolidating the recent gains near to the swing high at the level of $5,700. Any weekly candlestick closes above the weekly pivot point at the level of $5,342 will confirm the bullish scenario for Bitcoin, despite the overbought trading conditions. The key technical support level is still seen at $5,097.

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Burning forecast 10/20/2017

Burning forecast 10/20/2017

The crisis of Catalonia played against the pound – but the trend has not been reversed.

We continue to buy the GBPUSD pair.

On Thursday, the rate of the pound along with the euro came under selling pressure.

I believe that this is due not only because of the U.K.’s difficult negotiations with the EU regarding Brexit, but also to the crisis of Catalonia-Spain.

How can the crisis in Spain prevent the pound’s growth, provided that Britain withdraws from the EU and particularly does not enter the euro area?

I think this is the case when it comes to banks of Britain – and in Spanish government bonds. In the event of a worst development of the crisis – the release of Catalonia from Spain without an agreement – a collapse is inevitable in the government bonds market of Spain – and the crisis of the world’s largest banks. This weakened the euro and pound.

Nevertheless, we are buying the pound at a decline down to 1.3050.

Cancellation of purchases – a consolidation of the GBPUSD pair below 1.2980.

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Elliott wave analysis of EUR/NZD for October 20, 2017

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Wave summary:

There was no time for a deeper correction towards 1.6150. Wave iii towards 1.8032 is already well underway. The base channel resistance near 1.7030 will mark the first resistance, but if wave iii higher is developing, then this resistance should pose as no more than a temporary hurdle and once cleared the road higher to 1.8032 should be free.

Support is now seen in the 1.6816 – 1.6836 area for the next rally higher towards 1.7030.

R3: 1.7030

R2: 1.7000

R1: 1.6969

Pivot: 1.6950

S1: 1.6889

S2: 1.6836

S3: 1.6816

Trading recommendation:

Our EUR short position from 1.6635 was stopped out at 1.6675 for a 40 pips loss. We will buy EUR at 1.6840 with a stop placed at 1.6700.

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EURJPY testing major resistance, prepare to sell

The price is forming a very strong reversal pattern and we remain bearish below major resistance at 133.55 (Fibonacci extension, Fibonacci retracement, horizontal swing high resistance, Elliott wave theory) and we expect to see a strong drop from this level towards 131.90 support (Fibonacci retracement, horizontal overlap support).

Stochastic (34,3,1) is seeing major resistance at 98% and we expect to see a corresponding drop from this level soon.

Sell below 133.55. Stop loss is at 133.96. Take profit is at 131.90.

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EURUSD profit target reached perfectly, prepare to sell

The price has shot up perfectly from our buying area and reached our profit target absolutely perfectly. We prepare to sell below major resistance at 1.1878 (Fibonacci retracement, Fibonacci extension, horizontal overlap resistance) for a push down to at least 1.1747 support (Fibonacci retracement, horizontal overlap support, Fibonacci extension).

Stochastic (34,3,1) is seeing major resistance below 96% where we expect a corresponding reaction from.

Sell below 1.1878. Stop loss is at 1.1949. Take profit is at 1.1747.

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