The incident in the disputed waters of the South China Sea only eloquently confirmed all of the above.
The most significant event in the economic calendar on October 2 is the speech of the Chairman of the Board of Governors of the Federal Reserve Jerome Powell The technical picture in recent days leaves advantages on the side of the players to fall, who are now seeking to increase their influence and enlist the support of as many Ichimoku indicator elements as possible.
The Chikou Line, which most accurately warned about the end of the time allotted for the upward movement MVD dated As a result, Chinkou can move to the side of bears, giving them a benchmark downward target. In addition, the bears are currently seeking to overcome the daily cloud of 1. Fixation in the bearish zone will form another downward reference point target for the breakdown of the daytime cloud. At the same time, consolidation under the key supports will return the possibility of considering the guidelines of the weekly downward target on the breakdown of the weekly cloud.
One of which is the lower limit of the weekly cloud 1. Based on all of the above, it can be concluded that bears, having implemented these plans, will get good prospects and guidelines for reduction. In this situation, the players in the near future will have to start with retests in the area of 1. Yesterday, the players on the fall completed upward corrections, not allowing the opponents to go above the short-term H4 trend.
Today, the bears began to break down the accumulated resistance. The H4 and H1 are now all elements of the Ichimoku indicator on the side of the players to fall. The goals and guidelines of the lower timeframes are worked out and the main task remaining for the near future is to break down and reliable consolidation below 1. Indicator analysis currently prefers sales. It cannot be otherwise as the downward trend is now in its active phase.
The only thing you need to pay attention to is that the trend indicators have already gone into the oversold zone, while the pair is close to the final Pivot-level of the S3 day 1. All this is a reason for a more careful determination of bearish landmarks and profits. Now, the price is set at 1. On the H4 chart, the resistance is seen at the levels of 1. Besides, it should be noted that major resistance is seen at 1. According to the previous events, the pair is likely to move from 1.
However, if the pair fails to pass through the level of 1. So, the market will decline further to 1. Moreover, a breakout of that target will move the pair further downwards to 1. Recently, Gold has been trading upwards. According to the H1 time — frame, I found a potential end of the larger downward correction regular flat , which is a sign that buying positions are favorable.
I also found the breakout of the supply trendline in the background, which is another sign of the strength. My advice is to watch for potential buying opportunities on the pullbacks. Buyers failed to do anything in the first half of the day to break the downward trend in the European currency, even despite good data as the producer price index in the eurozone increased.
At the moment, the first task is to return to the resistance level of 1. In the event of a further euro decline along the trend, long positions can be returned on a false breakdown from support 1.
The breakthrough of several levels of support practically allowed the euro sellers to reach the level of 1. The formation of a false breakdown in the area of 1. In case of growth above the resistance level of 1.
The day moving average and day average are directed down, which indicates a continued decline of the euro in the short term. The volatility of the Bollinger Bands is at a good level, which indicates the presence of large players in the market and a further decline in the euro.
The Euro is lower across the board and it attracts risk aversion, because problems with the budget of Italy attract attention, especially with comments that Italy would be better with its own currency.
Until investors find a better topic for discussion, we may have to wait for a temporary period of turbulence. The buzz around the Italian budget is starting to get louder with lower-level officials who are looking for five minutes of fame.
Claudio Borghi, the eurosceptic head of the Italian budget committee, said Italy would deal with budget problems if it had its own currency. At that time, the country could decide on a deficit of 3. Let me just remind you that the 2. A detailed draft budget is to be presented to the European Commission on October 15, which gives plenty of time for speculation and shocking comments. The reaction of rating agencies is an additional risk. Yields of year Italian bonds are up to 3.
How important this zone is, was seen in August during the "Turkish crisis", when a successful breakthrough triggered avalanche drops to 1. Now, the slump should not be so strong, but we face the risk of temporary pitting.
Currently, the pair trades at the support at the level of 1. Nevertheless, the weak and negative momentum is still indicating a possible slide even lower, towards the next technical support at the level of 1. After a short break in the Asian trading session, new active purchases of the US dollar began in the European session. As a result, the pair fell to the first support level of 1.
Thus, the US dollar continues to almost recoilless strengthening against the euro after it became aware of the results of the Fed meeting. From a technical point of view, the upward correction has been brewing for three days. However, traders are in no hurry to close short positions, which leads to the lack of correction.
Tonight will be the speech of Fed Chairman Jerome Powell. Although now the question arises, is it worth it to wait? The dollar has already managed to rise significantly during the day. However, if there is something in Powell's speech that will disappoint the markets, it could trigger a round of long-awaited correction. Although the hope for such an outcome of the Fed chairman's speech is small. The MACD indicator is strongly oversold and in such conditions can react to any non-increase in the price by a discharge.
Thus, a reversal of the indicator upward without a simultaneous increase in the price will not be interpreted as the beginning of the correction. The price rebound from the first target can provoke a round of corrective movement, so before overcoming this level, it is preferable to carefully reduce the sell orders. The price rebound from the first target can provoke a correction, so it is recommended to reduce shorts now, and in case of overcoming this level — to increase with the target of 1.
It is recommended to consider long positions in small lots, if together with the rebound from 1. The goal of the correctional movement is the critical Kijun-sen line. In addition to the technical picture, fundamental data and the timing of their release should also be taken into account.
At today's meeting, the Reserve Bank of Australia did not impress traders with its rhetoric. The tonality of the accompanying statement was rather negative, despite the absence of obvious "failures" among the key macroeconomic indicators.
In other words, Aussie reflected the negative side of the October meeting, but did not panic, staying within the multi-day price range. The main claims of the Australian regulator were the growth rates of wages and household consumption. The dynamics of these indicators is largely related to each other, and their weak growth is reflected in the dynamics of inflation.
This is not a problem today. As early as the end of , a similar trend disturbed regulator members so much that some of them in particular, Jan Harper allowed a reduction in the interest rate if the incomes of the population and consumer activity of Australians do not grow. Today, monetary policy easing is not talked about, but the urgency of the problem remains high. The remaining theses of the RBA were neutral.
The regulator said that the level of the current interest rate supports the economy, as well as the low rate of the Australian against the dollar. Unemployment will gradually decline to five percent, and inflation will also gradually increase in and In the same vein, the Central Bank assessed the dynamics of other key indicators: Calm rhetoric has been ignored by the market, as it has been repeated for more than one month. Traders responded to concerns about wages, but only "formally". Following the meeting, the pair fell by only fifty points.
And then, the focus of the market shifted to a slightly different plane. The fact is that the Australian dollar reacts quite sharply to the American-Chinese conflict. Therefore, today's Aussie movement should be viewed solely from this point of view, taking into account the "passing" meeting of the RBA.
Unfortunately, relations between China and the United States leave much to be desired. Literally today, it became known that the head of the Pentagon canceled his visit to Beijing "because of the growing tensions between the countries. According to insiders, the matter is not only in a trade war, which is likely to be continued in the near future.
There are other fairly weighty claims of the United States to the Middle Kingdom. In particular, we are talking about China's attempts to intervene in the elections to the US Congress. It was precisely such accusations voiced by Trump against Beijing. In his words, the Chinese are trying, "using various means," to prevent the Republicans from winning the midterm elections on November 6.
He did not specify which methods the PRC resorts to, but, by and large, this is not so important in the context of the foreign exchange market. It is obvious that under conditions of mutual accusations, it is not necessary to expect trade negotiations, and even more so, the conclusion of a mutually beneficial transaction.
The incident in the disputed waters of the South China Sea only eloquently confirmed all of the above. I remind you that yesterday, the Chinese warship Luyang, in the opinion of the Americans, "made an unprofessional and dangerous maneuver," because of which, the US destroyer was forced to evade a collision.
China is the main trading partner of Australia, so this fundamental background puts pressure on the Australian dollar. Moreover, the macroeconomic indicators of China are not encouraging. In particular, the PMI index in the industrial sector, which is calculated by Caixin and Markit, fell to 50 points, that is, to a kind of "red line". The decline is tendentious. It falls over the past four months, weakening to a year and a half minimum. If the index falls below the 50th mark, the Australian dollar will receive an additional reason for its weakening.
The lack of optimism on the part of the RBA, the further cooling of relations between the US and China, the slowdown in Chinese industry and the oversupply in the iron ore market all reduce the demand for the Australian dollar amid the strengthening of the US currency the dollar index has now reached a three-week high of This combination will technically open the way to the bottom line of the above indicator, which corresponds to the price of 0.
If relations between China and the United States continue to deteriorate, the negative dynamics of the commodity market will put pressure on Aussie, and achieving this level of support will become only a matter of time.
Since then, the pair has been demonstrating a successful bullish breakout so far. However, On H4 chart, the market failed to maintain its uptrend within the depicted bullish channel on H4 chart. As anticipated, the price level of 1. On the other hand, regarding the price levels 1. Currently, these price levels turned to become supply levels to be watched for bearish price action on retesting. The current bearish decline below 1. See also Forex tick charts Forex informers Currency converter Forex symbols.
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