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RE: Wave Analysis by InstaForex - 6/3/2019 11:24:31 PM   
InstaForex Gertrude

 

Posts: 667
Joined: 5/16/2014
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Technical analysis of Bitcoin for 04.06.2019

Crypto Industry News:
The Japan House of Representatives officially approved a new bill to amend national laws regulating the cryptographic industry.

The draft law - prepared by the Japanese Financial Services Agency (FSA) and approved by the House in mid-March this year - was adopted by a majority of votes at the plenary session of the Chamber of Councilors, in accordance with the current update of the FSA on the official website.

The project is aimed at introducing changes to two national laws regarding cryptographic assets - the act on the settlement of funds and the law on financial instruments and exchange. Now that the bill has been adopted, the amended acts are expected to enter into force in April 2020.

The proposed changes to Japanese financial instruments and payment services will ostentatiously tighten the regulation of cryptocurrencies to promote user protection, more stringent regulation of trading in cryptographic instruments, mitigate industry risks, such as stock market busts, and the broad establishment of a more transparent legal framework for new asset classes.

According to earlier reports, the bill also introduces a legal change in the name of cryptocurrencies as "cryptographic assets", previously marked in the country as "virtual currencies". The draft also provides for stricter rules regarding trading in margins, limiting the leverage to double and four times the initial deposit.

Technical Market Overview:
The BTC/USD pair has made another wave to the downside as anticipated. This wave is a part of the wave 4 correction and so far reached the level of $7,739 after all the technical supports were violated. The next target for bulls is seen at the level of $7,484. This corrective cycle might evolve into an ABCDE Triangle pattern as well, so please keep an eye on the further developments.

Weekly Pivot Points:
WR3 - $10,284
WR2 - $9,622
WR1 - $9,121
Weekly Pivot - $8.545
WS1 - $8,037
WS2 - $7,438
WS3 - $6,960

Trading Recommendations:
The best strategy in the current market conditions is to trade in the direction of the main trend, which is still up. All the local bounces and correction should be treated as another opportunity to open the buy orders for a better price. Please notice, the larger time frame trend is up and there are no signs of any trend reversal.

Analysis are provided by InstaForex


(in reply to InstaForex Gertrude)
Post #: 481
RE: Wave Analysis by InstaForex - 6/6/2019 8:10:27 PM   
InstaForex Gertrude

 

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Joined: 5/16/2014
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EURUSD: ECB revised the interest rate forecast. Mario Draghi is pleased with the growth of the economy in the 1st quarter, but fears for its future

The euro ignored data on the growth of the eurozone economy in the 1st quarter of this year, as traders closely followed the ECB report. Even despite the fact that the expected dates for raising interest rates in the eurozone were shifted to the middle of next year, and Mario Draghi signaled a possible decrease in interest rates to a negative level if necessary, the euro held its position and even rose against the US dollar.

According to the report, a good increase in consumer spending in the euro area in the 1st quarter of this year contributed to accelerating economic growth. Export has also made a significant contribution.

According to the EU statistics agency, the eurozone economy grew by 0.4% in the 1st quarter of this year compared to the 4th quarter. Compared with the 1st quarter of 2018, the economy grew by 1.2%. In annual terms, an increase of 1.6%.

However, it is already known from the results of the latest reports that in the 2nd quarter of this year, GDP growth slows down, and, as many experts expect, growth will be the weakest since the beginning of economic recovery in 2014.

As I noted above, the attention of traders was focused on the ECB meeting, at which the regulator left the refinancing rate unchanged, at the level of 0.0%. The European Central Bank left the deposit rate unchanged at -0.40%.

The central bank revised its forecast, saying that rates would remain at current levels, at least until the end of the first half of 2020. The ECB will continue to completely reinvest the income from the QE program over a long period after the first rate increase.

A new TLTRO program was also announced, according to which targeted long-term loans for banks will be offered at a rate of 10 bp above the average refinancing rate.

The euro rose during the speech of the ECB President Mario Draghi, although the statements made by in principal were negative.

Draghi noted that he is closely following how monetary policy affects banks, and is ready to act. If necessary, the ECB will adjust monetary policy instruments. As for the extension of the forecast period of saving rates, it was quite expected due to the long-term uncertainty, which is now observed in the global economy. First of all, uncertainty is associated with conflicts in international trade and changes in the policies of central banks. Draghi also said that the ECB may lower interest rates if necessary.

As for the economy, the head of the ECB is confident that, despite the stronger growth in eurozone GDP in the 1st quarter of this year, the difficulties in the world still put pressure on the prospects for further growth, and the data indicate a slightly weaker growth in the economy 2nd and 3rd blocks.

ECB economists forecast GDP growth in 2019 by 1.2% against the previous forecast of growth of 1.1%, while in 2020 it is expected to grow by 1.4% against the previous forecast of growth by 1.6%.

The ECB president is confident that the increase in employment and wage growth will continue to support the eurozone economy, but the threat of protectionism and geopolitical factors will slow it down.

Analysis are provided by InstaForex

(in reply to InstaForex Gertrude)
Post #: 482
RE: Wave Analysis by InstaForex - 6/10/2019 1:18:51 AM   
IFX Yvonne

 

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Technical analysis of GBP/USD for 10/06/2019



Technical Market Overview:

The GBP/USD pair did not make the breakout above the technical resistance at the level of 1.2747, just a local high was made at 1.2761. The market reversed slightly, but there is still no new low made, so the outlook is not certain for now, but due to the face that the short-term trendline dynamic resistance has not been broken as well, the outlook remains bearish. The nearest technical support is seen at the level of 1.2668.

Weekly Pivot Points:

WR3 - 1.2954

WR2 - 1.2856

WR1 - 1.2800

Weekly Pivot Point: 1.2708

WS1 - 1.2658

WS2 - 1.2549

WS3 - 1.1502

Trading Recommendations:

The best strategy in the current market conditions is to trade in the direction of the main trend, which is still down. All the local bounces and correction should be treated as another opportunity to open the sell orders for a better price. Please notice, the larger time frame trend is down and there are no signs of any trend reversal.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

(in reply to InstaForex Gertrude)
Post #: 483
RE: Wave Analysis by InstaForex - 6/10/2019 11:23:59 PM   
InstaForex Gertrude

 

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USD/JPY to test resistance, a drop is possible!

USDJPY to test key resistance, a drop to 1st support is possible
Entry: 109.012
Why it's good : 61.8% Fibonacci extension, 23.6% Fibonacci retracement, horizontal pullback resistance
Stop Loss : 109.914
Why it's good :50% Fibonacci retracement,horizontal swing high resistance
Take Profit : 107.854
Why it's good: 61.8% Fibonacci retracement, 100% Fibonacci extension, horizontal swing low support

Analysis are provided by InstaForex

(in reply to InstaForex Gertrude)
Post #: 484
RE: Wave Analysis by InstaForex - 6/12/2019 11:50:38 PM   
InstaForex Gertrude

 

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GBP/USD near support, a bounce is possible!

GBPUSD is near support, a bounce to 1st resistance is possible
Entry: 1.2844
Why it's good : 100% Fibonacci extension, 38.2% & 23.6% Fibonacci retracement, horizontal swing low support
Stop Loss : 1.1256
Why it's good :38.2% & 61.8% Fibonacci retracement,100% Fibonacci extension, horizontal swing low support
Take Profit : 1.1342
Why it's good: 100% Fibonacci extension, horizontal swing high resistance

Analysis are provided by InstaForex

(in reply to InstaForex Gertrude)
Post #: 485
RE: Wave Analysis by InstaForex - 6/14/2019 12:14:16 AM   
InstaForex Gertrude

 

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Technical analysis of GBP/USD for 14/06/2019:

Technical Market Overview:
After two Pin Bar like candlestick formation around the upper consolidation boundary, the GBP/USD pair keeps trading close to the support zone located between the levels of 1.2652 - 1.2668. The momentum is barely holding the neutral fifty level and it looks like is about to go lower as well. The stochastic is in the middle of the range now, so all sum up there is no direct signal regarding the future price move now, but the support zone is tempting to be violated. In this scenario, the next target for bears is seen at level 1.2605.

Weekly Pivot Points:
WR3 - 1.2954
WR2 - 1.2856
WR1 - 1.2800
Weekly Pivot Point: 1.2708
WS1 - 1.2658
WS2 - 1.2549
WS3 - 1.1502

Trading Recommendations:
The best strategy in the current market conditions is to trade in the direction of the main trend, which is still down. All the local bounces and correction should be treated as another opportunity to open the sell orders for a better price. Please notice, the larger time frame trend is down and there are no signs of any trend reversal.

Analysis are provided by InstaForex


(in reply to InstaForex Gertrude)
Post #: 486
RE: Wave Analysis by InstaForex - 6/16/2019 10:22:51 PM   
InstaForex Gertrude

 

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USD/CAD approaching resistance, potential reversal!

Price is approaching its resistance where we expect to see a reversal.
Entry : 1.3437
Why it's good : 61.8% Fibonacci retracement, 100% Fibonacci extension, horizontal pullback resistance
Stop Loss : 1.3499
Why it's good : 78.6% Fibonacci retracement
Take Profit : 1.3364
Why it's good : Horizontal pullback support, 38.2% Fibonacci retracement

News are provided by InstaForex

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Post #: 487
RE: Wave Analysis by InstaForex - 6/17/2019 11:34:44 PM   
InstaForex Gertrude

 

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EUR/GBP near resistance, a drop is possible!

EURGBP is near resistance, a drop to 1st support is possible
Entry: 0.8982
Why it's good : 100% Fibonacci extension, 78.6% Fibonacci retracement, horizontal swing high resistance
Stop Loss : 0.9063
Why it's good :horizontal swing high resistance
Take Profit : 0.8791
Why it's good: 61.8% Fibonacci extension, horizontal overlap support, 61.8% Fibonacci retracement

Analysis are provided by InstaForex


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Post #: 488
RE: Wave Analysis by InstaForex - 6/18/2019 11:49:59 PM   
InstaForex Gertrude

 

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GBP/USD near resistance, a drop is possible!

GBPUSD is near resistance, a drop to 1st support is possible
Entry: 1.2564
Why it's good : 61.8% Fibonacci extension, 23.6% Fibonacci retracement, horizontal pullback resistance
Stop Loss : 1.2660
Why it's good :horizontal pullback resistance, 61.8% Fibonacci retracement, 61.8% Fibonacci extension
Take Profit : 1.2462
Why it's good: 100% Fibonacci extension

Analysis are provided by InstaForex

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Post #: 489
RE: Wave Analysis by InstaForex - 6/19/2019 10:48:09 PM   
InstaForex Gertrude

 

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USD/JPY approaching support, possible bounce!

Price is approaching its support where it could potentially bounce up to its resistance at 108.161
Entry : 107.492
Why it's good : 61.8% Fibonacci extension
Take Profit : 108.161
Why it's good : 50% Fibonacci retracement, horizontal pullback resistance, 61.8% Fibonacci extension

Analysis are provided by InstaForex


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Post #: 490
RE: Wave Analysis by InstaForex - 6/20/2019 11:03:09 PM   
InstaForex Gertrude

 

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GBPUSD: The pound is growing after the Bank of England's decision not to change the monetary policy

The British pound continued its growth against the US dollar, completely ignoring the weak report on retail sales. The demand for the pound has been observed since the beginning of the week, when it became clear that the monetary policies of the Bank of England and the US Federal Reserve may begin to diverge in different directions. In other words, the central bank of England will not lower interest rates, while the Fed intends to do this, which, although indirectly, was mentioned at Fed Chairman Jerome Powell's press conference yesterday.

As I noted above, retail sales in the UK fell in May of this year, and one of the main reasons are adverse weather conditions, which negatively affected the demand for summer wardrobe items. This once again confirms the fact that the UK economy is unlikely to show good growth rates in the 2nd quarter of this year and, at best, will only keep them.

According to the UK National Bureau of Statistics, retail sales in the UK fell by 0.5% in May compared with April. Fall is observed for the second month in a row. Between March and May, UK retail sales rose by only 1.6%, after rising 1.7% between February and April.

Economists had expected a similar decline in retail sales, which also kept pressure on the British pound before the publication of the Bank of England report on interest rates.

According to the data, the Bank of England left the key interest rate at the level of 0.75%, and the decision to keep the key rate at the same level was made at a ratio of 9 to 0.

The central bank noted that downside risks for GDP growth have increased, and therefore GDP growth will remain unchanged in the 2nd quarter. The regulator also expects that this year inflation will be below the target level of 2%, which will "slow down" with a further increase in interest rates in the context of growing uncertainty with Brexit.

Let me remind you that today Boris Johnson, who is the most likely successor of Theresa May as prime minister, moved ahead in the fourth round of voting with 157 votes. Johnson is a hard advocate of Brexit, which in the future could create serious problems for the economy.

The Bank of England expects a limited and gradual increase in interest rates in the event of a smooth Brexit.

As for the technical picture of the GBPUSD pair, growth was restrained by a large resistance level around 1.2730, and currently there is some downward correction in the support area of 1.2640, which will make it possible for large buyers to build the lower boundary of the new upward channel capable of continuing the current trend. The main weekly goal of the bulls will be a high in the area of 1.2760.

Analysis are provided by InstaForex


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Post #: 491
RE: Wave Analysis by InstaForex - 6/23/2019 10:51:13 PM   
InstaForex Gertrude

 

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EUR/USD approaching resistance, potential drop!

EURUSD is approaching resistance where we might see a drop in price.
Entry: 1.1448
Why it's good : Horizontal swing high resistance, 100% Fibonacci extension, 23.6% Fibonacci retracement
Stop Loss : 1.1493
Why it's good : Horizontal swing high resistance
Take Profit : 1.1346
Why it's good: 61.8% Fibonacci extension, 23.6% Fibonacci retracement, Horizontal pullback support

Analysis are provided by InstaForex

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Post #: 492
RE: Wave Analysis by InstaForex - 6/24/2019 11:40:07 PM   
InstaForex Gertrude

 

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Forecast for GBP/USD on June 25, 2019

GBP/USD
Yesterday, the pound solved the main task for the possibility of further growth - it consolidated above the line of the price channel on the daily chart. The balance line was on top of a strong resistance. The daily Marlin oscillator signal line lies at the horizon, which makes it possible for the pound to continue its slow growth below the balance line and reach the MACD line (1.2832), presumably at the point where both indicator lines coincide. From this point, a reversal or correction is likely.

There is a weak convergence on the four-hour chart on the Marlin oscillator, but nevertheless it is closer in form to consolidation in the growth zone, which may soon continue to increase the indicator and price.

A signal for a reversal will be the departure of the price below the price channel line on the daily chart and below the MACD line (1.2690) at the four-hour price.

Analysis are provided by InstaForex

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Post #: 493
RE: Wave Analysis by InstaForex - 6/26/2019 12:00:42 AM   
InstaForex Gertrude

 

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EUR/GBP approaching resistance, potential drop!

EURGBP is approaching resistance where we might see a drop in price. Entry: 0.8981
Why it's good : Horizontal swing high resistance, 78.6% Fibonacci retracement
Stop Loss : 0.9055
Why it's good : Horizontal swing high resistance

Analysis are provided by InstaForex

(in reply to InstaForex Gertrude)
Post #: 494
RE: Wave Analysis by InstaForex - 6/26/2019 7:22:26 PM   
InstaForex Gertrude

 

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Technical analysis of Gold for June 27

Gold price has pulled back towards $1,400 as expected and noted in our previous posts. The risk reward ratio did not favor bulls and as the RSI was giving bearish divergence signs, we said that we prefer to take profits and stay neutral when price was above $1,430.

Blue lines - bearish divergence
Green line - support trend line

Gold price has pulled back from $1,439 towards $1,400. The bearish divergence warnings by the RSI have been fulfilled. Price has made the minimum required pull back. Price could continue lower towards $1,380-90 area before resuming its up trend. Short-term support is found at $1,410 and resistance at $1.425. Medium-term trend remains bullish. Gold bears will need to break below $1,270-$1,300 area in order to cancel the importance of this bullish breakout.

Analysis are provided by InstaForex


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Post #: 495
RE: Wave Analysis by InstaForex - 6/27/2019 11:20:16 PM   
InstaForex Gertrude

 

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Forecast for EUR/USD on June 28, 2019

EUR/USD
The third day began, as the euro hardly moves from its place in anticipation of decisions from the fields of the G20 and the EU summit. As a result, the indicator lines on the H4 chart are approaching the current price, the oscillator lines on the daily and H4 continue to decline. Now, to create a signal in the medium-term sale, the price is enough to gain a foothold under the MACD line on the four-hour chart (1.1340), which is very close to the lows of the last days. The goal of reducing 1.1234 – the area of coincidence of the nested line of the price channel and the MACD line on the daily scale chart.

But, despite the strengthening of the declining version of the order to 65%, the possibility of growth of 35% is high enough to be realized in the movement to 1.1514 – the Fibonacci level of 50% on the daily chart (coincides with the top of January 2019). The growth can consist of two stages: the movement to the Fibonacci level of 61.8% at the price of 1.1445 and the movement to 1.1514. It remains to wait for developments. Again, on the G20, preliminary events are still developing in favor of the dollar.

Analysis are provided by InstaForex


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Post #: 496
RE: Wave Analysis by InstaForex - 7/1/2019 11:47:23 PM   
InstaForex Gertrude

 

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EURUSD: Unemployment will only provide temporary support for the euro, while other indicators will continue to disappoint

The euro rose after a report that the number of applications for unemployment benefits in Germany fell, and the unemployment rate in the eurozone fell. This indicates a good state of the labor market, which has recently caused concern to the European Central Bank.

However, ahead of the report on the labor market, there were indices for manufacturing in France, Italy, Germany and the eurozone, which leave much to be desired, confirming the negative impact of the protectionist policies of the United States and the slowdown in the global economy against trade conflicts.

As I noted above, according to published official data, the number of applications for unemployment benefits in Germany in June of this year fell by 1,000, after rising by 60,000 in May. The employment agency noted that the weak economic situation continues to be reflected in the labor market. Taking into account the seasonal adjustment, unemployment in June remained at the level of 5.0%, whereas in April of this year it reached a record minimum of 4.9%. The number of registered vacancies in June was 798,000, which is also less than in May.

The sharp rise in the euro occurred after it became known that the unemployment rate in the eurozone in May of this year fell, not coinciding with the forecasts of economists. However, looking ahead, it is necessary to say that speculative traders in vain ignored the report on the eurozone production index for June, the decline of which will force enterprises to reduce staff, adversely affecting the June report on the labor market.

According to the data, in May of this year, the number of unemployed in the eurozone decreased by 103,000 people, while the unemployment rate itself fell to 7.5% (the level of the crisis of 2008) from 7.6% in April. The report noted that the largest reduction in the number of unemployed was registered in Spain and Italy.

Why is low unemployment so important for the ECB? In addition to influencing the growth rate of the economy, low unemployment also stimulates the acceleration of inflation, which the regulator is counting on.

Data on lending to companies in the eurozone were ignored by traders. According to the ECB report, in May of this year, compared with April, lending to non-financial companies increased by 3.9%, which corresponds to the April rate. Lending to households in the euro area in May increased by 3.3%, as well as in April. Eurozone M3 monetary aggregate grew by 4.8%, while economists had expected the indicator to grow by 4.6% in May.

As I noted above, ignoring weak reports on production activity will not lead to anything good. According to the data, the PMI Purchasing Managers Index for the Italian manufacturing sector fell to 48.4 points in June, while Italy's manufacturing PMI was 49.7 points in May. In France, the same index rose slightly in June, reaching 51.9 points, against 50.6 points in May.

In Germany, the situation with production activity remains at a very bad level. There, the index remained below 50 points, which indicates a reduction, and amounted to 45.0 points in June against 44.3 points in May. In the euro area as a whole, the PMI purchasing managers index for the manufacturing sector in June dropped even more - to 47.6 points versus 47.7 points in May.

As for the technical picture of the EURUSD pair, it remained unchanged. The upward momentum after a good report on the eurozone labor market helped to carry out a number of stop-orders of speculative players, but the market remains on the sellers side. The purpose of the bears is the support test of 1.1310, below which the lows open as early as June 21 - 1.1285 and June 20 - 1.1225. In case of a breakout level of 1.1350, the upward correction will be limited to a high of 1.1370.

Analysis are provided by InstaForex

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Post #: 497
RE: Wave Analysis by InstaForex - 7/3/2019 12:16:39 AM   
InstaForex Gertrude

 

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Technical analysis of GBP/USD for 03/07/2019:

Technical Overview:
The GBP/USD pair has broken below the 61% Fibonacci retracement located at the level of 1.2611 and is heading lower. The next technical support is seen at the level of 1.2559 and 1.2529. The key support is seen at the level of 1.2505 and if this level is violated the downtrend will accelerate. On the other hand, the nearest technical resistance is seen at the level of 1.2605.

Weekly Pivot Points:
WR3 - 1.2870
WR2 - 1.2829
WR1 - 1.2757
Weekly Pivot - 1.2708
WS1 - 1.2629
WS2 - 1.2585
WS1 - 1.2508

Trading Recommendations:
The best strategy for the current market conditions is to buy the corrections in anticipation of the uptrend to resume. This strategy is valid as long as the level of 1.2505 is clearly violated. The larget time frame trend is still down and the recent rally up is the first sign the trend might be reversing. The key long-term technical resistance is seen at the level of 1.2775 and only if this level is violated, there is a chance for the trend reversal.

Analysis are provided by InstaForex

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Post #: 498
RE: Wave Analysis by InstaForex - 7/3/2019 10:42:33 PM   
InstaForex Gertrude

 

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AUD/USD: commodity market growth and the "hangover" of dollar bulls

The Australian dollar continues to gain momentum: the AUD/USD pair confidently overcame the key mark of 0.7000 and consolidated in the middle of the 70th figure. For two days, the pair shows a nearly recoilless growth, returning lost positions. It is noteworthy that the aussie turned 180 degrees after the July meeting of the RBA, at which the regulator lowered the interest rate and allowed a further easing of monetary policy. Such an abnormal market reaction is primarily associated with the general weakening of the US currency. In addition, the aussie continues to receive support from domestic data and the commodity market - in particular, the cost of iron ore continues to stay above $100 per ton.

And yet the main driving force behind the growth of AUD/USD is a weak greenback. After the unjustified euphoria, which was associated with the outcome of the G20 summit, a regular "hangover" gradually ensues, aggravated by loud statements by top White House officials. The essence of their comments comes down to the fact that, firstly, relief from Washington is more of a formal nature - for example, Chinese technology giant Huawei remains on the United States' blacklist, despite certain concessions processors).

Secondly, the very fact of the truce is under a big question mark - after all, a non-aggression pact was concluded rather than an armistice agreement in Osaka. Today, the White House announced a meeting between US Trade Representative Robert Lighthizer and Chinese Deputy Prime Minister Liu He, which will clear the future prospects for the negotiation process. Washington did not say exactly when this meeting will take place, but noted that it will occur "in the near future."

In general, the initial optimism of traders was replaced by concern and uncertainty that another attempt to find a compromise will be crowned with success. Similar doubts from investors have background pressure on the US dollar. To one degree or another, this also affects the US currency's postions in dollar pairs. Weak macroeconomic reports in the US only exacerbate the position of the greenback. The slowdown is demonstrated by both key and secondary economic indicators.

Take, for example, the latest releases: an indicator of consumer confidence in the US, an indicator of growth in orders for durable goods, a report on the labor market from ADP, regional indicators of production activity — all of these indicators came out in the red zone, not reaching weak forecast levels. Almost every day, US statistics disappoint investors to some extent, and today is no exception. Thus, activity in the service sector slowed to 55.1 points - this is the weakest result since July 2017. The extremely low influx of new orders (this component of the indicator updated a 2.5-year low) caused a decline in employment in this area, having a mediated effect on the overall slowdown in the US labor market.

Experts have previously warned that the service sector will begin to slow down after the manufacturing sector, and now, apparently, these predictions are beginning to materialize. By the way, the indicator of production orders published today came out at the lowest values since the summer of 2016. The indicator is actively decreasing for the second consecutive month, and the May indicator was revised downward (-1.2% instead of the previous -0.8%). This fundamental picture does not allow the dollar to develop to feel comfortable, even with continued demand. And together with the Australian dollar, the greenback is losing its position at the expense of the aussie's "independent" growth.

The Australian dollar won back a decline in the interest rate by 0.25% and after the announcement of the expected decision, it began to recover throughout the market. Although Philip Lowe did not rule out further easing of monetary policy, the market focused on current events, pulling up the aussie. First, the strategically important raw material for Australia - iron ore - continues to grow. To date, the cost of a ton of this raw material is already $124 (for comparison, in April this figure was in the level of $80). Secondly, due to the growth in the value of exports of iron ore, Australia recorded a growth in the trade surplus by 16.2% to $4 billion in May compared with April. Judging by the price dynamics of iron ore, the June figures will exceed the May results. High demand for this type of raw materials from Chinese steel mills only confirms this assumption.

Thus, despite the RBA's dovish position, AUD/USD buyers use the market's current situation to their advantage. Uncertain positions of the US currency against the background of a substantial growth in the commodity market makes it possible for the aussie to open new price horizons. The first resistance level is the mark 0.7060 - this is the upper line of the Bollinger Bands indicator on the daily chart. When it is overcome, the Ichimoku trend indicator will form a bullish "Parade of lines" signal, which will open the way for AUD/USD bulls to the next resistance level of 0.7180 (the top line of the Bollinger Bands indicator is already on the weekly chart). Support is the aussie's key for a 0.7000 mark.

Analysis are provided by InstaForex

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Post #: 499
RE: Wave Analysis by InstaForex - 7/4/2019 10:38:19 PM   
InstaForex Gertrude

 

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EUR/USD. Calm before the storm: the market hid in anticipation of the Nonfarm report

Today, the windless weather on the foreign exchange market: the European session was not rich in macroeconomic reports, and the US trading platforms are completely closed: Independence Day is celebrated in the United States. The nearly empty economic calendar allows you to take a wait-and-see position, especially on the eve of Friday's releases, which will certainly provoke strong volatility. It is noteworthy that on the eve of a "stormy Friday" the market ignored a rather alarming signal, which was voiced by US President Donald Trump. He again accused China and Europe of using currency manipulations, also complaining that Washington only obediently observes this process. The Chinese Foreign Ministry has already responded to this statement by Trump, publishing a concise refutation of the voiced accusations. Brussels ignored the words of the American president, although the reaction of Europe would hardly be different from the Chinese.

On the one hand, the situation has exhausted itself - Donald Trump often voices his thoughts or complaints with the help of Twitter. On the other hand, the concern of the US president about this issue is alarming for some currency strategists (in particular, Bank of America), given Trump's ability to take unconventional steps in his policy. Therefore, after the head of the White House once again accused Europe and China of manipulating currency, experts began saying that the president could initiate the use of currency intervention in the coming months. Analysts estimate the likelihood of this scenario in different ways. But almost all of the economists surveyed by Bloomberg do not exclude such a scenario. Especially - if the Fed in July does not reduce the interest rate, and the ECB, in turn, will prepare the ground for the introduction of additional incentives in the autumn.

As some currency strategists believe, the White House needs a substantial dollar drawdown across the entire market - by 10-20%. In the context of the euro-dollar pair, this means that the price should rise to levels five years ago, to the area of 1.31-1.37, up to level 40. Naturally, this will cause a domino effect - eurozone inflation is not the only thing that will suffer, but the entire EU economy as a whole, after which the ECB will resort to appropriate mitigation measures. But, as they say, "in war - as war": by launching a flywheel of currency manipulations, the White House will understand perfectly well that central banks of other countries will take a defensive position, devaluing their currencies.

As you know, there are several types of interventions, among them sterilized and unsterilized. In the first version of the intervention, the New York Fed will acquire or sell securities on the open market, but will not interfere with monetary policy. Unsterilized intervention directly affects the money supply and rates. And if during sterilized currency intervention the value of the monetary base is maintained, in the second case, the intervention leads to a change in the monetary base. What kind of tool the White House will apply is an open question, and it has become increasingly discussed in the foreign exchange market. According to many analysts, Trump's rhetoric in this regard will only become tougher in the near future.

But the traders actually ignored the important, in my opinion, signal from the US president. The market is focused on the upcoming events, namely the Nonfarm, which will be published tomorrow. According to preliminary forecasts, the growth rate of people employed in the non-agricultural sector will grow to "acceptable" values, that is, to 164 thousand. This is much less than the levels at which the indicator went out during the past year and the first quarter of the current year: the indicator practically did not fall below the 200 thousandth mark, and often exceeded the 300 thousandth level. But compared to May, when the number of employed has grown by only 74 thousand, this result will look quite good - but only if the real figures coincide with the predicted ones.

Let me remind you that, according to the latest ADP report, the number of people employed in June increased by only 102 thousand. This report is the main guideline on the eve of the publication of official data. Given the relatively weak result from ADP, the June Nonfarm may also disappoint traders. In this case, the dollar is unlikely to be able to hold its position and weaken throughout the market. You should also pay attention to the indicator of the average hourly wage, which is an inflationary indicator. On a monthly basis, over the past three months, it has been at the same level - 0.2%. And on an annualized basis, the index in May is minimal, but unexpectedly dropped from 3.2% to 3.1%. In June, wages should demonstrate a positive trend - both in monthly and annual terms. If this forecast is not justified, the US currency will fall under additional pressure.

In general, tomorrow's release either eliminates concerns about the aggressive easing of the monetary policy of the Fed, or, conversely, returns concern about this. In the second case, the EUR/USD pair will get another chance to gain a foothold in the 13th figure, breaking the resistance levels of 1.1305 (the Bollinger Bands average line on the daily chart) and 1.1340 (the Tenkan-sen line on the same timeframe). Otherwise, the bears will finally seize the initiative on the pair, up to the achievement in the medium term, up to the lower limit of the Kumo cloud on D1, that is, to the level of 1.1185.

Analysis are provided by InstaForex

(in reply to InstaForex Gertrude)
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