Forex analysis review

Fractal analysis of major currency pairs on July 8
EUR/USD. 5th of July. Results of the day. NonFarm Payrolls - the killer of European currencies
EUR/USD. Do not rush in buying the dollar: The Fed chief will dot the i in Congress

Fractal analysis of major currency pairs on July 8

Posted: 07 Jul 2019 06:58 PM PDT

Forecast for July 8:

Analytical review of H1-scale currency pairs:

For the euro / dollar pair, the key levels on the H1 scale are: 1.1299, 1.1286, 1.1257, 1.1238, 1.1208, 1.1191, 1.1155 and 1.1129. Here, we continue to monitor the downward structure of June 28. Short-term downward movement is expected in the range of 1.1208 - 1.1191. The breakdown of the last value should be accompanied by a pronounced downward movement. Here, the goal is 1.1155. We consider the level of 1.1129 to be a potential value for the bottom. After reaching this level, we expect a rollback to the top.

Short-term upward movement is possible in the range of 1.1238 - 1.1257. The breakdown of the latter value will lead to in-depth correction. Here, the goal is 1.1286. The range of 1.1286 - 1.1299 is a key support for the downward structure.

The main trend - a local downward structure of June 28.

Trading recommendations:

Buy 1.1238 Take profit: 1.1255

Buy 1.1258 Take profit: 1.1285

Sell: 1.1208 Take profit: 1.1192

Sell: 1.1189 Take profit: 1.1155

For the pound / dollar pair, the key levels on the H1 scale are: 1.2628, 1.2611, 1.2568, 1.2539, 1.2493, 1.2466 and 1.2412. Here, we are following the development of the downward structure of June 25th. Short-term downward movement is expected in the range of 1.2493 - 1.2466. For the potential value for the bottom, we consider the level of 1.2412. The movement to which is expected after the breakdown of the level of 1.2465.

Short-term upward trend is expected in the range of 1.2539 - 1.2568. The breakdown of the last value will lead to a prolonged correction. Here, the target is 1.2611. The range of 1.2611 - 1.2628 is a key support for the downward structure from which, we expect clearance of the expressed initial conditions for the upward cycle.

The main trend - the downward structure of June 25.

Trading recommendations:

Buy: 1.2540 Take profit: 1.2566

Buy: 1.2570 Take profit: 1.2610

Sell: 1.2493 Take profit: 1.2467

Sell: 1.2464 Take profit: 1.2419

For the dollar / franc pair, the key levels on the H1 scale are: 1.0070, 1.0008, 0.9980, 0.9938, 0.9905, 0.9881, 0.9841 and 0.9810. Here, we continue to follow the development of the ascending cycle of June 25. The continuation of the movement to the top is expected after the breakdown of the level of 0.9938. In this case, the goal is 0.9980. Price consolidation is in the range of 0.9980 - 1.0008 and hence, there is a high probability of going into a correction. For the potential value for the top, we consider the level of 1.0070.

Short-term downward movement is possible in the range of 0.9905 - 0.9881. The breakdown of the last value will lead to a prolonged correction. Here, the target is 0.9841. This level is a key support for the top. Its price will have the formation of the initial conditions for the downward cycle of 0.9810.

The main trend is the ascending cycle of June 25.

Trading recommendations:

Buy : 0.9939 Take profit: 0.9980

Buy : 0.9982 Take profit: 1.0008

Sell: 0.9905 Take profit: 0.9883

Sell: 0.9878 Take profit: 0.9844

For the dollar / yen pair, the key levels on the scale are : 110.09, 109.56, 109.21, 108.70, 108.29, 108.06 and 107.61. Here, we continue to follow the development of the ascending structure of June 25. The continuation of the movement to the top is expected after the breakdown of the level of 108.70. In this case, we expect a pronounced movement to the level of 109.21. Short-term upward movement, as well as consolidation is in the range of 109.21 - 109.56. For the potential value for the top, we consider the level of 110.09. The movement to which, is expected after the breakdown of the level of 109.56.

Short-term downward movement is possible in the range of 108.29 - 108.06. The breakdown of the last value will lead to a prolonged correction. Here, the target is 107.61. This level is a key support for the top.

The main trend: the ascending structure of June 25.

Trading recommendations:

Buy: 108.70 Take profit: 109.20

Buy : 109.23 Take profit: 109.53

Sell: 108.29 Take profit: 108.06

Sell: 108.03 Take profit: 107.65

For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3272, 1.3238, 1.3212, 1.3174, 1.3142, 1.3051, 1.3027 and 1.3001. Here, the price forms the potential for an upward movement of July 4th. The continuation of the movement to the top is expected after the breakdown of the level of 1.3142. In this case, the target is 1.3174, wherein consolidation is near this level. The breakdown of the level of 1.3175 will lead to a pronounced movement. Here, the target is 1.3212. A short-term upward movement, as well as consolidation is in the range of 1.3212 - 1.3238. For the potential value for the top, we consider the level of 1.3272. After reaching which, we expect a rollback to the bottom.

The level of 1.3051 is a key support for the ascending structure. Its breakdown will lead to movement to level 1.3027. For the potential value for the bottom, we consider the level of 1.3001.

The main trend is the formation of potential for the upward trend of July 4.

Trading recommendations:

Buy: 1.3142 Take profit: 1.3172

Buy : 1.3176 Take profit: 1.3212

Sell: 1.3050 Take profit: 1.3028

Sell: 1.3025 Take profit: 1.3001

For the pair Australian dollar / US dollar, the key levels on the H1 scale are : 0.7048, 0.7010, 0.6990, 0.6950, 0.6922, 0.6886 and 0.6863. Here, the price forms the potential for the downward cycle of July 4th. The continuation of the movement to the bottom is expected after the breakdown of the level of 0.6950. In this case, the target is 0.6922, wherein near this level is a price consolidation. The breakdown of the level of 0.6921 will lead to the development of a pronounced movement. Here, the target is 0.6886. For the potential value for the downward trend, we consider the level of 0.6863. After reaching which, we expect consolidation, as well as a rollback to the top.

Short-term upward movement is possible in the range of 0.6990 - 0.7010. The breakdown of the latter value will have to form an upward structure. Here, the potential target is 0.7048.

The main trend - the formation of the potential for the downward movement of July 4.

Trading recommendations:

Buy: 0.6990 Take profit: 0.7008

Buy: 0.7013 Take profit: 0.7045

Sell : 0.6950 Take profit : 0.6925

Sell: 0.6920 Take profit: 0.6888

For the euro / yen pair, the key levels on the H1 scale are: 122.28, 121.89, 121.67, 121.41, 121.22, 120.92 and 120.48. Here, we continue to follow the downward cycle of July 1. The continuation of the movement to the bottom is expected after the price passes by the noise range of 121.41 - 121.22. In this case, the target is 120.92, wherein near this level, there is consolidation. For the potential value for the bottom, we consider the level of 120.48. After reaching which, we expect a rollback to the top.

Consolidated movement is possible in the range of 121.67 - 121.89. The breakdown of the latter value will lead to a prolonged correction. Here, the goal is 122.28. This level is a key support for the downward structure.

The main trend is the downward cycle of July 1.

Trading recommendations:

Buy: Take profit:

Buy: 121.94 Take profit: 122.28

Sell: 121.22 Take profit: 120.94

Sell: 120.90 Take profit: 120.50

For the pound / yen pair, the key levels on the H1 scale are : 136.31, 135.87, 135.65, 135.24, 134.99 and 134.50. Here, we continue to monitor the downward cycle from July 1. At the moment, the price is in the correction zone. Short-term downward movement is expected in the range of 135.24 - 134.99. The breakdown of the last value will allow us to expect movement towards a potential target - 134.50. After reaching this level, we expect a rollback to the top.

Short-term upward movement is possible in the range of 135.87 - 136.31, and up to the level of 136.31, we expect the potential for the upward cycle to be formalized.

The main trend is the downward cycle of July 1, the stage of correction.

Trading recommendations:

Buy: 135.90 Take profit: 136.30

Sell: 135.24 Take profit: 135.00

Sell: 134.95 Take profit: 134.50

The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD. 5th of July. Results of the day. NonFarm Payrolls - the killer of European currencies

Posted: 07 Jul 2019 03:46 PM PDT

4-hour timeframe

The amplitude of the last 5 days (high-low): 42p - 90p - 47p - 44p - 22p.

Average amplitude for the last 5 days: 49p (51p).

The last trading day of the current week has passed with the US currency having full advantage. There was only one reason for this - the publication of the NonFarm Payrolls report for June. Analysts' forecasts predicted 162,000 new jobs outside the agricultural sector, but in reality there were 224,000. Such a strong excess of the real value over the forecast naturally provoked strong purchases of the US dollar and so the US currency rose by 60 points against the euro. Against the background of strong NonFarms, traders ignored unemployment in the United States, which rose to 3.7%, as well as weaker wage growth than originally estimated. However, the key question for the entire currency market now is: do strong NonFarm mean the end of a period of failed macroeconomic statistics in the US or is it just an accident? As we all see, the US dollar has almost completely offset all losses against the European currency, which suffered during the month when reports from the United States could not please even the most ardent optimists. Only 120 points are left to reach the year lows and such a resurrection of the US dollar occurred, by and large, without particularly strong support from the foundation. Now a new question arises: if the macroeconomic statistics ceases to disappoint, the Fed may not soften the monetary policy in 2019, respectively, the main advantage of the euro, which bulls of the euro/dollar pair could plummet into oblivion. What should the euro count on in this case? There is no answer to this question yet, but we state the fact: the US dollar is very close to "returning to the game" and in the near future it will be possible to state the resumption of a downward trend.

Trading recommendations:

The EUR/USD pair resumed its downward movement. Thus, it is now again recommended to sell the euro with the target of 1.1177. At the beginning of the new trading week, new levels of support and resistance will be formed.

It is recommended that you buy the euro/dollar pair not earlier than when prices have consolidated above the Kijun-sen line. However, this will require a strong fundamental basis for the bulls.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen - the red line.

Kijun-sen - the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dotted line.

Chikou Span - green line.

Bollinger Bands indicator:

3 yellow lines.

MACD Indicator:

Red line and histogram with white bars in the indicator window.

The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD. Do not rush in buying the dollar: The Fed chief will dot the i in Congress

Posted: 07 Jul 2019 03:46 PM PDT

The US dollar ended the first week of July in positive territory. Strong enough Nonfarm returned to the dollar bulls the hope of tightening the rhetoric of Fed members and, accordingly, changing plans for easing monetary policy. The demand for the US currency increased and the greenback changed the configuration of the main currency pairs in just a few hours of Friday.

Of course, the published data on the labor market against the backdrop of a truce with China made it possible for investors to expect certain changes. The evidence of this causal link "captivates" so the dollar can grow by inertia on Monday. But despite all the above factors, a further rally in the greenback is a big question. Certain signs suggest that the Fed will not back down on its intentions, even after the release of strong Nonfarm and political events in Osaka. Like it or not, we will know in a day, namely on Tuesday.

The central event of the coming week is the speech of Jerome Powell before the congressmen, where he will announce the semi-annual report. This is a very important event, which takes place only twice a year. At the beginning of the year, this report was postponed several times due to the prolonged shutdown, therefore the Fed chairman voiced his position before the deputies only at the end of February. This time, the Congress is operating normally, so Powell will communicate with American deputies for two days (Tuesday and Thursday), discussing with them the economic prospects of the country and the prospects of monetary policy. In addition to the report itself before the two specialized committees, the head of the Federal Reserve will answer the questions posed. Here it is worth paying attention to several aspects in the context of recent events.

The fact is that the semi-annual report is prepared and submitted to the US Congress a few days before its "official presentation" by the head of the American regulator. In this case, the document was sent to the relevant Congress Committees on Friday, so the market found out about its key theses already at the very finale of the trading week. It is noteworthy that this report includes key messages from the June meeting of the Federal Reserve.

Let me remind you that following this meeting, the likelihood of a rate cut has increased to almost 100%. In the text of the accompanying statement, the regulator has deleted the phrase "patience". This formulation meant that the Fed is ready to take a wait-and-see attitude, maintaining the status quo for the foreseeable future. Eliminating this phrase from the final communique, the US central bank warned that it was preparing to soften the parameters of monetary policy. The "point forecast" of the Fed confirmed this assumption, however, on this issue, the views of regulator members differed: 8 members of the Fed spoke for the rate cut before the end of this year (7 of them predict two drops), while another 8 were in favor of maintaining the wait-and-see position.

A monetary policy report released Friday said that Fed members generally did not change their minds about monetary policy prospects. The regulator is still dissatisfied with the growth rate of the US economy (including in the second quarter) and the slowdown in inflation rates. Contrary to the growth of consumer spending, the volume of business investment declined, while indicators of the export sector and production orders turned out to be in a completely negative area. The Fed does not deny that all this is a consequence of the trade war with China. Regulator members explained that the introduction of additional duties led to a significant drop in both import volumes and export volumes in the United States. The general growth of uncertainty about the prospects for the White House's trade policy forced the American business sector to reduce investment, and this fact had a negative effect on the country's investment climate. In addition, the report indicates another alarming signal: the decline in global sales of technology products. This fact has limited trade and production activity, especially in Asian emerging markets.

According to Fed members, the dynamics of growth of inflation indicators is also alarming. Core inflation is below the target level, although many members of the regulator are still confident that this trend is temporary and price pressure will increase by the end of the year. Nevertheless, the figures speak for themselves: according to the latest data, in annual terms, the index came out at a two-percent level, although experts expected growth to 2.1%. The index went below this value only in February last year. The general consumer price index was also in the "red zone" - both in annual and monthly terms. In May, the consumer price index rose by only 0.1% m/m and 1.8% y/y, while analysts expected to see CPI at 0.2% and 1.9%, respectively. In other words, inflationary dynamics rightly causes concern to the Fed.

Thus, the US Federal Reserve's semi-annual report shows the continuing intentions of the regulator to lower the interest rate in the near future. But the snag is that this report was prepared before the release of fairly strong data on the US labor market. Whether the Nonfarm influenced the position of the Fed in general and Jerome Powell in particular is an open question.

Therefore, the two-day speech of the head of the Federal Reserve in the Congress now has a particularly important role. If he focuses his attention on the uncertainty about US-China trade relations, as well as on the slowdown of many economic indicators, the dollar will collapse across the entire market as rapidly as it rose at the end of last week. But if Powell declares the expediency of maintaining a wait-and-see position, the greenback will continue its rally, and together with the euro will head towards the 10th figure. This scenario also has a reverse side - in this case, the White House may trigger available tools to weaken the dollar (using, for example, a stabilization mechanism or compensatory intervention). But, as they say, "this is a completely different story": the initial reaction of the market to Powell's "hawkish" mood will definitely be in favor of the dollar.

In general, the fate of the further rally of the US currency will depend on the Fed's position. The market reaction to the Nonfarm is premature, as the head of the regulator this week may disappoint traders with his dovish rhetoric, despite the success of the US labor market.

The material has been provided by InstaForex Company - www.instaforex.com

Forex analysis review

Forex analysis review

No comments:

Post a Comment