Technical analysis of EUR/USD for 20/06/2019:

Technical Overview:

The EUR/USD pair has broken through the trendline around the level of 1.1250, moved higher towards the level of 1.1268 which was broken as well. At the time of writing the current high was made at the level of 1.1285 and the momentum behind the move is strong. The next target for bulls is seen at the level of 1.1323.

Weekly Pivot Points:

WR3 - 1.1413

WR2 - 1.1376

WR1 - 1.1277

Weekly Pivot - 1.1237

WS1 - 1.1132

WS2 - 1.1096

WS3 - 1.0995

Trading Recommendations:

The best strategy in the current market conditions is to trade in the direction of the main trend, which is now up. All the local pull-backs and corrections should be treated as another opportunity to open the buy orders for a better price. There is a downtrend reversal sign on the weekly time-frame chart, which is why the recent move up might be the beginning of the new uptrend, but it needs confirmation and so far there is no clear confirmation yet.

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The Fed is preparing for a controlled recession. CAD and JPY will continue to grow

The Fed did not surprise the markets with the outcome of the two-day monetary policy meeting. The rate remained unchanged, but the forecasts for inflation, unemployment and GDP has slightly changed. The most significant changes according to forecasts occurred in 2020.

At the same time, the rate forecast has changed according to a not quite obvious algorithm. In May, the markets began to prepare for a one-time rate cut in the current year, and by June, expectations had shifted by two cuts or even three. This is based on the forecast for the CME futures market rate.

However, the Fed made an emphasis on 2020. The rate forecast was reduced from 2.6% to 2.1%, that is, it implies two cuts. But for 2019, the forecast is left unchanged.

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This means that the Fed is trying to prevent panic sales, because its forecast implies that there will be no recession this year. The same conclusion follows from other figures - the inflation forecast is lowered. However, by 2021, it is expected to be fixed at the target level, and the GDP and labor market forecast has been improved altogether.

But if so, then why reduce the rate? Apparently, the focus is on a smooth slowdown. It is absolutely impossible to ignore the record-breaking growth of the budget deficit, which will require emergency measures from the US government. In addition, preparations for these measures should take place against the background of a smooth slowdown, which is beneficial to all parties to the future presidential company.

Thus, it can be assumed that the outcome of the Fed meeting is more political than economic. In favor of this conclusion, the sharp rise in gold to a 14-month high, the rapid strengthening of the yen and the demand for bonds are traditional defensive assets. The dollar is expectedly weakening across the entire spectrum of the foreign exchange market, and this trend will only increase.

USDJPY

The Bank of Japan expectedly kept the interest rate at the level of -0.1%, targeting the yields of 10-year government bonds at the near-zero level which will also be maintained. On the other hand, decisions on the monetary base and the repurchase of assets remained unchanged. The Bank of Japan made it clear that, at least until spring 2020, it does not intend to make changes to its monetary policy, because it has to take into account both the growing uncertainties in the global economy and the need to assess the consequences of an increase in the consumption tax this fall.

Domestic demand in Japan is slowing, leading to an increase in the budget deficit. In the context of slowing demand, export growth is important. Thus, Japan is more interested in global growth than anyone else. The decline in demand from China and South-East Asia led to a marked decline in Japanese exports, which, in turn, affected the strong fall in engineering.

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The weakness of the manufacturing sector inevitably extends to domestic demand, which is clearly seen by the sharp drop in retail sales. Accordingly, there is no hope for growth in consumption at the current stage, since wage growth remains modest and real incomes of labor are declining. All of the above explains the cautious position of the Bank of Japan, which has no reason to change anything.

In the previous review, we expected a "slow decline to 107.80 followed by a breakthrough downward". The forecast was fully implemented, but a further decrease is still in question. If the stock markets hold near the highs, the yen will go to the side range with the upper limit of 107.80 / 90, but if panic is going to increase, then the movement to 106.20 / 40 with an eye on 105 will become more likely.

USDCAD

The loonie, as expected, successfully tested support for 1.3250. The movement was supported not only by the results of the FOMC meeting, but also by unexpectedly strong data on inflation in May. The annual index rose from 1.5% to 2.1%, while the expected decline to 1.2%. The result will not allow to expect that the Bank of Canada will take any incentive measures.

Canadian dollar remains in favor and aims at 1.3110 / 20.

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Technical analysis of GBP/USD for 20/06/2019:

Technical Overview:

The GBP/USD pair has strongly reversed its recent move down after the Bullish Engulfing candlestick pattern was made at the level of 1.1205. The price has broken above the 61% Fibonacci retracement at the level of 1.2661 and made a new high at the level of 1.2708 (at the time of writing). The technical resistance zone located between the levels of 1.2652 - 1.2668 has been violated and the price is now back in the zone again. The momentum is strong and positive so there is a possibility of another leg up towards the technical resistance located between the levels of 1.2746 - 1.2761.

Weekly Pivot Points:

WR3 - 1.2846

WR2 - 1.2797

WR1 - 1.2673

Weekly Pivot - 1.2620

WS1 - 1.2493

WS2 - 1.2439

WS3 - 1.2301

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 corrections 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.

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Review for GBP / USD pair on June 20: The forecast for the "Regression Channels" system. The effect of the FOMC meeting outcome

4-hour timeframe

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Technical details:

Older linear regression channel: direction - down.

Younger linear regression channel: direction - down.

Moving average (20; smoothed) - sideways.

CCI: 103.7750

The Federal Reserve helped both the euro and the sterling pound unwittingly yesterday. The most interesting thing is that the Fed left the rate unchanged. They did not announce any easing of monetary policy in 2019 and did not notice "increasing" risks or uncertainty. That is, according to the regulator, the situation has not changed very much since the last meeting and the FOMC members did not find reasons to reduce the rate. However, from the very morning of yesterday, traders began to close "dollar" positions, which led to a loss of 120 points in the US currency at the current moment. Meanwhile, opposition leader Jeremy Corbin supported a second referendum in the UK. He told his party members that the time had come to "make a choice" for both Brexit supporters and opponents. However, in any case, the holding of a repeated referendum will depend on the Parliament. Many deputies can be against. Thus, a situation may arise as with Theresa May's "deal", which seemed to find some support among deputies but it was clearly not enough to accept its approval at the legislative level. Thus, the news is interesting but does not affect the promotion of Brexit. By the way, we recall that in the event of a UK exit from the EU, Scotland may hold its own referendum on independence since the country does not support a "divorce" from the European Union. A meeting of the Central Bank will be held in the UK today and in the evening, the speech of its head, Mark Carney. Now, the currency markets will follow the mood of the British regulator, respectively, the prospects for the pound sterling for the next few days will now depend on Karni's rhetoric.

Nearest support levels:

S1 - 1.2634

S2 - 1.2573

S3 - 1.2512

Nearest resistance levels:

R1 - 1.2695

R2 - 1.2756

R3 - 1.2817

Trading recommendations:

The GBP/USD pair has overcome the moving average line, hence, the trend has now changed to ascending. However, given the weakness of the bulls, we recommend extremely cautious purchases of the pound with targets of 1.2695 and 1.2756.

Selling the pound/dollar pair will be possible no earlier than the reverse consolidation under the movement with the targets of 1.2573 and 1.2512. Today, this can contribute to the Bank of England and the rhetoric of its chairman.

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

Explanations for illustrations:

The older linear regression channel is the blue lines of unidirectional movement.

The junior linear channel is the purple lines of unidirectional movement.

CCI is the blue line in the indicator regression window.

The moving average (20; smoothed) is the blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.

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Bitcoin. The breakthrough of 9,350 is very close, but further growth is limited

Despite the fact that the growth of Bitcoin above 9 350 may occur in the near future, speaking and maintaining the current bullish momentum will be quite difficult after updating the level of 10 000 USD, which is a psychological mark, and where a number of large players will definitely record profits.

Bitcoin Buy Signal (BTC):

From a technical point of view, nothing has changed in recent days. Bulls have formed a good figure on the continuation of the growth of Bitcoin, and the main goal of buyers is to break through the range of 9,350 with access to the highs: 9,540 and 9,800, where I recommend taking profits. In the case of a decrease in cryptocurrency, support will be provided by the area of 8,960, while it is best to open long positions for a rebound near the minimum of 8,630.

Bitcoin Sales Signal (BTC):

I do not recommend opening short positions in Bitcoin in the current conditions, since in the near future, a new wave of growth may occur. Large resistance levels can be traced around 9,350 and 9,600, where it will be possible to monitor profit taking in long positions, which will necessarily lead to a downward correction. The task of bears is to break through and consolidate below support for 8 960, which will increase pressure on bitcoin and lead to a minimum of 8 630 and 8 190.

With a large increase in bitcoin, you can take a closer look at short positions from the level of 9,800 and 10,080.

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