Fundamental Analysis of EUR/USD for July 16, 2018

EUR/USD has been quite bullish the recent price action after a bounce off 1.1750 again recently. Despite the recent worse-than-expected economic reports, today USD gained good momentum amid expectations for upbeat economic data, while EUR is still struggling.

Today, Italian Trade Balance report was published with an increase to 3.38B from the previous figure of 2.99B which was expected to be at 3.25B and Trade Balance report was published with decrease to 16.9B from the previous figure of 18.0B which was expected to be at 17.6B.

On the other hand, today US Core Retail Sales report was published with a decrease to 0.4% as expected from the previous value of 1.4%, Retail Sales were slightly better than expected at 0.5%, decreasing from the previous value of 1.3% which was expected to be at 0.4%. Besides, Empire State Manufacturing Index report was also published with a better-than-expected figure of 22.6, decreasing from the previous figure of 25.0 which was expected to be at 20.3.

Menawhile, the trade war has been causing the market volatility nowadays which is expected to lead to uncertain momentum in the future. Though the US started the trade war, it's economy is also expected to suffer its consequences in the medium term. USD has been trading slightly better than expected in certain economic reports recently, while EUR has been quite mixed. USD is set to defend gains in the coming days. However, the question is still open how much endurance the momentum could hold.

Now let us look at the technical view. The price is currently residing at the edge of 1.1720-50 area from where it is expected to sink lower towards 1.1550 support area in the coming days. Though the price has been quite bullish since last Friday, USD has been outperforming EUR in light of economic data. The bearish pressure is expected to gain stronger. As the price remains below 1.1720-50 area with a daily close, the bearish bias is expected to continue.

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Today, the focus of retail sales in the US

After Friday's weakening on the background of positive data from China, and then increased demand for risky assets, primarily shares of US companies, under the influence of the ongoing corporate reporting season, the dollar at the auction on Monday morning remains under slight pressure.

Promulgated this morning, preliminary data of China's GDP for the second quarter showed that the growth of the country's economy has slowed somewhat, which seems to raise fears that the trade war between Washington and Beijing will continue to have a negative impact on its upward momentum.

According to the data provided by economic statistics, China's GDP in the second quarter increased by 6.7% after an increase of 6.8% in the first quarter. The Chinese authorities have set a target level of growth of the local economy of 6.5%, which makes the figures presented anyway positive, but the markets always take into account not the actual values, but the trend, and it has not yet started to put it in favor of the PRC. Another figure was disappointing: investments in fixed assets, which in the first half of the year amounted to 6.0% against 6.1% at the beginning of this year.

The published values of indicators can now force market participants to recall again the negative impact on the markets of the factor of the trade war, which in turn can serve as the basis for strengthening the US dollar's rate as a safe haven.

Today, the attention of market players will be concentrated on the publication of important data on the American economy, which can specify the direction of the dollar's movement by its values. It's about retail sales. It is assumed that the base retail sales index for June will grow by only 0.4% versus the May growth of 0.9%. The volume of retail sales should, according to the forecast, add 0.5% in June against May's 0.8%. In addition to these figures, the NY Empire State production activity index also comes out. It is also supposed to lower the growth rate to 22.00 points in July against 25.00 for the previous period under review.

Estimating the likely reaction of the currency market to the published data, we believe that if they prove to be more positive than the forecast, it will support the rate of the US currency against the major currencies. At the same time, if they are weaker, it could put pressure on the dollar, but, in our opinion, it will still be insignificant, and its fall, if it does, is in line with the general lateral trend typical for currency pairs, where there is a dollar. The weakening may be temporary since the dollar will become effective as a safe haven.

Forecast of the day:

The EUR / USD pair is trading under the level of 1.1715. Negative figures on retail sales in the US may push the pair up to 1.1785 after overcoming the level of 1.1715. But if the news is positive, the price may turn down and rush to 1.1615.

A similar picture can be observed in the pair AUD / USD. Breakthrough of the level of 0.7445 hi to its local growth to 0.7485. Strong for the US dollar news will put pressure on the pair, and it may drop to 0.7360.

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EUR / USD. July 16. Hour X. Meeting of Donald Trump and Vladimir Putin

4-hour timeframe

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Amplitude of the last 5 days (high-low): 58p - 73p - 92p - 46p - 74p.

The average amplitude for the last 5 days is 69p (71p).

On the last trading day of the past week, the EUR / USD currency pair started rather sharply and unexpectedly, an upward movement. In other major currency pairs, there was also a weakening of the US currency, so the reasons for the fall of the US dollar should be sought in America. However, in the States on Friday there were no significant macroeconomic publications. There were not any of them in the European Union either. Thus, most likely, the reasons for the decline in the US currency are purely technical. Even Donald Trump was on the eve of a meeting with the leader of the Russian Federation, Vladimir Putin, without any new accusations and threats, confining himself only to the words "that in any case he will be criticized for meeting with Putin." Also, the US leader said he does not understand Germany, which is a member of NATO and at the same time actively participates in the "Nord Stream-2" project with Russia, intending to pay, thus, billions of dollars for energy. Also, Trump called the European Union, China, and Russia - opponents, although he noted that he respects the leaders of these countries. The meeting between Putin and Trump will take place today in Helsinki. While it is not known what the negotiations will be about, but on the eve of their beginning, the American currency continues to become cheaper. Perhaps the market participants have bad expectations, given the fact that the US president has repeatedly been accused of excessive love for Russia. However, final conclusions can be made only after the meeting is completed and the official results of the talks are made public. From a technical point of view, the Friday target was worked out, the correction began immediately and continues. At the current bar, the price may gain a foothold above the critical line, which will enable bulls to resume movement upward.

Trading recommendations:

On the EUR / USD pair, an upward correction began. Thus, today intraday is recommended to consider long positions with a target of 1.1735. The signal to the manual closing of positions will be the turn of the indicator MACD down.

Sell-positions are recommended to open with the target of 1,1636 (according to the average volatility of the instrument) if traders return below the Kijun-Sen line. In this case, the pair can resume the downtrend.

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

Explanations to the illustration:

Ichimoku Indicator:

Tenkan-sen is a red line.

Kijun-sen is a blue line.

Senkou Span A is a light brown dotted line.

Senkou Span B - a light purple dotted line.

Chinkou Span is a green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

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

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Control zones of AUD / USD as of July 16, 2018

Last week, the implementation of the top-down model occurred. After the test of a weekly short-term fault of 0.7360-0.7340, there was an increase in demand and the formation of an absorption pattern. Today's test of the NCP 1/2 will prompt further priority.

Today, there is a test of the determining zone of resistance NCP 1/2 0.7430-0.7423. Depending on where the US session will be closed, trade decisions will be made this week. While the pair is trading below this zone, the downward movement remains a priority. Sales are best done after the formation of the pattern, as on Friday there was a daily absorption, which indicates a local ascending priority.analytics5b4c2f614956d.png

Favorable selling prices are within the limits of the NCP 1/2, however Friday absorption requires the formation of a reverse pattern for confirmation. This is also facilitated by the completion of the descending model and the weekly short-term fault test last week.

An alternative model will develop in the event that today's close of the American session occurs above the level of 0.7430. This will open the way for growth in the July high, which will allow purchases to become profitable. The main target will be located at weekly short-term fault of 0.7499-0.7486, which will make the ratio of risk to profit more than 1 to 3, and the probability of working out of the ascending model is 70%.

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The daily short-term fault is the daytime control zone. The zone formed by important data from the futures market, which change several times a year.

The weekly short-term fault is the weekly control zone. The zone formed by important futures market marks, which change several times a year.

The monthly short-term fault is the monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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Control zones of GBP / USD as of July 16, 2018

On Friday, there was a pattern of absorption in the American session. This allows us to assume continuation of the upward movement in the short term. It should be noted that the pair is testing NCP 1/2 1.3243-1.3230, which will allow us to determine the next priority for the week.

On Friday, there was a test of a weekly short-term fault 1.3106-1.3081. This allowed a 100% implementation of the top-down priority model. Strong growth in the US session made it possible to observe the formation of a sessional takeover, which makes the upward movement today a priority. For this reason, sales from NCP 1/2 1.3243-1.3230 are possible only with the formation of a reversal model. While the pattern for sale is not formed, it is better to refrain from short trades and get out of those that are already open.

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The pair is trading within the medium-term accumulation zone, which makes transactions from the middle of the range less profitable, but the risk-to-profit ratio still exceeds 1 to 3.

The first stage of the reversal pattern already occurred on Friday, when the US session's movement absorbed the daily decline. This suggests further growth. For confirmation, today's American session is required to hold above the NCP 1/2 1.3243-1.3230. This will give an opportunity to look for purchases, which with a probability of 70% will bring a profit at the maximum of the current month.

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Analysis of EUR / USD Divergences for July 16. Bullish divergence allowed the euro to strengthen

4h

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The EUR / USD pair on the 4-hour chart reversed in favor of the EU currency and fixed above the correction level of 50.0% to 1.1680. As a result, the growth process can be continued in the direction of the next correctional level of 61.8% - 1.1721. On July 16, no new brewing divergences are observed in any indicator. The consolidation of quotations under the Fibo level of 50.0% can be interpreted as a reversal in favor of the European currency and expect a slight decline in the direction of the correction level of 38.2% - 1.1639.

The Fibo grid is built on the extremes of June 14, 2018, and June 21, 2018.

Daily

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On the 24-hour chart, after the rebound from the Fibo level of 76.4% to 1.1789, the pair continues to fall towards the corrective level of 100.0% - 1.1553. Today there are no visible divergent in any indicator. The pair's exit from the correction level of 100.0% will allow expecting a turn in favor of the euro and some growth in the direction of the correctional level of 76.4%. Fixing the quotes below the Fibo level of 100.0% will increase the likelihood of a further decline in the direction of the next correction level of 127.2% - 1.1285.

The Fibo grid is built on extremes from November 7, 2017, and February 16, 2018.

Recommendations for traders:

Buy EUR / USD on July 16, with a target of 1,1721 with a Stop Loss level under the correction level of 50.0%, as there was a close above the Fibo level of 1.1680.

To sell the EUR / USD pair will be possible with the target of 1,1639 if the closing is done at the Fibo level of 50.0%, with a Stop Loss order above the correction level of 1.1680.

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Control zones of EUR / USD as of July 16, 2018

On Friday, the pattern of absorption took place, which indicates an upward priority at the beginning of this week. The main resistance will come from the NCP 1/2 1.1713-1.1704.

Strong growth in the American session on Friday caused the breakdown of the first resistance zone of the NCP 1/4 1.1663-1.1658, which indicates a 70% probability of the next resistance test for NCP 1/2 1.1713-1.1704, where the fate of the downward movement will be determined. To stop growth and resume falling, you will need to keep the price below the specified zone in the American session. If this happens, the first goal of the fall will be a weekly short-term fault of 1.1606-1.1588, which has not been tested with a decrease in the previous week.

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The downward movement still remains a priority, which makes it possible to search for sales at the NCP 1/2 test through a pattern or through a limit order setting. The size of the stop should not exceed 30 points, since the reduction potential is 100 pp.

To break the downward momentum, today's close of the American session above level 1.1713 is required. This will allow talking about the continuation of growth this week and 70% of the probability of renewing the July high. The absorption pattern on Friday was already formed at the American session, which indicates the possibility of a breakdown of the control zone. It remains to wait for confirmation and purchase will come to the fore. The risk-to-profit ratio will be profitable, but you should not rush to open a long position and it's better to wait for confirmation at the American session.

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The daily short-term fault is the daytime control zone. The zone formed by important data from the futures market, which change several times a year.

The weekly short-term fault is the weekly control zone. The zone formed by important futures market marks, which change several times a year.

The monthly short-term fault is the monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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

Overview of EUR / USD as of July 16, 2018

EUR / USD

On Friday, the dollar led to macroeconomic data. The consumer confidence index from the University of Michigan in the preliminary assessment for July fell from 98.2 to 97.1 (the forecast was 98.1), consumer expectations fell from 89.1 to 86.4. The component of inflation expectations in the consumer confidence index fell from 3.0% to 2.9%. Import prices for June decreased by 0.4% against expectations of growth of 0.1%, export prices increased by 0.3%.

In Germany, the wholesale price index in June rose by 0.5% against expectations of 0.4%. Also, investors closed positions before the new important week.

On the daily chart, the price touched the Kruzenshtern trend line (blue). The signal line of the oscillator Marlin continued to decrease.

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On a four-hour chart, the price was also delayed by the resistance of the Kruzenshtern line. Given the expectations of positive data for the US, we are waiting for the price to turn down. Retail sales in the US for June are expected to grow by 0.4% after the May growth of 0.8%, which indicates a very strong inertia of consumer activity. Base sales are expected to grow by 0.4% after the previous 0.9%.

In the afternoon, the trade balance of the eurozone for May will come out - a forecast of 17.6 billion euros against 18.1 billion in April.

We are waiting for the euro at 1.1590. Tomorrow, according to the released data on industrial production in the US, an increase of 0.5% is expected. The prospect of further reducing the euro in the range 1.1475-1.1508 remains.

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Fractal analysis for major currency pairs as of July 16

Dear colleagues.

For the currency pair Euro / Dollar, the price forms the potential for the top of July 13, the dynamics increase can be expected after 15:00. For the Pound / Dollar currency pair, the price forms the potential for the top of July 13, the development of this structure can be expected at 10:00 - 12:00 and the breakdown at the level of 1.3248 is required. For the currency pair Dollar / Franc, the price is in correction from the upward trend. For the currency pair Dollar / Yen, the continuation of the development of the upward structure from July 9 is expected after the passage at the price of the noise range of 112.73 - 112.93. For the currency pair Euro / Yen, we follow the local upward structure of July 11 and the level of 130.85 is the key support. For the Pound / Yen currency pair, the development of the local upward structure is possible after the breakdown of 149.45.

The forecast for July 16:

Analytical review of currency pairs in the scale of H1:

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For the EUR / USD currency pair, the key levels on the scale of H1 are: 1.1769, 1.1750, 1.1719, 1.1696, 1.1669, 1.1650, 1.1613 and 1.1586. Here, the price is in correction from the descending structure and forms the potential for the top of July 13. The short-term upward movement is expected in the corridor of 1.1696-1.1719 and the breakdown of the last value should be accompanied by a pronounced upward movement. Here, the target is 1.1750 and in the corridor of 1.1750 - 1.1769 is the consolidation.

The short-term downward movement is possible in the corridor of 1.1669 - 1.1650 and the breakdown of the last value will have to develop a downward structure. In this case, the target is 1.1613. We consider the level of 1.1586 to be a potential value for the bottom, after which we expect a rollback to the top.

The main trend is the downward structure of July 9, the formation of the potential for the top of July 13 in the correction.

Trading recommendations:

Buy: 1.1696 Take profit: 1.1716

Buy 1.1722 Take profit: 1.1750

Sell: 1.1667 Take profit: 1.1652

Sell: 1.1648 Take profit: 1.1615analytics5b4c0f9a49eca.png

For the Pound / Dollar currency pair, the key levels on the H1 scale are 1.3379, 1.3341, 1.3289, 1.3248, 1.3206, 1.3184 and 1.3155. Here, the price is in correction and forms the potential for the upward movement of July 13. The continuation of the upward movement is expected after the breakdown of 1.3248. In this case, the target is 1.3289 and near this level is the consolidation of the price. The break of 1.3290 should be accompanied by a pronounced upward movement. Here, the target is 1.3341. The potential value for the top is the level of 1.3379, upon reaching which, we expect a pullback downwards.

The short-term downward movement is possible in the corridor of 1.3206 - 1.3184 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 1.3155 and the breakdown of this level will have a continuation of the downward structure. However, as the price leaves the 13th zone, the downward structure from July 9 is no longer relevant.

The main trend is the downward structure from July 9, the correction stage and capacity building on July 13.

Trading recommendations:

Buy: 1.3250 Take profit: 1.3287

Buy: 1.3292 Take profit: 1.3335

Sell: 1.3206 Take profit: 1.3186

Sell: 1.3182 Take profit: 1.3157

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For the Dollar / Franc currency pair, the key levels on the scale of H1 are: 1.0079, 1.0046, 1.0031, 1.0003, 0.9986 and 0.9957. Here, we follow the development of the upward structure of July 9 and at the current time, the price is in correction. The short-term downward movement is possible in the range of 1.0003 - 0.9986 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 0.9957 and to this level, we expect the initial conditions for the descending cycle to be formalized.

The short-term upward movement is possible in the range of 1.0031 - 1.0046. Hence, the probability of a turn downwards is high and the breakdown at 1.0046 level will allow us to count on the movement to the potential target of 1.0079, from which we expect a pullback.

The main trend is the upward structure from July 9, the correction stage.

Trading recommendations:

Buy: 1.0031 Take profit: 1.0044

Buy: 1.0048 Take profit: 1.0076

Sell: 1.0003 Take profit: 0.9990

Sell: 0.9984 Take profit: 0.9960analytics5b4c0fb6335cb.png

For the currency pair Dollar / Yen, the key levels on the scale of H1 are: 113.78, 113.40, 112.93, 112.73, 112.36, 112.09 and 111.71. Here, the price we follow the upward structure of July 9. The continuation of the upward movement is expected after the passage at the price of the noise range of 112.73 - 112.93. In this case, the target is 113.40 and near this level is the consolidation. The potential value for the top is the level of 113.78 (the probable date of reaching July 16 - 18), upon reaching this level, we expect a pullback downwards.

The short-term downward movement is possible in the corridor of 112.36 - 112.09 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 111.71 and this level is the key support for the top.

The main trend: the upward structure of July 9.

Trading recommendations:

Buy: 112.95 Take profit: 113.40

Buy: 113.42 Take profit: 113.76

Sell: 112.34 Take profit: 112.12

Sell: 112.05 Take profit: 111.75

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For the Canadian Dollar / Dollar currency pair, the key levels on the H1 scale are: 1.3384, 1.3247, 1.3193, 1.3071, 1.3025 and 1.2938. Here, the situation is still in an equilibrium state. The short-term upward movement is expected in the corridor of 1.3193 - 1.3247 and the breakdown of the last value should lead to the formation of initial conditions for the upward cycle. Here, the potential target is 1.3384.

The short-term downward movement is possible in the corridor of 1.3071 - 1.3025 and the breakdown of the latter value will lead to the formation of a potential for downward movement. Here, the target is 1.2938.

The main trend is the equilibrium situation.

Trading recommendations:

Buy: 1.3250 Take profit: 1.3380

Buy: Take profit:

Sell: 1.3025 Take profit: 1.2940

Sell: Take profit:

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For the Australian Dollar / Dollar currency pair, the key levels on the scale of H1 are: 0.7434, 0.7410, 0.7355, 0.7341, 0.7318 and 0.7281. Here, we follow a small downward cycle from July 9 and at the moment, the price is in correction. More dynamic development of the situation can be expected after 15:00. The continued downward movement is expected after passing through the noise range of 0.7355 - 0.7341. In this case, the target is 0.7318. The potential value for the top is the level of 0.7281 (the probable date of reaching July 13)

The short-term upward movement is possible in the corridor of 0.7410 - 0.7434 and the breakdown of the last value will have to develop an ascending structure. Here, the potential target is 0.7483.

The main trend is the downward cycle from July 9, the correction stage.

Trading recommendations:

Buy: 0.7436 Take profit: 0.7465

Buy: 0.7411 Take profit: 0.7432

Sell: 0.7340 Take profit: 0.7320

Sell: 0.7316 Take profit: 0.7284

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For the currency pair Euro / Yen, the key levels on the scale of H1 are: 133.11, 132.38, 132.01, 131.73, 131.20, 130.85 and 130.42. Here, we follow the local upward structure of July 11. The short-term upward movement is expected in the corridor of 131.73 - 132.01 and the breakdown of the last value will allow to expect movement to 132.38 level, near this consolidation level, and hence there is a high probability of withdrawal into correction. The potential value for the top is the level of 133.11 and the probable date of reaching it is July 17 - 18, upon reaching this level we expect a pullback downwards.

The short-term downward movement is possible in the corridor of 131.20 - 130.85 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 130.42 and this level is the key support for the upward structure of July 11.

The main trend is a local structure for the top of 11 July.

Trading recommendations:

Buy: 131.73 Take profit: 131.00

Buy: 132.05 Take profit: 132.35

Sell: 131.15 Take profit: 130.90

Sell: 130.80 Take profit: 130.45

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For the Pound / Yen currency pair, the key levels on the scale of H1 are: 151.26, 150.47, 150.11, 149.44, 149.01, 148.10, 147.58 and 147.04. Here, we follow the formation of the local upward structure of July 9. The continuation of the development of the upward structure of July 9 is expected after the breakdown of 149.01. The target is 149.44, from this corridor there is a high probability of leaving down. The break at level 149.45 should be accompanied by a pronounced upward movement. Here, the target is 150.11 and in the corridor of 150.11 - 150.47 is the consolidation and from here we expect a key turn down. The potential value for the top is the level of 151.26, the probable achievement of which is July 17 - 18.

The short-term downward movement is possible in the corridor of 148.10 - 147.58 and the breakdown of the last value will lead to an in-depth correction. Here, the target is 147.04 and this level is the key support for the upward structure.

The main trend is a local structure for the top of July 9.

Trading recommendations:

Buy: 149.01 Take profit: 149.40

Buy: 149.48 Take profit: 150.10

Sell: 148.10 Take profit: 147.60

Sell: 147.55 Take profit: 147.07

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Trading plan for the European session of GBP / USD pair on July 16

To open long positions for GBP / USD pair, you need:

Buyers need to climb above the resistance of 1.3237 and gain a foothold there, which will keep the upside potential in the pound and lead to new highs in the area of 1.3269 and 1.3309, where fixing profit is recommended. In the event of an unsuccessful fastening at 1.3237, buying of the pound can be considered for a rebound of 1.3199.

To open short positions for GBP / USD pair, you need:

The formation of a false breakout at the resistance of 1.3237 will be a good signal to sell the pound, which will lead to a bigger sale with a test at 1.3199. The main purpose of updating the low around 1.3155, where fixing profits are recommended. In case of GBP / USD growth in the first half of the day, sales can be considered after a false breakdown of 1.3269 or a rebound from 1.3309.

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Description of indicators

  • MA (average sliding) 50 days - yellow
  • MA (average sliding) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
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Intraday technical levels and trading recommendations for EUR/USD for July 16, 2018

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Daily Outlook

In April 2018, the EUR/USD pair outlook turned to become bearish when the pair pursued trading below the broken uptrend as well as the lower limit of the depicted consolidation range.

Shortly after, the price zone (1.1850-1.1750) offered temporary bullish rejection towards 1.1990. The EUR/USD bulls failed to pursue towards higher bullish targets. Instead, a descending high was established around 1.1990.

This was followed by bearish breakdown below the price zone of 1.1850-1.1750. This price zone has been standing as a significant Supply zone since June 2018.

On the other hand, the price zone of 1.1520-1.1420 was considered a prominent demand zone where a valid bullish BUY entry was offered during previous weeks' consolidations.

On July 10, signs of bearish rejection were manifested around 1.1750. That's why, a bearish movement was expected to occur towards 1.1650.

Lack of enough bearish momentum allowed another bullish pullback to occur towards 1.1750 (the lower limit of the depicted supply zone).

The EUR/USD pair remains trapped inside a consolidation range between the depicted key-levels 1.1520 and 1.1750 until breakout occurs in either direction.

Please note that any bullish breakout above 1.1750 will probably enhance bullish advancement towards 1.1850 (the upper limit of the depicted supply zone).

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Putin and Trump will shake up the markets

Inflationary pressure in the US is increasing. This conclusion can be drawn from the results of the publications of the past week. Indeed, there was a noticeable increase in consumer and mortgage lending in May while producer prices showed growth exceeding forecasts. The annual growth in consumer prices tightened 2.9% against 2.8% a month earlier in June. Meanwhile, the root inflation index rose from 2.2% to 2.3%. The rise in inflation expectations should lead to an increase in the likelihood of a fourth increase in the Fed rate this year. In any case, the CME futures reduced the likelihood that there will be no increase to 40%.

However, this impression is deceptive. The yield of the bonds high reached its maximum by May 15 which reflect the real inflation expectations of the business. Since then it has been trading lower for two months, it may instigate doubts about the steady growth of consumer demand.

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Published on Friday, the consumer confidence index from the University of Michigan declined in July from 98.2p to 97.1p, which indicates an increase in consumer fears of economic prosperity in the near future.

Regarding the fears, after the start of the active phase of the confrontation between China and the US, the yuan was devalued to 7.00 per dollar. Further escalation could bring the global slowdown phase closer, as a stronger dollar tightens financial conditions in emerging markets. Global PMI is a lagging indicator in relation to the yuan exchange rate, so further escalation of the conflict is fraught with unfolding a new wave of the crisis even before the Fed leaves the regime of soft monetary policy.

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Published on Monday morning, the GDP data in the second quarter was better than expected, the economy grew by 6.8%. Industrial production grew by 6.7% and there is generally no fear of slowing down, which generally reduces tensions.

The long-awaited meeting between Putin and Trump can significantly increase volatility, given the ability of both leaders to make unexpected decisions. The American side is trying to lower the level of expectations, so as not to provoke a wave of disappointment in the markets, and there are no objective reasons to expect a breakthrough because the fundamental contradictions between Moscow and Washington are too strong.

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The week will begin without a traditional swing. On Monday, in addition to the widely advertised meeting between Putin and Trump, a report on retail sales in June will be published, which is traditionally used as an indicator of consumer demand.

On Tuesday, Federal Reserve Chairman Powell will address the Congress before the Senate. In addition, a report on industrial production in June and a report of the Treasury on the movement of foreign capital will be published in May. A month ago, Russia became the troublemaker of peace, having cut its investments in US securities almost twice in April. This time attention will be focused on China since it was in May that the active phase of US pressure on tariffs began.

On Wednesday, another speech by Powell but this time in front of the House of Representatives will also be published in beige book FRS and dynamics on the construction sector for June.

Before the report in Congress, the Fed published a six-month report and Powell gave an extensive interview last week. The position of the regulator does not look too optimistic despite the strong labor market and economic growth. The Fed notes that inflation is maintained at a high level largely due to rising energy prices, and wage growth is not sure enough.

The dollar is losing momentum to growth, in anticipation of new data, the most likely scenario is trading in the range. The EUR/USD pair may rise to resistance 1.1734 / 42, by the end of the day the euro may fall on news from Helsinki. The pound looks a little less confident where the GBP/USD pair is bounded from above by the zone of 1.3278 / 88, a little more likely to decline by the end of the day to 1.3155 / 67.

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NZD/USD Intraday technical levels and trading recommendations for July 16, 2018

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The NZD/USD pair had been trapped between the price levels of 0.7170 and 0.7350 until bearish breakdown of 0.7200 occurred on April 23.

Breakdown of 0.7220-0.7170 (neckline zone) was needed to confirm the depicted reversal pattern. Bearish target levels around 0.7050 and 0.7000 have been achieved already.

The price level of 0.7050 was considered a key-level for the NZD/USD bears That's why, bearish persistence below 0.7050 allowed further bearish decline to occur towards the price levels around 0.6800.

As anticipated, the recent bullish pullback towards the price level of 0.7050 (Broken Demand-Level) offered a good opportunity for a valid SELL entry.

Quick bearish decline took place towards 0.6800 where a false bearish breakdown occurred. This allowed temporary bearish movement to occur towards 0.6680. However, the pair failed to maintain enough bearish momentum.

On July 7, evident bullish rejection pushed the NZD/USD pair above 0.6820 again. This was followed by another bearish decline below 0.6750 which took place on Wednesday.

Trade Recommendations:

Currently, the price zone 0.6750-0.6800 constitutes a demand zone to be considered by NZD/USD buyers. Potential bullish targets would be located around 0.6900-0.6980.

Please be cautious if the current bearish decline extends below 0.6680 as this invalidates the suggested bullish scenario.

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Trading plan for the European session on July 16 EUR / USD

To open long positions for EUR / USD, you need:

Break and consolidation above the 1.1693 level will be a good signal for euro purchases, and as the trade will be conducted above this range, traders may consider continuing the upward trend with renewal of resistance 1.1724 and 1.1756, where it is recommended to fix profit. In case of a decline below the 1.1693 level.

To open short positions for EUR / USD, you need:

A return to support 1.1693 may lead to the selling of the European currency with the renewal of a larger area of 1.1658, where it is recommended to fix profit. In case of the euro growth in the first half of the day, traders may consider on short positions after the formation of a false breakdown at the 1.1724 resistance or on a rebound from 1.1756.

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Indicators Description:

  • MA (average sliding) 50 days - yellow
  • MA (average sliding) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20

* The presented market analysis is informative and does not constitute a guide to the transaction.

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Global macro overview for 16/07/2018

So far nobody wants to push the market too much in any direction, and most of the global investors prefer waiting for the development of events. Meeting two strong characters Trump and Putin can always generate interesting comments that will be reflected in the trade. In the afternoon we also have data on retail sales from the US for June, which should point to the fifth month of growth. The sale of cars will be boosted by the general indicator (0.5%), but the decline in fuel prices will worsen the results of gas stations. The consensus is tight, so it may be easier to be disappointed. Today, we will also be smarter about knowledge about the state of the manufacturing sector in July along with the publication of the NY Empire State indexes. The estimated decrease in relation to June takes into account concerns about the effects of trade conflicts, but it will be important how strong the sentiment will deteriorate. It must be remembered that the USD remains strong mainly on the contrast of the solidity of US economic activity against the rest of the world. Without it, the very prospect of further interest rate hikes by the Fed will not be enough. In this topic, in the next days, the Fed's president in Congress and a report on the activities of the central bank will be in the foreground (Tues-Wed). The first hearing before the Senate Banking Committee on Tuesday will be more important because surprises are more likely here. On the other hand, it is widely expected that Jerome Powell will be constructively speaking about the state of the economy and confirmed market expectations for two more hikes this year. All of this hawkish comments will be bullish for the US Dollar.

Let's then have a look at the US Dollar Index technical picture at the H4 time frame. The market had made a clear Double Top pattern, but since then the most important support at the level of 93.21 hasn't been visited yet. The bulls are trying to lift the prices higher, but so far no avail as the recent local top has been established at the level of 95.25 and the price has retraced 50% already. Moreover, there is still a battle for the golden trend line and so far the bears are winning it slightly as they had managed to break through it one time in the past. Any other violation of this line will likely make the potential sell-off more rapid and deeper.

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Global macro overview for 16/07/2018

Silence in the subject of trade wars continues, therefore, risky assets have a moment to recover from the previous weakness. AUD and NZD are making up for losses, USD, JPY and CHF have become less sought after. EUR / USD is boring in a narrow range of fluctuations, and the pound remains Brexit-laden and changes, though they are, are chaotic in both directions.

Despite this, it is not everywhere rosy, especially not in China, which has recently become a determinant of sentiment. Exchange index in Shanghai lost 0.6%, and after the yuan, there is no sign of strengthening. At night we received a packet of data from the Middle Kingdom, which had its strengths and weaknesses. GDP in the second quarter increased in line with expectations by 6.7% y / y accompanied by better than expected June retail sales growth, but weaker growth in industrial production. The composition can be considered a comforting one, as it supports the government's policy goal of improving the quality of growth with an increase in the share of consumption, and not only building new roads and bridges. On the other hand, in the entire first half of the year, the annualized growth was 6.4%, by 0.1 percentage point. less than envisaged in the plan for 2018. In the face of the risk of trade wars, it is difficult to expect an acceleration of growth in the second half of the year and the target of 6.5%. it may not be achieved. And China's economic problems are always bad news for risk appetite.

If the risk appetite slows down, the global investors will likely fly to the safe-haven assets like Gold, so let's now take a look at the Gold technical picture at the daily time frame. The market has made a Double Bottom formation at the level of $1,236, but there is still no impulsive reaction from the bulls. This level is very important from the longer timeframe point of view because in a case of a breakout lower, the next support is seen 30 dollars lower at $1, 204. If the flight to safe-haven actions will accelerate, the global investors will not see this level, so it is worth to keep an eye on the current market developments.

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Analysis of Gold for July 16, 2018

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Recently, Gold has been trading sideways at the price of $1,243.30. According to the H1 time - frame, I found a breakout of the bearish flag in the background, which is a sign that sellers are in control. Anyway, most recently there is an intraday upward channel in creation. My advice is to watch for a potential breakout of the channel to confirm a downward movement. The downward targets are set at the price of $1,239.00 and at the price of $1,236.15.

Resistance levels: R1: $1,242.00R2: $1,243.00R3: $1,243.50

Support levels: S1: $1,240.45S2: $1,239.90S3: $1,239.00

Trading recommendations for today: watch for potential selling opportunities.

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GBP/USD analysis for July 16, 2018

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Recently, GBP/USD has been trading upwards. The price tested the level of 1.3265. According to the H4 time - frame, I found a breakout of the supply trendline in the background, which is a sign that selling looks risky. I also found potential completion of the downwrad corrective phase (abc). My advice is to watch for potential buying opportunities on the dips. The upward target is set at the price of 1.3360.

Resistance levels: R1: 1.3240R2: 1.3250R3: 1.3265Support levels: S1: 1.3215S2: 1.3205S3: 1.3190

Trading recommendations for today: watch for potential buying opportunities.

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Bitcoin analysis for July 16, 2018

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Trading recommendations:

Recently, Bitcoin has been trading upwards. As I expected, the price tested the level of $6.493. According to the H1 time - frame, I found a successful rejection of an upward trendline (support), which is a sign that buyers are in control. I also found a hidden bullish divergence in the background, which is a sign that sellers lost the power. My advice is to watch for potential buying opportunities on the dips. The upward target is set at the price of $6.748.

$6.748 - Intraday resistance; $6.300 – Intraday support; $6.748 – Objective target;

With InstaForex, you can earn on cryptocurrency's movements right now. Just open a deal in your MetaTrader4. *The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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Bitcoin analysis for 16/07/2018

In the latest report, the USA, Switzerland, and Singapore were in the top three of the most favorable countries in terms of conducting initial monetary offers (ICO).

Analysts associated with the Crypto Finance Conference developed studies based on publicly available data on 100 ICO projects and compiled them according to countries in terms of funds raised and the number of projects launched.

The report underlines that the United States is the most favorable country for ICO. In total, 30 companies have started operations in this field. The second country is Switzerland, which is responsible for half of this number of projects, and Singapore ranks third, with 11 projects.

The report also includes Russia, Estonia, and the United Kingdom as one of the most promising countries for financing cryptographic projects. The best months for ICO investment took place only four months ago, and 2018 overall has changed considerably since last year. ICO volumes have reached new records in the first half of 2018, amounting to twice as much as in 2017.

Let's now take a look at Bitcoin technical picture at the H4 time frame. The market has bounced from the level of $6,024 after two Pin Bars candles were made. The rise is corrective in nature and it does not look as the bulls have too much strength to break through the weekly pivot at the level of $6,379. The price is now in a short-term horizontal consolidation and the long-term downtrend is still present. It is worth to keep an eye on all technical support levels at $5,971 (weekly pivot support), $5,900 and the most important at $5,742. Any violation of the last support will confirm the downtrend.

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Trading plan for 16/07/2018

The absence of investors from Japan has dampened activity on the currency market, but overall there is a slightly better climate for risk currencies. Data from China have better and worse sides, which also did not give rise to volatility. The stock market grew slightly.

The weekend was also calm for events, so investors enter the new week in observation mode. The US Dollar loses slightly, giving away fields to risky currencies - a form of rebounding trends from the previous week. NZD / USD has the highest reflection of 0.6780. In the range are still USD / JPY (112.40) and EUR / USD (1.17).

The stock market in the region is weaker today, probably due to Chinese data not encouraging to increase. Shanghai Composite is losing 0.8% and Hang Seng is down 0.4%.

China's GDP in the second quarter increased by 6.7 percent y/y, as expected. June retail sales increased by 9.0% y/y with a forecast of 8.8%, but industrial production fell less - 6.0% while the market participants expected 6.5%.

On Monday the 16th of July, the event calendar is light in important data releases, but the global investors should keep an eye on US data: Retail Sales, Business Inventories and NY Fed Empire State manufacturing index.

EUR/USD analysis for 16/07/2018:

The lack of new information in the subject of trade wars is good news and risky assets are trying to create the strength for correction. Concerns about escalation, however, are still present in the background and there is little need to disturb the peace. The market received some time to digest the latest White House news about the new import tariffs for Chinese goods worth USD 200 billion. The Chinese side continues to withhold the official response and this has helped stabilize the yuan exchange rate, and also gave reason to rebound the Shanghai stock exchange. Behind the signals from China, the investment climate is warming in the wider market, although the reaction is moderate. On the other hand, it is well known to everyone that the last word in the commercial zone has not been said and we remain at risk of unexpected information until the US and China successfully complete trade negotiations. For now, however, they do not even sit at the common table, which promises that these summer holidays will not be a boring period of time as it usually is.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The price has retraced 61% of the previous swing up and has bounced from the level of 1.1615. Currently, the bulls are trying to test the short-term trend line resistance around the level of 1.1715-1.1719, but so far no avail. Nevertheless, the oversold market conditions and positive momentum are supporting the short-term bullish outlook. The next technical resistance is seen at the level of 1.1719 - 1.1726 and then higher at 1.1758.

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Ichimoku cloud indicator analysis of EUR/USD for July 16, 2018

The EUR/USD got rejected last week at the daily cloud resistance and pushed lower towards 1.16. Friday's daily candle was a bullish reversal hammer candlestick pattern. If prices continue higher this week we could have a couple of weeks with EURUSD strength that could push the price to 1.19.

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Red line - short-term support trend line

Blue line - critical support

EUR/USD has resistance at 1.17-1.1760. As long as price is below this area we should expect EUR/USD to move lower. Support is at 1.1625-1.1615. Breaking below this level will open the way for a move towards the 1.15 support. If bulls manage to close price above 1.1760 we could see a push higher towards 1.1850-1.19.

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Ichimoku cloud indicator analysis of Gold for July 16, 2018

The Gold price is diverging. The price remains in a bearish trend. A bounce to $1,290 is justified but we cannot rule out a move to $1,200-$1,210 if $1,235-37 fails to hold.

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Blue lines - pitchfork

Red line - RSI Support

The Gold price is still below the 4-hour Kumo (cloud). The trend is bearish. The price is making lower lows and lower highs but not the RSI. The RSI respects its support trend line. This bullish divergence will eventually break to the upside. Bounce target and major resistance is at $1,280-90. Short-term resistance is at $1,247-$1,252 area. A break above this level will open the way for our $1,290 target. Bulls will need to be more constructive in order for the bullish scenario to $1,400 to be accomplished.

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Technical analysis of Bitcoin For July 16, 2018

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The Bitcoin at the 4-hour charts looks clearly moving in a Bearish bias. This can be confirmed by the price still moving in a down slope channel and the Exponential Moving Average period 21 still bellow the Linear Weighted Moving Average period 55, as long as the price does not break out and close above the 6,360.51, it is highly likely the bias from this cryptocurrency will still be in a Bearish condition.

(Disclaimer)

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Technical analysis of USD/CAD for July 16, 2018

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If we look at the 4-hour charts at the loonie, the overall bias of this pair still in a Bullish condition. This already can be seen by the price moving in an up slope channel, but now the USD/CAD pair has a correction and will try to test its nearest support level, as long as it does not break out and close bellow the 1.3041 the bias from this pair still in Bullish condition.

(Disclaimer)

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Technical analysis: Intraday Level For EUR/USD, July 16, 2018

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When the European market opens, some Economic Data will be released such as Trade Balance and Italian Trade Balance. The US will release the Economic Data too, such as Business Inventories m/m, Empire State Manufacturing Index, Retail Sales m/m, and Core Retail Sales m/m, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1735.

Strong Resistance:1.1728.

Original Resistance: 1.1717.

Inner Sell Area: 1.1706.

Target Inner Area: 1.1678.

Inner Buy Area: 1.1650.

Original Support: 1.1639.

Strong Support: 1.1628.

Breakout SELL Level: 1.1621.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all Traders or Investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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Technical analysis: Intraday level for USD/JPY, July 16, 2018

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In Asia, today Japan will not release any Economic Data, but the US will release some Economic Data, such as Business Inventories m/m, Empire State Manufacturing Index, Retail Sales m/m, and Core Retail Sales m/m. So, there is a probability the USD/JPY will move with a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 113.10.

Resistance. 2: 112.87.

Resistance. 1: 112.66.

Support. 1: 112.38.

Support. 2: 112.16.

Support. 3: 111.94.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all Traders or Investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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Elliott wave analysis of EUR/NZD for July 16, 2018

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Wave i/ peaked at 1.7479 and the ongoing correction in wave ii/ will ideally make it lower to the 38.2% support at 1.7067 before turning higher in wave iii/ towards 1.8638.

Short-term a break below minor support at 1.7238 confirms more corrective downside pressure towards 1.7112 and ideally towards the 38.2% corrective target at 1.7067 to complete wave ii/ and set the stage for the next upside attack in wave iii/ towards 1.8638.

R3: 1.7379

R2: 1.7320

R1: 1.7299

Pivot: 1.7238

S1: 1.7200

S2: 1.7181

S3: 1.7139

Trading recommendation:

We will wait for a buying opportunity near 1.7067

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Elliott wave analysis of EUR/JPY for July 16, 2018

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With wave (E) complete at 124.59 and a S/H/S bottom to confirm that view, we will be looking for more upside pressure in the days and weeks to come for a rally towards 135.72, which both marks the 161.8% extension of wave i and the S/H/S bottoms target.

Short-term, we could see minor resistance at 131.63 caps the upside for a corrective set-back to near 130.10 before the next upside attack towards 133.48 on the way higher towards 135.72 as the ideal target for wave iii.

R3: 132.54

R2: 132.11

R1: 131.63

Pivot: 131.24

S1: 131.08

S2: 130.76

S3: 130,34

Trading recommendation:

We will wait for a buying opportunity near 130.10.

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Weekly review from 16 to 21 July 2018 on the EUR/USD pair

Trend analysis (Figure 1).

Next week, the market may begin to move up, with the first target of 1.1756 - a pullback level of 23.6% (blue dotted line). However, the candlestick analysis gives the bottom job (harami). Let's turn to the indicator analysis.

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Fig. 2 (weekly chart).

Complex analysis:

- Indicator analysis - up;

- Fibonacci levels - up (blue dotted line);

- volumes - upwards;

- candle analysis - down;

- trend analysis - up;

- Bollinger bands - up;

- monthly graph - up.

The conclusion of the complex analysis is upwards.

The overall result of the calculation of the candles of the EUR/USD currency pair on the weekly chart: the price in the week is likely to have an upward trend with the absence of the first lower shadow of the weekly white candle and the absence of the second upper shadow.

The first upper target is 1.1756-the pull-back level of 23.6% (blue dotted line).

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Weekly review from 16 to 21 July 2018 on the GBP/USD pair

Trend analysis (Figure 1).

Next week, the price, according to technical analysis, will continue to move upward with the first top target of 1.3360 – a pullback level of 23.6% (yellow dotted line). A comprehensive analysis will show how likely this scenario is.

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Fig. 2 (weekly chart).

Complex analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- volumes - upwards;

- candlestick analysis - up;

- trend analysis - up;

- Bollinger bands - up;

- monthly chart - up.

The conclusion on the complex analysis is an upward movement.

The overall result of the calculation of the candle of the GBP/USD currency pair on a weekly chart: the price for the week is likely to have an upward trend with the absence of the first lower shadow of the weekly white candle and the absence of the second upper shadow.

The first upper target of 1.3360 is the retracement level of 23.6% (yellow dotted line).

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