Euro buyers still have a chance for further growth

Data released on Monday in the afternoon, did not significantly affect the quotes of the US dollar or risky assets, as it fully coincided with the forecasts of economists.

Attention was focused on the meeting of US President Donald Trump with Russian President Vladimir Putin. As the number of experts notes, the meeting consisted of a constructive dialogue, which allows us to count on the restoration of good relations between the two countries in the future.

As for the fundamental statistics, the data on the growth of retail sales in the US did not lead to an increase in the US dollar.

According to the report of the Ministry of Trade, retail sales in the US in June 2018 increased by 0.5% compared to the previous month, which fully coincided with the forecast of economists. This figure will certainly support the economic growth in the US in the future.

As noted, good growth was directly related to higher prices for gasoline and high sales of cars. Also, spending on healthcare has increased significantly. Excluding gasoline and cars, retail sales increased by only 0.3%.

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The growth of business activity in the area of responsibility of the Federal Reserve Bank of New York has slowed due to a decrease in optimism about future activity. According to the report, the production index of the Fed-New York in July this year fell to 22.6 points from 25 points in June. Economists had expected the index to be 21 points.

Inventories of companies in the US in May rose.

Growing demand from consumers forced the company to increase its reserves, which will certainly support the US economy in the future. According to the report of the US Department of Commerce, the growth of inventories in May this year, compared to the previous month, was 0.4%. The data fully coincided with the forecasts of economists.

Speech by the representative of the Federal Reserve, Neel Kashkari, did not put serious pressure on the market, even though he spoke about the need for a slower increase in interest rates in the future.

As the representative of the Federal Reserve said, further increases in rates threaten to reverse the yield curve, and, in his opinion, there is almost no reason for a significant increase in rates. Kashkari also sees no signs of overheating of the economy, as monetary policy is already close to neutral. According to the representative of the Fed, it can always react quickly in case of a sharp increase in inflation.

The technical picture remained unchanged. Buyers need a breakthrough resistance of 1.1730, which will maintain an upside potential in risky assets with the main purpose of updating resistances 1.1760 and 1.1780.

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Trading plan for the European session on July 17 EUR / USD

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

Break and consolidation above 1.1724 level will be a good signal for euro purchases, and while the trade will be conducted above this range, one can count on the continuation of the upward trend with the renewal of resistance 1.1756 and the exit to the monthly maximum in the area of 1.1787, where I recommend fixing profits. In case of a decline in the euro in the first half of the day, support should be provided by the area of 1.1693, and otherwise it is possible to open long positions for a rebound from 1.1658.

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

The formation of a false breakout and a return to resistance level 1.1724 will be the first signal to the euro sales in order to reduce to the support area 1.1693, the breakthrough of which may lead to a larger sale of the European currency with the renewal of the area 1.1658 and 1.1622, where I recommend fixing profits. In case of euro growth in the first half of the day, you can count on short positions after the formation of a false breakdown at resistance 1.1756 or on a rebound from 1.1787.

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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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Trading plan for the European session on July 17 GBP / USD

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

Much will depend on the speech of Mark Carney. In the event of a breakdown of resistance 1.3268, buyers can expect to continue the upward trend, with the update of highs around 1.3310 and 1.3348, where I recommend fixing profits. In the event of an unsuccessful fastening at 1.3268, consider buying pound is best for a rebound from 1.3192 and 1.3155.

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

The formation of a false breakout at resistance 1.3268 will be a good signal to sell the pound, which will lead to a larger sale with a support test of 1.3227, the breakdown of which will increase pressure on GBP / USD with a further decline to areas 1.3192 and 1.3155, where I recommend fixing profits. In case of GBP / USD growth in the first half of the day, you can consider selling after a false breakdown of 1.3310 or a rebound from 1.3348.

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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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The euro area's positive balance continues to decline

Despite the weak data on the euro zone's trade surplus and the performance of Fed officials who expect further interest rate hikes in the US, the European currency continues its upward trend against the US dollar, as investors believe in the determination of the European Central Bank.

According to the report of the EU statistics agency Eurostat, the positive balance of trade in goods in the euro area in May this year again declined. The reduction in the balance is observed for the third month in a row, which is a very worrying sign for the European regulator, which is expecting a bigger economic growth in the second quarter of this year, after a disastrous first quarter.

So, the positive balance of the euro zone's trade balance in May amounted to 16.9 billion euros against 18.0 billion euros in April. Import grew significantly more than exports. Without taking into account the correction, the trade surplus in May amounted to 16.5 billion euros against 19.3 billion euros in May 2017.

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It should be recalled that the United States introduces trade duties on steel and aluminum from the EU, which will also affect the above indicators in the future.

Speech of the President of the Fed-Atlanta Bostic did not affect the quotations of the US dollar. According to the representative of the Fed, the base scenario still implies three rate hikes this year, and if the economy accelerates or slows contrary to expectations, the Fed will need additional increases. Bostik also noted that we are closely monitoring the impact of duties. Let me remind you, most recently a report appeared that indicated the decline in the confidence of US households due to the introduction of duties, which will necessarily affect the economic performance.

As for the technical picture, it remained unchanged compared with the morning forecast. It is too early to talk about the resumption of the upward trend in risky assets. Only a confident break above 1.1730 and 1.1760 will indicate a resumption of a new upward trend, which could lead to a month high at 1.1820 and 1.1890.

The economy of China is gradually losing growth themes. Such a report was provided today by the National Bureau of Statistics of China.

According to the data, the gross domestic product in China in the 2nd quarter of this year increased by 6.7% compared to the same period of the previous year after an increase of 6.8% in the 1st quarter. The data coincided with the forecasts of economists.

Good data on industrial production partly offset the weak GDP report.

Thus, industrial production in June 2018 increased by 6% compared to the same period of the previous year after an increase of 6.8% in May.

Retail sales in June compared with the same period last year increased by 9.0% after rising by 8.5% in May.

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Dollar under pressure on the wave of lower geopolitical risks

On Monday, investors closely followed the meeting of D. Trump and V. Putin in Finland. Its outcome is really not known, as the leaders of the two countries at the press conference did not report anything vital, but limited themselves to general phrases. But the way they looked and how they answered the questions indicated that some important agreements had been reached. This instilled optimism in investors and had a calming effect on them. On this wave, the demand for risky assets, which, however, turned out to be limited, was revived.

The foreign exchange market reacted to this event by the weakening of the US dollar, which at the same time did not have a noticeably strong character. The dollar index, reflecting its dynamics to the basket of major currencies, declined from 94.50 points at the opening to 94.27 points at the close, while still remaining at local annual maxima.

The main currency pairs also added to the "American", but not so noticeable that it was possible to talk about the actual trend change in the currency markets. Today, at the beginning of trading in Europe, the dollar also remains under slight pressure amid a renewed rise in the yield of government bonds of the US Treasury. So, the profitability of the benchmark of 10-year Treasuries is growing by 0.27% to 2.864%. The dollar is adversely affected by the reluctance of market players to take noticeable actions before the speech of J. Powell, the head of the US Central Bank, today, as well as tomorrow. Probably, investors are careful with their actions, as the head of the Federal Reserve can speak not only of supporting the US dollar but also of pressure if it concerns the topic of continuing the cycle of raising interest rates and slowing inflation, as evidenced by the latest data on economic statistics.

It is likely that before the speech of Powell, the dollar may remain under pressure. The main downward factor for him today is the decline in geopolitical tension after the tet-a-state talks on Monday with Trump and Putin.

In our opinion, in spite of this optimism, it is hard to expect a global depreciation of the US currency, since the factor of trade wars has not disappeared anywhere and will often remind us of itself.

Forecast of the day:

The currency pair EUR / USD is trading above the 1.1715 level. It seems that the expectation of Powell's speech and the reduction of geopolitical tension will push the pair up to 1.1785.

The GBP / USD currency pair is tightening up after the eurodollar. Perhaps, today's speech of the head of the Bank of England Carney will support this dynamic. A break of 1.3265 may lead to a local price increase to 1.3300.

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Control zones of the currency pair USD / JPY as of July 16, 2018

Last week, the pair reached the next target zone of the NCP 1/2 112.64-112.53, which resulted in the growth of supply. The first support zone for the NCP 1/4 is at 112.28-112.23.

Today, there was a test of the first support zone of the NCP 1/4 112.28-112.23. Holding prices above these marks will allow the pair to continue its growth, and the July buyout will be the goal of purchases. The second goal of the growth will be a weekly short-term fault 113.76-113.56, located within the monthly short-term fault of July. The upward movement remains impulsive, so the probability of updating the July high is more than 70%, which makes purchases from the support zones profitable at a distance.

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The most favorable prices for the purchase are located within the limits of the NCP 1/2 111.78-111.68. The test of this zone will be decisive for the whole upward momentum. If the pair can stay above this zone in US sessions, the upward movement will continue with a 70% probability.

To form an alternative downward model, a breakdown and anchoring below level 111.68 will be required. This will allow talking about the end of the current phase of the bullish trend and consider selling in the short term. This model has a probability of 30%, so short transactions today are not profitable to consider. Without confirmation of direction, even a high risk-to-profit ratio will not give a significant advantage in a series of transactions.

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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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Overview of USD / JPY for the week of July 16 for simplified wave analysis

Wave picture of the chart H4:

The direction of the trend of the yen major from the middle of February indicates the "north" of the chart. The price is near the lower boundary of the target zone.

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The wave pattern of the graph H1:

The rising wave of May 29 forms the final part (C) in a larger model. The structure of the wave by now looks complete.

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The wave pattern of the M15 chart:

The rising wave of June 25 is approaching the calculated zone of a potential reversal. Further, at least, we should wait for a correction within this wave.

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Recommended trading strategy:

In the coming days, supporters of long-term transactions will need to hedge, or close the previously opened purchases. Proponents of inter-session trade will have the opportunity to make short-term sales of the instrument.

Resistance zones:

- 113.30 / 113.80

Support zones:

- 110.80 / 110.30

Explanations to the figures: In a simplified wave analysis, waves consisting of 3 parts (A-B-C) are used. For analysis, 3 main TFs are used, on each one the last, incomplete wave is analyzed. Zones show the calculated areas with the greatest probability of a turn.

Arrows indicate the wave counting according to the technique used by the author. The solid background shows the generated structure, the dotted - the expected movements.

Attention: The wave algorithm does not take into account the duration of the tool movements in time. To conduct a trade transaction, you need confirmation signals from your trading systems!

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Fundamental Analysis of GBP/USD for July 17, 2018

GBP/USD has been quite corrective and volatile, residing below the resistance area of around 1.3320. The price is expected to sink deeper towards 1.2850-1.3050 area in the coming days. GBP has been struggling politically and economically recently. GBP vulnerability is expected to lead to its further weakness against USD in the coming days.

Today, the UK Average Hourly Earnings Index report was published unchanged at 2.5% as expected which did not trigger any gains for the currency in the process. Moreover, Unemployment Rate was also unchanged at 4.2% but Claimant Count Change was increased by 7.8k in June from the previous figure of -3.0k which was expected to be at 2.3k. Additionally, BOE Governor Carney was quite dovish in his speech today, expanding on grave risks to the British economy. Thus, he does not signal readiness of the regulator to raise interest rates in the short term.

On the other hand, USD has been quite solid amid recent economic reports which helped the currency to sustain its gains over GBP. So, the pair is trading below 1.3320 with a daily close. Today, US Capacity Utilization Rate report is going to be published which is expected to increase to 78.4% from the previous value of 77.9%, Industrial Production is expected to increase to 0.5% from the previous value of -0.1%, and NAHB Housing Market Index report is also expected to increase to 69 from the previous figure of 68. Moreover, today Fed Chair Powell is going to testify on the central bank's agenda for further monetary tightening until the year end. Investors hope that the US regulator is ready for more agressive monetary policy.

At present, GBP is expected to struggle for further gains amid recent economic reports, whereas USD is performing better. Higher likelihood of two more rate hikes by the year end is certainly bullish for USD. As the economic calendar contains more macroeconomic reports from the UK this week, the pair is likely to trade with higher volatility but USD is expected to have an upper hand over GBP.

NEAR TERM RESISTANCE: 1.3320

NEAR TERM SUPPORT: 1.3050

BIAS: BEARISH

MOMENTUM: VOLATILE

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Fundamental Analysis of EUR/JPY for July 17, 2018

EUR/JPY has been trading with the bullish trajectory. The upward momentum led the price to reside around the resistance area of 131.50-132.00 from where it is expected to push lower in the coming days. EUR has managed to gain momentum despite recent mixed economic reports which subdued impulsive bullish pressure in the market.

Recently, Italy's 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 the euro area's trade balance report was published with a decrease to 16.9B from the previous figure of 18.0B which was expected to be at 17.6B. Ahead of the CPI report tomorrow which is expected to be unchanged at 2.0%, EUR is expected to trade roughly flat.

On the other hand, amid the celebration of Marine Day recently, Japan did not release any economic reports and hold any events today. On Thursday, Japan's Trade Balance report is going to be published which is expected to increase to 0.15T from the previous figure of -0.30T. On Friday, National Core CPI report is going to be published which is also expected to increase to 0.8% from the previous value of 0.7%.

At present, EUR gains are waning gradually against JPY. Any positive economic report from Japan or worse-than-expected report from the eurozone may arouse momentum in JPY, resulting in further bearish pressure in EUR/JPY in the coming days.

Now let us look at the technical view. The price has formed Bearish Divergence, while the price is residing inside the resistance area of 131.50-132.00 with a daily close. Currently, a bearish daily close is expected in the market before the price declines lower in the coming days. A daily close below 131.50 area will lead to further bearish momentum with a target towards 129.50 and later towards 125.00 support area in the future.

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BITCOIN Analysis for July 17, 2018

Bitcoin has been impulsive with the bullish gains recently which made the price reside above $6,500 area again with a daily close. Bitcoin has gained slightly over 4% in the intraday trade which signals great momentum in the recent price action that indicates further impulsive bullish pressure to push the price higher towards $8,000 in the coming days. At present, despite no negative fundamentals, the price is quite indecisive at the edge of Kumo Cloud resistance after breaking above $6,500. Though certain corrective indecision is unfolding, the price is expected to continue climbing higher in the future with a target towards $8,000 as the price remains above $6,500 with a daily close.

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Technical analysis of AUD/USD for July 17, 2018

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Overview:

The resistance is seen at the level of 0.7474 (which concides with the double top). The AUD/USD pair fell from the level of 0.7474 towards 0.7348. But, the price rebounded from the bottom of 0.7348 to trade around the spot of 0.7474 again. The resistance is seen at the levels of 0.7474, 0.7513 and 0.7554. Moreover, the price area of 0.7474/0.7513 remains a significant resistance zone. Therefore, there is a possibility that the AUD/USD pair will move downside and the structure of a fall does not look corrective. The trend is still below the 100 EMA for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. Thus, amid the previous events, the price is still moving between the levels of 0.7474 and 0.7257. If the AUD/USD pair fails to break through the resistance level of 0.7474, the market will decline further to 0.7302 as the first target. This would suggest the bearish market because the RSI indicator is still in a negative spot and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 0.7257 so as to test the daily support 3. On the contrary, if a breakout takes place at the resistance level of 0.7554, then this scenario may become invalidated.

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Technical analysis of EUR/USD for July 17, 2018

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Overview:

The EUR/USD pair continues to move downwards from the level of 1.1752 (around the pivot point). This week, the pair has dropped from the level of 1.1752 to the bottom around 1.1678. Today, the first support level is seen at 1.1694, the price is moving in a bearish channel now. Furthermore, the price has been set below the strong resistance at the level of 1.1752, which coincides with the 50% Fibonacci retracement level. This resistance has been rejected several times confirming the veracity of a downtrend. Additionally, the RSI starts signaling a downward trend. As a result, if the EUR/USD pair is able to break out the first support at 1.1694, the market will decline further to 1.1623 in order to test the weekly support 2. Consequently, the market is likely to show signs of a bearish trend. So, it will be good to sell below the level of 1.1752 with the first target at 1.1663 and further to 1.1566. However, stop loss is to be placed above the level of 1.1810 (golden ratio).

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Overview of EUR / USD as of July 17, 2018

EUR / USD pair

On Monday, unfavorable for the euro macroeconomic data, the currency itself rose by a few points, precisely only 25 points, but on the technical picture, this growth was of crucial importance. On the daily chart, the price was fixed above the trend line (blue) and the red balance line was below the price for the eighth session. Meanwhile, the Oscillator Marlin in the growth zone.

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The trade balance of the eurozone in May amounted to 16.9 billion euros against the forecast of 17.6 billion and 18.0 billion in April (down from 18.1 billion). Retail sales in the US increased by 0.5% in June while waiting for 0.4%. Business activity in the manufacturing sector of New York for this month was 22.6 against expectations of 20.3, although, the index was 25.0 in June. The growth of the euro against the data may indicate a rather strong mood of investors to buy a single currency. However, we do not expect a prolonged such mood. In the current situation, the target is the maximum of June 14 at 1.1852. The penetration of the level will open the way to 1.1996 with the maximum from May 14. But on this, we believe that corrective growth can be completed.

Today, the industrial output for the United States in June will be released. It is expected to grow by 0.5% with an increase in capacity utilization from 77.9% to 78.4%. Against this background, the euro will grow more difficult, unless some noticeable political factor interferes, clearly in favor of the dollar.

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On the H4 chart, the price was also fixed above the trend line. Oscillator Marlin points to the transition to an upward trend.

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Weekly review of the EUR / USD pair dated July 16, 2018

Politics periodically recovers and becomes the main driving force in the market. Although politics is nothing more than a continuation of the economy, and everything should be the other way around. However, strangely enough, the market reaction to political events over the past week fully corresponds to the general tendency to strengthen the dollar. So there were no contradictions between the economy and politics.

The first event was the resignation of two ministers in the UK. The ministers for Brexit affairs and foreign affairs resigned. They explained their decision by disagreeing with Theresa May's desire to sign a soft option for secession from the European Union, which implies the preservation of existing trade agreements. In their opinion, this contradicts the will of the people expressed during the referendum. Thus, there was a threat of development of the political crisis and loomed the specter of early parliamentary elections on the horizon. Hence, there was a threat of development of the political crisis and loomed the specter of early parliamentary elections on the horizon. this is only nine months before the final withdrawal of the UK from the European Union. Naturally, such tricks do not add confidence in the future to immediately affect not only the pound but also the single European currency. The question touches both sides of the negotiation process.

The investors did not have time to breathe and rejoice at the fact that early elections in the UK are not expected, as Donald Trump arrived in Europe, who immediately began to behave like an elephant in a china shop. His first destination was Brussels, where he took part in the summit of the heads of state of NATO. Even during the election campaign, Donald Trump was outraged that the NATO allies were not too quick in their own defense, forcing the US to spend too much on military spending, which was included to ensure the security of Europe. Immediately after winning the presidential election, he immediately began to implement one of his campaign promises and began to demand from the Allies to increase military spending to a minimum of 2.0% of GDP set by NATO rules. Long breaking and without much enthusiasm, European allies agreed to raise defense spending to the set minimum, though not immediately, but by 2025.

Apparently, Donald Trump needed time to realize the fact that even if he was re-elected for a second term, he would leave the White House with things in any case to the date indicated by the Europeans. So, only arriving in Brussels, Donald Trump demanded from the European NATO allies to immediately increase military spending to 2.0% of GDP. From such a pressure, many of the European leaders apparently began to quickly change diapers, and investors continued to sell a single European currency.

The fact is that European countries cannot increase defense spending. More precisely, it is possible but only at the expense of raising taxes, which are 1.5 times higher than in the US, and increasing government borrowings, which they already have a lot. They do not know what to do with all this, or by cutting down on the social expenses that they are already financing through debt. Thus, the only thing the Europeans can do is cut it alive, that is, to cut social spending. Naturally, the voters will not understand them and very soon, there will be other politicians in Europe. Yet, the current ones do not really want to part with their warm places. For them, such a turn will become a political suicide. Well, the funniest thing is that such a step will destroy the European social paradise. For them, such a turn will become a political suicide. Well, the funniest thing is that such a step will destroy the European social paradise. and very soon there will be other politicians in Europe, but the current ones do not really want to part with their warm places.

Satisfied with the childish surprise in Brussels, Donald Trump went to London. After the meeting with Theresa May, it occurred to someone that he thought of letting him into the microphone, and the US president immediately shared his thoughts on what would be better if the British prime minister was Boris Johnson, who recently resigned as foreign minister. It sounded so, that it is categorically incomprehensible, he expressed his private opinion or this position of the White House. In any case, investors are again worried about the political crisis in the UK, which may turn into early elections. Naturally, on the eve of the design of the divorce between Britain and Europe, this adds only acute sensations.

As said earlier, political balancing is completely within the economic logic of further strengthening of the dollar. After unequivocal data on the labor market, data on open vacancies came out, the number of which decreased from 6,840 thousand to 6,638 thousand. For a short time, this added concern, but data on applications for unemployment benefits, whose number decreased by 21 thousand, largely reduced fears. In particular, the number of initial applications for unemployment benefits fell from 232 thousand to 214 thousand and repeated from 1,742 thousand to 1,739 thousand. Most investors were pleased with the data on inflation, which even more inspired the market participants. Thus, the growth rates of producer prices accelerated from 3.1% to 3.4%. In turn, the final data on inflation confirmed its growth from 2.8% to 2.9%. So the market participants can still hope.

In Europe, almost nothing came out and only the data on industrial production, whose growth rate accelerated from 1.7% to 2.4% are worthy of attention. But against the backdrop of rising inflation in the US, especially the accelerated growth in producer prices, it inspires hope for a further rise in inflation. Fewer people have worried about the growth of industrial production in Europe.

Perhaps the main event of the week is the meeting between Vladimir Putin and Donald Trump, which will be held on Monday in Helsinki. Considering how much fun Donald Trump has talked about Europe, as well as his desire to drive off European and Chinese producers the American market, he can present another surprise. Not the most joyful statements about Europe but this will negatively affect the mood of investors possibly after the meeting.

Even without a political show, an extremely busy week awaits us. Thus, in the US, a sharp slowdown in the growth rate of retail sales is expected from 5.9% to 3.7%, which will make everyone remember the rise in inflation ahead of the growth of wages. But almost immediately after that, the dollar will be given a chance to improve somewhat its position due to data on industrial production. The growth rate of which can accelerate from 3.5% to 3.9%. So Donald Trump can again scream that he is fulfilling his campaign promise to return production in the US. Also, the total number of applications for unemployment benefits should be reduced by 3 thousand. Although this is not enough, the number of which can be reduced from 1,739 thousand to 1,730 thousand due to repeated applications. The number of initial applications for unemployment benefits, as expected to increase from 214 thousand to 220 thousand. Data on re-applications for unemployment benefits is much more important, as they give an understanding of long-term unemployment. Also, although the number of construction projects started may decrease by 4.0%, the number of building permits issued should increase by 6.0%. In general, the data is expected to be multidirectional, and it is quite difficult to draw a certain conclusion.

However, only inflation data comes out in Europe. Although this is extremely important information, they can not have a significant impact on the market. The fact is that the market has long taken into account the growth of inflation from 1.9% to 2.0%, so the final data is not unexpected. Moreover, after Mario Draghi shifted the emphasis towards the trade war between the US and Europe, inflation is no longer so important for determining the policy of the ECB.

As you can see, any forecasts are difficult to make and if you look at the statistics, the single European currency should rather consolidate at the current values of 1.1700. But Donald Trump clearly will make a variety in the dull schedule of the week and, most likely, will have a negative impact on the single European currency that could to a decrease towards 1.1600.

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Bitcoin analysis for July 17, 2018

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Trading recommendations:

Recently, Bitcoin has been trading upwards. As I expected, the price tested the level of $6.718. According to the H1 time - frame, I found strong demand on the market and potential running flat correction, which is a sign of strength. My advice is to watch for potential buying opportunities. The upward target and key resistance is set at the price of $6.772.

$6.718 - Intraday resistance; $6.541 – Intraday support; $6.772 – 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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Analysis of Gold for July 17, 2018

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Recently, Gold has been trading upwards. The price tested the level of $1,244.00. According to the H1 time - frame, I found a breakout of the supply trendline in the background, which is a sign that selling looks risky. I also found a fake breakout of the low at the price of $1,237.00 and hidden bullish divergence ont he MACD oscillator, which is another sign of strength. My advice is to watch for potential buying opportunities. The upward targets are set at the price of $1,247.95 and at the price of $1,265.20.

Resistance levels: R1: $1,24295R2: $1,244.35R3: $1,247.00Support levels: S1: $1,238.85S2: $1,236.15S3: $1,234.75

Trading recommendations for today: watch for potential buying opportunities.

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The EUR/USD analysis for July 17, 2018

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Recently, EUR/USD has been trading upwards. The price tested the level of 1.1737. According to the H1 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), which is another sign of strength. My advice is to watch for potential buying opportunities. The upward target is set at the price of 1.1790.

Resistance levels: R1: 1.1730 R2: 1.1750 R3: 1.1780 Support levels: S1: 1.1680 S2: 1.1655 S3: 1.1632

Trading recommendations for today: watch for potential buying opportunities.

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Intraday technical levels and trading recommendations for EUR/USD for July 17, 2018

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 a 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 the previous weeks' consolidations.

On July 10, the 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 of 1.1520 and 1.1750 until a 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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NZD/USD Intraday technical levels and trading recommendations for July 17, 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.

A quick decline took place towards 0.6800 where a false bearish breakdown occurred. This allowed a 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 a recent bullish reversal pattern (123 pattern) which enhances the bullish side of the market.

Trade Recommendations:

Currently, the price zone 0.6750-0.6800 constitutes a demand zone to be considered for valid BUY entries.

Bullish fixation above 0.6820 should be maintained to provide enough bullish momentum towards 0.6900-0.6980.

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

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Global macro overview for 17/07/2018

Yesterday's US trading session was rather calm and not much volatility was observed on the main sectors. Changes on NYSE were minimal. NASDAQ lost -0.3%, SP500 -0.1%, and DJIA gained + 0.2%. The situation changed after the first results were published.

After the session, Netflix published the results and the figures proved to be, to put it mildly, unsatisfactory. The most serious problem was the surprisingly low increase in the number of subscribers (5.15 million compared to expectations at 6.27 million), which was also below the forecasts of the company itself. Combined with careful guidance on the third quarter of 2018, this situation triggered double-digit drops in share prices in the aftermarket trading that might drag NASDAQ down. The second topic will be yesterday's failure of the Amazon website in one of the most important days of the year, a very promoted Prime Day. Admittedly, it took place before the shutdown, at which Amazon gained + 0.5%, but today investors will probably have slightly worse sentiment.

Let's now take a look at the NASDAQ technical picture at the H4 time frame. The uptrend is still powerful and the market has made a new all-time high at the level of 7837 yesterday, but due to the poor earnings of Netflix, this situation might temporarily change. The gap between the level of 7733 - 7788 will likely to be filled today after the market will open and then the bears will target the level of support at 7703 or even lower at 7638. Nevertheless, as long as the major support at the level of 7420 is not violated, the drop should be considered only as a temporary pull-back.

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Ichimoku cloud indicator analysis on EUR/USD for July 17, 2018

EUR/USD is showing short-term strength signs. After the daily bullish hammer reversal pattern we noted regarding Friday's candlestick, EUR/USD continues higher into resistance area.

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Red lines - triangle pattern

Blue line - support

The EUR/USD is challenging Daily cloud resistance. If price manages to remain inside the cloud and break above the upper triangle resistance at 1.1770 we should expect the price to move towards the upper cloud boundary near 1.1960. A rejection at the 1.1730-1.1760 area will open the way for a test of the lower triangle boundary at 1.1620-1.1630. Shorter-term support is found at 1.1660-1.1670. While short-term resistance is at 1.1740. A break below 1.1620 will open the way for a break of the 1.15 support and a move towards 1.12.

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Technical analysis on Gold for July 17, 2018

The Gold price remains near its 2018 lows. The trend remains bearish and there is no sign of a bullish reversal yet. The Gold price is oversold at current levels and we should focus on bullish trades than bearish ones.

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Green rectangles - support level

Red rectangles - resistance levels

Blue lines - pitchfork channel

Red line - short-term resistance

Short-term resistance is at $1,244-45. A break above this level justifies a move higher towards the 38% Fibonacci retracement at $1,247. A break above this Fibonacci resistance could push price towards the upper pitchfork boundary and 61.8% Fibonacci retracement level at $1,254. The short-term and medium-term trend could change only on a break above this level. Support is found at $1,235 and next at $1,231.

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Global macro overview for 17/07/2018

The Bank of Australia published a summary of the July meeting. The report has a neutral tone, though, according to many analysts, it is slightly more hawkish than expected after the last decision of the Bank.

From the report published by the Reserve Bank of Australia, we did get any breakthrough, but rather some form of clarifying what we already know. Board agreed that the next interest rate move would rather be upward as long as the economy improved as expected. For the time being, the Management Board of the Bank sees no grounds for changing the monetary policy in the nearest future.

Forecasts for the job market are positive, the number of new jobs is increasing. The latest data confirm forecasts about GDP growth by over 3.0% in 2018 and 2019. The Australian dollar is currently slightly weaker, but it is still within the range from the last two years. RBA noted that the increase in household income has slowed down in the past few years. The institution is worried about the financial stability of households, "they want to watch them closely".

Forecasts are still talking about rate hikes only in 2020. Australian dollar reacted to slightly hawkish minutes by strengthening up to the level of 0.7432.

Let's then take a closer look at the AUD/USD technical picture at the H4 time frame. Despite the recent spike higher, the price is still closed in a range between the levels of 0.7359 - 0.7445 and the last one is not even a swing high. The momentum is barely moving away to the north from its fifty level, so not much of strength is noticed there as well. The key technical resistance is still seen at the level of 0.7475 - 0.7483 and only a sustained break through this level would change the current bias from neutral to bullish.

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Bitcoin analysis for 17/07/2018

The world's largest investment management company, BlackRock is reportedly considering dealing with Bitcoin. According to the Financial News London report, a New York asset manager has set up a working group that explores how to use cryptocurrency and Blockchain technology, and monitors the activity of rivals in this space.

Quoting sources that are close to this case, the article says that the working group consists of different departments from BlackRock and the group is looking at the possibilities of the Bitcoin ETF fund. Shortly after this news, Bitcoin's price rose sharply from $ 6,360 to $ 6,646 in just two hours - more than $ 280.

While BlackRock only confessed to the overall investigation of Blockchain technology, it would not have been a surprise if the company took over Bitcoin futures.

In the past, the company's president, Larry Fink, spoke positively about the cryptocurrencies, saying in October 2017 that he was a "big believer" in Bitcoin, although he also warned that this was "an indicator for money laundering".

In February, the company said that it sees a wider role of cryptocurrencies in the future and that Blockchain, despite some obstacles, is promising: "It is possible that cryptocurrencies may be increasingly used in the future as the market matures, but now we believe that they should be taken into account only by those who can bear total losses. Similarly, Blockchain must overcome serious obstacles to achieve a promising future" - said at the time Richard Turnill, the chief investment strategist.

BlackRock is currently the largest asset management company in the world, valued at $ 6.3 trillion, according to December 2017 data.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The spike went up to the level of $6,706 which is the first weekly pivot resistance and was capped there at the moment of writing this article. Nevertheless, the key technical resistance is still seen at the level of $6,809 and despite this news, the bulls are still weak to break through it. The nearest technical support is seen at the level of $6,379. The positive and strong momentum support the short-term upward correction towards the mentioned target levels and above.

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Technical analysis of Litecoin For July 17, 2018

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The Litecoin at 4 hour chart looks like it cannot breach the Support Zone Level between 73.07-74.80, and it seems it will go back to upside way event. The bias from the Litecoin is in a Bearish bias. The upside movement seems just only a correction, but for a few days, there is possibility for this cryptocurrency to reach 84.63 level before it come back to the previous original trend (Bearish). As long as the XAG/USD does not break out and close above the 92.42 level then the Silver will still be in Bearish a bias.

(Disclaimer)

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Trading plan for 17/07/2018

Donald Trump is visiting Europe, issues related to international security are at the center of attention. This helps to ease investors' fear of trade wars, which creates a positive environment for risky currencies and assets. Optimism, however, is cooled by another huge crude oil discount and a huge disappointment, which proved to be the results of Netflix, one of the companies from the FAANG group, which guaranteed the strength of Wall Street.

EUR / USD returns above 1.17, but at night the range of changes was limited to around 20 pips. After breaking the last three weeks, the downward trend line USD / JPY remains close to 112.50. The GBP / USD has also been subject to high volatility in the last days compared to most of the G-10 pairs. Friday's minimum is almost 1.31 and yesterday's peak fell close to 1.33. Currently, the rate is at 1.3240.

On Tuesday the 17th of July, the event calendar is light in the important data releases, but the market participants should keep an eye on Claimant Count Change and Average Earnings Index in the UK, the Manufacturing Shipments data from Canada and Industrial and Manufacturing Production from the US. Moreover, there is a scheduled speech from Federal Reserve Chairman Jerome Powell later during the session.

NZD/USD analysis for 17/07/2018:

Among the major pairs today, NZD leads the way. Admittedly, consumer inflation reading for the second quarter was lower than expected (1.5% year-on-year with expected 1.6% year-on-year), but the show was steered by core inflation, whose dynamics at the level of 1.7% y/y was the highest since 2011. In addition, the reading of the indicator for the first three months of this year was revised upwards.

Let's now take a look at the NZD/USD technical picture at the H4 time frame. The rate is growing today by about 1.0% and is heading towards 0.6856 resistance on positive and strong momentum and there is plenty of room to the upside if this level is violated. The nearest support is seen at the level of 0.6792.

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Technical analysis of Silver for July 17, 2018

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At the 4-hour charts Silvers looks still moving in a Bearish bias with a low volatility, as long as the Silver does not break out and close above the 16.330 level usually sixty percent of the time the Silver will move in a Bearish bias at least for 3 days ahead.

(Disclaimer)

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Technical analysis: Intraday Level For EUR/USD, July 17, 2018

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When the European market opens, there's no Economic Data will be released from the Euro Zone, but The US will release the Economic Data such as TIC Long-Term Purchases, NAHB Housing Market Index, Industrial Production m/m, and Capacity Utilization Rate, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1767.

Strong Resistance:1.1760.

Original Resistance: 1.1749.

Inner Sell Area: 1.1738.

Target Inner Area: 1.1710.

Inner Buy Area: 1.1682.

Original Support: 1.1671.

Strong Support: 1.1660.

Breakout SELL Level: 1.1653.

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 17, 2018

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In Asia, Japan today will not release any Economic Data, but the US will release some Economic Data such as TIC Long-Term Purchases, NAHB Housing Market Index, Industrial Production m/m, and Capacity Utilization Rate. 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: 113.08.

Resistance. 2: 112.85.

Resistance. 1: 112.64.

Support. 1: 112.36.

Support. 2: 112.14.

Support. 3: 111.92.

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.

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

Elliott wave analysis of EUR/NZD for July 17, 2018

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Despite wave b/ moving higher to 1.7327, we continue to look for a deeper decline in wave c/ of ii/, closer to the 38.2% corrective target at 1.7067 and maybe even closer to the low of red wave iv at the 50% corrective target at 1.6971 before wave ii/ is complete and wave iii/ higher towards 1.8638 takes over.

Longer term we continue to look for this rally to continue higher towards our long-term target at 1.9831.

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 use the ongoing correction in wave ii/ to buy EUR. If the structure looks complete near 1.7067 we will buy there, otherwise we will buy near 1.6971 if possible.

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Elliott wave analysis of EUR/JPY for July 17, 2018

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EUR/JPY is now testing the 161.8% extension target for red wave iii and a correction should be expected anytime towards 130.87 and maybe even closer to 130.59 in red wave iv, before red wave v will be ready to take over, for a continuation higher towards 133.49 and the ideal target for black wave iii/ at 137.68.

Our preferred long-term count shows that a huge [B] wave triangle completed with the test of 124.59 and wave [C] to above 169.97 now is developing. As we still are in the very early stages of this [C] wave higher, the waves will be less clear, but as wave [C] builds it will become easier to extract the larger waves.

R3: 132.54

R2: 132.11

R1: 131.63

Pivot: 131.41

S1: 131.24

S2: 131.08

S3: 130.87

Trading recommendation:

We will use the coming correction in red wave iv to buy EUR. Ideally as close to 130.10 as possible.

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EUR/USD: Trump, Powell and G20

This week, the euro/dollar pair will focus more on verbal intervention by politicians and central bank officials than on macroeconomic statistics. The key economic indicators affecting the dynamics of the pair were published over the past two or three weeks. Non Farms, inflation indicators of the US and Europe, production indices and GDP for the second quarter caused the market to received a fairly complete picture in order to assess the prospects for monetary policy of both the ECB and the Fed. Now, the word depends on the representatives of regulators.

Also this week, we are waiting for a quite interesting and largely determining event. The Chairman of the Federal Reserve Jerome Powell will deliver a semi-annual report on economics and monetary policy for two days in the House of Representatives of the Congress. This event traditionally causes increased volatility in the market, and will certainly cause increased interest of traders due to the current conditions. Too many questions have accumulated to Powell in the light of recent events. First of all, his assessment for inflationary growth seems interesting. In his previous speeches, he quite positively assessed the US economic growth including inflation, and he said, "slowly but surely" goes to the target level of the Fed.

But the minutes of the last meeting showed that not all members of the Federal Reserve are confident that the key indicator demonstrates stable dynamics. The consumer price index in June grew by only 0.1% (on a monthly basis), and the growth rate of the average hourly wage after an increase of 0.3% in May last month returned to its "habitual" level of 0.2%. Such inexpressive figures with a steady increase in the number of employed - not quite a good combination. The general picture is also spoiled by unemployment, which unexpectedly increased to 4% (although this indicator still remains at a record low mark).

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In other words, the inflation dynamics remains ambiguous and Powell's position in this regard will play an important role. He can ignore indirect alarm signals and express confidence that inflation is systematically approaching the target level, or still focus on the weak growth of wages, voicing concerns about this fact. The dollar's reaction will depending on the tone of his speech.

The US foreign trade policy will also likely become the subject of discussion in the Senate. Not so long ago, the head of the Federal Reserve criticized the latest trends in this area. In his opinion, if high duties will be in effect for a long time, this will negatively affect the American economy. Taking into account the repeatedly voiced position of Trump (especially regarding the PRC), Powell's opinion on this issue has hardly changed.

That is, the market will assess the speech "tone" of the Federal Reserve Chair, while assessing also the possibility of the fourth rate hike in December. The confidence for the rate of the third time this year is expected to increase during the September meeting, and certainly will continue. But if the Powell report is too "dovish", the dollar will be under considerable pressure, since the probability of a fourth rate hike is projected to decrease. It is also worth noting that the documented speech of the Federal Reserve head can be published in advance, so do not be surprised if the market reacts to this report even before it is announced in the Senate.

However, the EUR/USD traders of will react this week not only to the speech of Jerome Powell, since the center of attention remains on Donald Trump due to the context of his trade confrontation with China as well as with the whole world. Yesterday, in an interview with an American television channel, Trump said that the EU and the PRC are "enemies of the United States." And if the EU treat this status "only on several aspects," then China is an economic enemy number 1, according to Trump. The market is gradually getting used to similar statements by the US president (imagine the reaction of traders if Obama had said such words a few years ago), but the stated position shows that it is still too far before the end of the trade war. Last week, the market hopes for a possible "truce" because of Beijing's restrained response to new duties from Washington.

By the way, the market will be able to assess the reaction of the financial world to the actions of the White House at the end of this week. The problem is that there will be a meeting of financial departments heads of the G20 countries schedule on July 19 to 22 in Buenos Aires. According to rumors, representatives of the EU countries will offer their colleagues to consider the draft reform of the World Trade Organization. The details of this project are still unknown, as well as the preliminary reaction of the leading countries of the world. But with a high degree of probability, it can be assumed that not only proposals for reforming the WTO will be heard at this meeting. The speeches of the representatives from the US, EU and China will make it possible to understand what steps these countries are willing to take in the course of developing a trade war.

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Thus, despite the lack of important macroeconomic news for the euro/dollar pair, we are expecting a fairly volatile week. Technically, the price was fixed above the middle line of the Bollinger Bands indicator on the daily chart, so the pair's bulls are open to the upper line of the above indicator - 1.1770 at the moment.

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

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Wave analysis of GBP / USD for July 16. The British pound rebounded from the lows, but still tends to fall

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Analysis of wave counting:

On July 13, the GBP/USD pair gained about 30 bp, although during the day the amplitude of the instrument moves much higher. Despite the increase in quotes, the pair is expected to remain within the framework of the wave construction of 5, at 3, in a, with a target of about 200.0%. In this case, the pair will resume the decline from the current positions or slightly higher. Since the whole wave 3, in a takes the form of a diagonal triangle, its internal wave 5 can turn out to be the most extended. There are no basis for the assumption of breaking the execution of the working level alternative.

Goals for buying:

1.3445 - 0.0% Fibonacci (official target)

Goals for selling:

1.3054 - 161.8% by Fibonacci

1.2962 - 200.0% by Fibonacci

1.2809 - 261.8% Fibonacci retracement

General conclusions and trading recommendations:

The GBP/USD pair continues to build wave 5, at 3, in a. Thus, the decline in quotations may resume, and it is recommended to sell the pair with the targets near the marks of 1.3054 and 1.2962, which corresponds to the 161.8% and 200.0% of Fibonacci. Only the breakthrough of the maximum proposed wave 4 will indicate the willingness of the instrument to build an upward set of waves and will require updating corrections to the current wave figure.

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

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

The pound came under fire from the White house

When Donald trump begins to comment on what is happening in the market or in any particular country, investors are nervous. His interview with the Sun newspaper shocked fans of the British pound. The US President criticized Theresa May's plan of the agreement with the EU and called the retired Foreign Minister Boris Johnson a great politician, which reduced the likelihood of strengthening trade relations between London and Washington and forced the GBP/USD quotes to collapse to the bottom of the 31st figure. After the meeting between Trump and May, it turned out that the press was misinterpreted by the information, and the owner of the White House was looking forward to Brexit, then to go on rapprochement with the UK.

Politics remains to be the joker who at any moment can appear on the table and change the balance of power in the currency pairs connected with the sterling. The pound reacted positively to the resignation of supporters of the hard Brexit Boris Johnson and David Davis, but as new layoffs in the government arose, the question emerged as to whether Theresa May will be able to maintain her post? And then such revelations from Donald Trump! I would venture to assume that he was dissatisfied with the content of the program of the British Prime Minister, seriously expecting the break of many ties. In fact, the draft agreement is a document in which only the financial services sector will suffer from divorce. Otherwise, it makes only minor adjustments to the existing relationship.

Deutsche Bank believes that investors will soon cease to be nervous and will find the strength to buy the GBP/USD. The bank forecasts the pair to grow to 1.41 by the end of this year, which contrasts with the median estimate of Bloomberg experts (1.34). As the main argument in favor of its "bullish" position Deutsche Bank leads soft Brexit.

Forecasts for GBP/USD

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The second important driver of the change in the pound's quotes is the normalization of the monetary policy of the BoE. Sterling will have a very interesting week in terms of the economic calendar, which allows us to call it the most interesting G10 currency. Releases of data on the labor market, inflation, retail sales and the size of net borrowing of the private sector will keep fans of the "sterling" in suspense.

In general, the situation has much in common with the May events, when the futures market estimated the probability of an increase in the repo rate at the Bank of England's next meeting at 80% or above. This is the figure that appears now in relation to the August meeting of the Committee on Monetary Policy. Then the "dovish" rhetoric of Mark Carney and the block of disappointing statistics became the starting point of the GBP/USD peak. Since then, the pair has lost about 9%, the head of the BoE has replaced anger to mercy, and the number of "hawkish" MPC, ready to tighten monetary policy even tomorrow, increased from two to three.

Technically, after reaching the target by 88.6% on the "Double top" pattern, a natural rebound in the direction of 23.6%, 38.2% and 50% of the CD wave followed. The development of the "bullish" attack on GBP/USD is facilitated by the implementation of the "Wolfe Wave" model.

GBP/USD daily chart

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Weekly review of the GBP/USD from July 16, 2018

Politics periodically takes over and becomes the main driving force in the market. Although politics is nothing more than the continuation of the economy, and everything should be the other way around. However, oddly enough, the market reaction to political events over the past week is fully consistent with the general tendency to strengthen the dollar. So there was no contradiction between economics and politics.

The first event was the resignation of two ministers in the UK. The ministers for Brexit and foreign affairs resigned. They explained their decision by disagreeing with the desire of Theresa May to sign a soft exit from the European Union, implying the preservation of existing trade agreements. In their opinion, it is contrary to the will of the people expressed during the referendum. Thus, there was a threat of a development of political crisis, and on the horizon loomed the specter of early parliamentary elections. And this is just nine months before the final withdrawal of the UK from the European Union. Naturally, such tricks do not add confidence in the future, which immediately affected not only the pound, but also the single European currency. The issue concerns both sides of the negotiation process.

Investors did not have time to take a breather and rejoice at the fact that early elections in the UK are not expected, as Donald Trump arrived in Europe, who immediately began to behave like an elephant in a China shop. His first destination was Brussels, where he took part in the summit of the heads of state of NATO. Even during the election campaign, Donald Trump was much indignant about the fact that NATO allies were not too quick to deal with their own defense, which forces the US to spend too much money on military spending. Including to ensure the security of Europe. Immediately after winning the presidential election, he immediately began to fulfill one of his campaign promises and began to demand from allies to increase military spending to a minimum of 2.0% of GDP set by NATO rules. Long breaking, and without much enthusiasm, the European allies agreed to increase defense spending to the set minimum, though not immediately, but by 2025. Apparently, Donald Trump took time to realize the fact that even if he will be re-elected for a second term, by the date indicated by the Europeans, he will in any case leave the White House with things. So, as he arrived in Brussels, Donald Trump demanded from the European allies for NATO to immediately increase military spending to 2.0% of GDP. From this pressure, many of the European leaders, apparently, began to quickly change diapers, and investors continued to sell the single European currency. The fact is that European countries cannot increase defence spending. More precisely, they can, but only by increasing taxes, which are already one and a half times higher than in the US, increasing government borrowing, of which they already have so much that they do not know what to do with all this, or by cutting social spending, which they already finance at the expense of debts. Thus, the only thing the Europeans can do is cut it alive, that is, to reduce social spending. Naturally, the voters will not understand them, and very soon there will be other politicians in Europe, but the current ones do not really want to part with their warm places. For them, such a reversal would be political suicide. Well, the funny thing is that this step will destroy the European social paradise.

Satisfied with the scent of a childish surprise in Brussels, Donald trump went to London. After a meeting with Theresa May, it occurred to someone that Trump should be given the microphone, and the US president immediately shared his thoughts about what would be better if the British prime minister was Boris Johnson, who recently resigned as foreign minister. It sounded so that it is categorically unclear whether he expressed his private opinion or the position of the White House. In any case, investors are again worried about the political crisis in the UK, which may result in early elections. Naturally, in anticipation of the issuance of the divorce between Britain and Europe, this adds only acute sensations.

As mentioned earlier, political equilibrium fully fits into the economic logic of the further strengthening of the dollar. After the controversial data on the labor market, data came out for open vacancies, the number of which decreased from 6,840 thousand to 6,638 thousand. For a short time this added concern, but the data on applications for unemployment benefits, which fell by 21 thousand, somewhat reduced jitters. In particular, the number of initial applications for unemployment benefits decreased from 232 thousand to 214 thousand, and repeated from 1,742 thousand to 1,739 thousand. Most of all, investors were pleased with the data on inflation, which further encouraged market participants. Thus, the growth rate of producer prices accelerated from 3.1% to 3.4%. In turn, the final data on inflation confirmed its growth from 2.8% to 2.9%. So market participants can still hope that by the end of the year the Fed will raise the refinancing rate not once, but twice.

If you look at the British data, the pound clearly had reasons for the decline. The fact is that the growth rate of industrial production has slowed from 1.6% to 0.8%, so there is no reason for joy.

Perhaps the main event of the week is the meeting between Vladimir Putin and Donald Trump, which will be held on Monday in Helsinki. Given that Donald Trump had much fun speaking in Europe, as well as his desire to oust European and Chinese manufacturers from the American market, he can present another surprise. It is possible that the meeting will be followed by not the most joyful statements about Europe, which will negatively affect the mood of investors.

But even without a political show, we will have a very busy week. Thus, in the US, a sharp slowdown in the growth rate of retail sales from 5.9% to 3.7% is expected, which will make everyone remember the growth of inflation, which is ahead of wage growth. But almost immediately after that, the dollar will be given a chance to improve its position somewhat due to data on industrial production, the growth rate of which can accelerate from 3.5% to 3.9%. So Donald Trump can once again shout that he is fulfilling his election promise to return the production to the United States. In addition, the total number of applications for unemployment benefits should be reduced by 3 thousand. Although this is not enough, this should be due to repeated applications, the number of which can be reduced from 1,739 thousand to 1,730 thousand. The number of initial applications for unemployment benefits, as is expected to increase from 214 thousand to 220 thousand data on repeated applications for unemployment benefits are more important, as they give an understanding of long-term unemployment. Also, although the number of construction projects starts may decrease by 4.0%, the number of construction permits issued should increase by 6.0%. In general, the data are expected to be multidirectional, and it is quite difficult to draw a certain conclusion.

Fortunately, there are quite a lot of statistics in the UK that can help market participants determine their preferences. Everything will start with the data on the labor market, which are expected to be quite alarming. The fact is that with the stability of the unemployment rate, as well as the growth rate of average wages, including bonuses, the number of applications for unemployment benefits is projected to increase by 2.3 thousand, as well as the slowdown in the growth rate of average wages without bonuses from 2.8% to 2.7%. This is a clear deterioration of the situation in the labour market. Moreover, inflation should accelerate from 2.4% to 2.6%, and against the background of a slowdown in average wage growth, this looks extremely alarming. Although the growth of inflation will be perceived positively, as investors will have more reasons to hope for an increase in the refinancing rate of the Bank of England. Also, there will be data on retail sales, the growth rate of which should remain unchanged. As a result, inflation is expected to rise and wage growth to slow down. In general, the picture is neutral, as after the negative data, a positive one is expected.

In other words, if you look at the forecasts for macroeconomic indicators, you should expect the consolidation of the pound at the mark of 1.3250. However, Donald Trump can again surprise, and then the pound will drop to 1.3150.

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

BITCOIN Analysis for July 16, 2018

Bitcoin has been quite indecisive below $6,500 price area earlier which is being taken out with a daily candle currently. After the recent hack attack which injected insecurity among market participants, the price has been quite volatile which even made the price reside below $6,500 area for a certain period. Though there have been certain rumors about a ban on crypto trade in some countries, speculators assume the overall Crypto market to gain its pace by the end of July that could push BTC price much higher in the coming days. At present, the price is heading towards the Kumo Cloud which may act as strong resistance. However, if price manages to remain above $6,000-6,500 area with a daily close in the coming days, the bullish pressure is likely to push the price higher towards $8,000 in the future without much bearish intervention in the process.

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Fundamental Analysis of USD/JPY for July 16, 2018

USD/JPY has been quite volatile and bearish in nature recently. The prive is expected to drop lower towards 111.00 support area in the coming days. Despite upbeat economic data today, JPY managed to sustain the bearish momentum it formed earlier.

Due to the observance of Marine Day, today Japan did not present any economic report. On Thursday, Japan's Trade Balance report is going to be published which is expected to increase to 0.15T from the previous figure of -0.30T and on Friday National Core CPI report is going to be published which is also expected to increase to 0.8% from the previous value of 0.7%.

On the USD side, 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% as well and 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.

At present, JPY is quite optimistic ahead of the upcoming economic reports. It is expected to draw attention of the bears in the pair, leading to certain gains over USD. Traders took little notice of upbeat retail sales report from the US, so USD is trading slightly lower that may lead to further weakness in the coming days.

Now let us look at the technical view. The price is currently struggling at the edge of Channel Resistance above 112.00 area. As for the current formation, the price is expected to push lower as the current price is quite away from the mean of 20 EMA which may result to certain bearish pressure in the pair before pushing much higher in the future. As the price remains above 110.50 area with a daily close, the bullish bias is expected to continue in this pair.

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