GBP / USD: Do not buy a pound on the eve of "super-Thursday"

The market is almost 100% sure that the Bank of England tomorrow will raise the interest rate by 25 basis points at the end of the August meeting. The alternative scenario is almost not taken into account, despite the increased uncertainty around Brexit and the weaker inflation data for June. Such excessive self-confidence of the market is fraught with consequences if the English regulator decides to postpone the tightening of monetary policy.

Tomorrow, the so-called "super-Thursday" is expected. Within a single day, several important events will take place. The Bank of England meeting, the quarterly inflation report, the monetary policy summary, Mark Carney's press conference, and the PMI data in the UK construction sector . This "news jackpot" is relatively rare, so we are expecting a fairly volatile day.

Let me remind you that the latest data on the growth of British inflation disappointed traders. In June, the consumer price index rose by 2.4% year-on-year with a forecast of growth of 2.6%. Thus, inflation remained at the May level, which is the minimum since the beginning of this year. Strezhevoy index of consumer prices and did a "dive" at a two-percent level, being at around 1.9% (with a growth forecast of 2.2%). In monthly terms, the indicator also did not reach the forecast values, demonstrating a slowdown in growth.

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Wage growth rates also leave much to be desired, with a significant strengthening of the labor market, salaries in Britain remain at a six-month low. The disproportion in the growth of inflation and the level of wages testifies to the increase in the cost of living in the country of Foggy Albion, and the rate increase, in turn, will only exacerbate this trend.

Also, one should not forget about the increasing risks of the "hard" Brexit. At the parliamentary hearings on inflation, the head of the Bank of England warned of the extremely negative consequences of such a scenario. In particular, Mark Carney stated that if Britain withdraws from the EU without a deal, then the country will have to rely on the terms of the World Trade Organization. According to Carney, this circumstance will put Britain "in the worst economic situation." The head of the British regulator even allowed the probability that the monetary policy will be revised, and the work of many financial institutions "will be in question."

These were voiced by Mark Carney in mid-July. Since then, the situation with Brexit has not improved. On the contrary, the text of the White Paper rejected by Brussels (the British scenario of further relations between London and Brussels) has put the parties in a difficult situation. Now, Theresa May prepares for the next round of talks, which will be held in mid-August with her personal participation. The fate of the deal largely depends on their success, because in October, the parties must outline the general outline of the future agreement. While at the moment, the key issues (the Irish border, access to a single market, migration problem) have not yet been resolved. It is difficult to predict (or rather, impossible) the outcome of the August talks. On the one hand, Theresa May is somewhat willing to compromise, but, on the other hand, her proposals still put the British in a privileged position, and this fact is quite reasonably disliked by Brussels.

At the same time in London, there is increasing talk about the fact that the parties will not agree on anything. Literally today, the newly-made head of the British Foreign Ministry Jeremy Hunt said that at the moment there is a "high risk of chaotic secession." In his opinion, this will be a big mistake with negative consequences but at the same time, London is allegedly being pushed to such an outcome. Hunt hinted that now, there is a "game of nerves", and Brussels is waiting for the moment when London will cede on key issues. However, in the opinion of the head of the British Foreign Ministry, "this is by no means going to happen." All this suggests that Brexit remains the No. 1 problem for the English regulator. The slowdown in the growth of inflation and the weak dynamics of the level of wages against this background play a secondary role.

What are the arguments in favor of the version about raising the rate at tomorrow's meeting? First, inflationary pressure in the country (despite some decline) allows the regulator to raise the rate by 0.25%. Secondly, after a slowdown in the beginning of the year, the British economy shows moderate growth: according to the latest data, the country's GDP in May grew by 0.3% after the April growth of 0.2%. More "fresh" figures are not available at the moment, as the National Statistical Office of Britain now publishes the corresponding report six weeks after the end of the quarter (earlier, a month later). Thus, the statistical department decided to minimize the number of subsequent amendments and adjustments.

The rhetoric of some representatives of the English regulator also indicates the readiness of the Central Bank to take decisive action. For example, Michael Saunders recently said that the Central Bank may even surprise the markets with a faster increase in interest rates "than is currently expected." True, such a scenario, according to him, is possible only with a smooth and predictable Brexit and provided stable economic growth.

In my opinion, the probability of a rate increase at tomorrow's meeting is very high, but not 100%. This suggests that buying a pound paired with the dollar is now extremely risky. Indeed, if the regulator hesitates, the pound will noticeably weaken all over the market. In addition, the Bank of England may tomorrow lower forecasts for the economy and inflation, thereby exerting pressure on the pound (even with an increase in the interest rate). Rhetoric Mark Carney is unlikely to have a "hawkish" character, given the tone of his speech in Parliament.

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All these factors indicate that the pound has a weak chance of a large-scale recovery, despite the high probability of a rate hike. Only the "pigeon" position of Mark Carney, which was voiced by him in the middle of July, can serve as a contrast to the expected rate increase and due to this factor, the growth of GBP / USD is possible in the mid-32nd figure area. All other factors, unfortunately, are not on the side of the British currency. If the regulator shows excessive caution, the pair will return to the annual minimum of 1.2957.

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EUR / USD. Should I pay attention to the IMF report?

The euro-dollar pair stayed briefly yesterday within the framework of the 17th figure. The growth of key European indicators and the weakness of the American Core PCE could not hold the price at daily highs. By the end of the day, the pair had returned to previous levels.

The mood of traders was spoiled by the International Monetary Fund, which recalled the Greek debt problem. The Greeks last attracted attention more than a year ago (in May 2017), when Athens announced that another payment of 7 billion euros is inestimable for the country. But then, the crisis was avoided. In July 2017, the European Stability Mechanism (ESM) agreed to give Greece another tranche of aid of 8.5 billion euros, to service the debt and to pay off the "body" of debt. Traders breathed a sigh of relief and safely forgot about the problem of Greek debts, although the problem itself did not go away.

Actually, this fact was reminded in the IMF. The fact is that in August, Greece will withdraw from the external support program of ESM with a huge external debt, which is about 180% of the country's GDP. The reforms carried out brought their result, and at the moment, the liquidity reserve reached 24 billion euros, this amount is enough to service the debt for the next two years.

This fact is recognized by the IMF, more distant prospects have become a cause for concern. According to Christine Lagarde, the Greeks will not be easy to ensure the growth of the country's economy to 3.5% by 2022, although such ambitions are voiced by Athens. Lagarde warned that there are political risks in the country, a high probability of "reform fatigue", the potential for increased unemployment and slow growth in trade. All these factors, according to the head of the IMF, can lead to the fact that the volume of reserve cash reserves in four years will drop to 12 billion euros.

Thus, the International Monetary Fund, on the one hand, recognized the real successes of the Greek government (last year real GDP growth was 1.4%), but, on the other hand, noted a high degree of uncertainty about the future prospects (in the period 2021-2022 and further).

Here, it is worth recalling that at the end of June, the Eurogroup approved the completion of the third macro-financial assistance program for Greece. Brussels extended for ten years the maturity of EFSF (European Financial Stability Facility) loans and agreed on a preferential 10-year regime for interest payments on these loans. As for direct financial assistance (it is about 15 billion euros), this tranche is also agreed by the Eurogroup, 5.5 billion will be used to service the Greek debt, and the remaining 9.5 will be used as a monetary pillow.

But, there is one "but", that the above money was transferred to the Greeks by ESM, the consent of the governments of all EU countries is necessary. On July 13, all heads of finance ministries of the euro area approved this issue, except Germany. The Germans took this decision because the Greeks had postponed the date of raising taxes on sales. However, according to most experts, this is a temporary hitch. Athens, in the end, will not risk a trench, and the Germans, in turn, will not risk the financial stability of the eurozone. Therefore, with a high probability of this tranche will be approved in the foreseeable future.

It is also worth noting that the representatives of the Greek government did not agree with the conclusions of the IMF. In their opinion, the currency fund unnecessarily dramatizes the situation, focusing on the weaknesses of the Greek economy and ignoring the impact of the reforms. Just a month ago, the Greeks again "tightened their belts". In Greece, they reduced the level of income that is not taxed, reduced the size of pensions to new pensioners, reduced social spending and approved the privatization of a number of state companies. Just a few weeks, after the adoption of this package of laws, S&P upgraded Greece's credit rating from "B" to "B +" (outlook "positive" rating).

In other words, the problem of Greek debts is not on the agenda and in the coming years will not be relevant. Why did the European currency react so sharply to such distant forecasts? According to some analysts, Christine Lagarde cast a "shadow of doubt" on the feasibility of completing the QE at the end of this year, although the report does not directly mention this. Against the backdrop of strong inflation and a decrease in unemployment, the IMF report yesterday became a kind of "contrast shower", which cooled the bulls EUR / USD.

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However, such fundamental factors do not have a long-term impact on the market. The voiced prospects look too remote, and there are too many "ifs" in the IMF scenario. Therefore, today, traders will switch to the meeting of the Federal Reserve, the results of which will be determined by the vector of movement EUR / USD. If the tonality of the accompanying statement will be cautious and pigeon-like, the pair will quickly restore its positions, especially against the background of the growth of European inflation. The main objective of corrective growth remains the same, 1.1760 (the upper line of the indicator Bollinger Bands on the daily chart).

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GBP / USD. August 1. The trading system "Regression channels". The fundamental background for the pound remains negative

4-hour timeframe

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Technical data:

Senior channel of linear regression: direction - down.

The younger channel of linear regression: direction - down.

Moving average (20; flattened) - sideways.

CCI: -86.0315

The currency pair GBP / USD on July 31 could not develop the upward movement and was fixed back below the moving average line. If you look at the technical picture as a whole, you can clearly see that each next maximum is lower than the previous one. And this says only about one thing, a downward trend in the pair remains. Today, the results of the Fed meeting will be announced, and tomorrow, the results of the meeting of the Bank of England. There are certain chances for strengthening the British currency. For example, if today, the rhetoric of representatives of the Fed is "soft" (although there are no prerequisites for this), and tomorrow, the Bank of England will raise the key rate (the probability of which is quite high). However, even if one or both of these conditions are met, the pound will receive support only in the short term. The problems of Britain, political and economic, will not disappear anywhere. Questions on Brexit are still much more than answers. The number of satisfied politicians Theresa May falls every day, like the ratings of the prime minister. Thus, from our point of view, even tightening monetary policy will not save the pound from further decline. If the Bank of England does not take such drastic measures, it can even more disappoint traders, and the pound sterling may go into a new free fall.

Nearest support levels:

S1 = 1.3062

S2 - 1,3000

S3 - 1.2939

Nearest resistance levels:

R1 = 1.3123

R2 = 1.3184

R3 = 1.3245

Trading recommendations:

The currency pair GBP / USD was fixed below the removals. Thus, on August 1, it is recommended to open or support already open shorts with a target of 1.3062. In the evening, there may be more movement or a sharp turn. Therefore, before the meeting of the Fed, it is recommended to move the Stop Loss level to a break-even point or be ready to close shorts.

The buy-positions will become again relevant only after the reverse fixing of the bulls above the removals. In this case, the pair will get another chance to form an uptrend with the first target of 1.3184.

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

Explanations for illustrations:

The upper channel of linear regression is the blue lines of unidirectional motion.

The junior channel is linear-violet lines of unidirectional motion.

CCI - the blue line in the regression window of the indicator.

Moving average (20; smoothed) - the blue line on the price chart.

Levels of Murray - multi-colored horizontal stripes.

Heikin Ashi is an indicator that color bars in blue or purple.

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The outcome of the Fed meeting and strong statistics will support the dollar

Today, the focus of the market will be the result of the Fed's meeting on monetary policy. The market is confident that the bank will not change interest rates, but investors will be interested in further plans to increase them in the future.

According to the dynamics of futures on federal funds rates, the probability of an increase in rates following the results of a two-day meeting is insignificant. Investors are convinced that the cost of borrowing by the regulator will not change. Market players will be interested in the prospects for further monetary exchange rate of the Fed. If the promulgated resolution talks about the prospects for strong economic growth and the risk of a further increase in inflationary pressures, this will be the actual confirmation that the Central Bank will continue to raise rates at least until the end of this year. Also, strong confirmation of this fact will be the mention of the need for this process by J. Powell at his press conference, which will be held after the meeting. So, if the outcome document of the Fed, as well as its head will be concerned about the prospects for rising inflation and in every way point out that economic growth will remain strong, this will be the most vivid confirmation that we should expect two more rate hikes by the end of this year.

Given such a likely attitude of the Fed, we think he may decide to raise rates at the September and December meetings. As for the likely current reaction of the market, the overall positive mood of the regulator will support the rate of the US currency.

Strong data on private sector employment from ADP and possibly better than expected from the US PMI (PMI) are also positive. If the values of the indicator are higher than the projected 59.4 points, then this will be an additional strong dollar-supporting factor.

In general, assessing the likely dynamics of the currency market, more precisely currency pairs, where the US dollar is present, we believe that today we should expect a local growth of the US currency.

Forecast of the day:

The currency pair EUR / USD is trading above the level of 1.1675. The pair is under pressure as a result of the expectation of a positive outcome for the dollar of the Fed meeting. Lower prices below this level could be the reason for its fall to 1.1600-25.

The currency pair USD / JPY is trading above 112.05 on the wave of a clear discrepancy in the monetary rates of the Japanese Central Bank and the Fed. The good outcome of the meeting of the Federal Reserve, as well as positive data from the labor market and production indicators may push the pair to further increase to 112.80.

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Forecast for EUR / USD as of August 1, 2018

EUR / USD

On Tuesday, the euro expectedly rose to the upper limit of the range of 1.1654-1.1750 and from there, it moved in the opposite direction on the current good US economic indicators and the expectation of subsequent events. But the first news that delayed the euro was eurozone GDP that was released in the second quarter, growth was below the forecast, 0.3% against 0.4%. The personal income of consumers in the US in June increased by 0.4%, personal expenses also increased by 0.4%, the data came out at the level of forecasts. A nice addition was the index of business activity in the manufacturing sector of the Chicago region, which showed the July rise to 65.5 from 64.1 with 61.9 expectations. Consumer confidence increased from 127.1 to 127.4, the forecast was 126.5.

Today, US Manufacturing PMI will be released from the ISM Institute in July, the forecast assumes a fall from 60.2 to 59.4, but yesterday's Chicago index data give grounds for the best result. The change in the number of jobs in the private sector according to the ADP for July is expected to 186 thousand against 177 thousand in June. At 19:00 London time, the FOMC Federal Reserve announces a decision on monetary policy. No change is expected. Even the head of the Fed, Jerome Powell, who was previously going to give a press conference after each FOMC meeting, will not speak after today's meeting.

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Technically, the price went to the combat position to attack the level of 1.1574, this is the low of July 19 and the support of the Krusenstern trend line (blue) on the daily chart. This readiness is indicated by the transition of the Marlin signal line to the negative number zone and the pure bearish signal on the four-hour chart.

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Here, the price went under the red balance sheet and the trend line, the oscillator Marlin also moved into the zone of negative numbers. The success of the price will be accompanied only by a rapid downward movement to overtake the balance line on the daytime, in which case the price will be fixed under it and facilitate further decline.

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Intraday technical levels and trading recommendations for EUR/USD for August 1, 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 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 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 again towards 1.1750 (the lower limit of the depicted supply zone) where another episode of bearish pressure was initiated this week.

That's why, the EUR/USD pair remains trapped within the consolidation range of 1.1750-1.1520 until breakout occurs in either direction.

Conservative traders should be waiting for a bullish breakout above 1.1750 as a valid bullish signal. Bullish targets would be located around 1.1850 and 1.1990.

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

NZD/USD Intraday technical levels and trading recommendations for August 1, 2018

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The NZD/USD pair had been trapped between the price levels of 0.7170 and 0.7350 until the 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.

The 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 a recent bullish reversal pattern (123 pattern) which enhances the bullish side of the market. Recent signs of bullish weakness were manifested on the chart.

The bulls are failing to maintain enough bullish momentum above 0.6820. Bullish fixation above 0.6820 should be maintained in order to allow further bullish advancement towards 0.6900 and 0.6980.

Trade Recommendations:

The price zone 0.6750-0.6800 still constitutes a demand zone to be considered for a valid BUY entry.

Bullish persistence above 0.6820 is needed to provide enough bullish momentum towards 0.6900 then probably 0.6980.

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

Control zones of GBP / USD pair 01.08.18

Last week, an accumulation zone was formed. The price is squeezed between two control zones and the outflow of which will indicate the further direction of trade in the first half of August.

Yesterday, the a control zone at 1.3151-1.3145 was tested, which led to the appearance of a proposal and the absorption of the growth of the European session. This fact allows us to consider the work within the medium-term accumulation zone. Sales from current marks are not profitable until the confirmation of a downward impulse. This will happen if the closure of today's US session occurs below the 1/2 control zone of 1.3084-1.3072.

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The goal of the fall will be the weekly control zone of 1.2956-1.2930, within which the July minimum is located. This will provide an opportunity to fix most of the sales and consider the formation of a reversal model.

For the resumption of growth will require the emergence of large demand in testing the a control zone of 1.3084-1.3072. This will indicate a high probability of a second weekly test of 1.3239-1.3213. The ratio of risk to profit in purchasing on the upward model will be 1 to 4, which makes them profitable. Working in the current flat medium-term zone allows you to take profit on its boundaries and look for patterns of entry. An important criterion is the favorable risk-to-profit ratio. If this relationship cannot be reached, it is better to skip the deal.

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The daytime CP is the daytime control zone. The zone formed by important data from the futures market that change several times a year.

The weekly CP is the weekly control zone. The zone formed by marks from important futures market which change several times a year.

The monthly CP is the monthly control zone. The zone is a reflection of the average volatility over the past year.

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

EUR / USD. July 31st. Results of the day. Euro is traded in different directions on the eve of the Fed meeting

4-hour timeframe

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Amplitude of the last 5 days (high-low): 62p - 75p - 104p - 43p - 71p.

The average amplitude for the last 5 days is 71n (70p).

On Tuesday, July 31, the EUR / USD currency pair traded higher during the European trading session, and with a decrease on the American session. Traders do not have now a common opinion about whether to buy or sell the euro. Today, several macroeconomic reports have been published in the Eurozone. So, it became known that the unemployment rate fell to 8.3% in June. The preliminary value of GDP growth for the second quarter is 2.1% against the previous value of 2.5% and the forecast of 2.2%. And the consumer price index rose to 2.1% in July (also according to preliminary estimates).

In general, a controversial package of macroeconomic information, but it still had little support for the euro, which, however, was offset by pressure on the US trading session. Thus, the situation on the instrument practically did not change for the second trading day of the week. Market participants have already fully focused on tomorrow's meeting of the Fed, or rather on its results and although the rate will most likely not change, all of the same attention will be riveted to this event.

In particular, to the accompanying statements of Fed representatives and Jerome Powell. It is expected that the head of the Federal Reserve will touch on the topic of new trading conditions initiated by Donald Trump, as well as "truce" with the European Union. Earlier, Powell indicated his concern with the trade war between the EU and China. Now, on the contrary, he can soften his position or, at least, say that he personally, as well as, the Federal Reserve expects as consequences of Trump's actions in the international arena. He can also comment on Trump's accusations that the Fed often tightens monetary policy quickly, which complicates the process of servicing US public debt. In general, one way or another.

Trading recommendations:

For the EUR / USD pair, the first target was 1.1731 and traders could not overcome it. Thus, there can be a correction that can be worked out today and tomorrow in the morning by small lots with the aim of the critical Kijun-sen line.

Long positions are recommended to be considered after the completion of the current correction or in case of overcoming the level of 1.1731. In this case, the short-term uptrend will continue with the target of 1.1768.

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.

Chikou Span is a green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and histogram with white bars in the indicator window.The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of AUD/USD for August 01, 2018

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Overview:

The daily strong resistance of the AUD/USD pair is seen at the price of 0.7474. The AUD/USD pair dropped 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. However, if a breakout takes place at the resistance level of 0.7550, then this scenario may become invalidated.

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Technical analysis of GBP/USD for August 01, 2018

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Overview:

The GBP/USD pair is still trading around the spot of the pivot point (1.3115). The GBP/USD pair is in the bullish trend from the support levels of 1.3056 and 1.3115. The price is currently in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. As the price is still above the moving average (100), immediate support is seen at 1.3115, which coincides with daily pivot point. Consequently, the first support is set at the level of 1.3115. So, the market is likely to show signs of a bullish trend around the spot of 1.3115. In other words, buy orders are recommended above the pivot (1.3115) with the first target at the level of 1.3209. Furthermore, if the trend is able to break out through the first resistance level of 1.3209. We should see the pair climbing towards the double top (1.3362) to test it in the long term. It would also be wise to consider where to place a stop loss; this should be set below the second support of 1.3056.

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GBP/USD analysis for August 01, 2018

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Recently, the GBP/USD has been trading downwards. The price tested the level of 1.3120. Anyway, according to the H1 time frame, I found the rejection of the support (upward trendline), which is a sign that selling looks risky. I also found breakout of the intraday supply trendline, which is another sign of strength. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 1.3175 and at the price of 1.3212.

Resistance levels:

R1: 1.3128

R2: 1.3143

R3: 1.3160

Support levels:

S1: 1.3097

S2: 1.3080

S3: 1.3065

Trading recommendations for today: watch for potential buying opportunities.

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Daily Technical Analysis - 1st August

Daily Technical Analysis - 1st August

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AUD/NZD Reversed Off Resistance, Prepare For Further Drop!

AUD/NZD reversed off its resistance at 1.0915 (61.8% Fibonacci extension, 76.4% & 50% & 50% Fibonacci retracement) where it is expected to drop further to its support at 1.0857 (100% Fibonacci extension, horizontal swing low support).

Stochastic (34, 5, 3) reversed off its resistance at 89% where a corresponding drop is expected.

AUD/NZD reversed off its resistance where we expect to see a further drop.

Sell below 1.0915. Stop loss at 1.0944. Take profit at 1.0857.

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USD/JPY Approaching Resistance, Prepare For A Reversal!

USD/JPY is approaching its resistance at 112.19 (61.8% Fibonacci extension, 61.8% Fibonacci retracement, horizontal pullback resistance) where a reversal is expected, causing the price to fall to its support at 111.25 (100% Fibonacci extension, 61.8% Fibonacci retracement, horizontal pullback support).

Stochastic (55, 5, 3) is approaching its resistance at 97% where a corresponding reversal could occur.

USD/JPY is approaching resistance where we expect to see a reversal.

Sell below 112.19. Stop loss 112.66. Take profit at 111.25.

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#theforexarmy #forexsigns #forexsignals #forexfamily #forexgroup #forexhelp #forexcourse #forextrade #forexdaily #forexmoney #forexentourage #forextrading #forex #forexhelptrading #forexscalping #babypips #forexfactory #forexlife #forextrader #financialfreedom #daytrader #scalper #swingtrader #fx #currency #pips #technicalanalysis #forexmarket

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Bitcoin analysis for August 01, 2018

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Trading recommendations:

According to the H4 time - frame, I found that price rejected from the demand zone (support), which is a sign that selling looks risky. I also found the rejection of the upward trendline, which is another sign of potential strength. My advice is to watch for potential buying opportunities. The upward target is set at the price of $8.445.

Support/Resistance

$7.774– Intraday resistance

$7.413– Intraday support

$8.445 – Objective target

With InstaForex, you can earn on cryptocurrency's movements right now. Just open a deal in your MetaTrader4.

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USD/CHF analysis for August 01, 2018

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Recently, the USD/CHF has been trading upwards. The price tested the level of 0.9930. According to the H1 time – frame, I found a potential end of the fifth wave (Wolfe wave pattern), which is a sign that selling looks risky and that buying is preferable. My advice is to watch for potential buying opportunities on the pullback. The projected upward targets are set at the price of 0.9980 and at the price of 1.000.

Resistance levels:

R1: 0.9934

R2: 0.9945

R3: 0.9956

Support levels:

S1: 0.9912

S2: 0.9900

S3: 0.9890

Trading recommendations for today: watch for potential buying opportunities.

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BITCOIN Analysis for August 1, 2018

Bitcoin has been quite bearish with the recent momentum which leads the price to reside below $8,000 after breaking it with a daily close earlier. After breaking above the $8,000 area, the price was quite corrective leading to certain contraction in the process which was expected to lead to a higher impulsive leg with target towards $10,000 but as the price was quite away from the mean price i.e. the dynamic level of 20 EMA, certain retrace lower is not a surprise. Currently the price is expected to push higher as it got confluence with the dynamic level of 20 EMA today which is to lead the price towards $8,000 and later towards $10,000 if a daily close above $8,000 is observed in the coming days. As the price remains above $6,500 with a daily close, the bullish bias is expected to continue further.

RESISTANCE: 8,000, 10,000

SUPPORT: 6,500

BIAS: BULLISH

MOMENTUM: RETRACING & VOLATILEanalytics5b615594955e1.png

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The dollar completes the trend to strengthen

The FOMC meeting, which ends today, is unlikely to bring any surprises that could lead the markets out of balance. It is expected that the target range for the rate will remain unchanged, and the only thing that can give at least some information is a accompanying statement, which, however, is also unlikely to undergo any changes.

Everything that the Committee would like to change at the current stage, was done at the June meeting, removing from the text a few proposals and making it clear to the markets that the rate is now close to neutral. Since at a recent congressional hearing, Federal Reserve Chairman Powell did not propose any new interpretations for the current policy, it is unlikely that this will be done at today's pass-through meeting.

High optimism about the prospects of the US economy remains, as evidenced by the indicators from the University of Michigan and NFIB, which gives the Fed the right to adhere to the chosen strategy, even despite the alarming dynamics of the yield curve.

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At the same time, there are more alarming signals. According to the US Department of Commerce, in June, the growth rate of personal consumption expenditure instead of the expected growth came at the level of May indicators, there is no positive dynamics in the income item, which may indirectly indicate a decline in consumer activity. This is a logical consequence of the weak average wage growth rates, which have been stable over the past two years and are clearly insufficient to contribute to the growth of inflation expectations. The last parameter is eloquently reflected in the dynamics of the yields of 5-year TIPS bonds, as of July 30, the yield on them is at the 3-month low of 2.01%, significantly dropping from 2.16% in mid-May.

Nevertheless, the situation does not look threatening, at least it will not force the Fed to reconsider the rate of growth, but for the prospects of the dollar, this information may be significant.

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Weak inflation expectations against the background of the Fed's balance sheet reduction and, as a result, the reduction of the monetary base can lead to a fall in the lending rate of both the consumer sector and the economy as a whole, which is tantamount to a slowdown in economic growth. These prospects, which are inextricably linked with the tightening of financial conditions, may lead to the fact that the demand for the dollar, which allowed it to grow in the last year, will begin to weaken, which against the background of expectations for tightening monetary policy by the Central Bank of England and Japan, as well as the ECB will lead to the end of the trend for the growth of the dollar.

USDJPY

The Bank of Japan did not live up to market expectations, announcing a different way than it was predicted, a way out of the soft monetary policy, without providing any temporary guidelines. The assessment of the state of the economy remained unchanged, the asset repurchase program was extended at the same level of 6 trillion yen a year, the deposit rate and the target target yield level of the bonds were maintained unchanged. This was enough to provoke the sale of the yen, even despite the "more flexible way of buying bonds."

USDJPY will continue to grow, the nearest target is 112.80.

EURUSD

Preliminary data on GDP for the 2nd quarter were much worse than expected, growth was only 2.1% against 2.5% a quarter earlier. A weak report could trigger the euro's sell-off, but unexpectedly strong inflation data, which showed a 2.1% rise against expectations of 2.0% in July, supports the euro.

EURUSD continues to trade in the range, which is limited by the resistance of 1.1750, support 1.1645.

GBPUSD

The Bank of England will hold an important meeting on Thursday, which is expected to raise the rate by a quarter of a percent. This step has already been taken into account by the market and will not contribute to the growth of the pound. At the same time, a number of macroeconomic parameters look weak, the situation with Brexit is far from ideal, and the pound is clearly losing to the euro in the players' likes.

GBPUSD will continue to trade in the range with a downward trend, support for 1.3072, resistance at 1.3213 until Thursday, further prospects will depend on whether the Bank of England will be able to surprise the markets.

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Fundamental Analysis of USD/CHF for August 1, 2018

USD/CHF has been quite bearish after rejecting off the 1.0050 with a daily close having a strong bullish rejection in the process which is expected to lead the price towards 0.98 in the coming days. Though the price is residing inside the range between 0.98 to 1.0050 area for a few days now, the bears are starting to take control of the market in the process.

Ahead of the NFP report to be published this week, USD has been performing quite well currently and today USD ADP Non-Farm Employment Change report is going to be published which is expected to increase to 186k from the previous figure of 177k, ISM Manufacturing PMI is expected to slightly decrease to 59.4 from the previous figure of 60.2 and Crude Oil Inventories report is also expected to increase to -2.6M from the previous figure of -6.1M. Additionally, today FOMC Meeting Minutes is going to be held along with Federal Funds Rate decision which is expected to be unchanged at 2.00%, which might lead to certain volatility in the pair as well.

On the CHF side, this week KOF Economic Barometer report was published with a decrease to 101.1 from the previous figure of 101.3 which was expected to increase to 101.6, which affected the growth of CHF against USD in the process leading to certain bullish pressure pushing the price higher. Tomorrow CHF SECO Consumer Climate is going to be published which is expected to be unchanged at 2, Retail Sales is expected to increase to 0.0% from the previous value of -0.1% and Manufacturing PMI is expected to decrease to 60.8 from the previous figure of 61.6.

As of the current scenario, ahead of the NFP and today's Federal Funds Rate report certain volatility is expected to be observed in this pair which might lead to a break out from the range it has been residing in for a while now. Though CHF has been quite dominating over USD earlier a strong impulsive break on either side may still happen in the process. To sum up, CHF may gain further momentum against USD as no changes on the Federal Funds Rate and Neutral FOMC is expected in today's high impact economic reports.

Now let us look at the technical view. The price has been in a contraction between the range of 0.98 to 1.0050 area from while Bearish Divergence can be observed alongside signaling further move down towards 0.98 and further lower in the coming days if the price manages to break below 0.98 with a daily close. As the price remains below the 1.0050 area with a daily close, the bearish bias is expected to continue further.

RESISTANCE: 1.0050

SUPPORT: 0.9800

BIAS: BEARISH

MOMENTUM: VOLATILE

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GBP / USD. 30 July. Traders are waiting for the meeting of the Bank of England, the volatility is minimal

4-hour timeframe

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Amplitude of the last 5 days (high-low): 76p - 87p - 68p - 107p - 49p.

The average amplitude for the last 5 days: 77p (97p).

The GBP / USD currency pair passed 49 points on the last trading day of last week and 50 points on Monday, July 30. Explicitly reduced volatility is due to some reasons, first, to the lack of macroeconomic information from the UK and the US, and secondly, with the upcoming meetings of the Bank of England and the Fed. On the eve of these major events, traders do not want to risk and prefer to sit out of the market. Thus, tomorrow, July 31, volatility in the pair may remain low, and on Wednesday the publication of the results of the Fed meeting will take place, after which it is necessary to expect a surge of activity. The meeting of the Bank of England will be held on Thursday and the key issue on the agenda. Many experts believe that it will increase,

At the same time, we do not believe that the issue of tightening monetary policy is resolved. Given all the problems of the UK, economic and political, the Bank of England can and wait with such a serious decision. In this case, the pound sterling can strongly fall in relation to the US currency, since traders will clearly be very disappointed after the expectations of an increase in the rate. Also much will depend on the speech of Mark Carney, focused on the results of the meeting of the regulator. His rhetoric will be important since Carney is known for his cautious utterances and a lot of fears about the future of the country's economy. In general, the British currency has good chances to grow this week, but the Fed and the Bank of England may present surprises.

Trading recommendations:

The GBP / USD currency pair began adjusting f the price is fixed above the Kijun-Sen line, then the actual target for Long will be the level of 1.3188. This goal can already be achieved tomorrow.

Sell-positions are recommended to be opened in case of a price rebound from the critical line or in case the MACD indicator turns down. Then the instrument can resume the downward movement with targets of 1.3075 and 1.3047.

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.

Chikou Span is a green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and histogram with white bars in the indicator window.The material has been provided by InstaForex Company - www.instaforex.com

Trading plan for 01/08/2018

Weaker data from China and leaks from the White House regarding customs duties on Chinese goods set the climate at the start of Wednesday's listing. NZD is worst despite good data from the labor market. The surprising increase in crude oil inventories in the API report is at the WTI price.

The stock market in Asia, on the one hand, wants to use the strong finish of Wall Street, but to stir up fears about trade disputes quenches optimism. Japanese Nikkei225 grows by 0.8% with the help of USD/JPY, but the Chinese Shanghai Composite is losing 0.7% today.

On Wednesday, the 1st of August, the event of the day is, of course, the FOMC interest rate decision and statement release, but there is plenty of other interesting data to be posted. China will reveal Markit Final Manufacturing PMI data, Eurozone and the UK will post PMI Manufacturing data and the US will issue ADP Non-Farm Employment Change, ISM Manufacturing, and Crude Oil Inventories data.

Crude Oil analysis for 01/08/2018:

The PMI index for China's industry slumped to 50.8 from 51 in July, which is the weakest result in eight months and foments worries about slowing recovery. The publication coincided with reports of sources similar to the White House, according to which the administration is considering higher tariffs on goods imported from China worth USD 200 billion.

WTI oil remains at the lows after the weak Tuesday's session. At night, an additional negative impulse was the API report, which pointed to an increase in crude oil inventory last week by 5.6 million barrels. The consensus against today's DoE data suggests a drop in inventories by 2.3m bbl. WTI has stopped falling at 68.05 this morning it is up to USD 68.45 at the time of writing.

Let's then take a look at the Crude Oil technical picture at the H4 time frame before the inventories data are published. The market bounce did not last long and the local lower high at the level of 70.54 was made before the price slumped again. The next target for bears is seen at the level of 67.59 and the short-term bearish outlook is supported by the weak RSI and weak stochastic indicator. Only the internal trend line support, marked in gold on the chart, is temporary saving the price to plummet even further.

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Global macro overview for 01/08/2018

New Zealand job market data were better than expected, but the Unemployment Rate rose 0.1%pt to 4.5%, due to slightly higher labor force participation. The participation rate was broadly flat at the high level of 70.9%. That, plus a 0.5% q/q increase in the working-age population, means labor demand was matched by solid growth in labor supply. The participation rate can be noisy – looking through this, the labor market is tracking broadly sideways.

The labor market remains tight. The unemployment rate at 4.5% is close to estimates of full employment, consistent with firms experiencing difficulty in finding skilled labor. The underutilization rate ticked up to 12.0% and remains historically high. This high level may imply that there is more spare capacity available in the labor market than the unemployment rate alone suggests, with employees willing to work more. Or it could be a symptom of mismatch of employers' needs and workers' skills or location. The labor market is expected to tighten further, but only modestly, given the weakness in forwarding indicators of labor demand, such as employment intentions in our business confidence survey.

Wage growth has accelerated from 0.3% to 0.6% last quarter, even after accounting for Government mandated pay increases.

In conclusion, today's reports will provide some comfort to the Reserve Bank of New Zealand that the economy is on track for both full employment and a gradual return to the inflation target.

Let's now take a look at the NZD/USD technical picture at the H4 time frame. The market remains locked in a horizontal consolidation zone between the levels of 0.6765 - 0.6831. The market conditions remain neutral, with a slight bias to the downside as indicated by the RSI direction. Any violation of the level of 0.6765 will open the road towards the next support at 0.6711. On the other hand, any violation of the level of 0.6851 will open the road towards the level of 0.6856.

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Fundamental Analysis of AUD/USD for August 1, 2018

AUD/USD has been residing inside a corrective range between 0.73 to 0.75 area for a while now from where it is expected to push lower with the long-term trend in the coming days. USD has been quite mixed with the recent economic reports which lead the currency to struggle to maintain the momentum it had over AUD earlier in the process.

Ahead of the AUD Trade Balance report tomorrow which is expected to increase to 0.91B from the previous figure of 0.83B and Retail Sales report to be published on Friday which is expected to slight decrease to 0.3% from the previous value of 0.4%, the currency is currently struggling to sustain the momentum it gained inside the range after bouncing off the 0.73 area recently. Today AUD AIG Manufacturing Index report was published with a decrease to 52.0 from the previous figure of 57.4 which is assumed to lead the currency to certain weakness being observed currently. Moreover, today AUD Commodity Prices report is going to be published which is expected to increase from the previous value of 6.6%.

On the other hand, ahead of the NFP report to be published this week, USD has been performing quite well currently and today USD ADP Non-Farm Employment Change report is going to be published which is expected to increase to 186k from the previous figure of 177k, ISM Manufacturing PMI is expected to slightly decrease to 59.4 from the previous figure of 60.2 and Crude Oil Inventories report is also expected to increase to -2.6M from the previous figure of -6.1M.

As of the current scenario, AUD has been struggling with the recently published economic reports whereas USD having high impact economic reports yet to be published, is expected to gain further momentum over AUD in the process. As USD publishes better than expected economic reports results, further gain on the USD side is expected at this moment.

Now let us look at the technical view. The price has been inside the range for a while now and recently it created a lower high below 0.75 area with an impulsive bearish momentum currently which is expected to push the price lower towards 0.73 area in the coming days. The price is currently residing at the edge of dynamic level support which is expected to be taken out with certain bearish momentum in the process. As the price remains below 0.75 area with a daily close, the bearish bias is expected to continue further.

RESISTANCE: 0.75

SUPPORT: 0.73

BIAS: BEARISH

MOMENTUM: CORRECTIVE AND VOLATILE

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Global macro overview for 01/08/2018

The market is convinced that the Fed will raise interest rates eighth time in the cycle and the third this year at the meeting, which is scheduled for 26 September. Today's meeting will not bring change in policy parameters and would normally not be absolutely controversial. It would not wake up if it were not for the recent comments of President Trump, who criticized the growing cost of money in the economy.

The rates will remain in the range of 1.75 -2.0 percent. The probability of a raise at the August meeting does not exceed 2 percent. The message may be modified in a more hawkish direction under the influence of the strength of the economy in the second quarter (4.1% in annualized terms is the best result since 2014) and PCE Core reached 2.0% YoY. The global investors should not expect policymakers to emphasize that the unemployment rate has risen from 3.8% to 4.0% - faith in the strength of the labor market remains unwavering in FOMC. The Fed will maintain communication suggesting two increases: in September and December. Changes in the communication should, therefore, be modest and rather reflect the actual state and not be any indication for the future. Among other things, please do not expect the release of the statement to refer to the flattening of the yield curve.

To sum up: the FOMC meeting should not change the market view on the monetary policy outlook and the future interest rate path. This is why there is no reason to see in it the factor triggering the next wave of strengthening the USD. Positive communication tone will contrast with the dovish narrative of the European Central Bank, the Bank of Japan and probably also the Bank of England, and it is only in this context that USD will be beneficial, so traders should see it strengthen across the board.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market has bounced from the technical support at the level of 94.17 and currently is testing the golden trend line from below. The market conditions are neutral, confirmed both by stochastic and RSI indicator. The next technical resistance is seen at the level of 94.93, but for now, the global investors are waiting for the FOMC meeting conclusions. The larger time frame uptrend remains intact.

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Bitcoin analysis for 01/08/2018

Recent IW Capital research has shown that 38% of Britons do not know basic knowledge about cryptocurrencies. What's more, only 5% of the surveyed investors admitted that they actually made a profit. The general manager of the investment fund found this to be very worrying.

The report assumes that the vast majority of the community investing in the UK believes that investing in cryptocurrencies is a worse decision than investing in traditional markets.

The investment house was attended by 2,0007 respondents, 38% of whom said they did not understand cryptocurrencies. In addition, one-third of respondents have the impression that the alleged bitcoin bubble will soon break, while only 7% believe that cryptocurrency investments are better than traditional channels.

According to research, only 5% of cryptocurrency investors made a profit - statistics probably distorted by the fact that more than 2.5 million Britons carelessly invested in the crypt without a full understanding of investment, which is the fastest way to lose money, especially on the bear market.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market has broken below the level of $7,752, which acted as a lower boundary of the consolidation zone and currently is heading towards the next important technical support at the level of $7,176. In a case of a breakout below this support, the next important level to keep an eye on is the level of $6,782. If this level is violated, then the impulsive scenario to the upside is invalidated and the market will continue to drop lower towards the swing low at $5,742.

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Technical analysis: Intraday Level For EUR/USD, Aug 01, 2018

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When the European market opens, some Economic Data will be released such as German 10-y Bond Auction, Final Manufacturing PMI, German Final Manufacturing PMI, French Final Manufacturing PMI, Italian Manufacturing PMI, and Spanish Manufacturing PMI. The US will release the Economic Data too, such as Federal Funds Rate, Total Vehicle Sales, Crude Oil Inventories, ISM Manufacturing Prices, Construction Spending m/m, ISM Manufacturing PMI, Final Manufacturing PMI, and ADP Non-Farm Employment Change, so, amid the reports, EUR/USD will move in a medium to high volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1745.

Strong Resistance:1.1738.

Original Resistance: 1.1727.

Inner Sell Area: 1.1716.

Target Inner Area: 1.1688.

Inner Buy Area: 1.1660.

Original Support: 1.1649.

Strong Support: 1.1638.

Breakout SELL Level: 1.1631.

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

Technical analysis: Intraday level for USD/JPY, Aug 01, 2018

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In Asia, Japan will release the Final Manufacturing PMI data, and the US will release some Economic Data such as Federal Funds Rate, Total Vehicle Sales, Crude Oil Inventories, ISM Manufacturing Prices, Construction Spending m/m, ISM Manufacturing PMI, Final Manufacturing PMI, and ADP Non-Farm Employment Change. So there is a probability the USD/JPY will move with a medium to high volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 112.40.

Resistance. 2: 112.18.

Resistance. 1: 111.96.

Support. 1: 111.69.

Support. 2: 111.47.

Support. 3: 111.26.

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 August 1, 2018

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EUR/NZD tried to break above short-term important resistance at 1.7205 but failed. We think it is just a matter of time before a new attempt to break above this resistance is seen. A firm break above resistance at 1.7205, will confirm that red wave ii has completed and that red wave iii towards 1.7510 and above is developing.

Short-term, support remains seen at 1.7134 and 1.7116. The later should continue to protect the downside for the expected break above 1.7205. An unexpected break below 1.7116, will indicate that black wave ii/ still is in motion for a spike lower to 1.7066 before turning higher in black wave iii/.

R3: 1.7268

R2: 1.7207

R1: 1.7185

Pivot: 1.7165

S1: 1.7137

S2: 1.7116

S3: 1.7106

Trading recommendation:

We are long EUR from 1.7226 with our stop placed at 1.7110. If you are not long EUR yet, then buy a break above 1.7205 and use the same stop at 1.7110.

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Elliott wave analysis of EUR/JPY for August 1, 2018

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EUR/JPY has rallied nicely of the 129.09 low and the break above resistance at 130.44 confirmed that red wave ii has completed and red wave iii now is developing towards 135.74 and higher longer term.

The next resistance to look for is seen at 131.71. Once broken the way higher to 135.74 should be right open.

Support is now seen at 130.24 and again at 129.68. The later should be able to protect the downside for the expected test and break above 131.71.

R3: 131.71

R2: 131.49

R1: 131.15

Pivot: 130.41

S1: 130.24

S2: 130.05

S3: 129.68

Trading recommendation:

We are long EUR from 130.28 and we have placed our stop at 129.50. If you are not long EUR yet, then buy near 130.24 and use the same stop at 129.50.

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

Technical analysis of GBP/USD for August 1, 2018

GBP/USD remains trapped inside the downward sloping wedge pattern. The price got rejected at 1.32 and did not make it happen. Bulls will need to reclaim at least 1.32 for a chance for this pair to move much higher.

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Blue lines - wedge pattern

Red lines - RSI triangle pattern

The price remains inside the downward sloping channel. The trend remains bearish. Price could make a new lower low towards 1.28. Short-term support is at 1.30, so a break below it will be a bearish sign. On the other hand, 1.3150 and 1,32 are my resistance levels to watch out for.

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Technical analysis of Gold for August 1, 2018

The Gold price remains inside the downward sloping wedge pattern. The price is testing the resistance area at $1,225-26. A sustained break above this area and a continued move higher above $1,235 could be the first sign of a bigger reversal.

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Black lines - wedge pattern

Blue line - RSI resistance

Red line - RSI Support

The Gold price has short-term resistance at $1,225-26. Next and most crucial is at $1,236. Support is at $1,214 and next at $1,200. Break above resistance and we could see $1,300 in the first two weeks of August.

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Daily analysis of GBP/USD for July 31. The second bullish divergence will support the pound sterling.

4h

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The GBP/USD pair on the 4-hour chart made a reversal in favor of the British currency after the formation of a bullish divergence in the CCI indicator, and began the growth process in the direction of the Fibo level of 161.8% - 1.3301. On July 31, there are no new brewing divergences. The passage of the last low of the divergence will work in favor of the US dollar and the resumption of the fall of quotations, and the consolidation under the correction level of 200.0% will increase the chances of the pair to further decline in the direction of the next Fibo level of 261.8% - 1.2638.

The Fibo grid is built on the extremes of March 1, 2018 and April 17, 2018.

1h

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On the hourly chart, the quotes of the pair performed a rebound from the correction level of 38.2% - 1.3112. There was also a bullish divergence in the CCI indicator, which allows us to count on continuing growth in the direction of the corrective level of 50.0% - 1.3160. The consolidation of quotations under the Fibo level of 38.2% can be interpreted as a reversal in favor of the US currency and expect a resumption of the fall in the direction of the correction level of 23.6% - 1.3052.

The Fibo grid is built on the extremes of July 9, 2018 and July 19, 2018.

Recommendations for traders:

Purchases of the GBP/USD pair can now be opened with a target of 1.3160 and a Stop Loss order under the correction level of 38.2%, since there was a pullback from the Fibo level of 1,3112 (hourly chart) and a bullish divergence was formed.

It will be possible to sell the GBP/USD pair with a target of 1.3052 and a Stop Loss order above the correction level of 38.2%, if there is a close below the Fibo level of 1.3112.

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EUR/USD: buying looks risky

European statistics could not please the bulls of the euro/dollar pair on Tuesday with positive figures. Many of the advantages of the day's releases were crossed out by data on the growth of European GDP – this indicator in quarterly terms slowed to 0.3%, in annual terms - to 2.1% (experts expected growth to 0.4% and 2.2% respectively). However, this circumstance did not prevent the bulls of the EUR/USD from maintaining optimism, and the pair was able to test the 17th figure.

Undoubtedly, the disappointing data on the growth of the European economy restrained the upward momentum of the pair. But traders still focused on the positive dynamics of inflation in the eurozone. The consumer price index is growing for the third month in a row, and in July was able to reach a six – year high – 2.1%, although the overall forecast was somewhat more modest-2%.

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Core inflation also rehabilitated itself: let me remind you that the June figure was revised downward (to 0.9%), but this month the indicator was better than expectations – 1.1%. Traditionally, the data on the labor market also pleased - in Europe as a whole, the unemployment rate slightly fell down (to 8.3%), in Germany, this indicator remained at a record low of 5.2% (although the number of unemployed fell by a smaller amount, than it was expected earlier).

This dynamic of key macroeconomic indicators means that the European Central Bank will continue to follow its policy of normalizing monetary policy: QE will be finally curtailed in December, and next year (most likely in the second half of the year), the regulator will raise the interest rate. This is provided that the current trend will continue-at least in the most minimal manifestations.

The structure of the CPI shows that the highest growth in inflation was recorded in the energy sector (by 9.4 %, compared with 8% in June), which in turn suggests that if the oil market will hold on to current positions, European inflation will have a "reliable rear". Here it is worth recalling that oil is gradually recovering, trading in the level of 75 dollars. In August, when US sanctions against Iran take effect, this trend may continue, positively affecting the dynamics of European inflation.

Among all the data published on Tuesday, the most alarming is the volume of the euro area's GDP. On the one hand, the problem is systemic – in the second quarter, none of the member countries of the Alliance was able to cross the 0.6% mark, while in the first quarter, some of them showed stronger dynamics. Let me remind you that the European Commission reduced its economic growth forecast this spring due to "external risk factors".

This, of course, is about Trump's protectionism, which at that time actively threatened Europe with the introduction of new import duties on European cars. According to experts, the "heat of passion" in the relations between the US and the EU in the first quarter of this year contributed to the fact that manufacturers began to reduce their exports. At the moment, Washington and Brussels have concluded a "trade truce", and the relevant working groups have begun to develop a mechanism for mutually beneficial trade.

Therefore, despite the relatively weak GDP figures for the second quarter, it is too early to talk about a large-scale decline. Moreover, domestic demand continues to grow, as evidenced by strong data on inflation and consumer activity. Such mutually exclusive trends are not typical for the period of stagnation, so in the third quarter the European economy can "catch up", especially if the deal between the US and the European Union is still concluded. By the way, the experts of the European Commission in their forecasts also noted that in the second half of the year, economic growth in the EU will accelerate against the background of lower unemployment, growth in consumer activity and a decrease in household debt.

In other words, the market did not attach much importance to the slowdown of the European economy, and this position is largely justified. In the context of recent events, inflation was much more significant for the euro, which showed a good result.

But all this does not mean that now it is necessary to open long positions on the EUR/USD pair – the loss is too great.

After all, do not forget that the next meeting of the Fed will be held on Wednesday, where the regulator will assess the current trends. Despite the slowdown in the consumer price index (on a monthly basis) and the basic index of personal consumption expenditure, the Fed can inspire the dollar bulls with a "hawkish" attitude. Jerome Powell will not hold a press conference at this time, so traders will have to draw appropriate conclusions only from the text of the accompanying statement.

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The Federal Reserve can repeat the main features of Powell's position, voiced by him in the US Congress. Then he completely ignored the growth of unemployment and weak figures on average wages, saying that the Federal reserve will continue to tighten monetary policy. If the Fed also neutralizes the fears of dollar bulls on Wednesday, the greenback will return the EUR/USD pair to the base of the 16th figure. The possibility of such a scenario cannot be ruled out, and not only because of fundamental factors. Technically, the pair did not overcome the upper line of the Bollinger Bands on the daily chart (1.1760), so the price rollback to the July low is quite likely.

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

Brent plays cat and mouse

Due to Saudi Arabia's export problems in the Red Sea and information about the previous later than anticipated recovery times in the North Sea, oil was able to lick some of the wounds received in July. Brent and WTI close the month in the red zone amid a strong dollar, growing risks of slowing global demand and increasing production of OPEC. News from Saudi Arabia and the North Sea is seen as short-term "bullish" factors, although not everyone agrees.

According to Goldman Sachs, the cartel will be able to increase production by 1 million b / s, but the efforts of Riyadh and Moscow will not be enough to compensate for the loss of Iranian production of black gold as a result of imposing new sanctions on Tehran from Washington. As for the American production, it will grow, but at a slower pace than currently expected due to problems in the Perm basin. The market was disappointed because of the inability of the "bears" to develop a correction that will lead to the "bullish" trend recovery. Goldman Sachs believes that Brent will test the mark of $ 80 per barrel before the end of this year.

The bank looks like a black sheep. A poll of experts from Reuters showed that OPEC increased production to 32.64 million b / s (+70 thousand b / s), and the number of drilling rigs from Baker Hughes increased to 861. At the same time, the decline in China's business activity indicates an economic slowdown of the country- the largest the consumer of black gold. The boost in production and the reduction in demand increase the risks of surplus, which is a "bearish" factor for Brent and WTI. Infinitely, the problems of supply disruptions in the Red and North Seas cannot continue, and sellers of both varieties will resume their attacks as soon as the situation there begins to change for the better.

Speculators do not particularly believe in oil, while fixing profits on long positions does not yet cause the development of a serious corrective movement for Brent and WTI.

The dynamics of oil prices and speculative positions.

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Donald Trump is capable of rocking the boat, who unexpectedly announced his readiness to meet with the head of Iran Rouhani. Prior to this, the US president was twitching with Tehran on his Twitter account. Given the desire of the owner of the White House to reduce gasoline prices, which requires the correction of Brent and WTI. It can be assumed that he will depart from his intentions to reduce Iran's exports to zero in exchange for Rouhani's refusal to develop nuclear program. If this "bullish" driver is eliminated, then the chances of continuing the southern campaign of both varieties of black gold will increase.

Technically, the inability of the "bears" to keep Brent quotes below the lower limit of the upward trading channel confirms their weakness. To develop a correction, the target is in the direction of 88.6% on the "Bat pattern", while sellers need to break the support at $ 71.9 per barrel and update the July low.

Brent daily chart

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* 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

EUR/USD. July 31st. Trading system "Regression channels". In Focus: Preliminary GDP and Inflation

4-hour timeframe

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Technical data:

Higher channel of linear regression: direction - down.

The lower channel of linear regression: direction - down.

The moving average (20; flattened) is up.

–°CI: 80.1073

The EUR/USD currency pair on July 30, showed impressive volatility despite the lack of important macroeconomic information, and was fixed above the removals after reaching the Murray level of "4/8". The "Swing" on the instrument continues and we can see a quite downward movement today with price fixing below the moving average line. The first of the two target levels has been worked out. Bulls can also try to work out the level of 1.1745, which had already been reached three times before. Today, the preliminary values of the consumer price index for July and GDP for the second quarter will be published in Europe. It is expected that the inflation rate will not change and will amount to 2%, while the GDP growth rate may slow down to 2.2%. In general, any negative information can send the euro back down again. Especially, the current price values has high probability of a reversal. At the same time, it should be noted that the reports published today are only preliminary values, not final ones. Reactions to them in general may not follow any.

Nearest support levels:

S1 = 1.1658

S2 - 1,1597

S3 - 1.1536

Nearest resistance levels:

R1 = 1.1719

R2 = 1,1780

R3 = 1.1841

Trading recommendations:

The EUR/USD currency pair was fixed above the removals. Thus, it is recommended to maintain long positions now with the targets of 1.1719 and 1.1745, where the upward movement may stop. Therefore, it is possible to fix profits within these levels or expect a downward turn of the Heiken Ashi indicator and close deals on this signal.

Selling orders can be opened after fixing the price below the moving with targets 1.1658 and 1.1597. In this case, the initiative on the instrument can go into the hands of bears for several days.

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

Explanations for illustrations:

The upper channel of linear regression is the blue lines of unidirectional motion.

The lowest linear regression channel is the violet lines of unidirectional motion.

CCI - the blue line in the indicator window.

Moving average (20; smoothed) - the blue line on the price chart.

Levels of Murray - multi-colored horizontal stripes.

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

* 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