The daily review of EUR / USD as of August 2, 2018. Ichimoku Indicator

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EUR / USD

The failure of the bulls gave a new chance to the bears. Will they be able to leave the zone of uncertainty and weekly consolidation this time? A way to understand this and get rid of the attraction, led by a week-long Tenkan (1.1680) and a daytime cross, the old one, you need to update the minimum extremes (1.1575 - 1.1508) and secure securing outside the weekly cloud (Senkou Span B 1.1515).

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At the moment, the pair went down to support the daytime Fibo Kijun (1.1628) and once again worked out the target for the breakdown of the H1 cloud (1.1619). On this current task can be considered completed, as a result of possible braking and a new rise to the center of attraction (1.1680). But if the players on the slide now want to achieve more, then they have a downside target for the breakdown of the cloud of H4 and the update of the minimum 1.1575. Further plans in this situation will be related to the area 1,1508-15 (minimum extremum + week Senkou Span B).

Indicator parameters:

All time intervals 9 - 26 - 52

The color of indicator lines:

Tenkan (short-term trend) - red,

Kijun (medium-term trend) - green,

Fibo Kijun is a green dotted line,

Chinkou is gray,

Clouds: Senkou Span B (SSB, long-term trend) - blue,

Senkou Span A (SSA) - pink.

The color of additional lines:

Support and resistance MN - blue, W1 - green, D1 - red, H4 - pink, H1 - gray,

Horizontal levels (not Ichimoku) - brown,

Trend lines - purple.

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

What did the Fed keep silent about?

Fed Chairman Jerome Powell promised next year to hold a press conference after each meeting of the regulator. But this year, as in all the previous ones, the chairman of the Fed will talk with journalists only four times. As a rule, decisions to raise or lower rates were made at those meetings after which the head of the regulator could fully explain the position to the financial world. Traders are accustomed to this pattern, so they did not have special illusions for yesterday's meeting.

Nevertheless, the August meeting was not "pass-through". At stake is the fourth increase in the interest rate this year. In addition, the market had to make sure that the regulator was ready to raise the rate in September, although traders are confident in this step more than 90%. In general, the Fed justified investors' expectations, however, without saying anything new. The main "hawkish" feature of the accompanying statement is that the Fed simply kept silent about the possible risks. But this was enough to ensure that the US dollar kept the status quo in the market, and paired with the euro even strengthened to the middle of the 16th figure.

But let's start with what theses the US regulator did after all. First of all, it should be noted that the Fed changed its formulations somewhat, tightening the general tone of the statement. For example, according to the Fed, annual inflation does not "approach two percent," but "remains near this mark"; unemployment does not "decline", but "remains at a low level"; Consumer spending does not "show signs of growth," but "increases at a strong pace"; The US economy does not grow at a "decent pace", but "strong enough." Such a seemingly insignificant rehash in the translation into "human" language means that the regulator is satisfied with the current trends in the above areas.

Also, the Fed repeated that the rates will continue to increase gradually, while the monetary policy remains stimulating (and not restraining). Traders reacted to yesterday's meeting accordingly, the probability of raising the rate to 2.25% at the September meeting rose to 92%, while the chances of raising the rate to 2.5% at the December meeting are estimated at 65%. Last week, the market was not so confident in the actions of the regulator (the probability was 80% and 45% respectively).

What did the Fed keep silent about, thus inspiring dollar bulls? First of all, Federal Reserve officials did not comment on and generally mention the risks associated with foreign trade, and, more simply, the trade war with China. Although Jerome Powell previously focused on this aspect of his attention, saying that high trade duties will harm the US economy. However, the regulator chose to ignore the trade conflict, although it continues to gain momentum.

Literally yesterday, Washington announced that it was preparing to introduce a 25% duty on Chinese goods for a total of $ 200 billion. Beijing, in turn, has already introduced additional duties on American products, the new tariff policy affected about forty percent of US exports to China. In addition, China continues to devalue the yuan. Today, the USD / CNY rate is 6,828, the highest since May last year. But the Fed in this case decided to resort to the "policy of the Ostrich", as if not noticing such a large-scale process of the trade war.

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Nor did the Fed mention the risks of inverting the yield curve. The difference between the yield of 10-year-olds and 2-year-old Treasuries continues to decline and at the moment is practically at the 10-year minimum. This situation looks like an alarm signal, as it may serve as a sign of an approaching economic recession. However, this moment was also tactfully omitted from the Fed's attention.

In addition, the accompanying statement does not indicate whether members of the regulator discussed the issue of a neutral rate, in other words, when the process of tightening monetary policy will be paused. Jerome Powell, speaking not so long ago in Congress, said that the Fed is still discussing when the so-called "neutral rate" will be achieved. Naturally, the accompanying statement does not reflect the course of the meeting (unlike the protocol that will be published later), but some analysts had expected that in the text of the statement there would be a reservation "for now" - "so far, plans to raise the interest rate remain." Such a formulation would say that the Fed as a whole is ready to take a break in tightening monetary policy, even without a notation of the level of a neutral rate and time guidelines. However, the regulator also ignored this aspect.

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In general, the Fed retained its main positions, somewhat toughened the tone of its rhetoric. This approach has provided little support to the dollar, but strengthened the won positions. However, even today, the focus of attention of traders will be shifted to the Friday release of key data on the US labor market.

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

FOMC passes the baton to the Bank of England

As expected, the US Federal Reserve unanimously kept the range at the current base rate of 1.75 - 2.00%, the text of the accompanying statement did not contain anything new. FOMC notes the balance of economic risks and the growth of costs and investments, and therefore considers inflation expectations stable and expects further growth of the labor market.

The dollar did not react to the results of the meeting, maintaining stability at the end of the day, while the earlier published macroeconomic indicators looked ambiguous. The ADP report on employment in the private sector in July was better than expected, 219 thousand new jobs, the best result since February, which allows us to hope for a good report on employment in general.

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At the same time, PMI indices indicate a slowdown in business activity. In the version from Markit, the index in the manufacturing sector fell from 55.5 to 55.3p, experts did not expect changes, a similar figure from the ISM fell from 60.2p to 58.1p. The construction costs dropped, the volume of transport sales fell noticeably, on the whole the situation does not look complacent at all, and the confidence in the steady growth of the economy has diminished.

Friday is able to add volatility, except for the main event of the day - the employment report is scheduled release of data on the trade balance and PMI in the services sector. Despite the overall stable position of the dollar, there is no certainty of renewing its growth, the trend should be supported by good statistics.

EUR / USD

Weak GDP data reduces optimism on the euro's outlook, as it may indicate a slowdown in economic growth and a decline in overall consumer activity, which will put pressure on inflation expectations. Despite the fact that the core inflation in June rose unexpectedly from -0.9% to 1.1%, it still remains low to count on the ECB's full exit from soft monetary policy, which in turn could push the first rate increase from June 2019 to September or even in December.

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The euro continues to trade in a range with a downward trend, support for 1.1616 today will be tested, growth is limited to the level of 1.1740.

GBP / USD

The Bank of England will hold an extended meeting today, which is expected to raise the base rate by a quarter of a percent. Despite the fact that the probability of an increase exceeds 80%, a number of factors still point to the weak prospects for the pound.

These factors include, first, a weaker wage growth, compared with the previous meeting in May (2.7% vs. 2.9%), and secondly, a slowdown in the growth of core inflation.

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The closer the date of the official withdrawal of the UK from the EU, the higher the risk premium, investors fear growth of EURGBP, which puts pressure on the pound and prevents it from starting recovery even against the expected rate increase.

The outlook for the pound on the results of today will depend directly on the two parameters. The first of these is the layout of the voting members of the Cabinet. For the growth of the pound, it is necessary that no less than 7 members vote for the rate increase, otherwise the market will see the uncertainty of the Cabinet and will vote for the sales of the pound. Secondly, the correction of quarterly forecasts is likely to decrease, which will also lower expectations for another rate increase next year.

The pound may fall to support 1.3039 / 45, there is no reason for a deeper fall. A possible surge in volatility is limited by resistance 1.3213.

Oil and ruble

Oil declined on Tuesday and Wednesday, reacting to the negative reports API and EIA, which showed a significant increase in inventories against the background of a decline in production in the US. At the same time, the geopolitical situation is not conducive to lower quotes, so it is likely that Brent prices will recover to $ 74 / bbl by the end of the week.

The ruble looked weak on Wednesday, subject to both the general market trend for strengthening the dollar, and reacting to a number of negative factors, which include both a sharp drop in oil and a number of internal factors, such as intervention by the Finance Ministry and the growing threat of sanctions on Russia's public debt . The ruble can test the strength of resistance 63.76 even before the end of the week.

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

The Fed will raise rates by supporting the dollar

The Fed's decision to leave the interest rates following the meeting was expected, but a positive assessment of the state of the economy and the announcement that the regulator plans two more increases this year supported the dollar rate.

In general, the final document was full of good assessments of the state of the country's economy. And for this, there are grounds, the latest data on GDP, the labor market, figures from ADP, which precede the official from the Ministry of Labor, and the persistence of inflationary pressures, as reported by the price index for personal consumption (RFE), which was presented earlier this week, are positive and constitute, in our opinion, a strong basis for the growth of the US dollar or at least for its stabilization in relation to the major currencies, which is now observed.

As a result of Wednesday, the rate of the American currency has increased, but still remains in the ranges relative to the major currencies. Today, its local strengthening continues against the major currencies with the exception of the Japanese yen, which became a "victim" of the statement of the deputy governor of the Bank of Japan, M. Amamiya, who reported that "the target level of long-term profitability remains about zero percent." Earlier, following the meeting of the Central Bank of Japan, a signal was given by the Central Bank executives that the yield of 10-year government bonds could be raised to 0.2%, which was regarded by the markets as negative for the yen. The inconsistency of statements made by the Central Bank leads to uncertainty surrounding the outlook for the yen.

Today, an important event will be the result of the meeting of the Bank of England. It is assumed that the key interest rate will be increased by 0.25%, to 0.75%. This probability is already taken into account in quotes, therefore, as it seems to us, investors will closely follow the rhetoric of the speaker at the press conference M. Carney. If he makes it clear that this is not a single rate hike in the future, we should expect a strong appreciation of the British currency, but if the regulator's communique and his manager's speech do not signal any of these prospects, the pound may be under considerable pressure.

Forecast of the day:

The currency pair EUR / USD is trading lower on the wave of the Fed meeting, which supported the dollar. Crossing at the price of mark 1.1640 opens a couple of way for further fall to 1.1585.

The currency pair GBP / USD is trading above the 1.3085 level. If this mark is overcome, we can expect the pair to fall to 1.3000.

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

The review of the currency market from 08/02/2018

There are many rumors that this year, the Fed will no longer raise the refinancing rate, but all of them were not justified. Of course, according to the results of yesterday's meeting of the Federal Commission for Operations on the open market, no one expected an increase in the refinancing rate, but it was believed that the accompanying note would point to a revision of the FRS's plans. However, the contents of the accompanying note completely disproved such assumptions, and the Fed intends to adhere to the previously planned plan, so in December we expect the refinancing rate to increase to 2.25%.

Naturally, this was the reason for the growth of the dollar, although you will not look at all the rest of the American statistics without tears. Thus, the index of business activity in the manufacturing sector fell from 55.4 to 55.3. Construction costs decreased by 1.1%. And the total sales of vehicles decreased from 17.5 million to 16.8 million. Only ADP showed an increase in employment of 219 thousand, which is 38 thousand more than in the previous month.

The joy of investors about the fact that the increase in the refinancing rate of the Fed is not canceled was so strong that even the growth of the index of business activity in the manufacturing sector did not help the single European currency, which increased from 54.9 to 55.1.

Pound managed to hold back, although the index of business activity in the manufacturing sector fell from 54.3 to 54.0. The thing is in today's meeting of the Bank of England on monetary policy. Moreover, everything is very similar to how events developed before the meeting of the Federal Commission for Open Market Operations. The forecasts were rather strange and contradicted what the FRS representatives said and did. Also in the situation with the Bank of England. The fact is that everyone expects an increase in the refinancing rate from 0.5% to 0.75%. But this contradicts earlier statements. Representatives of the Bank of England did not just say that it is not yet expedient to raise the refinancing rate but also hinted at the possibility of resuming the program of quantitative easing. So, like yesterday, it is unlikely that the expectations will be met. Most likely, the Bank of England will leave the refinancing rate unchanged, and the pound will have to fall to 1.3050. If the Bank of England really surprises us and raises the refinancing rate, then the pound has all chances to grow to 1.3200.

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But a single European currency has all the reasons for growth. In particular, the growth rates of producer prices can accelerate from 3.0% to 3.5%, which indicates a further increase in inflation. Also in the United States, the total number of applications for unemployment benefits should increase by 8,000. And the growth is expected as primary, and repeated applications. So the single European currency can grow to 1.1675. If the Bank of England also increases the refinancing rate, then the euro could rise to 1.1700.

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

Analysis of EUR / USD Divergences as of August 2. Fed meetings slightly helped the American currency

4h

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The EUR / USD pair on the 4-hour chart executed the fixation under the correction level of 50.0% to 1.1680 and continues the decline to the corrective level of 38.2% to 1.1639, after the bearish divergence of the MACD indicator. Quit of quotations from the level of Fibo 38.2% will allow traders to expect a turn in favor of Euro and some growth in the direction of the correction level of 50.0%. On August 2, there are no maturing divergences. Fixing the pair under the Fibo level of 38.2% will work in favor of continuing the fall in the direction of the correction level of 23.6% - 1.1590.

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

Daily

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On the 24-hour chart, the pair's quotes remain clamped between correction levels of 76.4% to 1.1789 and 100.0% to 1.1553. Signals to the reversals are still not there. The rebound of quotes from the Fibo level of 76.4% will allow us to count on a reversal in favor of the US dollar and a slight drop towards the correction level of 100.0%. Brewing divergences are not observed today. The consolidation of the pair's rate below the Fibo level of 100.0% will increase the chances of the pair to further fall towards the next correction level of 127.2% - 1.1285.

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

Recommendations for traders:

Purchases of the EUR / USD pair will be possible with the goal of 1.1680 and the Stop Loss level under the correction level of 38.2%, if there is a retreat from the Fibo level of 1.1639.

To sell the EUR / USD pair will be possible with the target of 1,1590, if the closing is carried out under the correction level of 38.2%, with a Stop Loss order above the level of 1.1639.

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

The daily review of EUR / USD as of August 1, 2018. Ichimoku Indicator

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EUR / USD

The next testing of the upper trend and the nearest maximum extremum (1.1750) in the day format failed, the pair returned to the center of the uncertainty zone (1.1680). As a result, all the conclusions and expectations voiced earlier remain. The tasks of rivals have not changed. For players on the rise are important 1.1750 - 1.1791 - 1.1852, for players to go down the path lies through 1.1575 - 1.1508.

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At the ascent, the target for the breakdown of the H1 cloud (1.1744) was tested and a maximum (1.1750) was tested. These resistances could limit the ascent, the pair returned to the zone of uncertainty and attraction. The center of the zone still forms clouds of lower dimes and short-term trends of the day (1.1685) and weekly (1.1680) times. If one of the players now again makes an attempt to leave the zone of attraction (1.1708 - 1.1628), the main task, as before, will be to update the extremes, with subsequent reliable securing beyond their limits.

Indicator parameters:

All time intervals 9 - 26 - 52

The color of indicator lines:

Tenkan (short-term trend) - red,

Kijun (medium-term trend) - green,

Fibo Kijun is a green dotted line,

Chinkou is gray,

Clouds: Senkou Span B (SSB, long-term trend) - blue,

Senkou Span A (SSA) - pink.

The color of additional lines:

Support and resistance MN - blue, W1 - green, D1 - red, H4 - pink, H1 - gray,

Horizontal levels (not Ichimoku) - brown,

Trend lines - purple.

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

What did the Fed say on August 1 (the text of the statement)

What did the Fed say on August 1 (text of the statement):

Since the meeting of the Federal Open Market Committee in June, the information received indicates that the labor market continued to grow and that economic activity has developed at a strong pace. The growth in the number of jobs was strong on average in the recent months, and the unemployment rate remained low. Household expenses and business investment have grown strongly. On a 12-month basis, both full inflation and inflation, other than food and energy, remain close to 2 percent. Indicators of long-term inflation expectations slightly changed in the end.

In accordance with its statutory mandate, the Committee seeks to promote maximum employment and price stability. The Committee expects that further incremental increases in the target range of the federal fund's interest rate will be consistent with sustained economic growth, strong labor market conditions, and inflation near the symmetrical 2% target of the Committee for the medium term. Risks for economic prospects seem to be approximately balanced.

In view of the realized and expected conditions of the labor market and inflation, the Committee decided to keep the range for the interest rate on federal funds around 1.75 to 2 percent. Monetary policy remains moderate, thus supporting strong labor market conditions and a gradual return to the 2 percent inflation.

In determining the timing and size of future changes in the target range for the federal fund's interest rate, the Committee will assess the real and expected economic conditions for its maximum employment target and the 2 percent inflation target. This assessment will take into account a wide range of information, including labor market conditions indicators, inflation pressure indicators and inflation expectations and monitoring of financial and international events.

The votes for the FOMC monetary policy decision were from Jerome H. Powell, chairman; John K. Williams, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Esther L. George; Loretta J. Mester; and Randal K. Quarles.

August 1, 2018

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Technical analysis of NZD/USD for August 02, 2018

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Overview:

The NZD/USD pair continues to trade downwards from the levels of 0.6807/0.6840 (bearish channel).

The pair has dropped from the level of 0.6807 to trade around the 0.6824 level. This level of 0.6807 coincides with the minor resistance today.

Today, the first resistance levels are seen at 0.6807/0.8640 followed by 0.6880, while daily support 1 is found at 0.6742.

Also, the level of 0.6775 represents a key price today for that it is acting as major resistance/support this week.

Amid the previous events, the pair is still in a downtrend, because the NZD/USD pair is trading in a bearish trend from the new resistance line of 0.6807 towards the first support level at 0.6742 in order to test it.

If the pair succeeds to pass through the level of 0.6742, the market will indicate a bearish opportunity below the level of 0.6742. Then, resell again at the price of 0.6742 with the targets of 0.6716 and 0.6697.

On the other hand, if a breakout happens at the resistance level of 0.6840, then this scenario may be invalidated.

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

Technical analysis of USD/CHF for August 02, 2018

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Overview:

The USD/CHF pair is still set above the pivot point of the price 0.9857 since days. The USD/CHF pair faced resistance at the level of 0.9943. The strong resistance has been already formed at the level of 0.9943 and the pair is likely to try to approach it in order to test it again. However, if the pair fails to pass through the level of 0.9943, the market will indicate a bearish opportunity below the new strong resistance level of 0.9943 (the level of 0.9943 coincides with a ratio of 50% Fibonacci and 61.8%). Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength above the moving average (100) and (50). Thus, the market is indicating a bearish opportunity below 0.9943, so it would be good to sell at 0.9940 with the first target of 0.9795. It will also call for a downtrend in order to continue towards 0.9733. The daily strong support is seen at 0.9733. On the other hand, the stop loss order should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.0053.

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

Fundamental Analysis of EUR/GBP for August 2, 2018

EUR/GBP has been pushing higher despite the volatile momentum it has been struggling for a few months now. Both currencies in the pair are struggling fundamentally and technically which is a result of indecisive actions taken fundamentally and by the market participants.

Ahead of the GBP Official Bank Rate hike from 0.50% to 0.75%, the market is expected to be quite volatile which is expected to lead to certain spikes in the process. As of the Brexit impact and Trade War affecting the growth of the GBP in many ways, the Bank of England is currently looking forward to maintaining the Inflation rate at 2% to keep the economy stable. This is the second time after the big recession at a 2008-2009 session that the UK is increasing its Official Bank Rate. Some of the officials still believe that the UK should have increased the rate earlier to maintain the stability in the economy and by the next few years, there should be at least 2-3 rate hikes for the UK for better outcomes in the future.

On the other hand, ECB has been struggling as well about the recent economic reports including today's Spanish Unemployment Change increasing to -27.1k from the previous figure of -90.0k which was expected to be at -87.6k and PPI also decreasing to 0.4% from the previous value of 0.8% but it managed to be slightly above from the expected value of 0.3%.

As of the current scenario, GBP is all set to gain certain momentum over EUR while latest economic reports on the EUR side is still quite dovish and mostly indecisive. As Official Bank Rate of UK increases and any optimistic update from the BOE Inflation Report and UK Monetary Policy Summary publishes, GBP is expected to gain further momentum in the process against EUR in the coming days.

Now let us look at the technical view. The price has been quite bearish recently having a Bearish Divergence in place which pushed the price lower off the 0.8950 area with a daily close. Currently, the price is being held by the dynamic level of 20 EMA which is expected to push the price lower with a target towards 0.8850 in the coming days before showing any evidence of bullish intervention in the process. If price fails to push higher off the 0.8850 area, a daily close below 0.8850 is expected to inject impulsive bearish momentum in the pair in the coming days.

SUPPORT: 0.8850

RESISTANCE: 0.8950

BIAS: BULLISH

MOMENTUM: VOLATILE

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

Analysis of Gold for August 02, 2018

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Recently, the Gold has been trading downwards. The price tested the level of $1,215.40. Anyway, according to the M30 time frame, I found a potential end of the downward movement. The price stopped exactly at the yesterday's level of $1,215.40, which is a sign that selling looks risky. My advice is to watch for potential buying opportunities. The upward targets are set at the price of $1,218.43 and at the price of $1,221.50.

Resistance levels:

R1: $1,221.50

R2: $1,227.45

R3: $1,230.50

Support levels:

S1: $1,212.49

S2: $1,209.45

S3: $1,203.50

Trading recommendations for today: watch for potential buying opportunities.

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

GBP / USD pair. August 2. Trading system "Regression channels". Judgment Day for the British Pound

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: -103.8619

The GBP / USD currency pair stood in one place all day on August 1, and even the evening announcement of the results of the Fed meeting did not change anything. The results of the Fed's meeting did not impress the traders, as there were no changes in the monetary policy. Now all the attention of the markets is focused on today's meeting of the Bank of England. According to many experts, the British regulator can continue tightening the monetary policy. In this case, the English currency can get market support, which, however, is unlikely to be long. No less important than the results of the meeting will be the speech of the head of the Bank of England, Mark Carney, which may affect the topics of the trade war, Brexit, and monetary policy. His words will determine the mood of traders for the GBP / USD pair in the coming days, as well as the rate, in our opinion. The issue of raising it has not yet been resolved. It is possible that the central bank will not tighten the monetary policy now, given the full range of problems that the UK has faced recently. If the rate is not raised, then a wave of disappointment will overwhelm the markets, and the British pound may fall under serious sell-offs.

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 GBP / USD pair is still slightly below the moving average. Thus, today, August 2, shorts with a target of 1.3062 are relevant. During the publication of the central bank, it is recommended to transfer. Stop Loss to the breakeven, since there are possible sharp price reversals and a surge in volatility.

Long positions are recommended to be opened only after fixing the price above the removals. In this case, the upward movement can begin with the target of 1.3184. However, if the growth is provoked by the Bank of England, a strong upward spurt is not ruled out, followed by a pullback downward. Thus, with long positions today, one should be extremely cautious.

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.

Heiken Ashi is an indicator that color bars in blue or purple.The material has been provided by InstaForex Company - www.instaforex.com

GBP/USD analysis for August 02, 2018

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Recently, the GBP/USD has been trading downwards. The price tested the level of 1.3067. Anyway, according to the M30 time frame, I found a potential end of the downward movement. The price stopped exactly at the support 2 (1.3073), which is a sign that selling looks risky. I also found 2 hammer candles, which suggests that buyers are taking control from sellers. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 1.3098 and at the price of 1.3120.

Resistance levels:

R1: 1.3146

R2: 1.3170

R3: 1.3194

Support levels:

S1: 1.3098

S2: 1.3073

S3: 1.3050

Trading recommendations for today: watch for potential buying opportunities.

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

Fundamental Analysis of AUD/JPY for August 2, 2018

AUD/JPY has been residing inside the range boundary between 80.50 to 84.50 area for a few days now. Currently, the price has been pushing lower quite impulsively which is expected to lead to certain bearish momentum in the coming days. Despite the recent worse economic reports on the JPY side, gaining over AUD having positive economic reports does indicate the weakness of AUD in the process.

Today AUD Trade Balance report was published with a significant increase to 1.87B from the previous figure of 0.73B which was expected to be at 0.91B. Despite the positive economic reports with such a significant increase in a result which is way better than the expectation, AUD failed to gain momentum over JPY.

On the other hand, JPY has been struggling with the economic reports recently which includes increased in Unemployment Rate to 2.4% from the previous value of 2.2%, BOJ Policy Rate remaining unchanged at -0.10% and Consumer Confidence also decrease to 43.5 from the previous figure of 43.7. Ahead of the Monetary Policy Meeting Minutes tomorrow, today JPY Monetary Base report was published with a decrease to 7.0% from the previous value of 7.4%.

As of the current scenario, Despite the worse economic reports, JPY has been sustaining its gains over AUD which lead to certain impulsive bearish pressure in the market already. As of the recent BOJ Policy Report, BOJ is looking forward for upcoming development and quite optimistic with the future growth which is currently analyzed to be the hidden factor behind the impulsive growth of JPY against AUD in the process. As AUD is struggling to gain momentum despite the positive economic reports like Trade Balance, JPY is expected to gain further in the coming days.

Now let us look at the technical view. The price is currently quite impulsive with the bearish gains which has already taken out the dynamic level of 20 EMA with mass extent and expected to push lower further with target towards 80.50 in the coming days. As the price remains below the recent lower high at 83.00 and below the resistance area of 84.50, the bearish bias is expected to continue further.

SUPPORT: 80.50

RESISTANCE: 84.50

BIAS: CORRECTIVE

MOMENTUM: BEARISH

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

The daily review of GBP / USD pair on 01.08.18. Ichimoku Indicator

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GBP / USD pair

In the last few days, there is a small consolidation and uncertainty. The players to rise cannot overcome the key resistance zone, although they retain the daily short-term advantage, using Tenkan (1.3103) as support. On the way of further bullish plans, currently it is 1.3160-80 (Kijuny day + month) and 1.3214-25 (week Tenkan + Senkou Span B). Bears need to return to a downtrend for restoring their moods and prospects (minimum extremum is 1.2957).

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In the resistance zone, many strong and important levels are now concentrated. Breakdown will allow players to raise to consider the nearest landmark, which is the goal for the breakdown of the H4 cloud. Relative to the clouds of the lower halves, fastening in the bearish zone will form insignificant potential downside targets for the breakdown of H1 and H4 clouds. Therefore, the main interest of players to fall in the current situation has a minimum extremum of 1.2957, which allows to restore the downtrend on the daily and weekly time interval.

Indicator parameters:

all time intervals 9 - 26 - 52

Color of indicator lines:

Tenkan (short-term trend) - red,

Kijun (medium-term trend) - green,

Fibo Kijun is a green dotted line,

Chikou is gray,

clouds: Senkou Span B (SSB, long-term trend) - blue,

Senkou Span A (SSA) - pink.

Color of additional lines:

support and resistance MN - blue, W1 - green, D1 - red, H4 - pink, H1 - gray,

horizontal levels (not Ichimoku) - brown,

trend lines - purple.

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

Technical analysis of #INDU for Aug 02, 2018

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If we look at the daily chart of #INDU, we can clearly see this index is already moving in a bullish bias. Since the Mercury Retrograde motion phenomenon started, #INDU get a correction to the downside. It is already confirmed to by the Stochastic Oscillator making a divergence with the price. Approximately the price will go to the ETA for lowest level on Aug 8, 2018. After that day #INDU may start going up again until to the end of the Mercury Retrograde motion on Aug 18, 2018 as long as this index does not break and close bellow the 24,970.20 level.

(Disclaimer)

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

Technical analysis of #GOOG for Aug 02, 2018

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At the daily chart #GOOG looks like moving in a bullish bias condition but since the Mercury Retrograde started, this stock have been correcting and it has filled the previous gap approximatley at Aug 5-8, 2018. It seems #GOOG will be at the lowest level before it manages to resume the previoust bullish trend until the end of the Mercury Retrograde Motion on the Aug 18, 2018 and as long as this stock does not break and close bellow 1187.17 .

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

Technical analysis: intraday levels for EUR/USD for Aug 02, 2018

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When the European market opens, some economic data will be released such as the results of the French and Spanish 10-y Bond Auctions, PPI m/m, and the Spanish unemployment change. The US will release economic data too such as the natural gas storage, factory orders m/m, unemployment claims, and challenger job cuts y/y. So amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1721.

Strong Resistance:1.1714.

Original Resistance: 1.1703.

Inner Sell Area: 1.1692.

Target Inner Area: 1.1664.

Inner Buy Area: 1.1636.

Original Support: 1.1625.

Strong Support: 1.1614.

Breakout SELL Level: 1.1607.

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 levels for USD/JPY for Aug 02, 2018

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In Asia, Japan will release the 10-y Bond Auction results and the monetary base data. At the same time, the US will also reveal some economic data such as the natural gas storage, factory orders m/m, unemployment claims, and challenger job cuts y/y. So there is a probability USD/JPY will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance. 3: 112.21.

Resistance. 2: 111.99.

Resistance. 1: 111.77.

Support. 1: 111.49.

Support. 2: 111.27.

Support. 3: 111.06.

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

Trading plan for 02/08/2018

Trade tension is the main topic in the first hours of Thursday's trade. In the currency market, this means a strengthening of the USD, although it also initiates the realization of profits from recent increases in USD / JPY. The stock market in China drops almost -3.0%. Demand for gold is small, while oil is stable.

During the night, the US administration took a step towards tightening the restrictions on trade with China, proposing a 25-percent. instead of 10-percent duty rates on goods worth USD 200 billion. The fears strengthened the role of the USD as a "safe haven", but also spoiled the sentiment in the stock market. USD mainly gains to AUD and NZD but loses in relation to JPY as a result of profits from recent increases and a drop in Nikkei225 by 1.1%.

On Thursday the 2nd of August, the main event of the day is the Bank of England interest rate decision that will be issued at 12:00 pm GMT, together with MPC Official Bank Rate Votes, Inflation Report, Monetary Policy Summary and Asset Purchase Facility data. The BoE Governor Mark Carney will give a speech at 12:30 pm GMT. The other important data to be released today are Construction PMI from the UK and Unemployment Claims from the US.

AUD/USD analysis for 02/08/2018:

Trade balance of Australia after June amounted to AUD 1.87 billion against expected 0.9 billion due to weaker import dynamics.

A country's trade balance reflects the difference between exports and imports of goods and services. The trade balance is one of the biggest components of the Balance of Payment, giving valuable insight into pressures on the country's currency. A positive Trade Balance (surplus) indicates that exports are greater than imports. When imports exceed exports, the country experiences a trade deficit. Because foreign goods are usually purchased using foreign currency, trade deficits usually reflect currency leaking out of the country. Such currency outflows may lead to a natural depreciation unless countered by comparable capital inflows (inflows in the form of investments, FDI - where foreigners investing in local equity, bond or real estates markets). At a bare minimum, deficits fundamentally weigh down the value of the currency.

Let's now take a look at the AUD/USD technical picture at the H4 time frame. The Aussie did not move much after the data, but tensions between the US and China supply arguments and during the session they pulled the rate to 0.7380. Currently, the market trades in the middle of the range as it bounces from the internal trend line support at the level of 0.7380. The nearest technical support is seen at the level of 0.7359 and the nearest technical resistance is seen at the level of 0.7440. The market conditions remain s neutral with a slight bias to the downside.

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

Bitcoin analysis for 02/08/2018

A large new report by the US Treasury Department called for a more flexible and favorable regulatory approach to innovation in the fintech and blockchain sector.

The 222-page report on "Non-Bank Finance, Fintech and Innovation" only briefly affects cryptocurrencies and distributed-list technologies (DLTs) such as Blockchain, noting that they are currently being investigated separately as part of an interagency action carried out by the Supervisory Board's Working Group on Financial Stability. In general, the document indicates a strong impulse from the US government to support emerging financial technologies and modernize the existing regulatory framework to remove obstacles to their evolution.

Noting that interest in the crypto assets of financial authorities around the world has increased significantly, the Ministry of the Treasury points to the special efforts of the G20 group to identify appropriate indicators for monitoring the newly emerging sector. The Treasury Department also recognizes a number of DLT applications developed by the financial services industry - though it notes that their services are still very uncertain.

In addition, the Ministry of the Treasury supports the use of regulatory sandboxes and encourages the creation of laboratories, working groups, innovation offices and other channels for industry players that would allow them to directly cooperate with regulators. A symbiotic relationship between regulators and innovators is needed to support the US economy and maintain global competitiveness.

This last message echoes the fears recently expressed by the president of the US Commodity Futures Commission (CFTC), which said that the US is lagging behind other countries in promoting innovation. The CFTC president noted in particular that the agency has no legally compliant procedures that would allow it to participate directly in the proof testing Proof-of-Concept (PoC), even though it created a dedicated LabCFTC to promote innovation in fintech.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The price has retraced 38% of the previous swing up and currently, is bouncing from the level of $7.405. The nearest technical resistance is seen at the level of $7,755 and only if this level if clearly impulsively violated, the bulls might regain the control over the market. Moreover, please notice the whole downward structure is corrective in nature, so there is a chance for an impulsive rebound higher.

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

Global macro overview for 02/08/2018

Before the today's Bank of England interest rate decision the market is counting on the so-called dove raise, i.e. the decision to raise, wrapped in a careful and not very optimistic comment. However, with the uncertainty associated with the Brexit negotiations and after the last series of weaker data, the Bank of England will have to justify the increase, which poses a risk of hawkish receipt. Lack of pound strength to rebound suggests that demand is waiting for the green light that BoE can give.

The money market has discounted today's hike to over 90%, seeing less 10% chances for the next move before the end of the year and one full move by 25 bp by the end of 2019. With such a valuation, the decision on the hike will not be an element conquering the GBP volatility. Support for the 9-0 application is the most likely scenario for building the consistency of the message. If BoE wants to raise interest rates, August is the last date this year. If you prefer the meetings where the Inflation Report is published, the next opportunity will be in November, just a few days after deciding whether the UK and the EU have set Brexit conditions. Suspending such a critical decision for a period of potential political turmoil would be ill-advised.

The Bank of England has no interest in deepening the weakness of the GBP, hence there is no justification in the overly dovish tone of the monetary statement. Too weak GBP will disturb inflation trends, which will only make it difficult for BoE to assess indicators. The present valuation of the pound even the neutral overtone of the message can be positively received, thus becoming a catalyst for closing short positions in GBP. Relief in the absence of information noise related to

Brexit (holiday break of the British parliament) may be a good excuse to draw GBP higher, but it seems to us that first the central bank is needed to be ignited.

Let's now take a look at the GBP/USD technical picture at the H4 time frame before the BoE decision is made. The market calmly awaits the interest rate decision as it is trading in the middle of the range at the level of 1.3102 at the time of writing.

The internal trend line is giving the support for the price, but in a case of a further weakness, the next technical support is seen at the level of 1.3072 and 1.3049. The most important technical support is still at the level of 1.2955. On the other hand, the technical resistance zone between the levels of 1.3191 - 1.3217 is preventing the price from falling higher, so in the bulls want to regain the control over the market, they must break out impulsively above this zone.

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

Global macro overview for 02/08/2018

As assumed by economists of large financial institutions and predicted the vast majority of analysts, during the August monetary policy meeting, the Federal Open Market Committee (FOMC) decided to keep the federal funds rate within a fixed range of 25 basis points (1.75% -2%).

In the content of the monetary policy statement, only slight changes occurred and those were mainly related to household expenditures (earlier it was suggested that they "increased" now that they "have clearly increased." In addition, the FOMC reported a strong increase in economic activity, maintaining the unemployment rate at low levels, the position of 12-month inflation at a small distance from the 2% ceiling and no change in forwarding guidance.

Let's now take a look at the US Dollar Index reaction at the H4 time frame after the decision was made. The changes are hardly noticeable as the price is still hovering around the golden trend line resistance as the bulls are trying to test the technical resistance at the level of 94.93. The price is still inside of the consolidation zone between the levels of 94.10 - 94.93 but after the FED decision the technical indicators are biased to the upside: momentum is above its fifty level and the stochastic is bouncing from the oversold levels. Any violation of the level of 94.93 will open the road towards the next target at the level of 95.25.

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

Elliott wave analysis of EUR/JPY for August 2, 2018

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EUR/JPY is currently testing the 50 - 61.8% corrective target of blue wave i between 129.88 - 130.12. We expect this support-zone max. 129.68 will be able to support EUR/JPY for the next impulsive rally towards 131.69 and 133.26 as the next sub-targets on the way higher to 135.74 and longer term much higher.

An unexpected break below 129.68 will be slightly disappointing, but support at 129.09 should continue to protect the downside for a continuation higher.

R3: 131.15

R2: 130.68

R1: 130.30

Pivot: 130.00

S1: 129.88

S2: 129.68

S3: 129.48

Trading recommendation:

We are long EUR from 130.28 with our stop placed at 129.50. If you are not long EUR yet, then buy EUR in the 129.88 - 130.12 support-zone and use the same stop at 129.50.

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

Elliott wave analysis of EUR/JPY for August 2, 2018

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EUR/JPY is currently testing the 50 - 61.8% corrective target of blue wave i between 129.88 - 130.12. We expect this support-zone max. 129.68 will be able to support EUR/JPY for the next impulsive rally towards 131.69 and 133.26 as the next sub-targets on the way higher to 135.74 and longer term much higher.

An unexpected break below 129.68 will be slightly disappointing, but support at 129.09 should continue to protect the downside for a continuation higher.

R3: 131.15

R2: 130.68

R1: 130.30

Pivot: 130.00

S1: 129.88

S2: 129.68

S3: 129.48

Trading recommendation:

We are long EUR from 130.28 with our stop placed at 129.50. If you are not long EUR yet, then buy EUR in the 129.88 - 130.12 support-zone and use the same stop at 129.50.

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

Technical analysis: Intraday level for USD/JPY, Aug 02, 2018

In Asia, Japan will release the 10-y Bond Auction and Monetary Base y/y data, and the US will release some Economic Data such as Natural Gas Storage, Factory Orders m/m, Unemployment Claims, and Challenger Job Cuts y/y. 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: 112.21.

Resistance. 2: 111.99.

Resistance. 1: 111.77.

Support. 1: 111.49.

Support. 2: 111.27.

Support. 3: 111.06.

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/JPY for August 2, 2018

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EUR/JPY is currently testing the 50 - 61.8% corrective target of blue wave i between 129.88 - 130.12. We expect this support-zone max. 129.68 will be able to support EUR/JPY for the next impulsive rally towards 131.69 and 133.26 as the next sub-targets on the way higher to 135.74 and longer term much higher.

An unexpected break below 129.68 will be slightly disappointing, but support at 129.09 should continue to protect the downside for a continuation higher.

R3: 131.15

R2: 130.68

R1: 130.30

Pivot: 130.00

S1: 129.88

S2: 129.68

S3: 129.48

Trading recommendation:

We are long EUR from 130.28 with our stop placed at 129.50. If you are not long EUR yet, then buy EUR in the 129.88 - 130.12 support-zone and use the same stop at 129.50.

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

Elliott wave analysis of EUR/JPY for August 2, 2018

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EUR/JPY is currently testing the 50 - 61.8% corrective target of blue wave i between 129.88 - 130.12. We expect this support-zone max. 129.68 will be able to support EUR/JPY for the next impulsive rally towards 131.69 and 133.26 as the next sub-targets on the way higher to 135.74 and longer term much higher.

An unexpected break below 129.68 will be slightly disappointing, but support at 129.09 should continue to protect the downside for a continuation higher.

R3: 131.15

R2: 130.68

R1: 130.30

Pivot: 130.00

S1: 129.88

S2: 129.68

S3: 129.48

Trading recommendation:

We are long EUR from 130.28 with our stop placed at 129.50. If you are not long EUR yet, then buy EUR in the 129.88 - 130.12 support-zone and use the same stop at 129.50.

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

Elliott wave analysis of EUR/JPY for August 2, 2018

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EUR/JPY is currently testing the 50 - 61.8% corrective target of blue wave i between 129.88 - 130.12. We expect this support-zone max. 129.68 will be able to support EUR/JPY for the next impulsive rally towards 131.69 and 133.26 as the next sub-targets on the way higher to 135.74 and longer term much higher.

An unexpected break below 129.68 will be slightly disappointing, but support at 129.09 should continue to protect the downside for a continuation higher.

R3: 131.15

R2: 130.68

R1: 130.30

Pivot: 130.00

S1: 129.88

S2: 129.68

S3: 129.48

Trading recommendation:

We are long EUR from 130.28 with our stop placed at 129.50. If you are not long EUR yet, then buy EUR in the 129.88 - 130.12 support-zone and use the same stop at 129.50.

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

Technical analysis of EUR/USD for August 2, 2018

The EUR/USD remains trapped inside the short-term triangle pattern. With a rejection at the upper triangle, boundary prices fell back below 1.17 towards the short-term support at 1.1660. However, the key level for traders and bulls is at 1.16.

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Red lines - triangle pattern

Blue line - short-term support

The EUR/USD has stopped its decline at the short-term support level of 1.1660. Next and most important support level is at 1.16. A daily close below this area will be a big sell signal pushing the pair towards 1.13. On the other hand, bulls need to take control of the trend by breaking above 1.1740-1.1760. For the time being, we continue to buy near support and go short near resistance.

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

Technical analysis of Gold for August 2, 2018

The Gold price got rejected at the short-term resistance at $1,225 and is now challenging recent lows at $1,216. The trend remains bearish with price trapped inside the downward sloping wedge pattern. Bulls need to overcome $1,225 for a tradeable big bounce that could lead to $1,300. Until then we can expect the Gold price to reach $1,204.

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Black lines - wedge pattern

Blue line - RSI resistance

Magenta line - short-term bullish divergence

Red line - medium-term bullish divergence

The Gold price despite the new lows continues to provide us with bullish divergence signs. This downward move will resolve to a big upward short squeeze but as long as the price is below $1,225 I have little hopes left for the bullish view. Bulls have not shown any sign of strength lately. Bears are in full control of the trend. Next target is at $1,204. Break $1,225 and we can start a big bounce.

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

Gold bets on August

July was the fourth consecutive month of gold closing in the red zone. The precious metal has not faced such a protracted peak since 2013. The US economy and the aggressive monetary tightening of the Fed, which gained under the influence of the fiscal stimulus, dealt a serious blow to the positions of the bulls in the XAU/USD. The futures market is almost 70% confident that the Federal reserve will raise rates twice before the end of the year amid a drop in unemployment to 4%, inflation to the target and an impressive +4.1% q/q of GDP for the second quarter.

Quarterly dynamics of gold

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While Japanese investors kept the yield of 10-year US Treasury bonds below the psychologically important 3% mark, and the growth of US stock indices did not allow precious metals to play a role in escalating trade conflicts, a strong dollar left it no chance. Even the information from competent Reuters sources about Donald Trump's willingness to announce the expansion of import duties for China by $200 billion was perceived as a reason for selling the XAU/USD in the near future. The dollar, for investors, seems to be a more reliable safe-haven asset than gold.

What can the precious metal answer? First, the seasonal factor can play on its side. August is the second best month for gold after January. By the end of the last month of summer 2017, it has strengthened by more than 4%, and in 2016-2017, ETF reserves added about 4%. Second, speculative net longs have fallen to a record low since the date of the accounting in 2006. They are lower than at the end of 2015, when the Fed started the process of monetary policy normalization. Finally, third, the market has serious doubts about the ability of the US economy to maintain the pace taken in the second quarter. Let Donald Trump in this no doubt, but the logic says the opposite. The gradual fading of the effect of tax reform, tightening of the Fed's monetary policy, trade wars and the dollar's revaluation in April-July increase the risks of a slowdown in GDP in the third-fourth quarters.

Another thing is that the main competitor of the dollar in the face of the single European currency is not shining yet. In April-June, the divergence in economic growth of the US and the eurozone turned out to be the broadest one since 2014. This does not allow us to count on the ECB's departure from ultra-soft monetary policy and creates serious obstacles for the EUR/USD to move upwards.

In the short term, gold is likely to show increased sensitivity to the results of the FOMC meeting and the release of data on the US labor market. The Fed's "dovish rhetoric and sluggish wage growth will push futures prices in the direction of $1,250 per ounce. On the contrary, if the central bank prefers the "hawkish" hunt, and the statistics on wages will please the eye, the precious metal risks to continue the peak in the direction of $1200.

Technically, gold is trying to push off the convergence zone of $1207-1222 (targets for 200% and 88.6% by the AB=CD and "Shark" patterns). If the bulls manage to keep the quotes above the important support, the risks of a rollback to $1,243 and $1,272 will increase.

Gold, daily chart

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

Control zones USDCAD 01.08.18

The downward medium-term movement remains a priority, since the main resistance zones remain untouched. On Tuesday, the pair continued its downward movement, and the next target was the NKZ 1/2 1.2931-1.2921.

The current phase of the market is a bearish momentum. This makes it possible to sell the instrument in case of corrective growth. The first resistance for Wednesday's growth will be NKZ 1/4 1.3040-1.3035. If a pattern for sale is formed below the specified zone, then opening a short position will be a profitable investment. A downside target is the 1/2 NKZ 1.2931-1.2921, which will result in a risk-to-profit ratio for sales of 1 to 3 or more.

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The determining resistance is NKZ 1/2 1.3102-1.3091. As long as the pair is trading below the specified zone, the downward movement will remain an impulse, and the probability of updating the July low will be 70%.

To break the downward medium-term model, the pair will need to grow and the day's US session should close above the level of 1.3102. This will allow us to consider the purchase tomorrow. The growth target will be the weekly short-term index of 1.3227-1.3204, where the fate of the downward medium-term momentum will be determined. The probability of forming an upward model is 30%, which makes it auxiliary one.

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Daytime CP is the daytime control zone. The zone formed by important data from the futures market, which changes several times a year.

Weekly CP is the weekly control zone. The zone formed by important futures market marks, which changes several times a year.

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

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

Control zones EUR/USD 01.08.18

Yesterday, there was a test of NKZ 1/2 1.1721-1.1712 which acts as the determining resistance in the current flat phase of the market. The false breakdown of this zone indicates the continuation of work in the medium-term accumulation zone.

After the formation of the reversal downward model on July 26, the main resistance was the NKZ 1/2 1.1721-1.1712, the test of which occurred yesterday. Closure of the American session occurred below the zone which indicates a top-down priority. Since the last week's maximum was not updated, the target of the fall is the weekly KZ 1.1565-1.1547, where fixation of the short position will be required. It is important to note that above the 1.1728 level, there remains a zone of large limit orders. This suggests that large players are interested in keeping the euro below the specified mark.

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The first point for possible fixations of sales is the minimum of last week, the test of which can lead to the emergence of demand and the corrective growth of the pair. This will give an opportunity to reopen sales at favorable prices.

To eliminate the downward impulse, the closing of today's US session should be above the NKZ 1/2 1.1721-1.1712. This will disrupt the current medium-term accumulation zone and allow us to consider growth in the long term. Purchases will come initially tomorrow, and the downward medium-term model does not work. The probability of implementing the upward model is 30%, which makes it a support and the main work should be conducted to the direction of weakening the euro.

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

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

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

* 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 United States is preparing an announcement to China of the Cold War

The United States is preparing an announcement to China regarding the Cold War.

The US Congress is preparing to adopt a new law on defense (National Defense Authorization Act) for $ 716 billion a year.

According to congressmen, this time the law on defense will be clearly directed against China. Congressmen point to such threats from China: aggressive actions in the South China Sea, theft of advanced technologies in the US, and propaganda of "communist ideas" in the United States. As a threat along with China, congressmen mentioned Russia.

After the actions of the Trump Administration against China in trade, support for anti-Chinese actions in both major US parties is growing.

The US National Defense Strategy for 2018 (unclassified part) points to the main threat to the United States - the resumption of global rivalry for world leadership (as it was before the collapse of the USSR in 1991 - Makarov's comment). The document says that China is carrying out an intensified military modernization and an aggressive economic policy while striving to expand the sphere of influence to subordinate the regions of the Indian and Pacific Ocean economically. Previously, the United States said that they would not allow one country to dominate the region - an explicit statement against China.

The new law on defense requires a sharp toughening of China's access to advanced US technologies. This can affect a large number of US companies manufacturing their devices in China.

The bill requires limiting the influence of Chinese propaganda on the American media, cultural institutions, academic institutions, and business.

All this together is very similar to the attitude of the US to the USSR in the midst of the Cold War.

Conclusion: The US this law is ready to officially start a cold war with China.

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