Burning forecast for EUR/USD on 07/31/2019 and trading recommendation

So, the date of the next meeting of the Federal Open Market Committee has come, and although everyone seems ready to lower the refinancing rate from 2.50% to 2.25%, there is quite a lot of interesting things that await us. Indeed, the market seems to have been morally ready to mitigate the monetary policy of the Federal Reserve System for a long time, but looking at the dollar, there were no special preparatory measures. It has been growing almost non-stop for almost a month. Although the idea was a complete opposite. This is largely due to the fact that, apart from a couple of representatives of the Federal Reserve System, no one else directly spoke about lowering the refinancing rate. So the intrigue remains. The truth is not in terms of whether or not the financing rate will be reduced today. It is clear that as soon as it becomes known that the refinancing rate was lowered, the dollar will begin to lose its position. The question is what exactly Jerome Powell will say today. If during his press conference he even hints at another reduction in the refinancing rate by the end of the current year, the dollar will lose its position with doubled strength. But if we do not hear this, then the weakening of the dollar will obviously be limited. And not long. There is also a rather amusing option, concluding that the Federal Reserve System will leave the refinancing rate unchanged. Of course, this is extremely unlikely, but if this happens, we will see a panic, and even hysterical, strengthening of the dollar. But again, not for long.

analytics5d413776992d7.png

The EUR/USD pair found support in the control point in the form of a range level of 1.1100, slowed down the downward movement and has in fact formed a pullback, with a subsequent accumulation. Analyzing the trading graph and the sequence of measures, we see that the wait-and-see position in the action plan of traders is clearly visible in the run-up to the Fed meeting. The accumulation, which already focuses as the fourth trading day, gives us an estimated scope of 1.1110/1.1160, with respect to which the fluctuation is made.

It is likely to assume that at first an awkward stagnation awaits us, after which a surge will occur against the background of the information flow. Trading recommendations in this case are divided into two options: First, we are holding a wait-and-see position outside the market and after the splash of the information background we analyze and enter the market; The second option is considered in terms of the Fed lowering the key rate, giving a consistent upward movement: 1.1180 --- 1.1230.

It is necessary to take into account such a moment that if predictions about a lowering of the rate are not justified, then the graph will sparkle with new colors, in the form of a hysterical decline.

From the point of view of the complex indicator analysis, we see that a stagnation within the upper accumulation limit led to the fact that the indicators on the minute and intraday intervals took the upward position. At the same time, in deeper time areas, like the day period, they maintain a downward interest against the background of an earlier descent.

analytics5d41379851c97.png

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

GBP/USD. July 30th. Results of the day. Boris Johnson and Stephen Barclay "killed" the pound sterling

4-hour timeframe

analytics5d41340200041.png

The amplitude of the last 5 days (high-low): 64p - 96p - 81p - 84p - 170p.

Average amplitude for the last 5 days: 99p (77p).

The collapse of the British pound sterling ended last night. Since then, the pound-dollar pair has been moving sideways with low volatility. That is, the upward correction did not start even after a sharp drop in the quotations of the pound, which means that traders do not even close short positions and, certainly, are not buying the British currency. Thus, there still are not many chances for the pound to more or less sharply strengthen. The pound fell due to Boris Johnson's firm attitude on the "hard" Brexit until October 31. In the first few days of his reign, he seemed to give hope for new negotiations with the European Union, but his ultimatums to Brussels, of course, did not cause joy among European colleagues. Thus, the new negotiations did not work out, and the country is moving at full speed into the abyss ... that is, to exit from the EU without any agreements. London-based Brexit negotiator Stephen Baclay, who confirmed Johnson's words that the United Kingdom will leave the EU in any way on October 31, had finished off the pound sterling. On the one hand, for the UK and, especially, the British pound, this may not be such a bad option. Since uncertainty and delaying the terms also have a negative effect on the country's economy and currency rate. Yes, the hard Brexit will hit the economy hard, but after it, the worst will be left behind and the UK economy will start to rise. Moreover, if there were real opportunities to reach an agreement with the EU, then one could complain that the government chose the wrong policy or was simply incompetent, but the issue of back-stop remains open and the parties have not advanced a word of it in the negotiations.

Trading recommendations:

The pound/dollar currency pair resumed the increased downward movement. Thus, it is now recommended to continue selling the pound sterling while aiming for the support level of 1.2065.

After the pair has consolidated above the critical line, it will be possible to buy the British currency, however, with extreme caution and in small lots. The first goal is the level 1.2476.

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

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen - the red line.

Kijun-sen - the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dotted line.

Chikou Span - 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 ETH/USD for 31/07/2019:

Crypto Industry News:

The US Department of Defense (DoD) aims to implement Blockchain's cybersecurity solution as part of its digital modernization strategy.

DoD has published plans for Blockchain technology in its four-year plan entitled "Digital DoD modernization strategy: Strategic plan for information management FY19-23."

According to the report, the Department's research branch, the Advanced Defense Research Projects Agency (DARPA), is currently involved in at least two cybercrime exploration projects using Blockchain.

First, DARPA is experimenting with Blockchain to build a new - or improved - communication and transaction platform. The stated intentions for this platform include communication between the units and the headquarters, as well as between intelligence officers and the Pentagon.

Second, DARPA tries to create an "unclassified code" using Blockchain technology, citing the ability of Blockchain to collect information about villains who are trying to break into databases.

Earlier, in February, DARPA announced plans to organize a two-day Blockchain workshop. DARPA was particularly interested in the study of consensus protocols not requiring consent. The organization also noted that there are potentially valuable use cases for Blockchain in storing data, saying: "The technologies of distributed consensus protocols have been revolutionized thanks to their significant role in cryptocurrency technologies and Blockchain. These technologies have dramatic implications for security and resilience when storing sensitive data and calculations, including for the Department of Defense".

Technical Market Overview:

Not much has changed at this market since the beginning of the week as the ETH/USD pair still keeps trading inside of a narrow price range between two levels of $189.91 - $223.38. The level of the local support at $199.68 has been tested, but the price did not break below but bounced back to the range. The bulls did not make any decision regarding the possible move higher, so the bullish momentum is decreasing as the price goes nowhere fast. In order to continue the move upwards, the bulls must break through the Fibonacci retracement levels located at $223.38, $233.77 and $244.16. Oterwise, the market will stay inside of the trading range or will be pushed lower by bears to test the technical support at the level of $189.91 again.

Weekly Pivot Points:

WR3 - $247.21

WR2 - $236.28

WR1 - $220.47

Weekly Pivot - $209.37

WS1 - $191.97

WS2 - $182.25

WS3 - $161.51

Trading recommendations:

The best strategy in the current market conditions is to trade with the larger timeframe trend, which is still up. All the shorter timeframe moves are being treated as a correction inside of the uptrend. The current cycle is wave 2 of the higher degree and it might have been completed, so the uptrend should resume sooner or later.

analytics5d412e9414afb.jpg

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

Technical analysis of BTC/USD for 31/07/2019:

Crypto Industry News:

Fortaleza, the main city of Northeast Brazil, will start to accept Bitcoin as a form of payment for bus tickets until the end of 2019.

Local transport services have announced an initiative to enable citizens to pay for bus tickets with credit and debit cards, as well as Bitcoin and other cryptocurrencies. This initiative aims to reduce operational costs in the ticket system.

The entity, known as the Cooperative of Independent Transport of Passengers of State of Ceara (Cootraps), said passengers would be able to pay for their travels with Bitcoin via smartphones by scanning the QR code.

While Cootraps reportedly stated that the incoming system would also accept other cryptos in addition to Bitcoin, the co-operative did not explain any further details in this matter.

However, Carlos Roberio Sampaio, CFO at Cootraps, reportedly said that the new payment methods would reduce the amount of bureaucracy required and attract more users because the unit expects to simplify payment procedures by processing them using electronic coupons. In addition, passengers will be able to pay for tickets without disturbing the driver's work.

Technical Market Overview:

The BTC/USD pair has bounced out of the trading range and currently is testing the trendline resistance around the level of $9,753. Any breakout above this trendline will be considered bullish breakout with a target at the level of $10,166. The increasing momentum supports the short-term bullish outlook.

Weekly Pivot Points:

WR3 - $11,468

WR2 - $11,040

WR1 - $10,062

Weekly Pivot - $9,661

WS1 - $8,704

WS2 - $8,287

WS3 - $7,289

Trading recommendations:

The best strategy in the current market conditions is to trade with the larger timeframe trend, which is still up. All the shorter timeframe moves are being treated as a correction inside of the uptrend. The larger degree WXY correction might have been completed and the market might be ready for another impulsive wave up.

analytics5d412d5d88045.jpg

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

Technical analysis of EUR/USD for 31/07/2019:

Technical Market Overview:

After three tests of the support at the level of 1.1112, the EUR/USD bulls decided to bounce a little bit higher, possibly towards the upper range border at the level of 1.1181. The momentum is positive and there are no signs of a trend reversal. Even if the bulls will manage to 1.1181, this moves up will be considered as a local correction inside of a downtrend. The next target for bears is located at the level of 1.1023.

Weekly Pivot Points:

WR3 - 1.1307

WR2- 1.1265

WR1 - 1.1188

Weekly Pivot - 1.1140

WS1 - 1.1055

WS2 - 1.1016

WS3 - 1.0927

Trading recommendations:

After the level of 1.1181 gas been violated, the best strategy for the current market conditions is to trade with the larger timeframe trend, which is still down. The Ending Diagonal pattern has not been finished yet and the bears are in full control of the market. The longer-term target is seen at the level of 1.0814, from where the traders can expect a larger rebound.

analytics5d412b8a27576.jpg

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

EUR/USD. July 30th. Results of the day. China decided on its trump card in the trade war with Donald Trump

4-hour timeframe

analytics5d413143d9c93.png

The amplitude of the last 5 days (high-low): 64p - 29p - 86p - 39p - 38p.

Average amplitude for the last 5 days: 51p (47p).

Barely, with grief in half, on Tuesday, July 30, the EUR/USD pair began an upward correction. At the beginning of this week, there were no important macroeconomic publications, so traders are fully focused on the upcoming announcement of the results of the Federal Reserve meeting, which will be held today. Yesterday reports were published on the change in personal incomes and expenditures of the US population, both values increased and coincided with the predicted values. The consumer confidence indicator rose to 135.7 altogether, exceeding the forecast by 10 points at once. However, the forex market still does not force events and waits for the FOMC meeting. A separate topic could be the next round of talks between China and the United States, which also started yesterday in Shanghai. In principle, both sides remain firm with their positions, which they have already reiterated. The United States require a conclusion on the trade deal on their terms and necessarily before Trump's presidency expires. China does not want to be led by Trump, is not going to concede in matters relating to sovereignty and, it seems, is trying to ensure that Trump's term is over. Trump understands where the Chinese side is heading and threatens a tougher deal or the lack of it at all if China deliberately delays the negotiations. However, if China nevertheless reaches the negotiations until 2020, and the next president is not Trump, then the likelihood of a more productive dialogue for China will increase many times. Thus, it is really beneficial for Beijing to delay the negotiations in a covert manner.

Trading recommendations:

EUR/USD has moved to a weak upward correction. Thus, it is now recommended to wait for the MACD indicator to turn down and consolidate the price below the Kijun-sen line and again sell the euro with targets of 1.1104 and 1.1078.

Formally, you can buy the euro/dollar pair now while aiming for the resistance level of 1.1201, but with a short stop, since the results of the Fed meeting could turn out to be a surprise, or just that traders might react to it in a not quite logical way.

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

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen - the red line.

Kijun-sen - the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dotted line.

Chikou Span - 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 GBP/USD for 31/07/2019:

Technical Market Overview:

The GBP/USD pair has hit the level of 1.2118 as anticipated. The local low was made so far at the level of 1.2118, but it is only a matter of time the level of 1.2100 is hit. the bounce was shallow and the market is making a pennant formation, which is a trend continuation pattern. The momentum indicator remains weak nad negative, which indicated a further possible spike towards the level of 1.1983. The trend is still down and there are no signs of a trend reversal yet.

Weekly Pivot Points:

WR3 - 1.2594

WR2- 1.2550

WR1 - 1.2446

Weekly Pivot - 1.2406

WS1 - 1.2296

WS2 - 1.2257

WS3 - 1.2154

Trading recommendations:

The best strategy for the current market conditions is to follow the larger timeframe trend. The larger time frame trend is still down and there are no signs of any trend reversal. The key long-term technical support at the level of 1.2420 has been violated and the next target for bears is seen at the level of 1.2100 and 1.1983. All the corrections are just the local correction inside of a downtrend.

analytics5d4129537a6cc.jpg

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

Control zones of USD/CHF pair on 07/31/19

The first support in the form of 1/4 WCZ of 0.9890-0.9885 was tested yesterday, which led to an increase in demand. Purchases made after the specified test should be transferred to breakeven after updating the weekly maximum. Further growth is possible before the weekly CZ of 1.0047-1.0025, which gives a very favorable ratio of risk to profit.

analytics5d412e8c1b70d.png

Working in the upward direction is the priority since a reversal pattern was formed.

An alternative model is to obtain better prices for the purchase. Reduction to the a WCZ of 0.9835-0.9825 will allow considering purchases at more favorable prices. his model will be formed only if the closure of today's US session happens below 0.9885. The 1/2 WCZ is outside of the average day course, so it will take two days or more to test it.

analytics5d412e8c1b70d.png

Daily CZ - daily control zone. The area formed by important data from the futures market, which changes several times a year.

Weekly CZ - weekly control zone. The area formed by marks from the important futures market, which changes several times a year.

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

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

Control zones AUDUSD 07/31/19

The current downward movement is corrective, so it is necessary to identify meaningful support in strengthening the Canadian dollar. The main support will be the WCZ 1/2 1.3111-1.3103. A test of this zone will indicate further priority. If the reaction is an increase in demand, it means that purchases will come to the fore again. The first growth target will be the weekly CZ 1.3206-1.3189.

analytics5d412913a8297.png

Now the pair is trading within the framework of the local flat, therefore, deals from current levels are not profitable to either side.

An alternative model will be developed in case the pair can consolidate below the level of 1.3103 in today's US session. This will indicate the completion of the upward momentum and the transition to a bearish phase. The probability of the implementation of this model is still at 30%.

analytics5d4129291b7bc.png

Daily CZ - daily control zone. The area formed by important data from the futures market, which change several times a year.

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

Monthly CZ - 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

Technical analysis: Important Intraday Levels For EUR/USD, July 31, 2019

analytics5d410df14461e.jpg

When the European market opens, some economic data will be released such as German 10-y Bond Auction, Italian Prelim GDP q/q, Unemployment Rate, Prelim Flash GDP q/q, Italian Prelim CPI m/m, Core CPI Flash Estimate y/y, CPI Flash Estimate y/y, Italian Monthly Unemployment Rate, German Unemployment Change, Spanish Flash GDP q/q, French Prelim CPI m/m, and German Retail Sales m/m. The US will also publish the economic data such as Federal Funds Rate, Crude Oil Inventories, Chicago PMI, Employment Cost Index q/q, and ADP Non-Farm Employment Change, so amid the reports, the EUR/USD pair will move with medium to high volatility during this day. TODAY'S TECHNICAL LEVELS: Breakout BUY Level: 1.1211. Strong Resistance: 1.1205. Original Resistance: 1.1194. Inner Sell Area: 1.1183. Target Inner Area: 1.1157. Inner Buy Area: 1.1131. Original Support: 1.1120. Strong Support: 1.1109. Breakout SELL Level: 1.1103. (Disclaimer)

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

Technical analysis: Important Intraday Levels for USD/JPY, July 31, 2019

analytics5d410d564da57.jpg

In Asia, Japan will release the Housing Starts y/y and Consumer Confidence. The US will also publish some economic data such as Federal Funds Rate, Crude Oil Inventories, Chicago PMI, Employment Cost Index q/q, and ADP Non-Farm Employment Change. So there is a probability the USD/JPY pair will move with medium to high volatility during this day. TODAY'S TECHNICAL LEVELS: Resistance. 3: 109.17. Resistance. 2: 108.96. Resistance. 1: 108.75. Support. 1: 108.49. Support. 2: 108.28. Support. 3: 108.06. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD approaching resistance, potential drop!

analytics5d411e97af05d.jpg

EURUSD is approaching our first resistance where we are expecting a drop below this level.

Entry: 1.1185

Why it's good : Horizontal overlap resistance, 100% Fibonacci extension, 23.6% Fibonacci retracement

Stop Loss : 1.1222

Why it's good : horizontal swing high resistance, 61.8%, 38.2% Fibonacci retracement

Take Profit : 1.1120

Why it's good: Horizontal swing low support

analytics5d411e4953574.png

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

NZD/USD broke past support, potential further drop!

analytics5d411dba30329.jpg

Price broke past its major support turned resistance where we expect to see a further drop to its 1st support.

Entry: 0.6597

Why it's good : major support turned resistance

Stop Loss : 0.6640

Why it's good : 23.6% Fibonacci retracement

Take Profit : 0.6516

Why it's good: 76.4% Fibonacci retracement, horizontal swing low support

analytics5d411d2b7b4b3.png

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

USD/JPY reaching support , potential bounce!

analytics5d411cac7e933.jpg

USDJPY is approaching 1st support at 108.365, potential bounce could occur!

Entry :108.365

Why it's good :38.2% Fibonacci retracement

61.8% Fibonacci extension

Horizontal pullback support

Take Profit : 108.956

Why it's good : horizontal swing high resistance

100% Fibonacci extension

analytics5d411c8d2eb3d.png

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

Forecast for AUD / USD pair on July 31, 2019

AUD / USD pair

The Australian dollar reached a target of 0.6866 (defined at least on May 17) and set off to corrective growth this morning after an eight-day fall. The targets for growth are the nested lines of price channels on the daily chart at 0.6910 (red line price channel) and 0.6933 (blue line price channel), which is reinforced by the MACD indicator line (blue indicator) located near it.

analytics5d4113df31713.png

On the four-hour chart, a convergence with the Marlin oscillator is formed. We are waiting for the continuation of corrective growth. The MACD line is aiming for the second target at 0.6933, which also increases resistance on the four-hour scale. From this level we expect the price to turn downward.

analytics5d4113f72bf01.png

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

Forecast for GBP/USD on July 31, 2019

GBP/USD

The British pound continued its inertial fall yesterday after a collapse on Monday, a decline of 67 points. Today, the US Federal Reserve will, with a market probability of 100%, lower the rate from 2.50% to 2.25%, which creates a risk of a price rebound back to the price channel line to 1.2270, that is, the price can make a classic retest of the price channel line. The signal line of the Marlin oscillator on the daily chart is slightly bent up, which creates prerequisites for such a movement.

analytics5d411d1763ed2.png

On the four-hour chart, the possible movement to 1.2270 coincides with a correction level of 38.2% of the entire previous four-day decline. The signal line of the Marlin oscillator went up sharply, the boundary with the growth area - the zero level - is close, it is possible for the indicator to turn down, and this is a sign of a rapid price increase, so fast that the indicator does not have time to adjust to this movement. With moderate growth, the signal line will reach the boundary with a touch of the Fibonacci price level of 23.6% (1.2220).

analytics5d411d2c12870.png

However, the likelihood of the pound continuing its downward movement persists even with a rate cut, since there are many psychological and economic arguments for a continued decline; from the market's full readiness to lowering the rate by a quarter of a point, and Fed Chairman Powell might declare expediency during the pause of the mitigation cycle, in order to take a closer look at the effect, to the hard Brexit and the easing of monetary policy by the Bank of England. The goal is the same - 1.2055.

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

Forecast for EUR/USD for July 31, 2019

EUR/USD

On Tuesday, the euro came under pressure from unfavorable economic statistics, but investors missed the data ahead of the Fed's FOMC decision on Wednesday. French GDP for the 2nd quarter was 0.2% against a forecast of 0.3%, personal incomes and consumer spending in the US showed an expected increase of 0.4% and 0.3%, respectively. But trading volumes were not large, as the euro rose by 11 points.

The price reached a Fibonacci level of 110.0% on the daily chart, where it stayed until today's Asian session. The signal line of the Marlin oscillator was discharged - it rose upwards, which may be a sign of a continued decline in case of favorable fundamental component.

analytics5d411f98c7ee8.png

On the four-hour chart, the price reached the balance and MACD line, and also lingered in them. The primary signal for a further decline is the departure of the price below 1.1132. Next, we expect to overcome the support zone of 1.102/12 and further decline to 1.1074 and 1.0985.

analytics5d411fae3b676.png

But today, the Fed will announce the decision on the rate with a market likelihood that it would decrease by a quarter point at 100%. The risk of a short-term growth in the euro to the line of the price channel at 1.1202 (daily), of course. In our opinion, today's rate cut is quickly being absorbed by the market, since, in parallel with the Fed, the European Central Bank also pursues a policy of easing, and amid deteriorating European economic indicators. Western media claim that the Fed rate cut has already been taken into account in the price. We do not agree with this statement, but the message is clear - financial institutions do not want a weakening dollar, which fits into our concept of a strong dollar in the long run.

Therefore, we see two scenarios for the euro's near development: an immediate downward movement after a decision on the rate, and especially after Jerome Powell's press conference, where a pause in the mitigation cycle can be mentioned, and a downward movement after a short-term growth to 1.1202.

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

Control zones of NZD/USD pair on 07/31/19

The current price of the pair is near the significant monthly minimum. This can cause the emergence of demand and stop falling. It is important to note that last week's closing occurred outside the middle course, which makes it possible to determine the next return target level at 0.6661. The probability of the test is 90% at this level. When forming a pattern for purchases, it is necessary to bear this in mind.

analytics5d41173195d0e.png

It is strictly not recommended to enter into purchases against a trend without forming a pattern of "absorption" because it is difficult to determine the size of the deviation from the average value of the weekly move.

An alternative model is being implemented at the moment. The fall may continue to the lower limit of the average progress of the current week at 0.6529. When testing this level, it is necessary to completely close any remaining sales since the likelihood of the appearance of large demand will significantly increase.

analytics5d411749ec397.png

Daily CZ - daily control zone. The area formed by important data from the futures market, which changes several times a year.

Weekly CZ - weekly control zone. The area formed by marks from the important futures market, which changes several times a year.

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

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

Control zones GBPUSD 07/31/19

Today, the pair is trading outside the monthly CZ of July and the range of the average move of the week. This allows you to close all short positions and look for opportunities to enter correctional purchases. The probability of a return to the level of 1.2216 is 90%, so the "false break" pattern of yesterday's low should be used to enter the trade today.

analytics5d4105c611496.png

Buying the pair from current levels will not be profitable, since the size of the stop will not make it possible for you to get a profitable profit risk ratio.

An alternative model will be the continuation of the fall, which will entail a removal from the monthly control zone and an increase in the size of the correction model. Selling outside the monthly CZ is not strictly recommended, since it has a 10% chance of working out.

analytics5d4105dcd87c1.png

Daily CZ - daily control zone. The area formed by important data from the futures market, which change several times a year.

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

Monthly CZ - 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

Fractal analysis of major currency pairs on July 31

Forecast for July 31:

Analytical review of H1-scale currency pairs:

analytics5d40f7d0d9119.png

For the euro / dollar pair, the key levels on the H1 scale are: 1.1212, 1.1195, 1.1174, 1.1162, 1.1119, 1.1104 and 1.1073. Here, the price entered an equilibrium state. The continuation of the movement to the top is expected after the price passes the noise range 1.1162 - 1.1174. In this case, the goal is 1.1195, wherein price consolidation is near this level. For the potential value for the top, we consider the level of 1.1212.

Short-term downward movement is possible in the range of 1.1119 - 1.1104. The breakdown of the latter value will allow us to expect movement towards a potential target - 1.1073. From this level, we expect a rollback to the top.

The main trend is the local downward structure of July 18, the stage of correction.

Trading recommendations:

Buy 1.1175 Take profit: 1.1195

Buy 1.1197 Take profit: 1.1212

Sell: 1.1119 Take profit: 1.1105

Sell: 1.1103 Take profit: 1.1075

analytics5d40f7e92599c.png

For the pound / dollar pair, the key levels on the H1 scale are: 1.2291, 1.2240, 1.2204 and 1.2105. Here, the price is near the limit value (1.2105) for the downward structure of July 19. Also, at the moment, we expect a correction movement with the subsequent formation of the initial conditions for the top. Short-term upward movement is possible in the range of 1.2204 - 1.2240. The breakdown of the last value will lead to a prolonged correction. Here, the goal is 1.2291. Up to this level, we expect the top of the ascending structure to be formed.

The main trend is the downward cycle of July 19, we expect to go into correction.

Trading recommendations:

Buy: 1.2204 Take profit: 1.2240

Buy: 1.2242 Take profit: 1.2290

Sell: Take profit:

Sell: Take profit:

analytics5d40f8681b91e.png

For the dollar / franc pair, the key levels on the H1 scale are: 0.9970, 0.9952, 0.9941, 0.9928, 0.9888, 0.9870 and 0.9849. Here, we are following the development of the ascending structure of July 22. At the moment, the price is in correction. The resumption of the upward trend is possible after the breakdown of the level of 0.9928. In this case, the target is 0.9941. Meanwhile, in the range of 0.9941 - 0.9952, there is a short-term upward movement, as well as consolidation. For the potential value for the top, we consider the level of 0.9970. After reaching which, we expect a rollback.

The level of 0.9888 is the key support for the upward trend. Its breakdown will lead to the development of a downward structure of July 26. In this case, the first target is 0.9870, wherein consolidation is near this level. For the potential value for the bottom, we consider the level of 0.9849. After reaching which, we expect a rollback to the top.

The main trend - the ascending structure of July 22, the stage of deep correction.

Trading recommendations:

Buy : 0.9928 Take profit: 0.9940

Buy : 0.9953 Take profit: 0.9970

Sell: 0.9888 Take profit: 0.9872

Sell: 0.9868 Take profit: 0.9850

analytics5d40f8831dce4.png

For the dollar / yen pair, the key levels on the scale are : 109.86, 109.48, 109.29, 108.94, 108.54, 108.40, 108.16 and 107.92. Here, we are following the development of the ascending structure of July 18. The continuation of the movement to the top is expected after the breakdown of the level of 108.95. In this case, the goal is 109.29. Meanwhile, in the range of 109.29 - 109.48, there is a short-term upward movement, as well as consolidation. We consider the level of 109.48 to be a potential value for the top. Upon reaching this level, we expect consolidation as well as a rollback to the bottom.

Short-term downward movement is possible in the range of 108.54 - 108.40. The breakdown of the last value will lead to a prolonged correction. Here, the goal is 108.16. This level is a key support for the upward structure. Its price passage will have to form the initial conditions for the downward cycle. Here, the potential target is 107.92.

The main trend: the ascending structure of July 18.

Trading recommendations:

Buy: 108.95 Take profit: 109.29

Buy : 109.30 Take profit: 109.46

Sell: 108.54 Take profit: 108.42

Sell: 108.38 Take profit: 108.16

analytics5d40f8da899dd.png

For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3279, 1.3259, 1.3217, 1.3201, 1.3175, 1.3140, 1.3117 and 1.3085. Here, the continuation of the upward trend is possible after the breakdown of the level of 1.3175. In this case, the target is 1.3201. The passage at the cost of the noise range 1.3201 - 1.3217 must be accompanied by a pronounced upward movement. In this case, the target is 1.3259. For the potential value for the top, we consider the level of 1.3279. After reaching which, we expect consolidation, as well as a rollback to the bottom.

Short-term downward movement is possible in the range of 1.3140 - 1.3117. The breakdown of the latter value will lead to the development of a downward structure. Here, the potential target is 1.3085.

The main trend is the local ascending structure of July 25.

Trading recommendations:

Buy: 1.3175 Take profit: 1.3201

Buy : 1.3218 Take profit: 1.3257

Sell: 1.3138 Take profit: 1.3118

Sell: 1.3116 Take profit: 1.3087

analytics5d40f8f5909bc.png

For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6934, 0.6921, 0.6907, 0.6888 and 0.6852. Here, the price is near the limit values for the downward cycle of July 18, and we expect to go into a correction. The development of the ascending structure is possible after the breakdown of the level of 0.6888. In this case, the target is 0.6907. The breakdown of which, in turn, will allow us to count on the movement to the level of 0.6921. For the potential value for the top, we consider the level of 0.6934. Upon reaching which, we expect pronounced initial conditions for the upward cycle.

The breakdown of the level of 0.6852 will be accompanied by an unstable downward movement, and here, we do not consider subsequent targets until the correction is made.

The main trend - the downward structure of July 18.

Trading recommendations:

Buy: 0.6888 Take profit: 0.6907

Buy: 0.6908 Take profit: 0.6920

Sell : Take profit :

Sell: Take profit:

analytics5d40f93d3e1e6.png

For the euro / yen pair, the key levels on the H1 scale are: 122.07, 121.62, 121.47, 121.26, 120.92, 120.74 and 120.49. Here, we are following the formation of the ascending structure of July 25. The continuation of the movement to the top is expected after the breakdown of the level of 121.26. In this case, the first target is 121.47. Meanwhile, we expect the formation of a pronounced structure of the initial conditions for the ascending cycle to the level of 121.62. For the potential value for the top, we consider the level of 122.07. The movement to which is expected after the breakdown of the level of 121.62.

Short-term downward movement is possible in the range of 120.92 - 120.74. The breakdown of the latter value will lead to a prolonged correction. Here, the goal is 120.49. This level is a key support for the top.

The main trend is the formation of the initial conditions for the upward cycle of July 25.

Trading recommendations:

Buy: 121.26 Take profit: 121.45

Buy: 121.64 Take profit: 122.05

Sell: 120.72 Take profit: 120.54

Sell: 120.45 Take profit: 120.10

analytics5d40f9584848d.png

For the pound / yen pair, the key levels on the H1 scale are : 133.17, 132.72, 132.40, 132.20, 131.80 and 131.44. Here, the price is the will of the limit values for the downward structure of July 25, and therefore, we expect movement in the correction zone. The development of an upward trend is possible after the passage of the price to the noise range 132.20 - 132.40. Here, the goal is 132.72. For the potential value for the top, we consider the level of 133.17, to which, we expect the registration of a pronounced structure of the initial conditions.

Short-term downward movement is possible in the range of 131.80-113.44. From here, we expect a key reversal to the top. The breakdown of the level of 131.44 will be accompanied by an unstable development of the trend, and so far, we do not set further goals for the downward structure.

The main trend - the downward structure of July 25.

Trading recommendations:

Buy: 132.40 Take profit: 132.70

Buy: 132.74 Take profit: 133.15

Sell: 131.76 Take profit: 131.50

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

Even if D. Trump declares a "crusade" against the dollar, it's not a fact that the Fed will join him

analytics5d40dace16427.jpg

According to analysts, the Fed is in a rather difficult situation: the market does not want to disappoint, and the recession must be prevented, and here, US President Donald Trump dreams of weakening the greenback and believes that the regulator should aggressively reduce rates.

When last Friday Larry Kudlow, the chief economic adviser to the head of the White House, said that the owner of the Oval Office had abandoned the idea of conducting currency interventions to reduce the value of the US currency, the dollar bulls sighed with relief. However, D. Trump later said that he had not yet made a firm decision on this issue. According to him, having a strong dollar is great, but it makes US exports more expensive.

Obviously, after two years of trade wars, the American leader finally understood the simple truth: it was the national currency rate that was the key to reducing the country's trade deficit.

It remains only to wait for D. Trump's insight about the fact that the growth of the dollar is to some extent associated with trade wars.

However, abandoning them without a resounding victory is likely to lead to increased criticism from the Democrats, and the price may be a second term of the presidency.

In addition, the US president has no inclination to admit his mistakes and abandon his ideas.

Instead, he pushes the central bank to take action, which immediately finds a response from the derivatives market, which expects that the federal funds rate will drop to 1.75% by the end of the year. Therefore, reducing the rate by only 25 basis points in July may disappoint investors.

Blackstone strategist Joseph Zidle believes that the market expects too much from the Fed.

"Even the S&P 500's rally to 3000 is not really due to fundamental factors, but to hopes for additional liquidity, which the Fed's aggressive easing of monetary policy will provide," he said.

Moreover, it is not typical for the Fed to start a campaign to stimulate at record highs in the stock market. The regulator usually waited for the end of the rally and the warning signals of the key indicators.

Does the Fed have compelling arguments for easing monetary policy without taking into account market pressure and D. Trump?

It is possible that the US central bank is afraid to follow the path of its Japanese colleague, who for many years, even with the help of a large-scale monetary stimulus could not defeat deflation, at the moment it has almost exhausted its "arsenal" and is now unable to push consumer prices to the target of 2%. Europe is on the same path, which is very difficult to turn off. Apparently, the reluctance to repeat the mistakes of others is what forces the Fed to stimulate the US economy, which is doing so well that theoretically it could lead to its overheating.

In addition, the Fed is well aware of the situation and evaluates the current dollar growth as one of the risks to the US economy.

The main question now is how far the regulator is ready to go for the greenback's devaluation. For a significant weakening of the US currency, the central bank must announce a cycle of rate cuts. It is possible that the Fed will only make a nominal concession to D. Trump, reducing rates once, and will wash his hands on it.

In the event that the Fed actually refuses to weaken the dollar, we can expect the US to withdraw from the G20 agreement on the absence of competitive currency devaluation, which marks the beginning of a new era of currency wars.

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

Fed: Investors will be disappointed

analytics5d40d6c7be675.png

Reducing the key rate range by a quarter of a percentage point can be considered a decided matter, which, in general, the markets do. However, in reality, anything can happen. If the Fed does not meet the expectations of investors, then hysteria will begin.

By the way, the owner of the White House has already demonstrated his emotional attitude towards the future decision of the Federal Reserve. Donald Trump ordered to definitely lower rates, and more aggressively. It is not yet clear what the central bank will do, while the dollar missed the next tweet of the US president and continued to grow. Currently, the US currency remains the most profitable among its main competitors.

analytics5d40d6e40cbc7.png

Given the steady growth of the US economy, record low unemployment and restrained inflation, the FOMC members will have to give a kind of "preventive coloring" to the policy easing. The fact is that the rate cut by 25 bp will not provide the necessary insurance for the economy. If the goal is only to normalize the yield curve (we are talking about reducing the yield on short-term bonds below long-term issues), then probably reducing the rate by a quarter of a point will help. The difference in rates for 3-month and 10-year Treasuries has narrowed to about this value.

However, trying to get away from recession does little to stimulate the economy. Investors are not just waiting for further rounds of monetary policy easing. The probability of lowering the rates at the September meeting to 1.75–2.00 is estimated at 70%. In December, the chances of falling to 1.50–1.75 or below exceed 50%.

Time to act

The response of traders to the decision on rates will depend on the text of the FOMC statement. And first of all, on how Jerome Powell explains the position of the Committee representatives. A hint of further easing will be found in his comments, in which attention will be paid to pressure factors and economic risks, especially against the background of a trade war.

If the Fed understands that easing by 25 bps will not be enough, why not get ahead of events and reduce rates by 50 bps at once. Such a bold decision will be effective and will provide the central bank with sufficient insurance to support growth. Nothing of what the Fed is going to do in the coming days will be able to accelerate inflation to a target of 2%, while an easing by 50 bp could be a catalyst for price growth.

I don't think Powell would take that step. The only thing that traders should hope for is that it will allow further policy easing.

Recently, Jerome Powell often changes his views. At first, he advocated a tightening of the policy, then it was time for a "wait-and-see" position and stable rates, and now he practically guarantees a reduction in rates. What is this - impermanence or intrigue?

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

The "heavy" sale of the pound spread to Tuesday, aiming for 1.20

analytics5d40d494196e1.jpg

Pound traders are focusing on the psychological level of 1.21. If bears manage to eliminate this obstacle, then they will switch to lower levels - 1.20 and 1.1986. At this very spot, the market hit bottom after the Brexit referendum in June 2016. Any closing below may open the way to the value of 1.19.

The trend for the pound remains bearish, both in the short and in the medium term.

analytics5d40d4a792a3f.png

The pair's fall to a new low today contributed to the strengthening of disturbing rhetoric against Brexit. Boris Johnson reiterated that the May deal, in which there was a point about the border in Ireland and which failed three times in the British Parliament, no longer exists. The prime minister made it clear that he will not resume negotiations with the EU until Brussels changes its position on the issue of the border with Ireland. British Foreign Secretary Dominic Raab said that European officials are showing unprecedented stubbornness, while the British side wants a compromise solution and a deal. Aggressive Brexit is undesirable, but so far there is no other way out.

The current situation around the pound is extremely unstable. As in previous episodes three years ago after the referendum, the British currency is very sensitive to any headlines in Brexit's news feed. Transactions in the foreign exchange market amid moderately positive messages can be supported by the desire of traders to buy the pound at record low levels. However, the fall is now aggravated by the massive triggering of stop orders, as evidenced by the rather ragged dynamics of the GBP/USD pair during the Asian session. Several stages of pulling down quotes by 20 points per minute were recorded.

As for the EUR/GBP pair, it jumped 3.2% since Johnson's first comments as prime minister. Historically, the pair feels insecure at levels above 0.9000. Over the last decade, the euro in conjunction with the pound appeared in the area of 0.9200 only during periods of severe market turbulence. The focus of traders has quickly shifted from the British currency to the euro, which caused the pair to pull back as soon as market shocks gave way to long-term sterling purchases on downturns and a weaker single currency.

analytics5d40d4bac0a3f.png

The fall of the pound was the reason for the growth of British stocks. Since the beginning of the week, the FTSE100 gained 2.2%, approaching annual highs. The rise in the index from Friday is 3.4%, which exceeds the scale of the weakening pound. It seems that stock markets are not yet very concerned about the long-term prognosis of the negative effects on the economy.

All the attention of the foreign exchange market, apparently, is on the side of the British currency. Except for its 2% fall from the beginning of the week, fluctuations in the main exchange rates look restrained. Traders prefer not to make unnecessary movements, and wait for further signals from the US Federal Reserve and the economy, as well as the possible results of trade negotiations.

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

Technical analysis of GBP/USD for 30/07/2019:

Technical Market Overview:

The GBP/USD pair has made a big move down towards the level of 1.2100 as anticipated. The local low was made so far at the level of 1.2118, but it is only a matter of time the level of 1.2100 is hit. The momentum indicator remains weak nad negative, which indicated a further possible spike towards the level of 1.1983. The trend is still down and there are no signs of a trend reversal yet.

Weekly Pivot Points:

WR3 - 1.2594

WR2- 1.2550

WR1 - 1.2446

Weekly Pivot - 1.2406

WS1 - 1.2296

WS2 - 1.2257

WS3 - 1.2154

Trading recommendations:

The best strategy for the current market conditions is to follow the larger timeframe trend. The larger time frame trend is still down and there are no signs of any trend reversal. The key long-term technical support at the level of 1.2420 has been violated and the next target for bears is seen at the level of 1.2100 and 1.1983. All the corrections are just the local correction inside of a downtrend.

analytics5d3fdc532ad11.jpg

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

Elliott wave analysis of GBP/JPY for July 30, 2019

analytics5d3fcbea9944e.png

GBP/JPY broke strongly below 133.53 which has extended the downside pressure towards 131.98 and maybe even closer to 130.69. However, this break should be short lived as the decline from 148.87 now is very over-extended and a sudden turnaround could be seen anytime now.

The first indication of a bottom being in place will be a break above 133.31 while a break above 134.07 will confirm the bottom of wave 2 and call for more upside through 135.67 towards 137.79 and above.

R3: 133.31

R2: 132.85

R1: 132.54

Pivot: 132.14

S1: 131.98

S2: 131.50

S3: 130.69

Trading recommendation:

We are long GBP from 133.65.

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

Elliott wave analysis of EUR/JPY for July 30, 2019

analytics5d3fca3c603e7.png

Support in the 120.54 - 120.60 area held well and protected the downside for a new rally to attack the 121.35 peak. This peak has not been conquered yet, but if minor support at 120.96 is able to protect the downside for a new attempt to break above 121.35, we think the next attempt will be successful. So, the price is likely to extend its climb to 122.32 and even higher to 123.36.

That said, we also have to accept the possibility of the rally from 120.71 to be part of a flat correction. A clear break below 120.96 will increase the odds for this scenario and call for another dip to the 120.54 - 120.71 area before EUR/JPY is ready to take off in the next impulsive rally.

R3: 121.84

R2: 121.68

R1: 121.35

Pivot: 121.22

S1: 120.96

S2: 120.88

S3: 120.71

Trading recommendation:

We are long EUR from 120.85 with our stop placed at 120.00

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

EUR / USD: a strong dollar, Trump hysteria and the intrigue of the July Fed meeting

The dollar index is at the peak of this year during the Asian session on Tuesday. It almost reached 98 points, reflecting the demand for US currency throughout the market. The EUR/USD pair managed to keep within the 11th figure but the position of the EUR/USD bulls is unstable. The bears could not impulsively push the support level of 1.1105 and enter the 10th figure, so they had to temporarily retreat. After which, the price showed a modest correctional increase. However, the dollar still maintains a strong position in the market. Therefore, a retest of the above support level is quite likely in the near future and possibly tomorrow, following the results of the July Fed meeting.

analytics5d3fcbc026f8a.jpg

It is noteworthy that the American currency has acquired a kind of "immunity" to the attacks of Donald Trump. Earlier this week, the American president again lashed out at the Fed. In his twitter, he wrote that the European Central Bank and the People's Bank of China are preparing to pour money into the financial systems while lowering interest rates. Meanwhile, the Fed is inactive, ignoring the weak inflation rate. He also clarified that the Fed "will make a very small step" in the near future, apparently bearing in mind a reduction in the rate by 25 basis points. Despite such a sharp lunge in the direction of the American regulator, the foreign exchange market completely ignored it, and the dollar index continued to gain momentum. This is due to several factors. Firstly, Trump is in a rather helpless state regarding the personnel policy of the Fed.

Secondly, the latest US macroeconomic data allows the Fed not to resort to an aggressive easing of monetary policy. US inflation is indeed growing at a slow pace, but other economic indicators show mainly positive dynamics after a temporary recession. In addition, recent comments by economic adviser Larry Cudlow have lowered investor concerns about currency intervention. A senior official said the White House abandoned this idea despite a significant strengthening of the national currency.

If it is really so, we will know soon. The results of the July meeting of the Fed may provide additional support for the US currency, which is already at its maximum value anyway - and not only paired with the euro but paired with the pound. Further growth of the greenback will negatively affect both the export sector of the United States and inflationary processes. On the eve of the two-day meeting of the Fed, Trump called on members of the regulator to soften monetary policy "more significantly" (that is, to cut the rate immediately by 50 bp). Despite the fact that the basic scenario of today's meeting implies a reduction in the rate by 25 points, the market still worries that the Fed members will succumb to political pressure. In particular, Jerome Powell may hint at a further rate cut in the fall or in December. In that case, Greenback will suspend his rally and the EUR/USD pair will not only be able to return to the 12th figure but also to claim higher values (much will depend on the dynamics of European inflation).

In addition, one should not forget that another round of trade negotiations between Washington and Beijing is starting today. The initial optimism in this matter faded away and the parties were again bogged down in the negotiation process. The White House has already stated that one should not expect any practical results from this meeting (in particular, the signing of the deal), the US delegation will only hold regular consultations with the Chinese side. Here, it is worth recalling Trump's recent statement that China may decide to wait for the next US election "in the hope that it will be able to negotiate trade issues with another president." This suggests that the head of the White House is skeptical about the prospects of the negotiation process, and the likelihood of a full-fledged trade transaction in the near future is low. By the way, a little more than a year is left before the next US presidential election, while Trump is 5-10% lower than his main Democratic opponents. Therefore, the wait-and-see attitude of the Chinese in this context is fully justified.

analytics5d3fcba913372.jpg

Given the above factors, the intrigue of tomorrow's meeting remains. With 100% probability today, the Fed will reduce the interest rate to 2.25% but further actions by the regulator remain in question. If Powell is satisfied with the precautionary step and declares that he has been waiting, the dollar will increase its growth and together with the euro, it will go into the 10th figure. However, if the head of the Federal Reserve hints at the "continuation of the banquet" in September, the EUR/USD pair will return to the first resistance level of 1.1210, which is the middle line of the Bollinger Bands indicator on the daily chart.

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

Forecast for USD / JPY pair on July 30, 2019

USD / JPY pair

In the past three days, the USD/JPY pair has slowed growth before the technical resistance of the price channel line. Hence, the Marlin oscillator signal line showed an intention to turn down with the subsequent formation of a divergence with the price on the daily chart. There is no consolidation over resistance. In case of deterioration of external conditions, the target level of 109.64 may not be achieved (in the near future).

analytics5d3fc48d80b23.png

Today, the Bank of Japan left the monetary policy decision unchanged. The unemployment rate fell from 2.4% to 2.3% but industrial production fell by 3.6% m/m in June. The market reacted to the news with a decrease in the pair.

Divergence is already formed on the four-hour chart. The positive scenario assumes price development within the upward price channel because for a full-fledged divergence on the daily chart. The price should still be overcome by the July 10 maximum at 109.00.

analytics5d3fc4b7cbd76.png

However, on the other hand, an unexpressed divergence will become the basis for a slight fall in the price. The first target will be to support the MACD line in the area of 108.28 on H4. Overcoming the support and securing it can send the price lower to a minimum on July 11 at a price of 107.87. The probability of a decline to 108.28 is 60% and to 107.87 about 45%.

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